Friday, October 08, 2021

The Communist-Fascist-Leftist Democratic-Socialist-Progressive Totalitarians: A Glossary of Dictatorship

This post can be thought of as a kind of compendium of dictatorship, with many links to previous posts where I have touched on the notions.

All terms in the title represent people who desire to, or do, exercise absolute authority or power over the citizenry. Differences between the terms and the people who espouse them are negligible. The consequences of such absolute power are not pretty.

Let me start with the totalitarians. They are the ones who want to and do use total coercive, governmental control to tell us what we can and cannot do in our personal and professional lives. Like, you know in recent times, to leave our homes, travel, sit down in a restaurant, run our businesses, etc., and perhaps even talk to our neighbors. In other words, covid totalitarianism.

The “left,” as in the left-right continuum, refers to the degree of government intrusion in and control of our personal and professional lives. The “far left” wants to control all, which means they are totalitarians. The right limits the government to self-defensive coercion against those who initiate physical force.

The left is Leninist socialism (there is no other type). It is Lenin’s giant post office that we all work for (government ownership of the means of production), protected by an armed proletariat (or other such “protectors”). The right is laissez-faire capitalism.*

The left wants to and does use physical force to establish and control everyone through a dictatorship. The right wants to and does establish the protection of individual rights, including especially property rights, political freedom, and equality before the (rationally defined, objective) law.
 
The middle ranges of the continuum are varying mixtures of freedom and dictatorship (or freedom and controls, as some say). The societies are also called mixed economies. “Moderates,” so called, fall within these ranges. They apparently like to distinguish themselves from the “extremists” on both ends of the continuum.

The freer countries of today’s world, including the United States, are mixed societies of freedom and dictatorship, the dictatorial control coming from the deep states’ and their governments’ overabundance of overly broad, vague laws and administrative rules.

Putting the word “democratic” in front of socialism does not make it a kinder, gentler Garden of Eden in which the lion lies down beside the lamb, nor does it make socialism more peaceful than Marx’s violent revolution. It just means democrats want to use the vote and discussion to abolish private property and establish Lenin’s post office, in increments by gradually moving the mixed economy to total control. In recent times, note how less gradual and more quickly this move seems to be occurring.

The problem with democratic socialism, as F. A. Hayek (chap. 10) and George Reisman (part I) have pointed out, is that the democrats’ policies require coercion to enforce. And because the policies violate some citizens’ rights for the favor and privilege of others, sooner or later the citizens whose rights are being violated start thinking about rebelling. Eventually they disobey the dictatorial edicts. To maintain control, the “lions” in the government will gladly sacrifice the lambs to their favor and privilege.

The worst in moral character, as Hayek demonstrated, rise to the top of government leadership because democrats lose their nerve to enforce coercive policies. Reisman, putting it more bluntly, says that armed robbery and murder become necessary to overcome the citizens’ armed resistance to coercive policies. The worst who have risen to the top gladly comply with this requirement. (Motivation? Envy and hatred.)

This is the time when society becomes rather inelegant or unpretty, you know, as in one-party rule, political imprisonment and executions, expropriation of property, and censorship—and often is followed up with gulags and concentration camps.

Democracy means unlimited majority rule, which is a form of dictatorship. A modest search of the US’s founding fathers will reveal a frequent use of the word “tyranny” in conjunction with democracy. That’s why they called our new nation a constitutional republic, the constitutional part including a bill of rights that restrains the majority. “Democracy” and “free society” only go together if the words “classical liberal” are its modifiers, as in classically liberal democracy.

The significance of the vote in modern history, as identified by Ludwig von Mises (sec. 8, chap. 1), is its use in the transition of leadership, i.e., the vote in place of guns, which means the avoidance of civil war.

The progressives are socialists through and through, though divided into two eras of American history. The early progressives, from 1880s to about 1930, were educated by German professors who were democratic socialists. Back in the US, the progressives’ goal was to replace classical liberalism with the so-called social variety (social liberalism) by establishing an administrative state, i.e., a large bureaucracy of “experts” voting in new laws and establishing regulatory rules to tame the alleged “capitalist beast.” In other words, to establish a mixed economy that would move steadily toward socialism.

The modern version of progressivism, from 1930 to the present, was initially explicit communism or socialism, at least until the mid 1950s. It was Nikita Khruschev’s leaked secret speech about Stalin that caused the leftists to hide behind the banner of progressivism, often dressed up as democracy. (A “soviet is an elected governmental council in a Communist country.”)

Communism and fascism, the final terms to mention, are both forms of socialism, and both decidedly leftist. Marx, Engels, and Lenin all considered communism a synonym of socialism. Fascism (Mussolini’s term) and Nazism (Hitler’s version) were systems that inherited industrial economies with large private sectors. The essence of fascism, as identified by Mises, is a nominal—in name only—private ownership of the means of production, with severe or total control and regulation by the government. Mises’ essentialization (chap. 7) makes it clear that fascism, as “socialism of the German pattern,” belongs on the left in the left-right continuum. It is only the manner of control that differs.

This means today’s mixed economies that have private property and private ownership of the means of production and are controlled and regulated by the government are fascistic. This includes present-day United States. The amount and severity of control pushes the country closer and closer to a de facto socialism.

Other issues associated with fascism, such as racism, militarism, intimidation of voters, concentration camps, and declarations of emergency powers, are either nonessential to the meaning of fascism or are shared with socialism. Not all fascist countries were racist, for one thing, and Hitler learned his tactics from Lenin and Stalin.

Where does this put the United States today? No matter what you call it, we are headed toward a communist-fascist-leftist democratic-socialist-progressive totalitarianism.

Keep in mind, as David Horowitz says (quoted in his website’s masthead), “Inside every progressive is a totalitarian screaming to get out.”

And as Ludwig von Mises (p. 52) put it, “Every advocate of the welfare state and of planning is a potential dictator. What he plans is to deprive all other men of all their rights, and to establish his own and his friends’ unrestricted omnipotence.”


* The “right,” traditionally, has been said to be the home of fascistic, military dictatorships, and the notion can be traced to what is called right-Hegelianism and to the French Revolution. This designation is often meant to denigrate capitalism as fascistic and the accusation comes from the communist-socialist leftists.

Tuesday, September 07, 2021

From the Preface to Applying Principles

Applying Principles: Short Essays Based on the Philosophy of Ayn Rand, Economics of Ludwig von Mises, and Psychology of Edith Packer will be published October 1. It is my first ten years of blogging. The book may be preordered at Amazon and Barnes & Noble, with more information on its website books.jkirkpatrick.net. Here are edited selections from the preface.


Although I spent thirty-six years in college classrooms teaching undergraduate and graduate students business marketing, my bachelor’s degree was in philosophy. That subject influenced and underscored my entire career. As a result, I never let the day job of teaching students how to sell soap (as I would often describe my academic duties) become disconnected from its foundations in psychology, economics, or philosophy.

Indeed, I recognized early in graduate school that marketing, as well as the other business disciplines, are properly described as applied sciences that rest on those more fundamental fields. “Art” is sometimes used to describe applied science, but the usage is correct only if it is meant as a synonym. Often the word is meant to disparage applied fields because they are allegedly less precise or rigorous than “real” science, which means the physical or quantitative sciences. A student many years ago complimented me when she realized that advertising was as disciplined (her word) as finance, her major. There may not be universal equations in the applied human sciences, but the principles are universal in their appropriate context and the fields are “disciplined.”

Business as applied science is analogous to medicine and engineering. Medicine rests on biology for its more fundamental foundation and engineering on physics and chemistry. All fundamental and derivative special sciences, again in turn, rest on philosophy. All such fields are related and should be integrated, rather than isolated as they so often are in today’s academic world.

Thus, what I did when researching, writing, and teaching was to apply principles from the other, more fundamental fields, which explains my interest in epistemology and psychology, as well as the principles unique to marketing and advertising.

To illustrate further, the civil engineer whose goal is to build a bridge must know not just the fundamentals of physics and chemistry, but also the nature and composition of materials (used to build the bridge), and also the nature and behavior of rivers, which includes the history of the particular river over which the bridge will span and the nature and behavior of the river’s soil and water.

Applied science gathers all relevant concrete facts of the specific case it is working on, then uses, that is, applies, the universal concepts and principles of the fundamental sciences on which it rests, plus the narrower concepts and principles of its discipline.

Application is one of the two fundamental methods of cognition and is deductive. Generalization is the other and is inductive. We all use both every day in our lives. The two methods, as I say in my 2018 blog post, “are not the monopoly of scientists, philosophers, or academics in general.” Generalization gives us concepts and principles to guide our lives, while it also gives us theory and theoretical science. Application, which requires the previously acquired knowledge that generalization gives us, is what our medical doctors do, what Sherlock Holmes did, and what we do on a daily basis.

Application means we identify “a this as an instance of a that.” We present a cough and runny nose to our doctor and he or she quickly concludes, based on accumulated knowledge and patient history, that we have a cold. Similarly, Holmes saw that Watson was tanned and showed signs of having been wounded in a war; thus he concluded Watson recently came back from Afghanistan. And a child applies the previously learned concept of balance by shifting weight when learning to ride a bicycle. All three examples are processes of deduction, and illustrate how deduction is the predominant method of applied sciences, as well as everyday life.*

Deduction, therefore, is essentially what I have been doing when writing my blog posts. I am not in any intended way coming up with new concepts or principles, nor am I repeating the proofs of the great writers listed in my masthead, or others I may cite in a post as a reference. I take their ideas and apply them to specific issues.


The following essays are not journalistic as a newspaper column might be. I gave myself the assignment always to come up with something more fundamental than the news of the day, whether theoretical or historical, which last includes relevant citation of research.

The posts are organized into seven chapters, listed chronologically within chapter. Because of the way I write—“interdisciplinary” to use the academic jargon—one may quibble over some classifications. The chapters are “Capitalism and Politics,” “Academia,” “Education,” “Psychology,” “Epistemology,” “Youth Sports,” and “The Arts.”

I do have favorites. It was difficult to choose one per chapter, but here they are, in chapter order:

• “The Reductio of Bureaucracy: Totalitarian Dictatorship”

• “Because the Stakes Are So Small”

• “Go Fish!”

• “Look at Your Premises. Look. Look. Look!”

• “Why Don’t Facts Matter?”

• “Yes, There Is Crying in Softball”

• “Life in Three-Quarter Time”

My idea for publishing this collection comes from two books of columns: All It Takes Is Guts by economist Walter Williams and Double Standards by radio show host Larry Elder. I did not read these books from beginning to end. I skimmed the table of contents and read whatever caught my attention. Readers of this work might want to do the same.


* It is in this sense that history is also an applied science. We, as well as professional historians, look at past events, natural or human, and try to explain them, that is, identify their causes, by reference to our accumulated theoretical knowledge. Historians in the human sciences rely in particular on political philosophy, economics, and psychology. See Ludwig von Mises, Theory and History, amazon.com.
 

Wednesday, August 11, 2021

“Whataboutism” and the Nature of Principles

“Whataboutism” (1, 2) is an accusation of inconsistency.

In recent years it has become a form of the tu quoque (“you too”) fallacy: “what about your (America’s) human rights violations?” But it has another form that has been around probably since the beginning of intellectual argumentation.

“You don’t believe women should be drafted into the military, but what about men?”

“You don’t believe small business should be regulated, but surely you believe big business needs regulation?” What about the steel industry? What about automobiles? What about high tech?”

When it occurs in this form, it might be a logically valid point, or it might be a dropping of context by failing to connect to reality. To understand the difference, we need to understand principles and their application.*

Slightly adapting a definition from the Oxford English Dictionary, principles are fundamental truths on which others depend that provide causal explanations and guidance to human action.

For example, water boils at 212 degrees Fahrenheit at sea level, lower at higher elevations or higher if the water contains impurities. This is a causal explanation and implicit guidance—adjust cooking recipes in high altitude.

Never lie in human relationships, unless threatened with initiated coercion, uninvited invasion of privacy, or when a blunt truth may unnecessarily hurt the other person. This is a guide to human action, a moral one at that, and an implied causal explanation of what is required for benevolent cooperation and friendship.

Principles are combinations of concepts and each concept in the principle must be true, that is, correctly identify the facts the concept subsumes under it.** In this way principles state truths and enable subsequent truths to rest on them to build our personal knowledge (unique to each one of us) and our physical, biological, and human sciences.

Truth is not in reality to be corresponded to or “grasped” as the traditional theory of truth holds, which is to say truth is not in the thing intrinsically as Aristotle and other naïve realists believe.

Truth and falsity are in our heads based on how well—correctly or incorrectly—we have processed reality, performing certain mental actions to make our identifications. If I call the glass of water on my desk a leprechaun, I have mentally processed the object in a way that the content of my consciousness contradicts the facts. This violates one of Aristotle’s many major contributions to rational thought, the law of non-contradiction.

If I call the object a glass of water, I have mentally processed the object in a way that the content of my consciousness correctly identifies it, that is, subsumes it under the concept “glass of water.”

Correctly identified truths are universal, as are correctly formed concepts, but the fundamental principle that guides all our identifications is Aristotle’s law that includes a crucial phrase at the end of his statement: “at the same time and in the same respect.”

Concepts and principles are formed and applied within a context. Water does not boil at 212 degrees Fahrenheit without appropriate qualifications. Herein lies the problem with the “whataboutists” who fail not just to understand the correct nature of principles but also the context in which they apply, hence the many repeated questions “what about this?” “and this” “and this?”

The principle of individual rights identifies freedoms of action that are universal in a social, political context, meaning they apply to all individuals in society, whether male, female, black, white, American, or Chinese. The principle of rights also applies to anyone who runs a business, any business.

And these rights are violated by initiated coercion, especially when imposed by the government.

This means the military draft is involuntary servitude for both males and females, no matter what rationalizations the Supreme Court has given to justify it. Being against the draft for women means also being against it for men, and vice versa.

If initiated coercion is used to regulate business people, the consistent conclusion of universal individual rights applied to business must be laissez-faire capitalism.

Applying principles means recognizing specific cases that are subsumed under the principle. Men, women, blacks, whites, etc.—and business people—are all included in the principle of universal individual rights, which means all of the individuals’ rights must be protected by the government, not violated through the initiation of physical force.

If, however, we say that some human beings should be drafted into the military, a disconnect from reality has occurred and a concession to the alternative principle of servitude has been made. This sets up a problem of logical consistency: either men and women both should be drafted and turned into slaves, or no one—morally and legally—should be. There is no way consistently to apply the principle of involuntary servitude to one and not the other.***

The same applies to business people. If it is okay to regulate one, consistency of the regulation principle makes it okay to regulate all. This is how government interventions in our personal and professional lives necessitate a full march toward socialism, which is where we are heading today and have been for the past one hundred years.

Consistency means no contradictions, but that can mean what follows deductively from a principle detached from reality or whether the principle is anchored inductively to facts. “Draft and regulate everyone” follows from the principle of servitude, but individual rights as freedoms of action that are violated by initiated coercion are rooted in and derive from the nature of human beings that possess the capacity to reason. Consistency, fundamentally, means being connected to and anchored in reality.

In today’s postmodern culture where facts don’t matter, consistency doesn’t either. Throw in the mixed economy that by its nature violates principles to combine freedom with dictatorship and you have many inconsistencies to call out with “what about this?” “and this?” “and this?”

Nonetheless, there are occasions in which a “what about this?” question, as I alluded to earlier, may bring up a valid point you may not have thought about. Such a questioner, however, must be sincere.

As a teenager I was introduced to whataboutism from one or two adults who condescendingly said, “What about this? I’m just trying to help you. I don’t really believe any of this” (crap was the full implication of the adult’s statement). One even said, “It’s just good debate,” meaning there is no such thing as truth.

These whataboutists are people who do not take ideas seriously and I have no use for them.


* This post is based on Ayn Rand’s epistemology, especially her theory of concepts. See also this earlier post.

** From the OED’s etymology discussion of the verb to identify: “to subsume (several things) under one idea or concept (1610).” Identification means to recognize similarity or sameness in order to classify whatever is similar or the same under a particular concept or principle. Rand’s notion of measurement omission gives us the causal explanation of how we abstract to form valid universals, and the guidance to form them.

*** See my earlier post and Ayn Rand’s comments on the anatomy of compromise of principles (1, 2).

Friday, July 09, 2021

Capitalism: A Treatise on Economics, by George Reisman—A Review

According to Frances Grimble, professional book reviewer and editor at Lavolta Press, many reviewers are guilty of “not reading the book thoroughly—just skimming, or just reading the first chapter, or reading the press release and jacket copy, but none of the book.”

On at least one prominent occasion, and possibly two, that occurred with economist George Reisman’s magnum opus Capitalism: A Treatise on Economics.

I assure you I have read Professor Reisman’s book.

Below is a review I wrote that unfortunately never was published. I had almost forgotten about it. In December 1996, I began submitting a shorter version to several publications that should have published it—Wall Street Journal, Forbes, Investor’s Business Daily, NY Times, plus a few others—but they predictably rejected it. Since then, the review has been sitting idly on my Cal Poly website.

Here it is.


In a 1989 article in The National Interest, Francis Fukuyama declared that the worldwide collapse of socialism signified only one thing: “the unabashed victory of economic and political liberalism.” In a New Yorker article a year later, Robert Heilbroner (hardly a friend of capitalism) acknowledged that Austrian economist Ludwig von Mises “of course . . . was right”—when Mises in 1920 explained why socialism and communism must inevitably fail. Capitalism, it would seem, has won the historic economic and political battle of the twentieth century.

George Reisman, former student of Ludwig von Mises and currently economics professor at Pepperdine University in Los Angeles, has written a manifesto for the twenty-first century to insure that this victory over socialism is not transitory. Capitalism: A Treatise on Economics is an exhaustive defense of laissez-faire capitalism as prerequisite for continued progress of material civilization. Reisman’s arguments are persuasive.

By integrating forgotten but sound principles of such classical economists as Smith, Ricardo, Say, and James and John Stuart Mill with equally sound principles of such Austrian economists as Menger, Böhm-Bawerk, Wieser, and Mises, Reisman develops powerful and highly original theories of aggregate profit and interest, saving and capital accumulation, wages, and aggregate economic accounting. In the course of presenting these theories, he demonstrates the role of technological innovation in reducing prices and increasing the supply of capital goods. He demonstrates that the economic function of businessmen and capitalists is to raise the productivity of labor and thereby the standard of living of the average wage earner. By applying his developed theories in scholarly but compulsively readable detail, Reisman dismantles Marxism, Keynesianism, the “monopoly” and “oligopoly” doctrines, environmentalism, and all fundamental forms of socialism and interventionism. This book is at once an introductory, intermediate, and advanced text on economic theory, as well as a mine of information on current political and economic issues.

The work is divided into three major parts. Reisman begins Part One, “The Foundations of Economics,” by defining the field as the “production of wealth under a division of labor,” immediately disputing the “scarcity” definitions found in contemporary economics textbooks. He goes on to discuss the nature of wealth as “material goods made by man,” the connection of wealth to human reason, and the attacks on the accumulation of wealth by the environmental movement. The second and third parts of his book roughly correspond to “micro-” and “macroeconomics,” respectively, although he, along with all Austrian economists, disputes the legitimacy of such a division.

In Part Two, “The Division of Labor and Capitalism,” Reisman states and defends over the course of several chapters one of his fundamental propositions: that human life and well-being depend on the production of wealth, which in turn depends on the rising productivity of labor, which in turn depends on an expanding division of labor, which, finally, depends on the institutions of laissez-faire capitalism. Chapters 6–8 of Part Two incorporate a revised and expanded version of Reisman’s 1978 book The Government Against the Economy, which earned him an endorsement from Nobel laureate (and Austrian economist) F. A. Hayek.

The culminating chapter of this Part is Reisman’s thoroughgoing discussion of all forms of monopoly. He rejects the popular economic concept on which the American antitrust laws are based, namely that monopoly is a single seller in a given territory. He concludes that the only valid meaning of the term is government-granted privilege. In this chapter, he argues that the antitrust laws are in fact pro-monopoly and that the socialist state is the one giant monopoly critics have long charged capitalism of tending toward. He demonstrates how Böhm-Bawerk and Ricardo use cost of production as a determinant of prices, rather than as a support of Marxism; Reisman then uses the ideas of both economists to critique the marginal revenue doctrine of contemporary economics. Reisman concludes the chapter by demolishing the perennial bugbear of business theory: the doctrine of pure and perfect competition.

The final chapter of Part Two discusses the productive roles of such maligned business activities as moneymaking, stock and commodity speculation, so-called insider trading, retailing, wholesaling, and advertising. It concludes with a refutation of the Marxian exploitation theory by using classical economics, specifically by throwing out the primacy-of-wages doctrine and replacing it with the notion that the original and primary form of income is profits. In other words, what Robinson Crusoe earns on his desert island is all profit; when he hires Friday, Crusoe must then deduct Friday’s wages from his—Crusoe’s—profits. From this follows a radical reinterpretation of “labor’s right to the whole produce.”

In Part Three, “The Process of Economic Progress,” Reisman explains in considerable detail the mechanism by which a free economy advances or, if interfered with by the government, does not advance; his theme is that progress requires saving (investment), capital accumulation, and technological advancement.

He begins by defending both the quantity theory of money and Say’s Law, which he says should more properly be called James Mill’s Law. He argues that monetary demand is entirely a function of the quantity of money existing in the economic system, whereas real demand is determined by capital accumulation and increased production. Consistent with the Austrian business cycle theory, he points out how government manipulation of the money supply, among other government policies, causes inflation, recession, and mass unemployment; in the absence of such manipulations and especially with the adoption of a 100%-reserve gold standard, full employment and an economy free of volatile swings would be the norm.

Real wages, Reisman demonstrates, are increased by raising the productivity of labor, while the productivity of labor is increased by capital accumulation, and this last is caused by saving and technological progress. Any attempt to increase wages through inflation or minimum wage laws is doomed to failure because such policies only increase money wages, not the worker’s standard of living. Under capitalism real wages rise relative to and because of the declining prices that accompany capital accumulation; in this process money wages may actually fall. Technological progress is an important determinant of capital accumulation because it is necessary to offset diminishing returns. This discussion is part of many that aim to refute the claims of Keynesian macroeconomics.

One of the legacies of classical economics, which encouraged Marx to develop his exploitation theory, was the notion that capital accumulation and falling prices must inevitably lead to a falling rate of profit, eventually falling to zero. Reisman’s most original contribution to economics is his theory that net consumption plus net investment equals aggregate profit. The primary source of aggregate profit, states Reisman, is the personal consumption expenditures of the owners and creditors of businesses. This net consumption, which is the consumption expenditures of everyone in the economic system minus wages paid to workers, will always exist as long as the owners and creditors of businesses seek to spend money in personal, non-business ways. The rate of net consumption constitutes the real rate of profit.

Net investment, which is productive expenditures minus costs, does tend toward zero, because productive expenditures and costs in the long run and in the absence of an increasing money supply tend to equal one another. Where the money supply increases over time, however, and it would increase even in a precious metals economy, net investment tends to equal the rate at which the money supply increases; thus, the rate of net investment constitutes the nominal rate of profit. Through a series of nearly a dozen ingenious graphical figures, contrasting stationary and progressing economies, Reisman demonstrates this theory and its role in the accumulation of capital, as well as the effects of taxation, budget deficits, and other government hindrances on the process of progress.

Reisman also presents his own approach to national income accounting, arguing that gross national product (or gross domestic product) essentially measures the rate of increase in the money supply and considerably understates national income; he suggests and demonstrates gross national revenue as a better measure. In a chapter-length critique, Reisman concludes that Keynsianism is merely “a piece of flotsam and jetsam from the wreckage of critical thought that [has been] carried along by the tide of irrationalism and anticapitalism.” Finally, Reisman’s last chapter is a detailed, practical political and educational program of deregulatory and privatization steps by which to establish a laissez-faire society.

This book advances economic theory by several leagues and will not be surpassed for many decades; socialist sympathizers and interventionists of all types, if they are to maintain any scholarly or political respectability, must address Reisman’s arguments. Informed by the philosophy of Ayn Rand, as well as the economics of Ludwig von Mises, this book is not a conservative manifesto; rather, it is a liberal program in the spirit of the Enlightenment and, in many respects, in the spirit of nineteenth century progressive liberalism. It is a defense of secular, scientific, and technological values that emphasize reason and self-realization of the individual human mind as the essence of political freedom. When it comes to the alleged anarchic and feudal nature of capitalism, however, Reisman demonstrates that those epithets are in fact precise descriptions of socialism.

Indeed, the progressive or modern-day social liberals would do well to heed Reisman’s section on the “indivisibility of political and economic freedom.” They just might come to understand how his theory represents the true nature of liberalism, a market liberalism for the twenty-first century.


Postscript. See last month’s post on “Profits over People or Primacy of Profits?” which includes a brief outline of Professor Reisman’s theory of profit. A more detailed, though still brief, summary of his “Net Consumption, Net Investment Theory of Aggregate Profit” can be read in my 2004 article published in the American Journal of Economics and Sociology.
 


 

Wednesday, June 09, 2021

Profits over People or Primacy of Profits?

The favorite refrain—ad nauseam, actually—of the communist-fascist left is that capitalism and its representatives, entrepreneurs, care nothing for people.* Profits are all that capitalists seek, exploiting both workers and customers.

In response to such Marxist blather, let me just say that profits are sales minus costs and the only way to earn a profit under true capitalism is to create and deliver a product (a good or service) to customers at a price that exceeds its cost. To do so, the created value must meet a need (a requirement for the improvement of the customer’s life) or want (an optional value that a market segment likes and wants, though not everyone has to like or want it) of the entrepreneur’s prospective customers.

Contrary to “profits over people,” this is the meaning of profits through customer satisfaction. Everyone in the company from CEO (the market entrepreneur) to lowly stock person must first consider the customer’s needs and wants before making any decision or taking any action. Most small businesses, as examples of this practice, face significant competition because they suffer fewer government regulations and enjoy fewer favors than their larger counterparts.

In today’s non-capitalistic mixed economy of government privileges and punishments for the favored and unfavored, the paperwork of bureaucratic management requires that entrepreneurial attention be turned away from customers to the government in order to comply with the imposed rules and regulations and for the profits the (political) entrepreneurs can acquire (not earn) through government-granted privileges.

This is one source and meaning of profits over people, because, in a government-by-lobby mixed economy, (usually big) businesses vie with one another for government favors. Customers, as a result, may be thrown an occasional crumb, maybe even a product improvement if it will keep the government happy, the taxpayer money flowing, and the competition at bay. Think in particular of the many occupational licensing monopolies (ranging from hair stylists to hospitals and insurance companies), public utilities and schools, and all broadcast, cable, and social media.** Today’s big businesses in general.

The more serious issue, however, when talking about profits is whether or not profits are a deduction from worker wages. Both Adam Smith and Karl Marx say they are. This primacy-of-wages doctrine led Marx to develop his exploitation theory asserting that capitalists—for the sake of profit—reduce workers to subsistence living. Hence, the major source of modern blather from the many historically and economically ignorant who mouth the slogan “profits over people.”

Economist George Reisman takes this issue head on and provides a strikingly clear and revolutionary identification of profits as the original and primary form of income, disagreeing with both Smith and Marx. Reisman writes (p. 19***):

Capitalists do not create profit and subtract it from wages. On the contrary, they create wages and the other costs which are subtracted from sales revenues, and thus the capitalists reduce the proportion of sales revenues that is profit.
Profits exist prior to capitalists. Reisman cites Adam Smith’s example of poor people who collect Scotch Pebbles on the shore of Scotland, then sell them to stone cutters. All receipts, states Reisman, are profits, because the collectors have no costs. Sales revenue of the pebbles is all income, not wages as Smith contends (p. 15; Smith, p. 33).

Sole proprietors of retail stores who work the stores entirely by themselves do have costs (rent, cost of goods) and the difference between sales and costs is the their profit. When the proprietors hire helpers, they pay a wage, which further reduces their profit. This is how profit and wages come into existence, both made possible by the capitalists.

Since wages are payments made in exchange for the performance of labor, “capitalists do not impoverish wage earners, but make it possible for people to be wage earners” (p. 19, Reisman’s italics). Reisman supports this statement by quoting F. A. Hayek’s Capitalism and the Historians where Hayek writes that the so-called proletariat created by capitalism “was an additional population which was enabled to grow up by the new opportunities for employment which capitalism provided” (Hayek, p. 16, my italics).

Thus, Reisman concludes that “between wage earners and capitalist there is in fact the closest possible harmony of interests,” not exploitation (p. 21). And by extension, since workers are also customers, we can conclude that there is not a clash but the “closest possible harmony of interests” between capitalists and customers.

Adam Smith observed that the rate of profit is lower in wealthier countries (Smith, p. 159). Reisman points out that this is because a greater percentage of total national income is spent on research and development, buildings and land, parts and materials—and wages—than in poorer countries. Workers, as consequence, should lobby for a greater, not lesser, degree of capitalism. The greater the degree of capitalism, the wealthier the country, which means higher wages and standard of living for everyone (pp. 20-21).

Capitalism brings into existence not just a proletariat that did not exist before, but an entire middle class that did not exist at all before the rise of capitalism.

Far from seeking “profits over people,” capitalists put labor and customers front and center. Capitalism, as Reisman argues, is run for the sake of the masses.

How does the communist-fascist left, i.e., socialism and its variants, view the people? Socialism, says Reisman, “is run for the benefit of the ruling elite at the cost of starvation wages” (p. 55). The socialist totalitarian state is a giant monopoly akin to the post office, as Lenin envisioned, which means only one employer in the economy and no competition for labor. Thus, the incentive for the elite is to keep the citizenry—the masses—alive, barely, at minimum subsistence. The only exceptions often are for those who help maintain the elite’s power, such as the secret police and its intelligence services, the military, and perhaps star athletes, dancers, and actors who bump up the dictators’ frail egos.

Capitalists, one might say, to borrow a word from the Marxists, are in the vanguard of progress!

The elite of the communist-fascist left, in contrast, are the ones who put dachas and several million dollar chateaus over the people.


* In an earlier post, I wrote that the designation communist-fascist left “works because differences between the two systems are superficial and Marx, Engels, and Lenin considered communism and socialism to be synonyms. ‘Left’ on the political spectrum means total control of life and economy.” Thus, the word “totalitarian” is redundant when speaking of the totalitarian left, though perhaps “totalitarian” should be used interchangeably with “communist-fascist.” Both communism and fascism are consequence and goal of progressive ideology.

** For the distinction between market and political entrepreneurs, see last month’s post and Burton Folsom’s The Myth of the Robber Barons.

*** All subsequent free-standing page references are to Reisman’s 114-page monograph Marxism/Socialism, A Sociopathic Philosophy Conceived in Gross Error and Ignorance, Culminating in Economic Chaos, Enslavement, Terror, and Mass Murder: A Contribution to Its Death. This work easily could and should be used as a text or supplement in high school and college economics classes. For a fuller treatment of this issue, see Professor Reisman’s magnum opus Capitalism: A Treatise on Economics, especially pp. 473-85 and throughout chap. 11. For a summary presentation of his theory of aggregate profit, see my article “Reisman’s Net Consumption, Net Investment Theory of Aggregate Profit” in the American Journal of Economics and Sociology, July 2004 (available here).
 

Wednesday, May 12, 2021

Is Big Business Still America’s Persecuted Minority? Or Are We Talking about Work versus Robbery, Corporatist Socialism, and Fascism?

In 1961 Ayn Rand delivered a lecture titled “America’s Persecuted Minority: Big Business.” The speech was subsequently printed in her 1966 book Capitalism: The Unknown Ideal, chap. 3.

In the intervening years the notion of big business being a persecuted minority has been scoffed at by friends and foes alike. Today’s politics of social media titans raises the question once again.

The scoffers, however, seem not to have read Rand’s article, as she clearly makes a distinction between economic and political power. The former is the power of production and trade, the creation of goods and services that customers buy voluntarily. As a result of multiple exchanges offering better and cheaper products, businesses grow large and efficient without government aid or privilege. Economic power is the power of a positive reward, not coercion.

The latter is the power of a government gun—initiated coercion—and Rand in her article demonstrates its use with the (Republican enacted) nonobjective antitrust laws that coerce businesses to bow to government edicts, for example, to hand proprietary patents over to competitors (Alcoa Aluminum) or even to send executives to jail for practicing what the government required their businesses to do a few years earlier (GE, Westinghouse, and other electrical equipment producers). Political power is the power of fear and punishment.

These victims of antitrust laws are indeed minorities and they are persecuted by the laws’ irrationality.*

In his study on the origins of The State (chap. 2), sociologist Franz Oppenheimer uses the two terms, economic and political, to identify the fundamental means of satisfying our desires: work and robbery. In The Myths of the Robber Barons, historian Burton Folsom makes a distinction between market and political entrepreneurs, the former succeeding by work, by satisfying customer needs and wants through economic power, and the latter by robbery, by enjoying the political power of government pull and favors. His book gives examples of both types of entrepreneur.**

In our interventionist mixed economy of government by lobby, most businesses, especially big businesses, enjoy government-granted privileges and just as often suffer coercive punishments, which means government commands, through various laws and regulatory rules, to grant favors to some and assign harm to others. Who get what usually depends on how much money is contributed to political coffers.

As I wrote in an earlier post, we must follow (or rather find) the government intervention before evaluating businesses, especially  social media. Today’s titans enjoy not just monopolistic protections of the Federal Communications Commission, but also Section 230 of the Communications Decency Act.

Many, if not most, businesses over the years have been mixed with both economic and political power, especially since the beginning of antitrust in 1890. Social media possess a great deal of economic power because of their millions of satisfied customers whom they have worked hard to satisfy, but they also enjoy political power that makes them monopolistic in the traditional sense of monopoly as a government-granted privilege. Social media enjoy an exemption from liability that empowers them to censor at will and at the government’s bidding.

The solution to these monopolies and their monopolistic practices is not to break them up using antitrust laws, but to repeal their privileges, meaning Section 230 and ultimately the FCC act.

The correct name for current practices is not “crony” or “political” capitalism or “corporate liberalism,” but corporatism or, as it is sometimes called, corporativism (1, 2).

Like the collectivistic organic theory of society, corporatism relies on an analogy to the human body and derives its essence from guild socialism. Corporate groups in society, so the theory goes, are like organs in the body that function together for overall health and flourishing. Thus, guilds or corporate groups—labor, employers, and local governments—are the separate organs that work together using parliamentary or democratic methods to provide a well-functioning and harmonious (socialist) state. A strong central authority is the final arbiter.

Corporatism was mostly associated with Mussolini’s Fascist Italy, though as Ludwig von Mises points out (chap. 7), Italy quickly adopted the German pattern of socialism, namely nominal private property ownership with total central control and little attention to the corporate groups. Communist China and post-USSR Russia are said to be corporatist states today, because some private property and market transactions exist, along with a large number of organizations regulated in near total fashion by the  central authority.

As Mises wrote, the Italian fascists preached “corporativism as the new social panacea” by resurrecting guild socialism from the “dust-heap of discarded socialist utopias.” Such utopias, however, as in Italy always progress quickly to authoritarianism with the worst rising to the top (Hayek, chap. 10, and here).

It is still not quite correct to call the United States a corporatist state. Yes, we have many businesses, laborers and their unions, and local and state governments vying with one another for the national government’s attention and rewards. But it is not organized in the way the older corporatists would have wanted it, and the explicit goal of participants has not been to establish socialism, at least until recently. The interventionist economy for decades has been nothing more than pressure-group warfare, but interventionism, unless eliminated by establishing laissez-faire, always leads inexorably to socialism or fascism.

The other terms used to describe the United States—crony and political capitalism—are not correct because the country today is not capitalist, as in laissez-faire capitalism. And the people who use the terms, usually advocates of socialism steeped in Marxist fallacies, want to slander capitalism with the labels by supposedly exposing the exploiter capitalists as seeking nothing more than profits to ultimately establish their own dictatorship.

Gabriel Kolko (p. 3), himself not an advocate of free markets, prefers “political capitalism” because big business in the late nineteenth and early twentieth centuries sought to stabilize the alleged “inherently unstable” capitalistic competition by partnering with government to pass appropriate controlling laws and regulations. He also adds the correct observation that this view is essential to American conservatism, hence the title of his book The Triumph of Conservatism.

“Corporate liberalism” refers to large corporations as a prominent elite, cooperating with government to lead the way to establish a socially liberal agenda, though social, as opposed to classical, liberalism goes by the better name of progressivism. From about 1880–1930 early progressives were advocates of democratic socialism; their followers from the 1930s to the present are more or less explicit Marxist socialists (1, 2, 3).

Senator Josh Hawley, a conservative, has just published a book titled The Tyranny of Big Tech and uses the term “corporate liberalism” throughout to describe our current plight. He also recommends using antitrust laws to break up social media.

The most correct term, however, to describe the United States today is fascism. The fascist state may have what appears to be private property and a free market, but it is in name only, because the entire economic and social worlds are controlled and regulated by the government.***

In nearly all cases, big businesses in such a system exhibit an abundance of political power, but they must tow the party line to acquire and use such power or be punished.

Big businesses that are persecuted minorities, as Ayn Rand wrote, earned their bigness through the economic power of creating wealth and satisfying large numbers of customers, not through government aid, favors, pull, party-line towing, or privileges at the expense of competition.


* See Dominick Armentano’s Antitrust and Monopoly for a discussion of the deleterious economic effects of antitrust policy and a review of prominent cases.

** See Gabriel Kolko’s The Triumph of Conservatism for examples of early political entrepreneurs lobbying for the likes of antitrust, income tax, and regulatory agencies.

*** Fascist Italy and Nazi Germany inherited industrial economies, which gave them a veneer of capitalism. See Gunter Reimann’s The Vampire Economy.

 

Wednesday, April 14, 2021

Business Ethics, Moral Values, and the Herd Conformity of Virtue Signaling

So-called virtue signaling means showing off to the significant others of one’s group in order to maintain identity as a prominent and respected member. It is always other directed with eyes on conforming to the herd. “Sucking up” might be a vernacular way of describing the behavior. “Looking good to be good” is another way.

Genuinely virtuous behavior is an expression of one’s character and what others think of us is fundamentally irrelevant.

Ethics (or morality—the two words are synonyms), as Ayn Rand defined it, is “a code of values to guide man’s choices and actions—the choices and actions that determine the purpose and the course of his life.” The first part of this definition is the genus and includes not just Ayn Rand’s theory, but the other ethical theories that have been developed throughout history. More importantly to understand, the genus also includes the applied sciences and the many personal values we choose that are morally optional, such as taste in ice cream, choice of romantic partner and career, or the eating of red meat and drinking water out of plastic bottles.

Moral values are universal. Optional values are not, which means they do not have to be accepted and pursued by everyone.

The second part of the definition is the differentia that gives us a standard of moral value, as well as the derivative values and virtues that guide our choices and actions. A value is whatever we act to acquire and enjoy and a virtue is the action to acquire it. Moral values and virtues are broad abstractions and general actions, not concrete objects or specific actions.

Rand’s standard of moral value is human life as a being that possesses the capacity to reason. Her fundamental value, then, is reason with the corresponding virtue of rationality. Deriving from that standard, Rand identifies several other moral values, including honesty, courage, integrity, independence, productive work, and justice, to name several that are relevant for the present discussion.

The corresponding virtues derived from reason and rationality are telling the truth, acting against great odds or opposition, remaining loyal to one’s fundamental values, relying on one’s own mind to perceive reality, purposeful pursuit of a rewarding career, and judging oneself and others by conformity to moral and legal standards, including especially in business by the standard of the ability to do the job. Vices are the opposite: lying, cowardice, corruption, dependence, indolence, and unfairness. Irrationality means placing something higher than reason, such as faith or emotion.

At this point let me highlight the optional values that guide our lives. First, the applied sciences. The engineer has a code of values to guide his or her thinking and development processes of designing and making tools to improve human life. The end value may be to build a bridge; the principles of civil engineering are the guides. We normally do not call the actions of engineers moral virtues and the mistakes vices, unless dishonesty or cowardice is involved. The values and principles of action required of applied sciences, and the behavior of their practitioners, are assumed to be moral unless one has reason to think otherwise.

Our personal values also are assumed to be moral, but just as everyone does not have to be a civil engineer, or an engineer at all, not everyone has to like vanilla ice cream or even like ice cream at all. We all hold and pursue a large number of morally optional or personal values. Choice of romantic partner and career both are extremely personal and optional, but also complicated in the sense of requiring a great deal of thought, planning, and knowledge before making the choice. And both do have moral components, as Rand has discussed extensively (1, 2), but I am focusing here are the optional element.

As stated above, red meat and water in plastic bottles are not moral values and acting to acquire and use both are not vices. Someone putting a slab of red meat over your face such that you cannot breathe would be a moral issue, but then we would be talking about attempted murder!

In a free society, no one will stop you from refraining from eating red meat, if you think that is necessary for your physical health. But it is not a moral issue. Neither will anyone stop you from drinking water out of non-plastic bottles.

Individual rights mean that everyone has the moral right to choose whatever each person wants to eat and whatever container each wants to drink water out of. Preaching a gospel of “immoral” foods and containers is the moralization of concretes that I have written about before. It is rampant in today’s culture and a major source of “virtue signaling.”

It is also condescending and phony, condescending because the signalers are convinced they are right and everyone else is wrong and phony because the signalers are playing at ethics without a clue as to what ethics really is.

Leaders of the intelligentsia, however, do or should know better, especially when they are spewing communist/fascist propaganda, such as: “the United States is systemically racist,” “recent state laws are election suppression,” and the favorite of all Marxists, “capitalism puts profits over people.”*

Such signals as these are either false (the first and third) or highly questionable without further investigation (the second). And all, in contrast to true moral values and virtues, are political catchphrases used as virtue signals to intimidate any opponent into thinking he or she is immoral.**

For business leaders to cite and promote them is not just gutless compromise of the principles of individual rights and capitalism, but their actions bring up 1932 Germany (1, 2) when twenty-two business leaders urged President von Hindenburg (who some said was senile) to appoint Adolf Hitler as Chancellor.

The group that today’s business leaders are sucking up to is the communist/fascist left and they, the business leaders, apparently think they will be protected when the left finally takes over the US government. Think again, business leaders, and do your homework about what happened to business leaders in the USSR and Nazi Germany.

Business ethics does not differ from general ethics, as moral values and virtues are broad enough to cover all applied fields. Business leaders, therefore, need to practice Rand’s virtues. Justice is particularly relevant to business ethics and virtue signaling because it means judging each individual person according to the moral standards of honesty, courage, integrity, independence, and productive work and treating each person by his or her conformity to those standards. It does not mean judging one by membership in a group, class, race, or by sex or sexual orientation (i.e., social justice). Individual justice in society means abiding by the US Constitution’s Bill of Rights and treating everyone equally, regardless of group, class, race, sex, or sexual orientation.

All virtue signaling is manifestly unjust because it is a pretension to ethics that does not treat each individual fairly or equally. At root it is collectivist. To some virtue signaling may be a psychological problem, which means they want to be liked, but for the virtue-signaling leaders, especially our business leaders, it puts us on a dangerous path to dictatorship—as in one-party rule, show trials or worse, expropriation of private property, and censorship.

Are we there yet, business leaders?

You and many others in the intelligentsia have become true believers, to borrow Eric Hoffer’s words on mass movements. You seem to be seeking, in your desperate and foolish virtue signaling, to identify with the left’s holy cause (1, p. 12; 2).

Hoffer has many phrases to describe the true believer, but here is a choice one (p. 62): each individual member of the movement “must be stripped of his individual identity and distinctness . . .  by the complete assimilation of the individual into a collective body.”

It means conformity to the herd.

In the late nineteenth century an advertising client asked his agent if he had any good ideas for ads. The agent replied, “Try honesty for a change!”

Altering this advice a bit, my suggestion to you, dear business leaders, is to try a genuinely virtuous behavior for a change—especially one of honesty, courage, integrity, independence, justice, and productive work.

A virtuous character is not a signal. It is a way of life.


* The intelligentsia does far worse. Cancel culture, according to David Horowitz, is tantamount to Nazi book burning and should be called what it is. And most or all of today’s leftist leaders are bigoted racists. Their intimidation tactics are right out of the Nazi playbook. Ominous parallels? The problem with conservatives, says Horowitz, is that they want to “play patty cake with the devil.”

** Racism, as Shelby Steele has demonstrated (1, 2), effectively ended in the 1960s with desegregation. What we have now is systemic white guilt. Issues of election irregularities or fraud are factual issues that need to be thoroughly examined, not evaded. And under capitalism, profits are earned through customer satisfaction. They are not deductions from the wages of workers; wages are deductions from profits (1, 2).
 

Monday, March 08, 2021

All It Takes Is Guts

A president from the American past stated this about his previous four years:

During this course of administration, and in order to disturb it, the artillery of the press has been levelled against us, charged with whatsoever its licentiousness could devise or dare.
No, this is not a statement of our most recent former president. The words are from Thomas Jefferson’s second inaugural on March 4, 1805, in which Jefferson endorses and praises the American experiment in a free press. He continues:
The experiment is noted, to prove that, since truth and reason have maintained their ground against false opinions in league with false facts, the press, confined to truth, needs no other legal restraint; the public judgment will correct false reasonings and opinions, on a full hearing of all parties; and no other definite line can be drawn between the inestimable liberty of the press and its demoralizing licentiousness. If there be still improprieties which this rule would not restrain, its supplement must be sought in the censorship of public opinion.
“Censorship of public opinion,” does not mean government censorship. As Jefferson clarifies, it means “punishment in the public indignation.” He continues, “Truth and reason” will prevail, as “facts are piercing through the veil drawn over them.”

Jefferson was a man of the Enlightenment, so he trusted all voters to exercise their reasoning capacity to speak up against the falsehoods of a “licentious” press. Do voters today do so? And will they in the future?

Edmund Burke, another man of the Enlightenment, supposedly said, “The only thing necessary for the triumph of evil is for good men to do nothing.” These words, though, do not appear in his writings. Ayn Rand, however, did write that evil is impotent and succeeds only from the sanction of its victims, that is, the victims’ willingness, due to ignorance or choice, to suffer silently, for example, through today’s covid totalitarianism.

Our culture’s intelligentsia, which includes the corrupt press, has eagerly promoted, and continues to promote, this total control of our personal and professional lives.

The solution, as it is with any bully, is to stand up to the communist-fascist left that is attempting to destroy civilization. “Stand up” means to speak out and write against the Goebbelsian propaganda (1, 2), to name names and never back down, especially if and when the “cancel culture” comes after you. This means, as I wrote in a previous post, no compromise of principle, no collaboration with the left, no concessions to them.

“All it takes is guts,” said Walter Williams in the title of his 1987 book of newspaper columns. “I have no shame in admitting my uncompromising bias for the sanctity of personal freedom,” he said in his preface, “and freely admit that as economist qua columnist I try to sell Americans on the moral superiority of individual freedom” (second emphasis added).

Conservative radio show host Rush Limbaugh displayed a similar intestinal fortitude with many courageous examples of standing up to the cancel crowd. Normally, Rush ignored whatever the intelligentsia, especially the “drive-by” media as he called them, threw his way. The following incident, however, required a major offensive.

Rush’s primary rule, according to his spokesman and strategist, Brian Glicklich, was “no faux apologies for fake transgressions.” A letter signed by 40-plus Democratic senators, sent to Rush’s syndicator, demanded an apology from Rush for a discussion he had with a listener. The subject of the discussion was “phony soldiers,” fraudulent people who claimed to have served heroically in the military, but did not. The letter claimed that Rush was denigrating these “heroes.”

Not only did Rush not apologize, nor would the apology have been accepted by the Democrats (as Glicklich points out), Rush sold the letter for $2.1 million, matching the sum from his own checkbook, and donated all of it “to scholarships for the children of fallen service members and police officers.”

Rush’s sponsors were then viciously attacked in the usual leftist manner of what looked like thousands of people sending thousands of emails threatening to stop patronizing the sponsors’ businesses. Rush did not just not back down; he provided research showing his sponsors “that 80% or more of all online boycott messages came from a group of people so small as to ‘fit into the elevator we used to come to your office for this meeting.’”

Finally, Rush realized that the handful of aggressors against his sponsors preferred to remain anonymous and unaccountable, so he named them on his website. Like all bullies, they ran.

Not apologizing, compromising, or backing down, Rush instead went on the offensive. “The Limbaugh doctrine against the suppression of speech,” as Glicklich put it, “was to offer more speech.” Rush often aggressively “fished for liberals’ outrage” and tweaked it, doing so with glee, or rather, in his words, “with half his brain tied behind his back, just to keep it fair.”

Rush Limbaugh, as did our previous president, taught many of us how to have guts and to display that intestinal fortitude.

Alan Dershowitz, a moderate Democrat, is an uncompromising First Amendment lawyer who, as victim of the cancel culture himself, has courageously and aggressively stood his ground. When falsely accused of sexual misconduct, he offered mounds of evidence in his defense, filed a defamation lawsuit, and wrote the book Guilt by Accusation.

More recently, Dershowitz wrote Cancel Culture: the Latest Attack on Free Speech and Due Process, in which he exposes the Stalinist and McCarthyite origins of such suppression of free speech. He also produced a video podcast “Cancel Culture Must Be Canceled.”

Dershowitz is very much aware of the need for more people to speak up. In an earlier video podcast he asked “Where are the libertarian Democrats?” The two words together likely mean Bill-of-Rights moderate Democrats, often called “liberals,” who have been far too silent over the past several years.*

In our postmodern age of the “Un-Enlightenment,” an age of untruth and unreason, will there be enough Jeffersonians to courageously counter the Goebbelsian propaganda that is spewed ceaselessly and ubiquitously?

As Rush said, to counter the suppression of free speech, more speech is needed—spoken and written without compromise or concession.

It just takes guts!


* Moderate Democrats, such as Dershowitz, are mixed-economy-Democrats who see some role for the government to regulate business. Far left or leftist Democrats today want the government to control every aspect of our lives, social and economic, which makes them totalitarians, whether of the communist, socialist, or fascist variety. The usual meaning of libertarian is classical liberalism or laissez-faire capitalism.
 

Friday, February 12, 2021

Romance, Fantasy, Arrogance, Blindness: An Inside Look at the Communist New Left

David Horowitz’s 1997 autobiography Radical Son: A Generational Odyssey has just come out in a second edition. The book provides many insights not just into the thinking of both his Old Left parents and Horowitz himself and his New Left colleagues, but also into who and what is influencing us today. Here is Horowitz’s summary of the communist dream:

Marxism was about a new creation that would begin with a “new man” and “new woman.” It was about remaking the world. About going back to Eden and beginning again. It was the romance to end all romances (p. 112).
Romance, fantasy, arrogance, blindness—these are words used by Horowitz to describe the delusions he and his comrades suffered when worshiping the “revolutionary fantasy” of communism during the 1960s and ‘70s. “Like all radicals,” says Horowitz, “we were intoxicated by our own virtue” (p. 299)

Horowitz was a founding member of the New Left while a graduate student from 1960-62 at the University of California, Berkeley. For many years he was an editor of the New Left’s flagship Ramparts magazine* and as a result knew all the players in the New Left. By the 1980s he developed “second thoughts,” as he calls his move away from the Left. Today he is an outspoken conservative.

Horowitz’s parents were unapologetic members of the American Communist Party, that is, until 1956 when Nikita Khrushchev’s secret speech about the crimes of Stalin leaked to the West.** Up to that point, Party members had blinded themselves to the rumors of Stalin’s purges, show trials, and executions. Horowitz’s parents, after Khruschev’s revelations, left the Party, thereafter calling themselves Progressives. About two-thirds of the Party’s members also left, losing decades old friendships, as Horowitz points out, and becoming “non-existent” to the remaining members.

The New Left, says Horowitz, was a movement of Marxist revolutionaries founded to save communism from Stalin. Fidel Castro was one of their heroes who was doing communism “the right way.” John F. Kennedy, invader of Cuba and agent of the “imperialistic” ruling class, was not a hero, though a new leftist years later rewrote history to claim they all loved JFK.*** The New Left throughout the 1960s was opposed to the Vietnam war and viewed the Black Panther Party as “vanguard of the revolution” and “America’s Vietcong.”

The new leftist Students for a Democratic Society (SDS), spearheaded by Tom Hayden, came into prominence in the 1960s, eventually morphing in the ‘70s into the Weather Underground. A founding SDS statement coined the words “participatory democracy” as code for “soviet democracy.” In my undergraduate days, the former was promoted as a fuzzy form of direct democracy. In fact, a soviet was an elected, usually local, organization in the USSR, thus making communism another form of democracy! SDS’ers believed in and meant communism.

Hayden died in 2016 but in his SDS days was instrumental in causing the Newark riots of 1967 and organized the violent protests at the 1968 Democratic Party convention in Chicago (pp. 184-88). The 1968 riots, according to Horowitz, are what succeeded in allowing the Left to take over the Democratic Party, which it today still controls. In Hayden’s post-SDS life he became a California state politician and husband of actress Jane Fonda.

The Weather Underground made revolution explicit with many bombings of banks and government buildings, including the US Capitol in 1971 and the Pentagon in 1972. Bill Ayers and Bernadine Dohrn were two early leaders. Both are now retired, Ayers from the University of Illinois at Chicago and Dohrn from Northwestern University Law School. Ayers, Horowitz said in a recent article, ghost wrote Barack Obama’s autobiography and “mentored the insurrectionary founders of Black Lives Matter.”

Though Marx thought capitalism would eventually collapse on its own, later revolutionaries, starting probably with Lenin, sought to help the collapse along. Hence, the remorseless bombings of the Weather Underground and today’s deliberately blind eyes to the ravaging of civilization by such violent organizations as Antifa and Black Lives Matter.

The Black Panther Party in the 1960s was founded by street thugs, led by Huey Newton, Bobby Seale, and Eldridge Cleaver, but to the new leftists, including Horowitz, Panthers were the oppressed minority who dared to rise up and fight (in some cases with guns) with an “in your face” activism.****

Horowitz in the early ‘70s collaborated with the Panthers to found a school in the slums of Oakland, California, and recommended a white woman, Betty Van Patter, who had worked for Ramparts magazine, to do the school’s books. Unfortunate for Van Patter, she asked too many questions about the Panther’s finances and ended up in San Francisco Bay. The Oakland District Attorney's Office could not prove who committed the murder, but suspected a Panther named Flores Forbes.

Van Patter’s death in 1974, along with suspicions Horowitz was beginning to have about the Panthers, was the turning point for him to leave the Left. He had been cautious in conversations with Newton, but did not suspect the worst. Van Patter’s daughter at the time, as well as many years later, could not believe at the time and years later that such an “idealistic” group of people would do such a thing.

Horowitz in the new Preface to Radical Son suspects that Forbes was the murderer, or knows who committed the crime, and that Newton likely ordered it. An internal group of enforcers to torture and murder anyone who did not toe the Panther Party line are believed to be guilty of at least a dozen murders. The enforcers were called, interestingly for today’s times, The Squad. Forbes was its head.

Today Flores Forbes is Associate Vice President of Strategic Planning and Program Implementation at Columbia University.

After much questioning about communism and socialism, especially about how the “noble ideal” in practice always seems to end up with millions of dead people, Horowitz concluded that the ideal itself was flawed. The aim of communism and socialism was to abolish private property and make everyone equal. But, Horowitz identified:
The abolition of property was really the abolition of private association and civil society, and of the bourgeois rights they underpinned. Socialist unity could only be achieved as a totalitarian solution (p. 308).
And everyone is not equal in nature. Who is to decide how everyone is to be made equal, asks Horowitz? A “ruling caste,” he concludes, seems always to arise.

Horowitz near the end of his book even cites Austrian economists F. A. Hayek and Ludwig von Mises who demonstrated the impossibility of socialism ever working, especially in the determination of prices independently of the market.

To use Hayek’s words, though Horowitz does not, the leaders of the “noble ideal” have always suffered a fatal conceit to think they had a god’s-eye view and a god’s omniscience to plan an entire social and economic system.

The “revolutionary fantasy” of socialism does not work. It only destroys.


* When Ramparts closed in 1975, several editors, though not Horowitz, went on to found Mother Jones.

** Horowitz’s father in 1935 on a trip for the Party wrote to his soon-to-be wife about the people of Colorado. He said that he felt like he was in a foreign land and that “most of us [Party members] aren’t really ‘patriotic,’ I mean at bottom deeply fond of the country and the people” (pp. 30-31).

*** “We were Marxist revolutionaries when we began the New Left and would have scorned anyone who supported Kennedy in the way [Todd] Gitlin suggests” (p. 115, Horowitz’s emphasis). Todd Gitlin today is professor of journalism and sociology and head of the doctoral program in communications at Columbia University.

**** The Left’s association with African Americans goes back at least to the 1930s. See this article about African American Manning Johnson who from 1930-39 was a member of the American Communist Party but left it because he saw that the communists “were using black Americans as pawns in their hope that a ‘bloody racial conflict would split America.’” The notion of  “systemic racism” is a concept of the Left and goes back to that time.
 

Sunday, January 17, 2021

"They Just Don’t Care"—Rationalization and the Need to Look Good

“They” in the title of this post refers to our culture’s intelligentsia. This elite includes mainstream media, teachers and professors who control today’s education system, certain entertainers and business leaders who think they are qualified to speak out about politics, and, of course, or especially, politicians and the unelected deep staters who have no second thoughts about issuing totalitarian edicts and imposing them on us.

Those edicts are currently condemning small businesses to bankruptcy and low-wage hourly workers, especially women, to unemployment, poverty, depression and thoughts of suicide, which in some cases have been executed successfully.

Why don’t they, the intelligentsia, care? The facts and science (1, 2) about our past ten months of coronavirus madness say that the bug is at worst a bad flu.*

The answer, whether the non-caring people are honest or not and depending on who we are talking about, is that they think they are doing good, namely, that they are moral and that anyone who criticizes them is not being fair and are themselves immoral.

This is the power of rationalization cloaked as ethics. In today’s culture, Nazi-style and Chinese Communist Party style intimidation, through political correctness and social credit scores, also cloaked as ethics, are used to silence dissent.

It’s for the good of impoverished and victimized groups or collectives, the intelligentsia say. Or: for the health of everyone you may come in contact with.

So don’t be selfish!

Altruism, the doctrine of self-sacrifice, is the foundation of all variants of socialism and dictatorship. It does not mean kindness or gentleness or giving to charity. It means giving up what you want and deserve. Never acting from “inclination,” as Immanuel Kant said.

The intelligentsia, because they are the self-proclaimed experts and preachers on altruism, which means “looking good” at being moral, are the ones who issue demands for us to obey.**

It’s our duty, after all, to sacrifice ourselves to their edicts.

Criminals (and I include dictators here) rationalize nearly everything they do. “He deserved it,” says the murderer and “She really wanted me,” says the rapist. (See Inside the Criminal Mind, esp. chap. 6 and 7.) Ideologies and systems of ethics can and have become rationalizations for some of the worst behavior in history. (See Eric Hoffer’s The True Believer.)

If you label your enemies as vermin or animals (or selfish exploiters or white supremacists), you can justify most any kind of punishment, including torture and death, and not likely feel remorse. You may even feel proud of yourself for having done “something good!” To the outside observer, it looks like you don’t care. And you don’t—about the person you just tortured or murdered.

The intelligentsia today are not quite as bad as torturers and murders, though some have actually expressed such desires about certain people and have used social media to express a need to “cleanse” the supporters of a certain politician. The word “cleanse” was apparently quickly replaced with less harsh language, but if our cultural tide does not turn, the elites will continue to advocate more serious punishments.

Federal prosecutors (1, 2, 3) are already proud of drumming up false charges and sending their bankrupted victims to solitary confinement.

Altruism, however, is not a valid system of ethics. As Ayn Rand said, it is a morality of death. It is a system of sacrifices, which means someone—the elites—must collect the sacrifices. How do we be good? Sacrifice ourselves.

Because this doctrine has not been challenged by many people worldwide, citizens of the world today are gladly and willingly forfeiting their lives and livelihood, their standard of living, and even their health for the sake of being able to say that they have been obediently moral.

No, they have been suicidal, both figuratively and literally.

Altruism is the opposite of what ethics is, namely living up to the requirements of human life, consonant with the survival of a being that possess the capacity to reason. Those requirements are all selfish.

Breathing and eating are selfish. Individual rights and private property ownership are selfish. Capitalism, by encouraging the cooperation of everyone under a division of labor, is the system of rational egoism that benefits all individual lives. Capitalism and rational egoism do not ask for obedience or sacrifices. They ask for trade between productive equals. And we are all equal under capitalism—before the law, the objective, not-corrupted-by-postmodernism law.

Pretension to ethics through rationalization is rampant today, made possible by the updated Marxism of postmodernism’s abandonment of reason, logic, objectivity and objective reality, and, in general, Enlightenment values. Lies, hypocrisy, inconsistency? Doesn’t matter, say the postmoderns. They have no intellectual arguments, just “narratives,” and they equate words to physical force and preach that there is no such thing as free speech.

But narratives are fictions, as I have written before. How do you respond to such condescending, cynical skeptics who are ruining our lives? You can’t argue with them. If you try, they will change the meanings of your words or, more likely, just hurl Goebbelsian smears (1, 2) at you and say you are the one doing everything they have already done or are currently doing, and that you are the one being Goebbelsian.

The ancient Greeks knew what follows from skepticism as a philosophy: dictatorship. You have your fiction. I have mine. How do we decide who is right? We have to have a “strong public sword” to keep the peace, as skeptic Thomas Hobbes said in the seventeenth century.

The solution is to find people who are not leaders of the corrupt intelligentsia, who have not totally swallowed the postmodern nonsense, and enlighten them.

And vote. The American sense of life is the Enlightenment sense of life and is still strong, at least in half of the country, probably more than half.

See Related posts: “The Dangerous Admiration of BS” (2007),  “Facts Don’t Matter, Or: The Art of BS” (2013), and “Why Don’t Facts Matter?”(2016).


* For many historical examples of the madness of crowd psychology, see Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds.

** “Looking good at being good” is not always an issue of ethics; it may be an issue of competence. A cursory search of Google Scholar reveals an interesting listing of academic papers about colleges and businesses preferring to look good—rather than be good—at educating or serving customers, though these competencies in education and business can also be infused with a dose of altruism. In a meeting years ago at my university, the dean held up an email from a dean at another school. The content, according to my dean, essentially said, “You scratch my back, I’ll scratch yours,” meaning they should praise each other’s school in a survey of college rankings! Such polls are mostly popularity contests and are relatively harmless when compared to the totalitarian edicts mentioned above.
 

Friday, December 11, 2020

Epistemology of the Models—Climate, Economic, and Epidemiological

How do we know the future? Since we are not omniscient, we can’t know it with certainty. National Oceanic and Atmospheric Administration (NOAA) SciJinks tells us that five-day weather forecasts are about 90 percent accurate, forecasts for seven days decrease to 80 percent, and for ten days 50 percent.

We do nevertheless predict the future all the time. We predict what our spouses, children, and dogs will do tomorrow and the next day based on what we know about them, that is, what we have learned cumulatively about them over the years. Businesses make predictions of sales based on what they know about the current market, their customers and prospects. And the National Aeronautics and Space Administration (NASA) makes predictions about human survival in outer space based on the current state of science, test runs with monkeys, and a lot of trial and error.

This, in essence, is forecasting: extrapolation from past knowledge into the near future. The emphasis is on “near” because, as with weather forecasts, the further from the present we get, the less accurate the predictions.

Dressing forecasts up in mathematics or computer algorithms does not make them more accurate if their starting knowledge is dubious. It can and does fool many people into thinking that profound science is being performed!*

Meteorologist Anthony Watts identifies the problem with the so-called scientific or quantitative climate forecasts: “The flaws in existing climate models are equivalent to saying that every grain of sand on the beach is exactly the same size, shape, and composition, or that snowflakes aren’t unique, but all are exactly the same.”

In other words, aside from the horrendous politicization of climate science, the modelers ignore, or do not even know about, the significance of Aristotle’s law of identity and its relation to causality. Aristotle’s concept holds that the actions or behavior of an entity are determined by the entity’s nature, that is, its identity.

If grains of sand differ from one another, and if individual snowflakes are not quantitatively the same, those differences matter when developing mathematical formulas to describe reality. If not taken into account, predictions of the behavior of sand and snowflakes in the future will fail.

The assumptions of modelers do not accurately capture the reality of the entities they are studying.

Ayn Rand points out that today’s abandonment of any shred of Aristotelian epistemology has led in such sciences as psychology and economics to “the resurgence of a primitive mysticism.” Psychology, for example, attempts “to study human behavior without reference to the fact that man is conscious” and political economy, or economics, attempts “to study and to devise social systems without reference to man” (emphasis in original).

The nature of man, that is, the identity of human beings, is that humans possess a consciousness that has the capacity to reason. Key word is “capacity,” meaning humans possess free will and must choose to exercise that capacity. Thus, our choices can and do thwart all the “elegant” equations devised by psychologists and economists. Indeed, free will, and the failure to acknowledge it, explains the failure to replicate many studies in the so-called social sciences.

In economics, the “model” of society described by the doctrine of pure and perfect competition relies on self-evidently false assumptions: product homogeneity, no barriers to entry, “perfect” information, infinite numbers of buyers and sellers, and a stilted and deterministic concept of economic rationality. These assumptions are so arbitrary and removed from reality that they would be laughable were the model not the basis of our antitrust laws for over one hundred years.

The use of simultaneous equations to predict economic equilibrium, or the use of any other equations in the human sciences, is obfuscation.

Novelist Sarah Hoyt makes a similar point about the epidemiological models that attempt to predict how many deaths will result from a particular virus, such as COVID-19. Hoyt uses a common joke from physicists to parody the modelers. They, in effect, she says, have assumed “a spherical cow of uniform density in a frictionless vacuum.” The missing variable in the models, she continues, is culture. Because people constitute culture, their differences will be reflected in their reactions to a virus.

To elaborate, the modelers’ assumption of a particular “R naught” (R0 or r-sub-zero) at, say, 3.2 means each infected person will infect an average of 3.2 people.** Hoyt’s point is that people have choices as to how to behave, which will affect that number. Throw in other variables that are just as oh-so-(but-not-really) precise, including the nearly entirely ignored variable of prior immunity, and major embarrassing—or it should be embarrassing—error results.

A side note on medical studies, especially the alleged gold standard of double-blind controlled experiments: human beings are the sample and they are all different—in height, weight and metabolism, not to mention their choices. That can make a difference in how much “gold” comes out of these studies. How sophisticated are the ones used by NASA? Sometimes scientists on the ground ask the astronauts, “Which worked better, X or Y?” The astronaut replies, “X worked.” NASA then says, “We go with X.” That’s trial-and-error, the same technique medical doctors use when they prescribe off-label drugs!

Bottom line to my critiques of these models is that they all ignore causality.

So why is weather forecasting so much more accurate—even at 50 percent over ten days—than those of changes in climate? “Modern weather forecasting,” says one writer, “is based on the fact that gases of the atmosphere follow a number of physical principles.” Universal principles of physics, in other words, have identified the nature of relevant gases and their respective actions and consequently have allowed the development of equations that can accurately predict changes in the weather.

Predictions of what goes on in the climate, especially over decades and centuries, is not close to such accuracy. Indeed, former NASA engineer Roy Spencer says clouds, not carbon dioxide, the variable that alarmists preach as the fundamental cause of climate change, need to be researched extensively before drawing any conclusions.


* Quantitative and computer-based models are to be distinguished from scale models that test how something might actually work when at full size. A dramatic example was the radio controlled Boeing 747 with space shuttle attached, built at 1/40 scale by NASA engineer John Kiker in the 1970s, to test the feasibility of putting a real space shuttle on top of a real Boeing 747!

** When I first read about the r-naught, I immediately thought of word-of-mouth communication in marketing. How many people do we tell if we like or dislike a product? Studies vary, but the consensus says we tell more people if we dislike the product. Moral of the comparison to r-naught? People are involved in both numbers and affect its accuracy. Modelers, or rather, let’s say more generally predictors, must take that variable and the identities of the people involved into account.