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Jews As the Enemies of the Enemies of Liberty – Article by Steven Horwitz

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Categories: Culture, Economics, Tags: , , , , , , , , , , , , , , , , , , ,

The New Renaissance HatSteven Horwitz
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Anti-Semitism, it’s often said, is the oldest prejudice. The hatred of Jews has waxed and waned over the centuries, but appears to be back with something of a vengeance over the last few years, and especially the last few months.

For example, on Monday, February 27, over two dozen Jewish institutions across the country received bomb threats by anonymous phone calls. These included Jewish Community Centers, synagogues, retirement homes, day care centers, and Jewish educational institutions. These threats are part of a pattern of such threats, including multiple cemetery desecrations, that has been ongoing over the last few months. There have been 100 such threats to Jewish institutions just since the beginning of 2017.

Every time such a threat is called in, these institutions have to clear the building to determine if it is just a hoax. This means rounding up children, infants, the elderly, the infirm, and the developmentally disabled, getting them out of the building and, often, out in the cold, for the hour or two it takes to confirm all is clear. Although, thankfully, these have all turned out to be hoaxes, they still are taking a real toll on the Jewish community and the non-Jews who make use of these institutions. They are, I would argue, a form of terrorism.

The Why of Anti-Semitism

There has been much debate over why these threats have increased in recent months, and it seems plausible that the increased brazenness of the “politically incorrect,” including the rise of the alt-right, in the wake of the Trump campaign is probably one key factor. But anti-Semitism is not solely a problem on the Right. The political Left has had its own history of hatred for Jews, manifested in the present by the increased anti-Semitism of the radical Left in the context of criticism of Israel, especially through the Boycott, Divestments, and Sanctions (BDS) movement.

The sources of anti-Semitism on both Right and Left are complicated, but one element on both sides is that Jews have historically been associated with important liberal ideas such as capitalism, entrepreneurship, cosmopolitanism, and free migration. These institutions have enabled massive social, cultural, and economic change, empowering the previously powerless all over the world, and threatening the old order.

The enemies of liberalism have problems with all of these, though the Right and Left differ on which bothers them the most. But for both, Jews can be easily seen as the enemies of those who find deep flaws with the classical liberal social order. When Jews are being threatened, it is usually a good sign that the foundations of liberalism are as well.

Jewish Anti-Capitalism

One point to note up front is that Jews themselves have a history of opposition to classical liberalism. Jewish intellectuals have had a long-standing attraction to socialism, starting of course with Marx himself. In particular, a number of the architects of the Russian Revolution were Jews or of Jewish heritage.

I raise this because I am not arguing that Jews were somehow reliably classically liberal over the last few centuries. And the fact that a good number of Jews were socialist, or that a good number of socialists were Jews, certainly doesn’t justify anti-Semitism by critics of socialism.

I do think that part of the attraction of socialism to Jews was its universalist aspiration in the form of the trans-national cosmopolitan vision of classical socialism along with its desire to “heal the world” and its strong ethic of concern for the least well-off. Those aspirations were shared by 19th-century classical liberals and were also part of Jewish practice. This universalism made Jews the target of the critics of classical liberalism from the Right, as well as the right-wing critics of socialism.

Jewish Pro-Capitalism

The association of Jews with capitalism, trade, and entrepreneurship is well known. The negative stereotypes of acquisitiveness, materialism, and selfishness that have long been part of anti-Semitism grew out of the truth that Jews were more likely to be traders and financiers than were other groups. Part of this was that as a nomadic people, Jews invested in their human capital rather than the physical capital they would have had to schlep around while getting kicked out of country after country.

(This might also explain why Jews have also been disproportionately entertainers and intellectuals. The skills for telling jokes, writing stories, making music, or working in the realm of ideas are ones that don’t require much in the way of physical capital in order to be successful.)

Jews were also often middlemen as a result of their nomadic existence and familiarity with so many parts of the world. Middlemen have always been suspect to the economically ignorant as far back as Aristotle, as they appear to profit by creating nothing tangible. This is particularly true when the middlemen are in financial markets, where they are not even trading something physical.

It’s no surprise, therefore, that hatred of capitalism has been accompanied by hatred of the Jews

Right-wing anti-Semitism, however, often draws upon these capitalist tropes as part of its hatred. But in this context, Jews are not so much seen as representative of capitalist exploitation that can be ended by socialism, but rather as an example of people who place love of money and their universalist aspirations above the love of their country and its citizens.

German anti-Semitism in the 20th century had roots in the argument that Jews had been “war profiteers” in World War I and had benefitted from the economic destruction that characterized the Weimar Republic period leading up to Hitler’s ascension to power. The Nazis, and other fascist movements, saw the Jews as the sort of rootless cosmopolitans who were unable to grasp the importance of blood and soil.

The modern version of this point, and one that is also found on the Left, is the “dual loyalty” charge laid upon pro-Israel Jews: they are beholden to Israel in ways that cause them to work against the interests of the United States.

The Why of Nationalism

One way to see the “national socialism” of various fascist movements is that they objected not to socialism per se, but to socialism’s attempt to put class ahead of race or ethnicity or nationality. To the fascists, German or Italian workers shared much more with German or Italian capitalists than they did with Russian or American workers. Marxian socialism drew the wrong battle lines.

And so it is today, as “economic nationalism” is on the rise globally and Jews have again become the most obvious target for an invigorated Right. Jews have always been the symbol of the cosmopolitan, the migrant, and the “rootless” trader. If you reject market-driven globalization, whether because you dislike markets or because you are a nationalist, you are going to have reasons to see Jews as symbols of what you reject. That opposition to immigration and global trade, and the market system that is at the root of both, would go hand-in-hand with anti-Semitism is hardly surprising.

The economic nationalism of Trump and a variety of European leaders is not inherently anti-Semitic, nor does it require that the leaders of such movements be anti-Semites, but the arguments of economic nationalism can easily empower the anti-Semitism of both the Right and Left. The leaders build in plausible deniability, knowing full well the nature of the forces they are unleashing but in ways that avoid direct responsibility.

How could they not know? We have centuries of experience to draw on, back to the ancient world through the Middle Ages all the way to the ghastly slaughter of the 20th century during which anti-Semitism nearly destroyed the whole of Europe itself. The costs have been unspeakable, and hence the vow to never forget. And yet, despite this history, the tendency to forget remains. To remember would require that we think more clearly about ideology and philosophy, human rights and dignity. Many people do not want to do that. It remains easier to scapegoat than to remember.

Admittedly, we liberals have a special grudge against anti-Semitism. It broke up the greatest intellectual society of the 20th century, shattering Viennese intellectual life, flinging even Ludwig von Mises out of his home and into the abyss. His books were banned, and those of many others too. He and so many fled for their lives but bravely rebuilt them in the new world that offered protection.

A Warning Sign

It has been said that Jews are the canaries in the coal mine of a liberal society: when they are under threat, it is a warning sign. The ongoing and increasing threats to Jewish communities here in the US, as well as similar trends across Europe, should have all of us worried. A world where Jews sing out in joy together and are unafraid to fly free is one far more safe from tyranny than one in which we Jews worry about dying in our own cages, as many of us are doing as the threats to our institutions have become more frequent and more brazen in recent months.

Watch how a society treats Jews and you’ll have an indicator of its degree of openness and respect for liberty. When Jews are being threatened, so are the deepest of our liberal values. The poisonous air from coal mining that killed canaries was invisible. The threats to Jews and to liberalism are not. Citizens of liberal societies dismiss or downplay those threats at our own peril.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. He is spending the 2016-17 academic year as a Visiting Scholar at the John H. Schnatter Institute for Entrepreneurship and Free Enterprise at Ball State University.

He is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

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A Plan to Make Me Great Again – Article by Jeffrey Tucker

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Categories: Economics, Politics, Tags: , , , , , , , , , ,

The New Renaissance HatJeffrey Tucker
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I was out shopping for a sweater this weekend and I ran into Donald Trump, who told me that I should stop outsourcing my job.

“You should be knitting your own sweaters.”

I explained that I’m not very good at knitting. I have other things to do, in any case. This whole idea strikes me as a huge waste of time. I just can’t see myself sitting at home doing knitting. It’s true that this would give me a job, but it is not a job I want, especially since someone else wants to do it for me.

But he strongly disagreed, explaining that the problem with this country is that we keep taking away our own jobs and keep giving them to other people, who then get the money. This is a bad thing. This is why we are all suffering so much.

I persisted with objections, so he proposed a deal. If I continue to outsource my job, I will have to pay him a 35% tax, which means that if I spend $50 on a sweater, I will need to send him $17.50. That’s a bummer, we both agreed.

Instead, he said, if I take up sweater knitting, he will reduce my income tax rate to a flat 15%, plus exempt my sweater-making from all existing regulations. I would be free to make any sweater I want. The catch is that I have to knit sweaters, because doing that will make me great.

“Just think of it,” he said, “Jeffrey Tucker is open for business!”

In some ways, this sounds pretty sweet. A bit goofy but OK. It’s awkward but I’ll take up knitting on nights and weekends, producing at least one sweater per month. I will continue to do this in order to earn the promised benefit.

Also, I’ll stop buying sweaters at the store and thus end my addiction to outsourcing my production. It’s true that I have given up a huge amount of my freedom over how I spend my time and use my resources (I have to buy all those yarns and needles), but, on the plus side, I avoid a punishing penalty, pay lower taxes, and obey fewer regulations.

The deal doesn’t strike me as very efficient, but, as Trump said, this focus on efficiency over greatness is precisely what has gone wrong in this country.

Sometimes I wonder why his version of greatness should prevail over mine, but, hey, he is the President.

One Month Later

I finally finished my first sweater, and I’m a bit behind on other things. I gave up my job driving Uber. I stopped selling stuff on eBay. I was doing volunteer work for a local charity and I had to give that up too. But at least now I have a sweater. Maybe I can make money at this after all.

I tried to sell it but I couldn’t find any buyers. It turns out that everyone else who needed sweaters had made a similar deal. They too had been persuaded to become great by knitting their own sweaters. We had all become sweater-self-sufficient.

I hope they aren’t feeling as poor as I feel now.

I gradually came to realize something. If you cooperate with others, share the work, find out what you do best, trade with others, and make your own decisions about what you want to insource versus outsource, you can eventually find the best strategy for using your time and resources well.

As Adam Smith proved so long ago, a key to prosperity is the expansion of the division of labor, that is, finding ways to benefit from the talents of others wherever they happen to be. I can only do this if I am truly free to buy and sell based on my own evaluation of what benefits me the most. And under this system, what benefits me also happens to benefit everyone.

This system, which we can call free trade, has the added benefit of creating a kind of community feeling. Peace. Prosperity. There is something great about that after all.

Jeffrey Tucker


Jeffrey Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email.

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

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Why Was Coffee Drinking Once Scandalous? – Article by Jeffrey A. Tucker

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Categories: Culture, Economics, History, Tags: , , , , , , , , , , , ,

The New Renaissance Hat
Jeffrey Tucker
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In 18th-century Europe, many products and services reached a newly emergent middle class for the first time in human history. The capitalist age was maturing, and that meant that average people had money for the first time and lots of choices on how to spend it. One of the new products they could buy was coffee. With that came a great deal of social suspicion and even dread.

None other than Johann Sebastian Bach satirized the puritanical fear of coffee in his delightful and witty “Coffee Cantata.” It was one of the few times he ever tried his hand at pure pop entertainment. Of course he succeeded brilliantly; he was Bach after all!

The “Coffee Cantata” tells the story of a daughter who scandalized her father due to her devotion to coffee. She couldn’t stop singing about how wonderful it is, while her father corrected her constantly.

“You naughty child, you wild girl, ah!” the father yells at his daughter. “When will I achieve my goal: get rid of the coffee for my sake!”

“Father sir, but do not be so harsh!” she responds. “If I couldn’t, three times a day, be allowed to drink my little cup of coffee, in my anguish I will turn into a shriveled-up roast goat.”

She happily agrees to do everything he says in every area of life except one: she will not give up coffee.

And then follows a beautiful tribute to coffee: “How sweet coffee tastes, more delicious than a thousand kisses, milder than muscatel wine. Coffee, I have to have coffee, and, if someone wants to pamper me, ah, then bring me coffee as a gift!”

The father threatens her: “If you don’t give up coffee for me, you won’t go to any wedding parties, or even go out for walks.”

She still refuses.

Then the daughter plays a little game. She has a husband in mind and extracts from him a promise that if she marries him, he must allow her to drink coffee. He agrees. Then she goes to her father, who opposes the marriage, and makes a deal: if she is permitted to marry him, she will give up coffee. The father is delighted, and agrees.

Thus does the daughter gain a new husband, and, much more importantly, a permanent right to drink coffee whenever she wants!

What was this fear of coffee? Why was this such a big deal? It does have some narcotic properties to it, as we all know so well. It can give you a delightful lift.

But that alone does not account for the early opprobrium with which coffee-drinking, particularly for young girls, was greeted. For a fuller account, we need to understand something larger and more socially transformative: the advent of the coffee house itself.

The coffee house was one of the earliest public institutions, operating on a purely commercial basis, that brought a wide variety of social classes, not to mention a mixture between men and women, in a market-based social setting. In the 18th century, coffee houses spread all over Europe and the UK, attracting young people who would sit and drink together and discuss politics, religion, and business, and exchange any manner of ideas.

What the father in the Cantata is actually objecting to is not coffee as such but unapproved, unchaperoned social wanderings.

The Loss of Control

This was a huge departure from the tradition that entitled parents and other social authorities, including governments, to determine what kind of associations their children would have. Coffee houses introduced a kind of anarchy to the social structure, and introduced new risks of randomized contact with ideas and people that parents could no longer control. Coffee represented freedom itself – the freedom to mix, mingle, and consume what one wanted.

Indeed, coffee houses became a great source of public controversy. In England, in the 17th Century, Charles II tried to ban them all on grounds that they were “places where the disaffected met, and spread scandalous reports concerning the conduct of His Majesty and his Ministers.” Even a century later, women were banned from attending them, and this was true in France as well. Germany had more liberal laws concerning women and coffee but public suspicion was still high, as the “Coffee Cantata” suggests.

houghton_ec65a100674w_-_womens_petition_against_coffee

Women who were banned from coffee houses developed a very clever response. In the famous “Women’s Petition Against Coffee” of 1674, women said that coffee was responsible for the “enfeeblement” of men. Historians say the campaign contributed to the gender integration of coffee houses.

We see, then, that the commercial availability of coffee actually contributed to the advance of women’s rights!

Looking back at the astonishing success of Starbucks in our own time, it doesn’t seem surprising. They too serve as gathering spots, social mixers, places of business, and centers of conversation and ideas. We are more accustomed to it now than centuries ago, and yet even today, how much political controversy is engendered by access to products and services of which social authorities disapprove?

War on pot anyone?

As the “Coffee Cantata” concludes:

Cats do not give up mousing,
girls remain coffee-sisters.
The mother adores her coffee-habit,
and grandma also drank it,
so who can blame the daughters!

 

Jeffrey Tucker


Jeffrey Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email

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

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Markets Are Breaking Down India’s Caste System, Turning Untouchables into Millionaires – Article by Malavika Nair and G. P. Manish

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The New Renaissance HatMalavika Nair and G. P. Manish
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This year marks the 25th anniversary of liberal reforms in India that led to the dismantling of many socialist economic policies and the end of the draconian License Raj. Liberalization has changed life for many in India over the past couple of decades, although much more remains to be done. Just the middle class alone has exploded from 30 million people in 1991 to 300 million in 2014.

So this is a good occasion to tell the story of perhaps the most unexpected beneficiaries of these reforms: the rising Dalit millionaires. In recent years, many thousands of so-called “untouchables,” or Dalits, members of the lowest group in the Indian caste order, have risen out of poverty to become wealthy business owners, some even millionaires.

By taking advantage of the greater economic opportunity brought about by market reforms, these Dalit entrepreneurs provide us with an important example of the power of markets, not just to bring about economic emancipation, but to fight deeply entrenched social discrimination.

The Plight of the Dalits

The Indian caste system is an ancient and complex social order that divides society into groups based on a somewhat rough division of labor. The Dalits belong to the lowest group, below the four-tiered hierarchy of priests, warriors, merchants and artisans. Traditionally, Dalits were relegated to a life of doing “dirty” jobs such as cleaning floors and toilets or handling garbage: hence gaining the name “untouchable” as others would refuse to come into contact with them.

Since one’s caste was determined by birth, and it was impossible to switch castes throughout one’s life, being born an untouchable meant a lifetime of being trapped in a low income “dirty” job with very low social status. Marriages would only take place among caste members, and hence one’s children would be faced with the same hurdles brought by the untouchable identity, leading to systematic discrimination locked into place for generations.

It isn’t surprising that the Dalits consistently rank near the bottom of poverty statistics in an already poverty-ridden country. The term “poorest of the poor” would be an apt description of their socio-economic status in general. For decades, this made them the targets of several affirmative-action programs as well as many a politician looking to champion a cause.

While affirmative action has helped some get ahead, it has by no means been a panacea. For as long as all industry was state-controlled and subject to extensive licensing, the state effectively made all production decisions and awarded licenses to a few chosen oligarchs. This meant that opportunities for entrepreneurship and business were slim to none, and affirmative-action programs only served to redistribute pieces of a fixed pie from one to another.

Slumdog Millionaires

But there is a new heartwarming trend of entrepreneurship and self-help among Dalits since the liberal reforms in India, especially in urban areas. A visit to the Dalit Chamber of Commerce website (see also the Facebook page) reveals slogans such as “Fight Caste with Capital” and “Be Job givers, not Job seekers” as well as a spokesperson who favorably cites the invisible hand, a la Adam Smith! This voluntary Chamber of Commerce, set up in 2003 to bring Dalit entrepreneurs together, currently has 5,000 members whose enterprises jointly boast over half a billion dollars in sales revenue. The actual number of entrepreneurs in the population is much higher.

To what do they owe their success? Fascinating new qualitative research that tracks the life stories of several of these Dalit entrepreneurs reveals a common thread. The opening up of production processes to market forces created new opportunities like never before. Starting small and scraping together resources and capital, many of these Dalits now run business empires that actually provide employment to upper caste members.

There is Thomas Barnabas who was born into a family of bonded laborers, all eight of whom lived in a one-room house. Thomas recalls being thrown out of an upper caste friend’s home as a child after eating and drinking there because he was “untouchable.” They then proceeded to purify and wash the floor where he sat and threw away the dishes from which he ate.

Thomas now owns an industrial waste recycling and disposal business that has an annual sales revenue of $2.3 million and employs 200 people (including many upper caste members) outside the city of Chennai. He strove to fulfill an unmet demand for the processing of industrial waste generated by large corporations like Samsung, Dell, and Mercedes that set up manufacturing facilities in India after liberalization.

Or there is M.M. Rao, who was just one of two children to get an education in a family of bonded laborers with eight children. His family was so poor that they could not afford to buy shoes. His mother and sister were forced to walk barefoot to work in a nearby town.

Rao now owns a group of companies that specialize in construction, especially in the telecom sector, with a sales revenue of $7.4 million in 2010 alone. He was able to use his education as a civil engineer to start a small sub-contracting business laying telephone cables for large companies after the liberalization of the telecom sector. Owing to the quality of his work as well as his business acumen, he was able to grow that small sub-contracting business into what it is today.

Sushil Patil grew up in a 200-square-foot house in a slum, and his father was a laborer in a factory where he was discriminated against for his low caste status. Sushil was able to complete his engineering degree only because his father had to request the college dean to waive the fees that they could not afford to pay. He recalls, “I can never forget my father bowing before the dean, that hit me hard.” He now owns a construction and engineering company with revenues of $45 million a year. His main business is to handle the construction of power plants for major power companies. He has friends who still live in the slum that he grew up in and hopes to construct a charitable hospital that will offer medical services free of charge to the poor.

Markets Break Down Barriers

These stories constitute but a tiny sliver of many thousands, if not more. They lead us to an interesting question: how is it exactly that markets fight social discrimination? Markets work in very different ways than the obvious and visible hand of state-driven policies. While the state seeks to outlaw and abolish caste identity by making discrimination illegal, markets work in quiet and invisible ways by making caste identity irrelevant.

Competition brings about the existence of meaningful and relevant alternatives that raise the opportunity cost of discrimination for everyone participating in the market. It is in an entrepreneur’s economic interest to hire and contract with those who have the highest marginal productivity regardless of their caste identity. For if he does not, his competitor might potentially steal away profits that he could have earned. The more open and competitive a market, the more true this holds.

Once liberal reforms were put in place, they created choice and opportunity for many like never before. Market forces unwittingly brought about economic and thus social progress for society’s poorest and most discriminated against.

But can we go as far as saying the caste system has withered away? Not at all. It is unfortunately alive and well, especially in the rural areas where 68% of the population still lives, despite its being legally “outlawed” for decades.

Can we say that discrimination melts away in a market setting? Not necessarily. Anyone is free to discriminate on the basis of caste identity, even in a market. However, the greater the economic opportunity out there, the greater the chance that the cost of discrimination will be borne by the discriminator himself, not the one being discriminated against.

This is not true under socialism. When the state has a monopoly over all production and its chosen oligarchs (employers) sell to a captive market, discriminating against a certain group of people does not have negative economic consequences for the employer, but only for the ones being discriminated against. Naysayers claim that this rise among Dalits is marginal and not representative of Dalits as a proportion to the total population of the country. Some are getting ahead, but most are still left behind.

While this may be true in terms of numbers, the fact that this has happened at all is nothing short of marvelous. It’s not a coincidence that there were no Dalit millionaires emerging under socialism. It is a direct consequence of the underlying institutional setting. The Dalits exemplify the theory of the so-called poverty trap: being locked into a low-income equilibrium for generations. And yet, given a little opportunity and choice, we see many leaving a life of poverty and social discrimination behind to become well-respected business leaders and philanthropists.

Most encouraging is the recognition among them that it is the invisible hand of the market that has been instrumental for social and economic progress in their community. It is a step in the right direction for the future of classical liberalism and its role in alleviating poverty at a time when many who are more fortunate seem to be forgetting or ignoring its importance.

References

  1. The unexpected rise of Dalit millionaires: Swaminathan Aiyar
  2. Capitalism is changing caste much faster than any human being: Shekhar Gupta
  3. Defying the odds: The Rise of Dalit Entrepreneurs: Devesh Kapur, D Shyam Babu, Chandra Bhan Prasad
  4. Capitalism’s Assault on the Indian caste system: Swaminathan Aiyar, Cato policy paper
  5. 5. Dalit Chamber of Commerce website: www.dicci.org.

Malavika Nair is an Assistant Professor of Economics in the Johnson Center for Political Economy at Troy University. She is also an associated scholar of the Ludwig von Mises Institute.

G.P. Manish is an Assistant Professor of Economics in the Sorrell College of Business and a member of the Manuel H. Johnson Center of Political Economy at Troy University.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the authors.

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How Pokémon GO Brightened a Dark World – Article by Jeffrey A. Tucker

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Categories: Culture, Politics, Technology, Tags: , , , , , , , , , , , , , , ,

The New Renaissance HatJeffrey A. Tucker
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All weekend, I’ve fielded texts from people who are despairing about the state of the country. Is some kind of unsolvable civil war developing between police and people, even between races? And how can politics solve this when the candidates seem to have every interest in actually exploiting and even exacerbating the problem? The opinion pages overflowed with expressions of deep sadness and warnings that, once again, the center is no longer holding. The nation is falling apart.

What could possibly be the solution here? These problems seem so deep as to be insoluble.

Oddly, the answer might be in your pocket. Through our smartphones and the app economy, we are being given tools to allow us to reach the world and connect with others in ways that were previously unimaginable. This is not a political solution; in fact, it might be solution precisely because it is not political.

Pokémon Brings Us Together

Poetically, it was exactly this weekend – following so much terrible news and after a season in which two-thirds of Americans report being alarmed by their coming presidential choices – that millions downloaded and played one of the most delightful digital apps to yet appear: Pokémon GO.

It has broken all records on the numbers of downloads in such a short time. In only a matter of a few days, the mobile app had nearly as many real-time users as Twitter. It now lives on more smartphones that even Tinder. As a term, Pokémon is top trending. If you follow your Facebook home feed, you know all about this. If any application could be described as having swept the nation, this was it.

How can a silly game lift up our hearts and give rise to the better angels of our nature?

That something marvelous had happened was obvious to anyone living in dense population areas. Parks filled up with people playing the game. They were hanging out in public areas around malls, at bus stops, in parking lots, and just about everywhere.

People were holding their phones, playing the game, laughing and moving around. Crucially, people were meeting each other with something in common – people of all races, classes, religions; none of it mattered. They found new friends and came together over a common love.

And there was a common feature to all the people doing this. We smiled. We smiled at each other. Even now, even in the midst of a world in which “the center no longer holds,” we actually found that center again: a heart-felt affection for something we love and an awareness that others share that same aspiration.

It was absolutely beautiful to watch. With an element of fantasy and the assistance of marvelous technology, we experienced the common humanity of our neighbors and strangers in our community. This kind of experience is key for building a social consensus in favor of universal human rights.

Why We Love It

The integration between digital and physical in the Pokémon GO game go beyond anything most people have ever experienced. Turn on your camera and you suddenly find opportunities for catching and collecting pocket monsters all around you. Head outdoors and chase them around, going up level after level and eventually find yourself at a gym where you can digitally battle other players in real space.

Dazzling doesn’t quite describe it. It is fun and imaginative, tapping into the inner kid of all of us. All the technological and intellectual discoveries over the last decades are on display. It all feels so real, all this capturing, collecting, and battling.

The industry calls it “augmented reality.” It’s a new level of gamification, not just something that happens on a screen. It reveals a layer of fantasy within the existing structure of reality itself, meaning that it brings to life the most delightful imaginings of our hearts. It helps us see what we would otherwise not see, and allows us to interact directly with the digitally existing thing.

In this way, Pokémon embodies something that we’ve all begun to intuit but haven’t been able to frame up completely. It is this: there is no longer a separation between what we once called real and what we think of as being a pure Internet fiction. The two are blending in ways that are dramatically enhancing our lives. We are to the point where we can no longer even imagine how the world even worked – and how our minds worked – before market forces blessed humanity with digital innovations.

The Great Blurring

Market-driven technology is not some invading imposition that makes people change the way they live without their permission. Instead it seeks to serve us and make our lives better; that’s its whole purpose and ethos. In the whole course of the digital revolution that began some twenty years ago, we’ve seen the gradual blurring between the physical and digital realms. What was created through code started to become just as substantial and meaningful in our lives as anything that took up physical space and we could touch.

We see this not only in games but also in health care, in finding our way around cities, in opening businesses, in driving, in dating, and in millions of life activities. Crucially, such apps are available to everyone regardless of life station. They spread capital and productivity across all classes of people, and more and more of our lives are migrating to this realm to escape the frustrating limits of physical space.

Of course the doubters have kvetched for two decades now. Old timers have screamed about how all this fascination with the Internet was causing a breakdown in human relationships, how the old-fashioned letter was so much better, why ebooks could never replace the glorious romance of physical books, how online music would kill the industry, how dating apps were killing romance, how time-killing blather on Facebook and Twitter were killing productivity, and so on.

Oh, and remember how video games were going to wreck our health by making us all sedentary? Now we have Pokémon GO players romping over hill and dale to “catch ‘em all.” As a wit on Facebook said, “Pokemon GO has done more for childhood obesity in the last 24 hours than Michelle Obama has in the past 8 years.”

Indeed, none of these fears have panned out. In fact, the opposite has proven true. The digital revolution has connected people as never before and given rise to more of what we love in life, whatever that happens to be.

Such doubters were missing something crucial. The key to the digital realm is its unrelenting adaptability to consumer preferences, thanks to the capacity of innovators to learn from the successes and failures of others. Digital innovation allows the crucial element of discovering and innovating to be crowd sourced, creating an environment of exponentially fast progress.

Market-driven technology is not some invading imposition that makes people change the way they live without their permission. Instead it seeks to serve us and make our lives better; that’s its whole purpose and ethos. Whatever it is we want to do – read, listen, play, study, create – the technology is there to make it easier and more widespread. It democratizes the tools we need to live better lives.

And what does it make possible? Whatever the human mind is capable of creating. And the element of surprise is always there. Just when we think we’ve reached an insuperable limit to the possible, something appears that surpasses that limit.

The individual human mind is not capable of outsmarting the brilliance of a market process that operates without limits.The challenge became very intense when Bitcoin came about in 2009, and the cryptocurrency gradually took on monetary properties. Economists claimed this could never happen, since money absolutely had to originate in a form of real-world scarcity of something you could hold.

I recall a conversation I was having with one skeptic on Skype who kept saying that Bitcoin can’t be money because it doesn’t exist. Frustrated, I asked him if the conversation we were having right then really existed. He said yes. I reminded him that I was not standing next to him and everything we were looking at and hearing was nothing but code.

Our conversation was purely fictional by his standards, simply because its only existence was in the digital realm. And yet it seemed to me to be actually happening. He was speechless.

The lesson here is that the individual human mind is not capable of outsmarting the brilliance of a market process that operates without limits. And within digital spaces today, we experience the closest thing we have to a free market. It is making things no one thought possible, and doing it daily, and doing it for everyone.

Overcoming Power with Humanity

Mobile apps like Pokémon GO can of course be dismissed as just another game, distractions that do not address serious life problems like race conflict and the tit-for-tat killings between police and citizens. But actually there is more going on here.

A few weeks ago, Facebook rolled out its live video functionality for all users – and keep in mind that this is free for everyone on the planet to use. When a police officer shot Philando Castile with four bullets during a routine traffic stop, his girlfriend Diamond Reynolds took out her phone and live streamed one of the most dramatic and powerful moments yet seen on the subject of police power.

It shocked the consciences of millions. Facebook was her 911. Had private enterprise not been there, the world would not have known. Now that we do, change is made more likely.

That’s the serious side of technology while Pokémon GO represents the delightful side. They work together, each making a valuable contribution to enabling a better life. What they have in common is that both are non-state solutions to crying human needs. No politician in history has ever achieved so much for the cause of human rights and human happiness.

Jeffrey Tucker

Jeffrey A. Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. Email

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

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Globalization’s So-Called Winners and Losers – Article by Chelsea Follett

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The New Renaissance HatChelsea Follett
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A recent Washington Post analysis has argued that political events as diverse as the Brexit and the rise of Donald Trump can be explained by a “revolt” of the world’s economic “losers.”

Before proceeding, it is important to keep in mind that all income groups in the world have seen gains in real income over the last few decades. That said, some have gained more than others. Between 1988 and 2008, for example, the lowest gains were made by people whose incomes fit beteen the world’s 75th to 90th income percentiles. That includes much of the middle and working class in rich countries.

The Washington Post calls the people in this group the bitter “losers” of globalization. But, are they?

follett1There are at least two problems with characterizing such people as “losers.” First, it seems to suggest that income growth rate matters more than absolute income level. Yet a person in the 80th income percentile globally would not want to trade places with or envy someone in the bottom 10th percentile, despite the latter’s much higher income growth rate.

Consider real GDP per person, adjusted for differences in purchasing power, in China and the United States. Between 1988 and 2008, China’s per person GDP grew by over 340 percent. America’s per person GDP, in contrast, grew by “only” 40 percent. China may be making gains more quickly, but it would be wrong to argue that the United States was a “loser,” for American GDP per person in 2008 was $52,704 and China’s $8,104.

chinagrowth

Poor countries are seeing faster income gains partially because their starting point is so much lower—it’s a lot easier to double per person GDP from $1,000 to $2,000 than from $40,000 to $80,000.

The second problem is that the Washington Post piece suggests that the incredible escape from poverty that has occurred in poor countries during my lifetime has come at the expense of the middle classes in the developed world. (This is a fascinating reversal of the more popular, but equally inaccurate, opinion that the Western riches came at the expense of poor countries).

Thus, the Washington Post piece claims, “global capitalism didn’t always work so well for workers in the United States and Europe even as—or, in some cases, because [emphasis mine]—it pulled hundreds of millions of people out of poverty everywhere else.”

Fortunately, prosperity is not a zero sum game.

When trying to understand the “winners” and “losers” of globalization, it is important that we do not compare income growth rates over the last few decades with some imagined ideal. Instead, we should compare income growth to what would have happened in a world without globalized trade. In such a world, hundreds of millions of people would have remained in extreme poverty. And the middle class of the developed world would also have made fewer gains. Just look at the amazing reduction in price of consumer goods that we have collected at HumanProgress.

A few individuals in select industries would benefit from protectionism, like the U.S. sugar industry does now. But on average everyone would be poorer, just as in 2013 Americans collectively paid 1.4 billion dollars more for sugar than they would have without protectionism. (The U.S. manufacturing industry, it may be worth noting, would not be among the “select industries” to benefit—most manufacturing job losses have come from mechanization rather than outsourcing, and have been offset by new jobs in other sectors).

Thanks to trade and exchange, people in all income percentiles have made real gains, and living standards for the middle class in advanced economies have soared in ways not captured by looking at income alone. America’s middle class is getting richer, and the people in the world’s 75th to 90th income percentiles are also winners.

Chelsea Follett is the Managing Editor of HumanProgress.org, a project of the Cato Institute which seeks to educate the public on the global improvements in well-being by providing free empirical data on long-term developments. Her writing has been published in the Wall Street Journal, Newsweek, and Global Policy Journal. She earned a Bachelor of Arts in Government and English from the College of William & Mary, as well as a Master of Arts degree in Foreign Affairs from the University of Virginia, where she focused on international relations and political theory.

This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

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Taking the Low Road on Free Trade – Article by Chris Baecker

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The New Renaissance HatChris Baecker
******************************

During the holidays, I took my daughters to my aunt and uncle’s house in Rogers, TX. Over the last few years, when not working their day jobs at Scott and White hospital in Temple, they have grown a large garden of marketable produce, devoting more than 4 acres to the operation. I sent some photos to a friend of mine who has his own backyard garden. His enthusiasm was palpable. This is a guy who once told me, “everyone should have a garden.”

Fast forward to this spring. I finally got around to buying a bookshelf. As I set about putting it together, I started thinking, “I could put together a nicer, sturdier one than this. All I’d need is some wood, sandpaper, stain/paint, braces … never mind. This one will do for now.”

I don’t have all the tools at my disposal to carry out that sort of a project, any more than I do for gardening. My interests lie elsewhere. In a free society like ours, each person is allowed to pursue their own preferred interests. Eventually, however, we do require other goods for sustenance, and leisure, so we trade with each other.

In what has been the most unpredictable and surprising election season of my lifetime, one issue that has come under unusually widespread attack is free trade.

The Opposition

Resistance to free trade has typically been found in the Democratic Party. Its union supporters fret about their jobs being “shipped overseas,” and environmentalists express concerns about trading with countries that lack “adequate” protections thereof. A few decades ago, that bloc was countered by the relatively more market-friendly Democratic Leadership Council, whose influence peaked with the election of Bill Clinton as president.

Remaining democratic opposition was joined by a couple of protesters from the center-right, H. Ross Perot and Patrick Buchanan. Mr. Perot famously claimed during a 1992 presidential debate that we would hear “a giant sucking sound” of manufacturing going south to Mexico. Four years later, while seeking the Republican Party nomination for President, Mr. Buchanan campaigned on a fear of losing nationality as goods and labor move more seamlessly across borders.

Nowadays, the DLC is defunct (2011) while the spirit of Messrs. Perot and Buchanan has morphed into this election season’s wild card, Donald Trump. The similarities amongst the three are many: businessmen (Perot and Trump), populist streaks, insurgent outsiders, meticulously crafted coifs, etc. They also share a skepticism of free trade.

A few Trump talking points have jumped out at me: “we don’t make things anymore,” we’re in “imbalance (deficit) with” other countries and threatening a 45% tariff on Chinese goods.

Trade protectionism has been around for ages. Our Founding Fathers supported tariffs, which used to be a prominent source of government revenue. Alexander Hamilton even coined the “infant industry” argument, whereby the government shields from international competition new and developing industries deemed important to self-sufficiency and independence.

Trade and Trump

In trade debates of modern times, Republicans have typically argued for “free” trade, whereas “fair trade” was sought by Democrats. Mr. Trump has picked up the mantle of the latter, saying the 45% tariff is merely a threat to achieve such fairness.

I’m reminded of the interrogation scene in the movie “Starsky and Hutch” where
Ben Stiller tries to coerce some information out of a suspect … by pointing the gun at his own head. Why threaten the American consumer with price hikes? Why not, for example, allow domestic steel-input consumers to benefit from rock-bottom prices that result from Chinese overproduction? How does it make sense to protect the American steel industry with a tariff of more than 500% if employment in, and value produced by, those input consumers is greater?

The answer also happens to explain why we’re lagging behind the rest of the world in the sugar trade: concentrated benefits (domestic industry) vs. dispersed costs (artificially inflated prices for consumers). Such beneficiaries typically have more clout with policymakers than consumers do. It’s this kind of rent-seeking that prevents us from being able to take advantage of the shortcomings of a centrally-planned (though certainly less so than a couple generations ago) economy like China’s, or the fact that some countries just flat out produce something more efficiently than we do.

Ironically enough, if Mr. Trump is so concerned with illegal immigration from our south, perhaps he should first take a look at the agricultural and dairy subsidies Uncle Sam doles out that put Mexican farmers out of business and drive them north to get a piece of our artificially- inflated industry.

Moreover, when he asks “(w)ho the hell cares if there’s a trade war?” someone should remind him of the Smoot-Hawley Tariff Act of June 1930. In an effort to protect domestic agricultural and industrial interests, President Herbert Hoover signed it into law over a petition signed by a thousand economists. Other nations retaliated and the world headed toward depression. And that was when trade was a smaller part of the global economy.

Lesson learned, after the war, the world moved toward freer trade. In that time, our real exports of goods and services rose steadily, accelerating in the mid-1980s, belying the claim that “we don’t make” stuff.

fred_graph1

As Harvard professor and former Chairman of the President’s Council of Economic Advisers Greg Mankiw recently pointed out in The New York Times, manufacturing is currently at an all-time high. The problem, as it were, is that we’re doing it with less manpower.

The Effectiveness of Efficiency

That very transformation is currently underway in the energy industry. Even after the price of oil started tanking, and rigs were idled, and jobs were being eliminated, production still increased. We became more efficient. It won’t take the same quantity of capital and labor to respond to $50 oil the next time it rises to that level. The displaced resources can be redeployed to other areas of the economy.

There are undoubtedly industry shakeups in freer markets. Labor, capital, and entrepreneurs are reshuffled. But our society encourages innovation by safeguarding intellectual and property rights. That allows us to find new and better ways of doing things.

This is just the latest example of our capacity to achieve the self-sufficiency that was the goal of our first Treasury Secretary (Mr. Hamilton) when he submitted to the second Congress suggestions of “encouragement” and “protection of government” in his “Reports on Manufactures.” All the “protection” we need for the aforementioned “encouragement” is between our ears. The human capital that we’ve built up over the years doesn’t go away, but rather accumulates.

Without free trade, there might be an erosion of two of its most important exports: peace and freedom. The world has to cooperate and get along if we all want to prosper. And the freer the people, the greater the likelihood of greater prosperity. Besides, should that peace unfortunately break down again someday, the Second Amendment and our bread basket give us time to dust off and tap that know-how to rev up the necessary industries.

Counterbalancing Deficits

Nevertheless, more trade liberalization is afoot. My industry has a new market: the rest of the world, thanks to the repeal of the oil export ban last December. That’ll surely alleviate something else nearly all our leaders are prone to complain about: our trade deficit.
fred_graph2

It’s a curious thing that you rarely hear that it’s actually only half of an equation, but it is.

The balance of payments (BoP) is basically an accounting of our international transactions. The current account (trade) is the one we always hear about when it’s in deficit. Interestingly enough, it tends to trend back toward break-even only when we’re heading toward recession. It makes sense that imports rise in good times. “We’re Americans,” I tell my students, “we like to buy stuff. We like to buy stuff so much, we rent storage facilities in which to put all our extra stuff!” Regardless, there’s nothing inherently wrong with a trade deficit.

The counterbalance is the capital account. We have a big example of that in our backyard: the Toyota plant in south San Antonio. This is foreign direct investment. That plant is in the heart of truck country. It gives Toyota direct access to that market here. And, they employ highly-skilled Texans. That seems like a win-win, a sign of strength perhaps, when a foreign company wants to locate operations here.
fred_graph3

You actually contribute to the capital account when you crack open a Bud Light after feeding Purina to Scooby, who was hungry because you forgot to feed him while you were eating a Smithfield ham steak (that had been stored in a GE freezer) for dinner before going to see “X-Men: Apocalypse” at the AMC Rivercenter 11. All those companies are foreign-owned. The profit portion of the prices paid for those goods is exported to another country. Foreign entities saw value in the brand recognition of items Americans know and love. And they were able to buy those companies in part because they do more of something that we don’t: save.

When the consumer expenditure portion of the Gross Domestic Product [GDP] started climbing in the 1980s from 60% to almost 70% today, it was arguably fueled by the concurrent proliferation of the all-purpose credit card. Perhaps it goes without saying, but when you’re spending, you’re not saving. And when you’re borrowing, you are dissaving. Much of the consumer savings derived from more efficient global production of goods could go to more savings. Instead, it seems to go toward buying more stuff.
fred_graph4

When you think about it though, our incentive to save has slid right alongside available interest rates.

fred_graph5

A couple years after they were pushed way up to break the inflation of the 1970s, interest rates have been on a steady march downward: ~7-8% in 1980s, ~5% in the 1990s, half that in the 2000s, and now near 0%. Monetary policy that could be enticing us to invest in learning new skills, opening a new business, guarding against unforeseen events, etc., instead has nudged us toward $1,000,000,000,000 in both credit card and automobile debt this year. What was the current trade deficit again?

If bringing down the trade deficit is the goal, increasing domestic savings and investment is preferable to erecting trade barriers. And if curbing interest-bearing consumer indebtedness happens as well, all the better.

While former Secretary of State Hillary Clinton seems like little more than a 21st century version of the pandering, “meaningless platitude-spouting” Kevin Fogerty from a classic episode of “Cheers,” Senator Bernie Sanders and Mr. Trump have been more consistent in their views toward free trade. But the aggressive tone they sometimes take toward it and our trading partners reminds me of when my four daughters (average age, 9) bicker with one another. Only it’s more understandable that my girls have to be taught to take the high road.

As for me, one of these days I could take up woodworking, or gardening, or some other hobby/trade that produces tangible output. Right now though, my spare time is best served educating. It’s what I like to do. It’s where I feel most productive. And given this season’s crop of presidential aspirants, there seems to be a need for it.


Chris Baecker

Christopher E. Baecker manages fixed assets for Pioneer Energy Services and is an adjunct lecturer of economics at Northwest Vista College in San Antonio.  He can be reached via www.chrisbaecker.com, @chrisbaecker71 & LinkedIn.com

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

 

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The Orlando Bloodbath and the Illiberal Mind – Article by Jeffrey A. Tucker

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The New Renaissance HatJeffrey A. Tucker
******************************

Society is forever threatened by individuals with corrupt hearts

***

The horrifying events at the Pulse bar in Orlando, Florida, the worst mass shooting in American history, illustrate what is meant by the term terrorism. It is violence designed to shake our sense of security and safety, to instill fear, to remind us how fragile is the very existence of what we call civilization. One moment, people are dancing and enjoying the music. The next they are covered with blood amidst unspeakable carnage, and wondering when the bullets are going to tear through their own flesh.

A nightclub—a conspicuous symbol of commercial ebullience and progressive cultural creativity—becomes a war zone in the blink of an eye, and why? There is no final answer to such a gigantic question, but there are strong suggestions based on the identity of the killer and recent experiences with Islamic extremism. It stems from intolerance, leading to seething hatred, resulting in violence, leaving only devastation and fear in its wake. One corrupt heart, driven to action through profound malice, turns a dance club into a killing field.

No Political Solution

It is political season, so of course the tragedy will have implications for the direction of politics. Islamophobia gets a boost, which helps the cause of religious intolerance and nativism, even though the killer was an American citizen and in no way represents the views of a billion and a half peaceful and faithful Muslims struggling for a better life.

Two nights earlier, beloved YouTube star Christina Grimmie was shot dead by a man having no motivations related to Islam. Fear drives people to seek political solutions, so the details of the case in question are not likely to matter. Political control over our lives and property will undoubtedly follow this catastrophe just as they did after 9-11.

And yet there are no political solutions, at least none readily at hand. Yes, the radicalization of some sectors of Islam might never have taken their present course had the U.S. not made egregious foreign-policy blunders that incited the drive for vengeance among millions. Looking back over the decades, back to the 1980s when the most extreme ideologies received U.S. encouragement from the U.S. as a Cold War measure, all the way to the destabilization of Iraq, Syria, and Libya, one sees how the violence of war has fed the violence of terrorism in repeating cycles.

Still, no one can say for sure that absent such blunders, someone like the Orlando shooter, Omar Mateen, would not come into existence. Society is always threatened by individuals with corrupt hearts and the malicious intent to purify the world of sin. We try to protect ourselves. Security systems respond by becoming ever better at what they are supposed to do. The horror has already re-started the debate between gun rights and gun control (however: by law, that bar was a gun-free zone, meaning that people could not protect themselves or stop others who are intent on killing). And yet, in the end, there is no system of politics and no system of security capable of ending all such threats to human well being.

Toleration as a Virtue

The answer lies with the conversion of the human heart.

Where does this begin?

Given that the driving force here is related to religion, we can turn to the very origins of liberalism itself. It was once believed that society, in order to function properly, required full agreement on matters of faith. But after centuries of warfare amounting to nothing, a new norm emerged, some half a millennium ago, which can best be summarized in the term toleration.

You can’t kill capitalism without killing people. The insight was that it is not necessary for people to agree in order that they find value in each other and get along. A society can cohere even in the presence of profound religious disagreement. We all have a greater stake in peace with each other than any of us do in winning some religious struggle. As 19th century liberal cleric John Henry Newman put it, “Learn to do thy part and leave the rest to Heaven.”

This was the profound insight, and it led to a new enlightenment on a range of issues beyond religion: free speech, free press, free trade, freedom of association. The insight concerning toleration planted a seed that led to a new realization of how humanity can enjoy progress. Voltaire’s Treatise on Toleration, which summed up the case, appeared a mere twenty-one years before Adam Smith’s Wealth of Nations. Their core idea was the same: we have more to gain from toleration, exchange, and freedom than we have from vanquishing the foe from the earth.

So it should be no surprise that the attempt to revert that progress and bring back a new age of tribal warfare would begin by questioning the core insight of religious liberty. Instead it seeks to purify the world of heresy and save souls through violence, if not by centralized authority, then by individual action. It is a premodern manner of thinking, one that seeks to end the lives of those who use freedom in ways that contradicts its own views of what is right and proper.

And notice too how the rise of intolerance has targeted such a conspicuous sign of capitalist consumerism: the dance clubs, and, particular, one that caters toward the gay community. Capitalism is the economic realization of the idea of human freedom, one in which people choose their partners, their music, their mode of expression. No one harms anyone; everyone is free to enjoy, to stay out late, to drink liquor, to move and sing as an expression of individuality.

The illiberal mind loathes such freedom and wants it destroyed. This is why, in the end, it is always capitalism itself that is in the crosshairs. And you can’t kill capitalism without killing people.

Resist Fear

What are we left to think and do when faced with such a bloody tragedy? Remember the foundations of what made us who we are, the philosophical underpinnings of what made the modern world great. Seek peace. Tolerate, even celebrate, differences among us. Find value in each other through trade. Defend human rights and freedom against all who seek to stamp them out.

Resist fear. Reject hate. Defend institutions that help all of us realize our dreams. Turn away from revenge fantasies and recommit ourselves again to living peacefully with others, treating even our enemies as if someday they might be our friends. Building a world free of violence and terror takes place in the conversion of one human heart at a time, beginning with our own.

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. 

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

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Why Modern Luddites Are Attacking Uber Drivers – Article by Mateusz Machaj

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The New Renaissance HatMateusz Machaj
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Earlier this year, a number of Uber cars in Poland came under attack by a group of vandals who were likely taxi drivers. In general, these types of vandalism have a long tradition in human history and have contributed to keeping populations’ general living standards at very low levels.

Attacks on Uber drivers are simply the latest chapter in a long story of efforts to intimidate and destroy innovators who are moving markets and societies in new and unfamiliar directions.

Reactions to Early Machines
For a very long time, separation of grain from the chaff was done in a very primitive manner. The process took weeks, involved hard working men, hard working women feeding them, and also children working as additional helpers. Finally, someone invented a threshing machine that allowed farmers to get rid of all this hard work: the machine could do the job much faster with less physical labor involved.

The change happened contrary to what many historical books claim: the move to threshing machines did not occur because of the patent system put in place 150 years before the change. It happened because social and political forces were too weak to stop it from happening.

Beginning in the eighteenth century in Europe, the entrepreneurial class was growing. They were a group of small profit-driven innovators interested in selling various products, and beating their competitors to markets. This “Great Change” was driven forward by many cultural, religious, political, legal, and technological factors.

At first, threshing machines were very imperfect. They didn’t always work well, and they also were expensive. There was a lot of room for improvements, and for making them better, faster, and cheaper. As they were slowly improved, it quickly became apparent the new machines were more efficient than the old manual methods. It was only a matter of time until someone would realize that steam engines could be combined with the threshing machines.

Not surprisingly, threshing machines were not welcomed by everyone. Swing Riots flared up and the Luddite movement attempted to crush technological innovation. Despite such obstacles, the entrepreneurs won out, paving the way for the future chain of market innovations, well symbolized by the modern farmer sitting in the modern air-conditioned tractor (with a good stereo system). Over the past two hundred years, agricultural workers were reduced from more than 80 percent of workers to less than 5 percent.

Economic Growth and Social Change
One of the big mysteries of human history is the question of why rapid technological and innovative growth started only around the nineteenth century. Many new ideas and technological changes were present for ages (and invented centuries before). Other cultures introduced many new innovative ideas as well.

Some steam engines were even being used in ancient times. They were applied in narrow places, however, due to social and political circumstances.

One early example of political resistance is related to us through the Roman Emperor Vespasian’s opposition to new labor saving innovations. Faced with the prospect of replacing workers with machines, Vespasian reputedly said: “You must let me feed my poor commons.”

Vespasian’s reaction is understandable; it is hard to predict what will happen in response to innovations that make certain job skills obsolete. And it’s not just the workers who fear the change. The ruling class, faced with an idle and unemployed population might also fear social upheaval.

The words of Peter Green summarize many of these concerns:

The ruling class were scared, as the Puritans said, of Satan finding work for idle hands to do. One of the great things about not developing the source of energy that did not depend on muscle power was the fear of what the muscles might get up to if they weren’t kept fully employed. The sort of inventions that were taken up and used practically were the things that needed muscle power to start with, including the Archimedean screw. On the other hand, consider that marvelous box gear of Hero’s: it was never used. That would have been a real conversion of power. What got paid for? The Lagids tended to patronize toys, fraudulent temple tricks in large quantities, and military experiments.

Naturally, human history is complicated and subject to many different factors. Nevertheless, there appears to be some truth in the argument that fixed social and political structure did not favor society open to the widespread adoption of innovation. Otherwise, it is hard to explain why so many new technical discoveries were not applied for so long, even though science and intelligence supplied them centuries before. We had to wait for the new political and social arrangements that either were tolerant of new innovations, or were unable to stop them.

Uber and Beyond
Everywhere we look, we see both the creative and destructive power of innovation. First threshing machine sellers lead to reductions in agricultural employment. Later, tractors killed the threshing machines. Telegraph and railway killed communication systems that relied on horses. Cars destroyed the horse industry. Mass production of textiles destroyed the demand for hand-crafted items. Big stores destroyed smaller shops, now discount shops (in parts of Europe) are destroying big stores. Video rentals hampered the cinema industry, now Netflix and others killed video rentals, while Napster’s success (despite its illegality) predicted a coming end to the old music industry. China’s growth and cheap efficient outsourcing reshaped traditional industries in developed countries. (From an economic perspective there is no difference between hiring cheaper labor or hiring a better machine.)

Dell smashed the traditional computer industry with eliminating many middle men. Ikea did something similar in the furniture industry. The internet destroyed regular newspapers, while Google smashed the marketing industry. Amazon destroys bookstores around the world, while Uber is doing the same with the taxi industry.

Economic progress decreases employments in one place, allows for creation of new ones, even in the service sector. During the process of liquidating employment positions, huge economic development is capable of multiplying per capita production within one generation, positively affecting all social classes.

The current state of affairs is not the end of history. Those companies, innovative today, will be endangered tomorrow. Even Jeff Bezos, creator of Amazon.com, admits Amazon won’t last forever:

Companies have short life spans. … And Amazon will be disrupted one day. I don’t worry about it ’cause I know it’s inevitable. Companies come and go. And the companies that are, you know, the shiniest and most important of any era, you wait a few decades and they’re gone.

Mateusz Machaj, PhD in economics; is a founder of the Polish Ludwig von Mises Institute. He has been a summer fellow at the Ludwig von Mises Institute. He is assistant professor at the Institute of Economic Sciences at the University of Wroclaw.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

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Thomas Carlyle: The Founding Father of Fascism – Article by Jeffrey A. Tucker

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The New Renaissance HatJeffrey A. Tucker
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Thomas Carlyle fits the bill in every respect

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Have you heard of the “great man” theory of history?

The meaning is obvious from the words. The idea is that history moves in epochal shifts under the leadership of visionary, bold, often ruthless men who marshal the energy of masses of people to push events in radical new directions. Nothing is the same after them.

In their absence, nothing happens that is notable enough to qualify as history: no heroes, no god-like figures who qualify as “great.” In this view, we need such men.  If they do not exist, we create them. They give us purpose. They define the meaning of life. They drive history forward.

Great men, in this view, do not actually have to be fabulous people in their private lives. They need not exercise personal virtue. They need not even be moral. They only need to be perceived as such by the masses, and play this role in the trajectory of history.

Such a view of history shaped much of historiography as it was penned in the late 19th century and early 20th century, until the revisionists of the last several decades saw the error and turned instead to celebrate private life and the achievements of common folk instead. Today the “great man” theory history is dead as regards academic history, and rightly so.

Carlyle the Proto-Fascist

Thomas_CarlyleThe originator of the great man theory of history is British philosopher Thomas Carlyle (1795-1881), one of the most revered thinkers of his day. He also coined the expression “dismal science” to describe the economics of his time. The economists of the day, against whom he constantly inveighed, were almost universally champions of the free market, free trade, and human rights.

His seminal work on “great men” is On Heroes,  Hero-Worship, and the Heroic in History (1840). This book was written to distill his entire worldview.

Considering Carlyle’s immense place in the history of 19th century intellectual life, this is a surprisingly nutty book. It can clearly be seen as paving the way for the monster dictators of the 20th century. Reading his description of “great men” literally, there is no sense in which Mao, Stalin, and Hitler — or any savage dictator from any country you can name — would not qualify.

Indeed, a good case can be made that Carlyle was the forefather of fascism. He made his appearance in the midst of the age of laissez faire, a time when the UK and the US had already demonstrated the merit of allowing society to take its own course, undirected from the top down. In these times, kings and despots were exercising ever less control and markets ever more. Slavery was on its way out. Women obtained rights equal to men. Class mobility was becoming the norm, as were long lives, universal opportunity, and material progress.

Carlyle would have none of it. He longed for a different age. His literary output was devoted to decrying the rise of equality as a norm and calling for the restoration of a ruling class that would exercise firm and uncontested power for its own sake. In his view, some were meant to rule and others to follow. Society must be organized hierarchically lest his ideal of greatness would never again be realized. He set himself up as the prophet of despotism and the opponent of everything that was then called liberal.

Right Authoritarianism of the 19th Century

Carlyle was not a socialist in an ideological sense. He cared nothing for the common ownership of the means of production. Creating an ideologically driven social ideal did not interest him at all. His writings appeared and circulated alongside those of Karl Marx and his contemporaries, but he was not drawn to them.

Rather than an early “leftist,” he was a consistent proponent of power and a raving opponent of classical liberalism, particularly of the legacies of Adam Smith and John Stuart Mill. If you have the slightest leanings toward liberty, or affections for the impersonal forces of markets, his writings come across as ludicrous. His interest was in power as the central organizing principle of society.

Here is his description of the “great men” of the past:

“They were the leaders of men, these great ones; the modellers, patterns, and in a wide sense creators, of whatsoever the general mass of men contrived to do or to attain; all things that we see standing accomplished in the world are properly the outer material result, the practical realization and embodiment, of Thoughts that dwelt in the Great Men sent into the world: the soul of the whole world’s history….

One comfort is, that Great Men, taken up in any way, are profitable company. We cannot look, however imperfectly, upon a great man, without gaining something by him. He is the living light-fountain, which it is good and pleasant to be near. The light which enlightens, which has enlightened the darkness of the world; and this not as a kindled lamp only, but rather as a natural luminary shining by the gift of Heaven; a flowing light-fountain, as I say, of native original insight, of manhood and heroic nobleness;—in whose radiance all souls feel that it is well with them. … Could we see them well, we should get some glimpses into the very marrow of the world’s history. How happy, could I but, in any measure, in such times as these, make manifest to you the meanings of Heroism; the divine relation (for I may well call it such) which in all times unites a Great Man to other men…

Carlyle established himself as the arch-opponent of liberalism — heaping an unrelenting and seething disdain on Smith and his disciples.And so on it goes for hundreds of pages that celebrate “great” events such as the Reign of Terror in the aftermath of the French Revolution (one of the worst holocausts then experienced). Wars, revolutions, upheavals, invasions, and mass collective action, in his view, were the essence of life itself. The merchantcraft of the industrial revolution, the devolution of power, the small lives of the bourgeoisie all struck him as noneventful and essentially irrelevant. These marginal improvements in the social sphere were made by the “silent people” who don’t make headlines and therefore don’t matter much; they are essential at some level but inconsequential in the sweep of things.

To Carlyle, nothing was sillier than Adam Smith’s pin factory: all those regular people intricately organized by impersonal forces to make something practical to improve people’s lives. Why should society’s productive capacity be devoted to making pins instead of making war? Where is the romance in that?

Carlyle established himself as the arch-opponent of liberalism — heaping an unrelenting and seething disdain on Smith and his disciples. And what should replace liberalism? What ideology? It didn’t matter, so long as it embodied Carlyle’s definition of “greatness.”

No Greatness Like the Nation-State

Of course there is no greatness to compare with that of the head of the nation-state.

“The Commander over Men; he to whose will our wills are to be subordinated, and loyally surrender themselves, and find their welfare in doing so, may be reckoned the most important of Great Men. He is practically the summary for us of all the various figures of Heroism; Priest, Teacher, whatsoever of earthly or of spiritual dignity we can fancy to reside in a man, embodies itself here, to command over us, to furnish us with constant practical teaching, to tell us for the day and hour what we are to do.”

Why the nation-state? Because within the nation-state, all that is otherwise considered immoral, illegal, unseemly, and ghastly, can become, as blessed by the law, part of policy, civic virtue, and the forward motion of history. The leader of the nation-state baptizes rampant immorality with the holy water of consensus. And thus does Napoleon come in for high praise from Carlyle, in addition to the tribal chieftains of Nordic mythology. The point is not what the “great man” does with his power so much as that he exercises it decisively, authoritatively, ruthlessly.

The exercise of such power necessarily requires the primacy of the nation-state, and hence the protectionist and nativist impulses of the fascist mindset.

Consider the times in which Carlyle wrote. Power was on the wane, and humankind was in the process of discovering something absolutely remarkable: namely, the less society is controlled from the top, the more the people thrive in their private endeavors. Society needs no management but rather contains within itself the capacity for self organization, not through the exercise of the human will as such, but by having the right institutions in place. Such was the idea of liberalism.

Liberalism was always counterintuitive. The less society is ordered, the more order emerges from the ground up. The freer people are permitted to be, the happier the people become and the more meaning they find in the course of life itself. The less power that is given to the ruling class, the more wealth is created and dispersed among everyone. The less a nation is directed by conscious design, the more it can provide a model of genuine greatness.

Such teachings emerged from the liberal revolution of the previous two centuries. But some people (mostly academics and would-be rulers) weren’t having it. On the one hand, the socialists would not tolerate what they perceived to be the seeming inequality of the emergent commercial society. On the other hand, the advocates of old-fashioned ruling-class control, such as Carlyle and his proto-fascist contemporaries, longed for a restoration of pre-modern despotism, and devoted their writings to extolling a time before the ideal of universal freedom appeared in the world.

The Dismal Science

One of the noblest achievements of the liberal revolution of the late 18th and 19th centuries — in addition to the idea of free trade — was the movement against slavery and its eventual abolition. It should not surprise anyone that Carlyle was a leading opponent of the abolitionist movement and a thoroughgoing racist. He extolled the rule of one race over another, and resented especially the economists for being champions of universal rights and therefore opponents of slavery.

As David Levy has demonstrated, the claim that economics was a “dismal science” was first stated in an essay by Carlyle in 1848, an essay in which non-whites were claimed to be non-human and worthy of killing. Blacks were, to his mind, “two-legged cattle,” worthy of servitude for all times.

Carlyle’s objection to economics as a science was very simple: it opposed slavery. Economics imagined that society could consist of people of equal freedoms, a society without masters and slaves. Supply and demand, not dictators, would rule. To him, this was a dismal prospect, a world without “greatness.”

The economists were the leading champions of human liberation from such “greatness.” They understood, through the study of market forces and the close examination of the on-the-ground reality of factories and production structures, that wealth was made by the small actions of men and women acting in their own self interest. Therefore, concluded the economists, people should be free of despotism. They should be free to accumulate wealth. They should pursue their own interests in their own way. They should be let alone.

Carlyle found the whole capitalist worldview disgusting. His loathing foreshadowed the fascism of the 20th century: particularly its opposition to liberal capitalism, universal rights, and progress.

Fascism’s Prophet

Once you get a sense of what capitalism meant to humanity – universal liberation and the turning of social resources toward the service of the common person – it is not at all surprising to find reactionary intellectuals opposing it tooth and nail. There were generally two schools of thought that stood in opposition to what it meant to the world: the socialists and the champions of raw power that later came to be known as fascists. In today’s parlance, here is the left and the right, both standing in opposition to simple freedom.

Carlyle came along at just the right time to represent that reactionary brand of power for its own sake. His opposition to emancipation and writings on race would emerge only a few decades later into a complete ideology of eugenics that would later come to heavily inform 20th-century fascist experiments. There is a direct line, traversing only a few decades, between Carlyle’s vehement anti-capitalism and the ghettos and gas chambers of the German total state.

Do today’s neo-fascists understand and appreciate their 19th century progenitor? Not likely. The continuum from Carlyle to Mussolini to Franco to Donald Trump is lost on people who do not see beyond the latest political crisis. Not one in ten thousand activists among the European and American “alt-right” who are rallying around would-be strong men who seek power today have a clue about their intellectual heritage.

Hitler turned to Goebbels, his trusted assistant, and asked for a final reading. It was Carlyle.And it should not be necessary that they do. After all, we have a more recent history of the rise of fascism in the 20th-century from which to learn (and it is to their everlasting disgrace that they have refused to learn).

But no one should underestimate the persistence of an idea and its capacity to travel time, leading to results that no one intended directly but are still baked into the fabric of the ideological structure. If you celebrate power for its own sake, herald immorality as a civic ideal, and believe that history rightly consists of nothing more than the brutality of great men with power, you end up with unconscionable results that may not have been overtly intended but which were nonetheless given license by the absence of conscience opposition.

As time went on, left and right mutated, merged, diverged, and established a revolving door between the camps, disagreeing on the ends they sought but agreeing on the essentials. They would have opposed 19th-century liberalism and its conviction that society should be left alone. Whether they were called socialist or fascists, the theme was the same. Society must be planned from the top down. A great man — brilliant, powerful, with massive resources at his disposal — must lead. At some point in the middle of the 20th century, it became difficult to tell the difference but for their cultural style and owned constituencies. Even so, left and right maintained distinctive forms. If Marx was the founding father of the socialist left, Carlyle was his foil on the fascist right.

Hitler and Carlyle

In his waning days, defeated and surrounded only by loyalists in his bunker, Hitler sought consolation from the literature he admired the most. According to many biographers, the following scene took place. Hitler turned to Goebbels, his trusted assistant, and asked for a final reading. The words he chose to hear before his death were from Thomas Carlyle’s biography of Frederick the Great. Thus did Carlyle himself provide a fitting epitaph to one of the “great” men he so celebrated during his life: alone, disgraced, and dead.

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.  Follow on Twitter and Like on Facebook. 

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

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