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Cryptocurrencies and a Wider Regression Theorem – Article by Peter St. Onge

December 19, 2014 Peter St. Onge Comments 0 Comment

Peter St. Onge

December 18, 2014

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The debate whether or not cryptocurrencies are “money” has put a spotlight on the Menger-Mises Regression Theorem. As stated, the theorem posits that a non-fiat money must have had value before it became a money. Some have used currencies’ lack of antecedent value as knocking it off the money pedestal or as forcing cryptocurrencies to ignominiously piggyback on fiat currencies’ own regressions.

In a 2013 post Konrad Graf makes the excellent point that such critiques misread the Regression Theorem. In reality, Graf argues, the theorem is not a hypothesis to be tested, rather the theorem tells us that cryptocurrencies such as Bitcoin indeed had some antecedent value. At which point our task is to discover what that antecedent value was. Graf suggests several alternatives, including utility of Bitcoin as a geek toy, as art, or as social marker. Because of these non-monetary uses, Graf writes, bitcoin and the theorem do not threaten each other, but “merely gaze across the intellectual landscape at one another with knowing smiles.”

While I agree with Graf on his main point that the theorem implies cryptocurrencies did have antecedent value, I believe that both the original critique and Grafs’ response fall into a trap of misreading the theorem as requiring non-monetary and previously realized (“bought and sold”) benefits.

Money Is a Useful Good

Among Menger’s greatest contributions in his Principles is the realization that money is fundamentally a good like any other — demanded for its usefulness in enabling transactions and store of value — with an actual price dictated by its scarcity.

If money, like any other good, derives its value from the benefits it offers, it’s hard to see why the money, even those benefits, require an antecedent. Just as the internet can be valuable without a “pre-internet,” a cryptocurrency enabling anonymous, irreversible, low-regulation transactions and savings can be valuable without a precursor. [1] If there is no regression requirement for value in any other good, why does money alone bear this burden?

Must Money Have a Non-Monetary Use?

Instead, I would argue for a reading of the Regression Theorem with two important liberalizations. First, benefits provided by a money needn’t be non-monetary. That is, the benefits can reside in the good’s use as money itself — no need for geek-chic art. Second, antecedent demand needn’t have been realized — the use needn’t have actually occurred. It’s the antecedent demand, even latent, not the previous buying and selling, which counts in importing value via the Regression Theorem.

To give an example that satisfies both liberalizations, a benefit such as anonymous wire transfers is both a money-related benefit and is also a service that didn’t previously exist. In a liberalized Regression Theorem, this benefit would count as the antecedent demand giving the spark of life to a scarce cryptocurrency.

A concrete historical example of a currency offering both mainly monetary value and offering it only at moment of birth is Tang China’s paper money. Called “flying cash,” paper offered the key benefit of portability, set against its other risks compared with bullion coins (flammability, uncertain redemption). We could surely seek out non-monetary antecedent value for Tang cash — toilet paper comes to mind. But it seems a stretch to reach for artistic or hygiene uses, compared to the natural conclusion that flying cash was demanded because of its monetary benefits. The fact that demand for portable money was unrealized would simply increase paper money’s value to the unfortunate customer who lacked alternative light-weight money.

This mistaken focus on non-money-related and realized antecedent value is understandable, since even Mises seems to be mixing historical and praxeological discussion in Human Action (chapter 17, sec. 4) where Mises writes, “No good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments.”

Here Mises seems to clearly state that Menger’s Regression Theorem requires a currency to have historically represented a commodity having non-money use. This is a natural interpretation, especially in context of Mises’s subsequent discussion of precious metals, clearly useful commodities that you can flash at parties.

But we must take care here to separate Mises’s historical generalization from the praxeological core of his statement. Because Mises has metal on his mind, he suggests the “other employments” must have been antecedent (“did not have”) and, in his subsequent discussion of metals, seems to imply the commodities should be both concrete and previously in use (realized) for non-money purposes.

Money Benefits Are as Useful as Non-Money Benefits

Again, praxeologically, none of these requirements are essential. Money benefits are as useful as non-money benefits, and a useful commodity could conceivably be created and become a medium of exchange at the same moment. So long as the commodity offers “employments” in the form of benefits to users. Cryptocurrencies’ anonymity, regulatory treatment, algorithmically fixed rate of growth, fee structure, and irreversibility of transfer are all money-related benefits, many unrealized before cryptocurrencies came along.

On this reading, and in agreement with Graf, cryptocurrencies are not at all a challenge to the Regression Theorem. They are a confirmation. At birth, cryptocurrencies offered useful features. These benefits function as “employments,” giving cryptocurrencies demand via transaction and store of-value benefits, which in turn import durable purchasing power.

Perceptions Are Important

That “seed” of demand can then be amplified by marketing — by framing the subjective benefits of the currency. Again like any other good, if individuals exert effort to communicate and frame the benefits of a cryptocurrency, then we might expect demand to increase. These individuals may be the owners of businesses that benefit from the currency, or they simply may be enthusiasts.

Now we can simply match these subjective benefits to scarcity to yield a price of a cryptocurrency. Below zero and the currency isn’t “good enough” — it’s not perceived to offer enough benefits. It’s not cool and it’s not art. Above zero and a currency is born: now Satoshi Nakamoto t-shirts are all the rage.

As technology lowers the costs of producing cryptocurrencies, broadening the Regression Theorem’s value requirement to accept novel money-related benefits opens up enormously the range of currencies that are possible in the future. It should be an exciting few decades in the world of currency innovation.

Notes

1. Cryptocurrencies benefit from a perception of anonymity, although whether or not there is actual anonymity in practice is another matter.

Peter St. Onge is an assistant professor at Taiwan’s Fengjia University College of Business. He blogs at Profits of Chaos.

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.

Contrasting the Roles of World-Transforming Business Enterprises in the Novels of Hazlitt, Heinlein, and Istvan – Article by G. Stolyarov II

December 17, 2014 Gennady Stolyarov II Comments 0 Comment

G. Stolyarov II

December 17, 2014

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Henry Hazlitt’s Time Will Run Back, Robert Heinlein’s Methuselah’s Children, and Zoltan Istvan’s The Transhumanist Wager each portray a different path by which business enterprises can dramatically improve the human condition, catalyzing paradigm shifts in the societies around them. (Follow the hyperlinks above to read my detailed analyses of each novel.) Far from being concerned solely with immediate profits or meeting quarterly earnings goals, the entrepreneurs depicted in these novels endeavor to thrive despite political persecution and manage to escape and overcome outright dystopias.

Among these three novels, Methuselah’s Children shows the tamest business-based route to reform. For centuries the Howard Foundation aims not to transform the broader society, but rather to protect its own beneficiaries and encourage incrementally greater longevity with each subsequent selectively bred generation. The Howard Families adapt to existing legal and cultural climates and prefer keeping a low profile to instigating a revolution. But even their mild outreach to the general public – motivated by the hope for acceptance and the desire to share their knowledge with the world – brings upon them the full force of the supposedly enlightened and rights-respecting society of The Covenant. Rather than fight, the Howard Families choose to escape and pursue their vision of the good life apart from the rest of humanity. Yet the very existence of this remarkable group and its members’ extraordinary lifespans fuels major changes for humanity during the 75 years of the Howard Families’ voyage. By remaining steadfast to its purpose of protecting its members, the Howard Foundation shows humankind that radical life extension is possible, and Ira Howard’s goal is attained for the remainder of humanity, whose pursuit of extended longevity cannot be stopped once society is confronted with its reality.

The path of incremental and experimental – but principled – reform through the use of business is illustrated in Time Will Run Back. Even though Peter Uldanov does not intend to embark on a capitalist world revolution, he nonetheless achieves this outcome over the course of eight years due to his intellectual honesty, lack of indoctrination, and willingness to consistently follow valid insights to their logical conclusions. Peter discovers the universality of the human drive to start small and, later, large enterprises and produce goods and services that sustain and enhance human well-being. Once Peter begins to undo Wonworld’s climate of perpetual terror and micro-regimentation, his citizens use every iota of freedom to engage in mutually beneficial commerce that allows scarce resources to be devoted to their most highly valued uses. Peter, too, must escape political persecution at the hands of Bolshekov, but, unlike the Howard Families, he does not have the luxury of completely distancing himself from his nemesis. Instead, he must form a competing bulwark against Wonworld’s tyranny and, through the superiority in production that free enterprise makes possible, overthrow the socialist dystopia completely. Where Wonworld experienced a century of technological stagnation, Peter’s Freeworld is able to quickly regain lost ground and experience an acceleration of advancement similar to the one that occurred in the Post-World War II period during which Hazlitt wrote Time Will Run Back. Because human creativity and initiative were liberated through free-market reforms, the novel ends with a promise of open-ended progress and a future of ever-expanding human flourishing.

The most explicitly revolutionary use of business as a transformative tool is found in The Transhumanist Wager. Jethro Knights conceives Transhumania specifically as a haven for technological innovation that would lead to the attainment of indefinite lifespans and rapid, unprecedented progress in every field of science and technology. Transhumania is an incubator for Jethro’s vision of a united transhumanist Earth, ruled by a meritocratic elite and completely guided by the philosophy of Teleological Egocentric Functionalism. Like Lazarus Long and the Howard Families, Jethro finds it necessary to escape wider human society because of political persecution, and, like them, he plans an eventual return. He returns, however, without the intent to re-integrate into human society and pursue what Lazarus Long considers to be a universal human striving for ceaseless improvement. Rather, Jethro considers unaltered humanity to be essentially lost to the reactionary influences of Neo-Luddism, religious fundamentalism, and entrenched political and cronyist special interests. Jethro’s goal in returning to the broader world is a swift occupation and transformation of both the Earth and humankind in Jethro’s image.

Jethro’s path is, in many respects, the opposite of Peter Uldanov’s. Peter begins as an inadvertent world dictator and sequentially relinquishes political power in a well-intentioned, pragmatic desire to foster his subjects’ prosperity. Along the way, Peter discovers the moral principles of the free market and becomes a consistent, rights-respecting minarchist libertarian – a transformation that impels him to relinquish absolute power and seek validation through a free and fair election. Jethro, on the other hand, begins as a private citizen and brilliant entrepreneurial businessman who deliberately implements many free-market incentives but, all along, strives to become the omnipotender – and ends up in the role of world dictator where Peter began. The two men are at polar opposites when it comes to militancy. Peter hesitates even to wage defensive war against Bolshekov and questions the propriety of bringing about the deaths of even those who carry out repeated, failed assassination attempts against him and Adams. Jethro does not hesitate to sweep aside his opposition using massive force – as he does when he obliterates the world’s religious and political monuments in an effort to erase the lingering influence of traditional mindsets and compel all humankind to enter the transhumanist age. Jethro’s war against the world is intended to “shock and awe” governments and populations into unconditional and largely bloodless surrender – but this approach cannot avoid some innocent casualties. Jethro will probably not create Wonworld, because he still understands the role of economic incentives and individual initiative in enabling radical technological progress to come about. However, the benefits of the progress Jethro seeks to cultivate will still be disseminated in a controlled fashion – only to those whom Jethro considers useful to his overall goal of becoming as powerful and advanced as possible. Therefore, Jethro’s global Transhumania will not be Freeworld, either.

All three novels raise important questions for us, as human society in the early 21^st century stands on the cusp of major advances in biotechnology, nanotechnology, robotics, artificial intelligence, space travel, and hopefully radical life extension. However, reactionary political and cultural forces continue to inflict massive suffering worldwide through brutal warfare, sweeping surveillance and humiliation of innocent people, policies that instill terror in the name of fighting terror, and labyrinthine obstacles to progress established by protectionist lobbying on behalf of politically connected special interests. Indeed, our status quo resembles the long, tense stagnation against which Jethro revolts to a greater extent than either the largely rights-respecting society of The Covenant or the totalitarian regimentation of Wonworld. But can the way toward a brighter future – paved by the next generation of life-improving technologies – be devised through an approach that does not exhibit Jethro’s militancy or precipitate massive conflict? Time will tell whether humankind will successfully pursue such a peaceful, principled path of radical but universally benevolent advancement. But whatever this path might entail, it is doubtless that the trailblazers on it will be the innovative businessmen and entrepreneurs of the future, without whom the development, preservation, and dissemination of new technologies would not be possible.

References

Hazlitt, Henry. [1966.] 2007. Time Will Run Back. New York: Arlington House. Ludwig von Mises Institute. Available at http://library.freecapitalists.org/books/Henry%20Hazlitt/Time%20Will%20Run%20Back.pdf. Accessed December 13, 2014.

Heinlein, Robert A. [1958] 2005. Revolt in 2100 & Methuselah’s Children. New York: Baen.

Istvan, Zoltan. 2013. The Transhumanist Wager. San Bernardino: Futurity Imagine Media LLC.

The Businessman as Radical Revolutionary in Zoltan Istvan’s “The Transhumanist Wager” – Article by G. Stolyarov II

December 15, 2014 Gennady Stolyarov II Comments 0 Comment

G. Stolyarov II

December 15, 2014

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Zoltan Istvan’s 2013 science-fiction novel The Transhumanist Wager portrays how a combination of business enterprises, united to achieve a philosophical goal, can transform the world. The novel’s protagonist, Jethro Knights, develops a wide-ranging business enterprise that simultaneously operates as its own country – Transhumania – and withstands a military offensive from the combined navies of the world powers. Transhumania then serves as the platform from which Jethro’s vision of transhumanism – the transcendence of age-old human limitations through science and technology – can spread throughout the world and become universally adopted.

The Transhumanist Wager takes place in a near-future world where economic malaise, resurgent Luddite sentiments, and labyrinthine political barriers to technological innovation have resulted in a climate of stagnation. Jethro Knights endeavors to change all this, knowing that the status quo will eventually result in his own death. He takes a highly principled, completely uncompromising, and often militant approach toward achieving his goal: indefinite life extension through science and technology. Jethro endeavors to avoid death through any rational means possible, while simultaneously striving to become the “omnipotender” – “an unyielding individual whose central aim is to contend for as much power and advancement as he could achieve, and whose immediate goal is to transcend his human biological limitations in order to reach a permanent sentience” (Istvan 2013, 33). As a college student, Jethro formulates his philosophical system of Teleological Egocentric Functionalism (TEF), which he later explains to an audience of fellow transhumanists:

Teleological—because it is every advanced individual’s inherent design and desired destiny to evolve. Egocentric—because it is based on each of our selfish individual desires, which are of the foremost importance. Functional—because it will only be rational and consequential. And not fair, nor humanitarian, nor altruistic, nor muddled with unreachable mammalian niceties. The philosophy is essential because it doesn’t allow for passive failure. It doesn’t allow transhumanists to live in delusion while our precious years of existence pass. (Istvan 2013, 84)

Jethro circumnavigates the world on his sailboat and works as a journalist in conflict-ridden areas, with the aim of learning as much as possible about the world. Upon returning to the United States, Jethro founds the activist organization Transhuman Citizen, which aims to promote emerging technologies – particularly biotechnological research into indefinite life extension. He must also to foil the increasingly violent and destructive attacks against cutting-edge scientists and research centers by Christian fundamentalist terrorists spearheaded by the Neo-Luddite Reverend Belinas. The Redeem Church, headed by Belinas, has no qualms about hiring thugs to brutally murder transhumanist scientists. At the same time, Belinas maintains a façade of public respectability and functions as a high-profile “moral leader.” He influences public opinion and prominent politicians – including Jethro’s former college classmate Senator Gregory Michaelson – to despise radical technological progress and crack down on transhumanist research through prohibitions and force. After Jethro’s wife and unborn child are murdered by Belinas’s henchmen and Transhuman Citizen rapidly loses support due to Belinas’s political and public-relations war, Jethro’s dream seems to be on the verge of total collapse. Jethro’s only opportunity for a turnaround arrives in the form of the Russian oil tycoon Frederich Vilimich.

Vilimich is not the ideal rights-respecting free-market capitalist; his rise to power during the chaotic post-Soviet era is marred by the suspicious death of a general with whom he illegally seized a large number of bankrupt oil companies. Vilimich has high business acumen and recognizes the benefits of using the best technology available: “Against the opinion of many people—including the general—Vilimich used every ruble of the company’s booming earnings to acquire the most technologically advanced oil extraction equipment available. Within a few years, the company quadrupled its oil output and became a dominant player in the worldwide energy field” (Istvan 2013, 174). Vilimich can be capricious and tyrannical but understands economic incentives and is ruthless about harnessing them to fulfill his objectives:

He was loathed by his own people for never giving one ruble to charity. He treated his workers poorly compared with other large oil companies, but paid them better. Governments feared him for his habit of impetuously shutting down his oil pipeline for days at a time, thus creating worldwide spikes in energy prices. Some said he did it just to amuse himself; others insisted he just wanted higher oil prices; still others grumbled that he just wanted to remind people who was in control. (Istvan 2013, 175).

Vilimich is a tragic figure; all joy had left his life when his wife and son were murdered by terrorists two decades earlier. Vilimich dedicates his time and his vast oil fortune to repeated, unsuccessful attempts to bring them back from the dead. Vilimich’s redeeming quality is his understanding and embrace of the necessity of radical technological progress: “Vilimich was a believer in change via technology. It had always been a natural instinct for him” (Istvan 2013, 176). Upon learning of the concerted worldwide crackdown against Transhuman Citizen, Vilimich’s reaction is to sympathize with Jethro: “The world was afraid of evolution, Vilimich told himself, shaking his head in frustration. His grueling but successful battle against colon cancer reminded him that life was not open-ended” (Istvan 2013, 175). Vilimich realizes that some of his previous, mystical attempts to revive his family could not possibly have worked; “however, advanced scientific technology, hard work, and wits most certainly could. They were the exact same things he had used to create his sprawling oil empire.” (Istvan 2013, 176).

Vilimich initially approaches Jethro with the aim to redirect Jethro’s quest for biological immortality toward bringing back the dead instead. He tells Jethro, “I can give you billions of dollars for exactly that mission. We can build a nation of scientists to accomplish it. It may not follow the pure transhuman and immortality quests you wanted, but it’s close enough” (Istvan 2013, 179). Not even Vilimich’s billions, however, can redirect Jethro from his overarching plan for transforming the world in the pursuit of indefinite life extension, as outlined in his TEF Manifesto. Jethro points out that biological life extension for the living is a far more realistic and proximately achievable goal than reviving the dead. He replies to Vilimich, “What you want is just not even on the transhuman timeline right now. And it would be irresponsible to dedicate more than only a fraction of transhuman resources to it at a moment when the real goals of the movement are, literally, on the verge of collapse; when the longevity of our own lifespans are so immediately threatened” (Istvan 2013, 180). A clash of personalities ensues. Jethro attempts to reason with Vilimich: “But your money could be used for more practical and possible goals, for near-term successes like your own immediate health and longevity. Then, at some later point, you could consider tackling the monumental task of bringing back the dead. What you want is not even reasonable just yet” (Istvan 2013, 180). To this Vilimich responds, “I didn’t get to be so successful because I was always reasonable” (Istvan 2013, 180). Both Vilimich and Jethro have lost their families to violence. However, unlike Jethro, who seeks to base his decisions on an overarching “machine-like” rationality, Vilimich is driven by his passionate obsession with bringing back his loved ones above all. Both men are stubborn and unyielding, and their initial meeting ends in an impasse.

However, four days later, Vilimich becomes swayed to give Jethro 10 billion dollars – half of Vilimich’s stake in Calico Oil – unconditionally. Vilimich sees much of himself in Jethro’s intransigence and single-mindedness, and his reversal makes all the difference for Jethro. Immediately, Jethro undertakes an elaborate scheme to conceal the money from the world’s governments, which would have expropriated it:

The next morning, in a rented private jet, Jethro flew around the world to Vanuatu, Singapore, Lebanon, Panama, Maldives, Djibouti, and Switzerland. He spent two weeks establishing bank accounts for various pop-up companies and corporations in out-of-the-way places, acting as the sole manager. He made up odd business names like Antidy Enterprises, Amerigon LLC, and Dumcros Inc. The money was wired in small, varying portions to all his hidden accounts belonging to the companies so it could never be frozen, tracked, or calculated by the NFSA [National Future Security Agency – a US federal agency established to crack down on transhumanist research] or anyone else on the planet. Even the Phoenix Bank president wasn’t aware of the account names or numbers, as third-party escrow accounts were used to hide and deflect all traceable sources. Jethro sent secondary codes and addresses to Mr. Vilimich, as the only other person capable of locating the money. But even he wasn’t allowed to know everything or control anything. On every account, there was a different company, a different address, a different identification number, a different mission statement. The ten billion dollars was split in a hundred different ways, all with digital tentacles that led only to Jethro Knights.

When the money was safe, he emailed Vilimich:

Dear Mr. Vilimich,

Thank you. The money is safe and being put to good use for the right reasons. I’ll be in touch as the transhuman mission progresses. Furthermore, you have my pledge that I will not forget that picture in your pocket.

Jethro Knights (Istvan 2013, 184)

What Jethro does with Vilimich’s money is nothing short of revolutionary. He endeavors to construct an independent community of cutting-edge scientists – Transhumania – on a floating platform – a seastead – in international waters, away from any country’s jurisdiction. Jethro fabricates the appearance of Transhuman Citizen’s continued decline, so as to trick the anti-transhumanist politicians and religious leaders into thinking that their victory against Jethro is imminent. In secret, Jethro reaches out to architect Rachel Burton, who pioneered many concepts for futuristic structures but is frustrated at the lack of interest in ambitious architectural projects due to the ongoing economic and technological stagnation in mainstream societies. Although the acerbic Burton is initially wary of Jethro, she becomes elated when he explains his vision to her:

“A floating city should shield transhumanists and the people I need away from those forces, giving me certain worldwide legal protections. The city will have to be built to house approximately 10,000 scientists and their immediate families. You’ll have to build up, because I want most of the city open for creating green spaces, jungles, and parks—so people like living there. Actually, so they love living there. These will be very picky people, some of the smartest in the world. They’ll want the best of everything, and they deserve it. I want them to be enthralled with every bit of their new home. I want the city big enough to have an airport for passenger jets, but small enough to comfortably ride a bike around in twenty minutes. I want to build the most modern metropolis on the planet, a utopia for transhumanists and their research.” (Istvan 2013, 192)

Unlike Vilimich, who pays his workers well but treats them poorly, Jethro is more focused on the quality of his employees’ lives. He understands the importance of employee motivation and creating a rewarding work environment and the opportunity for fulfilling personal lives outside of the workplace. Because Jethro must attract the best and brightest in order to have a hope of realizing his goal of living indefinitely, he needs to give these creative minds the best possible quality of life in order to entice them to come to Transhumania.

The platform and infrastructure for Transhumania – dominated by three towering skyscrapers – are assembled in Liberia at Burton’s recommendation. She outlines the geopolitical and economic considerations behind this choice: “West Africa is far off the radar screen for the rest of the world, so hopefully, there won’t be any troublesome interruptions by the media or the NFSA. Besides, Liberia has cheap labor, good weather, and lots of beach space to launch this puppy. It’s going to be at least ten soccer fields long, you know. We’re going to need lots and lots of space.” (Istvan 2013, 193) The construction effort is a massive project – requiring an “army of 15,000 workers” to labor for five months (Istvan 2013, 193). Jethro is a hands-on project manager who spends much time at the construction site and gets involved in the details of the plan for the seastead, as well as the means by which it is assembled. Jethro hires an international team of workers and, with the help of a multilingual foreman, sets up a work rotation to facilitate uninterrupted construction: “The work was endless: Twenty-four hours a day, there was a symphony of hammering, drilling, welding, grinding, and shouting. There was no break from the movement; sprawling bodies and their machines zipped tirelessly around the platform. The sheer creation process was a marvel to behold” (Istvan 2013, 195).

As Transhumania nears completion, Jethro travels throughout the world to clandestinely invite leading scientists to live there. Jethro becomes an expert presenter:

Jethro mastered his task of pitching the spectacular possibilities of the transhuman nation to his chosen candidates. His invitation to share in the rebirth of the transhuman mission and its life extension goals was compelling, exciting, and novel. Part of his presentation was done in 3D modeling on a holographic screen that shot out of his laptop computer. The state-of-the-art technology Burton’s company provided was impressively futuristic. (Istvan 2013, 196).

Jethro promises the candidate scientists that they will live in “The most modern buildings in the world. Every luxury and convenience you can imagine: spas, five-star restaurants, botanical gardens, farmers’ markets, an entertainment plaza, a world-class performing arts center. Then over there would be your offices and laboratories. No expense spared on your research equipment. The most sophisticated on the planet—I guarantee it.” (Istvan 2013, 196-197). Furthermore, Jethro emphasizes the tremendous freedom that scientists would have to pursue their research in the absence of political restraints: “Once scientists arrived there, he promised hassle-free lives from bossy governments and others that disapprove of transhumanist ways. The United Nations decreed three decades ago that rules and ownership 200 miles away from any land masses on the planet do not exist” (Istvan 2013, 197). Jethro grasps the essential harmony of interests between a well-run business and its employees, and therefore does not forget about providing generous pay and benefits, as well as creating a family-friendly living environment on Transhumania:

Additionally, he promised the scientists amazing salaries, stellar healthcare, and citizenship to Transhumania if people desired. For their children, there would be competitive schools, sports groups, piano tutors, French classes, tennis lessons, and swim teams. Dozens of varied restaurants and cafes would serve organic, sustainable, and cruelty-free foods. Coffee shops, juice bars, and drinking pubs would be ubiquitous. Movie theaters, art galleries, fitness centers, libraries, science and technology museums, and shopping centers would dot the city. Innovative designers would set up furniture and clothing outlets, including those that created products and garments with the latest intelligent materials capable of bio-monitoring the body. Whatever you wanted or needed, no matter how far-fetched; it would all be there. Jethro laid out the promise of an ideal, advanced society, the chance to belong to a country with everything going for it. (Istvan 2013, 197).

Jethro’s hiring policy is enlightened and meritocratic with regard to avoiding any prejudice based on attributes irrelevant to a person’s ability to get the job done. However, Jethro is also unforgiving of sub-optimal performance and ruthless about preventing or suppressing any possible behavior or institution that would get in the way of the fulfillment of his overarching vision for Transhumania. Moreover, Jethro – unlike a principled libertarian – does not brook significant ideological dissent in his country:

His hiring policy was simple. He didn’t give a damn where you came from, or what color you were, or with whom you had sex, or what gender you were, or if you had disabilities, or whether you were a criminal or not. But if you were hired for a position, and you failed to meet the goals assigned to you, or if you hindered other hires from meeting the goals assigned to them, then you would be fired and forced off Transhumania at once. There were no labor unions allowed. No workers’ compensation. No welfare. No freebies. In short, there was no pity, or even pretense at pity. There was just usefulness—or not. And if you didn’t like it, or didn’t agree with it, then you didn’t belong on Transhumania. Every contract of every scientist who wanted to join bore this severe language, as well as their consensual agreement to uphold the [tenets] of the TEF Manifesto and the core mission of transhumanism. (Istvan 2013, 197)

Because Jethro acts not only as the head of a vast business but also as the leader of a de facto independent city-state, it is not clear whether his behavior is consistent with respect for individual rights. On the one hand, every arrangement into which Transhumania’s residents enter is a freely chosen contract. On the other hand, they lose every association with Transhumania if they fail to adhere to Jethro’s demanding terms. They not merely lose their jobs, but they may no longer live or own property on Transhumania. Ultimately, Jethro facilitates comfortable lifestyles and offers abundant economic incentives not out of a devotion to individual freedom per se, but out of a recognition that a considerable allowance for economic liberty (though constrained by Jethro’s overarching purpose) would be the most conducive to rapid technological innovation and the eventual discovery of a means to reverse biological senescence and live indefinitely.

In spite of the severity of some of Jethro’s terms, the scientists who come to work on Transhumania know what they are getting into. Many come willingly after being inspired by a speech filled with Jethro’s characteristic militant, uncompromising rhetoric:

After so many years of being professionally stifled, intellectually muted, and socially ostracized, many transhuman entrepreneurs and scientists of the world cheered. While the speech was worded stronger than they themselves would have delivered, they respected Jethro Knights’ unwillingness to compromise the transhuman mission. They valued his promotion of the determined and accomplished individual. They applauded his hero’s journey to reverse the falling fortunes of the immortality quest. They especially appreciated the face-slapping of religion, human mediocrity, and overbearing government. Modern society was at a tipping point of such cowardly self-delusion and democratic self-sacrifice that someone needed to stand up and fight for what everyone wanted and admitted secretly to themselves: I want to reach a place of true power and security that can’t be snatched from me at the world’s whim. (Istvan 2013, 203)

Vilimich is pleased with his investment and sends Jethro a one-line note, “Thanks for punching the world for me” – to which Jethro replies, “Thanks for giving me muscles to do so” (Istvan 2013, 203). Through this exchange, Istvan illustrates the indispensability of these two visionary, intransigent men’s business partnership to making Transhumania possible.

Jethro raises the incentives for coming to Transhumania by offering each researcher “a tax-free million dollar signing bonus. It was more money than many had accumulated in decades of work. If they brought approved colleagues from their fields with them, an additional hundred thousand dollars was given. The main obligations of those who joined the transhuman nation included staying their full five-year term and reaching reasonable performance goals in their work” (Istvan 2013, 203). Jethro also creates the possibility of owning real estate: “One-, two-, three-, and four-bedroom residences were sold at enticing prices. Jethro made it cheaper to own than to rent, and most people opted to buy upon arriving. It replenished the cash Transhumania needed for actual research and city operations” (Istvan 2013, 204). Jethro understands that ownership of private property (limited though it may be by the requirement to adhere to the TEF Manifesto) gives the owner a powerful incentive to strive for the economic progress of the community where the property is located. By turning his employees into stakeholders of Transhumania, he not only enhances Transhumania’s revenue stream but also turns his scientists into more motivated, dedicated producers and innovators. Essentially, Jethro utilizes the principles of running a successful start-up technology firm and applies them to an entire small country: “Jethro ran the entire nation as if it were an aggressive, expanding technology company racing to bring an incredible invention to market. Every scientist had stock in its success, in the urgency of its mission. The result was a hiring domino effect. Soon, hundreds of scientists were showing up weekly to make tours of Transhumania and to sign contracts” (Istvan 2013, 204).

Jethro succeeds in cultivating a motivated, even inspired, workforce, with a prevailing “can-do” ethos:

Problems occurred, but they were quickly worked out for the most part. These were not people who complained about a broken hot shower or a bad Internet connection. These were professionals of the highest order, and they were all building the nation together. They fixed things themselves, went out of their way to improve operations, and helped one another when they could. These citizens were people of action, of doing—and doing it right. (Istvan 2013, 205).

Jethro is also able to vastly improve his scientists’ quality of life by restoring their sense that an amazing future can be created through their own work:

Many scientists commented they felt like graduate students again—when the world was something miraculous to believe in, when anything was still possible, when the next great discovery or the next great technological leap was perhaps just months away. […]At night, many of them looked at the stars from the windows of their skyscrapers and felt as if they had arrived on a remarkable new planet. They were never happier or more productive, or bound with a greater sense of drive. (Istvan 2013, 205).

In his discussion of the incentives and outcomes found in Transhumania, Istvan illustrates that the best-run businesses will not only generate economic value but will also inspire employees with the prospect of improving the human condition and creating a better world. Even though Jethro’s methods of sweeping aside all opposition are questionable, his goals of overcoming disease, lengthening lifespans without limit, and producing life-improving technological advances on all fronts are clearly some of the most admirable aims for any enterprise.

Five years after Transhumania’s founding, a major breakthrough enables the goal of indefinite lifespans to approach fruition. Jethro’s colleague, the scientist Preston Langmore announces that “The new cell-like substance that we’ve developed has so many applications. The manipulation of its DNA, controlled by our nanobots, will bring unprecedented changes to human life in the next decade, perhaps even in the next few years. We will begin our ascent to a truly immortal life form, full of all the benefits of what it means to be a transhuman being” (Istvan 2013, 222).

But the obstacles to the realization of Jethro’s dream do not cease once Transhumania becomes economically and scientifically successful. Jethro recognizes that anti-transhumanist organizations and governments will not simply allow Transhumanian research to continue in peace. Therefore, he devotes a third of Transhumania’s budget to defense. Transhumania’s vast revenues enable the construction of a missile shield, four megasonic airplanes, and ten combat robots, as well as the world’s most advanced cyber-warfare infrastructure. Shortly after Transhumania’s defensive capabilities are deployed, Belinas orchestrates Jethro’s kidnapping and torture. However, Jethro’s colleagues manage to locate the compound where he is held hostage, and one of the Transhumanian combat robots destroys Belinas’s thugs and kills Belinas himself. Jethro is freed, and Belinas’s crimes are broadly publicized, to the shame of the world’s governments. However, too many politicians and military leaders have become personally vested in attempting to seize Transhumania’s scientific and economic production for themselves, and it is too late to stop them from mobilizing their combined navies in an assault on Transhumania. Jethro’s hackers manage to cripple most of the invaders’ missile-guidance systems, causing the nations’ fleets to destroy one another. Only some extremely obsolete Russian missiles, whose use Jethro did not anticipate, manage to inflict moderate damage. Within twenty-four hours, the ingenuity of Transhumania’s scientists enables them to anticipate these missiles and effectively defend against them as well. By establishing the framework for the world’s freest and most innovative economy, Jethro enables the emergence of the ample resources needed to resist those who would stand in the way of his ambition.

Having defeated the combined might of the world’s navies, Jethro considers it impossible for Transhumania to peacefully coexist with the political status quo. Now that he possesses the technological means to easily outmaneuver and foil any nation’s military, Jethro is able to occupy much of the world after destroying all of the major religious and political monuments of traditional human societies. This is where Jethro crosses the line from justifiable self-defense of his society and into aggression against the rest of humanity – becoming an authoritarian world dictator in his quest to be the omnipotender. What distinguishes Jethro’s rule from historical totalitarianism is his instrumental use of free-market policies and incentives to facilitate technological and economic growth – but, again, only insofar as this serves his overarching goal of transforming the human condition along the path outlined in the TEF Manifesto. Jethro’s approach to the population of Earth is more utilitarian than based on any absolute, inviolate concept of individual rights; Jethro will recognize a semblance of personal freedom, but only for those who are useful to his broad ambition of turning humanity into a rapidly advancing, transhuman species. Those who cast their lot with Jethro during the early days of Transhumania are, on the other hand, rewarded with unprecedented power. Jethro urges his Transhumanian colleagues to renew their contracts and oversee vast swaths of the transhumanist-dominated Earth:

“You will have a choice, of course, to do as you desire and go where you like, and take the wealth you’ve earned. Nevertheless, in the best interest of the transhuman mission, I feel it expedient to appoint you as interim leaders of your birth nations and its major cities. Many of you will also oversee massive new science projects that only the resources of individual continents can foster. Others of you will be asked to found and build new universities and educational institutes, some of which will become the largest, most populated learning centers in the world.

“It is my hope that in your new appointments, you will seed and cultivate a surplus of amazing new transhuman projects to fruition for us all. As incentive to accept these new duties asked of you, your compensation packages will be staggering. I aim to make each and every one of you—as well as all other citizens on Transhumania—some of the richest and most powerful people in the world.” (Istvan 2013, 231)

In effect, Jethro takes the meritocracy he established in Transhumania and transposes it onto the wider world, turning the best and brightest into world leaders and fulfilling the age-old dream of some thinkers to put enlightened “philosopher-kings” in charge of human society. Jethro explicitly announces that the entire world will become Transhumania writ large:

“Earth, and human habitation of it, will be redesigned. It will no longer be many different countries with different cultures on different continents, but one committed transhuman alliance. It will be transformed into one global civilization bound to advancing science—one great transhuman planet. There will be no more sovereign nations, only Transhumania. Our transhuman goals will be the same as before; there will just be a lot more people working towards them, and a lot more resources to help us achieve success.” (Istvan 2013, 231)

With all of the Earth’s resources at his disposal, Jethro continues his quest to overcome disease and death, and by the novel’s end it appears that he is successful. Jethro is even able to be cryonically frozen and subsequently revived. He begins to venture into the possibility raised by Vilimich of eventually recovering deceased loved ones – but this quest remains unconcluded, and Istvan leaves the question of its feasibility as open-ended.

The Transhumanist Wager is a story about the clever use of a vast business structure and carefully crafted economic incentives to achieve the most revolutionary transformation of humankind conceivable: a revolution against contemporary societies and in favor of a global culture committed to rapid technological progress and the defeat of death above all. Jethro Knights is more of a utilitarian than a libertarian, and his choice of means eventually departs starkly from principled libertarianism, since a consistent respect for the individual rights of all people, including those whom one considers deeply hostile to one’s vision of progress, must ultimately clash with the desire to become an “omnipotender” and achieve as much power as possible. However, during the stage in which Jethro uses free-market policies and innovative business management as instruments toward the attainment of his vision, he is able to create an admirable and inspiring model for human progress.

Reference

Istvan, Zoltan. 2013. The Transhumanist Wager. San Bernardino: Futurity Imagine Media LLC.

Vaccine “Skeptics” Are Too Credulous – Article by Bradley Doucet

December 15, 2014 Bradley Doucet Comments 0 Comment

Bradley Doucet

December 14, 2014

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There is absolutely no question in my mind that those who refuse to vaccinate their children against diseases like measles and whooping cough love their children just as much as those who do vaccinate. Pretty big of me, eh? But seriously, to a first approximation, parents love their kids, end of story. If they refuse to inoculate them, it’s because they doubt the effectiveness and/or safety of vaccines. But while such parents may see themselves as skeptics, they are in fact too credulous by half.

When I first heard about the claim that vaccines might cause autism, several years ago, I looked into it with an open mind. I am a big fan of questioning things, and especially of challenging the powers that be. When it comes to public health issues, I personally find it pretty easy to believe that the people in charge of health agencies are overly conservative in approving beneficial drugs, for instance, because they want to cover their asses. I find it easy, also, to believe that the people who run drug companies want to use the patent system to make as much money as possible from the sale of their products. Of course they do.

But the alleged vaccine-autism link, I discovered, grew out of a thoroughly discredited study of just a handful of kids. It persisted in the public imagination because the onset of symptoms of autism happens around the time that children are vaccinated, but this is mere correlation, and epidemiological studies have not found any causal link. As for effectiveness, on the other hand, there is a clear and well-established causal link between mass vaccinations and the virtual eradication of numerous diseases—with recent resurgences caused in turn by falling vaccination rates among doubters.

A good skeptic does not automatically believe whatever the mainstream believes, but neither does a good skeptic rush to believe an online article stumbled upon that one time that cast aspersions on the motives of every single person working in the pharmaceutical industry or in a health agency. “Follow the money” is not, by itself, a good enough argument for believing anything. There are plenty of honest ways to make a living, so specific reasons are needed for believing that everyone involved in the production and sale and administration of vaccines is either corrupt or stupid. If you don’t have the scientific chops yourself, not to mention a decent grasp of statistics, why would you bet your children’s health, and even their very lives, on such a marginal suspicion?

Without assuming that everyone is moral or that they don’t face perverse incentives, I nonetheless find it extremely difficult to believe that very many people want to make money by harming others, or that they would be capable of doing so through a massive conspiracy spanning decades and even centuries. Based on what I’ve read, I’m convinced that vaccines are effective and safe, and that they have been a great boon to humanity. Furthermore, the onus is on “skeptics” to prove that the well-established mainstream theory is wrong, something they have utterly failed to do. If one hasn’t done the research and doesn’t have the knowledge base to be absolutely sure that the entire medical profession is mistaken, it is not skepticism to simply assert and believe the opposite of a theory that has stood the test of time.

Bradley Doucet is Le Québécois Libre‘s English Editor and the author of the blog Spark This: Musings on Reason, Liberty, and Joy. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also writes for The New Individualist, an Objectivist magazine published by The Atlas Society, and sings.

Henry Hazlitt’s “Time Will Run Back”: Unleashing Business to Improve the Human Condition – Article by G. Stolyarov II

December 14, 2014 Gennady Stolyarov II Comments 0 Comment

G. Stolyarov II

December 13, 2014

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The free-market economist, journalist, and editor Henry Hazlitt wrote his novel The Great Idea in 1951; the book was re-released under the title Time Will Run Back in 1966 in order to emphasize the rediscovery of the lost ideas of free-market capitalism by the novel’s protagonists. In addition to being the most rigorous work of fiction available for the teaching of economic ideas, Time Will Run Back highlights the role of business in taking a society from a condition of destitution, misery, and brutality to one of widespread prosperity, progress, and personal fulfillment.

The novel’s hero, Peter Uldanov, is the son of Stalenin, the dictator of Wonworld – a socialist dystopia that, in the year 2100 (282 A.M. – After Marx) spans the entire globe. Peter, raised away from politics by his mother, has not been indoctrinated into Wonworld’s ideology of totalitarian central planning of all aspects of its citizens’ lives. While completely new to politics, Peter is highly intelligent and an accomplished pianist and mathematician. Stalenin is dying and, out of paternal affection, seeks to engineer Peter’s succession. Peter is intellectually honest and is perplexed at the widespread poverty, famines, and shortages of Wonworld, as well as the constant climate of terror in which its subjects live – even though the regime claims to have “liberated” them from oppression by the capitalists of old. Peter attempts to introduce a series of reforms to allow criticism of the government and free elections, but his goal of achieving human liberation fails to take hold so long as the economy remains completely centrally planned. Peter’s nemesis is Stalenin’s second-in-command Bolshekov, who zealously defends the system of command and control while he is the main agent of torture, execution, and mismanagement within it. Peter enlists the assistance of Thomas Jefferson Adams – the third-highest official in Wonworld. Adams is disillusioned with the socialist system and gropes for alternatives but, like Peter, does not have the benefit of the lessons of history – since any works of literature, economics, philosophy, and political theory that disagreed with Marxism-Leninism were purged after Wonworld’s establishment a century earlier. Adams has become cynical by observing decades of attempted “reforms” within Wonworld, which tinkered with specific policies and plans but never challenged the overarching fact of total central planning. Peter, as an outsider with a fresh perspective, is more willing to overhaul the system’s most fundamental features. In the genuine search for greater prosperity and more humane treatment for Wonworld’s population, he begins to dismantle the socialist system piece by piece, at first without even recognizing that this is the effect of his actions.

Much of the novel depicts Peter and Adams groping toward a system of incrementally freer markets and greater individual liberty as they discuss possible reforms and attempt to understand both their direct and secondary, unintended consequences. As a result of their stepwise sequence of liberalizations, Peter and Adams inadvertently rediscover the old system of capitalism that Wonworld sought to stamp out. Adams often acts as a foil to Peter, proposing modified central plans or mixed-economy systems and attempting to posit the arguments made by inflationists and protectionists that emerge as milder obstacles to liberalization once private property, money, and decentralized economic planning by individuals are restored. Peter, however, is sufficiently wise to be able to perceive the secondary consequences of these proposals and to consistently espouse and act in favor of unhampered individual economic liberty.

Peter’s first successful reform is to permit people to exchange ration coupons which they were allocated for various specific commodities. Previously, each citizen of Wonworld received ration coupons that were limited to his personal use, and there was no way to realize any value from coupons for goods that the individual did not wish to personally consume. Initially, the citizens of Wonworld – terrorized for generations – are reluctant to exchange coupons for fear of being tricked into showing disloyalty, but after a few months of encouragement by Peter’s government, exchanges begin to occur:

At first individuals or families merely exchanged ration tickets with other persons or families living in the same room with them. Then in the same house. Then in the same neighborhood or factory. The rates at which the ration tickets exchanged was a matter of special bargaining in each case. They at first revealed no describable pattern whatever. In one tenement or barracks someone would be exchanging, say, one shirt coupon for five bread coupons; next door one shirt coupon might exchange for fifteen bread coupons.

But gradually a distinct pattern began to take form. The man who had exchanged his shirt coupon for five bread coupons would learn that he could have got fifteen bread coupons from someone else; the man who had given up fifteen bread coupons for one shirt coupon would learn that he might have got a shirt coupon for only five bread coupons. So people began to “shop around,” as they called it, each trying to get the highest bid for what he had to offer, each trying to get the greatest number of the coupons he desired for the coupons with which he was willing to part. The result, after a surprisingly short time, was that a uniform rate of exchange prevailed at any given moment between one type of coupon and another. (Hazlitt 1966, 103)

This reform inaugurates a price system, which facilitates rational planning by individuals and the effective allocation of goods to their most highly valued uses. It also leads to the emergence of markets where large volumes of exchanges can take place:

Then another striking thing happened. People had at first shopped around from house to house and street to street, trying to get the best rate in the kind of coupons they valued most for the kind of coupons they valued least. But soon people anxious to trade their coupons took to meeting regularly at certain places where they had previously discovered that they found the most other traders and bidders and could get the best rates in the quickest time. These meeting points, which people took to calling coupon “markets,” tended to become fewer and larger.

Two principal “markets” gradually established themselves in Moscow, one in Engels Square and the other at the foot of Death-to-Trotsky Street. Here large crowds, composed in turn of smaller groups, gathered on the sidewalk and spread into the street. They were made up of shouting and gesticulating persons, each holding up a coupon or sheet of coupons, each asking how much he was bid, say, in beer coupons for his shirt coupon, or offering his shirt coupon for, say, twelve beer coupons, and asking whether he had any takers. (Hazlitt 1966, 103-104)

As markets take hold, professional brokers emerge to handle large numbers of transactions for ordinary people in exchange for a percentage of ration coupons. The brokers quickly become adept at spotting and eliminating discrepancies among exchange rates between any two types of coupons:

Their competitive bids and offers continued until the relationships were ironed out, so that no further profit was possible for anybody as a result of a discrepancy. For the same reason, Peter found, the ratios of exchange in the market at Engels Square were never far out of line for more than a very short period with the ratios of exchange on Death-to-Trotsky Street; for a set of brokers were always running back and forth between the two markets, or sending messengers, and trying to profit from the least discrepancy that arose between the markets in the exchanges or quotations.

A special name—”arbitrage business”—sprang up for this sort of transaction. Its effect was to unify, or to universalize, price relationships among markets between which this freedom of arbitrage existed. (Hazlitt 1966, 105)

By allowing free exchange and permitting private entrepreneurs to take advantage of arbitrage opportunities, Peter enables a solution to emerge for Wonworld’s previously intractable problem of how to make the best use of scarce resources to fulfill as many human needs as possible. Peter recognizes that, even though the adjustments to prices that guide this process of rational resource allocation may appear automatic, they are in fact the effect of the actions of businesspeople seeking to earn a profit:

They took place solely because there was an alert group of people ready to seize upon the slightest discrepancy to make a transaction profitable to themselves. It was precisely the constant alertness and the constant initiative of these specialists that prevented any but the most minute and short-lived discrepancies from occurring. (Hazlitt 1966, 105)

Allowing free exchange of ration tickets leads to the spontaneous emergence of a monetary system as exchange rates begin to be quoted in terms of only a few leading types of coupons and eventually only in terms of cigarette coupons. These are superseded by packages of cigarettes themselves, which are in turn eventually replaced by gold.

The power struggle between Peter and Bolshekov escalates until Bolshekov engineers Stalenin’s assassination and seizes power in Wonworld. Peter and Adams flee to North America, assisted by their loyal Air Force, and establish their own country – Freeworld – where Peter’s economic reforms continue. Private ownership of land and capital goods is introduced, and large factories are privatized through the issuance of transferable shares to their workers, entitling them to receive a percentage of the profits from the enterprise. This greatly raises the incentives for production, responsibility, and prudent management of resources, as the newly empowered citizens inform Peter:

When he asked one of these new peasant-proprietors about his changed attitude, his explanation was simple: “The more work I and my family put into the farm, the better off we are. Our work is no longer offset by the laziness and carelessness of others. On the other hand, we can no longer sit back and hope that others will make up for what we fail to do. Everything depends on ourselves.”

Another farmer-owner put it this way: “The greater the crop we raise this year, the better off my family will be. But we also have to think of next year and the year after that, so we can’t take any risk of exhausting the soil. Every improvement I put into the farm, whether into the soil or into the buildings, is mine; I reap the fruits of it. But there is something that to me is more important still. I am building this for my family; I am increasing the security of my family; I will have something fine to turn over to my children after I am gone. I don’t know how I can explain it to you, Your Highness, but since my family has owned this land for itself, and feels secure in its right and title to stay here undisturbed, we feel not only that the farm belongs to us but that we belong to the farm. It is a part of us, and we are a part of it. It works for us, and we work for it. It produces for us, and we produce for it. You may think it is just a thing, but it seems as alive as any of us, and we love it and care for it as if it were a part of ourselves.” (Hazlitt 1966, 131)

The ability of individuals to own and run their business and earn a profit turns Freeworld into an economic powerhouse. Whereas Wonworld had, for a century, remained at the level of technological advancement approximately resembling that of 1918-1938, Freeworld becomes a haven for invention, the benefits of which disseminate rapidly to the population. Freeworld’s development appears to rapidly catch up to the condition of Hazlitt’s 1950s and 1960s America:

Constant and bewildering improvements were being made in household conveniences, in fluorescent lighting, in radiant heating, in air-conditioning, in vacuum cleaners, in clothes-washing machines, in dishwashing machines, in a thousand new structural and decorative materials. Great forward leaps were now taken in radio. There was talk of the development, in the laboratories, of the wireless transmission, not merely of music and voices, but of the living and moving image of objects and people.

Hundreds of new improvements, individually sometimes slight but cumulatively enormous, were being made in all sorts of transportation—in automobiles and railroads, in ships and airplanes. Inventors even talked of a new device to be called “jet-propulsion,” which would not only eliminate propellers but bring speeds rivaling that of sound itself.

In medicine, marvelous new anesthetics and new lifesaving drugs were constantly being discovered …

“In our new economic system, Adams,” said Peter, “we seem to have developed hundreds of thousands of individual centers of initiative which spontaneously co-operate with each other. We have made more material progress in the last four years, more industrial and scientific progress, than Wonworld made in a century.” (Hazlitt 1966, 153)

Instead of dreading work and needing to be terrorized into toil, the people begin to welcome and yearn for productive innovation:

Peter was struck by the startling change that had come over the whole spirit of the people. They worked with an energy and zeal infinitely greater than anything they had shown before. Peter now found people everywhere who regarded their work as a pleasure, a hobby, an exciting adventure. They were constantly thinking of improvements, devising new gadgets, dreaming of new processes that would cut costs of production, or new inventions and new products that consumers might want. (Hazlitt 1966, 139)

Peter explains to Adams that this “is precisely what economic liberty does. It releases human energy” (Hazlitt 1966, 139). Whereas, previously, only the Central Planning Board could decide how to direct resources,

Now everybody can plan. Now everybody is a center of planning. The worker can plan to shift to another employer or another line of production where the rewards are higher. He can plan to train himself in a new skill that pays better. And anybody who can save or borrow capital, or who can get the co-operation of other workers or offer them more attractive terms of employment than before, can start a new enterprise, make a new product, fill a new need. And this puts a quality of adventure and excitement into most people’s lives that was never there before. In Wonworld, in effect, only the Dictator himself could originate or initiate: everybody else simply carried out his orders. But in Freeworld anybody can originate or initiate. And because he can, he does. (Hazlitt 1966, 139)

Hazlitt frequently emphasizes the connection between the economic empowerment that freedom in business offers and the resulting surge in the quality of life and daily experience – a sense of responsibility, opportunity, self-direction, and the ability to chart one’s own future that permeates an economy where individuals are their own economic masters. While under central planning, no progress occurs unless initiated by the exceptionally rare enlightened rulers at the top, in a free market every businessman and worker can be an agent of human progress. Peter observes that a free-market system is meritocratic and tends to reward contributions to human well-being: “Everyone tends to be rewarded by the consumers to the extent that he has contributed to the needs of the consumers. In other words, free competition tends to give to labor what labor creates, to the owners of money and capital goods what their capital creates, and to enterprisers what their co-ordinating function creates” (Hazlitt 1966, 139). Adams responds that, to the extent a free-market system is able to achieve this, “no group would have the right to complain. You would have achieved an economic paradise” (Hazlitt 1966, 139). In a later discussion, Peter notes that the profits realized by businesspeople in a free-market system cannot be maintained on the whole except in a growing economy where consumers are increasingly better off; a free-market system cannot be called a profit system “in a declining or even in a stationary economy. It is, of course, a profit-seeking system” (Hazlitt 1966, 150), but the search for profit in a free economy will only succeed if human needs are fulfilled by the entrepreneur in the process.

Cultural and esthetic progress, too, are facilitated by the actions of Freeworld’s entrepreneurs. Hazlitt points out that “it was not merely in material progress that Freeworld achieved such amazing triumphs. No less striking were the new dignity and breadth that individual freedom brought about in the whole cultural and spiritual life of the Western Hemisphere” (Hazlitt 1966, 155). By contrast with Wonworld’s regime-monopolized “art” designed to praise the ruling ideology, the outpouring of creativity and variety in Freeworld “showed itself in novels and plays, in criticism and poetry, in painting, sculpture and architecture, in political and economic thinking, in most sciences, in philosophy and religion” (Hazlitt 1966, 155). Even though freedom in artistic production results in catering “to the presumed tastes of a mass public; and the bulk of what was produced was vulgar and cheap” (Hazlitt 1966, 155), there also emerges the opportunity for some artists to pursue lasting greatness:

What counted, as Peter quickly saw, was that each writer and each artist was now liberated from abject subservience to the state, to the political ruling clique. He was now free to select his own public. He did not need to cater to a nebulous “mass demand.” He could, if he wished, write, build, think, compose or paint for a definite cultivated group, or for his fellow specialists, or for a few kindred spirits wherever they could be found. And plays did have a way of finding their own special audience, and periodicals and books of finding their own special readers.

In contrast with the drabness, monotony and dreariness of Wonworld, the cultural and spiritual life of Freeworld was full of infinite variety, flavor, and adventure. (Hazlitt 1966, 155)

The intellectual honesty of Peter Uldanov enables him to transform the role of inadvertent world dictator to that of guardian of individual freedom. Freeworld overcomes Bolshekov’s Wonworld in a largely bloodless military campaign, due to Freeworld’s overwhelming superiority in production and the eagerness of Wonworld’s citizens to throw off Bolshekov’s totalitarian rule. At the novel’s end, Peter decides to hold free elections and subject his own position to the people’s approval. Running against the mixed-economy “Third Way” advocate Wang Ching-li, Peter narrowly wins the election and becomes the first President of Freeworld, even though his preference would be to devote his time to playing Mozart. Peter has the wisdom to unleash the productive forces of free enterprise and then to step aside, except in maintaining a system that punishes aggression, protects private property, and provides a reliable rule of law. The ending of Time Will Run Back is a happy one, but it is made possible by one key tremendously fortunate and unlikely circumstance – the ability of a fundamentally decent person to find himself in a position of vast political power, whose use he deliberately restrains and channels toward liberalization instead of perpetuating the abuses of the old system. Peter is, in effect, a “philosopher-king” who reasons his way toward free-market capitalism, unleashing private business to bring about massive human progress. Without such an individual, Wonworld could have lingered in misery, stagnation, and even decline for centuries. In our world, however, where the vestiges of free enterprise and the history of economic thought are much stronger, we do not need to rediscover sound economic principles from whole cloth, so perhaps existing societies could eventually muddle through toward freer economies, even though no philosopher-kings are to be found. Hazlitt gave us Peter Uldanov’s story to enable us to understand which reforms and institutions can improve the human condition, and which can only degrade it.

Reference

The Role of Business and the Virtuous Cycle of Progress in Robert Heinlein’s “Methuselah’s Children” – Article by G. Stolyarov II

December 12, 2014 Gennady Stolyarov II Comments 1 comment

G. Stolyarov II

December 12, 2014

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Methuselah’s Children is a pioneering science-fiction novel by Robert A. Heinlein, remarkable for its favorable treatment of greatly extended lifespans several decades before the era of biotechnology and the advent of the transhumanist and life-extension movements. Moreover, Methuselah’s Children presents important insights regarding the virtuous cycle of improvement that occurs when a business structure is deliberately oriented toward catalyzing both technological progress and increased length and quality of human life.

Originally published as a series in the July, August, and September 1941 issues of Astounding Science Fiction magazine, Methuselah’s Children was released as a full-fledged novel in 1958. Exceptionally long-lived humans – the members of the Howard Families – are the novel’s protagonists and are portrayed in a favorable light, as the novel chronicles their escape from persecution in a society where most people continue to live lives of conventional duration and falsely believe the Howard Families to possess a means to artificially engineer extended lifespans. In fact, the Howard Families’ exceptional longevity is genetic – a legacy of generations of selective breeding.

The Howard Families’ origin dates to the 19^th century and is made possible by the success of a businessman who dreamed of overcoming death:

Ira Howard, whose fortune established the Howard Foundation, was born in 1825 and died in 1873 – of old age. He sold groceries to the Forty-niners in San Francisco, became a wholesale sutler in the American War of the Secession, multiplied his fortune during the tragic Reconstruction. Howard was deathly afraid of dying. He hired the best doctors of his time to prolong his life. Nevertheless old age plucked him when most men are still young. But his will commanded that his money be used to lengthen human life. The administrators of the trust found no way to carry out his wishes other than by seeking out persons whose family trees showed congenital predispositions toward long life and then inducing them to reproduce in kind. Their method anticipated the work of Burbank; they may or may not have known of the illuminating researches of the Monk Gregor Mendel. (Heinlein 1958, 141)

Ira Howard applied his business fortune and business expertise to create a foundation and trust for the purpose of lengthening human life, enabling a small fraction of humankind to become supercentenarians over the course of generations. Officially, the Howard Foundation is “an openly chartered non-profit corporation” (Heinlein 1958, 6). The Foundation’s strategy is to provide financial support and a strong social network for its beneficiaries, while avoiding public notice and adhering to the legal constraints of the eras through which the Foundation prevails. In a conversation in 1874 with medical student and future beneficiary Ira Johnson, a lawyer for the Foundation explains that, in order to avoid legal prohibitions, the Foundation does not form official contracts with those whom it supports:

No, no, such a contract would be void, against public policy. We are simply informing you, as administrators of a trust, that should it come about that you do marry one of the young ladies on this list it would then be our pleasant duty to endow each child of such a union according to the scale here set forth. But there would be no Contract with us involved, nor is there any ‘proposition’ being made to you – and we certainly do not urge any course of action on you. We are simply informing you of certain facts. (Heinlein 1958, 6)

Methuselah’s Children is set on Earth during the 22^nd century, in the largely peaceful and rights-respecting society of The Covenant. Generations of selective breeding by that time had, by then, raised the life expectancy of members of the Howard Families past 150 years. The Howard Families had hitherto kept their existence a secret from the broader population through periodic reinventions of individual members’ public identities, an effort in which the Foundation was instrumental:

Two courses of action were adopted: the assets of the Foundation were converted into real wealth and distributed widely among members of the Families to be held by them as owners-of-record; and the so-called ‘Masquerade’ was adopted as a permanent policy. Means were found to simulate the death of any member of the Families who lived to a socially embarrassing age and to provide him with a new identity in another part of the country. (Heinlein 1958, 8)

During the more tolerant era of The Covenant, the Howard Families decide to attempt a gradual disclosure of their exceptional lifespans. Part of the motivation is to benefit the progress of humankind, as explained by Foundation trustee Justin Foote: “the Families as a group had learned many things through our researches in the bio-sciences, things which could be of great benefit to our poor short-lived brethren. We needed freedom to help them.” (Heinlein 1958, 9)

The Howard Families decide to reveal 10 percent of their membership and observe the reaction, but their estimation of their fellow humans’ tolerance is far too generous. Their plan backfires: the general public becomes falsely convinced that the Howard Families possess a biotechnological secret that could rejuvenate anyone and are withholding it from the remainder of humanity. All of the civil liberties afforded by The Covenant fall by the wayside as the masses clamor for the Howard Families to be detained so that their secret could be extracted from them by force.

Administrator Slayton Ford, who is sympathetic to the Howard Families, nonetheless feels compelled to authorize their arrest due to public pressure, while secretly assisting with the Families’ plan to escape to another world. This plan is the brainchild of Lazarus Long – a member of the Families and a recurring Heinlein protagonist memorable for his inventiveness, wit, practicality, and self-reliance. Lazarus Long – named Woodrow Wilson Smith at birth – is a space adventurer and rugged individualist who has stayed away from the Families but reveals himself to be their oldest member at an age of at least 241 years. By the rules of the Foundation, which reward longevity with authority, this gives him a leadership position. Lazarus manages to sway the initially reluctant membership of the Families with the rhetorical assistance of more forward-thinking trustees such as Zaccur Barstow. Barstow points out that it is precisely because of the Families’ accumulated wealth and ability to use business and commerce to their advantage that Lazarus’s plan might succeed:

“[T]here is an appropriateness in the long-lived exploring the stars. A mystic might call it our true vocation.” He pondered. “As for the ship Lazarus suggested; perhaps they will not let us have that … but the Families are rich. If we need a starship – or ships – we can build them, we can pay for them. I think we had better hope that they will let us do this … for it may be that there is no way, not another way of any sort, out of our dilemma which does not include our own extermination.” (Heinlein 1958, 47)

The wealth accumulated through Ira Howard’s business and preserved over the course of centuries enables the Howard Families to purchase the small spaceship Chili, which becomes an instrument to take control of the larger ship New Frontiers with Administrator Ford’s clandestine assistance. An interesting conversation regarding the economic effects of longer lifespans occurs between Lazarus and Joseph McFee, who sells him the Chili. McFee posits that uncertainty about the cause of the Howard Families’ longevity has resulted in a disruption to many individuals’ ability to engage in economic planning:

“Never saw such a dull market. Some days you can’t turn an honest credit.” McFee frowned. “You know what the trouble is? Well, I’ll tell you-it’s this Howard Families commotion. Nobody wants to risk any money until he knows where he stands. How can a man make plans when he doesn’t know whether to plan for ten years or a hundred? You mark my words: if the administration manages to sweat the secret loose from those babies, you’ll see the biggest boom in long-term investments ever. But if not well, long-term holdings won’t be worth a peso a dozen and there will be an eat-drink-and-be-merry craze that will make the Reconstruction look like a tea party.” (Heinlein 1958, 72-73)

Through McFee, Heinlein illustrates an important insight regarding the impact of lifespan-related expectations on economic behavior. Longer anticipated lifespans extend people’s time horizons and render them more willing to undertake long-term projects and investments, out of the recognition of a high probability of personal benefit from such undertakings. On the other hand, anticipation of short lives and imminent mortality engenders a “live for today” attitude where prudent, long-term planning falls by the wayside, and actions that sustain and drive forward human civilization are neglected. Longer lifespans tend to result in a lower rate of time preference – the degree by which present satisfactions are preferred to future satisfactions.[1] With longer time horizons available to people, remoter future satisfactions can be conceived of and worked toward. Such work generates numerous ancillary benefits along the way for oneself and others – in terms of both material well-being and cultivation of the virtues and habits conducive to an actualized, fulfilling life. Therefore, extending human lifespans ought to bring about more businesses that focus on long-term human well-being and are comfortable with realizing profits over many decades or centuries, whereas short lifespans drive a mentality of focusing on immediate profits only, without regard for longer-term consequences of business decisions.

Through the engineering and navigational abilities of Andrew “Slipstick” Libby, another member of the Howard Families, the long-lived protagonists manage to use faster-than-light travel to escape the Solar System together with Administrator Ford, who defects to them at the last moment. While the Howard Foundation made the Families’ exodus possible, it also rendered itself obsolete in the process. Once the Families are underway on their journey, Justin Foote explains the need for a new decision-making structure to emerge:

I am able to say without bias that the trustees, as an organized group, can have no jurisdiction because legally they no longer exist. […] [T]he board of trustees were the custodians of a foundation which existed as a part of and in relation to a society. The trustees were never a government; their sole duties had to do with relations between the Families and the rest of that society. With the ending of relationship between the Families and terrestrial society, the board of trustees, ipso facto, ceases to exist. It is one with history. Now we in this ship are not yet a society, we are an anarchistic group. This present assemblage has as much – or as little – authority to initiate a society as has any part group. (Heinlein 1958, 99)

From its formation to its dissolution, the Howard Foundation embodies some of the noblest and most admirable qualities possible for a business structure. It prioritizes its mission of promoting longer lifespans and the well-being of its members over its structural survival as an organization. It acts genuinely to protect and empower its beneficiaries – the Howard Families – enabling them to transcend the need for the Foundation’s existence and to form a new organizational structure. The Howard Families utilize Ford’s administrative skills to coordinate the effort of the New Frontiers’ interstellar journey and the formation of colonies on two successive planets, where the Howard Families coexist with two friendly but utterly non-individualistic species – the Jockaira and the Little People. In most respects apart from coordinating the logistics of the voyage and the initial settlement phase, the new administration adopts a hands-off, libertarian approach toward the colonists’ time allocation and life choices – enabling many of the settlers to lead lives of ease and leisure on the second world of the Little People, where there are abundant resources for all. However, Lazarus cannot accept this as a permanent condition, as his human ambition and desire for challenge are not fulfilled. Furthermore, even though they possess exceptional longevity, members of the Howard Families are still mortal and still face the prospect of losing their individual existences either through death or through voluntary sublimation into the group-mind structures of the Little People – which still destroys individual personality and self-awareness. Lazarus convinces the majority of the settlers that, in order to strive for more than contentment and to have the potential to achieve further progress, they must endeavor to return to Earth.

On Earth, 75 years have passed since the Howard Families’ exodus. Human society has become far more enlightened in the meantime, and the Howard Families are no longer perceived as public enemies to be persecuted, but rather as admirable early pioneers in life extension and interstellar exploration. Driven by the impression that there was a “secret” to super-longevity, human scientists independently achieved through biotechnology the same results that the Howard Families attained through selective breeding. In a society where everyone possesses life expectancies of over a century and a half, the Howard Families cease to be outliers or targets for envy and suspicion. Ultimately, Ira Howard’s plan to greatly lengthen human lifespans is realized for the entirety of humankind. The Howard Foundation’s efforts led the remainder of humanity to view super-longevity to be attainable for all. This perception motivated massive research efforts to this goal after the Howard Families’ exodus. This result illustrates the ability of a business organization oriented toward human progress to achieve transformation of the wider society, even if explicitly focused on a much narrower subset thereof. A businessman who seeks to catalyze technological progress and create a better future can achieve a wider scope of success by setting an example of what is possible and inspiring others to pursue similar outcomes.

Upon returning to Earth, Lazarus Long and Andrew Libby discuss business plans to explore further reaches of the galaxy – facilitating the expansion of human settlement there – while enabling Lazarus and Libby to lead an enjoyable lifestyle free of significant material limitations:

“Somebody is going to have to do a little exploring before any large-scale emigration starts. Let’s go into the real estate business, Andy. We’ll stake out this corner of the Galaxy and see what it has to offer.”

Libby scratched his nose and thought about it. “Sounds all right, I guess after I pay a visit home.”

“There’s no rush. I’ll find a nice, clean little yacht, about ten thousand tons and we’ll refit with your drive.”

“What’ll we use for money?”

“We’ll have money. I’ll set up a parent corporation, while I’m about it, with a loose enough charter to let us do anything we want to do. There will be daughter corporations for various purposes and we’ll unload the minor interest in each… Then-“

“You make it sound like work, Lazarus. I thought it was going to be fun.”

“Shucks, we won’t fuss with that stuff. I’ll collar somebody to run the home office and worry about the books and the legal end-somebody about like Justin. Maybe Justin himself.”

“Well, all right then.”

“You and I will rampage around and see what there is to be seen. It’ll be fun, all right.” (Heinlein 1958, 181)

What leads Lazarus to formulate such a far-reaching vision – in terms of both space and time – for a combination of business and unending personal adventure? It is precisely the emerging ability, at the novel’s conclusion, of human scientists to artificially extend lifespans even beyond the Howard Families’ typical life expectancies. Lazarus remarks, “I didn’t start planning our real estate venture till I heard about this new process. It gave me a new perspective. I find myself thinking about thousands of years – and I never used to worry about anything further ahead than a week from next Wednesday” (Heinlein 1958, 182). Here, too, Heinlein illustrates the tremendous incentive that lengthened lifespans provide for long-term thinking and planning, enabling people to accomplish, experience, and create on a grand scale instead of remaining mired in the immediately accessible.

Methuselah’s Children offers an insightful vision of the positive feedback loop between progress-oriented business structures and the attainment of longer, better lives. Through establishing the Howard Foundation, Ira Howard set in motion a chain of events that resulted in super-longevity for all humans and ambitious efforts at interstellar exploration and colonization. The fruits of this effort – incentives for long-term thinking – motivate Lazarus Long to initiate business ventures of his own for the purpose of pushing further outward the boundaries of human ability and expansion. Heinlein concludes the novel with Lazarus’s statement of unending ambition: “Yes, maybe [the universe is] just one colossal big joke, with no point to it. […] But I can tell you this, Andy, whatever the answers are, here’s one monkey that’s going to keep on climbing, and looking around him to see what he can see, as long as the tree holds out” (Heinlein 1958, 183). This never-ending aspiration for discovery and improvement ought to motivate real-world businesspeople and humans in general to continually seek out ways in which they can apply their skill sets to expand the boundaries of possibility in any endeavor that advances human well-being.

References

Heinlein, Robert A. 1958. Methuselah’s Children. New York: Baen.

Stolyarov II, G. 2005. “Austrian Economics and Time Preference”. The Rational Argumentator, Issue XLII. Available at http://rationalargumentator.com/issue42/austriantimepreference.html. Accessed December 11, 2014.

Notes

[1] The concept of time preference was extensively elucidated by the renowned Austrian economist Ludwig von Mises (1881-1973). For a concise overview of this idea, see “Austrian Economics and Time Preference” (Stolyarov 2005).

Transhumanist March (March #12), Op. 78 (2014) – Musical Composition and Video by G. Stolyarov II

December 9, 2014 Gennady Stolyarov II Comments 0 Comment

G. Stolyarov II

December 8, 2014

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The Transhumanist March depicts the accelerating improvement of the human condition and the overcoming of human limitations through technological progress. An ambitious and benevolent melody intensifies throughout the piece, pushing onward to champion the radical improvement of the human condition through the lifting of age-old barriers and the conquest of both space (through settlements on new worlds and elsewhere on Earth) and time (through the reversal of senescence and the curing of deadly diseases to achieve indefinite lifespans).

Download the MP3 file of this composition here.

A PDF file of sheet music for the Transhumanist March can be downloaded here.

See the index of Mr. Stolyarov’s compositions, all available for free download, here.

The artwork is “Depiction of a futuristic city” – a digital painting by Cronus Caelestis, used pursuant to a Creative Commons Attribution Share-Alike Unported 3.0 License and available for download here.

This composition and video may also be freely reproduced using the same Creative Commons Attribution Share-Alike Unported 3.0 License.

Remember to LIKE, FAVORITE, and SHARE this video in order to spread rational high culture to others.

House Chooses New Cold War With Russia – Article by Ron Paul

December 7, 2014 Ron Paul Comments 0 Comment

Ron Paul

December 7, 2014

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Last week the US House voted overwhelmingly in favor of an anti-Russia resolution so full of war propaganda that it rivals the rhetoric from chilliest era of the Cold War. Ironically, much of the bill condemns Russia for doing exactly what the US government has been doing for years in Syria and Ukraine!

For example, one of the reasons to condemn Russia in the resolution is the claim that Russia is imposing economic sanctions on Ukraine. But how many rounds of sanctions has US government imposed on Russia for much of the past year? I guess sanctions are only bad when used by countries Washington doesn’t like.

The resolution condemns Russia for selling weapons to the Assad government in Syria. But the US has been providing weapons to the rebels in Syria for several years, with many going to terrorist groups like al-Qaeda and ISIS that the US is currently bombing!

The resolution condemns what it claims is a Russian invasion of Ukraine (for which it offers no proof) and Russian violation of Ukrainian sovereignty. But it was the US, by backing a coup against the democratically elected Yanukovich government in February, that first violated that country’s sovereignty. And as far as a military presence in Ukraine, it is the US that has openly sent in special forces and other military advisors to assist the government there. How many times have top US military and CIA officials visited Kiev to offer advice and probably a lot more?

The resolution condemns Russia for what it claims are attempts to “illicitly acquire information” about the US government. But we learned from the Snowden revelations that the NSA is spying on most rest of the world, including our allies! How can the US claim the moral authority to condemn such actions in others?

The resolution attacks Russian state-funded media, claiming that they “distort public opinion.” At the same time the bill demands that the thousands of US state-funded media outlets step up their programming to that part of the world! It also seeks “appropriate responses” to Russian media influence in the rest of the world. That should be understood to mean that US diplomats would exert pressure on foreign countries to shut down television networks like RT.

The resolution condemns what it claims is Russia’s provision of weapons to the Russian-speaking eastern part of Ukraine, which seeks closer ties with Russia, while demanding that the US government start providing weapons to its proxies on the other side.

As I have said, this is one of the worst pieces of legislation I can remember. And trust me, I have seen some pretty bad bills. It is nothing but war propaganda and it will likely lead to all sorts of unintended consequences.

Only ten Members – five from each party – opposed this reckless resolution. Probably most of those who voted in favor did not bother to read the bill. Others who read it and still voted in favor may have calculated that the bill would not come up in the Senate. So they could vote yes and please the hawks in their districts – and more importantly remain in good graces of the hawks who run foreign policy in Washington – without having to worry about the consequences if the bill became law.

Whatever the case, we must keep an eye on those Members of Congress who vote to take us closer to war with Russia. We should thank those ten Members who were able to resist the war propaganda. The hawks in Washington believe that last month’s election gave them free rein to start more wars. Now more than ever they must be challenged!

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

North Korea: From Hermit Kingdom to Merchant Kingdom? – Article by J. Wiltz

December 7, 2014 J. Wiltz Comments 0 Comment

J. Wiltz

December 7, 2014

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Toward the end of her remarkable speech at this year’s One Young World Summit in Dublin, North Korean defector and human rights activist Yeon-mi Park listed three ways in which ordinary people can help freedom-seekers in North Korea:

One, educate yourself so you can raise awareness about the human crisis in North Korea. Two, help and support North Korean refugees who are trying to escape to freedom. Three, petition China to stop repatriation.

To this list, Swiss-born businessman Felix Abt might add a fourth suggestion: do business with them. This suggestion forms the heart of Abt’s new book, A Capitalist in North Korea: My Seven Years in the Hermit Kingdom (Tuttle Publishing 2014).

From Hermit Kingdom to Merchant Kingdom

Those familiar with the situation in North Korea (officially known as the Democratic People’s Republic of Korea or DPRK) will not find Abt’s title as shocking as it’s probably intended to be. Indeed, as early as 2009, and undoubtedly even before that, Western media outlets were reporting on “the secret capitalist economy of North Korea” (i.e., the black market) which sprung up in response to the famine of the mid-1990s. Writing for the Washington Post in May 2014, Yeon-mi Park herself even referred to the young people currently living in North Korea as the “Jangmadang, or ‘Black Market Generation’.” These young people, she says, are far more individualistic than their predecessors, far less loyal to the ruling Kim regime, and infinitely more likely to be exposed to outside media and information.

Abt’s book echoes and elaborates on all of these points. Drawing on his personal experience as the foreign head of a North Korean pharmaceutical company, as well as a co-founder of the Pyongyang Business School, he details the DPRK’s early forays into franchising, customer service, online forums(!), bicycle merchants, performance incentives, and even that most un-socialist of all market activities, advertising.

These ideas and practices are still very new to the world’s most notorious “bastion of communism” (Abt’s words), but already the government is being forced to make gradual changes to its market policies. Two quick examples: “More flexible opening hours are allowed for markets, and more companies are permitted to interact with businesses abroad.”

In spite of these positive developments, however, Abt laments, “There appears to be no end in sight for the severe economic problems of the world’s most centrally planned economy.” He divides the blame for these problems among several perpetrators: (1) North Korean military policy; (2) over-dependence on foreign humanitarian aid; and (3) foreign sanctions and embargoes.

“North Korea,” says Abt, “is the most heavily sanctioned nation in the world, and no other people have had to deal with the massive quarantines that Western and Asian powers have enclosed around its economy.”

Two Steps Forward, One Step Back

To be sure, arguments against North Korean sanctions are a tough sell, given the country’s well-documented human rights abuses and annual nuclear threats against the United States and South Korea. Several Amazon reviewers have accused Abt of simply parroting North Korean propaganda, calling him “Pyongyang Pete” and “the Kim Dynasty’s useful idiot.” Even many libertarians, long opposed to the Cuban embargo, can probably agree that many of North Korea’s domestic and international woes are self-inflicted.

For example, in 2006, the former president of South Korea’s largest dairy company came up with the strategy to provide every child in North Korea a daily glass of milk. “Charities and wealthy individuals committed to the project,” Abt writes, “but after Kim Jong Il’s first nuclear test, the prospect quickly vanished.”

Abt also notes that in 2007, the website DailyNK reported that North Korea spends up to 40 percent of its annual budget on monuments and celebrations dedicated to the Kim regime. Abt recounts how he “gasped” at the sheer size of these monuments, as well as other buildings like the Koryo Hotel where “up to 1000 guests can stay in 504 rooms on 45 floors.”

But read to the end of A Capitalist in North Korea and you’ll find that “fewer than a third of all hotel rooms are occupied during most weeks.” Pyongyang tourist videos on YouTube corroborate this point. On almost every day of any given year, the 504 rooms of the Koryo Hotel sit empty (a predictable side effect of the DPRK’s notoriously tight travel restrictions). This is not what an efficient allocation of resources looks like.

Moreover, the North Korean government sometimes reacts to the market activities of its foreign investors with repression and cronyism. In 2006, a Chinese-run pharmacy was closed because it posed a threat to the socialist public health system. Several years later, a German internet provider was able to lobby the government, making it impossible for other foreign-invested businesses to install their own satellite dishes.

“So how will reform come about?”

And yet, not one of these things — not the nuclear tests, the empty hotels, or the shady business dealings — could in any way be prevented by sanctions that target foreign banks, farm equipment, fertilizer, mobile phones, alcoholic drinks, French cheese, or luxury items. “The current sanctions have not only failed to curtail the nuclear ambitions and human rights abuses of the ambitious North Korean leader,” says Emma Campbell in a May 2013 article for East Asia Forum, “they are also constraining the actions of humanitarian NGOs trying to carry out life-saving activities inside the DPRK.”

Among these life-saving activities is the development of a market-minded merchant class that is less dependent on the regime and better able to conduct business with the outside world in a peaceful, profitable manner. While Abt is clear that doing business in North Korea is by no means a guaranteed success, he rightly sees it as one of the best methods for improving the lives of millions of North Koreans caught between domestic and foreign repression. “Business,” he writes, “is the way forward for Kim’s country … a promising way to open and change the hitherto isolated country and the course of things for the better.”

The decades-long task of opening North Korea to the outside world may very well be accomplished by first opening the outside world to North Korea.

J. Wiltz writes from Anyang, South Korea, where he teaches English and blogs at A Day with J.

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.

Nathaniel Branden Remembered – Article by Edward Hudgins

December 7, 2014 Edward Hudgins Comments 0 Comment

Edward Hudgins

December 7, 2014

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I first met Nathaniel Branden, who passed away on the morning of December 3, 2014, in fall 1983. I had successfully passed my Ph.D. oral defense of dissertation that morning, so except for shuffling paperwork, I was now “Doctor Hudgins.” I don’t know how others would mark such a milestone, but I was eager that evening to hear Branden’s talk on “The Benefits and Hazards of the Philosophy of Ayn Rand [1].”

Discovering Ayn Rand [2] and Nathaniel Branden

I had discovered and loved the works of Rand a decade earlier. She presented a vision of a rational world of flourishing, self-actuated, self-confident, achievement-oriented individuals, in sharp contrast to the corrosive culture of whim-worshipping irrationality and self-abnegation of that time.

Nathaniel Branden, Edward Hudgins, and Barbara Branden

The author with Nathaniel Branden (1930-2014) and Barbara Branden, 2007.

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With Rand, of course, I encountered Nathaniel Branden. I knew he had been her philosophical heir-apparent, and that they had had an angry break. And I had heard rumors of their affair. But even though he was persona non grata in Objectivist circles, I eagerly read his post-Rand books, including The Psychology of Self-Esteem [3], Breaking Free, and The Disowned Self.

The latter two were especially important. The Objectivist world at the time had what some called cult-like qualities, which Branden himself later acknowledged he had helped create in his years with Rand. One simply was to assume that Ayn Rand [2] was right about everything, and as a “student of Objectivism [4]” your goal was simply to understand her philosophy. Ironically, independent thinking–a key Objectivist virtue–was frowned upon in practice.

Nathaniel Branden’s Breaking Free

While Branden in Breaking Free and The Disowned Self was not directly addressing the defects of the Objectivism [4] movement, he was dealing with self-alienation and other deep problems that held individuals back from being independent and flourishing. He was clearly drawing from the problems he had encountered in individuals who loved Rand’s vision but found the official Objectivist movement stifling.

So that evening in 1983 I listened to Branden address head-on the benefits and hazards of Rand’s philosophy. It was refreshing and liberating. Whether I agreed completely with his analysis or not, there was now a more open, adult conversation going on about the Rand and the philosophy.

Branden argued that Objectivism [4] indeed presented a radiant vision of, in Rand’s words, what the world can be and should be. But too many individuals who loved Rand’s vision saw themselves as so far removed from the heroes of her novels that they despaired. Too many would say “I’m no Roark or Galt, so I must be no good.”

Technology for Self-Esteem Pioneered by Nathaniel Branden

Branden defined his goal as creating the psychological technology to help individuals get from where they were to where they wanted to be.

Branden is often credited as being the father of the modern self-esteem movement. This is true, but misleading. Today, many see “self-esteem” as a lazy and vacuous glance in the mirror to say “I’m great!” Branden defined self-esteem as the recognition that one is worthy of happiness and capable of achieving it. But happiness and flourishing require effort.

In The Six Pillars of Self-Esteem [5] he identified the necessary practices to reach those goals as living consciously, self-acceptance, self-responsibility, self-assertiveness, living purposefully, and personal integrity. Branden was, in effect, operationalizing Rand’s dictum that “as man is a being of self-made wealth, so he is a being of self-made soul.”

Over the decades that followed “Benefits and Hazards” I had many opportunities to attend and to host conferences with Branden, to discuss with him his insights about psychology and about Objectivism [4], and to see the benefits that his own work brought to many in this world.

To his wife, Leigh, and all his friends I pass along my condolences. Keep in your hearts and minds the good memories of him. He would have wanted it that way.

Links:

[1] http://nathanielbranden.com/the-benefits-and-hazards-of-the-philosophy-of-ayn-rand-mp3
[2] http://www.atlassociety.org/ayn_rand
[3] http://nathanielbranden.com/on-self-esteem/the-psychology-of-self-esteem/
[4] http://www.atlassociety.org/objectivism
[5] http://nathanielbranden.com/on-self-esteem/the-six-pillars-of-self-esteem-the-definitive-work-on-self-esteem-by-the-leading-pioneer-in-the-field/

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Dr. Edward Hudgins directs advocacy and is a senior scholar for The Atlas Society, the center for Objectivism in Washington, D.C.

Copyright, The Atlas Society. For more information, please visit www.atlassociety.org.