business – The Rational Argumentator

No, Mr. Trump, Victims of Eminent Domain Do Not “Get a Fortune” – Article by George C. Leef

February 26, 2016 George C. Leef Comments 0 Comment

George C. Leef

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Trump’s huge mistake about eminent domain

During the debate among Republican presidential candidates last month, Jeb Bush hammered Donald Trump on his abuse of eminent domain. But Trump apparently sees nothing wrong in having government officials force people to sell their property.

Trump replied,

Eminent domain is an absolute necessity for a country, for our country. Without it, you wouldn’t have roads, you wouldn’t have hospitals, you wouldn’t have anything. You would have schools, you wouldn’t have bridges.

And what a lot of people don’t know because they were all saying, oh, you’re going to take their property. When somebody — when eminent domain is used on somebody’s property, that person gets a fortune. They at least get fair market value, and if they’re smart, they’ll get two or three times the value of their property.

This last assertion led George Mason law professor Ilya Somin (an expert on eminent domain) to quip at the Volokh Conspiracy, “If eminent domain really were a good way to make a fortune, the Donald Trumps of the world would be lobbying the government to condemn their property. But that rarely, if ever, happens.”

Put aside Trump’s hyperbole about the supposed impossibility of schools, hospitals, and bridges without eminent domain. What I want to focus on is his claim that eminent domain is not objectionable because people who have their property taken make out just fine financially.

That claim is simply indefensible. The truth is that people who lose their property to eminent domain proceedings are almost never made whole.

Legal scholars have for many years been writing about the injustice that usually befalls people who have to settle for what the government deems “just compensation” under the Fifth Amendment. I wouldn’t expect Mr. Trump to know about that because he is too busy making deals. But the kind of deals businessmen usually make involve two parties who can say “no,” unless and until they think the deal will improve their positions.

With eminent domain takings, however, the property owner can’t say “no,” and usually must settle for much less than he or she would have bargained for in a voluntary setting.

Professor Gideon Kanner has written extensively about the problem of inadequate compensation for people who’ve been forced to sell under eminent domain. In his article “[Un]Equal Justice under Law: The Invidiously Disparate Treatment of American Property Owners in Taking Cases,” he writes:

The true standard of compensation is not indemnity, but rather fair market value so artfully defined as to exclude factors that sellers and buyers in voluntary transactions would consider, and that the government need only pay for what it acquires, not for what the owner has lost.

Those losses include business goodwill, relocation expenses, and the emotional damage of having to leave a community where one may have strong ties. In the government’s calculus, people are expected to suffer such losses as part of the price of living in America.

As the Supreme Court stated in the 1949 takings case Kimball Laundry v. U.S., “Loss to the owner of non-transferable values … is properly treated as part of the burden of common citizenship.” That “tough luck, property owner” mindset still prevails.

Knowing that they hold the high cards (and ultimately the guns) when they deal with property owners, government officials take full advantage. As Kanner observes, “Condemning agencies regularly reap unjustified windfalls from the fact that the majority of their offers (including the many low-ball ones) are accepted without litigation or even involvement by a private appraiser or lawyer.”

Therefore, eminent domain causes many property owners to suffer uncompensated losses.

Far from “getting a fortune” or “two or three times” the market value of their property, most owners are left substantially worse off for their unwanted encounter with condemning government agencies. Few if any of them shrug off the losses as their part of the “burden of common citizenship.”

Although the eminent domain issue came up during a debate among presidential candidates, there is hardly anything that the president can do to rectify the problem of under-compensation for property owners. He (or she) cannot issue an executive order mandating that property owners be made whole.

If there is to be a solution, it must come from the judiciary.

Judges, and especially the justices of the Supreme Court, will have to stop ruling that merely because an individual is paid an amount deemed “fair market value,” the Fifth Amendment’s requirement of “just compensation” has been satisfied.

It would also help property owners if the Supreme Court would overturn Kelo v. New London and establish that property can only be taken for actual “public use,” as the Fifth Amendment requires, and not for private use that local politicians think might have some “public benefit.”

Since we are going to have confirmation hearings for a new member of the Court eventually, it would be important to find out precisely what the nominee thinks “just compensation” and “public use” actually mean.

George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.

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

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.

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

Are Immigration Laws Like Jim Crow? – Article by David Bier

July 7, 2012 David Bier Comments 0 Comment

David Bier

July 7, 2012

Recommend this page.

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Alabama Governor Robert Bentley was forced to defend his state’s harsh immigration law recently against charges that it amounts to a return to segregation-era racially biased policies. “What took place in the civil rights era was a series of unlawful actions against lawful residents,” Bentley said in response to the charges. “It was a shameful chapter in our state’s history. The immigration issue of today is entirely different.”

Parallels to segregation might be slightly overdone, but to call immigration policies “entirely different” is disingenuous. America’s restrictive immigration system was invented by the Eugenics Research Institute’s future president, Rep. Albert Johnson (R-Washington), who wanted to protect America’s racial purity from, in the words he quoted from a State Department official, “unassimilable . . . filthy . . . and often dangerous” foreigners. While such laws are no longer justified on racial grounds, their impacts today are just as ethnically disparate—more than 80 percent of immigrants labeled “illegal” are Hispanic, and 97 percent (pdf) of deportees are Hispanic.

Nor was segregation “unlawful”—it was a bizarre system of legal controls. Although it’s best known as a system of social control, it was just as much a system of economic regulation. Jim Crow began humbly—with segregated streetcars in Georgia in 1891—but quickly escalated, imposing on southern businesses ever more burdensome requirements: twice the number of bathrooms, waiting rooms, ticket counters, phone booths, even cocktail lounges. The president of Southeastern Greyhound told the Wall Street Journal in 1957, “It frequently costs fifty percent more to build a terminal with segregated facilities.”

Businessmen Conscripted

Since laws that intend to control personal behavior are so rarely enforceable, governments conscript business people to act as de facto State agents. In this way social controls quickly morph into economic regulations. It is often forgotten that the railroad in the infamous Supreme Court case Plessy v. Ferguson (1896) actually helped fight the “separate but equal” doctrine because it “saddled employers with the burden of becoming the state’s race policemen.” Immigration law, which began as a way to restrict the movement of foreigners into the United States, has followed exactly the same pattern. Today a vast portion of America’s immigration code targets businesses, not foreigners.

Jim Crow’s regulatory state only affected businesses that served both white and African American patrons. For most small businesses, the costs of the regime were simply too great. Similarly, for many businesses today, hiring migrant workers has just become too dangerous. “I always relate it to tax law,” labor law consultant Barlow Curran recently told the Tampa Tribune. “Federal tax law is so complicated that if the IRS audits you, regardless of how careful you’ve been, they’ll probably find something. The same thing is true of farm labor law.” No wonder Immigration and Customs Enforcement has imposed $100 million in fines in just the last three years alone—more than the Bush administration’s previous eight years.

Alabama has only added to these regulatory threats. The state’s HB 56—enacted a year ago—mandated that employers use E-Verify to check the work authorization for potential employees. Over 60,000 Alabama businesses missed the deadline. If employers are unable to comply, they face license suspensions and may even be given the “business death penalty,” permanent closing.

As Isabel Wilkerson documents in her Pulitzer Prize-winning The Warmth of Other Suns, more than six million African Americans fled the Jim Crow South and left many southern employers facing labor shortages. “Farmers . . . have [woken] up on mornings recently to find every Negro over 21 on his place gone,” editorialized the Macon Telegraph in 1916 as the Great Migration began. “And while our very solvency is being sucked out beneath us, we go about our affairs as usual.”

Fleeing the State

Alabama is discovering that harsh immigration laws can just as easily “suck the solvency out beneath” them. “From a business point of view, it’s a terrible piece of legislation,” Henry Hagood, CEO of Alabama Associated General Contractors, told Reuters. “My counterparts around the country are saying, ‘thanks for sending workers our way.’” Tens of thousands of workers have already fled the state. University of Alabama professor Samuel Addy found that losing these workers reduced the state’s GDP by between $2.3 billion and $10.8 billion.

Conservatives who profess a commitment to the free market must extend that commitment to the labor market. They must realize that harsh immigration laws have the same dire effects on business as other burdensome regulations. They limit not only the free movement of foreign workers but also the rights of American businesses to hire, transport, and associate freely. They need to go the same way as Jim Crow—into the dustbin of history.

David Bier is the immigration policy analyst at the Competitive Enterprise Institute.

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

Creation of an Ethical Business: The Implementation of Virtuous Behavior and Shared Values and Goals – Article by Jessica L. Kuryn

May 11, 2012 Jessica L. Kuryn Comments 2 comments

Jessica L. Kuryn

May 10, 2012

Recommend this page.

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IN TODAY’S COMPETITIVE BUSINESS ENVIRONMENT, a growing number of firms will do almost anything to gain sales and customers, as well as to increase profits. For some of these firms, playing by the rules doesn’t achieve the results they are after. Firms have the choice to act ethically or unethically. While misguided managers think that unethical behavior can lead the firm, and ultimately themselves, to greater profits over the long term, it is only for the short term. It will eventually lead to their downfall in that unethical behavior spirals out of control and can be very difficult to maintain. Once this occurs, a firm’s reputation becomes tarnished and the company fades into non-existence. On the contrary, “firms that pursue ethically driven strategies realize a greater profit potential than those firms who currently use profit-driven strategies” (Arjoon 159).

The point is that a firm’s leaders do have a choice in how they conduct business. Creating an ethical business does not happen overnight. It takes extensive collaboration and several implementation and evaluation processes, as well as continual reinforcement of and changes to established practices and values. Perhaps one of the most important aspects to creating an ethical business is that it requires cooperation on multiple organizational levels and the implementation of virtuous behavior and values.

Maintaining ethical practices, once implemented, is an ongoing process. There are many factors that can affect ethical behavior, such as competition for customers and market share, the need for increased profits, and management incentives. Some firms, such as BB&T have been able to implement an ethical environment that has led to firm success, while others such as Enron, have succumbed to greed and wrongdoing, and no longer are in existence. BB&T’s story of success will be discussed later in this paper.

CREATING AN ETHICALLY DRIVEN BUSINESS

Business ethics can be defined as “the applied ethics discipline that addresses the moral features of commercial activity” (Marcoux). The question we have to ask concerning business ethics is how they can be applied to a business. One of the most important aspects in creating an ethical business entails the need for new and refined organizationalvalues. A value, as defined by Ayn Rand in Younkins’s article, is “that which one acts to gain and/or keep” (Younkins 9). Antonio Argandoña suggests a business must first identify its currently existing values and from that develop what values are needed (Argandoña 22). In identifying these needed values, it is crucial that businesses select values that pertain to both the business’s goals, as well as the employees’ goals. Congruence between the goals of the business and its employees increase the chances that the valueswill be received well and adhered to.

Once the desired values and goals have been determined, it falls in the hands of management to implement and communicate them. “At the top level of an organization, it takes effective communicators who are clear about what they champion and who establish the company on virtuous behavior” (Younkins 21).Virtues, which are also defined by Ayn Rand in Younkin’s article, are “the act[s] by which one gains and/or keeps an objective value” (Younkins 11). It is crucial for each employee and manager to establish virtues within themselves in order to pursue individual and organizational values, as well as keep them once they have been successfully implemented.It is the responsibility of management to ensure that these values are clearly communicated and followed, while established virtuous behavior becomes the mean by which these values flourish and exist.“A culture (or climate) of virtue in a business begins with executives who exhibit virtuous leadership through their personal actions and interpersonal relationships” (Younkins 21).

In displaying virtuous behavior throughout an organization, managers are setting an example for employees. “Employees are influenced by observing visible and legitimate role models who themselves act as virtuous agents. Not only should leaders openly discuss virtues and values, they should also live the virtues and values that they advocate” (Younkins 21). I believe that this is one of the most important aspects in creating and sustaining an ethical business environment. As explained by Kouzes and Posner in Minkes, Small, and Chatterjee’s article, “…leaders who could not personally adhere to a firm set of values, could not convince others of the worthiness of those values” (Minkes, Small, and Chatterjee 330). People learn through example. Therefore, managers should be mindful of this and back up their words with consistent virtuous behaviors that champion the organization’s values.

Once organizational values have been implemented, only half of the work has been done. The remaining half is a continual and never ending process within the business. In maintaining an ethical business, ongoing promotion and reinforcement is necessary. Management must continue to display ethical behavior, while continuing to communicate values to employees. This also includes communicating what actions are and are not acceptable. Employee evaluations should also frequently be performed, in which employees are evaluated on values implemented by the organization’s managers. In addition, management also needs to develop systems that reward value-oriented behaviors and reprimand value-destructive behaviors.

In regards to a reward system, “employees should be objectively appraised and compensated based on their contribution toward achieving a firm’s mission, values, and goals” (Younkins 19). Employees may receive monetary or recognition awards for their display of virtuous and ethical behavior. In establishing such incentives, there is an encouragement that exists among employees to accept and display the organization’s values and goals. In addition, such incentives create a pathway in which individuals can fulfill their own self-interests and goals simultaneously. “The good manager tries to shape employees’ ideas about self-interest by instituting incentives rewarding cooperation and reinforcing the pleasure people take in collaborating with each other” (Koehn 498). When employees act ethically, the business is also handsomely rewarded in that it gains a good reputation as being an ethically driven business. This can lead to higher profits in that consumers will be more likely to choose that particular business over competitors because of its reputation. “Many companies are now realizing that ethically driven strategies are resulting in a sustainable competitive advantage” (Arjoon 168). In addition, “companies that have seriously adopted ethically driven or people-centered strategies have seen clear gains in productivity, sales and profits, customer service, retention rates, reduction in absenteeism, positive impact on employee morale, [and] increased and timely launching of products” (Arjoon 169).

Adversely, a disciplinary system is also necessary in order to maintain organization values and ethically driven behavior that have already been established. Employees should be aware of the possible repercussions of their actions in advance, and management needs to ensure disciplinary actions are followed through with when dealing with value-destructive behaviors. This sends a message to employees that unethical behavior will not be tolerated and it should be avoided at all costs.

The acts of Enron and WorldCom have increased consumer demands for ethically driven organizations. Therefore, the businesses that make ethics a priority will likely obtain a sustainable competitive advantage because more consumers will choose to do business with them. In today’s economy and business world, businesses must place a large focus on ethics in order to be successful.

FACTORS THAT AFFECT ETHICAL BEHAVIOR

Implementing a form of virtue ethics and values throughout a business can be very challenging, but maintaining it can be just as difficult. There are many factors that can affect ethical behavior and lead a manager or employee to act unethically. Competition for customers and increased market share, as well as the need for more profit are common issues that can lead to unethical behavior. In addition, management incentives, such as bonuses, pay increases, promotions, and stock options can open the gateway for unethical behavior.

With a specific focus on profit, businesses that have an urgency to increase profits are likely to engage in false reporting. Reporting false financial information makes a business’s financial statements look more appealing to investors and gives a false pretense that the business is in better financial health than it really is. In addition, management may inflate earnings if they receive bonuses, pay increases, or promotions for increasing profits. These monetary compensations can prove beneficial for businesses in that management will be more driven to make sales and increase wealth in the business. Adversely, these monetary compensations can be dangerous if a manager works in his or her own interest and does not act ethically. It could put the business in a financial position that is difficult to correct.

Stock options are another form of management compensation. “Stock options allow employees to purchase a particular number of common shares of company stock at a specified price over a specified time period” (Brooks and Dunn 172). Stock options can be beneficial in that they serve as a motivational devise. When managers have an interest in the company they work for, they are more willing to strive towards an increase in stock prices. Shareholders, as well as the managers, enjoy higher returns when stock prices increase. In addition, stock options enable management to adopt the investor’s perspective in that theyenable both the interests of investors and management to be aligned.

One of the biggest problems with this is that unethical managers can work out of their own self-interest to falsely raise stock prices in order to earn more money. With the incentive to earn more money comes the high possibility for unethical behavior and false reporting. Managers that get used to these increasing stock prices are also the ones who will likely forego ethical standards and correct reporting procedures. The concept of stock options can be extremely dangerous to a firm, especially when stock prices are truly in decline and these types of managers are present. Reporting false income to increase these prices will eventually catch up to the firm and will result in the company’s non-existence. Another problem with stock options is that management has the option to exercise their stock options and then sell them immediately. This does not align with investor interests in that managers are only maintaining a short term perspective. Making decisions based on the short term only hurts the long term investors.

BB&T – A TRUE ETHICALLY DRIVEN BUSINESS

BB&T is a fine example of a business that has been led to success through the values-driven approach adopted by one its leaders. John Allison, former CEO of BB&T, now serves as the chairman of the board of directors. During Allison’s time as CEO, the company has grown from approximately $5 billion in assets to $165 billion in assets. This substantial growth has placed the company as the eighth largest financial institute in the United States. Just a few of the issues BB&T has made a bold stand on are a municipality’s right to seize property by eminent domain for the purpose of economic development, and negative amortization loans. Allison received national attention is his decision to “not provide loans for any economic development projects in which the land for the project had been taken in this manner” (Parnell and Dent 587). This decision was not initially favored by many mortgage producers.

“When we made the decision not to do these loans, we got beat up in the market. We also lost a number of mortgage producers who could make more money working for Countrywide – of course a number of these producers would now like to come back to BB&T. We believe that doing our best to help our clients make the right financial decisions is good for BB&T. I believe that while there may be short-term trade-offs by sticking to your values, you are never making a sacrifice in the long run, if your values are rational” (Parnell and Dent 589).

“Allison is known for, and attributes BB&T’s success to, operating by a set of principles that are embodied in BB&T’s Values Statement. These ten values – Reality (Fact-Based), Reason (Objectivity), Independent Thinking, Productivity, Honesty, Integrity, Justice (Fairness), Pride, Self-Esteem (Self-Motivation), and Teamwork/Mutual (Supportiveness) – are not simply platitudes at BB&T but drive the decision-making process of the bank” (Parnell and Dent 588). These values serve as the foundation that BB&T was built on. As part of the evaluation process, employees are evaluated on their performance in accordance with the 10 values. Those employees that perform in accordance with the values are rewarded.

Allison attributes Rand’s philosophy of Objectivism as the framework for these 10 values. The main aspect of Objectivism is that it relies on truth and blocks out all emotions in the decision making process. “The purpose of the process is to help you think rationally. It is about not letting your emotions make decisions that are bad for you. It is the ability to make logical decisions based on the facts and to pursue our purposes that makes us happy” (Parnell and Dent 591).

In addition, BB&T has also been viewed as being socially responsible. Milton Friedman, who is referenced to in Parnell and Dent’s article, argues that there are two reasons as to why a firm should act socially responsible. “First, not doing so can increase the likelihood of more costly government regulation. A number of regulations over business operations were enacted because some firms refused to be socially responsible” (Parnell and Dent 593). The second reason as to why a firm should act socially responsible is that “stakeholders affected by a firm’s social responsibility stance – most notably customers – are also those who must choose whether to transact business with the firm” (Parnell and Dent 593). The point here is that if consumers do not think a firm is socially responsible, they have the option to do business with another company, and they will more than likely do so. As discussed in Parnell and Dent’s article, studies have shown that consumers will be willing to pay more for products and services that are responsibly produced. Simply, consumers favor ethically driven and responsible businesses, and will purchase products and services from them considering this factor. This is why it is crucial for businesses in today’s economy and environment to be ethically driven and socially responsible. With the events as seen in Enron and WorldCom, it has made consumers extra sensitive to firms and what approach they take in formulating profit. Consumers want to be valued for their choice to do business with a particular firm, and they take enjoyment in purchasing products from these firms when they display ethically driven strategies.

From a market and environmental perspective, we could argue that BB&T is doing exceptionally well. “From a market perspective, BB&T has delivered strong growth and financial performance since Allison’s appointment as CEO in 1989. From a broad environmental perspective, BB&T’s business decisions defending eminent domain rights and eschewing negative amortization loans reflect support for a sustained society that respects personal property rights and responsible mortgage loan practices” (Parnell and Dent 594). In respect to this, BB&T speaks on behalf of individuals and what they want. While BB&T suffered somewhat in the short term, they were able to come out on top in the long run. In my personal opinion, I have much more respect for companies like BB&T because they are willing to forgo potential profits and take a stand, even when it is not the popular decision. Companies, like BB&T, will be around for years longer than the companies that jump on the popularity bandwagon. They will also see considerably larger profits because they stand out among their competitors – just as BB&T has come to do

CONCLUSION

In conclusion, it is easy to see how BB&T has come to be a top competitor in the financial institution sector of business. BB&T is a classic example of an ethically driven firm that has realized greater profits than the firms that have adopted a profit-driven strategy. The implementation of ethics throughout an organization is a very difficult thing to do. It requires substantial acceptance from employees and managers alike to be successful. Most importantly, managers are the driving forces in implementing such a strategy throughout an organization. They must be effective in communicating the values of an organization to employees, as well as lead by example. Management cannot expect to preach values that they do not live by themselves. After all, people learn through example. A leader that lives by the values it communicates to employees has the best shot at having an ethically driven business.

In addition to the communication process, managers must provide incentives for desirable behavior. A rewards system based on monetary or recognition awards are great ways to encourage cooperation and motivate employees. This also encourages the creation of a pathway in which individuals can fulfill their self-interests. These same values must also be a part of the evaluation process. Just as there are rewards systems, management must also design a disciplinary system. It is important that employees are aware in advance what they could encounter by not behaving in accordance with a firm’s values and policies. Managers must also follow through with any disciplinary action to reinforce their importance on having a values-based business.

The benefits of implementing an ethically driven business strategy can be great, but it can be a difficult thing to do. Competition for customers and increased market share, as well as the need for more profit are common issues that can lead to unethical behavior. In addition, management incentives, such as bonuses, pay increases, promotions, and stock options can open the gateway for unethical behavior. However, if a firm is able to successfully implement an ethics-driven approach, these issues can be minimized and the interests of the firm and employees will be satisfied and aligned. When a firm is able to align individual self-interests with its own interests, happiness and flourishing are more likely to occur for both.

Jessica Kuryn is a student in Wheeling Jesuit University’s Master of Science in Accountancy (MSA) program.

SOURCES

Argandoña, Antonio. (2003). Fostering values in organizations. Journal of Business Ethics 45:

15-28.

Arjoon, Surendra (2000). Virtue theory as a dynamic theory of business. Journal of Business

Ethics, no. 28:159-78.

Brooks, L. J., and P. Dunn. Business & Professional Ethics for Directors, Executives &

Accountants. 5. South-Western Pub, 2011. 172.

Koehn, Daryl. (1998). Virtue ethics, the firm, and moral psychology. Business Ethics Quarterly

8 (3): 497-513.

Marcoux, Alexei, “Business Ethics”, The Stanford Encyclopedia of Philosophy (Fall 2008

Edition), Edward N. Zalta (ed.), URL

<http://plato.stanford.edu/archives/fall2008/entries/ethics-business/>.

Minkes, A.L., M.W. Small, and S.R. Chatterjee. (1999). Leadership and business ethics: Does it

Matter? Implications for management.Journal of Business Ethics 20: 327-35.

Parnell, John A., and Eric B. Dent. (2009). Philosophy, Ethics, and Capitalism: An Interview

With BB&T Chairman John Allison.Academy of Management Learning & Education

8 (4): 587-96.

Younkins, Edward W. “Morality, Success, and Individual Happiness in Business: The Virtuous

Pursuit of Values and Goals,” Libertarian Papers 3, 26 (2011).

What People Mean When They Talk About Freedom – Article by Bradley Doucet

April 12, 2012 Bradley Doucet Comments 0 Comment

Bradley Doucet

April 11, 2012

Recommend this page.

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Most people I talk to believe that freedom is important. They generally want to be free, and they want others to be free as well. The disagreements only begin when we start discussing what, exactly, we mean by “free.” These disagreements over the meaning of liberty underlie a good part of the much-hyped polarization of politics in the western world.

One meaning, or set of meanings, is reflected in Freedom House’s annual Freedom in the World survey, whose findings for 2009 are available here. Freedom, according to this survey, is “the opportunity to act spontaneously in a variety of fields outside the control of the government and other centers of potential domination.” If that seems a little vague, the organization’s website gets more specific, breaking freedom down into two broad categories: political rights and civil liberties. Political rights allow people to “vote freely for distinct alternatives in legitimate elections, compete for public office, join political parties and organizations, and elect representatives who have a decisive impact on public policies and are accountable to the electorate.” Civil liberties include “freedoms of expression and belief, associational and organizational rights, rule of law, and personal autonomy without interference from the state.”

In the latest survey, fully 47 countries, ranging from Canada to Barbados, from the United States to Uruguay, get a perfect score of 1 for political rights and a perfect score of 1 for civil liberties. Only nine countries, including North Korea, Somalia, and Sudan, get the worst possible score of 7 on both counts. To get a sense of the spread, Argentina gets a pair of 2s, Turkey gets 3s, Kenya gets 4s, Ethiopia 5s, and Iran and Zimbabwe 6s.

Setting the Bar Too Low

This survey, however well-intentioned, suffers from two glaring deficiencies. First, it sets the bar way too low. By no stretch of the imagination are there 47 countries in the world that deserve perfect scores for freedom, even if we accept Freedom House’s criteria. Are civil liberties really perfectly safe in England, with surveillance cameras on every other street corner? Should the American Civil Liberties Union close up shop in an age of warrantless wiretaps, enhanced interrogation techniques, and jail time for smoking a joint? And here at home, how many Canadians really imagine that our proroguing Prime Minister is fully accountable to the public? I’m not saying I’d rather live in Zimbabwe—or Argentina, for that matter—but even in these relatively free countries of the Anglosphere, there remains plenty of room for improvement.

The other glaring defect in Freedom House’s survey is that it completely ignores economic freedom. There is no mention, for instance, of red tape, which costs small- to medium-sized Canadian businesses over $30 billion a year. No mention, either, of the eminent domain abuse that is rampant in the United States, robbing small property owners of their homes and shops in order to help some developer with deep pockets.

The Economic Freedom Network—with members in over 70 nations around the globe, including Canada’s own Fraser Institute—provides a picture of economic freedom in the world with its annual report. By its definition, economic freedom exists when property acquired “without the use of force, fraud, or theft is protected from physical invasions by others” and when individuals “are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others.” More specifically, according to its latest report, to have high economic freedom, a country has to protect private property, enforce contracts, and have a stable monetary environment. “It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than the political process to allocate goods and resources.”

Compare and Contrast

Many of the countries that score highest in economic freedom are also at the top of the list in Freedom House’s survey of political rights and civil liberties, and conversely, most of the least free score dismally on both surveys. In fact, a graph in the Economic Freedom Network’s report shows this strong positive correlation. But there are some notable exceptions. Hong Kong and Singapore, first and second respectively for economic freedom with scores of 8.97 and 8.66 out of a possible 10, are only middling according to the Freedom House survey; and the United Arab Emirates (7.58) and Bahrain (7.56), 19th and 20th for economic freedom, are quite repressive on other counts, both scoring 5.5 according to Freedom House (with 7 being the worst possible combined average score).

Would I rather live in Singapore than in Canada, which placed 8th for economic freedom with a respectable score of 7.91? The trade-off in terms of civil liberties would probably be too high. But I would gain something in exchange for my loss. According to the Economic Freedom Network’s report, countries with higher economic freedom have substantially higher per capita incomes, higher growth rates, longer life expectancies, better environmental performance, and less corruption. The poor are also better off in absolute terms in countries with higher economic freedom, and no worse off in relative terms.

As a libertarian, I value both civil and economic liberty. I fault the authoritarian segment of the political right for running roughshod over the former, but I also fault an equally authoritarian segment of the political left for trampling the latter. But beyond this, I fault both sides of the spectrum for fetishizing political rights. Democracy is a tool, and it can be a useful one, but what good are elections if our representatives are not checked by a strict constitution from taking away our civil and economic freedoms? What good is accountability if the people don’t know or appreciate what is being taken away from them? Looking at it from the opposite perspective, if we cared enough and were wise enough to guard our civil and economic freedoms properly, would it matter very much anymore who administered the machinery of government? Yet without constitutional limits and the will to enforce them, political rights amount to the “freedom” to force others to do what we want—a power that interest groups will fight tooth and nail to wield.

As I am regularly reminded when I discuss libertarianism with my fellow Canadians, this is a pretty good place to live. Canada scores better than or as good as most places on the planet in terms of political rights, civil liberties, and economic freedom. This is a fact, and I am grateful for it. But does that mean we shouldn’t try to make life even better? Why are we so complacent, so ready to accept “pretty good” as good enough? Why are so many intelligent, educated people uninterested in even exploring what history’s great thinkers have had to say about liberty? Few Canadians, I wager, have even heard of Benjamin Constant, for instance. A champion of individual freedom two centuries ago, he viewed political rights as a collective kind of freedom, present in the ancient world, which was “compatible with… the complete subjection of the individual to the authority of the community.” Yes, Canada is a pretty good place to live, all things considered. When individuals are no longer subjected to the dictates of their fellows, free to live as they see fit and responsible for the consequences of their own actions, it will be a great place to live.

Bradley Doucet is Le Quebecois Libré‘s English Editor. 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.

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