To thine own self be true

“To thine own self be true” Hamlet Act 1, scene 3, 78–82

There was once a psychological experiment done that I find terribly interesting. It was conducted by Solomon Asch as follows: a volunteer (the test subject) was placed in a room with a group of other people, sitting in a circle. The volunteer was led to believe that the other people in the room were also volunteer subjects who were participating in the same experiment. They were in fact part of the experimenting team, and were ‘in’ on the trick of the experiment. The volunteer knew that the experiment was investigating human behavior, but was not told what behavior specifically was the target. They were told simply to answer the questions that the experimenter asked. The experimenter asked outrageously simple questions, such as “which line is longer?”, when there were only two lines on the card. The people in the room proceeded to go around the circle answering the questions one after another. The ‘in’ people always answered incorrectly, and it was arranged that the test subject always answered last. Does the subject follow suit with the rest of the group and answer incorrectly, defying his own senses and mind, or does he stand alone and answer correctly?

Can you imagine yourself in this test? What goes through the subject’s mind the first time the question is asked and someone answers wrongly? You would probably assume that the first
person is a little slow mentally. But then the second person gives the same answer. “Hmm… that’s a little weird”, you may think. Then the third answers the same, then the fourth, fifth, six, and so on. By the time the experimenter gets to you, you are perplexed. You know which line is longer on the card, yet everyone is answering wrongly. Do they know something that you do not? Are you missing a crucial fact somewhere? How can so many people all be wrong? Who are you to think you know better than all these other people? What do you do? Answer as you know, or go with the crowd?




The results of the experiment were startling. I do not remember the exact numbers (you can look them up), but qualitatively there was a majority of people who consistently answered incorrectly in accordance with the rest of the group.
This experiment resulted in the first identification of what we call peer pressure, and it is usually discussed in relation to peer pressure. I want to look at it from another angle, however. I want to examine this experiment at its more fundamental level, the epistemological level. (Epistemology is a branch of philosophy that studies how we gain knowledge, i.e. faith or reason, emotions or logic, etc.)

How many of the people who gave in to the group do you suppose believed that they were answering correctly? I do not mean that they were dolts and couldn’t figure out which line was longer. I am assuming that initially everyone knew the correct answer. What I mean is that by the time their turn to answer came around, they had actually changed their mind about what the right answer was. My thesis is that there were many who did just that. In the face of other people answering contrary to their first assessment, they revised their assessment to agree with the group, in effect convincing themselves that they must have been wrong initially. Additionally, I bet that many of the subjects eventually just stopped looking at the cards as the questions were asked, and instead just listened to their neighbors’ responses for guidance. (Now undoubtedly there were also many people who knew they were answering wrongly and were just caving in to pressure, but I am less interested in them.)

This phenomenon was identified by Howard Roark in Ayn Rand’s The Fountainhead as the principle of the 2nd hander. A 2nd hander is someone who relies on other people for his mental processes. The 2nd hander forms ideas and convictions based on the ideas and convictions of other people. To a second hander the value of an idea is gauged by how many people agree with it. When confronted with a problem the first response of a second hander is to seek guidance, form a committee, ask an expert, take a poll, search for someone else’s previously tried solution, etc. In contrast, an independent minded person, when confronted with a problem, would look first to reality, then, relying on his own mind struggle to come up with a solution.

Now before anyone objects let me add some caveats: I am not saying that it is bad for other people to be of assistance to you, or that you have to discover everything about life on your own. As the bromide goes, you don’t have to re-invent the wheel. Getting aid from others does not make one a second hander. What does make one a second hander is when other people’s thought is substituted for, or given prominence over, your own.

For example, suppose you are taking a backpacking trip in a wilderness area. You would need to decide what equipment to bring with you. A first handed mentality would consider what sorts of conditions they would be likely to encounter, and plan equipment accordingly. A second handed mentality would ask their neighbor what to bring, because they know that the neighbor likes camping. A first handed person would know exactly where he was going on the map, will have studied the surrounding area, memorized landmarks, mileages, trail junctions, elevations, etc. A second handed person would be sure to bring along a first handed person who knew where he was going, or he would not make the trip. On the trail a first handed person would have a good (if not exact) grasp of where he was based on time of travel and landmarks. A 2nd hander would be constantly asking everyone else how far they had gone, where they were, and when they were to reach the summit (even when the summit was clearly in sight). Upon arrival at the destination, a first hander would begin looking for a good camping sight, based upon definable criteria such as tree cover, flat ground for a tent, logs or rocks for seating, proximity to water, seclusion from the trail, etc. A 2nd hander would follow the first hander he brought along, and uncritically accept whatever spot was chosen regardless of its merit, or lacking any 1st hander, the 2nd hander would simply look for evidence of someone else’s previous camping spot. When it came time to fish the 1st hander would search for the right spot where he suspected the most fish to be. The 2nd hander would look for the side of the lake with the most people fishing on it, assuming that to be the prime spot.

Now of course, the second hander in my example was carried to the extreme. No one is entirely second handed. We all form some thoughts on our own. The question is, what is our primary orientation? What is our default setting? Most people have some areas in which they feel confident, but when they are outside their comfort zone they switch to 2nd hand mode. It almost seems that the more important the issue, the more second handed some people become. They feel fine forming their own opinions about trivia, but allow the course of their life to be set (through the ethics they accept) by what they have always been told. (“Traditions of their fathers”)

Now the 1st handed person may receive help from other people, but that is not necessarily 2nd handed. For example, the first hander above may have received advice from someone who had been to the wilderness area before about which lake was the best to go to. But he would have expected reasons to be given in support of the person’s suggestion. He would have inquired about why the person thought it was the best lake. Was the fishing good? Was it picturesque? Was it less crowded? He may then decide, based on this information as well as any other corroborating evidence, to act on the person’s advice. But the key is that he still made his own judgment call based on the information available to him, including the person’s testimony. The 2nd hander by contrast is not concerned with why the person recommends the lake, but merely that he does recommend it. To a 2nd hander the persons advice is not information in the decision making process, it is the entire process.

A similar pattern is evident in gaining knowledge. I am not expected to discover on my own that energy and matter are interchangeable, and that the equation governing that interchange is e = mc2. I learn from those who went before me. But I cannot claim that I know that e = mc2 unless I have gone through the mental effort necessary to understand the concept. Einstein may have discovered it, but the concept becomes mine when I can make the mental connections on my own. Any trained parrot can squawk “eee equals emmm see squared!”, but none of us would claim that it has mastered the Theory of Special Relativity. A first hander gains knowledge from many sources, including other people, but he takes the responsibility to learn that knowledge himself, whatever the source. And he never accepts the knowledge uncritically. He demands that it makes sense, that it jives with previous knowledge he has gathered, and that all the sources are valid. He goes through a process of validating everything he believes.

A second hander however accepts ‘knowledge’ (if you can call it that) uncritically. He doesn’t bother to look at the experimental results, reason through implications, or check credibility. The fact that it was in a text book, or said by a professor, or an expert, etc. is enough for him. And the second hander rarely makes an effort to understand for himself the knowledge he has managed to copy. They simply memorize sayings, slogans, formulas, or bromides, such as e = mc2, use the formula on the test, and promptly forget any semblance of meaning they may have randomly associated with it. 2nd handers rarely have an original idea or conviction of their own. When confronted with a choice they always look outward for answers.

Now I ask you, how can you to be true to yourself? You are, in the deepest metaphysical sense, your mind. What you think makes you who you are. You can call it your Spirit if you like, it makes no difference what the name is. But to be true to yourself you have to have a self. When your mind is a junk pile of recycled ideas, borrowed convictions, or hastily accepted evaluations; when it is open to any and all comers, and its course is dictated by their whim, based on no criteria other than that they are someone other than you; when your greatest fear is trusting yourself (your mind), how can you ever be true to yourself? The only way to be true to yourself is to reject 2nd handedness fully, to think for yourself, to make your own judgments, to stick to your convictions, and to never accept any authority over the authority of your own mind. When you accept yourself as the only sovereign over your own mind, then you are true to yourself.

"I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man." –Thomas Jefferson, inscribed on his monument


“I recognize no authority higher than that of my own mind” – Me

(p.s. thanks to Brandon who encouraged me to do another post)

Atlas

Do you remember the Greek myth about the giant Atlas? He was tasked to hold up the entire world. Ayn Rand used this story as a metaphor in her book Atlas Shrugged (must read). She equated Atlas with the producers of the world, the men/women of the mind, those whose creative effort brings into existence all of our material abundance. She noted that they labored under the strain of holding up the rest of the world, the moochers and looters, who couldn't be bothered with producing their own sustanence, just as Atlas held up the world in the myth. In a famous conversation in her book between two heroes, Fransico D'Anconia asks Hank Rearden what he would do if he saw Atlas, bent and bleeding, struggling with all his might to hold up the world. Hank doesn't know what he could do, and so turns the question back to Fransisco. Fransisco replys, "Tell him to shrug." (Hence the title of the book)

I find Miss Rand's metaphor extremely accurate. If you look around the world today it is clear that there is a minority of people who, through their tremendous effort, are supporting the rest. This support is manifest in many ways: welfare, foreign aid, medicare/medicade, social security, public works, etc. In all cases though the pattern is the same -- the most productive people (i.e. rich people) have their hard earned production taken away from them (via taxes) to support various 'noble' causes (i.e. handouts to moochers/looters).

My question is this: can this continue? (Of course it should not continue.) The moochers and looters have always relied on one implicit assumption: that there will always be some producer around for them to loot from. I would like to explore this assumption and see wether it is true.

There are two important factors that will determine whether there remain any producers in the world (or at least enough producers to support the rest). First, there must be people willing to produce. Second, they must be able to do so. The moochers/looters take for granted that the first condition will always be satisfied. They understand that there is a basic (and noble) human drive to be productive, and they count on some people to follow it. The second condition is never considered by the moochers/looters. They, having renounced the mind, are unable/unwilling to consider how things are produced and under what conditions such production is possible. They have the mentality that goods simply exist, and will always continue to exist. How? Somehow is the ubiquitous answer.

So let us consider each condition. Will there always be people willing to produce? To answer this we must consider what gets them to do so in the first place? They must have some motivation. Naturally, men's selfish desire to live (which is a good thing) usually serves as their motivation. But what if they knew that any action that they could take in an attempt to advance their good would ultimately not serve that end? Would it still serve as a compelling motivation? No. So in the realm of production, what could frustrate a persons attempts to further his good? The confiscation of his wealth is one thing. For example, you go to work in order to earn an income. Would you continue to do so if you recieved no income? No. (You may like your job, and have other secondary reasons for doing it, but they are not the primary reason. Earning an income is primary.) Also, it should be noted that it need not be all of you income that is confiscated for your motivation to be squashed. There is a critical level of confiscation, above which all motivation to produce is lost. So we have found one condition that will quell peoples desire to produce: confiscation of their wealth. (there are others, but it this is the most prevelant one today)

Next let us consider whether there exist conditions that make production impossible, even if hypothetically there remained some people willing to try. First let us note that when men are compelled by force, they cannot produce. Oh they can go through motions, perform manual labor, etc., but that is not the root of production. Production is a product of the mind, and the mind is paralyzed by force. Just look at the former Soviet Union; they had millions of people forced to labor and what did it get them? Starvation, stagnation, and the slow distruction of a nation. Not only can you not compell production, but you cannot restrain those who do produce and expect them to continue. Freedom is a neccacerry condition for production. When men are not free to make the decisions that are best for their productive enterprise, they cannot produce long. Production is an active process, that cannot survive stagnation. For example, suppose you own a development company. You obtain a section of land and start to build a housing subdivision on it. Half way through excavation you are served with a court order to stop building. Apparantly there is an endangered field mouse who may live on your property, and as such you are now restricted from developing it. You however have sunk millions of dollars into this project already, anticiating a large return after completion. Now you are stuck with a worthless peice of land that cannot be developed, and you go bankrupt. As a bonus, the bank that financed your expedition cannot bare the blow of your bankruptcey, and thus goes under too. Of course that was a made up example, and it only illustrates how one restriction hurts one person, but the principle is true across the board. Whenever there is a regulation placed on a producer it can only hinder his production, but never increase it. When regulation becomes total and complete, however, all production fails. (it is like chaining a man frome nose to toes, and then expecting him to be able to work)

In addition to regulation, confiscation of wealth also hinders production. In an industrial society business concerns are made possible by financing through capital. (such as the bank lending money to the developer in the above example) Banks however get their money through the savings of other producers. (see post below) If everyone's wealth is confiscated though, then there can be no excess capital to be put to good use, and thus no advanced in production. Even when confiscation is not total, the incentive to investors is diminished, and thus capital is reduced, thereby, through a chain effect, stunting production. (would you buy a stock if 75% of its earnings were taxed away?)

It is interesting that the very two things that are most popular today in our government, taxation and regulation, are the very things that cause production to cease.

Now any of you who know me know that I am a math/science geek, and the rest of the post will reflect this. I wanted to come up with a mathmatical and visual way a representing what I have argued above. So here goes:

• let p be a variable representing the fraction of producers in our society. (thus p = 0.30 means 30% of the people in our soceity are producers)
  let m be a variable representing the fraction of moochers/looters in our society. (thus m = 0.70 means 70% of the people in our soceity are producers)
• note that p + m = 1 because the total percent of producers added to the total percent of moochers/looters must be 100%. (so if the number of producers goes down, then the number of moochers/looters must go up)
• let a be a variable representing how much the producers can produce.
• let b be a variable representing how much the moochers/looters steal from the producers.
• define P(p,m,a,b) to be a function that represents the total excess production, meaning that which the producers produce less that which the moochers/looters steal.
• Then P = ap - bm , but because p + m = 1 , ==> P = ap - b(1 - p) = p(a + b) - b .

Now the looters assumptions can be quantified as follows: their assumption that there will always be those willing to produce is the same as assuming that p does not decrease, and their assumtion that production will always be possible is the same as assuming that a will not decrease. If that where true then the excess production could simply be determined by setting b at the appropriate level. The following graphs illustrate how setting b at different levels changes production, P.














The goal of the moochers/looters is illustrated in the third graph. They want to take as much as possible from the producers, while still having P > 0. (if P is less than 0, then people are starving).

However, a and p are not constants. As I argued above, they are diminished by the presence of confiscation and controls (represented by b). Thus, as long as b does not equal 0, a and p will be decreasing functions of b. The actual functional relationship may be very complex, but a good approximation is given here.

• let a(b,t) = a - ct^(db) . I realize that the math looks weird, but all that is going on is a is decreasing in time, t, and the speed at which it is decreasing depends on the size of b. (a, c, and d are just constants that can be figured out for particular cases) What this function represents is the diminishing of productive capacity by the presence of confiscation and controls.


• let p(b,t) = p -et^(fb) . This is the same idea as the function for a, p is diminishing as time goes on with speed set by b. This represents how the number of people willing to produce decreases in the presence of confiscation.

With thess additions our graphs change:

Of course the actual numbers in the graphs are made up, but what I am going for is a visual understanding of the problem, not a rigorous proof. As you can see, the very presence of controls and confiscation diminishes productivity, and the more the controls/confiscation, the faster it does so. Eventually the moochers/looters end up taking more from the producers than is produced (when the red line crosses zero). At this point the society is in trouble.





Ok, no more math stuff. Let me recap my point (cause I kinda got lost). Producers cannot be exploited indefinitely. If the confiscations and controls they are currently enduring are not lifted then they eventually will "shrug" and drop the world. The assumption of the moochers/looters that someone will always be there to produce, ...somehow..., is wrong. With their motivation squashed and their hands tied, even the best eventually will fall. What is the solution? Freedom of course.

Has the Free Market Failed?

I was listening to a talk show the other day, and they were debating the consequences of the AIG crash. (spurred on by the news of the multi-million dollar bonuses some executives were getting after ruining the company and receiving billions of bailout-dollars) The show host argued that the failure of AIG proved that more government regulation is needed, while the guest was supporting the free market. The host raised the following questions: "didn't the free market already have it's chance? The credit-default-swap market (the genesis of AIG's failure) was completely unregulated, and look what happened as a result. Shouldn't the government have stopped AIG from investing so irresponsibly?"



I am not interested right now in arguing who was right between the host and the guest (you probably know what I would say anyway), but I did want to explore what I consider to be the underlying issue. The host is saying that the free market did not work. I would like to ask what he means by "the free market did not work"? The obvious answer is: look at AIG! The biggest insurance company in the world went bankrupt, the government had to bail them out, the credit market went into a tail-spin as a result, and the entire economy is tanking. (I am, of course, putting words into someones mouth, but I think it is a fair representation.) For decades now, ever since the New Deal really, this same formula has been used -- when something bad happens in the economy say that the free market has failed, and that we need more regulation to save us.



But has the free market really failed? I argue that the facts listed above about AIG and the economy are true, but that they do not show that the free market does not work. They are in fact instances of the free market working! It is quite simple really: what is the free market's mechanism for discouraging bad investment? Risk, i.e. the possibility of failure. AIG made horrible investments (bad risk), and as a result they should fail! AIG's failure is the result of their actions, and represents the way the market automatically adjusts to discourage such actions.



Imagine for a moment that the government had let AIG go under instead of bailing them out. Would any reasonable company make similarly silly investments in the C.D.S. market? Of course not! They would say to themselves, "Holy Crap! We need to dump that risky C.D.S. stuff, or we are going to go the way of AIG." The market would correct itself without the need of some Regulator to go around deciding who could invest in what and how much, based solely on his discretion. Is it moral for a Regulator to tell people or companies how they can invest? No. But beyond that I am saying that, moral or not, it is not even needed! Of course the government did not let AIG die, so the message sent instead was this: do what ever you want, because if your risky investments turn south, you will be bailed out. The government essentially has removed the cautionary incentive of Risk, thereby undercutting the free market, all the while blaming the free market that it has hog tied!



Let me return to my main point though. What would a failure of the free market consist of? Failure is a completely conditional concept, i.e. it depends on what the goal is. For example, if I asked you "is earning $10.00 a failure?", how would you respond? You would likely be confused. Why? Because I did not specify a context. If the goal was earning $1000.00 to buy a new computer, then yes, $10.00 is a failure. If, however the goal was getting a hamburger, then $10.00 would be a success. This may seem like a trivial example, but the people who are claiming that the free market doesn't work are doing the exact same thing. They (referred to as Statists from here on) say the market failed, but specify no yard stick by which to measure failure.



The Statists do, of course, have a yard stick, but the do not express it explicitly. Their measure is this: if something bad happens in the economy, such as large companies going bankrupt, high unemployment, inflation, stock market drops, etc., then that is a failure of the free market. (it is important to note that they do not consider the bad event a failure of those involved, but of the market itself) In other words, the goal is uninterrupted economic growth with no setbacks, losses, or bad deals. That sounds on the surface like a good goal, and I believe most people would accept it initially. That is one reason why the Statists feel no need to explicitly state it. However, the goal does not stand up long to any rational scrutiny, which is the second reason the Statists don't want to openly state it. They are afraid to let their goal be rationally discussed, and instead deflect discussion to more catchy emotional subjects, like the bonuses to the executives, or sob stories of needy workers, etc. They are dependent on the fact that most people take things for granted and accept their initial feelings about a subject as sufficient, never examining closely the ideas they accept. (I say most people. There are those who do think deeply about things. I wish there were more.)



So then, let us scrutinize the goal of perfect prosperity. First, is it achievable in real life? No. In real life there is always the possibility that someone will fail. This is true of free and controlled markets (more on that later). Second, why should we want to achieve it? It is true that in general terms prosperity is good, but we cannot consider it in a vacuum, out of context. Whether the goal is good or not depends entirely on what price would have to be paid to achieve it. I say that the goal of perfect prosperity is evil, because of the price that must be paid for it. The only way to ensure no bad economic outcomes is to remove the possibility of any variation in outcomes at all. That means the elimination of good outcomes. For, after all, if one can succeed then one must also be able to fail. (for those of you who are LDS: it is the same thing we believe Satan wanted to do. He wanted to eliminate all choices in order to remove the possibility of making a bad choice)



Consider an analogy -- We would all probably agree that health is a good thing. However, there is always the possibility of disease in real life. If I proposed, in the name of uninterrupted health, placing everyone in a protective quarantine plastic bubble (such as the one in the Jon Travolta movie), would you say my goal is noble? No. Health is only a valid goal because it promotes our living a vibrant life. But as we all know, living vibrantly is more than bodily function, and living in a bubble is no life at all. Thus we cannot say that my goal is noble, but just not realistic. The very price of the goal negates its goodness: health ceases to be good if it is destroying ones capacity to live (in the broader sense of live). It is the same with the Statists alleged goal.



So why do the Statists hold such an unachievable, irrational goal as a standard of measure? Precisely because they know it is unachievable. When bad things inevitably happen, they can step in, as they are now, and say the free market has failed. This opens the door for them to do as they please. They naturally promise that they will be able to do better, and we naively believe them. Of course they cannot achieve their goal either, but that is not the point. When more failures occur they will have an ace up their sleeve. Simply blame the free market again! Then even more controls will be clamored for. It is a self reinforcing cycle that repeats with the ultimate end being total state economic control. Of course then when the failures continue to happen there will be no free market left to blame, but by then it wont matter.



What is the solution? We must insist on a proper measuring stick of success. That measure should be freedom. The success of the economy must be measured by how free it is. Not because we believe that freedom will somehow mystically ensure uninterrupted prosperity (as some conservatives argue), because that is falling into the trap of accepting the Statists premises. There will be unfortunate events from time to time in a free economy, but freedom should be our goal because it is right.

What is Wealth?

Well, here we are in a full blown recession. It seems like all we hear about on the news anymore are debates about what President Obama should do to "fix" the economic woes of the country. There are Multi-Billion Dollar bailouts plans, and Multi-Trillion Dollar stimulus plans, being tossed around. (for those of us who find it hard to imagine what a trillion dollars is, it is: $1.0 x 10^12; or $1,000,000,000,000; or One Thousand-Billion dollars, or One Million-Million dollars, or One Thousand-Thousand-Thousand-Thousand Dollars... i.e. a lot! Consider this if you earned a hefty $100-Million per year you would have to work Ten-Thousand years to earn a Trillion dollars.)

Naturally, the political lines have been drawn: Democrats are salivating at the opportunity to hugely expand the governments role and spend oodles-&-gobs of money, while the Republicans, in classic "I'm still rel event" fashion, are opposing anything and everything the D's want to do. They do agree on one thing though: that the government needs to do something to fix the economy. The R's just don't want the D's to get the credit for doing it!

I challenge both the R's and the D's basic premise: that the government has the responsibility, or even the right, to try fixing the economy. But that is for another post -- so for the sake of argument I will assume that the health of the economy is a valid concern for the government. What then characterizes a healthy economy? One in which wealth is maximized. But this begs the question that is the title of this post, what is wealth?

For nations wealth is measured in GDP, for a financial planner it is Assets less Debts, but in the end it all boils down to plain old dollars. This seems like a simple answer, wealth is dollars, ...duhh. But have you ever asked yourself what money is? I don't mean paper or metal, or even the means of exchange for goods. I mean what is it? Only by understanding this can we know how to maximize it.

Money is products that have been produced but not consumed. In our modern economy it is often hard to see this link between production and money, so it is helpful to think in more basic terms first, and then project upward. Suppose everyone were farmers. You could only eat that which you had produced. If you produce more than you need, then that surplus represents your wealth. This wealth could be saved in case the next year was less productive, or traded via barter to other farmers for rudimentary goods. However you would not be able to save much, because the food would naturally spoil after time. And trading with other farmers would not alleviate this problem because all they have to trade to you is also their surplus food (aside from a negligible amount of home-made products) which will also spoil. So there is a natural ceiling to the total production possible to a community.

For example, suppose you become so productive as a farmer that you can reap 3 years worth of food in one year. What are you going to do with the other 2 years worth of food? Suppose you can save one years worth without it spoiling, then what about the other extra year? Maybe you can trade a quarter of it to other people for durable goods, but the last 3/4 goes to waste. This is where money steps in. If you could exchange your extra 2 years of food for money, then that money would not spoil, and in the future you could trade the money back for food or other goods if needed. Thus money is a means of saving. Of course it is also a means of exchange, but that is not it's primary purpose. Money is not important because it makes trading easier, it is important because it makes savings possible. It is savings that allows man to progress beyond a Dark Age style hand-to-mouth existence.

Without savings our modern economy would never be possible. Consider any non-farming profession: lets take an Auto maker for example. An Auto maker does not produce anything that can be readily consumed. So how does an Auto maker live (he/she has to eat something)? They must somehow obtain food from those who do produce it (farmers). If the farmers are only producing enough for themselves though, this is impossible. So the very existence of non-farming professions depends on the farmers being able to save. And, as outlined above, the degree to which farmers can save is severely limited without money, and therefor so also is the possibility of professions limited without money.

Of course we do have money, so we know how an Auto maker could survive: he sells his cars for money, and then trades that money to farmers for their food. (they then can buy things, such as cars) Here is the crucial point though: the Auto maker only got the money because he had produced something (the car). Likewise the farmer only received the money from the Auto maker because he had produced something (the food). This is true for every link in the chain of selling all the way back to the miner who brought the money (gold) out of the ground with his blood, sweat, and tears.

Now back to our society and the question at hand. Knowing that wealth is goods produced but not consumed (i.e. money, i.e. savings), how can it be maximized? Only by producing more goods than are consumed! This is the secret that the D's and the R's refuse to see. Production is wealth. The governmental approach to the economy however seeks simply to give money to certain groups, thereby "stimulating" the economy. How does this moving around of money increase wealth? Where, after all, does the government get its trillions to stimulate the economy? By taking it from people who already have it. How did the people get it? By producing. Does taking the money from them and giving it to someone else somehow increase that which had been produced? No. The total amount of production remains unchanged, and, tragically, a horrible injustice is also perpetrated. However, even if one disagrees with me that it is unjust to do this, surely one can see that it does not work!

In the primitive society imagined above, if some people refused to produce they would starve (or be left to the charity of those who did produce). However in our modern society there is the possibility of delaying this process through the use of credit. Many people consume more than they produce through this means, but we all know that eventually it catches up to them. Our government is now doing the same thing. By refusing to see that the only way to increase wealth is by increasing production the government is living on borrowed money. But government or individual, the time of reckoning always comes.

Suing the BCS?

Most people from Utah are familiar with the BCS system (the five major college football bowls) and its bizarre and unfair selection processes, given that the University of Utah football team has 'broken in' to the BCS twice in the last four years. In both of those years the Utes didn't loose a single game the whole year, and yet they didn't even get a chance to play for the national championship, while the teams that did all had losses.

In light of the Utes' impressive win over Alabama in the Sugar Bowl this year, the argument that the BCS system is flawed seems more valid than ever (although there are good arguments on the other side too: case in point -- Florida, one loss, but undoubtedly a better team than Utah). That debate will continue to rage, but there is something much more interesting, and troubling, that has surfaced regarding Utah and the BCS. Apparently Utah's Attorney General, Mark Shurtlef, is planning to sue the BCS, alleging that they have violated federal anti-trust laws. (http://www.heraldnet.com/article/20090107/SPORTS/701069748/1093/SPORTS06)

I hope you are as shocked as I was when I heard this. Mr. Shurtlef has finally flipped his lid. There are at least three reasons why this action is stupid: first, it will not work, second, there will be negative repercussions for Utah and all other non-BCS schools, and third, it is a complete moral outrage.

Legally our honorable AG has no standing in this case. The BCS system is equivalent to a private business. They work in conjunction with the NCAA, but really they are in it for the money (which I mean as a compliment, not a denigration as it is commonly used). The various bowls invite teams to come play for them, promising them a purse whether they win or loose. In return the bowls get to pocket the ticket receipts, and more importantly the TV rating proceeds. Naturally the bowls will want the teams that will draw the biggest audiences, so that they can make a profit. The bowls purchase the venues, pay for the promotions, and make all the arrangements -- in short the own the bowl. Given that fact, what right does anyone, be they the AG of Utah or the Queen of Sheba, have to tell the bowls who they must host in their bowl game? If they want to have the University of Ulaanbaatar in their bowl game then that is their right (they may loose money though, as there aren't many TVs in Mongolia).

Not only does the BCS have a right to choose whomever they want on whatever basis they want, there is also no way that they could be considered a Trust (monopoly). To be prosecuted as such it would have to be shown that they A) have a nearly exclusive market share, B) exercise pricing power independent of the market, and C) use coercive means to restrict competition in the market. In refutation of: condition A -- there are 29 non BCS bowl games, condition B -- there really isn't a price, other than for tickets, and the bowls certainly can't charge whatever they want for those or no one would go, and for condition C -- anyone could start a bowl game and the BCS would have no power to stop them (whether they could get anyone to care about their game is a different problem). So if the BCS in no way resembles a Trust then pray tell how does Mr. Shurtlef plan to prosecute them under anti-trust laws?

Not only is the plan to sue the BSC misguided, it is not practical. I assume that the AG's objective is to get more fair treatment of non-BCS teams in the BCS system. The only consequence of his actions, however will be more disdain from the BCS toward non-BCS teams. His suit is the equivalent of a child throwing a tantrum when he doesn't get what he wants. And although the child's tantrum may blow off some emotional steam, it usually lands him in time-out. In this case the time-out will be greater difficulty for any non-BCS team trying to 'bust in'.

Lastly, and most importantly, the suit is morally offensive. First because of the means employed. The anti-trust laws of the United States are unconstitutional, non-objective, and designed to punish the good for being good. It is a tragedy that they were passed, and is a crime that they haven't been repealed. The ends do not justify the means, even when the ends are good (which they are not), and in this case the means make the end even worse. Second the suit is immoral because of its main premises: egalitarianism. Mark clearly believes the egalitarian mantra that everyone needs to be equal in all things. His entire argument rests on the premise that if one school has an unequal advantage over another school in getting to a bowl game, this is somehow wrong, and must be remedied, not by persuasion but by governmental force. The fact that in order to do this justice is denied and rights are violated doesn't bother him, but it does me.

The best argument against the current BCS system is the one that the Ute's gave in New Orleans. The system may be flawed, and we can work to change it, but lets not be petty little children about it. And lets certainly not sell our souls to the devil (no that isn't hyperbole, I really do feel that way about anti-trust) in an ill-fated attempt to get what we want.

Democracy

In common usage today democracy is equated with freedom. For example when politicians talk of the ‘free nations’ of the word, they are almost always talking about the democratic nations of the world. We are told that we need to bring 'freedom' to the Middle East, while what is meant is that we need to bring democracy: witness the elated media coverage of purple fingered Iraqi voters, hailed as a triumph of liberty. In America we are told that voting is a hallowed privilege and a solemn duty, and that democracy is the mark of free, civilized societies. This conceptual pairing of democracy and freedom is incorrect, misleading, and harmful. Democracy is not only not a sufficient condition for freedom, it is not even a necessary condition.

Let me define my terms so that it is clear what I mean:

Freedom, in a political context, means freedom from coercion (i.e. physical force). The political principle that ensures freedom is individual rights. A free society is one in which every person's rights are protected from infringement by others.

Democracy is a term used loosely today to denote any political system based on the principle of majority rule, whether it is pure (ancient Greece), representative (U.S.), parliamentary (England), etc. The meaning of majority rule is that whatever the majority of a population decides should be law, is law; and even beyond that, it not only is law, but should be law. This subtle distinction is important, so let me rephrase it: majority rule per se is not just a system of making law, it is a moral sanction on the majority's choices, i.e. the majority not only rules de facto, but by right.

It is this foundational principle of democracy, majority rule, that is antithetical to the principle of rights, and thus also to freedom. If a majority can do whatever it wants, which it can if it rules by right, then that includes violation of rights. If the majority decides that a certain minority segment should be repressed, then repression becomes the law. In other words, the fact that a majority makes a law in no way insures that the law will respect rights. The majority certainly can respect rights, but the key issue is that it can just as easily not. This is not only true in theory, but also in practice. There are now and have been many repressive governments that were all democratically elected: the Palestinian Authority, the Islamic Republic of Iran, Egypt, Venezuela, Columbia, Russia, Nazi Germany (that's right, Hitler was elected Chancellor, and the Nazi party was a political party that was voted into power), and even the United States during years slavery was legal.

Perhaps the best example of the tyranny that a democracy can represent is given in the death of Socrates. Socrates was one of the fathers of philosophy who lived in democratic ancient Greece. At one point he was put on trial for arguing against the Greek gods and "corrupting the youth". The jury found him guilty and sentenced him to death. Socrates was given every opportunity to flee to save his life, but he refused. He decided that, despite the injustice of his sentence, he had to respect the will of the majority. He drank, of his own free will, a cup of poison. Two tragic aspects of this story: first the fact that the society even could sentence him to death for something so silly, and second that he would willingly comply with his own murder in the name of majority rule.

What then is the role of democracy? Is it always evil? Of course not. My point is not that democracy is bad. My point is that democracy alone does not ensure freedom. Democracy can be an effective mode of government only if it is completely restrained in such a way that individual rights are completely protected. This was the purpose of the constitution of the United States. In this setting, democracy is the best form of government. The primary principle however must be freedom. The proper formula is: freedom first, then choose a method of government. Theoretically if freedom were insured by restricting government (e.g. through an iron-clad constitution and checks/balances), there would be nothing wrong with a government that was not democratically elected. The president, for example, could be an office passed on from generation to generation, in the same manner as royalty (though without the absolute power). This mode of government of course would be stupid, because family connections are not good measures of competence to rule. That is one reason democracy is the best method for choosing leaders: we can vote for the most competent rulers. The point is however that although the aforementioned method of government would be stupid it would be compatible with freedom, so long as the government is restricted to respect individual rights. The choice of the particular mode of selecting rulers then becomes secondary. How you select a leader becomes a question of effectiveness and efficiency rather than a moral question. As long as rights are protected, almost any mode of government will work (although the case can be made that democracy is the best choice).

It is time that we recognize the tribal, collectivist notion of majority rule as anti-freedom, and dethrone it as a cardinal American principle, replacing it with the true principle of freedom: absolute individual rights. We should stop exporting democracy, as if it is the magic cure all of 3rd world ills, and instead insist on the respect of individual rights. When rights are secure, democracy will naturally flourish, but the reverse is not necessarily true.

Sacrifice

Sacrifice is a word that is completely misunderstood and misused in our current cultural vocabulary. This is important because the concept of sacrifice is at the center of the biggest ethical debate in history. The dominant ethical theory of our day, the theory of Altruism, places sacrifice in the high seat of it's cardinal virtue. According to Altrusit theories, both the religious and the secular, sacrifice is the moral duty and the highest moral aspiration of men.

But what does it mean to sacrifice? An accurate definition would be to give up a higher value for a lesser value. For example: you value time spent with your family more than time spent with a borish aquantance, but you give up time spent with your family (higher value) to spend time with the aquantance (lesser value). That could be described as a sacrifice. Though the example is a seamingly trivial one, it serves to show in a simple way how one could sacrifice. Unfortunately the term is not very often used in this way. It is more often misused in the following ways:

-"Sacrifice to get blessings" This is one that most church goers will be familiar with. It is the promise that if you give up certain things now, you will recieve greater things later. This is called the principle of sacrifice, but it has nothing at all to do with sacrifice! Put aside whether you believe in God or not, that is not relevant to the question at hand. The question is what is being advocated by the principle described above? The best word that should be used is investment. When you give up a value, but do so in anticipation of a future greater value as a return, is that a sacrifice? No it is not. Just consider the act of investing in stock, you give up a value (money) in order to gain a greater value in the future (more money). The fact that this example deals with money, while others do not is irrelevant.

-"You must sacrifice in your relationship in order to make it work." This statement is usually given as advice with the implicit understanding that what is meant is that in order to have a happy relationship each person has to give up some things that they might have otherwise valued, such as time with friends, hobbies, goals, energy, etc. The problem though is that what is overlooked is the enormous value that one recieves in return, a happy fullfilling relationship! Of course the advice includes this aspect in it, and yet few people make the mental connection that if they are giving something up for something that they really want more they are not sacrificing. They are merely paying the price that is required to maintain a happy relationship. If on the other hand one does not value the relationship as much as the things being given up it could be properly termed a sacrifice. But in that case the couple has no buisness pretending to be in love, and there is no point giving them advice.

-"You need to sacrifice now while you are going to school so you can have a great job later." I won't say anything more about this one because it should be obvious that it makes the same mistake as the last two.

There are myriad other examples, but they all share the same error: they use the word sacrifice to denote giving up anything in order to get something you value more in the future, which is really investment. Why does this matter at all? Am I just arguing symantics? The answer is that words direct our thought. Our conceptual faculty is based upon using words to denote ideas. When a word becomes corrupted and is used with incorrect meaning is also corrupts the underlying ideas in our minds. When you use the word sacrifice to describe what is really investment you associate sacrifice in your mind with something good and useful. Then later when someone (your preacher, politician, professor, etc.) tells you that you need to sacrifice, and this time they really mean sacrifice, i.e. give up things you value for nothing in return, then you have a hard time resisting them because you have implicitly accepted that sacrifice is good. After all, you reason to yourself, I sacrificed all those times in the past and it turned out well, so it must be a true principle. And then they've got you. In fact this is often the goal of those that pervert words and their meaning. Its a form of the old bait and switch tactic.

So what is the lesson to be taken away from this? 1) Works have exact meanings and they are important. 2) If you want something, pay the price for it. (but don't fool yourself that you are 'sacrificing')