Archive for November, 2009

Have Faith

November 12, 2009 Leave a comment

Late the other night I had the tv on in the background turned to Fox News.  I can’t remember what show it was but it was a business show and there were like five free-market Wall Street types ganging up on one lady that was associated with the Whitehouse somehow.  At one point they were talking about banks renegotiating mortgages and she said (I’m paraphrasing) “I thought you guys believed in the free market.  If they would renegotiate these mortgages themselves we wouldn’t have to step in.”  I’d like to take a moment to examine the type of thinking which seemingly leads to statements like this.

In my mind to have faith in something means that you believe it is right even when it comes to a different conclusion than you would have.  My mind is recalled to when I was a kid and it seemed like every time I was upset about something that had happened someone would come around and tell me something like “don’t worry it’s all part of God’s plan.”  Now let’s put aside the question of whether there’s a God with a plan.  My first reaction to this after some thought was “well how do you know God’s plan doesn’t suck for me?”  Nobody really had an answer for this at the time.  I later figured out what they should have said (interestingly it was Adam Smith who provided the insight but not in the Wealth of Nations).  They should have said “you know what, it’s not really about you.”  If you believe that there is a God and he has a plan (that is, if you have faith) then what are you saying when you complain about part of that plan being lousy for you?  You’re saying that you think God should have made a different plan to convenience you, even though you have no idea what his plan actually  is.  If you had faith in God you would assume that his plan is good for the universe, even if it sucks for you and you would gladly accept your role in service to the larger plan whatever it was.

A different conception of faith is having faith that something will come to the same conclusion as you.  This is the kind of faith that is vulnerable to arguments like “if there is a God why does he allow so much suffering in the world?”  A person with the first type of faith, when faced with this question, would probably respond: “I have no idea…what’s your point?”  Only the latter type of faith leads to a response like “I can’t understand why God would do that, therefore I renounce my faith in God.”  

Now I can’t speak for everyone who proclaims to have faith in the free market but I can say that my faith in it is the first kind.  I don’t make some judgement as to what prices “should” be and then consider it a test of whether or not the market works.  I have faith, due to much careful study of the nature of markets, that they tend to gravitate toward efficient outcomes.  This means I consider the market price of something to be the best guess I could make at what it’s price “should” be no matter what that price is. The statement above only makes sense if you have the second definition of faith.  This is how these people think and speak (recall George W Bush claiming to be a “free market guy until someone tells me….”).  They have faith in the free market so long as it provides exactly the outcome that they want.  If not, they will step in and tell it what to do.  Is that really a free market?  When your wife/girlfriend tells you to “do what you want” (go ahead try to picture your wife/girlfriend saying those words in an unthreatening tone,  I dare you) does it really mean “you are free to do what you want” or does it mean “I’m not going to tell you what to do because it would look bad but if you don’t figure out what I want you to do and do it, I’m going to make your life a living hell?”  These people think that they are the ultimate authority on right and wrong and that attitude is precisely what destroys the rule of law.  In the end it’s a matter of faith either way.  Which would you rather put your faith in, these guys or freedom and the rule of law?

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Rule of Law Vs. Rule of Men

November 7, 2009 Leave a comment

I am creating this blog as a forum for having the debate that this country (and many others) ultimately need to have.  In the past year or so we have been getting close to identifying the real nature of the decision before us.  For generations the debate has been over right and left.  The right wants to use the power of government to keep people from using drugs, getting abortions, gambling and doing other things that they consider immoral.  The left wants to use the power of government to keep people from owning guns, making too much money, driving SUVs and doing other things that they consider immoral.  Both sides want to use the power of government for the purposes of social engineering.  They are only arguing about what to engineer us into.  This is the kind of debate that politicians on both sides are happy to have because it is never-ending.  People have some set of morals.  They are different for different people and most people are unlikely to change their mind about them at any given time for any reason.  A person who thinks abortion is immoral is not likely to be persuaded by an argument made by someone who thinks it is moral and the latter is equally unlikely to be convinced by any argument made by the former.  This is because these arguments are based entirely on values, there is no component of logic serving as a common ground.  It’s easy for a politician speaking to a group that holds one value system to make the people who hold the other value system seem like evil people and this belief causes their constituency to become skeptical and often downright hostile to the other constituency.  So long as you are talking to the people who make up 51% of the voters in your district this situation makes for fairly good job security.

Recently however, a lot of people are beginning to wonder if these are the only two choices.  Students of political science are probably familiar with the political compass which identifies political ideology on a two-dimensional space with right/left on one axis and authoritarian/libertarian on the other.  To illustrate the type of confusion that this paradigm tries to clear up consider the following quote from the link above.

“U.S. neo-conservatives, with their commitment to high military spending and the global assertion of national values, tend to be more authoritarian than hard right. By contrast, neo-liberals, opposed to such moral leadership and, more especially, the ensuing demands on the tax payer, belong to a further right but less authoritarian region. Paradoxically, the “free market”, in neo-con parlance, also allows for the large-scale subsidy of the military-industrial complex, a considerable degree of corporate welfare, and protectionism when deemed in the national interest. These are viewed by neo-libs as impediments to the unfettered market forces that they champion.”

This sort of thinking, along with a general alarm at the rapid growth of government  is causing a shift in the debate away from left versus right and toward big government versus small government.  In my opinion this gets us much closer to the relevant issue but there is a further refinement yet required to arrive at the heart of the matter.   The best illustration of this can be seen from the point of view of the big government types.  If you go to a socialist, communist, or other collectivist event and talk to people who believe in such things they usually will tell you that their idea of “communism/socialism/etc.” has never been tried, implying that the USSR, Cuba, North Korea, China, Vietnam, and so forth were all actually something different from what they are advocating.  Nonetheless, these countries (as well as many others) have certainly all had what we would consider big governments.  In short, it’s not actually big government that these people want.  They want the government to do certain things which require it to be big.  Similarly, the small government types would mostly like for the government to not do certain things.  Most of these things a government would have to be “big” in order to do but if a new technology allowed the government to spy on people and micro manage their lives with incredible efficiency and it did so with low taxes and few employees, they would not be happy.  Conversely, if a foreign threat arose which threatened to destroy the republic, there is likely no government, being necessary to defeat such an enemy, which these people would consider too big.

The real choice before us is between the rule of law and the rule of men.  The rule of law is the only system of government compatible with individual freedom.  The rule of men is the only system of government compatible with reallocation of wealth.  The reason is simple.  In order for men to live together in freedom (other than in a state of pure anarchy) there must be rules protecting certain natural rights such as life liberty and property.  But if they are to be free to live their lives as they choose and make their own decisions, they must know what the rules are and that they will not change unpredictably.  In this system everyone must be subject to the same set of laws, but the system cannot prevent some people from accumulating more wealth than others by virtue of either making better decisions, being more naturally talented, being born into better circumstances, or the accidents of random circumstance.  Nor can it even distinguish between the various causes of material success because such a distinction would be completely arbitrary and the difference between the rule of law and the rule of men is that only the latter allows for arbitrary judgement of circumstances.  Here are some examples of decisions the law cannot make:

Which companies are too big to fail?

How much money is fair to pay a certain executive of a private company?

Which people should have access to loans and at what terms?

How much (or how little) is it fair for an insurer to charge for health insurance?

Which crops should receive government subsidies?

Which green technologies should we invest in?

These decisions all come down to three basic judgements: who should gain, who should lose, and by how much?   They all infringe upon some personal right, they are all arbitrary and they are exactly what the rule of law is designed to avoid.  These types of questions require regulators and “czars” to make these arbitrary judgements.  In a rule of law society there is no place for regulators.  Now I will say up front that I am on the side of rule of law.  This is because I value freedom above all else.  I have complete confidence that freedom leads to much greater general prosperity than any system which relies on the rule of men and I am prepared to make that argument but even if I did not believe that I would rather be poor and free than a comfortable slave.  That being said, I acknowledge that some people may not share my values and may have legitimate reasons to favor this type of system.  I feel that now, like never before, there is potential to get down to the heart of the matter and have an honest debate about what we actually want.  In pursuit of this goal I will use this site to shout my opinions on current events and their relevance vis-a-vis the rule of law into the darkness of cyberspace and see if anyone shouts back.

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