by John Young http://www.wvwnews.net/downloads/audio/john_young/jy20080116.mp3
Podcast is nearly two hours in length, so this file is large. The image demonstrates the Orbison Illusion.
Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites,—in proportion as their love to justice is above their rapacity,—in proportion as their soundness and sobriety of understanding is above their vanity and presumption,—in proportion as they are more disposed to listen to the counsels of the wise and good, in preference to the flattery of knaves. Society cannot exist, unless a controlling power upon will and appetite be placed somewhere; and the less of it there is within, the more there must be without. It is ordained in the eternal constitution of things, that men of intemperate minds cannot be free. Their passions forge their fetters. — Edmund Burke
Welcome to Western Voices, I’m John Young of European Americans United. Recently, one of our members related to me the objections that a friend had registered regarding EAU’s economic world-view. In essence, this young man considered criticism of the economic system in the United States to be an attack against freedom itself.
It is at times like this that I realize how tenaciously a world of illusion clings to many of our people. The overwhelming majority of any group of people, at any given time, operates under a mixed set of beliefs, some of which can be objectively validated in a scientific sense, and some of which cannot. As far as I can tell, that’s the way it has been throughout recorded history — and that’s the way it will be for the foreseeable future. In many cases, the aspects of a belief system that cannot be seen under a microscope are worthwhile in that they constitute important cultural memes that shouldn’t be trifled with lightly. But in too many cases, belief systems include fictions that serve to the detriment of our people.
Because we, the members of European Americans United, aspire to lead our people to greater happiness, meaning and prosperity; we can’t afford to allow ourselves to be mired in the world of illusion that encompasses most of our people. So, today, I’m going to dispel just a part of that. Human beings are unlike any other creature in that they are able to deliberately delude themselves into believing ideas that aren’t true. Sometimes this is relatively harmless, such as the suspension of disbelief required to read a novel. But other times it has resulted in travesties on a truly epic scale.
Ideas are, first and foremost, tools that we human beings use to make sense of the world around us and interact with our environment. A tool, in and of itself, has no intrinsic moral content. It is the way that the tool is used that provides the moral content. So an idea or belief can be used beneficially or it can be used detrimentally. An excellent example is the idea of fairness. Used beneficially, it gives people a shot at success without regard to any pre-existing notions. Used detrimentally, it beats down the best and brightest and is used to justify theft and redistribution on a grand scale. It isn’t the idea itself that is bad. After all, the idea is just a tool. It is the character, goals and loyalties of the person using it that determines the outcome.
In every era there are sets of ideas that are fostered, promulgated and supported by the group of people who sit at the highest levels of a society. These ideas can be fostered for any number of reasons, some of which are benign, and others of which are self-serving. Sometimes an idea that is self-serving can still be beneficial overall, representing a sort of win-win for everyone.
In Europe, for centuries, the belief in “the divine right of kings” was prevalent. It was supported, of course, by kings who had been so anointed and certainly was supported by religious authorities who gained power thereby. This belief put the entire aristocratic class at a higher level than that of the rest of society by divine decree, even when their behavior demonstrated their lack of fitness for such a role.
But while their behavior was consonant with their role, the idea was beneficial to everyone and even served to secure freedoms that one would be hard-pressed to find in some democratic countries today. Certainly, when the people who implemented the idea and were its primary beneficiaries were noble people, the idea served everyone. But when the beneficiaries were less than noble, the idea benefited only themselves and ultimately harmed their posterity.
Another example is that over a period of centuries, tens of thousands of people were burned to death for practicing witchcraft. We can be fairly certain that intelligent people at the time knew full well that women didn’t smear themselves with ointment, fly through the air on brooms and consort with the devil. In the ninth century, French abbot Agobard of Lyons denied the existence of witchcraft, and many philosophers, clergy and people of importance and influence continued to deny the existence of witchcraft, even while witchcraft trials were ongoing. Accusations of witchcraft and heresy, though, since they could never be dis-proven and gave the ruling classes of the day absolute power of life and death, served as a powerful means of social control.
In the pre-Civil-War American South, ministers routinely preached from the pulpit that slavery was a divinely ordained institution given to us as a gift from God. This belief certainly supported the southern aristocratic slave-owning class, and was so prevalent that all of the Articles of Secession explicitly state the institution of slavery to have been sanctioned by God.
So we can see that beliefs that either had no rational basis whatsoever or had, at most, a tenuous scriptural basis, were used as a means to justify the behavior of the dominant castes of their day and maintain their grip on power. It is for this reason that, for centuries, crimes such as “heresy” — which is nothing more than a challenge to dominant beliefs — carried the penalty of death. Even in modern times, thought-crimes against a ruling oligarchy have been punished through ostracism, banishment to Siberia, jail and economic penalties.
This is not strictly a matter of ancient history, of course, as we have our own superstitions and irrational beliefs today that serve the purposes of a ruling caste. And those people who dare to challenge those beliefs find themselves persecuted.
But before I get into that, we need to delve into the philosophical difference between metaphysical reality and man-made ideology. An easy way to draw a distinction between the two is to ask this question: if all humans on earth vanished tomorrow, would the thing we are discussing still exist? If all the humans disappeared tomorrow, gravity would still exist. The strong and weak nuclear forces, magnetism and electric fields would still exist. Human beings may put words to these phenomena, but they existed before humans did. Humans may have an imperfect understanding of these phenomena, but the fact that our understanding falls short of perfection doesn’t mean the phenomena we are describing don’t have an existence that supersedes our consciousness.
BUT if all humans disappeared, the so-called “laws” of economics would cease to exist, as would ideas such as rights, fairness and equality. The reason why it is important to make this distinction between metaphysical reality and man-made ideology is so we can tell the difference between things that are immutable and unchangeable, like the laws of gravity; and things that are within human capacity to change, such as economic policy.
And as I described above, ideology has been used very effectively by ruling castes up to the present day to justify their behavior and maintain their own dominant societal positions. The primary method they use to accomplish this task is deliberately confounding man-made laws and ideology with metaphysical laws of nature.
A few centuries ago, the ruling classes used religion — the will of God — to provide this stamp of approval. By invoking religion, they were able to convert man-made institutions such as monarchy into divinely ordained laws of nature as immutable as gravity in the public mind. Today’s ruling elites use perverted science and a form of abstracted religion from which all of the divine elements have been removed. Being a scientist myself, I find this practice objectionable, but it is most certainly real. The scientist of today is seen in much the same way as the priesthood was viewed 1000 years ago: as the ultimate arbiter of truth.
Unfortunately, just as the priesthood of yesteryear could be swayed in its pronouncements by temporal concerns, the scientist of today is beholden to the ruling caste for both his salary and reputation. Thus it should come as no shock that scientists are routinely trotted out to lend credibility to pronouncements that our managerial rulers want us to believe. An example of such a pronouncement is the nonexistence of race.
The scientific basis for the existence of race is every bit as rock-solid as the basis for the existence of gravity. It’s a metaphysical reality. Yet a handful of scientists get written up in the newspaper once in a while making sage announcements that race doesn’t even exist. This is an example of a man-made human idea — that of “equality” — being used as a tool by a handful of people to accomplish something that is to their benefit, but http://www.wvwnews.net/story.php?id=2176.
Another trick they have pulled recently to lend credibility to their arguments is the idea of consensus. Without regard to what is actually going on regarding the phenomenon of global warming, and whether human activities are affecting it; the most recent argument I have heard supporting the need for curtailment of human activities is that a “consensus of scientists” agrees. Consensus simply indicates agreement, not truth, fact or right. No doubt a consensus of Taliban officials believes that women shouldn’t be able to learn how to read. Certainly, a consensus of Nazi SS officers approved the notion of building concentration camps. Likewise, a consensus in the Kremlin thought starving millions of Ukrainians to death deliberately was a pretty swell idea.
I hate to burst their bubble, but consensus means nothing. Almost all human progress in culture, science, engineering and dozens of related fields has been made by individual human beings with the confidence and courage to go against consensus and reach their own conclusions. John Snow, Louis Pasteur and Robert Koch all stood against the consensus of their times in progressively developing the germ theory of disease. While that theory, particularly Koch’s last postulate, is by no means seamless even today, it was a quantum leap forward from the “spontaneous generation” theory it eventually supplanted and has saved untold millions of lives.
So today’s ruling caste mis-uses science and confounds it with notions of consensus in order to make the ideas they want us to believe seem to be metaphysical realities when they are really just man-made ideas used to justify their own behavior and preserve their positions. And, for areas where science has nothing to say, the ruling caste sets up a pseudo-religion in which a person’s moral worth is premised upon his or her degree of agreement with the ideas that support the activities and continuity of the ruling elite.
Thus, moral approbation and condemnation flow freely in attempts to force people to conform their views within a very narrow range. You can rest assured that moral condemnation doesn’t flow freely against people whose views regarding metaphysical realities lie outside the mainstream; but such condemnation comes in a flood that can sweep away those who contradict the man-made ideas that artificially support an elite that isn’t really very elite.
So, another way to tell the difference between ideas representing true metaphysical reality — as opposed to man-made ideas that are put forth as being true even if they are not — is that people who contradict the ideas of true metaphysical reality are not persecuted for it. Members of the Flat Earth Society may be scoffed at, but they aren’t being tracked and spied upon by law enforcement agencies. People who dispute the germ theory of disease, believe that alien spacecraft are zipping across the skies or that the lost continent of Atlantis will soon rise again don’t lose their jobs, have their addresses published in newspapers, or find themselves entrapped in elaborate investigations.
With man-made ideology, though, quite the opposite is often true, especially if those ideas under-gird the structure of the ruling elite of the time. Disputing the existence of witchcraft or denying the divine right of kings could buy you a one-way trip to the gallows in certain ages. And today, pointing out that race is both real and socially important can quickly put you in the soup line if you aren’t careful.
This is a key aspect of ideologically driven political systems. At a certain level, all such ideologies can be seen to advance the interests of one group or clique over the interests of other groups or cliques. But at another level, ideology-driven politics and economics almost always assumes an authoritarian or totalitarian character.
Any given ideology is a human creation and as such, no matter the intentions of its creators, is imperfect. The content of the ideology is based upon limited observation and limited knowledge. When it gets applied to real people in the real world, it doesn’t work. If the true goals of the purveyors of an ideology really ARE as laudable as usually claimed, then the ideology is adjusted and changed in order to add knowledge and minimize bad effects.
Unfortunately, ideologies are seldom actually intended to achieve their stated goals. You can see this with programs like the Great Society that have actually increased the problems they were supposed to solve, yet haven’t been changed. The stated goals serve as a smokescreen for the real intentions — intentions that always benefit some group of people to the detriment of other folks.
In their zealous pursuit of ideology, the ruling caste discards or re-interprets any aspect of history or reality that doesn’t fit. And the True Believers never give up, even when the proof of the failure of their ideas is undeniable.
There are Marxist professors all over America today who state that there is nothing wrong with Marxism as an ideology, and that its failures in the USSR, China, Cuba and elsewhere are all attributable to failed human interpretation. There are even a few believers in National Socialism who steadfastly believe that if America had stayed out of Europe during WWII, Germany would be a utopia today. There are capitalists today who use the so-called free-market to justify breaking basic immigration laws required for our physical safety.
Current capitalist practice in the United States discards everyone with with an IQ under 85 as unemployable and paradoxically depends upon the welfare state (the living contradiction of capitalism) to support these people in order to avoid mass starvation.
These are all True Believers who use ideology in place of religion, and who will adhere to that ideology even in the face of tragic human costs or fundamental contradictions. At a minimum, they will deny failures or rationalize them on the basis of inadequate implementation. But as failures reach a point where fundamental questions could pose a threat to the ruling oligarchy, they will suppress and persecute.
Thus, materialistic economic ideologies are always at war with truth.
I’ve spent a long time on this fairly esoteric philosophical point, but the purpose is to explain how to see through the layers of illusion so you can get to the truth of any subject, no matter what that subject may be.
Today, our primary topic is economics, so with no further delay, let’s jump right in.
Very often, economic systems are discussed in terms of capitalism and communism. Both of these systems are man-made ideologies that encompass particular views of human nature and moral virtue. Likewise, both have a Utopian world-view that envisions the greatest good for the greatest number in materialistic terms. Both, also, dispense with traditional non-materialistic means of judging the value of individuals and institutions with the exception of their pseudo-religious condemnation of dissenters.
Economic systems are entirely man-made. They are certainly essential for societies of any size, but within the limits where they bump up against the walls of metaphysical reality, they are malleable. Moses didn’t walk down from the mountain with the writings of Smith, Keynes and von Mises chiseled into tablets of stone, interest rates can’t be found under a microscope, and the moral content of these systems only exists in comparison to non-economic realities. Therefore, before looking at labels and definitions, I want to look at certain non-economic realities.
We humans are complex creatures whose needs go far beyond the basics of food, water and shelter to encompass family, community, relationships, interests, creativity, sometimes spirituality, and much much more. Economic systems are devised as a mechanism to serve the material aspect of those needs. As such, they are essential because it is difficult to be spiritual or conduct research into areas of interest if we are cold, hungry or dying from thirst, as Maslow’s Hierarchy of Needs demonstrates.
Well-designed economic systems can do a pretty good job of serving our material needs, but are utterly incapable of fulfilling our non-material needs. Unfortunately, economic systems — without regard to their provenance — tend to define everything in terms comprehensible within those systems. Being strictly materialistic in nature, they cannot conceive of poor people who are also happy and fulfilled; and they either discount or attempt to supplant crucial human needs for a life filled with meaning. They try to replace transcendent meaning with material goods. In practice, this doesn’t work out very well.
In the modern West, economics in the form of capitalism has gradually expanded to fill almost every aspect of our society and culture. In effect, capitalism has obtained — through gradual encroachment — the preeminent position that communism could only attain through violence. In such a world, we are seen as strictly economic beings, through measures of “consumer confidence” and “consumer spending” and we are administered through a system of “human resources.”
The problems that have manifested as a result are more attributable to the importance economics plays in every aspect of our lives than the details of a particular economic system. This is what happens when economics leaves its rightful place as the servant of a people, and instead becomes its master. As I covered in the last Western Voices podcast, this has led to spiraling rates of alienation, depression and suicide.
Life can be difficult — not just for the poor, but for the relatively well-off as well. We are mortal, and have a limited amount of time on this earth individually. The core question that faces every person is how to invest that life with meaning. WHY am I working so hard? WHY should I get out of bed in the morning? In practice for most of our history, that meaning has been derived from a sense of our individual contributions to both the happiness and wellbeing (both morally and materially) of our families and communities. People have had a sense of their role in the scheme of things, and a sense of connection to both the past and the future.
But in a world where the family unit has been shaken to its core and increased “diversity” has led to social alienation, it has become harder for people to find meaning in their lives. This problem has become even more pronounced as definitions of right and wrong have become increasingly fluid in order to accommodate both the behavior of our ruling caste and the need to accept practically anything in the name of their idea of “diversity.” So, while, in the past a person could be motivated by the desire to do good deeds, in the post-modern West there’s no longer any real sense of what that even means. It is from this understanding that we will launch into an analysis of modern capitalism.
The basic definition of capitalism according to Merriam Webster is: “an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision rather than by state control and by prices, production and the distribution of goods that are determined mainly by competition in a free market.”
There is nothing wrong with this definition at face value. After all, the right to property is premised upon our right to life. That is, our lives are finite, a fact that gives their every moment value. When we invest the precious and finite time of our lives in the act of creating or acquiring something, it is — and by right ought to be — our own. For anyone else to exercise control over our property, then, is to exercise control over the finite time of our lives. In other words: slavery.
Likewise, we use the time of our lives to produce or acquire those things which are necessary for our survival; and the seizure or assault of these things can be reasonably seen as a risk to life itself. Some hard-core anarcho-capitalists take this association too far. When people form societies, cultures and governments in order to accomplish things on a scale too large to be accomplished individually, they incur an obligation to pay for these things such as the building of roads, the common defense and so forth. Thus, taxation cannot legitimately be seen to automatically constitute theft. Rather, the place where taxation crosses that line is when the funds extracted from individuals are used to fund projects, people and entities outside the original authority of government.
Thus, in the United States, taxes for purposes of boondoggle projects and establishment of social controls ARE theft in that they exceed the powers given to Congress in the Constitution; whereas taxes to secure our borders and provide for the common defense are a simple obligation of citizenship. A simple comparison is that of employment. If I have performed the agreed-upon work, I have every right to my paycheck in full. It’s my employer’s obligation to pay me. But if I undertake a project outside of work without his or her prior agreement, if I turn around and seize my employer’s assets in order to pay for that, I am stealing.
So the core idea underlying capitalism in the dictionary — private property — is supportable on the basis of metaphysical reality, even if we apply that idea only to the extent of the food we eat. Our property is an extension of the only thing we truly have — our finite time on this planet — and as such it is ours by right. It is when we go beyond the basic metaphysics of this equation into the man-made ideology surrounding capitalism that we run into a minefield of problems, contradictions, inconsistencies and injustices.
Capitalism, we are told, is both essential for the existence of freedom and inevitably creates freedom wherever it is practiced. All we have to do to see that this isn’t true is look upon the abuses of child labor and coal mining that existed in our own country at the turn of the century, or look at how American search engine companies have willingly provided the despots in China with lists of political dissidents in exchange for continued access to that market.
China, itself, is economically capitalist and growing its economy rapidly. Yet capitalism has only spurred technological innovation that has enabled the totalitarian regime in Beijing to keep an ever-more-watchful eye on the population. While Christians and advocates of democracy are persecuted — often with the help of American corporations — their successful economy is creating a new middle class. Material well-being derived from capitalism does not depend upon even the most basic freedoms that Americans take for granted.
This is a critical error made by many advocates of capitalism, even though well intentioned. Ayn Rand, one of capitalism’s most zealous advocates, stated that “The reasoning mind cannot work under any form of compulsion.” This is only partially true. After all, many people created weapons systems to destroy human life while under Soviet rule, and others continue to create a good many innovations under the authoritarians in China. Likewise, many people invest effort on behalf of corporations on projects about which they may have moral reservations, but do so under the threat of economic loss. In essence, the boss says: “Do this, or you’re fired.”
As an engineer, I perform creative tasks under externally imposed deadlines all the time. Throughout the Middle Ages, architects who could have been put to death by dictatorial decree at any time created some of the most timeless and inspiring architecture ever formulated by human beings. Ms. Rand stated her principle as an irreducible primary, when, in fact, it was an only partially-correct conclusion.
I said it is partially correct, and it is. Obviously, our creativity and ability to solve problems can be artificially limited in a number of ways. For example, laws, rules or customs that prohibit the honest exploration of reality will necessarily result in our creations being based upon falsehoods, and therefore they will be limited. Such intellectual censorship tends to snowball and block off entire areas of knowledge from human exploration. Likewise, compulsion that prohibits the very things we wish to create can most assuredly have a chilling effect on both that proximate creation while simultaneously giving other creators pause. Before Galileo was confined for his heliocentric solar system theory, Italy had been the greatest bastion of invention and creativity in Europe. But for hundreds of years afterwards, Italy lagged behind.
The important thing to see here is that the problems with creativity are not tied to a particular governmental or economic system, but rather to the degree of intellectual freedom that a person has. Capitalism doesn’t guarantee such freedom, and lack of such freedom doesn’t completely stifle productivity because while the profit motive is certainly a good motivator, so is the desire to avoid punishment. Clearly, capitalism, as an economic system, does not automatically guarantee freedom in the important ways in which our Founding Fathers codified it in the Bill of Rights. In many cases, in fact, it is used as a way to take away freedom.
The reason for this lies in three points. First, freedom and responsibility are interdependent and when the link between the two is broken, freedom will suffer. You see this in the very nature of a corporation. The first benefit to incorporating a business is that doing so limits your liability, or the level of personal responsibility you will have to take for your actions and decisions. Limiting the responsibility of the decision makers of a company gives them a wider ability to take actions that infringe upon the freedom and wellbeing of others.
As a corporation depends upon profit just as human beings depend upon food and water, profit ultimately becomes the standard of value by which decisions are evaluated. When the level of personal responsibility that accrues to decision-makers is limited, free reign can be given to the darkest impulses of the human heart.
From 1995 to 2001, Purdue Pharma realized $2.8 billion in revenue from its painkilling drug, Oxycontin. Purdue Pharma admits that the company lied when it marketed Oxycontin as being less addictive and less likely to be abused than other pain medications, and therefore suitable for treating the moderate pain of injuries doctors see routinely. The truth of the matter is quite different, so thousands of unsuspecting doctors prescribed the drug for control of moderate pain, and untold thousands of people wound up addicted. The societal harm has been immense, and a whole generation of young people in rural America are addicted. Over 500 people have paid with their lives so far.
According to Steve Berman, an attorney working to sue Purdue Pharma, “From the beginning, OxyContin’s enormous profit potential drove an operating modus of lies and deceit.” In a recent settlement, Purdue Pharma paid a $624M fine to the government for fraudulent marketing, and three company officials, Michael Friedman, Howard R. Udell, Dr. Paul D. Goldenheim paid $34.5M in fines. They received NO jail time because their case was skillfully negotiated by a person whose name you might recognize: Rudy Giuliani. (Remember this when he tells you he’s tough on crime. He’s only tough on certain types of crime, but not the sort of folks who murder by the hundreds.)
Only in corporate America can someone engage in a deliberate deception that kills hundreds of people, pay less than a quarter of the revenue derived from the crime in fines, and walk away. The violation of a person’s life, or addicting them to drugs by lying to them, is a serious affront to freedom to say the least.
For every case like that of Oxycontin where the miscreants are brought to at least some form of justice, there are dozens where the corporate veil effectively protects wrong-doers. As a result, corporate America has not become a den of idealized virtue, but rather an environment in which outright sociopathic behavior nets profits and rewards. Such behavior, by definition, compromises the freedom of innocent people. You simply cannot have freedom without responsibility, and the very nature of corporations separates the two.
Even though I’ve just given a pretty horrible example of the results of divorcing freedom and responsibility, a lot of people still don’t understand the concept because when they visualize it in their mind, they are thinking about a lone individual.
Instead of a lone individual, think instead of five people on a desert island. As long as each of their actions doesn’t result in infringements or impositions on the others, they are all equally free. Likewise, if one of them steps out of line and starts stealing … as long as the others are able to assign responsibility to the malefactor and seek justice, his behavior will be controlled in most cases so that freedom continues. But what if, due perhaps to a disparity of force, someone on the island has the ability to do whatever he wants to the others without fear of retribution? Well, HIS freedom is not diminished, but EVERYONE ELSE’S is. This is why an absolute prerequisite of a free society is the ability to identify and seek justice against people who violate the life, liberty or property of others.
So even though there is nothing wrong, per se, with the idea of private ownership of property, the very nature of the corporate structure as currently constituted is such that it presents a threat to freedom. Since corporations are man-made institutions, and they are subject to man-made laws, this problem CAN be fixed.
The benefits of corporations, including their economies of scale and ability to leverage profit-driven initiative are extremely important. Without a doubt, up until the early 1970’s capitalism helped to make the United States and its people the most prosperous the earth had ever seen. Used properly, the ideological tool of capitalism was a great boon. And, it must be acknowledged that a number of lawyerly notions make it nearly suicidal to engage in business without some form of limitation of liability. And, certainly, individual directors or employees of a corporation shouldn’t be held accountable for its debts.
Nevertheless, corporate behavior that is criminal in nature seldom brings the hand of justice to bear on the actual criminals, and this must be changed.
Second, freedom requires a common set of values. As an example, the only reason our founding fathers could include the right to keep and bear arms in our Bill of Rights is because they were confident that, in the main, the values held in common among our people would allow armed citizens to act, much more often than not, morally. As people lose confidence that their neighbors share the same values, they are more willing to see reductions in freedom in order to feel safe. And when those neighbors just happen to own a business, restrictions, regulations and rules will be placed on that business in response to the community’s sense of the degree to which businesses in general can be trusted.
Most people understand that a business shouldn’t lie, cheat, steal or attempt to deceive. And if every business were run this way, there would be few regulations. But now there are thousands and thousands of business regulations specifying everything from the accounting methods to be used to the height of desks. A long parade of dishonest businessmen have eliminated any pretext of freedom from business. Moreover, the regulations adopted in order to prevent the sorts of abuses perpetrated by the folks at Purdue Pharma raise the cost of engaging in those businesses through the stratosphere so that in practical terms it isn’t possible for folks who don’t already control enormous wealth to get into those businesses.
The cost of getting a single pharmaceutical through the FDA process nowadays is roughly $800M. Already-established businesses have the staff and regulatory experts to clear the governmental hurdles with no difficulty, but starting a new business of that nature is prohibitive because the bar is set so high. Thus, the so-called “free market” becomes severely compromised. It is no longer free.
John Jay recognized long ago that a commonality of values was a prerequisite of freedom. We have lost that commonality of values, and as a result the free market is no longer free.
Another aspect of this point worth considering is that the breakdown of a common set of values in this country has set the stage for the misbehavior we are seeing in corporate America. The sociopaths we are seeing as CEOs would never be installed in such positions by boards of directors whose values were consistent with the best interests of our country as a whole. Greed at such a level that it allows people to, quite literally, die in exchange for profit can only exist in an environment where coworkers, peers and superiors refuse to call such malefactors to account. Evil can only exist where good people will fail to shine the light of discovery upon it. So when that job isn’t being done by the people involved in the business, it falls to government.
Businesses cry that government regulations force them to move offshore to save costs, but fail to cite why those regulations exist in the first place.
Third, through property rights and one-sided contractual arrangements in which they hold all the cards, businesses gain the ability to abridge your rights in ways that government isn’t even allowed. If you are planning to go hunting after work, most businesses disallow you from keeping a firearm in your trunk. Many businesses have random and pre-employment drug and even alcohol screenings. One prominent company, the folks that make Miracle Gro fertilizer, even fires employees who test positive for nicotine. A number of retailers make receiving discounts contingent upon your agreement to allow them to catalog everything you purchase — for purposes we can’t even yet imagine. Internet providers routinely adopt Terms of Service that explicitly restrict your freedom of speech even in areas where that speech is legal.
Advocates of the so-called “free market” say that if you don’t like these policies, you can always work elsewhere, shop elsewhere or switch to a different ISP. But many policies are adopted across the board by thousands of employers, retailers and service providers at a time, effectively removing that choice.
The purpose of our Constitution, as stated in the preamble, is to “form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”
As the foregoing describes, capitalism as it is currently practiced perverts justice and most assuredly is not a guarantor of liberty. In an environment in which CEO salaries have skyrocketed in comparison to those of workers while workers have been losing real buying power for years, it is reasonable to question if the economic status quo even serves the general welfare, as opposed to the welfare of a very small group of people.
Our founding fathers did not establish or seek to establish a particular economic philosophy. Rather, they sought — explicitly — liberty, justice and the general welfare. Thus it is no surprise that the term “capitalism” doesn’t exist in our Constitution. In fact, the term wasn’t even invented until 1854, long after our Founding Fathers had penned the Bill of Rights. In addition, the term “free market” wasn’t invented until 1907. When people try to associate a particular economic system like capitalism or a form of competition, such as the free market, with the thought that went into our Constitution, they are engaged, at best, in rather dubious historical revisionism and, at worst, in outright deception.
Our Founding Fathers were very bright people. When they wrote the Constitution, they didn’t write it to the tenets of a particular named philosophical system. Rather, they named the goals they were trying to achieve specifically so that their posterity — that means us — can stay focused on what is important. By guaranteeing us the common law right in the Constitution, they set us on the path of organic tradition rather than an abstract philosophy.
So let’s take a look at what capitalism has become in post-modern America. Today it is utterly inseparable from a tandem utopian philosophy known as globalism or “free trade.” And this is, partly but not exclusively, where capitalism has gone awry. But a big part of the problem is that — like any tool — capitalism takes on the character of those who are using it, and the character of capitalists has changed considerably in the past 150 years.
The most wealthy Americans 100 years ago put America on wheels, constructed railroads that tied the nation together, built a steel industry that was the envy of the world and endowed libraries and institutions of higher learning. They employed Americans almost exclusively and had no qualms about asking Congress to exercise the power of protective tariffs included in the Constitution. Today, the wealthiest Americans, with few exceptions, are bankers, stock traders and gambling magnates who import illegal aliens, export our industrial base and encourage foreign companies to dump cheap goods into our markets.
So what happened to our capitalists? According to Professor Robert Hare, corporations already have psychopathic tendencies in that they ruthlessly pursue shareholder value without regard to the harm they may cause others, such as environmental damage.(1) Professor Hare is not a light-weight. He developed the P-test, a screening test used by both the FBI and British justice system for detecting psychopaths. His tests are also used by schools, police, fire departments and for high-risk jobs like nuclear power plant operators. In short, Professor Hare knows whence he speaks. According to Hare: “I always said that if I wasn’t studying psychopaths in prison, I’d do it at the stock exchange, there are certainly more people in the business world who would score high in the psychopathic dimension than in the general population. You’ll find them in any organization where, by the nature of one’s position, you have power and control over other people and the opportunity to get something.”(2)
His speculation isn’t idle. A Fast Company research article on the subject stated: “Such scandals as Enron and WorldCom aren’t just aberrations; they represent what can happen when some basic currents in our business culture turn malignant. We’re worshipful of top executives who seem charismatic, visionary, and tough. So long as they’re lifting profits and stock prices, we’re willing to overlook that they can also be callous, conning, manipulative, deceitful, verbally and psychologically abusive, remorseless, exploitative, self-delusional, irresponsible, and megalomaniacal. So we collude in the elevation of leaders who are sadly insensitive to hurting others and society at large. … There’s evidence that the business climate has become even more hospitable to psychopaths in recent years. In pioneering long-term studies of psychopaths in the workplace, … Babiak [an industrial psychologist found that … organizational shake-ups created a welcoming environment for the corporate killer. ‘The psychopath has no difficulty dealing with the consequences of rapid change; in fact, he or she thrives on it,… organizational chaos provides both the necessary stimulation for psychopathic thrill seeking and sufficient cover for psychopathic manipulation and abusive behavior.’ And you can make a compelling case that the New Economy, with its rule-breaking and roller-coaster results, is just dandy for folks with psychopathic traits too.”(3)
Psychologists Belinda Board and Katarina Fritzon performed a study of 39 high-level executives and concluded: “The Personality Disorder profile of the senior business manager sample was found to contain significant elements of Personality Disorder, particularly those that have been referred to as the “emotional components” of Psychopathic Personality Disorder.”(4)
Alan Deutschman put several big-name CEOs through the test for psychopathy anonymously, and ALL of them scored as moderately psychopathic. The average person scores 3 or 4 out of 40 on the test, whereas someone like the BTK killer scores around 30. Big-name CEOs score in the low 20s. Perhaps we shouldn’t find this phenomenon so shocking, as a standard police textbook from 1990 states that “… modern American society makes heroes out of psychopaths. Further, the adaptability of this type of character structure makes the psychopath likely to emerge in increasing numbers. The modern world provides fertile ground for the rise of the psychopathic personality.”(5) Some psychologists have even surmised that the psychopath is a new sort of human being that is being produced by the selective evolutionary pressures of the modern economic environment.(6)
The unfortunate phenomenon of our corporations being led by psychopaths has become so prevalent that an industrial psychologist, Paul Babiak, and psychopathy expert Robert Hare have written a book about the topic entitled “Snakes in Suits.” According to Harvard psychologist Martha Stout, if western society continues in its pursuit of glorified self-interest and the rejection of the importance of community bonds: “evolutionarily speaking, it doesn’t end well.” (1)
Look, again, at the example I gave a few minutes ago regarding Oxycontin. Lying to people, causing their deaths and addiction in order to realize profits is classic psychopathic behavior. The executives of Worldcom, Enron, ImClone and Purdue Pharma are not abberations. Rather, they are examples of what has become the norm for leadership in corporate America.
Capitalism is particularly vulnerable to infiltration by people affected with this sort of personality disorder because it is the only economic system whose proponents extol the virtue of selfishness(7) and proclaims that “greed is good.” By its very nature, capitalism in a free market is competitive — that’s the whole point. This competitive situation, in a perfect world, results in equilibrium pricing, each person employed at the highest level he or she can achieve, better products and a host of other benefits. But it is also a system that incentivizes dishonesty, corporate espionage, anything that reduces costs including off-shoring American jobs, etc. etc. etc.
These incentives come in the form of higher stock prices, impressive CEO compensation packages, and sometimes even the opportunity to cheat retirees out of their pensions. In practice, people are sometimes penalized simply for being more competent than their bosses, women who have the audacity to actually have children don’t get promoted, fathers who opt to work only a 40 hour week don’t get raises, and all the while Human Resource directors specialize in explaining to employees why they should be grateful that the increase in the employee share of their health insurance is bigger than the raise they are getting that doesn’t keep pace with inflation.
In fact, over the past seven years, while CEOs of companies like Home Depot have walked away with tens of millions of dollars for dismal performance and Gillette’s CEO collected over a hundred million dollars for selling out to Proctor and Gamble … good-paying jobs with benefits have gone to China and India, and the real income of average Americans has actually been declining. In a nation where nearly everyone shared common values that kept even the extremely wealthy in line, capitalism did well for everyone. But in a world where common values are under assault, psychopathic behavior is rewarded and CEOs collect bonuses of hundreds of millions of dollars in exchange for laying off thousands of workers; there are no barriers to the evil they can accomplish.
Capitalism is an idea, a tool, a servant. When it comes to government, George Washington said: “Government is not reason. It is not eloquence. It is a force, like fire: a dangerous servant and a terrible master. Never for a moment should it be left to irresponsible action.” The same reasoning applies to capitalism. In order to derive its potential benefits, structures need to be put in place to tame its more deadly manifestations.
For much of our nation’s history, such structures were provided by common blood and a common value system. But with those values perverted and replaced, capitalism needs to be restrained externally.
And speaking of its more deadly manifestations, none is more dangerous to this country and our people than the idea of free trade. Like most ideological zealots, Free trade advocates have a Utopian world-view in which all peoples of the world trade with each other to derive mutual benefit and as a result nobody goes to war. I’m not going to ask from which country these Utopians imported whatever they’ve been smoking, but they are wrong.
Prior to WWI, Britain and Germany were trading partners. It didn’t help. Plenty of countries with substantial ties via trade have spilled each others’ blood. One need not have a very long memory, either, to recall the spies that China placed in our most sensitive nuclear programs. Such behavior indicates hostility and malicious intent, rather than friendship.
A second problem with so-called free trade is that it puts consumption rather than production first. That is, free trade concentrates on whatever makes a product better and/or less expensive for the consumer. This works well … temporarily for the consumer, and certainly allows fat cats to get even fatter; but ultimately it lowers wages and destroys the nation’s self-sufficiency — all so that only a few corporations can hold the wealth and power that had previously, and properly, belonged to nations.
Historically, nations have grown more wealthy rather than less when protective tariffs have been enacted. Great Britain had always had such tariffs until they were repealed in 1860. In 1860, Great Britain was the greatest economic power on earth. Within fifty tears, the United States who had kept her tariffs in place had an economy twice that of Great Britain, and Great Britain was well on her way to losing her empire. In fact, according to Pat Buchanan’s research, “… every modern state that rose to preeminence and power — Britain before 1846, the United States from 1860 to 1914, Germany from 1870 to 1914, Japan after WWII and China today — was protectionist … All four presidents on Mount Rushmore — Washington, Jefferson, Lincoln, Theodore Roosevelt — were economic nationalists. All believed in tariffs to finance the government, spur industry, and give U.S. manufacturers an advantage over foreign manufacturers in the American market. And what is wrong with preferring your own? Does not every family?”(8)
I have heard some advocates of unrestrained global trade argue that protective tariffs allow our manufacturers to be fat, lazy and inefficient. This sort of argument is either frivolous in the extreme or so un-informed as to be laughable. Manufacturers in the United States have historically maintained the safest work environments, the tightest environmental standards and the best working conditions of anyplace on earth. Even without competition against overseas firms, they have to compete against each other. Our manufacturers have to contend with minimum wage laws, workers’ compensation laws, contribute an employer match to social security and shoulder numerous other costs that (generally) contribute positively to our environment and quality of life. There is no way on earth that a manufacturer under such conditions could be expected to compete against a foreign company that employs child-slave labor and dumps its pollution directly into the local river.
Our environmental laws, safety regulations and amendments prohibiting slavery exist for very sound reasons; and moving manufacturing offshore where they can all be flouted with impunity doesn’t do anyone any favors in the long run except the handful of people who pocket the difference.
But meanwhile the American industrial base has been moved offshore to such a dramatic degree that we are running trade deficits in the hundreds of billions of dollars every year.
Trade deficits are a straightforward concept. A trade deficit represents the amount of money we send to foreign countries after the money that people in foreign countries send us is subtracted. In other words, it is money coming out of the pockets of United States citizens and going to foreign countries where it is used to create jobs overseas, build foreign military might, subsidize the education of people who will be competing against our children, and so forth. In exchange, we get nothing back. Well, that’s not entirely true, because foreign countries have to do something with all of those trillions of dollars. And what they are doing is buying the bonds that fund our federal deficit so that our Congress dares not defy them and buying up companies right on our soil that used to be American companies. It has gotten so bad that foreign-based companies even own some of the toll roads we drive on outright.(9)
As if toll roads weren’t already a serious problem that causes accidents and funds quasi-governmental agencies filled with hacks, these very roads built on OUR land with OUR labor using OUR tax dollars are now providing the monetary benefit of toll collections to foreign countries.
But that’s not all. Foreign countries are now establishing their own investment houses for the express purpose of buying up our economy. Steven Weisman noted in the New York Times: “For years, the Bush administration has shrugged off concerns about the trillions of dollars that the United States owes to China, Japan and oil-producing countries in the Middle East, arguing that these debts give no undue leverage to foreign governments. But at a time of global financial instability, the administration has started to worry that foreign governments are increasingly converting their dollar holdings into investment funds to acquire companies, real estate, banks and other assets in the United States and elsewhere. The fear is that these so-called sovereign wealth funds could destabilize markets or provoke a political backlash.”(10) Mr. Weisman makes the source of this problem clear when he states: “The funds are a product of decades of the United States importing more than it exports.”
Right now, these so-called “Sovereign Wealth Funds” control roughly $2.5 trillion in assets, but that will grow to about $17.5 trillion within ten years. And the potential consequences economically and politically aren’t just theoretical. Weisman points out: “Probably the most political turbulence caused by a sovereign wealth fund occurred when Temasek Holdings, the state-owned investment branch of Singapore, purchased a stake in the company owned by the prime minister of Thailand, Thaksin Shinawatra. The deal fed anti-government demonstrations that led to his ouster in a coup in 2006. The worry is that beyond the possibility of foreign funds pushing up prices on bonds, stocks and real estate, they might exercise inappropriate control politically or in the private sphere.” Today, it is Thailand. Tomorrow, OUR political system that is already corrupted by special interests, will be doing the will of China as Chairman Mao’s capitalist successors grab our politicians by the balls and squeeze.
Congressman Duncan Hunter recently described the situation in stark terms that anyone can understand: “In World War II, our manufacturing base made more than: 100,000 tanks; 2.4 million vehicles; 36 billion yards of cloth; 3 million rifles; 41 billion rounds of ammunition; and 41,000 artillery pieces … carried Eisenhower’s forces to Berlin and paved the way for the Marines in the Pacific as they pushed the Japanese back to their mainland. This great arsenal, our industrial base, was important to collapsing the Soviet Empire and the Berlin Wall because it provided the strength in Ronald Reagan’s stand against the forces of evil. Today my friends … massive production of textiles, steel and machine tools are no longer found in South Carolina, or Ohio, or Pennsylvania, nor dozens of other states. In fact, as Chairman of the Armed Services Committee, when I sent my team to get more steel to protect troops against roadside bombs in Iraq, they found only one company in the U.S. making armor plate grade steel. When a Swiss company cut off the critical component for our smart bombs only one U.S. company remained which could supply it. Now, if you want to find where our Arsenal of Democracy has gone, you must look in places like Korea, France and, perhaps more ominously, China. China is cheating on trade. They are piling up over 200 billion U.S. dollars each year as a result and they are buying ships, planes and missiles with American trade dollars. They have purchased Russian Sovreignny Class missile cruisers designed to destroy American aircraft carriers. They have built between 750 and 1,000 medium range ballistic missiles and they have 17 submarines under construction. How are they cheating? China gives 17% tax rebate to their exporters and a 17% penalty to our businesses who export to them. In addition, they maintain a 40% currency devaluation just to make sure the U.S. business doesn’t win. This is not free trade. This is not fair trade. It’s cheating and if we put up with it, then we are dis-serving not only business and workers, but also our security. If this was a football game, it means China has put 74 points on the score board before the opening kick-off.”(11)
Any American with more than two neurons in his or her skull should be deeply concerned and hopping mad that a situation of this sort has even been allowed to come to pass. I mentioned earlier that the real income of working Americans has been declining for the past several years; and the proximate cause of this phenomenon is free trade, also known as globalism. In the near-term, off-shoring the production of a product to a place where the average hourly wage is only $1.50/hour will certainly allow the product to be priced lower. But in the mid-term, the people who once had good jobs at good wages making that product find themselves in jobs paying lower wages. They have lost ground and are worse off financially than they were when paying a higher price for the product. The only people who benefit in the long run are the fat-cat “citizens of the world” who have tossed their national loyalties aside in order to realize personal benefit.
In the long-term, the nation’s standard of living for most people becomes equalized with that of the third world, and our ability to pursue our national interest is severely compromised.
That process has already begun. Free trade and globalism have, for the first time, managed to create an unbridgeable rift between the working class and the owners of corporate America. In the past, through constraints of common ethics and national loyalty, we could all dream of becoming a success in America. The founders of our great corporations were held in high esteem because their success really DID “trickle down” and become everyone’s success. The rising tide really lifted every boat and gave us the most prosperous nation in the world. But today that rising tide is really a tide of red-ink on the ledger sheet where a globalist oligarchy gobbles the wealth of our country and our people are becoming more and more impoverished. Because the working class can clearly see the source of their impoverishment while stock brokers are flying high, class-warfare and resentment have replaced what had previously been a solid, if occasionally troubled, relationship. For most of American history, as the Dow Jones Industrial Average increased, wages went up as well. But now, quite the opposite happens. As corporations increase their share value by cutting costs through off-shoring, wages decline.
None other than Karl Marx predicted this eventuality when he noted in 1848: “The Protective system … is conservative, while the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of the proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In the revolutionary sense alone, gentlemen, I am in favor of Free Trade.”(12)
So if you have ever wondered why left-wingers like Bill Clinton favored agreements like NAFTA and GATT, now you know. Furthermore, these agreements set up international unelected and unaccountable governing bodies like the World Trade Organization that exercise authority within our national borders. Finally, capitalism and democracy have not worked out very well in tandem in the United States over the past fifty years. In fact, the combination has corrupted our political process to such a degree that it can truly be said that our Congress doesn’t represent the best interests of the American people at all anymore.
The fault of this lies both in the nature of capitalism AND in the nature of representative democracy. In 1790, when the first census was taken, there were fewer than 4 million Americans divided among the thirteen states. The largest city in America at that time was Philadelphia with 42,000 residents. New York followed with 33,000 residents and Boston had 18,000. At that time, the average Congressman represented 30,000 people — men, women, children, white indentured servants and black slaves combined. Of those 30,000, fewer than 11,000 were eligible to vote. In our earliest elections, fewer than 1-1/2 percent of eligible voters actually voted at the Federal level because our government was effectively constrained by the Constitution so that it couldn’t be used as a weapon to advantage some people at the expense of others. It’s powers and duties were straightforward and didn’t present a threat to anyone, so very few people even bothered to vote.
Think about that for a moment. When each representative stood for 30,000 people, these representatives were well-known in their respective communities and subject to being confronted by their neighbors. Our ancestors met their representatives at the hardware store or the barber shop, or while on their way to visit relatives. A change in circumstances due to sudden wealth from corruption would be immediately evident, and the comings and goings around our Representatives’ homes could be keenly observed. As a result, we truly had a government of, for and by the People. Most Representatives and Senators served for only a few years and then returned home to their regular occupations. Of the Representatives from Virginia, Alexander White served for four years, John Brown served for two years, Andrew Moore served for 9 years, Richard Bland Lee served for six years, and so forth. You see, in that era, being a Representative or Senator was truly about service. It paid so poorly that most politicians couldn’t afford to ensconce themselves in Washington for decades while their plantations, law practices and other enterprises languished.
Meanwhile, any attempts to use the power of government as a mechanism for wealth redistribution or to give someone a business advantage were immediately squashed by those presidents who had been involved in the founding of our country.
Today, of course, matters are quite different. Our government has gradually seized the power to regulate practically every aspect of our lives and every aspect of business under the guise of a perverted interpretation of the interstate commerce clause in the Constitution. The federal government tells me how many gallons of water I’m allowed to use to flush my toilet, how many bullets my pistol can hold, what my child needs to learn at school and on and on and on. It’s ability to regulate business is even more profound; and because it has the ability to create businesses, destroy businesses, grant monopolies as it has for major league sports and prevent certain businesses from ever starting … because of this, our legislators have a keen interest in business. And businessmen, quite understandably, have a keen interest in influencing the legislative process.
So the core cause of the corruption that lies at the interface between capitalism and democracy lies in the fact our federal government now wields far more power than the founding fathers ever intended. The day of the citizen legislature is gone. Ted Kennedy has been in Congress since before I was born, and I’m not exactly a youngster. Looking again at today’s House delegation from Virginia, Frank Wolf has been there for 27 years, Robert Scott has been there for 18 years, and Bob Goodlatte has been a Congressman for 16 years.
The character of the task has changed from one of service, to one of pursuit of power and personal advantage. I was almost — but not quite — shocked to find the biography on another Virginia Representative’s official Congressional website specifically referring to his positions on committees described as “powerful.” I won’t name the particular Congressman. I just want him to know that, in the words of a popular song, “that don’t impress me much.” Show me some tariffs against foreign manufacturers, THEN I’ll be impressed. All the power in the world means NOTHING unless it is being used ethically.
The world has changed since when each Representative represented fewer than 11,000 potential voters. In the 2004 election, 197 million Americans were eligible to vote. Congressional districts now encompass over 660,000 residents. The franchise has also been expanded to include women and African-Americans. As a result, the influence of a single individual’s vote in a Congressional election is only 2% as great as it was 200 years ago.(14)
The power that we, as individual citizens, have over our governance is now 1/50th of what it was at the founding of the Republic. But, as Representatives need to reach an ever increasing population of hundreds of thousands of people in order to win election, and they have to turn to expensive media in order to do this, the power of people who can buy influence with MONEY rather than votes has increased substantially. That’s why your Congress no longer represents you. Speaking, by the way, of ethics …. Far too often, when our Congress-critters finally get around to vacating their positions, they move directly into jobs with lobbying firms. Recent incumbents who lost the last election and then moved straight into lobbying firms for various industries include Congressmen Richard Pombo, Nancy Johnson, Conrad Burns, Curt Weldon and Jim Davis.(13)
An article in USA Today gave two clear examples: “Weldon, a former member of the House Armed Services Committee, was named chief strategic officer this month by Defense Solutions, a defense contractor that consults and lobbies for other companies. One of the company’s executives, in a previous job, benefited from federal funds secured by Weldon. … Burns was hired last month as a senior adviser by Gage LLC, a lobbying firm headed by his former chief of staff and whose clients benefited from funding Burns inserted into spending bills.”(15)
Anybody whose brain hasn’t been completely liquefied by the idiot box should see the corruption here with crystal clarity. Because, under the Constitution, our House and Senate are allowed to make their own rules regarding such behavior, what I have just reported to you isn’t illegal. But it OUGHT to be. Far too many of the people who are supposed to be our servants are salivating like Pavlov’s dog at the ringing of a bell whenever a lobbyist shows up. The depths of this sort of perfectly-legal corruption are so extensive I can barely touch on them in this podcast; but I’d like to give a few more examples just to drive this point home. http://www.wvwnews.net/story.php?id=3001