Beware of the Common Good or Public Interest

I recently had someone tell me that we should enact Pres. Obama’s domestic agenda for the sake of the common good and that his policies were in the public’s interest. His statement forced me to consider the fallacy of the argument that is “the common good” or “public interest.” To justify a decision based upon “the common good” is merely a tool of using an indefinable concept to justify someone’s ideological agenda. If you break “the common good” of society down to its core, you realize that the public is merely a collection of individuals.

When politicians argue that “the common good” of society is somehow different from and superior to the individual good of society’s members, they are essentially concluding that the good of SOME men should take precedence over the good of others. So what is to become of the less fortunate members of society? Well, they become the proverbial sacrificial lambs that must be slain for “the common good."

The use of terms such as “common good” and “public interest” assume that it is moral and just for the good of the majority to trump the individual. However, if we understand that a society is nothing more than a collection of individuals, we will recognize that the good of the majority is delusional because the violation of an individual’s rights means the abrogation of all rights. As we have seen in Russia, China, Germany and in many other tyrannical states over the past 100 years, the end game of justifying “change” in the name of “the common good” is a deliverance of a helpless majority into the hands of any demagogue that claims to have the “voice of the people.” History of such regimes has proven that the State acting in the interest of “the common good” is always at the expense of the individual’s liberty and freedom.

Compiled thoughts on the Baucus Health Bill Write-up

Sorry for not posting for so long. The new baby has taken up much of my time but I will do my best to keep up. I am attaching some great thoughts on the Baucus proposal:

"Taxing Baucus [Benjamin Zycher]

Mike Tanner of Cato and I (separately) have looked at the CBO analysis of the Baucus markup (which is not a bill), and have reached much the same conclusions. The headlines will tell us that it will cost $829 billion (that is, less than $900 billion) over ten years, and will reduce the cumulative deficit by $81 billion.

Those numbers are phony for any number of reasons, but notice that the "deficit reduction" is the net result of $518 billion in increased spending from expanded insurance coverage, $404 billion in reduced spending from "other provisions affecting direct spending," and $196 billion in increased revenues. The $404 billion "does not include effects on spending subject to future appropriations." So: Will Congress actually cut Medicare reimbursements (by over 20 percent), unlike previous years? More fundamentally: The increase in revenues ($196 billion) is over twice the net reduction in the deficit. So put aside all the other problems with the numbers: None of this net "deficit reduction" results from spending efficiencies. It is all tax increases and more. Will those higher taxes be limited to those making in excess of $250,000 per year? Please... Note also that the analysis states in the first paragraph that the "analysis is preliminary in large part because the Chairman's mark, as amended, has not yet been embodied in legislative language."

So, it is no longer the production of only laws and sausages that should be hidden from view. Chairmen's marks also are to be hidden from polite society, lest voters, CBO, and an ever-hopeful press be scandalized. So much for transparency."

Random Thought

It has been a while since I posted and have been busy with family matters but I thought I would include this interesting perspective on redistributive policies and government intervention:

"U.S. President Grover Cleveland once vetoed an expenditure that would have provided $10,000 of federal aid to drought-stricken Texas farmers. He explained to congress why such an appropriation of taxpayer money was inappropriate:

"I can find no warrant for such an appropriation in the Constitution; and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadily resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people. ... The friendliness and charity of our fellow countrymen can always be relied on to relieve their fellow citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."

“Progressive” Government & Big Business: Common and Corrupt Bedfellows

After examining the moral justification for capitalism and the hypocrisy that exists within government regarding the policy of price controls and monopolies, it would be reasonable to conclude that businesses would want as much freedom and competition free from government control as possible within the marketplace. However, ever since politicians and economists first began enacting policies to regulate and “plan” the free market, there have been a contingent of traditionally larger businesses that have been strong advocates for government control and manipulation of the markets. Why would these businesses jump in bed with the government? The answer lies at the end of what my grandfather wisely taught me about years ago: “Follow the money trail.”

A byproduct of the consumer-friendly competition created by capitalism is the requirement of every business to pull its own weight and create value for consumers or risk being overtaken by more innovative, creative and driven competitors. So what is the best way for a large established company to avoid the hard work required to remain its status at the top of its industry? Run to the only institution capable of forcing businesses and individuals to comply with its demands: the government.

Traditionally, political pundits and historians have painted the interests of big business as being aligned with a conservative agenda. However, an examination of the Obama administration’s “cozy embrace of big business,” through its economic policies and bailouts, persuasively illustrates that big business has rarely had such an ally as the government in shielding them from the cruel realities of competition.

A few examples I have stolen from Jonah Goldberg (writer for National Review) will illustrate my point: (1) it has been well publicized that when President Obama called for healthcare reform, insurance companies quickly adopted the mantra that they wanted to be “at the table rather than on the menu.” Translation – insurance companies wanted to ensure that they were in a position to play a profitable and integral role in the upcoming welfare state that will be created through socialized medicine; (2) Phillip Morris, the largest of the tobacco companies, recently supported and realized passage of a so-called “anti-tobacco” bill that benefited Morris’ position in the market because it made it more difficult for smaller, more innovative competitors to compete (the bill made it more difficult for tobacco companies to advertise their products – a nice bill for a large tobacco company looking to retain its 50% market share); (3) GE has willingly jumped into bed with the government on the global warming hysteria by peddling “green” products to Uncle Sam rather than creating and selling competitive products on the free market that create value for consumers. Why? Because GE knows that it wants to position itself as a “favorite” of Obama when cap-and-trade passes so that it can attain a protected industry status, thereby ensuring decades of government subsidization; (4) finally, the most obvious and blatant example of protectionism for big business is President Obama’s proposed plan to deal with “systemic risk” in the financial markets. A quick summary of the proposal shows that big businesses in the financial markets – large banks, insurance companies, etc – will not be permitted to fail if it is determined by the Federal Reserve that such a failure would threaten the stability of the financial markets. This policy creates an obvious incentive for larger financial firms to grow as quickly and attain as much influence within the markets as possible in order to attain a “too big to fail” status (even if it were to involve irresponsible “investments”). By attaining a “too big to fail” status, a business can become lazy and rest assured that it has become a ward of the state and can operate as a careless chronic welfare recipient that has no incentive to do anything other than maintain its status.

Who loses when big business jumps into bed with the government? You do. Individual consumers and small businesses seeking to expand by offering better products at lower prices lose. Individual consumers lose because we never experience the drop in prices and development of new, innovative and more efficient products by smaller, hungrier and aggressive entrepreneurs. Small businesses lose because they don’t have the benefit of government protection from competition and are required to play from an uneven playing field, thereby limiting the prospects of success.

The examples discussed above provide a wonderful illustration of how a planned economy creates inequities that far outweigh the claimed “unfair” consequences of a free market economy. What is the end result of President Obama’s policies that protect big business at the expense of small business and consumers? Any Rand summarizes it best: “The inevitable result of planned economies is a ‘syndicalist or corporative organization of industry in which competition is more or less suppressed but planning is left in the hands of the independent monopolies of the separate industries. This places the consumer at the mercy of the joint monopolist action of capitalists and the workers in the best organized industries.” See what happens when government confuses and corrupts the free market by taking sides and protecting certain “big” business? I don’t fault big business for looking out for their interests by attempting to capitalize on a corrupt government; I fault our corrupt government for taking sides and corrupting the free market.

The Moral Justification for Capitalism

The topic of capitalism vs. planned/organized economies and their variations (socialism, fascism, communism, etc) is too complex to completely dissect in a blog posting but due to the fact that so many of President Obama’s domestic policies (health care, cap & trade, extensive regulation of the financial industry, wealth redistribution policies employed under the tax system) are based upon a perceived deficiency of capitalism and the free markets, it is important to examine the moral justification for capitalism when compared to planned economies. This blog posting will only examine the moral justification for capitalism and will reserve discussion regarding planned economies and President Obama’s concept of a planned economy for soon-to-be posted blog discussions.

When considering whether a social system should be adopted by a society, it makes sense to ask whether individual citizens will retain their freedom under the proposed system. A number of economists, philosophers, and Founding Fathers of our country have outlined the concept of freedom and the reality that in order to guarantee freedom, a social system must uphold and protect the rights of the individual. As the Declaration of Independence and other Founding documents have indicated, a citizen’s individual rights can only be assured by upholding a political and economic system that guarantees an individual’s right to his own life, his own liberty, and to the pursuit of his own happiness. If we assume that the primary goal of a social system is to provide and protect freedom, we must consider whether the system respects individual rights and whether physical force is banned from human relationships.

Although many of the concepts and thoughts about capitalism that I am about to discuss are common knowledge, I think it is important to revisit them from the moral perspective of who is permitted to make decisions and the freedom provided under capitalism. Generally, capitalism is defined as “an economic and social system in which trade and industry are privately controlled (instead of state-controlled) for profit.” Under capitalism, all human relationships (investments, distribution, income, production, pricing, and supply) are voluntary. As a social system, capitalism respects individual rights by respecting the concept of property rights. A cornerstone of capitalism is the concept of privately-owned property. The concept of private property (the right to keep property purchased and earned as a result of one’s labor) provides an incentive for each individual to strive to pursue his own good for his own sake. By allowing human relationships to remain voluntary, capitalism permits each individual to decide what product or service provides the most value. Additionally, capitalism, through the mechanism of competition, creates an incentive for each producer to continue to provide better quality and lower priced products in order to survive. By allowing every business, producer and consumer to keep the property they have earned as a result of their labor and value created within the market, capitalism provides an incentive and reward for all parties in the market: consumer, producer and service provider.

The economic benefits of capitalism are widely recognized but many proponents of capitalism advocate its use for efficiency reasons, while neglecting the freedom of choice free from coercion that capitalism provides. As an example, many passive proponents of capitalism argue that the concept of the free market can only be justified because it provides for the “best allocation of the national resources” or that it represents “the best way to achieve the common good.” These arguments are misplaced because as Ayn Rand and F.A. Hayek and others have pointed out, man is not a national resource and the fact that capitalism provides the most effective means of achieving the “common good” is merely a secondary consequence and not the primary justification for capitalism.

Many critics of capitalism argue that this desire to act in one’s own self-interest through the existence of the “profit motive” is immoral because it creates greed, excess and a misallocation of resources that leaves a segment of the population neglected and in poverty. This focus on selflessness/altruism is an admirable quality for individuals to pursue in their own lives. However, altruism is a philosophy that should be accepted or rejected by each individual based upon their own decisions, not a political philosophy employed and directed by the government. When government imposes altruism upon its citizens through claims that every citizen must act in the best interest of the public or that each citizen has a social or societal duty, it imposes a moral duty upon the competent to serve the incompetent and the willing to serve the unwilling.

The moral justification for capitalism is that it is the only system that provides for and protects the individual and his right to exist for his own sake. Capitalism provides an equal opportunity to each individual and does not discriminate or make judgments upon individuals: “The economic value of a man’s work is determined, on a free market, by a single principle: by the voluntary consent of those who are willing to trade him their work or products in return. It wholly rejects altruism (the deliberate pursuit of the interests or welfare of others or the public interest). Man is not the property or the servant of society – a man works in order to support his OWN life and must be guided by his own self-interest and if he wants to trade with others he must not expect sacrificial victims.”

The Founding Fathers always expressed their deepest respect and conviction for the freedom of individuals in society and the necessity that governments limit their sphere of influence and control. It was for this reason that America has long remained the most free of all men since its founding. Our Founding Fathers also knew that government should concern itself with providing a framework in which freedom and equality of opportunity can be assured and maintained and understood that it is wiser to leave altruism and benevolence to the moral conviction of each individual and the philanthropy of every man.

When is a Monopoly & Price Fixing a Good Thing?

I am starting this posting differently because in the process of writing about the hypocritical economic policies being advocated by the Obama administration and the liberal members of Congress related to the Cap and Trade and socialized medicine proposals, I have realized that capitalism must be thoroughly defended and explained. It has become popular to vilify, denigrate and blame the free market for all of society’s economic problems in order to gain support for new policies that concentrate on government planning. As such, I will begin a series of blog postings related to capitalism/the free market and the fallacies and effects of government planning on our economy and individual liberties. Here are a few of the upcoming topics: (1) The Moral Justification for Capitalism; (2) Why Big Business Supports Obama’s Regulation of the Free Market; (3) Pres. Obama’s Policy of Planned Competition/Capitalism. But, these topics are for another day; back to the topic at hand.

President Obama’s health care reform rhetoric and proposed policy agenda has proposed a clever, yet dangerous twist on applying government control within the framework of competition: Obama proposes to create a public health care option operated and funded by taxpayer funds that will compete with private health insurance companies. On the surface, it sounds like a good idea to many people because it sounds like you still have competition and the free market available to all with the government merely competing as a new member of the group for the benefit of all Americans. However, as pointed out by many economists, the government insurance plan will have many political and economic advantages over private insurance companies (gov’t agency has no need to make money and can run at a loss for decades at the expense of the taxpayer, as well as exclude itself from harsh regulations imposed on the private sector – thereby placing the private sector at a distinct disadvantage) that will ultimately create a government-run health care monopoly.

The health care proposals of President Obama are merely an example of a broader point I am attempting to make: Why is a monopoly and the practice of price fixing a criminal act punishable by prison time when a private business is involved but instantly becomes admirable policy enacted for the “public interest” when instituted and directed by government?

In order to understand why the public accepts such a hypocritical argument by bureaucrats, we have to understand that, over time, the public has accepted a baseless statement: businesses operate solely on a basis of “excessive greed and irresponsibility” and policies enacted by bureaucrats are admirable attempts by “public servants” with “good intentions” to look out for the common people.

It is useful to consider the government’s own arguments against the use of monopolies and price fixing (Anti-trust laws) when determining the government’s culpability. The logic behind the Sherman Act and other anti-trust laws as expressed by the U.S. Supreme Court was that business decisions “directed to (take) control of the market by suppression of competition” should be made illegal. “The end sought (by anti-trust laws) was the prevention of restraints to free competition in business and commercial transactions which tended to restrict production, raise prices, or otherwise control the market to the detriment of purchasers or consumers of goods and services, all of which had come to be regarded as a special form of public injury.” The primary purpose of the Sherman Act and similar laws was to protect the consumer from manipulation of the market by businesses that would result in higher prices and the squeezing out of competitors, thereby limiting the effectiveness of the free market. Additionally, the Sherman Act was so concerned about the effect a monopoly would have on the consumer and other competitors that it made it a felony to show “intent to monopolize,” as expressed in Section 2: “Every person who shall monopolize, or attempt to monopolize, or combine to conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony. . .”

If it has been determined by government that price fixing and monopolies are detrimental to the consumer and a “restraint to free competition,” what danger does a government program pose when it possesses inherent advantages that would have the end effect of creating an industry monopoly (a government-run health care monopoly)?

To gain a full understanding of the danger of such a government policy, it is necessary to examine the difference between economic and political power. Ayn Rand’s analysis is illustrative: “Economic power is exercised by means of a positive – offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative – threat of punishment, injury, imprisonment, alienation, destruction. The businessman’s tool is values; the politician’s tool is fear. The sole means by which a government can grow big is physical force; the sole means by which a business can grow big, in a free economy, is productive achievement.” Rand makes the insightful point that the only entity in society that holds a legal monopoly on the use of force is the government. Businesses and individuals have no legal power to force individuals to act against their own choice. However, “the nature of governmental action is coercive action.” The public must recognize that when businesses make an error of economic judgment, that business suffers the consequences; when the government makes an error of political judgment, the entire country suffers the consequences.

Perhaps the most important point to take from the government’s proposal is that just as bureaucrats consistently propose legislation from which they exclude themselves (excluding Congress from the proposed government-run health care monopoly), so too they vilify, criminalize and regulate business under the disguise of “protecting the public,” only to accept and implement the same monopolistic policies for the “protection of the public.” Which is more dangerous and capable of corruption and control, business or government?

Social Justice: The Goal of President Obama and Sotomayor’s Application of Empathy and Race

On May 1, 2009, President Obama was very clear in his conclusion that in determining a qualified candidate for the U.S. Supreme Court, the “quality of empathy, of understanding and identifying with people’s hopes and struggles, (w)as an essential ingredient for arriving at just decision(s) and outcomes.” Pres. Obama further elaborated his thoughts on empathy as a necessary quality to justice on July 17, 2007 during a speech to Planned Parenthood Action Fund: “We need somebody who’s got the heart, the empathy, to recognize what it’s like to be a young teenage mom, the empathy to understand what it’s like to be poor, or African-American, or gay, or disabled, or old -- and that’s the criteria by which I’m going to select my judges.”

In the same spirit as her husband, Michelle Obama has voiced her views regarding race and her opinion that an “(African-American) separationist may better understand the desperation of their (Black lower class) situation and feel more hopeless about a resolution as opposed to an integrationist who is ignorant to their plight.”

In an attempt to establish a presence of empathy on the U.S. Supreme Court, President Obama has chosen Sonia Sotomayor, an appellate judge who has repeatedly asserted that she “embraces the view that ‘Our experiences as women and people of color affect our decisions’ and explicitly disagrees with Justice O’Connor’s assessment that a wise old man and a wise old woman would reach the same conclusion. According to Judge Sotomayor, ‘I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a while male who hasn’t lived that life.’ Judge Sotomayor challenges the belief that the law needs to be knowable and predictable, borrowing from the early 20th century Legal Realists who rejected the idea that judging involves the impartial application of neutral principles.”

With such a judicial philosophy in mind, the conservative Republicans involved in the confirmation hearings must focus on what Sotomayor’s ultimate goal is when applying empathy, race and economic status in the evaluation of cases. Why would empathy be required when applying the law to a set of facts? Social justice is the ultimate goal of President Obama and Judge Sotomayor.

Social justice has long been a goal of many philosophers and politicians and originated as a moral duty by each individual to assist individuals and groups in receiving fair treatment and an opportunity to an impartial share of the benefits of society. However, Socialism imposed a political duty on governments to ensure social justice to identified groups or individuals deemed to have experienced some form of injustice. Social justice, as a political duty, has long been defined by results. All of the named people groups Pres. Obama and Judge Sotomayor identified were all groups statistically deemed to have experienced some form of discrimination or stigma: unwed teenage mothers, the poor, gay, disabled, elderly, African-Americans, Latina women, etc. Additionally, Judge Sotomayor has explicitly identified which groups should receive empathy and at whose expense: wise Latina women would make better decisions than white males presumably because minority women would be able to account for how judicial decisions would affect minorities and other groups that have experienced some form of discrimination or injustice.

What the concept of social justice, as applied in the judicial context, truly means is that judges must, in the words of the renowned liberal constitutional law professor Lawrence Tribe, “get into the kind of controversial substantive choices that the process components are so anxious to leave to the electorate and its representatives.” More specifically, the written law is “neither irrelevant NOR all-determining and the U.S. Constitution is to be interpreted broadly as moral values to be applied rather than as explicit rules to follow.” Under Sotomayor’s view, empathy is a necessary ingredient in judicial decision-making because the decisions being made are not mere issues of law, but also issues of morality and equality.

An essential component in ensuring social justice is achieved is the belief that assistance to the less fortunate must come not through merely the means of charity, but by the transfer of benefits to the less fortunate from the more affluent of society. This transfer of wealth is viewed as a matter of justice – “individuals are entitled to some share of the wealth produced by society, simply by virtue of being members of that society, and irrespective of any individual contributions made or not made to the production of that wealth.” Empathy would be an empowering quality to an activist judge seeking social justice through redistribution of wealth and property rights in the application of the law.

Oliver Wendell Holmes opposed “confounding morality with law” and held the essential function of the law was to preserve society and strongly opposed the application of empathy or other “emotional applications,” as this quote illustrates: “The law takes no account of the infinite varieties of temperament, intellect, and education which makes the internal character of a given act so different in different men. It does not attempt to see men as God sees them.” Justice Holmes knew that to apply empathy and other emotional arguments to law was to imply a drastic change in the judicial process under the disguise of a mere preference for one group over another, with the end result being an expansion of the power of government to make “discretionary determinations in domains once exempt from its power.” Finally, to assume the judicial branch or any other branch is capable of producing specific social results is presupposing “a mastery of social details inherently beyond our ken.”

The point of this post was to point out that although the nomination of Judge Sotomayor may ultimately be confirmed due to the make-up of Congress, conservatives in Congress must use this time as an opportunity to teach and expose the true ideology behind the application of empathy, race and economic status to the judiciary. Questions should require Sotomayor to illustrate how empathy would result in better decisions and how race and an understanding of certain groups of individuals would result in more “just” decisions. If the questions are tailored appropriately, the answers from Sotomayor will illustrate that her adherence to such principles of judicial activism are the means by which she wishes to ensure social justice is achieved at the expense of the law.