Tagged: economics

Hong Kong, Baby!

Yes. Hong Kong baby. This small island was nothing more than a fishing village not that long ago. When the Island of Hong Kong was given back to China from the British, China took a “hands off”(translation: laissez-faire) approach — what happened is pictured below. With near laissez-faire Capitalism, there is no government safety net, or very little, and regulation is almost non-existent. Yet people flocked to this little fishing village in droves. But, for what? Certainly not to live under socialist or statist policies — there were none. They went there because it was economically free. And the results are difficult to ignore, even if predictable.


Taking a look around the world, you see that countries and economies are successful to the degree that they have freedom(Capitalism), and are free from government coercion, regulation, taxation, etc. All first world countries today are a mixed economy, and consequently, they produce mixed results.

It is consistently clear that Capitalism delivers the goods, even to the passive observer. No reasonable person would or could argue that it doesn’t. So why is it that the major general trend is to continuously move towards more and more statism??

People reject Capitalism(with their votes, contrary to their best interests) based on the ethics and morality that Capitalism necessarily requires.

Free markets are all about self-interest. People view self-interest as unseemly, or worse. When you trade, you only do so if it benefits you — both people believe they will benefit from each exchange in a free market, or they would not do it. That, as ridiculous as it sounds, is the reason people reject Capitalism. People are convinced of an altruist and collectivist morality, which glorifies self-sacrifice and requires that individuals sacrifice themselves to the “greater good,” and preaches that they are not entitled to live for themselves, that they must sacrifice and live for others to be considered moral.

The archaic “morality” of altruism and the communist/socialist/leftist ethics of collectivism is what people reject Capitalism based on.

But I just have just one question for altruists and collectivists. One teeny tiny question. …Why?? Why shouldn’t people live to pursue their own values? Why should they live for other people and not themselves? There is no rational answer to that question. 

The ethics of self-interest are the only way to rescue Capitalism from the left. A culture which upholds sacrifice/altruism and collectivism as its highest values can only end one way — totalitarianism, communism, national socialism, fascism(all essentially the same extreme left political system, slight variances). It is profoundly moral to live to pursue your own values, not someone else’s.

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Is Money Really the Root of All Evil??

The following is Francisco d’Anconia’s money monologue, from Atlas Shrugged… Enjoy!


Rearden heard Bertram Scudder, outside the group, say to a girl who made some sound of indignation, “Don’t let him disturb you. You know, money is the root of all evil–and he’s the typical product of money.”

Rearden did not think that Francisco could have heard it, but he saw Francisco turning to them with a gravely courteous smile.

“So you think that money is the root of all evil?” said Francisco d’Aconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor– your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil?

“Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions–and you’ll learn that man’s mind is the root of all the goods produced and of all the wealth that has ever existed on earth.

“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is MADE–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.


“To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except by the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss–the recognition that they are not beasts of burden, born to carry the weight of your misery–that you must offer them values, not wounds–that the common bond among men is not the exchange of suffering, but the exchange of GOODS. Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best your money can find. And when men live by trade–with reason, not force, as their final arbiter–it is the best product that wins, the best performance, then man of best judgment and highest ability–and the degree of a man’s productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?

“But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality–the men who seek to replace the mind by seizing the products of the mind.

“Money will not purchase happiness for the man who has no concept of what he wants; money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?

“Only the man who does not need it, is fit to inherit wealth–the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve that mind that cannot match it. Is this the reason why you call it evil?

“Money is your means of survival. The verdict which you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?

“Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?

“Or did you say it’s the LOVE of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It’s the person who would sell his soul for a nickel, who is the loudest in proclaiming his hatred of money–and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.”

“Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.

“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich–will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt–and of his life, as he deserves.

“Then you will see the rise of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of DISARMED victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.


“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.’

“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world?’ You are.

“You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while your damning its life-blood–money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves–slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer. Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers–as industrialists.

“To the glory of mankind, there was, for the first and only time in history, a COUNTRY OF MONEY–and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being–the self-made man–the American industrialist.

“If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to MAKE money.’ No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

“Yet these were the words for which Americans were denounced by the rotted cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide-as, I think, he will.

“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”


Fascism, by any other name…

corporatist obama

…is still Fascism.

They will try to dumb you down, they will try to steal and corrupt language for their own purposes, they will try to erode the level of discourse down to where they need it to be — don’t let them do it. Professional leftists and progressives, big-government types, the academe, the media, union leaders, whose livelihoods depend upon the huge machinery of the state, will confuse corporatism(or “cronyism”) with Capitalism, and they do it on purpose. They do it to destroy the impeccable record of the free market for creating vast amounts of wealth, for raising the standard of living of all those in economically and politically free nations(to the degree that Capitalism exists anywhere), for civilizing the planet, even greatly benefiting those not living under it.

Let’s be crystal clear in defining the terms we’re working with. Laissez-faire Capitalism(real Capitalism) necessarily requires the complete and total separation of state and economics — which makes corporatism impossible in the literal sense of the word. One of the preferred strategies of opponents of Capitalism is the straw-man technique described above, whereby they criticize cronyism/corporatism(which is, strictly speaking, Fascism), while framing it as Capitalism. The most ironic part being that they are advocating for more of the fascist/socialist policies that actually caused whatever ailment they are blaming Capitalism for.

Among other, totalitarian social aspects, for which fascism is known for, is perhaps the most important aspect of it: the economic posture of fascism makes it perhaps more insidious and destructive than socialism or communism, which requires state ownership of all industry and business, while fascism only requires state control. Private ownership is retained, but totalitarian centralized control is achieved through regulation by the state, which allows failures of policy to be blamed on private ownership and free markets, and which allows them to demand more government regulation and control. This process may be repeated until the inevitable collapse of the entire facade, as has been the result of all nations who progress to achieve complete statist/leftist tyranny.

A quote, from Benito Mussolini himself: “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.” He is describing two different types of power — corporate power(economic), and political power(guns, force, violence, coercion). The two could not be more different in nature. But that’s another discussion.

Big Gov Logic

Big Gov Logic

Not just taxing it, but investing it towards political ends instead of market-directed ends, which is, quite simply, malinvestment. It destroys productivity, market liquidity, new ventures, and innovation, and when done on a large scale it can create bubbles. It’s also stealing.

Pure Democracy

Where there is arbitrary power over others through use of initiatory force, such as the government, the most power-hungry, unethical, and dishonest among us will be enticed by it.

When there is a government of men, and not a government of laws, such as in a pure democracy, where property and rights are subject to the vote, the most corruptible and unscrupulous among us will be drawn to its use.

We have given legitimacy to the criminal mindset by legitimizing initiatory force with democracy — stealing is still stealing, even if 90% vote for it. Regulation is initiatory force, no matter how many desire it. Ends cannot justify means.

Ethical and honest men/women seek to interact voluntarily, and accept nothing else.

Big-government Liberals and Conservatives. Union thugs. Environmentalists. Anti-abortion activists. Etc. Your philosophies are built on the tenet that it is proper to force others to do what you have decided is good. Do some introspection.


The Economic Argument Isn’t Enough

It occurs to me that most people think North America is already Capitalist. The perpetrators of that little slight-of-hand are many, but mostly the blame is with intellectuals, politicians, and the media, who are advancing an agenda. In fact, what we have today in North America is a mixed economy. It’s impossible to quantify, but just to throw a number out there, I’ll say North America is 50/50, capitalism and socialism. Antitrust, bailouts, the enormous entitlement and welfare states, and the pervasive intervention in the lives of individuals, the denial of individual rights, are all un-Capitalistic and anti-freedom on a fundamental level.

After watching a video of John Stossel and David Boaz from the Cato Insitute at a Students For Liberty Q&A at George Washington University, I’m pleased to see 500 Libertarians all in one place, and more pleased that they seem to be extremely well-informed.

But I’d like to present an argument that Rand made against Libertarianism, and the Libertarian political party of the 70’s.

First, though, for everyone still inside the matrix: If you support Liberalism, you support force-backed plunder. There is no two ways about it. It may not be full blown communism, but it is based upon the same destructive ideas, and no amount of government plunder, for any reason, is moral — yes, even to help the poor.

If you support Conservatism, you support oppressive social authoritarianism(and force-backed plunder but traditionally to a lesser degree). There is no way around that. Arbitrary social “rules” in the name of some “good” chosen for someone else is authoritarian and anti-freedom. The drug war, for example. Or laws against prostitution.

The reason for this note, however, is to address Libertarians. If you support Liberty, based on the ineffectiveness of big government and statism, centrally-planned economies, etc, OR based on the economic up-side of free markets, you may be failing to grasp the real problem. Efficacy arguments have never stood up to altruist morality arguments, and there’s no reason to believe they ever will. In fact, the economic argument is so one-sided, so clearly on the side of freedom and Capitalism that it’s not really a debate. The other side — the moral argument — is where the war is won or lost. And the moral argument is not even being fought, it’s been conceded to the left. The altruist and collectivist morality of the culture literally ensures that we will continue on the same trend as the last 100 years — towards the left, towards statism.

Indeed the only proper defense of freedom, and Capitalism, is a moral defense — laissez-faire Capitalism is proper to human beings, because everything else is slavery, in the true sense of the word. It is not enough to show that Capitalism improves everyone’s standard of living, or creates an environment for business, religions, races, and all social groups to co-exist peacefully, or any number of the other great things Capitalism does — those things are historically, factually and demonstrably true, however they do not make a proper defense of laissez-faire Capitalism. Why?? They are an argument, sure, but they are not the argument. They are corollary arguments, but they are secondary.

Material gain is not an effective defense and those arguments have always failed against the inhuman “morality” of altruism and collectivism, as they have in the past, and as they still do today(slowly but surely, we move ever more to the left).  People want to do what they think is right — if they’re convinced that self-interest and profit are immoral, and “evil”… convincing them that Capitalism achieves self-interest and profit better than socialism or communism, is actually counter-productive. The real debate is whether or not self-interest(what markets are based on — trade is, for both parties, based on self-interested gain) is moral or immoral. Proponents of Capitalism must make the argument that self-interest is moral — and it is — because people don’t vote their pocketbooks. They vote their conscience, because they want to be moral. The problem is, they’ve been convinced of a backward, anti-life, upside down morality, one that says it is immoral to live for your own sake.

These points addressing Libertarians are perhaps more important than the ones directed at Liberals and Conservatives, because as Rand said, Capitalists supporting freedom because it “works,” may actually do more damage to the cause of freedom than the worst big-government liberals, or the most socially authoritarian conservatives, because they fail to defend freedom properly — they undermine the real justification for a free society, which is that a free society is the only moral society.

Non Libertarians: I don’t mean to say that it is a bad idea to hear out the the arguments for the “effectiveness” of laissez-faire Capitalism(Capitalism is: the absolute separation of economics and state, like the separation of church and state), because those ideas are true, and can be persuasive, and they demonstrate an important fact: that the moral is the practical — however these ideas have never been enough against the destructive and irrational altruist morality presented by Marx, by the bible, by the left, by virtually everyone — even many Libertarians.