TGIF: Markets and the Pursuit of Happiness

For some time now I've thought that many people's antagonism to the market is motivated not by moral or economic objections but by aesthetic criteria. (I discuss this in What Social Animals Owe to Each Other and here.)

By that I mean they simply find market relations -- involving private property, contracts, profit, competition, and "impersonal forces" such as supply and demand -- unattractive, even ugly. They wish society had nothing to do with such relations, which they (mistakenly) believe have displaced the cozy cooperation and communalism that marked an earlier golden age. They long to return to the beautiful but lost Garden of Eden, where markets don't exist and people can be human again. They make just two errors. First, they misunderstand the market. For example, competition and cooperation go together. And second, the longed-for Eden never existed. Before human beings transformed the earth, nature was a cruel master. People weren't always so nice either.

The aesthetic rejection of markets could explain why we libertarians have made little progress in persuading people that crony capitalism is significantly different from the free market. The people who find markets ugly don't care whether businesses get favors from the government or not. That's not what matters to them.

Something underlies this revulsion at the market and the freedom it entails: self-interest, or what the critics would call selfishness. It's also been called the pursuit of happiness. (Of course, Ayn Rand, who held that the pursuit of self-interest is entirely proper embraced the word selfishness at least for the shock value. See her book The Virtue of Selfishness.) The aesthetic rejection of markets may rest on an aesthetic reaction to self-interest. The line between ethics and aesthetics can be blurry.

So we must ask, with Ayn Rand, what's wrong with self-interest? It is not a good answer to say that self-interest means exploiting other people, defrauding them, and even physically hurting them. But this assumes that self-interest is entirely subjective or actually requires the domination of others. That's nothing more than a confession. It's not proof. Because someone says something is good doesn't make it so. And why would self-interest require domination? (For Rand it emphatically did not.)

Like the boy in "The Emperor's New Clothes," we can ask in all innocence, What's wrong with self-interest? It doesn't seem a priori bad. On the contrary, you get only one life. Why not make the most of it in all sorts of ways? Put that way, most people would agree.

It will not help the critic's case to equate self-interest with greed, which is never defined. It's just a lazy slur.

Rand's Objectivism justified rational egoism and political economy from a metaphysics and an epistemology of reason. She did not think that people could be won over to freedom and free markets if they were hostile to reason and egoism, that is, the principle that one's own life is one's highest value, the value on which all others depend. That makes sense to me.

And that raises a question: if the pursuit of self-interest (happiness) were to lose its stigma, which it has at least part-time for many people, would opposition to the freedom and free market disappear? And if so, how can we remove the stigma?

It won't be enough to argue, as many market advocates do, that in markets people altruistically service one another. It's true that in voluntary transactions both parties. benefit But market opponents will scoff that since the motive for this "service" is self-interest, not self-sacrifice, it doesn't count.

Fortunately, we can try to destigmatize self-interest by invoking a pillar of Western civilization that for centuries was held in high esteem. I mean more than using Jefferson's great term in the Declaration of Independence the pursuit of happiness. I have mind the ethics of personal flourishing, or eudemonia, bequeathed by the ancient Greek philosophers, especially Aristotle. The work of Benedict Spinoza in the 1600s inherited many of its virtues.

For Aristotle, the path to happiness in the sense of the good life is to live according to one's nature as a rational/social being. Reason is in the driver's seat in individual and social matters. This suggests a society based on individualism, persuasion, and trade rather than collectivism, force, and domination. (The Greek philosophers' politics, however, left much to be desired.) The virtues we associate with the ancient Greeks -- such as justice, prudence, moderation, and courage -- described this way of living intelligently.

Reason and cooperation don't just get rational people what they want; those things are what rational people want because that's the human way of living. (I'm taking guidance here from philosopher Henry B. Veatch's Aristotle: A Contemporary Interpretation and Rational Man: A Modern Interpretation of Aristotelian Ethics and from philosopher Roderick T. Long's Reason and Value: Aristotle versus Rand and "Economics and Its Ethical Assumptions.")

Here is a common-sense ethics of rational self-interest that most people could sign on to. It might erode the stigma of selfishness. It's worth noting that In his Nicomachean Ethics, book 9, chapter 8, Aristotle defended -- of all things -- "self-love." He wanted to show that, contrary to popular opinion, the person who most loves himself is the one who lives intelligently in pursuit of happiness, which Aristotle regards as noble. He wrote:

We blame, it is said, those who love themselves most, and apply the term self-loving to them as a term of reproach: and, again, he who is not good is thought to have regard to himself in everything that he does, and the more so the worse he is; and so we accuse him of doing nothing disinterestedly. The good man on the other hand, it is thought, takes what is noble as his motive, and the better he is the more is he guided by this motive, and by regard for his friend, neglecting his own interest.

But this theory disagrees with facts, nor is it surprising that it should. For it is allowed that we ought to love him most who is most truly a friend, and that he is most truly a friend who, in wishing well to another, wishes well to him for his (the other’s) sake, and even though no one should ever know. But all these characteristics, and all the others which go to make up the definition of a friend, are found in the highest degree in a man’s relations to himself; for we have already seen how it is from our relations to ourselves that all our friendly relations to others are derived....

Those who use self-loving as a term of reproach apply the name to those who take more than their due of money, and honour, and bodily pleasures; for the generality of men desire these things, and set their hearts upon them as the best things in the world, so that they are keenly competed for. Those, then, who grasp at more than their share of these things indulge their animal appetites and their passions generally—in a word, the irrational part of their nature. But this is the character of the generality of men; and hence the term self-loving has come to be used in this bad sense from the fact that the greater part of mankind are not good. It is with justice, then, that we reproach those who are self-loving in this sense.

That it really is to those who take more than their due of these things that the term is usually applied by the generality of men, may easily be shown; for if what a man always set his heart upon were that he, rather than another, should do what is just or temperate, or in any other way virtuous—if, in a word, he were always claiming the noble course of conduct, no one would call him self-loving and no one would reproach him.

And yet such a man would seem to be more truly self-loving. At least, he takes for himself that which is noblest and most truly good, and gratifies the ruling power in himself [reason], and in all things obeys it. But just as the ruling part in a state or in any other system seems, more than any other part, to be the state or the system, so also the ruling part of a man seems to be most truly the man’s self. He therefore who loves and gratifies this part of himself is most truly self-loving.

Again, we call a man continent or incontinent, according as his reason has or has not the mastery, implying that his reason is his self; and when a man has acted under the guidance of his reason he is thought, in the fullest sense, to have done the deed himself, and of his own will.

It is plain, then, that this part of us is our self, or is most truly our self, and that the good man more than any other loves this part of himself. He, then, more than any other, will be self-loving....

The good man, therefore, ought to be self-loving; for by doing what is noble he will at once benefit himself and assist others: but the bad man ought not; for he will injure both himself and his neighbours by following passions that are not good.

Note that Aristotle says that living rationally (nobly, egoistically) --  -- "assists others" as well as himself. Think about the producer and merchant who do so much good for others. But that obviously is not the reason to live that way. The reason is that it is the human way to live and therefore the way to flourish.

I'm not saying this will persuade anyone with an aesthetic aversion to the market. It certainly won't persuade one who lusts for power over others. But we've got to do something to remove the stigma from self-interest. Otherwise, we'll never see a truly free society.

TGIF: Politics Corrupts Money

Money does not corrupt politics. Politics corrupts money. Politics as we know it is inherently corrupt; it's the way to select government officials,  who then use the legalized threat of physical force, and force itself, to make peaceful people do or not do things against their will. Since that's so, public problems cannot be solved by yet another measure to restrict people from spending their own money to support candidates for office or lobby elected officials. At most, it will drive any influence to less-visible forms.

Money in politics is a favorite complaint of populists across the political spectrum. Superficially it seems to be a problem. No one likes that money might count most in determining who is elected and what policies are enacted. Candidates and policies ought to be judged on merit. The popular solution is to strictly limit spending on campaigns, even by independent political-action committees, and to somehow limit lobbying by (some) interest groups and individuals after the campaigns. But those touted reforms seem undemocratic on their face. If in theory democracy is the rule by the people, why can't the people spend their money to influence "their" government? Sure, some people have more money than other people, and strongly motivated concentrated groups have an advantage over the unorganized masses, but how can that be changed without violating liberty? Maybe the focus ought to be on what government has the power to do.

Campaign and lobby finance is not as simple as the advocates of control insist it is. This is not to say that money has no relevance ever. Let's remember that the essence of government is to dispense wealth taken under threat of force from its producers. Voluntary exchange is not its modus operandi. This is so even when the government does what might be construed as generally welfare-enhancing, such as building roads or defense. As H. L. Mencken wrote in A Carnival of Buncombe, “[G]overnment is a broker in pillage, and every election is a sort of advance auction sale of stolen goods.” Any power the politicians have to help their friends at the expense of others rests entirely on the power to tax.

On the other hand, the influence of money on politics is a complicated matter and easily overestimated. Considering the size of government largesse -- the federal government will spend $5.8 trillion this fiscal year -- economists have wondered why so little money is "invested" in politics. "The discrepancy between the value of policy and the amounts contributed strains basic economic intuitions. Given the value of policy at stake, firms and other interest groups should give more," write Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder Jr., drawing on research by Gordon Tullock. (This is also helpful.) Campaign-finance restrictions don't solve the puzzle.

The reason interest groups and wealthy individuals do not give more could be that too many other things garble the connection between cost and benefit. The joints are loose. Safer investments are available. Ask some wealthy aspirants to the White House, such as former New York City Mayor Mike Bloomberg and former Texas Gov. and Treasury Secretary John Connally, who in 1980 famously spent $500,000 of his own money in his quest for the Republican nomination and bagged one delegate.

Outspending an opponent, or having wealthy supporters, is no guarantee of success. Hillary Clinton knows. A candidate still has to appeal to inscrutable voters in the center under shifting circumstances, and that process has many moving parts. The same goes for lobbying. Money can get someone access, but before a measure is enacted, Its potential sponsors will need confidence it won't backfire at the next election.

We should also ask whether people with money corrupt politicians or do people with money donate to politicians who already agree with them. The deep pockets might put money into primary candidates, but there's no guarantee of success. Small donations can add up and free media can make a difference.

It's easy to fool the voters, to be sure, but there are limits, especially when countervailing winds blow. Rich individuals and organizations on the other side of an issue are also free to spend their money on candidates and lobbying -- and they do. The progressives' "good guys" can outspend the so-called "bad guys." Alex Epstein, author of Fossil Future, notes for example that the anti-fossil-fuel lobby, which includes oil companies that are hedging their bets, far outspends the few defenders of fossil fuels. Moreover, bashing big business (with justification or not) can get politicians grass-roots donations that make up for the lack of interest-group donations.

The much-hated 2010 Citizens United v. Federal Election Commission ruling empowered unions and other incorporated nonbusiness organizations, as well as for-profit corporations, to spend money independently in support of candidates. A ban on political spending, the Supreme Court, said, is an unconstitutional ban on speech, which it certainly is. Critics of this ruling often say that corporations should not be regarded as persons. That's sophistry. Corporations are associations of persons with free speech rights.

Then there's the problem that politicians have the power to extort donations from the so-called privileged. Some years ago a book called Money for Nothing: Politicians, Rent Extraction, and Political Extortion, by Fred McChesney, showed how politicians can attract support from businesses merely by publicly talking about the need for new regulations. In effect, the politicians say: "Support me or I'll ruin your business." How much money do businesses donate in self-defense? Departures from the free market harm consumers too, so this is hardly something to welcome.

Another consideration is that even though Congress has repeatedly passed restrictions on campaign finance, many people think it has not been enough. This is despite the obvious point that limits protect incumbents since challengers are often less well-known. I suspect that the futile restrictions are intended to pave the road to exclusively tax-financed campaigns. Wouldn't forcing people to pay for campaigns violates freedom of conscience?

But the deepest problem of all is that the advocates of stricter controls want to eat their cake and have it too. They say they want democracy but not rule by the people. These advocates say they trust the voters to elect the right politicians but really think the voters are simpletons who vote according to how many times they've seen an ad on television.

Here's the knockout punch to the money critics: if they really don't want money to influence politics, they should favor prohibiting the government from dispensing favors of any kind, full stop. No one takes their money to a boarded-up shop.

If voters are merely puppets of big spenders, then maybe democracy isn't all it's cracked up to be. In fact, people face perverse incentives in the political arena (stemming from the impotence of any one vote and the dispersion of costs) that they don't face anywhere where an individual's decisions are decisive and costs are fully borne. Thus we'd be better off shrinking the political arena as much as possible.

TGIF: Has Libertarianism Passed Its Sell-By Date?

Ron DeSantis, who could be the next president of the United States, made his views frighteningly clear: "We understand that freedom is not just about the absence of restrictions.... I think we have to understand that the threats to freedom are not simply as a result of what happens in legislatures. Yes, you've got to win those fights. The left is trying to impose its agenda through a wide range of arteries in our society, including corporate America."

On another occasion he said, "Fighting for freedom is not easy because the threats to freedom are more complex and more widespread than in the past. The threats can come from entrenched bureaucrats in D.C., jet-setters in Davos, and corporations wielding public power."

Why do I call this frightening? Because DeSantis, although he started his political career as a limited-government advocate, has abandoned that position for an activist conservatism that is becoming more prominent. He has gone from budget hawk to culture warrior. (He has long been a war hawk, though lately he's voiced doubts about the U.S. proxy war against Russia.)

He is especially eager to use the power of the government, as he has shown in Florida, to fight woke cultural positions from public schools to private corporations like Disney. I raise this not because I think the champions of woke culture are right -- far from it -- but because DeSantis is perfectly willing to build up the government to face down forces that themselves have looked to government to impose their preferences on people. He's done it as governor of Florida (often ineffectively), and we have every reason to think he'd do it as president.

Whether he knows it or not, DeSantis is voicing an old and mistaken objection to the laissez-faire libertarian philosophy. It's an objection I'm hearing more frequently from right and left. It is that the philosophy of indivdiudal liberty and constrained government -- the original liberal project -- has become irrelevant. There's some dishonesty here because it implies that the critics once found that philosophy relevant. But never mind that.

Why isn't it relevant? Because, they say or imply, it does not address new threats to freedom. Here's why that's an old complaint: for decades people who opposed free markets but remained attached to other parts of classical liberalism (freedom of conscience and toleration) liked to say that Adam Smith made his case for the "system of natural liberty" back when the government was the only threat to the individual and the separation of economy and state was the only answer. But now things have changed, those critics continued, because the new threat is no longer the government but the corporations. Today's right has broadened the list of threats to include academia, the old mass media, the new digital-age media, and other institutions. (I've critiqued that old case before.)

What both forms of that objection miss is that the new threats are derived from the old one. It's "the dangerous derivative." Just as "corporate power" would be impossible without government power (see Adam Smith's view), so those other forms of power would be impossible -- or certainly much less formidable -- without government power. If you look closely, you can see this principle in horrifying action with the housing bust and financial fiasco of 2008. (See my "Wall Street Couldn't Have Done It Alone.")

What explains this principle of derivation? It is the government's exclusive "legitimated" power to initiate force: the assumed authority to give orders compelling people who have violated no rights to do some things and not do other things. Only individuals who hold certain positions in government use compulsion legally. Try collecting charitable donations by force from your neighbors or preventing them from drinking alcohol or using heroin. You'll soon see the police, which of course are personnel of the government.

In those circumstances the people with the power -- of taxation most prominently but hardly exclusively -- inevitably will use it to subsidize some members of society and impede others. For libertarians and classical liberals, this is the root of class conflict. (Marx's version was a distortion of the liberal insight.) This will happen in a representative democracy, where providing goodies is crucial to assembling voter blocs, but it also happens in autocracies, because autocrats cannot go it alone.

Without secondary access to government power, private crusaders would be unable to impose their preferences on society. Conservatives miss this point and do not see the government as fundamentally flawed. They see something they don't like and immediately look to the government to stop it. In the process, they enable their opponents to use power against them later.

Why can't the conservatives see that without such access, those who aspire to force their dubious preferences would have to resort to persuasion, which apparently is what they don't want to do? If the government could not finance education, social and hard science, and other influential stations in society -- money that always comes with strings -- the link between opinion shapers and power would be broken. Those institutions would change from state-succored monopolies or oligopolies to competitive enterprises that would have to prove their worth every day because people would be free to take their money elsewhere. The revolving door between those institutions and government agencies would be blocked, preventing the rotation of activists from nongovernment institutions to bureaucracies where they can shower benefits on their pet causes.

Taxation is merely one way that this perverse situation comes about. The power to regulate peaceful conduct is key. When the social networks complied with "suggestions" from government personnel about deleting or suppressing inconvenient posts, the network executives knew they were at the mercy of the regulatory state. Social networks were not the only sort of firm that thought it prudent to comply with government requests.

Since government power remains the exclusive source of private institutional power, the government still should be the target of those who champion liberty. It is just wrong to think, as DeSantis and others do, that we need to increase the government's power to protect liberty. Even seemingly innocuous measures, such as the legislative prohibition of wierd subjects in schools, will necessarily be vaguely written and precedent-setting for causes that conservatives oppose. (Decentralized control of schools, if we can't have a separation of school and state immediately, would be better.) We should never forget Robert Higgs's lesson about the "ratchet effect": government easily grows, but it is tough to shrink it.

TGIF: Let's NOT Go to War with China

The word that strikes fear in the power elite is China. It's not fear of an existential threat; rather it's fear that America is becoming second fiddle in world politics. As a result, some believe, or say they believe, that war with China is inevitable. For them, that's a fancy word for desirable.

Here's an idea: let's not go to war with China. China has nuclear bombs, although not nearly as many as America has. No good would come from war for the people of China, the American people, or almost everyone else if you don't count the advocates of centralized authoritarian power here and the military-industrial complex. They will make out like bandits and murderers.

The limited choice between regarding China as an enemy (or adversary) and as a competitor is bogus. It's neither. China is a country with lots of people. Yes, it has a bad centralized government that tells people in some ways what to do. But it's neither "our" enemy nor "our" competitor. When Americans buy goods assembled in China (though the parts were made in many other places), they are cooperating, indirectly at least, with Chinese individuals acting together as a business firm. American consumers do not compete with Chinese manufacturers. If an American company makes a product that a Chinese firm also makes and exports, that is competition, but it's against the Chinese firm not the nation of China.

We have to get over seeing the world economy as a race among nation-states. That attitude leads to limits on freedom here, such as tariffs and quotas. Despite much government interference, including from the U.S. government, we still have a world market, and that means a worldwide division of labor, which is cooperation.

No one who values individual liberty would want to live under the Chinese government. No political liberty exists, and economic liberalization is limited. Further, the Chinese government reportedly enslaves one or more groups. Whether that is true, I do not know. But it's not grounds for war, whether nuclear or conventional.

The Chinese government, of course, looks after its security in its neighborhood, just as the U.S. government does -- except that the U.S. government sees the whole world as its neighborhood. It surely doesn't help that the U.S. government conducts war exercises with Taiwan. China is the target. I presume China spies on the United States, but the U.S. government spies on everyone, as we know from recent revelations. It's what big (and smaller) powers do. Hide your secrets better.

Whatever the merits or demerits of the dispute over Taiwan, it is not a matter for the U.S. government. Its claim to be acting for American security is about as believable as a Federal Reserve chairman declaring the American banking system sound. Taiwan, Hong Kong, and some small islands in the South China Sea are not our concern, not if we care about our own liberty and prosperity, not to mention the rest of the world's. Needless to say, decent people will wish everyone in that region life, liberty, and the freedom to pursue happiness, but a war won't bring those things.

The concern over China affects other issues, as to be expected. The latest is social networking in the form of TikTok, a social network that 150 million Americans use. Joe Biden and congressional Republicans and Democrats (with honorable exceptions like Sen. Rand Paul) want to ban TikTok because it's owned by a Chinese company and the Chinese government allegedly uses it, or may use it, to gather information about Americans. This is denied by TikTok's CEO, who is not Chinese and who has American partners.

The irony here is that the Chinese government notoriously bans and restricts social networks for its people to keep them from learning what the communist party doesn't want them to learn. In other words, those who would have the U.S. government ban or otherwise interfere with TikTok want the government to be more like the Chinese Communist Party. I can't find the sense in that.

As we well know the U.S. government has routinely pressured American social networks to ban or restrict information and opinions it did not want the American people to learn. Do we want to give this government even more power? That's exactly what members of Congress would do; pending legislation (acronym RESTRICT Act) would give the commerce secretary ominously broad and vaguely defined power to interfere with any social network allegedly to protect us from "foreign" influence. You know that can't be a good idea. The government's record to date in his regard is alarming. Government-connected organizations and individuals have interfered with the free exchange of ideas over the social networks by claiming that the sources of those ideas are foreign adversaries when in fact they came from Americans, as the Twitter Files about Hamilton 68 have disclosed.

Finally, China surprised everyone by facilitating renewed diplomatic relations between Iran and Saudi Arabia. This is good for several reasons, among them: it signals a waning of America's role as the self-appointed world guardian. One hopes it will also formally end the brutal Saudi war against the Yemeni people. It should also thwart the U.S. and Israeli governments' ambition for war with, or capitulation of, Iran and undermine the pursuit of the Abraham Accords, begun under American arms-salesman-in-chief Donald Trump, which aim for a united front against Iran and further marginalization of the Palestinians. The Israeli and the U.S. governments have wanted Saudi Arabia to sign such an accord. (Why hasn't Biden reinstated the nuclear deal with Iran, which his old boss Barack Obama signed, and end the cruel sanctions against the Iranian people?)

I've heard commentators dismiss China's Middle East diplomacy as naked self-interest because China buys Saudi and Iranian oil and wants uninterrupted commercial relations with both. But if China's self-interest lies in substituting diplomacy for war, what's wrong with that? Rational self-interest is a feature, not a bug. There are signs that China may do something similar with Ukraine and Russia. (Zelensky, but not Biden, says he's interested.) A ceasefire should have been arranged a long time ago.

The American state has been a force for global disruption, misery, and war for a long time. Its repeated bullying over sanctions, regime-change operations, and covert and overt warfare have increasingly disgusted much of the world, which is fed up with the dominance of "the exceptional nation." That had to happen sooner or later. The U.S. government cannot design a world order. It's time to liquidate the empire and come home. It not only harms foreigners but also makes Americans unfree and poorer.

Conversation on Bro History Podcast

I had a great conversation on Zionism, antisemitism, and the Palestine question with Henry Szamota and Danny Abdeljabbar on the Bro History podcast, which you can find in all the usual podcast places. Or listen here. I hope you enjoy it.

Interview on Agora: The Podcast

I was recently interviewed by the hosts of Agora: The Podcast. We talked about the political landscape, my own political development over 50 years, and more. Have a listen here.