Producers, Consumers and the General Welfare

Every now and then, I come across a quote in my reading which seems particularly relevant to current events. This is one of those.

Each of us is producer and also a consumer. However, we are much more specialized and devote a much larger fraction of our attentions to our activity as a producer than as a consumer. We consume literally thousands if not millions of items. The result is that people in the same trade, like barbers or physicians, all have an intense interest in the specific problems of this trade and are willing to devote considerable energy to doing something about them...The groups that have a special interest...are concentrated groups to whom the issue makes a great deal of difference. The public interest is widely dispersed. In consequence...producer groups will invariably have a much stronger influence on legislative action and the powers that be than the widely spread consumer interest.

--Milton Friedman, from Capitalism and Freedom, quoted in The Regulation of Medical Care: Is the Price Too High by John Goodman, pg 95.

This quote nicely explains the source of the incentive to organize and lobby as a special interest group. The problem of special interests arises because we have allowed them to gain customized favors through the political process. The solution is to eliminate all possibility of special treatment for any group or individual by consistently applying equality before the law.

This is the proper understanding of "promote the general welfare." If a law does not treat all parts of society equally, then is it not promoting the general welfare but instead is promoting a special welfare of some at the expense of others.

The consistent application principle of individual rights includes the corollary principles of equality before the law and the promotion of the general welfare. Properly understood and implemented, these principles will protect us from the natural tendency of organized special interests groups to obtain special favors or privileges at the expense of the rest. These principles guide us in forming laws so that there are no legal conflicts of interests between rational men.

Debate on Dead Aid

I just finished reading Dead Aid by Dambisa Moyo.

Her primary thesis is that not only has aid not helped to end poverty (a view also held by William Easterly: The White Man's Burden and The Elusive Quest for Growth, Peter Bauer, and others) but on balance, aid does more harm than good.

Moyo has a PhD in economics, interestingly obtained under the tutelage of foreign aid advocate, Dr. Paul Collier (The Bottom Billion).

The book is short and quickly glosses over multiple topics. For someone unfamiliar with the history and controversies surrounding foreign aid, this book could be one good place to start --but as a defense of her thesis, it falls short. Her arguments are plausible, especially for someone already skeptical of government intervention into economic affairs. A convincing presentation, however, would require much more empirical data and analysis in order to substantiate the claims.

Wanting to obtain an opposing point of view, I asked my favorite Keynesian for his recommendation--and he sent me the link to Stephen Lewis' segment in the following debate. I highly recommend watching at least the opening statements of this star panel which in addition to Lewis includes Moyo, Collier and Hernando de Soto (The Mystery of Capital).

The 2009 Munk Debates: "Be it resolved, foreign aid does more harm than good"

Part 1 of 15 - Intro

Part 2 of 15

Part 3 of 15

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Part 5 of 15

Part 6 of 15, Part 7 of 15, Part 8 of 15, Part 9 of 15 , Part 10 of 15

Part 11 of 15, Part 12 of 15 , Part 13 of 15 , Part 14 of 15, Part 15 0f 15

Nurturing the Wealth Creators

At my son's graduation for the local government high school, all of the speakers were politicians--the mayor and our national congressional representative. It struck me even then, why no businessmen? I know of several members in our community who work in businesses doing world-changing work. My first reaction was pretty cynical--well of course a government school promotes politicians. But after seeing the clip below, I thought about how the bias goes further than public school. I know of no private school that teaches entrepreneurship either.

Entrepreneurs and businessmen are wealth creators. Without the middlemen to bring the bacon to market--we'd have to all live on a farm. They deserve our admiration, and our nurturing when young.




Caveat: Just because I post something doesn't mean that I endorse every single thing within it--whether an article or a video clip.

Putting the oil spill in perspective

The Deepwater Horizon oil spill has directly caused the loss of 11 lives and will result in extensive ecological and economic damage. Just as physicians obtain malpractice insurance in order to compensate patients for the inevitable occurrence of injury due to unintentional error, we rightfully expect oil companies to make similar provisions to mitigate the damage caused by their business activities. However, a reasonable degree of responsibility must be based on a full context of the character of human activity. Amidst the hue and cry, name-calling, finger pointing, and calls for retribution against BP and a halt to off-shore drilling, three authors stand out for their articles reminding us of the wider context which we must hold while evaluating the benefits and costs of drilling for oil.

Boston.com columnist Jeff Jacoby reminds us that "Oil fuels better lives," pointing out the importance and value of oil to the quality and even the quantity of modern life--both in numbers of human beings the earth can support, as well as individual longevity.

Awful as the catastrophe has been, however, life without oil would be far, far worse.

Americans consume oil not because they are “addicted’’ to it, but because it enriches their lives, making possible prosperity, comfort, and mobility that would have been all but unimaginable just a few generations ago. Almost by definition, an addiction is something one is healthier without. But oil-based energy improves human health and reduces poverty — it makes life longer, safer, and better. Addictions debase life. Oil improves and expands it.

Alex Epstein, a regular contributor to Voices for Reason and Pajamas Media, demonstrates the importance of oil to the simple daily occurrence of a bacon and eggs breakfast, as well as the life saving materials and technology of modern surgery.

Blogger Stephen Bourque of One Reality uniquely identifies the relative scale of the BP oil spill compared to the much larger man-made disasters central planning and government usurpation of fundamental liberties.

Mr. Obama was brazen enough to say, after describing the damage done by the oil spill, “We cannot consign our children to this future.”[Note 2, emphasis mine.] There is simply no comparison between the damage of the oil spill, large as it is, and the utter long-term devastation that the Obama administration, the Federal Reserve, and the Democrats on Capitol Hill have wreaked. (By the way, I’m focusing on President Obama here, but the same criticism applies to Bush, Paulson, etc.)

Free minds and free men are the key to solving whatever challenges we encounter. The most crucial environment to preserve is the social system which ruthlessly and consistently protects individual rights and systematically eliminates the initiation of force as a legitimate means of achieving any end.

Worse than the explosion of one oil rig, is the explosion of government mandates, taxes and debt which act as a ball-and-chain on ingenuity and industriousness. Worse than the slimy oil slick creeping into estuaries and suffocating the wildlife are the myriad of regulations and bureaucrats suffocating innovation and production in the name of safety. But worst of all is the toxic contamination of the civic mindset that freedom has failed and the solution is to relinquish ever greater amounts of control and responsibility to the central authority of the state.

We must not consign our children to a future in which they are born thousands of dollars in debt, legally obligated to live and work as servants indentured to the community, or with a legacy of dependency and statism replacing one of self-reliance and liberty.

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Living for yourself is not living only for yourself

This is the second of three installments aimed at addressing points made in comments to a previous post. In the first, I explained why I do not think advocating for voluntary funding of government is utopian (i.e. naive or unrealistic). Here, I would like to address another misconception: that in defending an individual’s right to be either persuaded or left alone, I am advocating we all “live only for ourselves.”

I do not “live only for myself”—nor is that what I advocate or promote. I am, however, insisting that each person has the right to exist for his or her own sake and that no one has any unchosen obligations. If a person chooses to be an antisocial recluse—that is their business, and I think, their loss as well. I am simply arguing that it is never right to do by ballot what you would never consider doing as an individual. One example would be demanding at the point of a gun that someone hand over his honestly earned money.

I do not advocate for any right which cannot be applied equally to all. It is this principle of non-contradictory individual rights which creates the barriers to stop each of us from infringing on others.

The basic political question is not “should I value and give my time to others?” (That is an important moral question--but not all that has to do with morals belongs in politics. Morals have to do with right and wrong in general; politics has to do with right and wrong in a social context, especially as related to the institutional use of force.) A fundamental political question is "If I don’t see the value in something, should my neighbors be able to gang up on me and force me into certain actions, regardless of my own judgment?"

Frequently it is postulated that either we put others before ourselves or we put ourselves before others. These two opposing alternatives do not exhaust the possibilities. The alternative I support is as follows: The respect for and valuing of other people is an extension of the respect for and valuing of my own life. My right to live for my own sake does not exist separate from the right of others to live for their own sake. My life is much richer for the interactions and exchanges I have with other people. Provided we keep our interactions voluntary, we have much to gain from sharing our lives, time, riches and values with other human beings.

When steeped in this mutual respect, people are of bountiful value to each other, not as supplicants or duty-bound servants, but as equals. When these rules of proper social interaction are codified in law, we can live amongst each other secure in our person and property, peacefully in freedom, with government acting solely as objective arbitrator and the protector of each and everyone's individual rights.

Up next: Voluntary taxes: How could it possibly work?

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