Heather Wilhelm has posted a response to critics of her Wall Street Journal column arguing that Ayn Rand is bad for the free market cause. I was one of those critics, even though I have many reservations about Rand myself. Wilhelm’s response concedes that Rand may have had some value for free market advocates, but claims that the emphasis on Rand today makes it harder for libertarians to appeal to the political middle by making the case that free markets benefit all of society:
The main point of the article, which I think is pretty clearly articulated in the last paragraph, is this: For the free market movement to succeed in this day and age, it needs to continually stress the moral case for economic liberty. This is why the political left has been so successful. They have convinced the majority of the population that big government is the only thing in society that truly and effectively “cares”.
Ayn Rand has done a lot of things for the free market movement, and, as I point out in the piece, she has influenced many key people who have made progress in terms of advancing political liberty….
What I’m critiquing, and I state this explicitly, is the current fixation on Rand, which I think is counterproductive. I’m not saying everyone should throw Ayn Rand or her ideas out the window. I’m saying we have to be smarter in how we present free market ideas to the political middle—the people who are ultimately going to determine whether we live in a collectivist society or not. Ayn Rand does a lot of things, but she doesn’t effectively communicate the power of free markets to improve the lives of people–all people, including the poor and disadvantaged–around the world.
Rand inspires many people. Unfortunately, some of her fans have succumbed to a sense of cultlike dogma, where any attack on Rand is heresy….
Free market supporters won’t get anywhere if we can’t adapt our message to our target audience—and if you look around at what’s happening, the free market movement at large isn’t exactly knocking the ball out of the park.
I certainly agree that Rand shouldn’t be worshipped as a “cult” figure, and that free market advocates could do a better job of adapting their message to different audiences. At the same time, I still think that Wilhelm’s argument misses her target. First and most important, she fails to come to grips with the obvious fact that Rand was – and remains – the most successful modern popularizer of libertarian ideas. Millions of people continue to buy her books and be influenced by them. And far from all of these people are already committed free market supporters – as shown by the fact that many of today’s free market advocates got that way in part as a result of reading Rand. Second, as I noted in my original post criticizing Wilhelm, Rand’s work does include important elements focusing on the benefits of free markets for ordinary people and they way in which government planning harms them. This is one of the main themes of Rand’s most famous book, Atlas Shrugged.
Third, Rand’s message that big government unjustly confiscates the property of successful wealthy entrepreneurs may have more appeal to “the political middle” than Wilhelm believes. For example, a recent Tax Foundation poll shows that some 66% of Americans believe that no one should have to pay more than 19% of their income in taxes (including all levels of government), and 88% say that no one should have to pay more than 29%. These are of course far lower percentages than the current income tax burden on the wealthy, or even the middle class. The same poll also shows that some two thirds want to abolish the estate tax completely. The average American isn’t nearly as supportive of entrepreneurs as Rand was; but they do seem open to the idea that these people should have more freedom and keep more of their income than they do under status quo policies.
Finally, I completely agree that free market advocates shouldn’t be “fixated” on Rand and that we must make the case that strict limits on government power benefit the vast majority of people, including the poor – an argument that has been a major theme of my own work (see here for some links). But I see little evidence that we are neglecting such arguments in favor of some distinctively Randian message. Virtually all the major pro-free market think tanks, activist groups, and scholars spend most of their time making exactly the kind of arguments that Wilhelm recommends. That’s the central focus of the Cato Institute, the Heritage Foundation, the Institute for Justice, most libertarian academics, and nearly every other pro-market organization with any prominence. I’m certainly open to the idea that we can do a better job of making our case. We have made many mistakes. But an unhealthy “fixation” on Rand isn’t one of them. Indeed, Rand’s success in reaching so many more people than other free market advocates suggests that the rest of us should do more to learn from her achievements.
UPDATE: I should mention that there is little evidence to support Wilhelm’s point that “the left” has successfully persuaded the public that “big government is the only thing in society that truly and effectively ‘cares’” To the contrary, public trust in government is very low, and 57% of Americans say they think that the federal government is doing too many things that should be left to the private sector. Polls routinely show that members of Congress are among the least trusted and most negatively regarded of all professions (see e.g. here and here) – right down there with us lawyers. Free market advocates’ inability to persuade the general public isn’t due to an optimistic belief that government really “cares.” Rather, it is a result of a wide range of other factors, including the inability or unwillingness of many voters to connect their general distrust of government to specific policy issues such as health care, education, and environmental protection.
Dennis D says:
I have always felt that some protectionism of American Markets was the conservative position. How we arrived at this free market insanity is beyond me. Now we have lost our markets to China, Japan and others
December 6, 2009, 7:04 pmstephen says:
The worst publicity for Rand are the 18-27 year old males walking around campus trying to be their own version of Roark, but they come off as emotionless automatons who could care less about any human emotion, or see emotion as a weakness. It is so un-human and downright weird. I find many of them to be social outcasts who discover Rand and then embrace their social status as outsider to be some higher moral being. But this often results in condescension, not unlike Rand I suppose.
December 6, 2009, 7:10 pmIlya Somin says:
The worst publicity for Rand are the 18–27 year old males walking around campus trying to be their own version of Roark, but they come off as emotionless automatons who could care less about any human emotion, or see emotion as a weakness. It is so un-human and downright weird. I find many of them to be social outcasts…
There are certainly college campus jerks who are attracted to Rand. On the other hand, there are plenty of campus jerks who are leftists, hard-core conservatives, and non-Randian libertarians. I think any non-mainstream political movement is likely to attract a disproportionate number of “social outcasts” because they have less to lose by adopting unpopular ideas.
December 6, 2009, 7:15 pmAnthony says:
I think Wilhelm’s point is about mainstreaming, though: if you want to really influence the world, you need to figure out a way to move your idea set into the mainstream. Traditionally, doing so involves hiding or ejecting your radicals, such as Ayn Rand.
December 6, 2009, 7:45 pmrpt says:
This is a feature, not a bug. The beneficiaries of “free trade” policies have no particular national loyalty to the United States. Lower wages, benefits and standards of living here, and everywhere, are a good thing for them.
December 6, 2009, 8:05 pmOrson Buggeigh says:
Slight correction – first sentence should read ‘Ayn Rand’ not ‘Any Rand.’ Otherwise, interesting post.
December 6, 2009, 8:06 pmJavert says:
The right has been compromising and appeasing for decades, and has lost the battle of ideas because of it. How on earth does Wilhelm expect to win the intellectual fight for capitalism and individualism by re-branding them as some sort of middle-of-the-roadism? A country’s intellectuals are supposed to teach and lead, not conduct market studies and take polls.
December 6, 2009, 8:38 pmMark Field says:
I’m trying to figure out what the last sentence of this quote might refer to. With some help from teh Google, I found this:
“The Congressional Budget Office study found that a person in the middle of the income distribution (the middle fifth, if you divide the population by fifths according to income) paid an effective federal tax rate of 14.2 percent in 2005, while a person in the one percent of the population with the highest income had a effective tax rate of 31.2 percent.”
According to the chart here, the 2008 tax rate didn’t reach 30% until earnings topped $500,000, and most taxpayers are far below this.
Do you have some data to cite to?
December 6, 2009, 8:41 pmsteve s says:
The idea of great men in our society, I have never met one, and the fact that women should serve and look up to those men puts a damper on selling her. There are better ways to sell the ideals of liberty, though it does appeal to young guys.
Steve
December 6, 2009, 9:12 pmIlya Somin says:
“The Congressional Budget Office study found that a person in the middle of the income distribution (the middle fifth, if you divide the population by fifths according to income) paid an effective federal tax rate of 14.2 percent in 2005, while a person in the one percent of the population with the highest income had a effective tax rate of 31.2 percent.”
This refers only to federal income taxes, and excludes state taxes, sales taxes, and federal payroll taxes (which alone are about 9% of income for middle class people earning under the 90,000 level). By contrast, the Tax Foundation question explicitly referred to all taxes from all levels of government.
December 6, 2009, 9:15 pmIlya Somin says:
Dennis D: I have always felt that some protectionism of American Markets was the conservative position. How we arrived at this free market insanity is beyond me. Now we have lost our markets to China, Japan and others
This is a feature, not a bug. The beneficiaries of “free trade” policies have no particular national loyalty to the United States. Lower wages, benefits and standards of living here, and everywhere, are a good thing for them.
actually, the overwhelming consensus among economists, right and left, is that free trade leads to increased standards of living, both here and abroad.
December 6, 2009, 9:16 pmIlya Somin says:
Orson Buggeigh says:
Slight correction — first sentence should read ‘Ayn Rand’ not ‘Any Rand.’
Thanks! I have corrected this typo.
December 6, 2009, 9:17 pmOwen H. says:
So far, the vast majority of those claiming to support “free market” policies, in fact do not. Free Markets require not only the free transfer of goods and capital across international borders, but labor as well. And I have yet to see any support for that at all.
“Two novels can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other involves orcs.”
December 6, 2009, 9:19 pmAnderson says:
Rand’s message that big government unjustly confiscates the property of successful wealthy entrepreneurs
… few if any of whom would have become wealthy without the infrastructure, the rule of law, and the other facilitating factors provided by “big government” and funded by the taxes “confiscated” from those whinging narcissists.
Whinging is never attractive, but whinging *rich* people? Fuck ‘em.
December 6, 2009, 9:26 pmrpt says:
Prof:
I would not be surprised that to be the consensus of the economics profession, but is it actually and provably true?
December 6, 2009, 9:33 pmTodd says:
I think the left has been successful at moralizing to sell their agenda or oppose the right’s attempts at scaling back gov’t (ie, Gingrich who stole Christmas, etc) and I agree the right has not been as effective making moral counter arguments.
For instance, I recently saw a Ron Paul appearance on Ed Schultz’s show from earlier in the year (http://www.youtube.com/watch?v=DfuvndfA1jw), in which Paul pretty much pwned Ed on the merits, but did not effectively counter Ed’s criticism Paul’s desire to eliminate the Dept. of Agriculture somehow meant the nation wouldn’t get safe food! How I wished Paul would’ve asked Ed which federal department akin to the FDA makes sure lighting, ovens, toasters and other consumer electronics were safe! The UL labs, funded by fees paid by companies who want the UL seal of approval, does all this privately! Indeed, why aren’t UL labs also doing the same for pharmaceuticals & food?
Is it moral to make the poor and elderly dependent on politicians for their well being? Is it moral to make income earners effectively work for the government against their will for whatever “progressive” percentage the politicians demand?
The thing is, the right, especially the religious right, needs to square good civics with their own moral views and understand no law can make any person be moral or act moral. Life, liberty, property. Those are the bedrock rights. Libertarians need leaders with strong moral conviction and willingness to appeal to the moral senses of the masses – while reminding them God can judge the hearts of men and dish out whatever punishment he sees fit. The moral job of the state is to simply protect individual rights: life, liberty, property.
The more the left is cast as moralizing busybody do-gooders, which they undoubtedly are, the better. The problem is the right is full of ‘em too. I don’t mind moralizing, per se, but loathe it when it is employed via the coercive apparatus of the state.
And in this, I think Rand was on to something, her awful metaphysics notwithstanding. The state is full of looters, from the entitlement mentality of the poor classes to the graft, subsidies and protectionism of the wealthy classes. It is wrong to take what isn’t yours without consent of the one you from whom it is being taken. Even if the law says so.
Bastiat’s The Law should be required reading for every high school government class.
December 6, 2009, 10:08 pm24AheadDotCom says:
Of course she shouldn’t be worshiped like a cult leader, but the lessons she taught us still resonate today and would resonate even more if only most people would give her a chance. Not only is she the heart and soul of the libertarian movement, but also of the tea parties movement. At every rally you can find dozens of Galt references, and many rightwing sources – whether Prof. Glenn Reynolds or Reason Magazine – are infused with her wise teachings.
We don’t need less Rand, we need more and we need to make her even more the centerpiece of the libertarian and tea party movements.
December 6, 2009, 10:17 pmMark Field says:
I looked for income taxes because you specifically said “income taxes”. State income tax rates could not possibly take the percentage over 30% except at the very highest levels.
December 6, 2009, 10:33 pmcatchy says:
Could we get an example of an advocate of libertarianism who you won’t write in favor of?
It seems it doesn’t matter how crazy or callous they are.
If Rand, Beck, whomever, support the cause of libertarianism they receive (qualified) praise from you.
For future posts, and in the interest of being succinct, might I suggest the phrase ‘libertarianism uber alles’?
December 6, 2009, 10:33 pmRicardo says:
Maybe a clearer way of stating the problem is that Objectivism attracts a disproportionate number of socially awkward nerds. This is a problem because a movement that aims to influence people needs to have leaders who are charismatic and who can use their social skills to attract adherents rather than people who will revel in their outsider status. “Social outcasts” rarely become leaders.
On a somewhat related note, I will point out that the College Republicans are a relatively popular student group at Berkeley. I suspect this has to do with the leadership of the organization at both the national and campus level: people have found out how to make being a Republican appealing at least to a large enough subset of young people.
December 6, 2009, 10:43 pmcatchy says:
“some 66% of Americans believe that no one should have to pay more than 19% of their income in taxes (including all levels of government), and 88% say that no one should have to pay more than 29%. These are of course far lower percentages than the current income tax burden on the wealthy, or even the middle class.”
This is false for a # of reasons.
Most of the middle class don’t pay close to 29%. Most pay around 25%, including all levels. I know this b/c I read the NY Times. Look it up yourself.
Re: the wealthy, I know that the top 400 families in the US payed an effective rate of 17.2% on federal income b/c I looked it up. The chances that they paid over 29% when factoring in state and local income taxes isn’t credible.
You were probably thinking that the marginal rate for wages and salaries is 35% for the welathiest but forgetting that income from investments is taxed at about 15%.
http://www.ctj.org/pdf/irstop400.pdf
Ilya, please look up readily available and basic tax data before spouting off. It’s actually a little disturbing that you’re so misinformed. MAkes me think you’re reading propaganda or something.
December 6, 2009, 10:54 pmTwirlip says:
Probably true. “Free trade” very frequently means “trade I like”.
Untrue. Unless you think that e.g. Milton Friedman was not a believer in free markets. The whole point of free trade is that you don’t need to have Swiss cuckoo clock makers come to America to make you a cuckoo clock. You trade for it. The “free movement of labor” people are merely cultural leftists looking for an opening.
December 6, 2009, 11:47 pmTwirlip says:
Then by all means, let us begin to engage in some free trade. Because our current trade relationship with China is not that. It is the distilled essence of mercantilism.
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December 7, 2009, 12:05 amRicardo says:
In fact, Friedman based his opposition to literally open borders on the fact that the U.S. has a welfare state, that it is not getting rid of the welfare state anytime soon and that it is not politically palatable to exclude foreigners from the same benefits everyone else gets. In other words, he did not reject free movement of labor out of hand but saw instead that the reality of the welfare state meant that completely free movement of labor was untenable. Overall, Friedman was very pro-immigration as this bit of heresy makes clear:
December 7, 2009, 12:05 amDiana Hsieh says:
Ayn Rand’s “Atlas Shrugged” is an eye-opening experience — not just for its prescient grasp of politics, but for its radical philosophy of rational selfishness. That’s what so many need-focused libertarians like Heather Wilhelm can’t accept — and usually don’t understand. The same applies to most commenters here, unfortunately.
Anyone interested in studying the actual events, characters, and ideas of the novel in more depth will likely find my podcasts of great help. (Six of twenty are done so far.) Find them here:
http://www.ExploreAtlasShrugged.com
– Diana Hsieh. Ph.D, Philosophy
December 7, 2009, 12:20 am– http://www.DianaHsieh.com
Eric K. says:
As with free trade, I would not count on beliefs about tax burdens to broaden the tax base and equalize rates. What people vote and what they believe are two different things. Regardless of what one believes is the proper maximum tax %, they are unlikely to vote based on this issue unless they are in a bracket above that %.
December 7, 2009, 12:35 amAnthony says:
And like many polls, this result is worth less than the paper it’s written on. Everyone is in favor of tax reduction in the abstract; what matters is the point at which tax reduction becomes a higher priority than what taxes pay for. How do you think the same people would respond if told “In order to reduce taxes to those rates, we will have to make the following cuts..”, assuming the cuts are actually realistic.
December 7, 2009, 1:27 amAnthony says:
And like many polls, this result is worth less than the paper it’s written on. Everyone is in favor of tax reduction in the abstract; what matters is the point at which tax reduction becomes a higher priority than what taxes pay for. How do you think the same people would respond if told “In order to reduce taxes to those rates, we will have to make the following cuts..”, assuming the cuts are actually realistic.
December 7, 2009, 1:27 amAmerican Psikhushka says:
Ilya-
Finally, I completely agree that free market advocates shouldn’t be “fixated” on Rand and that we must make the case that strict limits on government power benefit the vast majority of people, including the poor — an argument that has been a major theme of my own work (see here for some links). But I see little evidence that we are neglecting such arguments in favor of some distinctively Randian message. Virtually all the major pro-free market think tanks, activist groups, and scholars spend most of their time making exactly the kind of arguments that Wilhelm recommends. That’s the central focus of the Cato Institute, the Heritage Foundation, the Institute for Justice, most libertarian academics, and nearly every other pro-market organization with any prominence.
The thing is that the emotional arguments the leftist and big government types (both left and right) make are very difficult to counter. The “rich need to pay their fair share”, “the rich can afford to pay more”, etc. are very appealing on a simple, visceral level.
It goes back to Bastiat and the Seen vs. Unseen essay. The politician says they’re going to create some government jobs, but no one sees that the taxes taken to fund them would have created more private sector jobs. The average person doesn’t equate higher taxes with a weaker and slowing or shrinking economy, that is unseen to them. So they keep voting for politicians that keep increasing taxes, and then everyone (except a few) wonder why the economy is weaker.
December 7, 2009, 1:32 amAmerican Psikhushka says:
Anderson-
… few if any of whom would have become wealthy without the infrastructure, the rule of law, and the other facilitating factors provided by “big government” and funded by the taxes “confiscated” from those whinging narcissists.
Not quite. The infrastructure was there for everyone else as well, why aren’t they rich? By your logic if it was due to the infrastructure then everyone should be rich. The fact is most of them created value and were rewarded for it.
And besides, the basic services necessary for a stable society and economy are a small part of the budget.
Whinging is never attractive, but whinging *rich* people? Fuck ‘em.
I wouldn’t call it “whinging”. But what happens when they stop “whinging” and leave or reduce their labor because they get tired of being overtaxed? See here. Who are you going to tax then, the poor? Woodland animals? Oh, that’s right, you can’t tax or redistribute your way to prosperity, you just destroy your economy that way.
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December 7, 2009, 6:36 amArkady says:
Lessee, 10% unemployment (real un- and underemployment estimated to be around 17%), and then we have:
Goldman Sachs bankers on course for $19bn pay and bonuses
After, of course, teh bailouts. Now, I submit that advocates of a more unrestrained capitalism — and of the capitalist as existential hero — have a very hard row to hoe in overcoming the perception of not a few folks that, at the highest levels, capitalism benefits the very few while the rest of us get screwed. The “optics” ain’t good, and flourishing AS and proclaiming the capitalist übermench won’t advance the cause.
And
Get real. Judging from recent history, they won’t leave — where the hell are they going to go? — but they will try to hide their money in offshore accounts…which leaves the rest of us to pick up the tax slack.
December 7, 2009, 6:49 amArkady says:
And BTW, I don’t mean to be understood as not appreciating all the libertarian to-and-fro that goes on hereabouts. (I have to say, though, I don’t find all the debate nearly as interesting as the red vs green kryptonite debate.) But really guys, these debates are carried on at such a level of abstraction that one seeks in vain for a real-world tether for it all.
In the meantime, when a real deprivation of liberty is about to take place, one looks, without satisfaction, to the VC for any commentary (at least I haven’t found any). I’m speaking here of the about-to-be implemented provisions of the Real Id Act. How many readers of the VC know that if you live in a state that has not adopted the provisions of the Act that after Dec. 31, you will have to present a passport to travel within the United States? A fucking passport to travel within your own country! Now, if you don’t think that’s liberty infringing, well, I don’t know what would be in your mind. And yet, as I said, nary a peep around this place.
December 7, 2009, 8:14 amStormy Dragon says:
This seems an odd criticism of Rand given that one of the big differences between her and many of her libertarian contemporaries is that Rand was the first to broadly argue for libertarianism as being moral in and of itself rather than on purely consequentialist grounds.
December 7, 2009, 8:36 amSteve Simpson says:
I’ve been critical of your posts on Ayn Rand before, Ilya, so let me say that this is a very good one. Thanks.
December 7, 2009, 9:54 amTodd says:
What you reference isn’t laissez faire capitalism. “Hands off” goes both ways and the level of government regulatory intrusion (Fannie/Freddie/Comm. Reinvestment Act) and hand outs to the “too big to fail” wealthy is hardly “unrestrained capitalism”!
December 7, 2009, 9:57 amWht9 says:
Randian crap just never goes away. No matter how many times the real world shows just how idiotic a selfish world view turns out to be, it just keeps coming back. Why, because the follower are delusional. They believe in the aspirational nature of the fiction, without wanting to deal with the realism of the results.
Never once do Randians stop and think, “What if part of this works, but overall the idea just leads people taking advantage of others and eventual backlash” Never once do they question whether the results seen so far, justify the initial belief.
A football analogy (yes it is simplistic). Team is positive it can run against another team. For the entire first half they gain a total of 10 yards trying to run it up the middle. At half time players start pointing out that it might be a good idea to throw a lot more. But, no the coach is positive that the team can run, they just are not executing it correctly or running the right plays. In the second half they start running sweeps, draws, counters, tosses. The result – same as before about nine yards.
This is randians worldview. No matter how many examples of their ideas falling short, they explain them away. Usually with the “not free enough” mantra with regard to the markets. But that isnt how the world works, it never has. Give me one other example where an idea only works if you go all in…meaning that when only seen in increments it seems like a total failure and complete failure, but when implemented completely it is the most amazing thing ever.
I cant think of a single example. Usually you would see gradual improvements that would than lead to further implementation.
That is Randians in a nutshell. They are the Scientologists of economic theory.
Also – how do Randians explain China – I would never argue that it operates a Free Market. If you apply China and the US relationship to modern Randian models, it fits perfect though. China is the individual utilizing and manipulating the market to benefit itself at the expense of others (the US). In this case the US is the dupes, and the Randians are the ones encouraging us to be the idiots and invest in Madoff.
December 7, 2009, 10:24 amJavert says:
And you never even heard of individuals such as Thomas Edison? Ayn Rand never said to “serve” such individuals. She said to admire and protect them — for the fate of human progress depends on their existence.
December 7, 2009, 10:32 amAnderson says:
But what happens when they stop “whinging” and leave or reduce their labor because they get tired of being overtaxed?
IF and WHEN that happens, then the tax rates can be adjusted.
But those whose grasp of human nature slightly exceeds Ayn Rands’s — that is to say, 99.9% of the population — can figure out that entrepreneurs are driven by their emotions and desires more than by any cost-benefit analysis. They do what they do because they’re good at it, they like to compete, they like to succeed. And at the end of the day, even though they do write large checks to the IRS, they still have lots of money to play with thereafter.
The spoiled-child, take-my-toys-and-go-home “entrepreneurs” that Randians identify with in Atlas Shrugged bear little relation to real human beings … as is true of the rest of her characters.
December 7, 2009, 10:51 amAnderson says:
P.S. to Javert — Edison would have chortled at the idea that he needed “protection.” Geniuses don’t sit around waiting for society to come begging on its knees.
December 7, 2009, 10:56 amWht9 says:
Have you ever read an Edison licensing agreement…not really a free market type of guy is he?
December 7, 2009, 11:40 amAeon J. Skoble says:
Wilhelm says “For the free market movement to succeed in this day and age, it needs to continually stress the moral case for economic liberty.” Talk about missing the point — this might as well be a verbatim quotation from Rand! This was the essence of her dislike of libertarians. Rand thought her system was better partly _because_ it was (she thought) the only one that made a moral case for economic liberty. I can never decide which is more irritating, the cult-of-personality-worshipfulness aspects of some of Rand’s followers, or the relentless caricature and misrepresentation of 99% of her critics.
December 7, 2009, 11:58 amAmerican Psikhushka says:
Arkady-
Goldman Sachs bankers on course for $19bn pay and bonuses
After, of course, teh bailouts. Now, I submit that advocates of a more unrestrained capitalism — and of the capitalist as existential hero — have a very hard row to hoe in overcoming the perception of not a few folks that, at the highest levels, capitalism benefits the very few while the rest of us get screwed.
Most libertarians were telling everyone and their dog not to do the bailouts. The bailouts aren’t free market capitalism, it’s regulatory capture, cronyism, etc.
Get real. Judging from recent history, they won’t leave — where the hell are they going to go? — but they will try to hide their money in offshore accounts…which leaves the rest of us to pick up the tax slack.
Read my link above. There’s already a lot of migration within the country from the high tax states to the lower tax states. There is likely also capital flight out of the country as well. Plus there are people reducing their labor, having hiring freezes, putting off expansions and acquisitions, etc.
In the meantime, when a real deprivation of liberty is about to take place, one looks, without satisfaction, to the VC for any commentary (at least I haven’t found any). I’m speaking here of the about-to-be implemented provisions of the Real Id Act.
That’s ridiculous too if true. There are so many nightmares going on at once its tough to keep up. Maybe one of the bloggers here will write about it.
December 7, 2009, 12:50 pmAmerican Psikhushka says:
Wht9-
Usually with the “not free enough” mantra with regard to the markets. But that isnt how the world works, it never has. Give me one other example where an idea only works if you go all in…meaning that when only seen in increments it seems like a total failure and complete failure, but when implemented completely it is the most amazing thing ever.
I cant think of a single example. Usually you would see gradual improvements that would than lead to further implementation.
It isn’t all or nothing, it’s a continuum. The freer you get the better off, in general, things get. But when the economy gets bad and you have things like the housing crash and foreclosure crisis, it is generally due to government intervention, impingements on economic freedom, etc.
Probably the starkest economic example you can find is South Korea versus North Korea. They have the same general climate, geography, demographics, etc. so its almost like a controlled scientific experiment.
In the Economic Freedom Index, South Korea is #40(of 179 countries), which places it in the “Moderately Free” class. South Korea exports all kinds of goods to us – Samsung electronics, Kia, Daewoo, and Hyundai cars, etc.(Note in the car sector they started making economy cars and have migrated upmarket, just like the Japanese manufacturers did before.) South Korea’s GDP per capita in 2008 was $27,700.
North Korea, which is pretty close to true communist/socialist, is ranked last – #179 out of the 179 ranked countries. It’s GDP per capita was estimated at $1,800 in 2008. There are also problems with hunger there.
That’s pretty striking (and unfortunate) evidence, yet some people still seem to think socialism and communism are viable economic systems.
December 7, 2009, 1:16 pmAmerican Psikhushka says:
Anderson-
IF and WHEN that happens, then the tax rates can be adjusted.
Read the link – it’s already happening. Google things like “capital flight”, “going Galt”, etc. to get more news articles. People are moving from the high tax states to the lower tax states. Some people are reducing their labor, putting off hiring, putting off expansions and acquisitions, etc.
There’s nothing “spoiled” about it.
December 7, 2009, 1:22 pmJavert says:
You have a grossly mistaken concept of “free market,” which does not mean every claimant gets to loot another man’s property (or, in this case, intellectual property.) Such an agreement is the free market in action — which has as a basic principle the rule of contract. A licensing agreement is just a type of contract.
December 7, 2009, 1:34 pmAmerican Psikhushka says:
Anderson-
P.S. to Javert — Edison would have chortled at the idea that he needed “protection.” Geniuses don’t sit around waiting for society to come begging on its knees.
From what I recall his rights were pretty much honored. But lots of inventors, scientists, and thinkers have come here to get their rights honored – a lot of the people who fled Nazi Germany, for instance. The property rights – among other rights – make this “the land of opportunity”.
December 7, 2009, 1:35 pmAnderson says:
57% of Americans say they think that the federal government is doing too many things that should be left to the private sector.
And given the sterling education in economics provided in American high schools and colleges, that’s certainly a considered opinion.
December 7, 2009, 3:07 pmAnderson says:
The property rights — among other rights — make this “the land of opportunity”.
Sorry, two comments ago you denied that was the case.
December 7, 2009, 3:08 pmWht9 says:
Not really. It is a contract that would likely be illegal without government interference. In most cases a licensing agreement is a restriction on the market. It constricts the markets to fewer players and manipulates the market to the benefit of a few. Its not always a bad thing, but it does create a monopoly. You should seriously go look at some of the licensing agreements. Pure anti-competitive, restrictive market orientated thought behind those. Before putting forth someone as a champion of the individual and champion of free markets everywhere .
As a side note…why are Randians not against copy right. IP is a pretty big government role in the restriction of free markets (is there a reason that IP is exempted). The argument to protect the originator doesn’t really hold up to 150 year copyrights does it? That government interference prevents the flourishing of secondary markets for almost all those works. Imagine if MS-DOS was in the public domain now instead of 2129 (at which time would it have a better economic impact being in the public domain).
December 7, 2009, 3:57 pmWht9 says:
Why use N. Korea instead of China or Vietnam. Both are anything but free economies. And even S. Korea as the foil doesnt work. Most major banks in S. Korea are partially government owned. You should look at the government involvement in Korea’s shipbuilding industry. You will probably start to see why shipbuilding moved from our nice free markets to less free ones.
North Korea is just a giant criminal enterprise that happens to also be a government. And for the most part good criminals (look up insurance fraud) actually do pretty well in N. Korea. It is almost a utopian Randian community in N. Korea. the winners have basically taken it all, and continue too. The winners do not share (why share with losers). Kim Jong is basically a model Randian. He uses his own abilities to exploit the weaknesses of others. Its not his fault that the losers keep losing, they should have known better. If you stop thinking of it as a country and more as criminal syndicate, N. Korea makes more sense.
December 7, 2009, 4:04 pmAnderson says:
Kim Jong is basically a model Randian. He uses his own abilities to exploit the weaknesses of others. Its not his fault that the losers keep losing, they should have known better. If you stop thinking of it as a country and more as criminal syndicate, N. Korea makes more sense.
Dude, I think you’ve got a book treatment in nuce there.
December 7, 2009, 4:37 pmAmerican Psikhushka says:
Anderson-
Sorry, two comments ago you denied that was the case.
No. It’s getting worse because the federal government and some states are raising taxes, causing some to migrate to lower tax states and some to leave the country or shelter assets, but fortunately it is still pretty good.(Especially in the lower tax states.) Hopefully the federal and state governments won’t mess this up further.
December 8, 2009, 9:49 amAndrew J. Lazarus says:
You know, the pseudo-surveys that ask people how much they would like to pay in taxes without saying what level of services various taxation rates can provide is like having a survey about how many calories you think chocolate cake a la mode should have. Even if you answer 10 calories a slice, it doesn’t make for a good lose-weight diet in practice.
I’m still wondering, who cleaned the toilets in Galt’s Gulch?
December 8, 2009, 11:43 amAmerican Psikhushka says:
Wht9-
Not really. It is a contract that would likely be illegal without government interference.
By that logic, so would real estate property titles, vehicle titles, etc. The state it just acknowledging ownership and issuing documentation that allow owners to protect ownership rights.
In most cases a licensing agreement is a restriction on the market. It constricts the markets to fewer players and manipulates the market to the benefit of a few.
Not quite. It just restricts others from using (or more correctly economically profiting from) their original inventions and creations without their permission. Other players in the market are free to buy or create their own inventions and creations.
As a side note…why are Randians not against copy right. IP is a pretty big government role in the restriction of free markets (is there a reason that IP is exempted).
I’m not sure about Randians, but some libertarians are against copyright. Other libertarians, including myself, feel they are mistaken.
That government interference prevents the flourishing of secondary markets for almost all those works. Imagine if MS-DOS was in the public domain now instead of 2129 (at which time would it have a better economic impact being in the public domain).
Not at all. I don’t see MS-DOS’s protection preventing Apple from making operating systems. Or people making open-source operating systems like Linux. MS-DOS is just prevalent because it’s decent and widespread because it was packaged with IBM clone computers, there’s nothing stopping anyone from making a competitor. The correct question is why do you need to profit from someone else’s work? Why can’t you create your own OS like Linux?(And it’s not like you have to start from scratch, Linux was based on open-source material.)
December 8, 2009, 2:09 pmAmerican Psikhushka says:
Wht9-
Why use N. Korea instead of China or Vietnam.
Because North Korea is still basically true socialist/communist. China and Vietnam have both moved towards more market economies or “hampered market” economies as they are referred to in Austrian School of economics.
See here on Vietnam:
“Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. Since 2001, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration.”
See here on China:
“China’s economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment.”
They have both moved towards market based economies. China’s GDP per capita is more than triple that of North Korea’s. Vietnam’s GDP per capita is approaching double that of North Korea’s.
Most major banks in S. Korea are partially government owned. You should look at the government involvement in Korea’s shipbuilding industry. You will probably start to see why shipbuilding moved from our nice free markets to less free ones.
I’m not saying South Korea is perfect. It is in the middle category of “Moderately Free” on the Economic Freedom Index, there are two categories that are considered more free.
North Korea is just a giant criminal enterprise that happens to also be a government. And for the most part good criminals (look up insurance fraud) actually do pretty well in N. Korea.
But things were bad before the current leadership. And events transpired there very similar to the other true communist/socialist countries. So North Korea doesn’t seem to be an exception to how things go in true communist or socialist countries.
It is almost a utopian Randian community in N. Korea. the winners have basically taken it all, and continue too.
Wrong. From what I understand Randian heroes become successful by inventing and selling a great product. In this process they create jobs for people along the way. I assume people choose to buy their products, because we are talking about capitalism, not a totalitarian disctatorship. This is the polar opposite of North Korea.
The winners do not share (why share with losers).
It’s not a zero-sum game. The Randian success creates lots of jobs and increases societal wealth, benefitting society. Next year someone could come along with a better product and replace them. And note that it is the public – voting with their dollars for the products they prefer – that makes the choice. Nothing is forced on them.
If you stop thinking of it as a country and more as criminal syndicate, N. Korea makes more sense.
No, things went generally the same way there that they went in the other countries that instituted true communism/socialism.
December 8, 2009, 2:38 pmRicky says:
Kim Jong is basically a model Randian. He uses his own abilities to exploit the weaknesses of others. Its not his fault that the losers keep losing, they should have known better. If you stop thinking of it as a country and more as criminal syndicate, N. Korea makes more sense.
December 14, 2009, 7:16 am