Peter Schiff is a mensch II: Interviewing OWS

Peter Schiff tries to explain that high-wage earners are often the people who provide jobs and if you tax them at too high a rate, they are likely to just stop working hard and stop risking their capital, and people whom they employ will lose their jobs.  It is a compelling narrative if you are an employer, as are both my wife and I.  Craig Carter says something similar (If You are Thankful for Your Job, Hug a Billionaire):

Every time I hear the “Tax the 1%” meme, I feel personally threatened. I feel as though someone is out to destroy the economy and create the kind of conditions in which I could, potentially, lose my job. The war against the rich is really a war against the middle class and it is based on emotional manipulation, rather than reason. The people who are involved in it may be sincere, but they are much too gullible.

Maybe economics should be a compulsory subject in high school and maybe we ought to start purging socialists out of our universities so that free market principles once again dominate the curriculum. OWS and liberal/socialist propaganda is getting out of hand and people are getting hurt.

I don’t think Peter Schiff would argue with Dr. Carter on that point.

Hat tip:  Monty Pelerin

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I am victim II: A dialogue with Steve (a progressive Christian)

Craig Carter has written an interesting post entitled, “Secular Politics Infiltrating the Church: Hell’s Scheme to Bring Down Evangelicalism.”  There I’ve entered into a rather lengthy discussion with a self-proclaimed progressive who apparently believes himself to be Christian.  I reproduce here my comments and his responses.  I think it demonstrates that while progressives claim to care about people, they really despise people and are more concerned about re-engineering society to make it more equal–who cares who dies or suffers along the way, just so long as the rich can no longer parasitically leech off of others.  I responded first to his manner in which he responds to Craig Carter and Gordon (another correspondent), while mercilessly libelling the Tea Party.  Later, I explained how progressive, with their need to enlarge the state, had forced me to renounce my US citizenship, resulting in my suffering the loss of my birth right.  The reason that I insist on telling my story about how I’ve suffered is that I still can.  Those whom the progressives around the world have murdered can no longer tell their story.

Peter W. Dunn said…

That’s amazing Steve. You praise Craig and Gordon for civil tone of their responses to you, and then insult the Tea Party, libelling them as liars. Wow. An entire movement of people who want smaller government libelled as liars. You called Ron Paul demonic.

I think you should read my blog Steve: The Righteous Investor. You could start with this:  Worship the invisible God or our modern Idols:  which? 

You wrote:

“Progressives are not trying to replace a deity through gov’t, as you suggest, but progressives do not believe in a theocracy. We believe that ended with Jesus. The gov’t should meet the needs of all people, not just those who are wealthy or favoured by majority status.”

Well with these lines you have proved Craig Carter’s main point in the post. Because a god or an idol is what we have faith in to meet all our needs. You suggest that it is government. I suggest that Jesus is still alive and that it didn’t end with Jesus but he still lives in our hearts by the Holy Spirit. I’m not advocating theocracy–like the progressives who believe in big government that meets all our needs–I believe in small government that doesn’t suck up all the oxygen in the room and thus allows other institutions, like the family and the church, to breath a little too. But you advocate government as panacea and that ultimately is evil.

The socialists, of course, reject God as Jehoveh Jireh, because they believe in government-jireh, which provides everything we need. Who needs faith in a God who strictly prohibits in his Ten Continue reading

The City of God or the City of This World: Which Christians are right about politics?

Augustine writes about the city of this world in his preface to the City of God (Penguin ed., H. Bettenson, trans.):

Therefore I cannot refrain from speaking about the city of this world, a city which aims at dominion, which holds nations in enslavement, but is itself dominated by the lust of domination.

Andrew, who is a frequent contributor on these pages, wrote a post at The City of God in which he suggests that Christians could resolve their political differences if they focussed on their common dislike of crony capitalism:

As I’ve been listening to the positions and representatives of the progressives, conservatives, and libertarians, it occurs to me that they can all agree on certain social justice matters. They can agree on the rule of law in a true sense: where the law does not favour anyone due their financial status. And this principle has many applications. I believe all three positions can agree that crony capitalism, or welfare for the rich, is not just. Conservatives and libertarians (in our context) are both supposed to be free-market, which opposes welfare as a general rule, and progressives oppose welfare for the rich in specific; why then, cannot all three wings of the church agree to co-operate in opposing this?

I really wonder, too, if focusing on just bringing our political order into accord with this one principle, in all its many applications, would not drastically improve the plight of the poor, more than any other political principle. This is something that could be challenged, but I have a feeling that it might be the single most important issue in terms of helping the poor, considered in its widest significance.

My first response to Andrew was that the problem today isn’t just crony capitalism which has become very bad lately, but then socialism exists in the form of handouts of all kinds, to the point that governments are even borrowing money to give to the poor. The end result will be a meltdown of the economy, and then reality sets in and shows that socialism can’t work.

But then I wrote a second response, which I repost here in full:

I would also like to point out that a large part of the difference between libertarians on the right and statists on the left is their understanding of the role of government. Libertarians truly desire smaller government because they rightly see government as a usurper of rights while its true role should be to protect rights. So I would wish above all to downsize government to the point where it serves the function of protector and nothing else.

The statists, on the other hand, view government as a panacea, the solution to all the woes of humanity, whether poverty, sickness, inequality or ignorance. In their quest to create the kingdom of heaven through government they enlarge the government to the point where it becomes the biggest threat to freedom–and this includes Christian freedom, because historically governments have largely failed to protect Christians but have instead murdered them by millions. This emphasis on state as panacea is fundamentally opposed to the Christian world-view that  God’s intervention only can accomplish the Kingdom of Heaven–it is not something which sinful men who rebel against God can bring about–it is likewise impossible even for kind-hearted Christians with good intentions to bring about the Kingdom of Heaven through political means, because it requires a change in hearts of all men, a change that is only possible through the power of the Holy Spirit.

I have experienced personally the threat of big government–having been threatened with imprisonment and fines only because I am unwilling to relinquish my rights which are guaranteed by law–but who am I to challenge the evil and raw power of a rogue state which no longer protects but usurps rights? So I have quietly withdrawn from the battle, but I have only loathing for the state.

Thus, in my opinion, it is a mistake for Christians, who see government as the solution, to believe that good policy can somehow transform the Kingdom of this world into the Kingdom of God.  Augustine would say that that attempt is futile, for the city of this world aims at domination, which results intrinsically, as I suggested, in the curtailing of human freedom.  Thus, as a Christian libertarian, I desire the state to content itself with the protection of rights and to stay out of the business of making heaven on earth.

Anarcho-Socialism vs. Anarcho-Capitalism

[This is cross-posted at City of God]

In the wake of the emerging church movement, new attempts to grapple with a Christian approach to economics have become more intensely discussed and put into practice. One of the most popular “third-way” economics, at least in theory, seems to be anarcho-socialism. While, as with most things intellectual, there are variations on this position, there seems to be one or two positions that these variations all hold in common: (1) a labour theory of value, and (2) a dislike of economization and the price-system.

Lurking within many of these positions is a deep suspicion of “private property”. Of course, as with general view of anarcho-socialism, so in the case of private property, there are variations on how it is opposed. Nevertheless, if any sense is to be made of the “socialism” part of anarcho-socialism, some degree of opposition to private property must be present.

Part of the suspicion of private property comes from (1) above. That is, a labour theory of value, most fundamentally, believes that the value of any product must be the same as the value of the input of labour that produced it. By implication, this means if a labourer is paid less by an employer for the production of a good than the employer will make by selling it, so that the employer makes a profit off of the labourer, the labourer is actually being defrauded by the amount that the employer makes in profit. For, as was explained, if the object is worth however much the labour was worth, then there is no room left for an employer to make a profit, unless the employer is simply underpaying the labourer, or else is defrauding the customer.

Austrian economists, the consummate free-marketeers, in response, developed what is called the subjective theory of value (otherwise known as marginal utility theory). The subjective theory of value argues that the value of any product is determined by individual according to their preferences, and that market prices therefore are simply what the buyer and seller can agree on as a mutually beneficial compromise between their two value schemes, leading both to agree that economic exchange is more worthwhile than not exchanging. This fundamental view of value has many implications. It implies that wealth is not a zero-sum game. In any voluntary exchange, in fact, both parties believe they are actually increasing their wealth, simultaneously. It is a win-win situation, because both are getting something they prefer in exchange for something they prefer less. This means that real wealth is created every time a voluntary exchange occurs. It also means that the labour theory’s criticisms of profit are misguided.

The fact is, the existence of profit-making by an employer does not imply that the labourer has been stolen from, because it is entirely possible for a labourer to voluntarily prefer a fixed wage lower than the market price of a product rather than the chance of making the higher profit along with the attendant risks of being an entrepreneur. The labourer prefers a guaranteed wage now to a possible profits in the future, whereas the employer prefers potential higher profits in the future to a more secure income in the present. In the end, some people voluntarily prefer to be employees and have a more reliable source of income, and some people prefer to be their own employers and take on higher risk for the chance of a higher income. In situations like this, employers and employees have a mutually beneficial relationship; no one is being stolen from. Rather, the employer’s profit margin is higher than wage rates because the employer is the one risking his or her own capital; the labourer is not.

Some socialists have also issued criticisms of the principle of economy and of the price system. The former principle basically means just this: it is just a fact of existence that resources are scarce, and so rational agents will act to meet their ends with the least amount of waste possible. Waste, the destruction of wealth, is ultimately a harmful thing in a world where we do not have infinite goods to meet our needs. Rational people perceive this, and so act to avoid unnecessary waste. The converse of this point is that they act in the way they believe is the most efficient to achieve their ends. The price system is simply the social outworking of this principle. As was explained above, prices are just agents communicating to other agents what they think the value of a product is. When a price is agreed upon between a buyer and seller, both are convinced that the product has been appropriately valued, and they believe that they will be benefitted more by what they are receiving than what they are giving away. Socialists (again, as far as I know, some, though perhaps all) have criticized these principles as inhuman. Murray Rothbard, in a 1970 article, “The Death Wish of the Anarcho-Communists”, quotes one socialist making this point:

The anti-rational spirit of anarcho-communism was expressed by Norman O. Brown, one of the gurus of the new “counter-culture”:

The great economist von Mises tried to refute socialism by demonstrating that, in abolishing exchange, socialism made economic calculation, and hence economic rationality, impossible … But if von Mises is right, then what he discovered is not a refutation but a psychoanalytical justification of socialism … It is one of the sad ironies of contemporary intellectual life that the reply of socialist economists to von Mises’ arguments was to attempt to show that socialism was not incompatible with “rational economic calculation” — that is to say, that it could retain the inhuman principle of economizing. (Life Against Death, Random House, paperback, 1959, pp. 238-39.)

But, in response, Rothbard argues that it is in fact the denial of this system that is inhuman:

The fact that the abandonment of rationality and economics in behalf of “freedom” and whim will lead to the scrapping of modern production and civilization and return us to barbarism does not faze our anarcho-communists and other exponents of the new “counter-culture.” But what they do not seem to realize is that the result of this return to primitivism would be starvation and death for nearly all of mankind and a grinding subsistence for the ones remaining.

And it seems hard to deny this counter-argument. For, if an agent did not act in a way that attempted to be efficient with the use of scarce resources, they would lose those scarce resources through continual waste. And if a community of agents could not, or would not, signal to each other what they thought would be the most valuable/efficient use of a particular object would be through a price system, they would have no way of collectively acting in a way that would economize their scarce resources. And eventually, the continual waste of scarce resources would indeed lead straight into “starvation and death for nearly all of mankind and a grinding subsistence for the ones remaining.”

Thus, in the end, it seems that a capitalist understanding of wealth and property is necessary to prevent poverty and death; the principle of scarcity and the need to plan accordingly can be ignored only at our own peril.

With these criticisms made of socialist versions of anarchism, though, there is one valid criticism to be made of some forms of anarcho-capitalism. It seems (at least in my limited forays into their literature) many anarcho-capitalists (usually of the atheistic variety), believe strongly that there exists only one moral wrong: aggression. This means that letting another person starve to death, when you could prevent such an end, and there was no reason not to prevent it, would be perfectly morally licit. Obviously, this sits in stark contrast to the Bible’s command to “love your neighbour as yourself”, especially when it is seen in light of Jesus’ interpretation of it in the story of the Good Samaritan. It is quite clear that our Lord interpreted this fundamental axiom of the Law to require compassion and charity. This does not mean that everyone is required to share their goods in an absolutely equal fashion. In a situation where two people are both well off enough not to need charity, but one is richer and the other is poorer, there is no moral obligation for the richer person to share with absolute equality all of his goods with the poorer person. Absolute economic equality is not a requirement of natural justice. But, that said, human beings have a moral obligation to help our truly needy neighbour, insofar as it is possible for us to help them; this is matter of justice, of the Creator’s moral law, not subjective preference. God will not accept the rationalizations of the atheistic anarcho-capitalists on judgment day.

And so, one could perhaps argue that the only morally permissible type of anarchism is one which affirms two counterbalancing propositions: (1) the ultimate choice over what to do with property should lie with its private owner, not with a community acting coercively, but (2) private owners of property are still morally obligated to help their neighbours when it is possible for them to do so. The decision should ultimately be left with the individual (in the sense that the community should not use violence against them or their property), but the individual is obligated by God to show charity.

So, what does one call this kind of anarchism? Is it capitalistic, because it opposes coercion in exchange, supports the principle of private property, and denies an absolute moral imperative to voluntarily create total economic equality? Or is it socialistic, because it opposes an inhuman disregard for the suffering of others in affirming a moral obligation to show love to our neighbour? I tend to think that, because of the possibilities available for the meaning of the term “capitalist”, it is in fact capitalist. That is, because not all capitalisms deny there are moral obligations to help our neighbour, this “socialistic” principle does not rule out the appropriateness of the term. But maybe others will disagree. I think, however, in the end, this is just a semantic disagreement.

Walter Williams on the Eighth Commandment

“You shall not steal.”  Exodus 20.15

Walter Williams claims that if I find a needy, destitute woman and I take $200 from you at gun point to help that woman, it is stealing.  If I vote a democratically elected government which takes $200 from you and then gives it to that poor woman it is no less stealing; this is just simply the majority deciding whom it robs and to whom it bestows favors and it is equally immoral to stealing on an individual level.

But socialism doesn’t work.  The seeds of socialism’s own destruction is in its benefiting wrong behavior and punishing good behaviour.  For it takes from the productive and gives to the non-productive.  When a behavior is rewarded you get more of it; when it is punished you get less.  This is the point of sin taxes on tobacco and alcohol and even socialists understand this basic concepts.

Williams further supports limiting the government’s take of the GDP to 10%.  That’s a brilliant suggestion that could help socialist Western countries to get back on track.  In my view, the only legitimate roles of a federal government are: (1) defense; (2) justice; and (3) regulation interstate/interprovincial commerce and foreign trade.  They must get out of the business of cradle to grave socialism or fail completely.

Click on the picture to watch the video at Yahoo: