On the Wealth of Nations – Story of Civilization VII.i.i-VII.ii.viii

Adam Smith’s Wealth of Nations was published in 1776.  What is remarkable about it is that it took two hundred years for some like Adam Smith to come along and synthesize the observations and come to the conclusions that he did.  Of these conclusions, the most notorious is the thesis that market freedom is essential for prosperity; in the modern day, some regard this thesis as categorically eliminating the use of government interference in any economic sphere.  But to understand Smith’s thesis, it is necessary to understand the context out of which his writings grew.

As I said, The Wealth of Nations is remarkable not because it contains revolutionary content, but because it took so long for someone to synthesize all of this content.  The vast majority of the problems that Smith concerns himself with were already endemic in the England of Elizabeth (1558-1603).

The labor market was the market that labored most heavily under government oppression.  During or before the reign of Henry VIII, there had been a severe shortage of labor in England as a result of plagues that decimated the lower classes.  For a while, wages had skyrocketed, until the government intervened to save the moneyed class the trouble of paying their workers what they were worth.  Under Henry VIII, these wage controls blossomed into a full-fledged, all-encompassing government regulation of labor.  Vagrancy or unemployment was subject to severe penalties, men found to be unemployed could be pressed into employment by any member of the upper class, wages were subject to strict upper and lower limits, working hours were fixed by the government, and unionization of any sort was absolutely prohibited.  Under Elizabeth, it was further decreed that workmen could not even leave their job and seek other employment without first obtaining the permission of their local justice of the peace (although firing them was similarly difficult).  (Incidentally, compare the beginning of Directive 10-289.)

Today we would call these “labor market rigidities” and lament them.  This is a direct result of Smith’s forceful illustration of the problems that such laws created.  Such problems will be easily imaginable even to those who have not read Adam Smith.  To wit, and most especially, the inability of workmen to quit their jobs and follow the demand for labor resulted in severe labor shortages in some regions at the same time that other regions suffered mass unemployment.

Smith railed with great effect against other sixteenth-century ideas too.  Mercantilism, the doctrine that a nation ought to emphasize the import of raw materials, the export of finished goods, and the hoarding of currency, was a spawn of the sixteenth-century, and ably defended by William Cecil, Elizabeth’s most influential counselor.  Mercantilism then as now resulted mostly in trade protectionism: tariffs on imports and subsidies for exports.

Did Elizabeth’s England prosper because of or despite what we now view as serious flaws in economic policy?  Being intellectually enslaved to modern free market dogma, I am inclined to think that England prospered despite these flaws.  In fact, I would go so far as to say that England’s rising prosperity – result of control of sea trade, a rising population, and relative peace with foreign powers – itself caused the flaws in economic policy.  It’s easy to see how wage controls that never rose as fast as price controls would be in the interest of a mercantile class rising in wealth and political influence.  Likewise, it’s easy to see how trade protectionism would appeal to English merchants seeking markets and monopolies for their goods at the expense of foreign competitors.

Mercantilism is far from dead; it persists everywhere in the world today, but most especially in China.  One is inclined to have at least some hope for China if my hypothesis above is true.  If it is true, then a rising middle class in China is molding China’s (ultimately self-destructive) mercantile policy for the sake of its own interests.  Perhaps this class will eventually rise to seize political and intellectual freedom too.

And yet, one is inclined to wonder… China is now hailed as the future world hegemon, and its economic growth, which is attributed to its mercantilistic  and protectionist economic policies, is cited as a harbinger of its future power.  Also cited as an ominous sign is its hording of U.S. currency (in the form of debt), which is the world’s current equivalent of what gold was to Elizabeth’s England (and even more worthless).  And if Elizabeth’s England did so well, inaugurating the British Empire that was to dominate the world for the next two to three hundred years, or more if you count the United States as a lineal descendant and heir to Great Britain, why should we not fear that China’s mercantilism will have the same result?  Was Adam Smith really right?  The same financial class who loudly lauds the free market at home seems to expect China’s anti-free market mercantilism to trounce us in the coming decade?  Perhaps my entire hypothesis is a result of my enslavement to our current, obviously contradictory groupthink?

Edit: for lamentable spelling, because my editor did not proofread the post, and the hack who wrote it was evidently sleep-deprived and in a hurry.

Scott Brown vs. Martha Coakley

The citizens of Massachusetts face a very difficult decision on this coming Tuesday.  How are they to come to a reasoned conclusion?

It may seem odd, but the first thought that came to us when considering which candidate to endorse was this: what are their characters?  Is one candidate clearly corrupt, while another is clearly the moral superior?  Does Scott Brown, for instance, have a record of drowning kittens, or does Martha Coakley regularly light her yard on fire just to add some CO2 to the air?  (No such allegations have been raised.)

In the consideration of character, it is often a negative consideration that we must make.  Praiseworthy actions rarely come to light, whereas smears or attacks are gleefully highlighted by the opposition.  Following this, the first point that came to our consideration of character was this comment by Scott Brown.  After supporting the uncouth Sarah Palin, Mr. Brown casually suggests that Barack Obama was born out of wedlock.  Like our considerations of kitten killing or predilections for pyrotechnics, Mr. Brown’s allegation is completely unfounded, and what’s worse, has little bearing on any real qualification that Obama might have had for the office of President (the comment having been made before the 2008 election).  From this comment, out of his own mouth, Scott Brown shows that he will be a partisan of standard Republican attack techniques, showing little regard for truth or fact, and raising “questions” that are designed to puzzle the simple-minded into doubt.  In short, Scott Brown shows every sign that he plans to manipulate the people rather than speak the truth to them.

By comparison, what can we say of Martha Coakley?  After some searching, and the sampling of many laughably inept Republican attack ads (for example), the best I could come up with was Dorothy Rabinowitz’s unbelievably partisan piece on the Wall Street Journal on Coakley’s role in the Amirault affair.  Herein, Coakley used her formidable powers as a prosecutor, and then attorney general of Massachusetts, to pursue (on scant and dubious evidence) drastic penalties against a family accused of sexual offenses against minors.  The consensus, according to Rabinowitz, is that Coakley’s case was weak, and that she needlessly defamed and ruined the lives of the Amirault family.

This in and of itself does little to settle the question of Coakley’s character.  The question becomes this: why did she defend the case against the Amiraults so viciously?  Was it all a mistake or misunderstanding?  Was her reason corrupt, or was it noble?  A case could be made that prosecutors should always pursue their cases to the very ends of the Earth, on however slim evidence, because often criminals can be very slippery, and can manipulate the truth to their own ends, and appear for all the world like the most innocent of men.  Recall the villains that Eliot Spitzer pursued when his was a noble name; who would deny that he should have used all the powers at his disposal to pursue the Wall Street fat cats?  Even now, who thinks he should have acted with more restraint?

Unfortunately, it seems unlikely that Coakley’s motivations were so principled; as M. Leblanc suggests, it is more likely that Coakley was acting to further her own political interests and ambitions, by trying to appear tough on crime.  Especially against sex offenders, as the Amiraults were suggested to be, the consensus everywhere is to penalize them in the severest ways, because such action is unlikely to encounter much public disapprobation.  In short, Coakley probably kept Gerald Amirault in prison not out of a personal conviction that he was guilty, or even out of a principled belief that, regardless of her own convictions, the harmony of the entire justice system required that her capacity as district attorney pursue the maximum possible penalty against him… not for these things did she pursue his incarceration, but for her own personal political ambition.

Such a thing is a great moral tragedy, although arguably one that any candidate for political office might be guilty of.  Also arguably, we do not think it is a much greater crime than Scott Brown’s apparent willingness to use disingenuousness and manipulation to achieve his own ends.  It seems our decision will not be made on character; who knows that this would have been a sufficient basis anyway?

Indeed, even arriving at a basis for decision in this election is difficult; we have every reason to believe that Coakley, as a Massachusetts liberal, and Brown, as a member of a minority opposition party clinging to the filibuster, will both vote along party lines more often than not.  Are we not then justified in ignoring their personal positions on issues, and in considering only their parties?  What’s more, the composition of the Senate will change dramatically in just a few months, when the 2010 elections happen; between now and then, it is hard to imagine but that the healthcare reform currently before Congress will be by far the issue of greatest import.  Considering then, that the Senate currently has 59 Democratic-aligned senators and 40 Republican-aligned, and that 60 votes are necessary to break a filibuster and pass legislation, it seems that our decision to vote for Coakley vs. Brown is a referendum on healthcare reform.

What, then, of healthcare?  In previous posts (in several different places) on the healthcare debate, I have argued, in broad summary, that spending on healthcare is not bad for the economy, that it represents the purchase of a good that, in general, people want, that increased government spending on healthcare would have a healthy and multiplicative effect on the economy, and finally, that despite all this, the current system has seriously skewed incentives due to the government-imposed insurance model.  I at no time reached a conclusion on whether the healthcare reform that we now face is a good thing or not.  Let me do so here.

The healthcare reform that we face is essentially socialism.  This is not out-and-out a bad thing, but it’s important to recognize it for what it is.  Whether or not the bill before us will immediately create a socialized system, or whether it will merely attempt to create the conditions for such a system in years to come is not relevant.  What is relevant is whether we want a socialized system.  All other developed countries in the world have systems that are socialized, or moving toward socialization, and even not “developed” countries with powerful economies, like China, have socialized healthcare.  Only the United States does not.

Let’s be clear on the facts: these other developed countries are doing fine.  While partisans will batter us with statistics from either side, there seems to be little citizen testimony from any developed country that the state of health in other countries is substantially different from that in the United States today.  The only thing that is different is that they do not have to pay for their healthcare (except in their taxes, and in such a way that income is redistributed from the rich to the poor).  The only advantage that the United States has over these other countries is our markedly better pharmaceutical development industry, but I think that the intellectual property issues surrounding pharmaceutical development are separate enough from the mundane questions of who will fix broken bones or diagnose your kid’s strep throat that we can leave pharma for another time.

With this in mind, shouldn’t we get socialized healthcare too?  I think that the answer is a resounding “no”.  Our country was founded as an experiment in the affirmative freedom of the individual citizen, an experiment in minimalist government.  We are a bold experiment, and a novel one.  We are the eternal opposition party of history; we are the opposite of China.  They desire harmony; we desire dynamism.  While other societies were created to endow all of their citizens with a collective good, we exist to provide a haven for those who wish to pursue their own individual goods.  We see the inalienable rights to life, liberty, and the pursuit of happiness as precluding other rights, such as the “rights” to jobs or healthcare, which rights would necessarily be provided to some citizens at the cost of the liberty or happiness of others.

If every other civilized country will have universal healthcare, and yet right now – as I said before – their healthcare and ours are on roughly the same footing, I say let us continue to experiment.  The situation is not yet so dire that consensus has been reached, that socialism has been proven to be the answer.  There is still room to doubt, so doubt we must.  If everyone else chooses socialism, let us choose anything else.

Such a position would seem to lead us to recommend Scott Brown for United States senator from Massachusetts.  Can it be that the heroic pursuit of truth leads us to select  this manipulating, two-faced, Sarah Palin-supporting rascal to be elected to the Senate of our land?  Citizens of Massachusetts, you truly face a difficult decision.

A Sermon – Isaiah 9:1-6

“The people who walked in darkness have seen a great light; upon those who dwelt in the land of gloom a light has shone.  You have brought them abundant joy and great rejoicing, as they rejoice before you as at the harvest, as people make merry when dividing spoils.  For the yoke that burdened them, the pole on their shoulder, and the rod of their taskmaster you have smashed, as on the day of Midian.  For every boot that tramped in battle, every cloak rolled in blood, will be burned as fuel for flames.  For a child is born to us, a son is given us; upon his shoulder dominion rests.  They name him Wonder-Counselor, God-Hero, Father-Forever, Prince of Peace.  His dominion is vast and forever peaceful, from David’s throne, and over his kingdom, which he confirms and sustains by judgment and justice, both now and forever.  The zeal of the Lord of hosts will do this!”

In this passage we have expressed the messianic hope that is one of Christianity’s most spectacular messages.  One can hardly read this passage without getting goosebumps at the wondrous descriptions of the savior.  The messianic hope, indeed, is one of the three fundamental virtues of Christianity: faith, hope, and love.

A priest could preach a very moving sermon on hope, and on the blessings that a savior could bring to the world.  How wondrous it would be if one God-man could rescue us from the strife and faction that infests every corner of our world, could wrest from us the poverty and pollution that we cling to as a heritage.  How wonderful to be children again, with a Father Forever to watch over us, to administer to us justice, and to take responsibility for us!

The greatest evil of Christianity is just this false hope.  No such things will occur.  Old men will never be innocent again, the flower of our youth is gone forever.  Peace will not be seen on Earth in our lifetimes, nor justice, nor cleanliness.  A religion that preaches that these things will be delivered to us, given to us, as our destined heritage, is a false religion.

God is dead, and so we must be the heroes of our own lives.  This message is chilling, but also liberating.  We are freed from the slavery of expectation, empowered to take action.  If we wish for peace, we must work for it.  We must create our own peace, our own justice, our own prosperity.  It will not be given to us.

There is no power watching over us, no savior to redeem our sins.  No “something out there” loves us; it is only we that love ourselves, and only we that are protecting ourselves.  It is only we that can grant happiness.

Those we have wronged, we have wronged, and only they can forgive us.  Those who have died in poverty, misery, and violence, are dead forever.  Some will say that to deny the Christian storyline denies their suffering meaning, but I say the opposite.  I say that to affirm that story, to claim that this suffering is part of some deity’s grand scheme of good, or to say that it will be some day redeemed or made right, this deprives that suffering of meaning.  Only by recognizing the great magnitude of evil that our own failings as a race have allowed to happen will the meaning of that suffering emerge; only by owning these sins, and learning from them, will that suffering and those sins become part of a better future.  Even still, the horrible truth remains: for those that lived and died in suffering, there is only suffering.

It has been said by some, ironically, that “Freedom is Slavery.”  I say that this is true, and its converse too.  The slavery of religion brings freedom from responsibility; to be a servant of God is to be free from the responsibility for the evil that occurs in the world, to be free from the eternal sorrow at the irredeemable suffering that has already occurred.  To be a servant of God is much like being a “citizen” of the Chinese state; it is the obligation of God the Messiah, or the state, to provide justice and judgment, peace and heroism, in the end.  It is not for the Christian or Chinese slave to question the directives of his master; his duty is only to obey, no matter to what atrocities this may lead.

Freedom is slavery.  To reject these doctrines, that someone else, some other power, will save us and provide for us, is to be burdened with a responsibility that the weak-minded think so awesome that they assign it to super-human entities.  In a way, our responsibility as free people is even greater than that which the Christians assign to their God… we must not only make the good immanent, we must first learn what it is… God has the fortune of already knowing this.  But once knowing the good, it becomes our onerous duty to advance it at every step; every second of leisure, every diversion, is time stolen from the harshest of masters.  For not to advance the right is as great a sin as to advance the wrong.

This Christmas, instead of seeking a new savior in the world, a hero who will bring us peace and justice, let us realize that only we can be such heroes, and the longer we fail to recognize this, the greater are those things we irrevocably lose.

On Bernie Sanders and Tom Coburn

In the Senate today, Bernie Sanders and Tom Coburn got into an altercation over an attempt by Mr. Sanders to insert a single-payer amendment into the healthcare bill.  Mr. Coburn asked that the 767-page amendment, which would have been the ultimate Christmas present for Democrats, and anathema to Republicans, be read aloud on the Senate floor.  According to one reporter, the exercise would have taken eight hours.  This possibility prompted Mr. Sanders to withdraw the amendment, though not without some sharp words for his colleague.

This is part of a larger trend: a major, if subtle, Republican tactic to drum up popular opposition to healthcare reform has been to cite, as frequently and as loudly as possible, the huge numbers of pages of legislation that healthcare reform would consume.  In response, Democratic talking heads have used the Republican complaints about length as an example of the absurd, trite, and insubstantial nature of the Republican opposition to healthcare reform.

So the question: can the length of a bill be sufficient reason for opposing it?  I would like to submit that the answer is yes.  Arcane and lengthy legislation removes power from citizens in a variety of ways.

First, a 767-page amendment is difficult to read.  When Congress publishes thousands of pages of legislation a year, how is the average voting citizen supposed to keep up?  I am all for civic participation, and I would accept the proposition that the average American does not care enough about or invest enough time in the government, but it is simply not reasonable to expect working Americans to come to a considered conclusion about several pages of legalese for each day of the year.  In this way, by making legislation lengthy, it is almost guaranteed that only a tiny minority of the voting public will ever have any direct knowledge of what it contains.  Very few people will be able to perform primary evaluation of the legislation.  Very few people will actually know what it contains.

This forced ignorance of the American public has several pernicious consequences.  First, it is in part responsible for our current culture of partisanship.  When a voter cannot read the legislation, he turns to the news media to inform him.  Thus, by means of several mostly redundant thirty-second soundbites a day, he acquires in his mind a caricature of the legislation.  This image is further distorted by the almost inevitable intentional or unintentional bias of most popular media outlets, ranging from Fox News (intentional) to the New York Times (apparently unintentional).  In the end, the voter is reduced to chanting a slogan – “Healthcare is a right!” or “Universal healthcare is socialism!” – while having a thousand micro-debates on parts of the bill that never make it to the President’s desk, such as the “kill Granny” provision.

The same hapless ignorance that distorts the creation of legislation is also a danger to citizens once the legislation has been passed.  Consider the tax code: a frequent complaint against it is that its complexity enables rich citizens, who can hire lawyers, to make careers out of sifting through the tax code, understanding its complexities and loopholes, and in this way performing legal pirouettes so as to pay less taxes than even the poorest among us.  Meanwhile, the rest of us can never be quite sure that we’re not committing tax fraud – sure, I filed my 1040, but did I spend the extra twenty minutes tracking down Schedule 4149 to make sure that I’m eligible to file just a 1040?

This state of ignorance can be induced by any complex piece of legislation.  For example, suppose that healthcare reform passes: how will you determine what you must do to be in compliance with the law?  Will you read the entire piece of legislation?  Unlikely.  Have you read the entire tax code?  No… if you’re responsible, you’ve probably paid someone else to do your taxes, someone who has the time and resources to understand the tax code, or if you can’t afford this, you’ve done them yourself and hoped for the best.  In just the same way, if healthcare reform passes, the very same insurance companies that are taking your money now to offer you “protection” will switch their packs of lawyers from finding ways of denying you coverage to finding short, snippy tidbits of information they can give you about the new legislation (that come with no guarantees, of course).

In short, complex legislation, regardless of its intended effect, transfers power.  It transfers power from the citizens, who are the ultimate source of the law, to bureaucracies, both governmental and corporate, who have the time and resources to understand complex legislation.  Common citizens, ignorant of the law, are at a disadvantage against these organizations.

This is not an argument against big government.  One can imagine a tax law as simple as a flat tax that would produce the same level of income as the current gargantuan tax code.  One can imagine a brief charter for a governmental healthcare corporation.  This is simply an argument that, no matter one’s political beliefs, in a democratic society, all expression of the law must be comprehensible, so that it is subject to the evaluation of the citizens, because the citizens themselves are ultimately responsible for the justice of their society.

I do not say that complex legislation cannot work under any conditions; a society like China’s is well-suited for complex legislation.  The servile populace, under the iron fist of a sprawling governmental bureaucracy, has no hand in the justice of its own society.  The government, subsuming all power itself, also subsumes all responsibility.  The common Chinese citizen cannot be expected to understand the way his government works; he can only hope that it will be just to him, and reward or punish him according to his deserts.  He gives up his freedom of action and his political voice, and in return, he is freed from the responsibility of helping to provide his society with justice.

How nice it would be if in our country we didn’t have to worry our pretty little heads with understanding laws before they’re passed.  Help make this a reality!