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  • Author: Daniel Wahl
  • Publication Date: 09-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes. . . .
  • Topic: Economics, Government
  • Political Geography: United States
  • Author: David H. Mirman
  • Publication Date: 09-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Consider a drunk staggering down the middle of a busy highway and assume that his average position is the centerline. The state of the drunk at his average position is alive, but on average, he's dead. (p. 83) This is an example of the danger of the “Flaw of Averages,” Sam Savage's term for the common mistake of “representing an uncertain number by its average” (p. 59). “Plans based on average assumptions are wrong on average,” he explains. “In everyday life, the Flaw of Averages ensures that plans based on the average customer demand, average completion time . . . and other uncertainties are . . . behind schedule, and beyond budget” (p. 11, emphasis original). In The Flaw of Averages, Savage demonstrates the harm caused by the error and arms his readers with skills to avoid it. . . .
  • Author: Craig Biddle
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Welcome to the Fall 2010 issue of TOS—and a special welcome to our new Canadian readers who, with this issue, are discovering the Standard via newsstands in Canada's largest bookstore chain, Chapters/Indigo. We are excited to add our northern neighbors to the list of countries we infiltrate with principled discussion of the moral and philosophical foundations of freedom.
  • Topic: Economics, Islam
  • Political Geography: America, Canada
  • Author: Craig Biddle
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Considers the Ground Zero mosque, the spread of Islam in America, and how Americans and Westerners in general should deal with such efforts.
  • Topic: Islam, Terrorism
  • Political Geography: America
  • Author: Stella Daily Zawistowski
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: In their desire for less expensive, higher quality, more accessible health care, Americans have accepted a false alternative: fully regulated, socialized medicine, as advocated by Democrats, or semi-regulated, semi-socialized medicine, as advocated by most Republicans. But if Americans want better health care, they must come to recognize that government intervention, great and small, is precisely to blame for America's health care ills. And they must begin to advocate a third alternative: a steady and uncompromising transition toward a rights-respecting, fully free market in health care. In order to see why this is so, let us first consider the unfree, rights-violating nature of American health care today. Under our current semi-socialized health care system (which both Democrats and Republicans created), the government violates the rights of everyone who provides, purchases, insures, or needs health care. It violates the rights of doctors by forcibly subverting their medical judgment to the whims of government bureaucrats or to the heavily regulated insurance companies; it violates the rights of citizens in general by forcing them to buy insurance with a mandated set of benefits; it violates the rights of insurers by prohibiting them from selling plans of their design to customers of their choice at prices they deem economically appropriate; it violates the rights of pharmaceutical companies by forcing them to conduct trials that, in their professional judgment, are unnecessary; and it violates the rights of suffering and dying patients who wish to take trial medications but are forbidden to by law. These instances merely indicate the numerous ways in which the government violates the rights of health care participants, but they are enough to draw the conclusion that Americans are substantially unfree to act in accordance with their own judgment—a fact that alone is sufficient reason to condemn our current system as immoral. But, as we shall see, the immoral nature of the current system is also precisely what makes it impractical. The system is in shambles because of these rights violations, a fact that will bear out on examination of the three aspects of health care of most concern to Americans: its cost, its quality, and its accessibility.
  • Topic: Health
  • Political Geography: America
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: I recently spoke with Professor John Allison about his efforts and successes in creating pro-capitalist programs in American universities. Professor Allison was the CEO of BB for twenty years, during which time the company's assets grew from $4.5 billion to $152 billion. He now teaches at Wake Forest University. —Craig Biddle Craig Biddle: Hello, John, and thank you for joining me. John Allison: It is a pleasure to be with you. Photo courtesy Wake Forest University CB: Let me begin with a couple of questions about your work at Wake Forest. I understand that you joined the faculty in March 2009 as a Distinguished Professor of Practice—a fitting title given your decades of applying philosophy to business. What has your work at the university entailed so far? And how have your ideas been received? JA: I've primarily been involved in teaching leadership both to students and to some of the administrators in the university. I taught a course on leadership last fall, and I've been participating in various courses taught by other professors on finance, mergers and acquisitions, and organizational development. But my focus is on leadership. My ideas have been well received. The students take great interest in talking to someone who has been in the real world and been successful in business. I think they appreciate that perspective. CB: Through the BB Charitable Foundation, you've established programs for the study of capitalism at a number of American universities. How many of these programs are there now? What unifies them? And what generally do they entail? JA: BB has sponsored sixty-five programs to date, and they're all focused on the moral foundations of capitalism. While many people recognize that capitalism produces a higher standard of living, most people also believe that capitalism is either amoral or immoral. Our academic question is: How can an immoral system produce a better outcome? We believe that capitalism is moral and that this is why it is so successful. We think it is critically important that we not only win the battle over economic efficiency, but that we engage in and win the debate over ethics as well.
  • Topic: Economics
  • Political Geography: America
  • Author: Michael Dahlen
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: For most of human history, the vast majority of people lived in squalor and bitter poverty. People labored hard in grueling conditions but produced little wealth for their efforts; food was scarce; disease was rampant; child mortality was about 50 percent; and life expectancy was twenty to thirty years. To borrow from Thomas Hobbes, life was “nasty, brutish, and short.” ©2008 Frankie Roberto http://commons.wikimedia.org/wiki/ File:James_Watt%27s_Workshop.jpg Today, by contrast, in developed countries such as Britain and the United States, the relatively few people who are considered “poor” typically work in comfortable jobs (if they work at all); have refrigerators, electric light, indoor plumbing, televisions, telephones, and the like; and can expect to live into their seventies. Their “poverty” appears rather fortunate compared to the wealth of kings past. The average person today works in even greater comfort; has a car, a computer, a cell phone, countless other devices of luxury, and a lifestyle that would make any king living in the pre-industrial era look like a peasant. The dramatic transformation from universal poverty to widespread wealth began in the late 18th century with the Industrial Revolution, which originated in Britain. The Industrial Revolution was just that: a revolution of industry—a revolution in which an enormous increase in the commercial production and sale of goods changed the world and improved man's standard of living by orders of magnitude. As historian Eric Hobsbawm remarks, “No change in human life since the invention of agriculture, metallurgy and towns in the New Stone Age has been so profound as the coming of industrialization.”1 To see what caused this dramatic transformation, let us look first at the political climate and living conditions of the medieval era that preceded the British Industrial Revolution; then we will consider the politico-economic system in which the Revolution occurred, several related developments that illustrate the nature of the era, and the economic growth that these developments brought about.
  • Topic: Political Economy
  • Political Geography: Britain, United States, United Kingdom
  • Author: Daniel Wahl
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Twelve-year-old Richard Feynman's room was a mess. Old, broken radios were scattered across the floor; spark plugs and electronic gizmos overflowed from a big wooden box; a well-worn microscope protruded from a tabletop covered with specimens and slides; and a book titled Trigonometry for the Practical Man lay open on the bed. Richard navigated through the chaos of his room, walked out the door, down the hall, and into his three-year-old sister Joan's room. He woke her, saying he wanted to show her something wonderful. They left the house and walked through the streets of Far Rockaway holding hands. When they reached a golf course, far away from the city lights, Richard stopped and said, “Look up.”1 There, in the sky above them, shone the aurora borealis, a beautiful green curtain of light caused, as Richard explained, by excited nitrogen atoms colliding with one another and emitting photons.2 Few twelve year olds knew this phenomenon was taking place; far fewer knew how. But Richard was not an average boy. Richard was the kid who presented a book report about a tale of mystery and adventure while delaying the revelation that he was talking about a math text.3 He was the kid who earned the curious title “the boy who fixes radios by thinking.”4 He was the boy who, in high school, won math competitions by circling his answers mere moments after the questions were asked.5 Richard read voraciously on any subject that interested him, amassing, integrating, and applying an ever-expanding wealth of knowledge. When his friend Arline told him that she was studying the works of Descartes in her philosophy class and that Descartes had proved the existence of God, Richard replied, “Impossible!” After examining Descartes' argument, Richard confirmed his initial conclusion: “It's a bunch of baloney.” When Arline said, “Well, I guess it's okay to take the other side. My teacher keeps telling us, 'There are two sides to every question, just like there are two sides to every piece of paper'”—Richard excitedly shot back: “There are two sides to that, too.” He grabbed a strip of paper, gave it a half-twist, connected the two ends, and handed her a one-sided piece of paper known as a Möbius strip (named after its discoverer, August Ferdinand Möbius). The next time her teacher repeated the cliché, Arline held up her own Möbius strip and said, “Sir, there are even two sides to that question: There's paper with only one side!
  • Author: Richard G. Parker
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Isaac Newton developed calculus, demonstrated the immense practicality of the scientific method, and discovered the laws of motion that govern the physical world. Charles Darwin developed the theory of evolution, discovered the mechanism of natural selection, and established the fundamental principles of biology. Michelangelo perfected the art of sculpture, depicted man as a heroic being, and inspired viewers and artists across centuries. Such men advanced their respective fields by orders of magnitude. Who is their equivalent in the field of medicine? His name, which few people today recognize, is Herman Boerhaave (1668–1738). In his day, Boerhaave was a world-renowned physician and educator. He held three professorial chairs—in medicine, chemistry, and botany—at the University of Leiden and made the Dutch school the focal point of medical education in the Western world. During the Age of Reason, Boerhaave was the undisputed standard-bearer of Enlightenment medicine: When he began his work in medicine, the field was still mired in the mystical methodologies and superstitions of the Middle Ages; by the time he was through, the field was a science concerned with the natural causes and treatments of illnesses. And although his name has since faded into near obscurity, his influence remains. To acquaint you with this heroic man, let us briefly survey the highlights of his life, and then consider his seminal contributions to medicine.
  • Topic: Education
  • Author: Craig Biddle
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Author's note: This is chapter 7 of my book Loving Life: The Morality of Self-Interest and the Facts that Support It (Richmond: Glen Allen Press, 2002), which is an introduction to Ayn Rand's morality of rational egoism. Chapters 1–6 were reprinted in prior issues of TOS. We have seen that being moral consists in being self-interested—acting in a life-promoting manner. We have also seen that what most fundamentally makes life-furthering actions possible to human beings is rational thinking. In order to live, we have to use our mind to discover the requirements of our life, and we have to act accordingly. We begin this chapter with the question: What can prevent us from acting on our judgment? What can stop us from employing our means of survival? Observe that if you are alone on an island, nothing can stop you from acting on your judgment. If you decide that you should acquire some food, you are free to make a spear and go hunting, fashion some tackle and go fishing, or plant a garden and tend to it. And if you obtain food, you are free to eat it, save it, or discard it. Likewise, if you decide that you should build a shelter, you are free to gather materials and construct one. And if you do, you are free to live in it, build an addition onto it, or tear it down. Alone on an island, you are free to act according to the judgment of your mind. But suppose another person shows up on the island, grabs you, and ties you to a tree. Clearly, you are no longer free to act on your judgment: If you had planned to go hunting, you cannot go. If you had planned to build a shelter, you cannot build it. Whatever your plans were, they are now ruined. And if you are not freed from your bondage, you will soon die. The brute's force has come between your planning and your acting, between your thinking and your doing. You can no longer act on your judgment; you can no longer act as your life requires; you can no longer live as a human being. Of course, the brute could feed you and keep you breathing; but a “life” of bondage is not a human life. A human life is a life guided by the judgment of one's own mind. In order to live as human beings, we have to be able to act on our judgment; wild animals aside, the only thing that can stop us from doing so is other people; and the only way they can stop us is by using physical force. Consider another example. A girl is walking to the store intent on using her money to buy some groceries when a man jumps out from an alley, points a gun at her head, and says: “Give me your purse, or die.” Now the girl cannot act according to her plan. Either she is going to give her purse to the thief, or she is going to get shot in the head. In any event, she is not going grocery shopping. By placing a gun between the girl and her goal, the thief is forcing her to act against her judgment—against her means of survival. If she hands her purse to him, and if he flees without shooting her, she can resume acting on her judgment—but, importantly: not with respect to the stolen money. While the thief may be gone, the effect of his force remains. By keeping the girl's money, he continues to prevent her from spending it; and to that extent, he continues to stop her from acting on her judgment. This ongoing force does not thwart the girl's life totally, but it does thwart her life partially: If she had her money, she would either spend it or save it; but since the thief has her money, she can do neither. She cannot use her money as she chooses, and her life is, to that degree, retarded.
  • Author: Daniel Wahl
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Americans today have been told to expect years of military action overseas. Yet they are also being told that they should not expect victory; that a “definitive end to the conflict” is not possible; and that success will mean a level of violence that “does not define our daily lives.” John David Lewis holds that this defeatist attitude is completely at odds with the lessons of history. In Nothing Less than Victory: Decisive Wars and the Lessons of History, Lewis shows how nations in the past that faced far greater threats and more formidable foes than America does now went on to defeat their enemies and win lasting peace. Lewis examines six major wars, devoting one chapter each to the Greco-Persian wars, the Theban wars, the Second Punic War, the campaigns of the Roman emperor Aurelian, the American Civil War, and two chapters to World War II. He shows how the Greeks defeated the mighty Persian empire, how the Thebans shattered the mirage of Spartan invulnerability, how the Romans swiftly ended a long war by attacking the enemy's home front, how Aurelian battled enemies on many fronts to reunite Rome, how William Tecumseh Sherman marched through the American South and destroyed the Confederate will to fight, and how America achieved a permanent victory over Japan. While recounting the key events of each conflict, Lewis draws several important, universally applicable lessons.
  • Topic: War
  • Political Geography: America, Romania
  • Author: Burgess Laughlin
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: In Neoconservatism: An Obituary for an Idea, authors C. Bradley Thompson and Yaron Brook show that the neoconservative intellectual movement is very much alive. Those who carry its banners are “deeply embedded in America's major think tanks, philanthropic foundations, media outlets, and universities” (p. 1). Then why would the authors select a title that implies that the object of their study is dead? The title is ironic, in part because the authors hope that their book may cause the movement's death, thus “inspiring the need for some future obituary” (p. 2). The authors wrote their lean work to Americans “who value our nation's founding principles” (p. x). The main message is that neoconservatives, who boast of being “in the American grain,” threaten those principles. That inference is based on an investigation that ranged across a diverse and sometimes deceptive intellectual movement. The authors examined the movement's leaders today; the movement's publicly stated guiding ideas; the lineage of the ideas passed down from the movement's ex-Marxist founders; the actual, but usually unstated, principles of the underlying neoconservative worldview; and, finally, the consequences of the guiding ideas and worldview in political policies that affect American lives. The ambitious scope of the book raised a crop of problems for Thompson and Brook. First, the authors say, the neoconservative movement's founders have presented a moving target. “[O]ver the course of forty years, [the neoconservatives] evolved rather seamlessly from neo-Marxists” at Brooklyn College in the late 1930s, to “neo-liberals” in the 1950s, and to “neoconservatives” in the late 1960s.
  • Political Geography: America
  • Author: Roderick Fitts
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Ayn Rand was an influential and controversial novelist and philosopher whose name invariably ushers in a flood of debate. Unfortunately, not all of the controversy stems from Rand's radical ideas, such as her advocacy of egoism and laissez-faire capitalism. Distracting from the discussion of her ideas is a controversy concerning claims made about Rand's personal life and character in the works of two of her former students: Barbara Branden's The Passion of Ayn Rand (Doubleday, 1986) and Nathaniel Branden's My Years with Ayn Rand (Jossey-Bass, 1999). For eighteen years, the Brandens (who were married to each other from 1953 to 1965) were among Rand's closest friends. However, their relationships with Rand ended abruptly in 1968, at which point they became her most vocal and publicized critics. In their books, both of which were published after Rand's death, the Brandens tell their stories. James Valliant's The Passion of Ayn Rand's Critics: The Case Against the Brandens is the first book-length critique of the Brandens' allegations. Valliant's book is divided into two parts: the first, an analysis of several dozen claims made by the Brandens about Rand; the second, a selection of journal entries from Rand concerning psychological issues that Nathaniel Branden revealed to her during their romantic relationship. (Rand was happily married but had an open affair with Nathaniel Branden, with the full knowledge and consent of her husband and Barbara Branden.) The purpose of Valliant's book is to dispel false claims the Brandens made regarding Rand, setting the record straight for those interested in the details of her life.
  • Author: Daniel Wahl
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes.
  • Topic: Economics
  • Political Geography: United States
  • Author: David H. Mirman
  • Publication Date: 10-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Consider a drunk staggering down the middle of a busy highway and assume that his average position is the centerline. The state of the drunk at his average position is alive, but on average, he's dead. (p. 83) This is an example of the danger of the “Flaw of Averages,” Sam Savage's term for the common mistake of “representing an uncertain number by its average” (p. 59). “Plans based on average assumptions are wrong on average,” he explains. “In everyday life, the Flaw of Averages ensures that plans based on the average customer demand, average completion time . . . and other uncertainties are . . . behind schedule, and beyond budget” (p. 11, emphasis original). In The Flaw of Averages, Savage demonstrates the harm caused by the error and arms his readers with skills to avoid it.
  • Author: Craig Biddle
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: No abstract is available.
  • Topic: Government
  • Political Geography: America, India
  • Author: Craig Biddle
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: No abstract is available.
  • Author: Deborah B. Sloan
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: When Thomas Edison invented the lightbulb, he knew that he had created something of enormous value with the power to raise everyone's standard of living. What a spectacle it would have been if, upon completing his magnificent invention, Mr. Edison had sheepishly and halfheartedly offered it on the market with little explanation as to exactly what it was or why anyone would want to use it, even as he bent over backward not to challenge the merits of the old, reliable methods of illumination, such as candles and torches.
  • Topic: Government
  • Political Geography: America
  • Author: Chak Kakani
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Over the past few years, the Indian government spent $8.5 billion to host the Commonwealth Games (CWG), a multisport event akin to the Olympics, which were held in New Delhi from October 3 through 14, 2010.1 The official purpose of the CWG was to generate “national prestige” for India.2 But the Games did no such thing. In fact, the CWG were a national disgrace. The games showcased a contradiction embraced by Indians that threatens to destroy the economic and political progress they have achieved over the past two decades.
  • Topic: Economics
  • Political Geography: India, New Delhi
  • Author: Craig Biddle
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Considers the Republicans' alternatives following their victories in the 2010 midterm elections, and identifies a moral conflict, which, if unresolved, will preclude them from saving the land of liberty
  • Topic: Security
  • Political Geography: America
  • Author: Andrew Bernstein
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Surveys the ills of government-run schools, shows the general superiority of private schools, zeros in on the reason for the difference, and proposes a radical change from which everyone would benefit
  • Topic: Education
  • Political Geography: America
  • Author: Andrew Schiff
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The author and investor discusses his book, the state of economy, the cause of America's financial problems, and investment possibilities under the circumstances
  • Topic: Security, Economics
  • Political Geography: United States
  • Author: Scott Holleran
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Andrew Carnegie was the quintessential American, the archetypal self-made man. A poor immigrant boy, Carnegie rose to become a titan, advancing key theories of integration in business, producing more steel than all of England,1 creating the first billion-dollar corporation,2 and leaving an indelible legacy of colleges, arts, and libraries. His was an exceptional life and, in his time, he became the world's richest man.
  • Topic: Education
  • Political Geography: America, England
  • Author: Craig Biddle
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Includes the book's final, summarizing chapter along with an afterword on terrorism and an appendix on emergency situations.
  • Topic: Terrorism
  • Author: Sean Saulsbury
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The documentary Waiting for “Superman” examines America's failing public education system and calls on Americans to do something about it. Writer/director Davis Guggenheim takes viewers through the entrails of our public schools, showing the horrifying experiences of students across the country (mostly fifth and eighth graders), exposing the policies that led to those experiences, and providing statistics that measure the extent to which our public school system has failed. As part of the exposé, the movie includes several compelling interviews with educators, addressing issues such as the failure of the No Child Left Behind program, the purpose and effects of teachers' unions, the incredibly high dropout rates among public school students, and the impact of failing schools on our economy and society.
  • Topic: Education
  • Political Geography: America
  • Author: C. A. Wolski
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: “Kafkaesque” is a word that has lost much of its potency due to overuse: These days any bizarre situation is likely to be described this way. But if any story today deserves to be likened to the bewildering fiction of Franz Kafka, it is the nonfiction tale of Stanislaw Burzynski, MD, PhD, a Texas-based doctor who has been waging a single-handed battle with his home state's medical board, the U.S. Food and Drug Administration (FDA), and federal prosecutors. What makes Dr. Burzynski's story particularly bewildering is that he is being persecuted not because he is a terrible doctor, but because he may have made one of the most important medical discoveries in history: a treatment for cancer that is safer and more effective than either chemotherapy or radiation.
  • Author: Daniel Wahl
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Small books can pack a big punch—as proven by John Bolton's latest, How Barack Obama is Endangering our National Sovereignty. In fewer than fifty pages, the former U.S. ambassador to the United Nations shows that American sovereignty is under siege and indicates what concerned Americans must do to save it.
  • Topic: Sovereignty, United Nations
  • Political Geography: America
  • Author: Daniel Wahl
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: “From a standing start as refugees with virtually no capital, a person with the last name Patel today owns one out of every five motels in the United States” (p. 132). According to hedge fund investor Mohnish Pabrai, one word identifies how these Indian immigrants have achieved this extraordinary success in a little more than thirty years: Dhandho.
  • Topic: Foreign Policy
  • Political Geography: United States
  • Author: Jules Klapper
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Granted, the subtitle of Appetite For America: How Visionary Businessman Fred Harvey Built a Railroad Hospitality Empire That Civilized the Wild West is hyperbolic, but author Stephen Fried's narrative makes a strong case for Fred Harvey's immense contributions to America's westward expansion. Fried tells how Harvey and the two generations of Harveys that succeeded him pioneered and developed many business and marketing concepts still in use today.
  • Political Geography: America
  • Author: Daniel Wahl
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: It may seem unimaginable now, but someday you will look back and be thankful for whatever is angering you or making you anxious today—if, that is, such problems, in conjunction with this book review, inspire you to a study of Mind Over Mood: Change How You Feel by Changing the Way You Think. In their book, Dennis Greenberger and Christine Padesky teach skills that enable you to understand your emotions and make fundamental changes in your moods, behaviors, and relationships.
  • Author: Daniel Wahl
  • Publication Date: 12-2010
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: I'm sometimes puzzled at people, some of my good friends among them, who never give a serious thought to rereading a book, even a classic. Yet these same people would surely not pass up a trip to Paris because they've already been there or refuse to listen to a CD of Beethoven's Ninth because they've already heard it.
  • Author: Craig Biddle
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Welcome to the Summer 2009 issue of TOS.First up in this edition is my interview with Jonathan Hoenig, who discusses the nature and value of hedge funds, the government's role in the financial crisis, and how to fight for free markets.
  • Topic: Government
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Letters and Replies To the Editor: I wanted to let you know that I received my first issue of The Objective Standard (Winter 2008-2009) in the mail and was greatly impressed. I am relatively new to the ideas of Objectivism, and the articles in this issue have helped to clarify both the theory behind the philosophy and the practical implications of its principles. Seeing how the principles apply to real-life issues and current events makes them much easier to understand (and to explain to others). I just ordered all the available back issues and look forward to reading them as well. Kendall Bryan Jacksonville, Florida
  • Political Geography: Florida
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: I recently spoke with Jonathan Hoenig, manager of the Capitalistpig Hedge Fund and regular contributor to Fox News Channel's Cashin' In, Your World with Neil Cavuto, and Red Eye with Greg Gutfeld. Mr. Hoenig is also a columnist for Smartmoney.com and contributes economic commentary to WLS 890AM in Chicago. -Craig Biddle Craig Biddle: I must ask at the outset, why did you name your firm "Capitalistpig"? Is there a story behind that? Jonathan Hoenig: Yes, there is. From weeding yards as a young boy to working at Starbucks in high school, I have always been interested in money and actively hustling for dollars. Getting an "A" in school didn't mean much to me, but earning a few hundred dollars working in a local warehouse or passing out samples of Nutella (another summer job) always provided a tremendous sense of accomplishment and pride. One of my earliest memories is going with my dad to our local bank and opening my first passbook savings account. Even then, it was a real thrill to watch the balance slowly build. As a kid, while many of my contemporaries were either bullying (or being bullied), I was busy discovering the virtue of mutually beneficial exchange. My neighbor appreciated me cleaning out her basement, and, for a few bucks, I was more than happy to do an excellent job. Ever since I can remember, capitalism wasn't something I spurned, but embraced. Knowing I wanted to pursue a career in the financial markets, after college I traded futures at the Chicago Board of Trade for a few years before opening up my firm in 2000. The name Capitalistpig Asset Management was a punchy way of communicating the philosophy by which my operation is run. We also give all new clients a copy of [Ayn Rand's] Atlas Shrugged. The name Capitalistpig also helps to attract the right type of customer. I prefer to work with like-minded individuals who support capitalism and individual rights and are happy to be part of an operation that loudly promotes these ideals. CB: What exactly is a hedge fund? How is it different from a mutual fund? And what do you and other hedge fund managers do? JH: A hedge fund is simply a pool of money funded by profit-seeking investors and managed by a professional money manager. In that sense, it is similar to a mutual fund. But unlike a mutual fund, a hedge fund is not required to register with the Securities and Exchange Commission. This doesn't mean hedge funds are unregulated; far from it. The government places stringent restrictions on how hedge funds can operate. Most notably, we're prohibited from accepting investments from "nonaccredited" individuals-meaning, those who don't have a liquid net worth of at least $1 million or haven't earned an income of at least $200,000 for two consecutive years. This, incidentally, is the source of the notoriously "exclusive" and "elitist" nature of hedge funds: They're exclusive and elitist not by choice, but by government edict. While most people assume that hedge funds trade frequently and make big bets on financial esoterica, the truth is a hedge fund is a legal structure, not an investment technique. Some trade frequently and use leverage, others buy and hold stocks for months or years at a time. So while the media routinely characterize hedge funds as "risky" or "highly leveraged," the reality is that hedge-fund strategies, just like mutual-fund strategies, run the gamut from the ultraconservative to the highly volatile. Some managers employ complex spread trades, while others simply buy and sell stocks. Just knowing someone runs a hedge fund tells you absolutely nothing about how it's run. What matters are the strategies, positions, and discipline that the manager uses to maximize the money. My fund is focused on absolute return, ideally earning a profit regardless of the condition of the stock market or larger macroeconomic environment. To accomplish this, I use strategies such as selling short, trading options, commodities, currencies, and other instruments, some of which aren't directly correlated with the stock market. My fund functions as one part of an individual's portfolio, usually no more than 25 percent, and it has been profitable eight out of nine years, earning a total return of over 345 percent. The Dow Jones has lost 28 percent over the same period. CB: Hedge funds and their managers have been loudly and repeatedly condemned for having somehow caused or exacerbated the current financial crisis. Did hedge funds lead to or worsen the crisis? If so, how? If not, what do you make of such claims? JH: Such accusations are absurd. Hedge-fund managers have neither caused nor exacerbated the financial crisis, and they couldn't have done so even if they had tried. These managers simply invest money for their clients. If they make good investments, their clients make money; if they make bad investments, their clients lose money. Moreover, hedge funds-one of the few financial industries that has not asked for and will not receive a bailout-actually helped shoulder the burden of the credit collapse. In buying and selling risky mortgages, loans, and other instruments, hedge funds substantially mitigated the crisis by adding liquidity to the marketplace and facilitating trade. Wealth creation requires investment, and the savings needed in order to make loans, finance operations, start new companies, and invest in R come from investors, such as hedge-fund managers, who are seeking to profit. Far from fueling the financial crisis, hedge-fund managers reduced its severity, and continue to do so, by allocating capital in accordance with the principles of economics, long-range thinking, the profit motive, and market demand.
  • Topic: Economics
  • Political Geography: America, Chicago
  • Author: Thomas A. Bowden
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Examines the meaning and consequences of Oliver Wendell Holmes's famous dissent in Lochner v. New York, showing how and why it has devastated American jurisprudence, and indicating what future jurists must grasp and do in order to begin reversing the damage.
  • Political Geography: New York, America
  • Author: Alex Epstein
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The most important and most overlooked energy issue today is the growing crisis of global energy supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated. Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, supply stagnates-meaning rising prices as far as the eye can see. What is the solution? We just need the right government "energy plan," leading politicians, intellectuals, and businessmen tell us. Of course "planners" such as Barack Obama, John McCain, Al Gore, Thomas L. Friedman, T. Boone Pickens, and countless others favor different plans with different permutations and combinations of their favorite energy sources (solar, wind, biomass, ethanol, geothermal, occasionally nuclear and natural gas) and distribution networks (from decentralized home solar generators to a national centralized so-called smart grid). But each agrees that there must be a plan-that the government must lead the energy industry using its power to subsidize, mandate, inhibit, and prohibit. And each claims that his plan will lead to technological breakthroughs, more plentiful energy, and therefore a higher standard of living. Consider Nobel Peace Prize winner Al Gore, who claims that if only we follow his "repower American plan"-which calls for the government to ban and replace all carbon-emitting energy (currently 80 percent of overall energy and almost 100 percent of fuel energy) in ten years-we would be using fuels that are not expensive, don't cause pollution and are abundantly available right here at home. . . . We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. . . . [W]e can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses. And Gore claims that, under his plan, our vehicles will run on "renewable sources that can give us the equivalent of $1 per gallon gasoline." Another revered thinker, Thomas L. Friedman, also speaks of the transformative power of government planning, in the form of a government-engineered "green economy." In a recent book, he enthusiastically quotes an investor who claims: "The green economy is poised to be the mother of all markets, the economic investment opportunity of a lifetime." Friedman calls for "a system that will stimulate massive amounts of innovation and deployment of abundant, clean, reliable, and cheap electrons." How? Friedman tells us that there are two ways to stimulate innovation-one is short-term and the other is long-term-and we need to be doing much more of both. . . . First, there is innovation that happens naturally by the massive deployment of technologies we already have [he stresses solar and wind]. . . . The way you stimulate this kind of innovation-which comes from learning more about what you already know and doing it better and cheaper-is by generous tax incentives, regulatory incentives, renewable energy mandates, and other market-shaping mechanisms that create durable demand for these existing clean power technologies. . . . And second, there is innovation that happens by way of eureka breakthroughs from someone's lab due to research and experimentation. The way you stimulate that is by increasing government-funded research. . . . The problem with such plans and claims: Politicians and their intellectual allies have been making and trying to implement them for decades-with nothing positive (and much negative) to show for it. For example, in the late 1970s, Jimmy Carter heralded his "comprehensive energy policy," claiming it would "develop permanent and reliable new energy sources." In particular, he (like many today) favored "solar energy, for which most of the technology is already available." All the technology needed, he said, "is some initiative to initiate the growth of a large new market in our country." Since then, the government has heavily subsidized solar, wind, and other favored "alternatives," and embarked on grand research initiatives to change our energy sources-claiming that new fossil fuel and nuclear development is unnecessary and undesirable. The result? Not one single, practical, scalable source of energy. Americans get a piddling 1.1 percent of their power from solar and wind sources, and only that much because of national and state laws subsidizing and mandating them. There have been no "eureka breakthroughs," despite many Friedmanesque schemes to induce them, including conveniently forgotten debacles such as government fusion projects, the Liquid Fast Metal Breeder Reactor Program, and the Synfuels Corporation. Many good books and articles have been written-though not enough, and not widely enough read-chronicling the failures of various government-sponsored energy plans, particularly those that sought to develop "alternative energies," over the past several decades. Unfortunately, the lesson that many take from this is that we must relinquish hope for dramatic breakthroughs, lower our sights, and learn to make do with the increasing scarcity of energy. But the past failures do not warrant cynicism about the future of energy; they warrant cynicism only about the future of energy under government planning. Indeed, history provides us ample grounds for optimism about the potential for a dynamic energy market with life-changing breakthroughs-because America once had exactly such a market. For most of the 1800s, an energy market existed unlike any we have seen in our lifetimes, a market devoid of government meddling. With every passing decade, consumers could buy cheaper, safer, and more convenient energy, thanks to continual breakthroughs in technology and efficiency-topped off by the discovery and mass availability of an alternative source of energy that, through its incredible cheapness and abundance, literally lengthened and improved the lives of nearly everyone in America and millions more around the world. That alternative energy was called petroleum. By studying the rise of oil, and the market in which it rose, we will see what a dynamic energy market looks like and what makes it possible. Many claim to want the "next oil"; to that end, what could be more important than understanding the conditions that gave rise to the first oil? Today, we know oil primarily as a source of energy for transportation. But oil first rose to prominence as a form of energy for a different purpose: illumination. For millennia, men had limited success overcoming the darkness of the night with man-made light. As a result, the day span for most was limited to the number of hours during which the sun shone-often fewer than ten in the winter. Even as late as the early 1800s, the quality and availability of artificial light was little better than it had been in Greek and Roman times-which is to say that men could choose between various grades of expensive lamp oils or candles made from animal fats. But all of this began to change in the 1820s. Americans found that lighting their homes was becoming increasingly affordable-so much so that by the mid-1860s, even poor, rural Americans could afford to brighten their homes, and therefore their lives, at night, adding hours of life to their every day. What made the difference? Individual freedom, which liberated individual ingenuity. The Enlightenment and its apex, the founding of the United States of America, marked the establishment of an unprecedented form of government, one established explicitly on the principle of individual rights. According to this principle, each individual has a right to live his own life solely according to the guidance of his own mind-including the crucial right to earn, acquire, use, and dispose of the physical property, the wealth, on which his survival depends. Enlightenment America, and to a large extent Enlightenment Europe, gave men unprecedented freedom in the intellectual and economic realms. Intellectually, individuals were free to experiment and theorize without restrictions by the state. This made possible an unprecedented expansion in scientific inquiry-including the development by Joseph Priestly and Antoine Lavoisier of modern chemistry, critical to future improvements in illumination. Economically, this freedom enabled individuals to put scientific discoveries and methods into wealth-creating practice, harnessing the world around them in new, profitable ways-from textile manufacturing to steelmaking to coal-fired steam engines to illuminants.
  • Topic: Government
  • Political Geography: United States, China, America, India
  • Author: Monica Hughes
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The most important and most overlooked energy issue today is the growing crisis of global energy supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated. Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, supply stagnates -meaning rising prices as far as the eye can see. What is the solution? We just need the right government "energy plan," leading politicians, intellectuals, and businessmen tell us. Of course "planners" such as Barack Obama, John McCain, Al Gore, Thomas L. Friedman, T. Boone Pickens, and countless others favor different plans with different permutations and combinations of their favorite energy sources (solar, wind, biomass, ethanol, geothermal, occasionally nuclear and natural gas) and distribution networks (from decentralized home solar generators to a national centralized so-called smart grid). But each agrees that there must be a plan-that the government must lead the energy industry using its power to subsidize, mandate, inhibit, and prohibit. And each claims that his plan will lead to technological breakthroughs, more plentiful energy, and therefore a higher standard of living. Consider Nobel Peace Prize winner Al Gore, who claims that if only we follow his "repower American plan"-which calls for the government to ban and replace all carbon-emitting energy (currently 80 percent of overall energy and almost 100 percent of fuel energy) in ten years-we would be using fuels that are not expensive, don't cause pollution and are abundantly available right here at home. . . . We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. . . . [W]e can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses. And Gore claims that, under his plan, our vehicles will run on "renewable sources that can give us the equivalent of $1 per gallon gasoline." Another revered thinker, Thomas L. Friedman, also speaks of the transformative power of government planning, in the form of a government-engineered "green economy." In a recent book, he enthusiastically quotes an investor who claims: "The green economy is poised to be the mother of all markets, the economic investment opportunity of a lifetime." Friedman calls for "a system that will stimulate massive amounts of innovation and deployment of abundant, clean, reliable, and cheap electrons." How? Friedman tells us that there are two ways to stimulate innovation-one is short-term and the other is long-term-and we need to be doing much more of both. . . . First, there is innovation that happens naturally by the massive deployment of technologies we already have [he stresses solar and wind]. . . . The way you stimulate this kind of innovation-which comes from learning more about what you already know and doing it better and cheaper-is by generous tax incentives, regulatory incentives, renewable energy mandates, and other market-shaping mechanisms that create durable demand for these existing clean power technologies. . . . And second, there is innovation that happens by way of eureka breakthroughs from someone's lab due to research and experimentation. The way you stimulate that is by increasing government-funded research. . . . The problem with such plans and claims: Politicians and their intellectual allies have been making and trying to implement them for decades-with nothing positive (and much negative) to show for it. For example, in the late 1970s, Jimmy Carter heralded his "comprehensive energy policy," claiming it would "develop permanent and reliable new energy sources." In particular, he (like many today) favored "solar energy, for which most of the technology is already available." All the technology needed, he said, "is some initiative to initiate the growth of a large new market in our country." Since then, the government has heavily subsidized solar, wind, and other favored "alternatives," and embarked on grand research initiatives to change our energy sources-claiming that new fossil fuel and nuclear development is unnecessary and undesirable. The result? Not one single, practical, scalable source of energy. Americans get a piddling 1.1 percent of their power from solar and wind sources, and only that much because of national and state laws subsidizing and mandating them. There have been no "eureka breakthroughs," despite many Friedmanesque schemes to induce them, including conveniently forgotten debacles such as government fusion projects, the Liquid Fast Metal Breeder Reactor Program, and the Synfuels Corporation. Many good books and articles have been written-though not enough, and not widely enough read-chronicling the failures of various government-sponsored energy plans, particularly those that sought to develop "alternative energies," over the past several decades. Unfortunately, the lesson that many take from this is that we must relinquish hope for dramatic breakthroughs, lower our sights, and learn to make do with the increasing scarcity of energy. But the past failures do not warrant cynicism about the future of energy; they warrant cynicism only about the future of energy under government planning. Indeed, history provides us ample grounds for optimism about the potential for a dynamic energy market with life-changing breakthroughs-because America once had exactly such a market. For most of the 1800s, an energy market existed unlike any we have seen in our lifetimes, a market devoid of government meddling. With every passing decade, consumers could buy cheaper, safer, and more convenient energy, thanks to continual breakthroughs in technology and efficiency-topped off by the discovery and mass availability of an alternative source of energy that, through its incredible cheapness and abundance, literally lengthened and improved the lives of nearly everyone in America and millions more around the world. That alternative energy was called petroleum. By studying the rise of oil, and the market in which it rose, we will see what a dynamic energy market looks like and what makes it possible. Many claim to want the "next oil"; to that end, what could be more important than understanding the conditions that gave rise to the first oil? Today, we know oil primarily as a source of energy for transportation. But oil first rose to prominence as a form of energy for a different purpose: illumination. For millennia, men had limited success overcoming the darkness of the night with man-made light. As a result, the day span for most was limited to the number of hours during which the sun shone-often fewer than ten in the winter. Even as late as the early 1800s, the quality and availability of artificial light was little better than it had been in Greek and Roman times-which is to say that men could choose between various grades of expensive lamp oils or candles made from animal fats. But all of this began to change in the 1820s. Americans found that lighting their homes was becoming increasingly affordable-so much so that by the mid-1860s, even poor, rural Americans could afford to brighten their homes, and therefore their lives, at night, adding hours of life to their every day. What made the difference? Individual freedom, which liberated individual ingenuity. The Enlightenment and its apex, the founding of the United States of America, marked the establishment of an unprecedented form of government, one established explicitly on the principle of individual rights. According to this principle, each individual has a right to live his own life solely according to the guidance of his own mind-including the crucial right to earn, acquire, use, and dispose of the physical property, the wealth, on which his survival depends. Enlightenment America, and to a large extent Enlightenment Europe, gave men unprecedented freedom in the intellectual and economic realms. Intellectually, individuals were free to experiment and theorize without restrictions by the state. This made possible an unprecedented expansion in scientific inquiry-including the development by Joseph Priestly and Antoine Lavoisier of modern chemistry, critical to future improvements in illumination.18 Economically, this freedom enabled individuals to put scientific discoveries and methods into wealth-creating practice, harnessing the world around them in new, profitable ways-from textile manufacturing to steelmaking to coal-fired steam engines to illuminants. . . .
  • Topic: Development
  • Political Geography: United States, America
  • Author: Craig Biddle
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Author's note: This is chapter 2 of my book Loving Life: The Morality of Self-Interest and the Facts that Support It (Richmond: Glen Allen Press, 2002). Chapter 1 was reprinted in the previous issue of TOS (Spring 2009). The book is an introduction to Ayn Rand's morality of rational egoism. As we have seen [in chapter 1], subjectivism-whether "supernatural," social, or personal-fails to provide proper guidance for human action, because each version calls for human sacrifice and leads to human suffering. If we want to live and achieve genuine happiness, we need a non-sacrificial alternative that is grounded in the facts of reality. But in search of such an alternative, we are faced with a big problem: The world is full of facts. In fact, facts are all there are out there: Paris is a city in France. The Earth revolves around the Sun. Men are mortal. Acorns are potential oak trees. Computers are man-made objects. For every action, there is an equal and opposite reaction. Electrons surround the nucleus of an atom. Fire is hotter than ice. Some grass is green. People make choices. Mountains are bigger than molehills. A bush cannot speak. "Think" is a verb. The stock market rises and falls. The list goes on and on. But where among all the facts is morality? Behind a tree? Up in the sky? On the Web? In a crystal? Where? The problem is that in just looking around, facts appear to be everywhere, but morality does not appear to be anywhere. Our task is to discover moral principles in a world full of facts. To begin, note that we can identify facts on several levels. Some are directly perceivable (fire is hotter than ice; some grass is green; the Sun rises). Others must be logically inferred (heat is a function of the motion of atoms; color is a function of the wavelengths of light; the Earth revolves around the Sun). With our five senses, we can observe countless facts at the concrete, perceptual level. And with the power of our minds, we can infer even more facts on the abstract, conceptual level. The faculty that enables us to advance from the perceptual level (which we share with other animals) to the conceptual level (which is distinctive to human beings) is: reason. Reason enables us to form concepts, to use language, to discover causal relationships, and to make the logical connections necessary for the achievement of our goals. It is our means of understanding the world in ever deeper and wider ways and of applying our discoveries to our chosen ends. But reason allows us to identify facts and only facts, which alone do not seem to tell us anything about what we morally ought to do. There simply is no fact labeled "ought" out there. This is a serious problem. As human beings, we need moral guidance. Without moral guidance, how do we know the right way to spend our time or where best to put our effort? How do we know whether we should work for a living or steal from others or beg for handouts? How do we know whether we should tell the truth always or sometimes or never? How do we know if we should befriend someone, do business with him, trust him with our children, support his campaign, or grant him our vote? And how do we know the proper way to deal with criminals, tyrants, or terrorists? In order to live and achieve happiness, we need to know how to evaluate our alternatives; we need to know how in principle we should act. In order to establish and maintain relationships conducive to our life and happiness, we need to know how in principle we should evaluate and respond to the actions of other people. And in order to define and defend the social conditions necessary for a life of happiness, we need to know what in essence they are. So, since facts are all there are out there, and since reason is our means of discovering and understanding facts, the question we must answer is: How can we use reason to derive moral principles-principles regarding what people ought to do-from the facts of reality-from what is? . . .
  • Political Geography: Paris, France
  • Author: Eric Daniels
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: During the Great Depression, the English economist John Maynard Keynes published The General Theory of Employment, Interest, and Money, in which he argued that governments could spur employment and reinvigorate an ailing economy by borrowing and spending money. The recent financial crisis has reinvigorated interest in Keynes's ideas. Articles in the Financial Times, the Christian Science Monitor, the New York Times, and Forbes have heralded the resurgence of interest in Keynesian theory. Commentators across the political spectrum, from Paul Krugman and Joseph Stiglitz to Bruce Bartlett and Greg Mankiw, have called for a return to Keynesian economics. Congress and President Obama have enacted a gargantuan "stimulus" bill and are pursuing massive spending programs the likes of which Keynes could only have dreamed. It seems that pundits and politicians are all Keynesians now. A new book, however, argues that Keynes's theory is much more profound than most people realize. In Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, George Akerlof and Robert Shiller present what they regard as the essence of Keynesianism-Keynes's view of man as an animal saddled with inherent, irrational drives. These "animal spirits" have historically been ignored, say the authors, which is why Keynesianism has, at times, given way to other theories. Those who want Keynesian political policies to rise back to dominance and endure need to understand and embrace this neglected aspect of the theory. The authors point out that, because Keynes published his work in the middle of the Great Depression, his followers wanted governments to adopt his policy recommendations as soon as possible. To make his prescriptions more palatable, Akerlof and Shiller tell us, Keynesians of the time deemphasized the more insightful yet more abstruse "fundamental message" in Keynes's work. Although the watered-down version of Keynesianism was more politically acceptable, it was, according to the authors, less politically potent and more vulnerable to attack. Yes, the Hoover and Roosevelt administrations engaged in deficit spending, but they "lacked the confidence to pursue those policies far enough" (p. viii). The Keynesian borrowing and spending of World War II was more robust, Akerlof and Shiller say; consequently, it ended unemployment, became all the rage in the 1940s, and remained a widely respected policy for some time. But even this broader and longer-lasting support for Keynesian deficit-spending was bound to fizzle because the "more fundamental message of The General Theory was cast aside" (p. viii). . . .
  • Topic: Economics, Government
  • Political Geography: New York
  • Author: David Littel
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: New York: Norton and Company, 2009. 221 pp. $24.95 (cloth). Reviewed by David Littel A political consensus is forming around the ideas of attorney and author Philip K. Howard. Beginning in 1990 with The Death of Common Sense and continuing through scores of articles and the work of his organization, Common Good, Howard has depicted an American legal system run wild, and he has advanced a thesis about what must be done. Political figures from Al Gore to Newt Gingrich praise his work. Self-proclaimed pragmatist Michael Bloomberg raves that Howard "offers big-picture ideas for how we can solve entrenched problems." In a prepublication review, George Will announced that Howard's latest book, Life Without Lawyers: Liberating Americans From Too Much Law, "surely will be 2009's most-needed book on public affairs." The bulk of Life Without Lawyers is an indictment of American law, covering everything from public schools to administrative regulations to civil lawsuits. As in his earlier books, Howard describes a series of nightmare scenarios drawn partly from his own experience as a practicing attorney and partly from other sources. For example, he tells the story of a family-owned dry cleaning business in Washington, D.C. that was sued for $54 million because of a lost pair of pants. The plaintiff calculated his damages based on a $1,500 consumer fraud penalty multiplied several times over in addition to $15,000 per weekend for a rental car to take his laundry to a more reliable establishment, $542,000 for his own time in pursuing the matter, and $500,000 for mental anguish. The suit was not dismissed but was allowed to linger for two years, costing the business owners more than $100,000 in legal fees (p. 72). . . .
  • Topic: Law
  • Political Geography: New York, America
  • Author: Daniel Wahl
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The scene is the offices of Donaldson, Lufkin Jenrette (DLJ) in late 1991. Analysts here are regularly given deadlines requiring them to work through the night; hundred-hour workweeks are the norm, and the environment is extremely hectic-even by Wall Street standards. It is three o'clock on a Sunday morning, and a young David Einhorn sits at his desk trying to finish the job he was given. A few months into this position, he has lost fifteen pounds due to the stress (p. 12). Two years later, Einhorn takes a job working for Siegler, Collery Company, a mid-sized hedge fund with about $150 million under management. He learns "how to invest and perform investment research from Peter [Collery], a patient and dedicated mentor" (p. 12). He spends weeks "researching a company, reading the SEC filings, building spreadsheets and talking to management and analysts." He then turns in his work to Peter-who, having read everything, makes a detailed list of questions that Einhorn wishes he had asked (p. 12). In 1996, confident in his own abilities, Einhorn resigns from the firm to start his own. The original business plan is written on the back of a napkin. The original office is a 130-square-foot, windowless room. He names the firm Greenlight Capital, as suggested by his wife, who also gave him the green light. As Einhorn explains, "When you leave a good job to go off on your own and don't expect to make money for a while, you name the firm whatever your wife says you should" (p. 12). Greenlight Capital is a "long-short" hedge fund-which means a fund that "goes long" on investment opportunities that it thinks are substantially undervalued and "short" on those it regards as substantially overvalued. Einhorn succinctly explains these terms: Short selling is the opposite of owning, or being long a stock. When you are long, the idea is to buy low and sell high. In a short sale, you still want to buy low and sell high, but in this case the sale comes before the purchase. It works this way: Your broker borrows shares from a stockholder who lends them to you, and you sell them in the market to a new buyer, thus establishing a short position. To close out the position at a later date, you buy shares in the market and return them to your broker to "cover" your short, and the broker returns them to the owner. Your profit or loss is the difference between the price you receive when you sell the shares short and the price you pay to buy them back. The more the stock falls, the more money you make-and vice versa (p. 5). For instance, on the long side, Greenlight invests 15 percent of the fund in C. R. Anthony, "a small retailer that had recently emerged from bankruptcy and returned to profitability. The market valued the company at $18 million despite its having twice that in net working capital (current assets less all liabilities)." When other investors (finally) notice the discount at which it is selling relative to net working capital, the stock increases substantially. And when they start to value the company based on its future earnings potential, the stock shoots up 500 percent from Greenlight's initial investment (page 19-20). On the short side, Greenlight sells Sirrom Capital, a business development company that Einhorn considers overvalued. "By tracking performance of [Sirrom's] loans from the year of origination, we determined that although the overall portfolio statistics appeared appealing, rapid asset growth masked poor results. . . . We estimated that from inception to final maturity, 40 percent of the loans went bad" (p. 29). After researching how Sirrom has accounted for bad loans in the past, Einhorn predicts that the company will have to recognize a significant loss on its loans in the near future. If this is correct, the market will lower its estimation of both Sirrom's current assets and its future earnings potential; the company will be unable to sell new stock in amounts large enough to mask past errors; and the price of its current shares will decline accordingly. Einhorn's prediction proves accurate. Sirrom is able to sell shares to the public only one more time before reporting disappointing results, at which point the shares collapse from a high of $32 to just under $3 (p. 30). The foregoing are just two of Greenlight's many such successes. By figuring out the true state of a company, comparing it with the state of the company as reported by its management team or as judged by the market, and then going long or short accordingly, Greenlight proceeds to earn spectacular returns for its clients. The company's earnings and assets under management soar-as does peer respect for Einhorn himself. Because of Greenlight's success in shorting Sirrom, Einhorn is approached by a hedge fund specializing in financial institutions for his opinion on a company with a structure identical to Sirrom's and with seemingly identical problems. The company in question is Allied Corporation (p. 43). . . .
  • Author: Heike Larson
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Free marketeers reading the news these days cannot help but feel depressed. Media reports would lead us to believe that entrepreneurs are exploiters, that global trade hurts rather than helps people in America-in short, that capitalism has failed and that only the "change" offered us by central planners can alleviate our economic woes. In this climate, Marc Levinson's book The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger provides a welcome respite and intellectual refueling for weary capitalists. It tells a suspenseful story of achievement-replete with many twists and turns and a swashbuckling American hero-that will leave you wanting to run to the nearest container port to admire with newfound appreciation the industrial machinery that impacts almost every part of our daily lives. The Box, published on the fiftieth anniversary of the first sailing of a containership christened The Ideal-X, tells the story of how a seemingly mundane thing-a metal box with a wooden floor-managed to fundamentally change the world we live in. Until the 1960s, shipping had not changed much in decades. Handling cargo was a labor-intensive activity, and transportation costs and times-whether by land or by sea-were huge obstacles to trade, often making transcontinental, let alone global, trade economically unfeasible. In the 1950s, moving goods by ship was "a hugely complicated project," involving "millions of people who drove, dragged, or pushed cargo through city streets to or from the piers" (p. 16). Docks were cluttered with every kind of good imaginable, "steel drums of cleaning compound and beef tallow alongside 440-pound bales of cotton and animal skins"-all of which needed to be loaded and unloaded manually by gangs of longshoremen (p. 17). The process of loading and unloading a single ship during a single visit to a port often took weeks and accounted for between 60 and 75 percent of shipping costs. And, given the difficulties inherent and time involved in moving goods housed in a variety of different containers, it was imperative that factories locate close to docks for fast access to raw materials. Transportation costs and long delivery times made long-distance trade challenging and expensive-even before factoring in the heavy regulation that plagued the shipping industry. Recognizing the great expense and wasted time inherent in shipping practices of the day, two companies-both outsiders to the maritime shipping industry-developed in parallel an alternative system. Malcom McLean, an entrepreneur who grew his trucking company from a single vehicle purchased on credit during the Great Depression to one of the largest in America, bought a marginal East Coast maritime shipping line using "an unprecedented piece of financial and legal engineering" to circumvent regulations that prevented trucking companies from owning ship lines (p. 45). McLean set out to design and build a new shipping system from scratch based on a novel approach to the business: Whereas most shipping executives at the time believed that their business was operating ships, "McLean's fundamental insight, commonplace today but quite radical in the 1950s, was that the shipping industry's business was moving cargo" (p. 53, emphasis added). Within less then two years, McLean and his company, Pan-Atlantic, bootstrapped the first viable container system, in which cargo was loaded into stackable metal and wooden boxes of uniform dimensions, eliminating much of the labor required for and many of the problems inherent in loading ships with goods housed in a variety of containers. Further, "McLean understood that reducing the cost of shipping goods required not just a metal box but an entire new way of handling freight. Every part of the system-ports, ships, cranes, storage facilities, trucks, trains and the operations of the shippers themselves-would have to change. In that understanding, he was years ahead of almost everyone else in the transportation industry" (p. 53). His team of entrepreneurial, fast-moving engineers, managers, and partners designed, among many other things, the 33-foot box (only small steel containers were previously available); developed a quick-release locking system that eliminated the need to chain containers to ships or trucks; built a new trailer chassis to guide containers automatically into place; and put in place large cranes equipped with spreader bars-devices stretching the entire length of a container that enabled crane operators to attach and release hooks at the container's corner with the flick of a switch, thereby eliminating the need for longshoremen to climb up to each container corner and attach chains manually. And they accomplished all of these things while dealing with skeptical regulators who doubted the safety of containers and were pressured by truck and rail competitors to prohibit the container shipping experiment. When the first containership sailed on April 24, 1956, McLean's detailed cost tracking system showed clearly the benefits of the new system: "Loading loose cargo on a medium-sized cargo ship cost $5.83 per ton in 1956. McLean's experts pegged the cost of loading the Ideal-X at 15.8 cents per ton. With numbers like that, the container seemed to have a future" (p. 52). . . .
  • Topic: Economics
  • Political Geography: America
  • Author: Amy Peikoff
  • Publication Date: 06-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: You strive to be as productive as possible in your career. You have relationships with friends and family you want to enjoy and nurture. You have hobbies or other interests you want to pursue. You have a car, a home, or other physical things that command your attention. You have a body to maintain. Your life is full and, at least at times, you feel overwhelmed by all the commitments you have made to yourself and others. At those times you find it difficult, perhaps impossible, to "live in the moment"-to focus on whatever you are or need to be doing right now, and thereby make the most of your time and life. If you have explored other strategies for managing your time and life, then you might be skeptical of David Allen's claim at the beginning of Getting Things Done (GTD): "It's possible for a person to have an overwhelming number of things to do and still function productively with a clear head and a positive sense of relaxed control" (p. 3). You may be even more doubtful when Allen tells you that, although he will incorporate "many of the things you've been doing instinctively and intuitively all along" into "a new behavior set," the results will nonetheless "blow your mind" (p. xiv). The promise to "blow your mind" is not representative of Allen's style in GTD, however. The book is a logically structured presentation of an approach to time and life management that is grounded in good epistemology and designed to facilitate productivity in light of certain features and limitations of the human mind. The problem, Allen says, is that all the commitments you have made are "on your mind," which overwhelms you to the point that you cannot think clearly and be productive. The question becomes, why are all these things on your mind? "[T]he reason something is 'on your mind,'" Allen writes, "is that you want it to be different than it currently is" (p. 15). Allen's formulation is deliberate. Many people have not really thought about the commitments they have made, and therefore have neither "clarified exactly what the intended outcome is" nor "decided what the very next physical action step is" (p. 15). And yet, inherent in allowing a commitment into one's life, Allen says, is a further commitment: a "commitment to . . . define and clarify its meaning" (p. 17). Allen explains that, in order for your mind to let go of this corollary commitment so it can be clear and ready to focus on the task at hand, you must envision the outcome you desire and decide what is the very next physical action you must take in order to move the current state of affairs toward that outcome. Thus arises one of two main prongs of the GTD approach, "disciplining yourself to make front-end decisions about all the 'inputs' you let into your life so that you will always have a plan for 'next actions' that you can implement or renegotiate at any moment" (pp. 3-4). You must do whatever thinking is necessary to define outcomes and requisite actions for each of your commitments, from the simplest to the most complex. Allen facilitates this thinking by introducing an intentionally broad definition of "project": "any desired result that requires more than one action step" (p. 37). Some things that Allen calls "projects" are so simple-for instance, "make guacamole for party"-that one can immediately call to mind not just the next action, but all actions required to complete them. More-complex projects may require the use of a more elaborate project-planning model, which Allen provides (chaps. 3, 10). Such a model is needed because, insofar as the next actions are not yet identified, a complex project on a "to-do" list will seem vague, in need of clarification, and thus in need of your attention. The goal is to see all projects as a sequence of discrete actions because, as Allen puts it, "You don't actually do a project; you can only do action steps related to it" (p. 38).
  • Author: Craig Biddle
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: No abstract is available.
  • Topic: War
  • Political Geography: America, Washington
  • Author: Alex Epstein, Yaron Brook
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: No abstract is available.
  • Topic: Islam, War
  • Political Geography: America
  • Author: John David Lewis
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Examines America's political climate in light of the unmistakably statist agenda emanating from Washington, and finds cause for optimism in the effect Obama is having on the minds of Americans-and cause for activism toward helping Americans to see the proper political alternative: not conservatism but capitalism.
  • Political Geography: America, Washington
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Discusses the dismal state of American foreign policy and what should be done about it.
  • Topic: Foreign Policy
  • Political Geography: America
  • Author: Elan Journo
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Author's note: The following is the introduction to Winning the Unwinnable War: America's Self-Crippled Response to Islamic Totalitarianism. The book is being published by Lexington Books and is scheduled for release this November. "I don't think you can win it. . . . I don't have any . . . definite end [for the war]"-President George W. Bush1 The warriors came in search of an elusive Taliban leader. Operating in the mountains of eastern Afghanistan, the team of Navy SEALs was on difficult terrain in an area rife with Islamist fighters. The four men set off after their quarry. But sometime around noon that day, the men were boxed into an impossible situation. Three Afghan men, along with about one hundred goats, happened upon the team's position. What should the SEALs do? Their mission potentially compromised, they interrogated the Afghan herders. But they got nothing. Nothing they could count on. "How could we know," recalls one of the SEALs, "if they were affiliated with a Taliban militia group or sworn by some tribal blood pact to inform the Taliban leaders of anything suspicious-looking they found in the mountains?" It was impossible to know for sure. This was war, and the "strictly correct military decision would still be to kill them without further discussion, because we could not know their intentions." Working behind enemy lines, the team was sent there "by our senior commanders. We have a right to do everything we can to save our own lives. The military decision is obvious. To turn them loose would be wrong." But the men of SEAL Team 10 knew one more thing. They knew that doing the right thing for their mission-and their own lives-could very well mean spending the rest of their days behind bars at Leavenworth. The men were subject to military rules of engagement that placed a mandate on all warriors to avoid civilian casualties at all costs. They were expected to bend over backward to protect Afghans, even if that meant forfeiting an opportunity to kill Islamist fighters and their commanders, and even if that meant imperiling their own lives. The SEALs were in a bind. Should they do what Washington and the military establishment deemed moral-release the herders and assume a higher risk of death-or protect themselves and carry out their mission-but suffer for it back home? The men-Lt. Michael Murphy; Sonar Technician 2nd Class Matthew Axelson; Gunner's Mate 2nd Class Danny Dietz; and Hospital Corpsman 2nd Class Marcus Luttrell-took a vote. They let the herders go. Later that afternoon, a contingent of about 100-140 Taliban fighters swarmed upon the team. The four Americans were hugely outnumbered. The battle was fierce. Dietz fought on after taking five bullets, but succumbed to a sixth, in the head. Murphy and Axelson were killed not long after. When the air support that the SEALs had called for finally arrived, all sixteen members of the rescuing team were killed by the Islamists. Luttrell was the lone survivor, and only just.2 The scene of carnage on that mountainside in Afghanistan captures something essential about American policy. What made the deadly ambush all the more tragic is that in reaching their decision, those brave SEALs complied with the policies handed down to them from higher-ups in the military and endorsed by the nation's commander-in-chief. Their decision to place the moral injunction to selflessness ahead of their mission and their very lives encapsulates the defining theme of Washington's policy response to 9/11. Across all fronts U.S. soldiers are made to fight under the same, if not even more stringent, battlefield rules. Prior to the start of the Afghanistan War and the Iraq War, for instance, the military's legal advisors combed through the Pentagon's list of potential targets, and expansive "no-strike" lists were drawn up.3 Included on the no-strike lists were cultural sites, electrical plants, broadcast facilities-a host of legitimate strategic targets ruled untouchable, for fear of affronting or harming civilians. To tighten the ropes binding the hands of the military, some artillery batteries "were programmed with a list of sites that could not be fired on without a manual override," which would require an OK from the top brass.4 From top to bottom, the Bush administration consciously put the moral imperative of shielding civilians and bringing them elections above the goal of eliminating real threats to our security. . . .
  • Topic: War
  • Political Geography: Afghanistan, America
  • Author: Craig Biddle
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: The proper purpose of government, wrote Thomas Jefferson, is to "guarantee to everyone the free exercise of his industry and the fruits acquired by it." The government "shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." In accordance with this view of the purpose of government, the founders established a republic in which the government was constitutionally limited to the protection of individual rights-the rights to life, liberty, property, and the pursuit of happiness. In this new republic, men were free to think, to produce, and to trade in accordance with their own best judgment; thus, they were free to thrive in accordance with their intelligence, their ability, their initiative. The result was astounding. Nineteenth-century America was a land of unparalleled innovation and prosperity-and further political achievement. In addition to countless inventions that sprang up-including the steamboat, the cotton gin, vulcanized rubber, the telephone, the incandescent light, the electric power plant, the skyscraper, and the safety elevator-and in addition to the vital industries that arose or were revolutionized-such as the railroad, oil, and steel industries-19th-century America witnessed the end of slavery, which was recognized as a violation of the basic principle of the land. Between the end of the Civil War and the turn of the century, America came as close to being a fully rights-respecting society as any country has ever come. Men were essentially free to live their own lives, by their own judgment, for their own sake. Unfortunately, although the Land of Liberty was a great success, it would not and could not last. The founders established America on the principle of individual rights, but neither they nor the thinkers who followed them identified the deeper philosophic foundation on which this principle depends, namely, the morality of egoism-the idea that being moral consists in pursuing the values on which one's life and happiness depend. In the absence of this foundation, Americans have embraced philosophical ideas that are contrary to individual rights. Over the past century, Americans have increasingly accepted the morality of altruism-the notion that being moral consists in self-sacrificially serving others-and they have increasingly applied this morality to the realm of politics. Consequently, our government is no longer committed to "restrain men from injuring one another [and] leave them otherwise free to regulate their own pursuits of industry and improvement." Rather, our government regularly-and increasingly-"take[s] from the mouth of labor the bread it has earned" and redistributes that bread to those who have not earned it. Consider just a few of the countless altruistically motivated, wealth-redistributing laws and institutions that have been enacted or established over the past hundred years: The Federal Reserve violates the rights of Americans by (among other things) printing fiat money-thus debasing citizens' savings-in order to finance welfare programs, bail out failed banks, "rescue" bankrupt car companies, and the like. The Federal Deposit Insurance Corporation (FDIC) violates the rights of taxpayers by forcing them to insure the bank deposits of strangers. Social Security violates the rights of younger Americans by forcing them to fund the retirements of older Americans. The National Labor Relations Act (aka the Wagner Act) violates the rights of automakers (and other businessmen) by forcing them to "contract" with labor unions on terms that are detrimental to their businesses. Medicare and Medicaid violate the rights of taxpaying Americans by forcing them to fund the health care of the aged and the (allegedly) destitute. The Community Reinvestment Act violates the rights of bankers by forcing them to provide loans to people whom they regard as too risky for business. The Troubled Asset Relief Program (TARP) violates the rights of taxpayers by forcing them to purchase bad debt from failing financial institutions. The American Recovery and Reinvestment Act (ARRA) violates the rights of Americans by expanding the extent to which they are forced to fund welfare programs, unemployment benefits, government-run education, and the health care of others. Of course, federal, state, and municipal governments violate Americans' rights in thousands of other ways as well, but the foregoing indicates the enormity of the problem. The explicit "justification" for all such rights-violating laws and institutions-the principle behind all of them-is altruism: the notion that we have a moral duty to serve others, whether "the poor" or "the public interest" or "society" or "the common good." As Theodore Roosevelt put it, the government must "regulate the use of wealth in the public interest" and "regulate the terms and conditions of labor, which is the chief element of wealth, directly in the interest of the common good"; or as Franklin D. Roosevelt put it, the government must seek "the greater good of the greater number of Americans"; or as John F. Kennedy put it, the individual must "weigh his rights and comforts against his obligations to the common good"; or as Bill Clinton put it, the individual must "give something back" on behalf of "the common good"; or as George W. Bush put it, we must "seek a common good beyond our comfort"; or as Barack Obama puts it, we must heed the "call to sacrifice" and uphold our "core ethical and moral obligation" to "look out for one another" and to "be unified in service to a greater good." A government animated by this principle will increasingly force citizens to serve the so-called "common good"-and with each political success, the government will get bolder and more aggressive in its enforcement of this principle. This is why the U.S. government has graduated over decades from the mere redistribution of wealth via taxation and inflation . . . to the establishment of wealth-redistributing institutions and hubs such as Social Security, Medicare, and TARP . . . to the outright nationalization of businesses, such as American International Group (AIG), General Motors (GM), and Citigroup . . . and to the nullification of private contracts that stand in its way (e.g., employment contracts in the case of AIG bonuses, investment contracts in the case of Chrysler's senior-secured creditors). Under such expanding government control, explains an article in the New York Times: Businesses and private property . . . become not an instrument of private "egoism" but "functions of the people." They remain private wherever and so long as they fulfill their "functions." Wherever and whenever they fall down, the State steps in and either forces them to fulfill the functions or takes them over entirely. That description of what we have witnessed recently, however, was not written recently; it was written in 1938. Nor was the author describing conditions in the United States; he was describing conditions in Germany under the then-burgeoning National Socialist Party.
  • Topic: Oil, War
  • Political Geography: America
  • Author: Michael Dahlen
  • Publication Date: 10-2009
  • Content Type: Journal Article
  • Journal: The Objective Standard
  • Institution: The Objective Standard
  • Abstract: Nineteenth-century America was the closest thing to capitalism-a system in which government is limited to protecting individual rights-that has ever existed. There was no welfare state, no central bank, no fiat money, no deficit spending to speak of, no income tax for most of the century, and no federal regulatory agencies or antitrust laws until the end of the century. Consequently, total (federal, state, and local) government spending averaged a mere 3.26 percent of Gross Domestic Product (GDP). The Constitution's protection of individual rights and limitation on the power of government gave rise to an economy in which individuals were free to pursue their own interests, to start new businesses, and to create as much wealth as their ability and ambition allowed. This near laissez-faire politico-economic system led to the freest, most innovative, and wealthiest nation in history. Since the beginning of the 20th century, however, capitalism and freedom have been undermined by an explosion in the size and power of government: Total government spending has increased from 6.61 percent of GDP in 1907 to a projected 45.19 percent of GDP in 2009; the dollar has lost more than 95 percent of its value due to the Federal Reserve's inflationary policies; top marginal income tax rates have been as high as 94 percent; entitlement programs now constitute more than half of the federal budget; and businesses are hampered and hog-tied by more than eighty thousand pages of regulations in the Federal Register. What happened? How did America shift from a predominantly free-market economy to a heavily regulated mixed economy; from capitalism to welfare state; from limited government to big government? This article will survey the progression of laws, acts, programs, and interventions that brought America to its present state-and show their economic impact. Let us begin our survey by taking a closer look at the state of the country in the 19th century. Total (Federal, State, and Local) Government Spending America's Former Free Market The Constitution established the political framework necessary for a free market. It provided for the protection of private property (the Fifth Amendment) including intellectual property (Article I, Section 8), the enforcement of private contracts (Article 1, Section 10), and the establishment of sound (gold or silver) money (Article I, Sections 8 and 10). It prohibited the states from erecting trade barriers (Article I, Section 9), thereby establishing the whole nation as one large free-trade zone. It permitted direct taxes such as the income tax only if apportioned among the states on the basis of population (Article 1, Sections 2 and 9), which made them very difficult to levy. Finally, it specifically enumerated and therefore limited Congress's powers (Article I, Section 8), severely constraining the government's power to intervene in the marketplace. Federal regulatory agencies dictating how goods could be produced and traded did not exist. Rather than being forced to accept the questionable judgments of agencies such as the FDA, FTC, and USDA, participants in the marketplace were governed by the free-market principle of caveat emptor (let the buyer beware). As historian Larry Schweikart points out: merchants stood ready to provide customers with as much information as they desired. . . . In contrast to the modern view of consumers as incompetent to judge the quality or safety of a product, caveat emptor treated consumers with respect, assuming that a person could spot shoddy workmanship. Along with caveat emptor went clear laws permitting suits for damage incurred by flawed goods. To be sure, 19th-century America was not a fully free market. Besides the temporary suspension of the gold standard and the income tax levied during the Civil War, the major exceptions to the free market in the 19th century were tariffs, national banking, and subsidies for "internal improvements" such as canals and railroads. These exceptions, however, were limited in scope and were accompanied by considerable debate about whether they should exist at all. Alexander Hamilton, Henry Clay, and Abraham Lincoln supported such interventions; Thomas Jefferson, Andrew Jackson, and John Tyler generally opposed them. These interventions (except for tariffs) were, as Jefferson, Jackson, and Tyler pointed out, unconstitutional. But history shows that they were also impractical. Tariffs were initially implemented, beginning with the Tariff Act of 1789, as a source of revenue-the main source in the 19th century-for the federal government. Pressure from northern manufacturers, however, to implement tariffs for purposes of protection led to the "Tariff of Abominations" (1828), which was scaled back by 1833 due to heavy opposition from the South. Tariff rates then remained relatively low-about 15 percent-until the Civil War. By 1864, average tariff rates had risen to 47.09 percent for protectionist reasons and remained elevated for the remainder of the century. As to national banking, the Second Bank of the United States' charter expired in 1836, thereby paving the way for the free banking era-which lasted until a national bank was reinstituted during the Civil War. By virtually every measure of bank health, this free banking era was the soundest in American history. In terms of capital adequacy, asset quality, liquidity, profitability, and prudent management, national banking proved to be inferior to free banking. As to subsidies for internal improvements, although private entrepreneurs financed and built most roads and many canals, state governments intervened in the 1820s to subsidize canal building-amending their constitutions to do so. However, most state-funded canals either went unfinished, generated little to no income, or went bankrupt. As a result, by 1860 most state constitutions were amended again to prohibit such subsidies. After the Civil War, federal subsidies for the transcontinental railroads caused similar problems-as well as corruption. Further, they were proven to be a hindrance to rather than a precondition of a thriving railroad industry: James Jerome Hill's Great Northern was the most successful of the transcontinental railroads, yet was built without any subsidies or land grants. The foregoing interventions, though impractical, were motivated in part by a desire to help promote the development of business and industry. But lurking in the periphery, growing in popularity, and poised to fuel further government interference in the marketplace, was the ideology of collectivism-the notion that the individual must be subordinated to the collective or the "common good." This idea was stated by economist Daniel Raymond in his 1820 textbook: "it is the duty of every citizen to forgo his own private advantage for the public good." And as the 19th century progressed, this idea was increasingly cited as a justification for government intervention. One of the most important instances of this was the Supreme Court's decision in Munn v. Illinois (1876). In the majority opinion, Chief Justice Morrison Waite declared: Property does become clothed with a public interest when used in a manner to make it of public consequence. . . . When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good. . . . Although the case applied only to the states, Munn undermined the sanctity of private property rights by establishing the precedent that property "clothed with a public interest" (i.e., any property related to business) is subject to government regulation and control. As a result, Munn helped pave the way for the two major assertions of federal control over the economy-the Interstate Commerce Act and the Sherman Antitrust Act-that would come in the Gilded Age.
  • Topic: Government, History
  • Political Geography: America