What is the right size of government?

In response to a newsletter from a thinker I respect, I was moved to reply and it turned into a mini-essay that I felt had some valuable insights. 

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One of your comments struck me as almost accurate and I thought it worthy of a response.

o Also, note that government doesn’t produce anything but simply redistributes capital from producers of capital to consumers of capital.

o   And while government has an important role to play in a thriving economy, it is one of facilitating the production of wealth, not creating it.

o  Therefore, the larger the government, the greater a drag it is on the productive capacity of the economy.

One of the obvious differentiators between Objectivism (which is a full philosophical system) and the economics-focused Libertarianism we commonly see is the role of government in a proper society. 

Libertarians fall into a range of camps that include Anarchy, Anarcho-capitalism, Minarchy, and related ideas. According to Rand, these are all anti-concepts that attempt to fuse a negative into a positive, thus destroying people’s ability to properly conceive and consider the positive. Anarchy is the absence of a central government. Anarcho-capitalism is the worst because it names the positive and then destroys it. Minarchy generally means the smallest government necessary and might be the closest to a proper formulation, but unnecessarily clouds the issue by creating a new term for what is simply capitalism. 

The positive is capitalism, the political and economic system where all property is privately owned and government is created to protect the rights of every individual citizen to life, liberty, and property. So long as the individual does not violate the rights of others, the government has no role, no policy, and takes no action. 

In a free society, government is an unalloyed good, an absolute necessity. Such a government is generally very small, but it may expand sometimes if needed to protect the country from external threats. Such a government is not good because it is small – size is not the standard of value – but because of what is does: protect rights from internal and external threats.

The first bullet could be improved by stating that through economic policy and the resultant use of force against innocent citizens, the government seizes the capital of producers and gives it to those people and groups favored by government policymakers. Some of those receiving the favours are also producers.

Your second bullet is almost perfect but can be improved by reformulating it as “A free society requires Government to play an essential role in the economy by protecting the rights of producers and consumers, creating the optimal conditions for production and trade.”

The third bullet is the weakest because it implies a negative correlation between government size and economic productivity. This is contradicted by Objectivism. A better formulation would be that since government is essential, there is a Kuznets curve something like this:

 At the origin point, there is essentially no economic production due to the condition of anarchy. This was the state of humanity for most of its history, with almost no production other than that needed for subsistence, and even then, subsistence was miserable. This is the fixed-pie view of wealth where anything can be stolen or destroyed with relative impunity.

The introduction of a government that starts to protect rights enables a sharp increase in production such as seen in the transition from the Enlightenment re-discovery of the power of reason and the consequent introduction of rights through the Industrial Revolution. In the U.S. and other relatively capitalist countries this persisted into the late 19th century and economic growth was 6% or even higher for long periods. 

Once the government started to adopt and enforce policies that did not protect rights, but violate them, the rate of economic growth started to decline. Controls, regulation, tariffs, taxes and other types of non-objective law are all forms of rights violations. The decline side of the curve is much more gradual than the increase side because it still contains significant rights protection, and these are usually gradually eroded. Because all the infrastructure created during a period of rights protection is difficult to destroy, both physically and intellectually, it is possible for a fascist government to commandeer production yet not rapidly destroy it. I think a good case in point is Argentina, in the news these days due to the election of a relatively free-market figure, which was once among the wealthiest of nations but then suffered a slow decline as collectivism became entrenched. 

A proper formulation of the third bullet point would thus be: “Once a proper, rights-protecting government has been instituted, any further growth of government will of necessity be rights-violating and thus lead to lower economic production.”

All this started with just the idea that the third bullet point was weak, but I am very happy with the thoughts that emerged, particularly the shape of the graphic, the form of which I have not seen before. 

The cancer stories you never hear

This story makes me think of the heroes among us who work, mostly quietly, to overcome the bureaucracies of government and the endlessly tangled health care outcomes created by the thousands of controls imposed by government and their regulators, and then by the companies and professionals subject to those regulations. It seems that no matter where you live these days, the remnants of individual rights and freedoms are being eroded and the barriers between patient and medical professionals are growing.

Who among us has not witnessed a family member or friend do battle with health care bureaucracies to figure out what is wrong and how to fix it? Time is money. Time is life. Precious individual lifetimes and lives are being sacrificed to the idea that collectivist/altruist fantasies of health care are better than a system where the people with the power are the patient and the medical professional. A system that protects individual rights and never violates them. A system known as freedom and which has been branded as capitalism.

https://www.commonsense.news/p/the-cancer-stories-you-never-hear

On the wonders of plastics

I'd like to offer another perspective on plastic - a constructive one - to contrast with that of Eric Schiller in the December 2018 edition of Image. If I wanted to thoroughly explain all the ways the inventors and entrepreneurs and businessmen who have brought us plastic have improved our lives I would need a collection of books to do so.

From the plastics that make up much of the computer I am typing this letter on, to the wireless router in another room, the shielding on the cable that connects my house to the world wide web, my ability to exchange ideas with the whole world would be impossible without plastics.

Plastics are widely used in medicine to make surgeries better and safer, to keep hospitals cleaner, to make sure medicines from the pharmacy are safer, and as above, to enable to vast network of knowledge and communications used in modern medicine. Our health depends on plastics.

Our food supply is greatly enhanced through the use of plastics in agricultural equipment, in the processes of harvesting, processing, shipping, and packaging of foods to keep them safe, fresh, cheap and convenient. I just had a glass of milk and a slice of toast with margarine and honey made from bread I made yesterday in my breadmaker. A substantial part of the breadmaker is plastic, my margarine and honey was safely sold to me in a plastic container, I kept my bread in a super-handy plastic ziploc bag, my glass of milk was safely and cheaply delivered in a plastic bag made with maybe a tablespoon of plastic and was kept cool and safe in a fridge made with lots of plastic.

It is easy to take for granted the hundred or thousand plastic items all around my house that improve my life every day. Plastics improve my clothes, transportation, education, climate, comfort, food, entertainment, safety and everything else these days. What a wonderful, human, life-promoting, innovative, adaptable, material! I an indebted to the great businesses that make this possible.

It is a myth that there are "vast ocean islands of plastic." Such areas naturally occur due to the mechanics of ocean circulation, but the plastic density there is more like flecks of pepper in your soup rather than an island. If there was an actual island then clever businesses could take a boat over there and collect it for large profits - and this would be good, but the fact is this is not possible.

Mr. Schiller says plastic bottles end up in the environment, as if the materials they are made from did not originate in the environment. The environment is not suffering since it is not a conscious being. In fact, my environment has been improving from the day I was born due to continuing advances in technology by entrepreneurs and industrialists. When societies rise from their primitive, collectivist, pre-industrial state to a more free, wealthier, life-promoting, more capitalist one, there are by-products of industrialization that may be identified as pollution by those in more advanced societies because we have already passed the top of the inverted-U shape normally found during development. As a society produces more wealth, pollution rises yet quality of life rises fast. Once a certain level of wealth is achieved people can afford to take greater care and pollution falls. This is a basic economic principle.

A call for the elimination of plastic bottles through political means is a move towards dictatorship. When I, a living, thinking, reasoning and relatively free human being have decided to buy water in a safe, portable and inexpensive plastic bottle, by what right does anyone else forbid me to do so? Who is to decide if the bottle is needed if not the individual buying it? You? What if I refuse to follow your command? By making this a political issue you are asking for the power of the gun (the only power politics provides) to be used against me and/or those who so helpfully produced it and sold it to me. Is this the right way for reasoning beings to live - taking away water bottles from fellow human beings at gunpoint? If you wish to deal with me as a human being, use reason, education and persuasion to show me a way that I can see is better for my life and don't threaten me with government-enforced bans.

A tragedy of the commons

In discussion with a Facebook friend we ventured into talking about communities where restrictive covenants are used to define specific property rights. My friend posted a link to a definition of the "tragedy of the commons" and my response follows.

So.. tragedy of the commons. I know the concept. I see this as a serious problem only for societies that do not have clear property rights. When there is property that "no one owns but everyone owns", i.e. state-owned property, there is no way to allocate resources, to determine priorities, to objectively resolve disputes, to coordinate economic activities.

The reference you provided refers to demand overwhelming supply. In a free market this is impossible except in the very short term because free people can expand the supply of any given resource. To many people this is counter-intuitive because they see resources as finite, as mere physical objects, when in fact resources are everything in reality that man's mind can conceive. Every single thing we see as a resource today has existed for millions of years - the difference is that humanity did not have the reasoning ability, the knowledge and the social structures of freedom and capitalism to realize the potential of these resources. Let me provide a few examples.

Until the minds of men were able to discover and exploit the principles of chemistry, that dark, gunky, toxic soil that was a blight for farming was worse than useless but today has become the most abundant, most economical, most life-supporting energy source yet discovered - oil and other fossil fuels.

Until the minds of men discovered certain principles of chemistry and physics, there was no such thing as steel, aluminum and a multitude of alloys that today support the structure of our homes, our offices, our factories, our bridges, cars, trains and planes.

Until the minds of men discovered and exploited certain principles of biology, the perpetual state of almost all mankind was starvation and malnutrition but today our supply of food has expanded so far obesity has become a problem in many advanced nations and risks becoming so for even poorer nations in just a few decades. I think most people would rather have the challenges of obesity than starvation.

Thanks to enlightenment thinkers, industrialists in relatively free countries discovered ways to mass produce goods and services in such vast quantities that supply not only exceeded what their contemporary populations could use, but can now provide supply for a vastly increased population with little difficulty.

Supply is not a function of a limited view of resources but rather one of human imagination and freedom. If one specific physical resource appears to be in short supply, a free economy sees its price rise, which then attracts additional attention from producers, who then work to discover new ways of producing or alternatives that may even make the earlier ways entirely obsolete. The energy field is a classic example. In the early part of this century there was a hue and cry about "peak oil" and forecasts of doom. Oil prices rose rapidly. Alternatives were sought and so quickly discovered and implemented that the USA, which was previously a huge oil importer, now is an exporter. If government and anti-human activists had seen this coming they would have had a decent shot at preventing such progress and this is evidenced by their strident opposition to shale oil, horizontal drilling, hydraulic fracturing, oil pipelines, oil tankers, oil trains, and even the production of oil and other fossil fuel sources - they oppose every single economic source of energy. This advance happened so fast they were caught flat-footed. Today, the supply of oil and other fossil fuel energy is greater than at any time in human history, not because the raw material was not available, but because human minds had not yet identified it and found ways to make it a resource.

And what's next after fossil fuels? Likely fusion, which requires raw materials that are incredibly abundant and is a process that produces nothing humanity considers a pollutant. The potential supply of energy from fusion is so vast it is easily a thousand times more than that of fossil fuels, and we have centuries of supply of fossil fuels remaining. From a time less than two hundred years ago when whales were being killed for their oil to today when we can see unlimited energy resources in front of our noses, the raw materials found in nature did not change one iota. What changed was that men were largely left free to make the best use of the resources they had currently discovered and this enabled them to discover even more resources. it was not environmental activists who saved the whales but the geologists and engineers and venture capitalists who launched the age of oil that did so.

Now back to the tragedy of the commons. Imagine what would have happened if all property was owned by the state instead of by individual people and the voluntary relationship groups they form such as partnerships and corporations. Do you think we would have ever advanced to the stage of having industrial scale steel, aluminum, oil or anything else? Not a chance.These great leaps forward always occur in the more free society, where there is a degree of respect for the individual human being, where citizens have property rights and a government protects these rights, including intellectual property rights. While a country founded upon enlightenment principles leaped further forward than any country in all of history in just a hundred years from its founding, a multitude of other countries that remained collectivist, tribalist, fascist and otherwise did not protect the individual and his mind remained mired in primitive squalor.

The same is true today. What country, when it was relatively free for a while was formerly one of the wealthiest but now has in just a couple of decades fallen so low that all of the pets, all of the animals in the cities and even the zoo animals have been eaten by its people while formerly middle class citizens forage through garbage in search of food? Which country has the world's greatest known supply of oil, yet thanks to a true tragedy of the commons is pathologically unable to produce enough energy even for its own citizens to live as rational human beings and has gas prices at about $10 Cdn per liter? Which country once exported food all around its area and just a short time later depends on international aid to delay mass starvation? What country has an inflation rate of about thirteen thousand percent (80% per month) and and has seen GDP shrink by about 16% in the last year? What triggered this horrendous change? Was it the adoption of freedom, the protection of individual rights, the implementation of free trade, free markets, the limiting of the role of government to rights protection and the removal of rights-violating regulation - that is to say was it capitalism?

Or was it the antithesis of capitalism, meaning collectivism: the elevation of so-called group rights above the individual; the destruction of free association including the right to form corporations and seek economic production; the attack on objective law that protected citizens from those who would violate their rights, especially the state; the attempt to equalize all people's situations in defiance of their individual differences; the reversal of the proper role of the state from the protector of the right of citizens to pursue their own reasoned decisions to the agency that dictates how citizens must behave, organize their productive activities and even think? Did this country suffer from an excess of freedom and capitalism or the near total destruction of these?

Did socialism ride to the rescue of this formerly partially capitalist and wealthy country and make all its citizens happy, healthy and equally wealthy? Well, on the side of wealth they are in the process of becoming equal all right - equally poor, equally starving, equally desperate to escape the death-trap of socialism. And yet, do you think these same people, once they have thrown off the first layer of socialist shackles will advocate for ma truly free country, for pure freedom and capitalism, for a state that has as its sole duty the protection of individual rights? Not unless they have the intellectual and moral tools to do so - meaning they almost certainly will not. Rather, they will swing back towards enough freedom to improve their lives for a while and then again will lean towards statism and the cycle will continue.

Oh, and in case it wasn't evident, the country in question is Venezuela and it is currently in the grasp of a true tragedy of the commons.

James Hansen advocates fighting climate change by suing everyone in sight, including ourselves

As thousands of government representatives prepared to jet to Germany for the COP23 climate conference in the fall of 2017, the volume and stridence of proclamations from the leaders of the climate change alarmist movement rose quickly.

Former NASA scientist James Hansen was quoted several times in a Nov. 7, 2017 National Geographic interview, in which he recommended suing the world’s biggest oil, coal and gas, and cement companies for damages resulting from climate change. He says 100 companies have been the source of more than 70 percent of the world’s greenhouse gas emissions since 1988. The article tells us “An enormous amount of money is urgently needed to dramatically slash emissions of carbon dioxide (CO2), take existing CO2 out of the atmosphere, and for countries to cope with the impacts of climate change, Hansen argues. And that money should come from the companies that profited most from burning fossil fuels, Hansen will tell world leaders Tuesday in Bonn, Germany, at the annual United Nations climate negotiations.”

Later, the article says “Hansen is involved in a 2015 lawsuit against the U.S. federal government, brought by 21 kids under the age of 21, including his own granddaughter. The case argues that the government’s failure to curb CO2 emissions has violated the youngest generation’s constitutional rights to life, liberty, and property.”

If Hansen’s assertions are correct and all our lives are damaged by greenhouse gas emissions, then suing those who harm us might be one way to reduce the harm. But are his assertions true? How do we know? One good way to examine the validity of a statement is to follow it to its logical end and see if it makes sense. Let’s examine two aspects of Hansen’s assertions: that we have all been harmed by CO2 emissions and that suing big companies is a solution.

According to Hansen, all our lives should be much worse off because of greenhouse gas emissions and their supposed causal effect of increasing global temperature. We should have powerful measurable evidence of harm to humanity. Reality contradicts Hansen since by all objective measures our lives have become safer, longer, healthier and richer as humanity has created more energy from fossil fuels. As Indur Goklany says in Humanity Unbound - How Fossil Fuels Saved Humanity from Nature and Nature from Humanity “From 1750 to 2009, global life expectancy more than doubled, global population increased 8-fold, and incomes increased 11-fold. How did this happen? While there were many factors tracing their roots to the renaissance and enlightenment, the rapid industrialization of the West was made possible and supercharged by the discovery and exploitation of industrial scale energy production - energy that powers all other industries. As Goklany states, even today when other energy sources like hydro, nuclear, solar and wind have been discovered and industrialized, “...fossil fuels provide 80 percent of mankind’s energy and 60 percent of its food and clothing.” Clearly, civilization depends on fossil fuel energy and is likely to do so for quite some time.

But has our environment become more dangerous as we exploit this energy? Not at all, points out Goklany, in fact “Global death rates from extreme weather events declined by 98 percent since the 1920s, while economic damages corrected for population growth and wealth have not increased.”

What about Hansen’s assertion we should sue the very companies that have provided the energy and structure that powers the modern world? What would it mean to sue them? Who owns these companies? Well, in brief - we all do. The shares of these publicly traded companies are owned in our individual investment accounts, our group investment plans, our pension plans and the pension plans of our governments. Perhaps hundreds of millions of people own a part of companies like Exxon.

Following the lawsuit process to the end would mean suing ourselves and our neighbors and friends, our employers and our governments, even our children and our parents. Hansen would be suing his granddaughter and she him at the same time they would both be suing the companies that built and power their schools, hospital, roads, homes, and cell phones. They would be suing the creators of the internet and the content that rides on it like that produced by Disney, the artists who travel between cities for productions like Disney on ice, the builders of the ice rinks and power companies who enable the existence of ice rinks in the desert. Hansen would be suing all of human civilization and almost everyone alive today except the few primitives who remain isolated from modern society. In short, it would mean everyone attacking everyone at the same time. To borrow a term from the current movie scene, it would be Ragnarok! Hansen’s call to sue the top 100 producers of CO2 emissions is nothing less than a call for the end of civilization and the virtual elimination of humanity, his granddaughter included.

One of the many things Hansen does not understand is that companies are not people, they are owned by people - many people. The companies have not been the ones profiting from industrial scale energy production, people are. Not just those who own the company, but all those who are customers of the company or customers of their customers. It is the daily choices of all the people in the economic chain of activity that have directed money and profits towards those big companies, and it can be taken away at any time if consumer preferences shift. This is a much more powerful (and what’s more it is a fully moral) method of tuning and improving the marketplace for energy. Whereas the free market price mechanism provides an elegant and infinitely adaptable solution to potential economic challenges like the effects of climate change, Hansen would use a club and rock to smash our biggest and best energy producers to impose his radical personal views on the rest of us. I hope his granddaughter does not grow up to ever see the world in the state that Hansen’s ideas would take us.

Capitalism and the moral high ground

When I saw the meme below I re-posted it on Facebook and attracted more than one active commenter.  The exchange below was quite detailed and I thought was worth assembling here. In it, I am able to address a number of important issues and questions brought forward by the commenter, which I have shown in blue.  

Comment: Are you complaining about wealth distribution? We're playing monopoly while 50% of the world is playing feed my family - living on $2.50 per day. Hunger is the leading cause of death worldwide. 1% of world population owns 50% of global wealth. http://www.bbc.com/news/business-30875633
My reply: I am not complaining about wealth distribution so long as it is within a free society where rights are objectively defined and protected by government. In such an economy, the poorest people are far better off than in a country where rights are violated, productivity is punished instead of rewarded and cronyism is de rigueur.

I do complain about the lack of rights, freedom and protection that persists in large parts of the world, despite the example set by the West over the last couple of centuries, clearly showing the path to prosperity and long life. I also complain about the path the West is on, headed back to various forms of collectivism and away from the freedoms they earlier enshrined in their societies. I complain about the tremendous loss of lives and progress due to the lack of freedom and rights and encourage people to rediscover the true meaning of freedom and its political-economic corollary, laissez-faire capitalism.

For all of human history hunger, disease, climate and murderous governments and groups prevented humanity from learning, experimenting, discovering and progressing. Until the renaissance, enlightenment and the founding of a country on the principle of individual rights, no country in history was even close to having a system proper for the life of man - the rational being. Hunger is a problem quickly solved in countries that embrace rights and freedom.

In just over two short centuries, men in mostly free countries advanced so fast they virtually eliminated the problems of food supply, shelter, clothing, protection from the climate and predators, education and physical violence, among others. Those who remain stuck in pre-capitalist societies are poor and hungry because of their desperate lack of capitalism and not because of the wealth produced under more free economies. If we owe anything to them, it is to share the message of how to create wealth through productive activity, the protection of rights and trade with others.

Comment: Where to begin? It seems you are not aware that laissez-fair capitalism - trickle down economics - has been proven to be a broken model. While capitalism is the uncontested winner overall, left to it's own (unrestricted) mechanisms, wealth is not distributed in a way that helps the world most.

Laissez-faire capitalism leads to the rich getting richer, and the poor getting poorer. The Monopoly analogy is equivalent to saying: OK, all the properties have already been purchased, but jump into the game and try to get ahead on $200 of income. (80% of the worlds lives on just USD $10 per day - so $200 is not far off).

In terms of freedoms, I am not sure why you are so opposed to taxation. Is it abuse your fear? I think you believe in insurance, so why not just consider taxation your insurance contribution... health insurance (for all), education insurance (for youth), security insurance (army, police, courts - for all).

I want to live in a society that works collectively to manage collective issues - like health, education and security. I also want to live in a society that values progressive contributions. From each according to their capacity, to each according to their need. This can get distorted, but the principle is one I do believe in.

The dollars lost on individual abusers does not compare to the dollars lost on corporate abusers. We think Apple, Google and others are wise for juggling their finances in such a way as to take advantage of international tax opportunities. But this is faulty and we need a global taxation system to respond. Corporations should be taxed on revenues earned in a country, according to the tax policies of that country. Becoming an Irish-based corporation should not free a company from their tax liability in Canada, US or elsewhere.

Part of my personal experience of freedom comes from living in a system that restricts capitalism, has a progressive tax system and supports those in need. If I pass by a homeless person, for example, I am free not to care too much, as there are supports for that individual. That's is a wonderful freedom. I am delighted to have health care, free education and police. Aren't you?

The US is probably the closest country to model your version of laissez-faire capitalism, but look where that is getting them. The class divide is growing and inequality is at record highs. Their health care and education scores are at the bottom of "rich" countries. The middle class has been shrinking for 40 years. By 2040, it is estimated that 50% of the population will only make minimum wage.

But somehow, I feel like maybe you are ok with that. I think you feel that laissez-faire capitalism provides everyone with equal opportunity. If governments would just get out of the way, capitalism will lead all to a happier, healthier life. Right? Competition and the markets will regulate themselves.

I certainly agree that capitalism is good. And there is no doubt that it has lead to the prosperity that the modern, developed world enjoys. Greed works. It motivates wonderfully.

However, the 2008 financial collapse, resource oligopolies and the shrinking middle class are all examples of why greed needs to be mitigated and restricted. Similarly, aging seniors, kids with special needs and refugees are all examples of why a social welfare element to capitalism is necessary and positive.

We Canadians tend to believe in an economic approach that is kinder and gentler than laissez-faire capitalism. This is true of most of Europe. And, it is working. Most every report suggests that cities in these parts of the world are amongst the best places to live. US cities generally don't make the cut. Countries with capitalist economies and a high measure of social-minded programs/taxation tend to score highest on health, education, and quality of life. For me, that counts.My reply: I think we have to go back to basics here to make sure we are talking about the same thing.

When I say capitalism I mean the social system where the right of individuals to life, liberty, property and the peaceful pursuit of their own happiness is recognized as the fundamental basis for society. The recognition of rights means that physical force and fraud must be banished from society since it is the only way rights can be violated. Thus, there is an absolute need for a government for the purpose of protecting those rights and its sole responsibility it to intervene when rights are physically violated or threatened and to arbitrate when there are non-violent disputes among individuals. Any other actions require the violation of rights and are thus immoral. Under capitalism all economic activity is done through productive action and voluntary exchange of values. If one man wishes to trade his production with another man, he is free to do so and no one has the right to stop him or to interfere in the exchange. Capitalism is the system of individual rights and freedom.

While there has never been a truly capitalist country, the US did come closest in the 19th century and the result was the greatest improvement in the human standard of living in all of history as the potential of the human mind was released from the various forms of collectivism that had enslaved and suppressed it for many centuries. From a world where poverty, starvation and disease were almost universal there arose such wealth that a poor person in a partially free country today has easy access to a standard of living un-dreamed of by kings before the coming of the freedom-fueled industrial revolution.

Capitalism is the ultimate system of voluntary cooperation since it empowers everyone to pursue any goal they wish, so long as they recognize the right of others to do the same. Capitalism is the most kind, gentle and benign form of government discovered. Under partial capitalism, lifespan, health, education, safety and all other measures of quality of life advanced more than in all previous centuries combined. These advances were not because people were ordered to do this and forced at gunpoint if they refused, but by free men of good will working together for mutual gain. A free market enables everyone to experiment withe different ideas and to compete with all other ideas to discover which ones work best and are preferred by their fellow men with whom they trade values.

Being in favour of capitalism means I am against all forms of tyranny, slavery, oppression and other versions of the violation of individual rights. It means I advocate for a society where not only is your right to your own life protected from force applied by other individuals, it is specifically protected from the force of government, thus the need for a constitution that defines and delineates the proper function of government. Force does not become moral when two people decide to use it against a neighboring individual, when ten people get together in a gang, or when a population votes to initiate force, no matter how many people vote. Using the agency charged with protecting individual rights in order to violate those rights is a contradiction that wipes out the very essence of the concept of proper government. Once government is used to start violating rights, there is a natural progression of increasing violations, as is the case in western civilization today.

Capitalism, lacking a proper moral defense at its inception, has been in decline since the day it was first tried. Thus, we have the spectacle of the financial crisis being caused by decades of forcible government interventions culminating in a massive destruction of wealth, yet being blamed on too much freedom, in a sector more heavily regulated than any other - the financial sector. People have lost understanding and connection with the definition of rights, the meaning of freedom and the basic principles of economics. Government creates a monopoly on the money supply, manufactures inflation then blames freedom for the destructive consequences. Government enforces thousands of rules on banks, creates a monopoly on risk rating agencies and then blames freedom for the ridiculous risk ratings that were produced. Government forces banks to lend to people who are a poor credit risk and should not be borrowing, then blames freedom for the harm done to these people. Government inverts the yield curve, encouraging enormous short term borrowing in risky assets that inflates house prices and then blames freedom when havoc results.

I have personally spoken to and read a book by the former head of the BB&T Bank in the US. His bank remained profitable through the crisis because it focused on win-win lending, where a responsible lender contracts with a responsible borrower for mutual benefit. Though he did not want it, government rammed money down the throats of all the banks so that the public could not see which ones were weak and which were strong, hiding the damage government had done to the financial sector for decades, protecting their cronies and harming the more honest banks. Under capitalism the foolish banks would be out of business long ago and the most productive ones, as determined by the preferences of their customers, the public, would thrive. Government regulations encouraged deceit, recklessness and even criminal activity and when it went to hell the government bailed them out to hide their mistakes, thus doubling down once more on their ideology of forcible intervention in the economy.

Under capitalism there is no such thing as a government subsidy for business, nor for individuals; no such thing as cronyism since government has no power to hand out favours; no such thing as lobbyists since there is nothing to gain in a system where all rights are protected and government cannot use force against innocent citizens; no such thing as patronage since government has no goodies to give away; no such thing as dog-eat-dog since no one has the right to destroy anyone else's effort except through open and honest competition for customers.

This, and much more is what I mean when I say capitalism.

Comment: Where in this "social system" you describe is there a place for collective good? The capitalism you describe is fueled by personal fulfillment - and that's why it's so damn good. But we are social creatures - not just goods and services machines geared to exchange at optimal profitability.

We care about others in our societies. We help each other and support each other - often at a loss of time and energy, with no financial gain.

Many have said that business is about people. Where is this in your purist model?

Where is there room for those who care more about the collective good than personal financial advancement? By definition, society involves some measure of giving to the collective for the sake of personal satisfaction gained. It's a give and take.

We come together for security, community, commerce and capacity. We form states for personal gain (yeah capitalism) but this inherently involved sacrifice. In short, we must share - give back. I like to think that as Canadians, this is something we take pride in. Government is not forced tyranny. Taxation is neither slavery nor theft. We take much of our way of life from the bounty that Canadian society provides - safety, infrastructure, resources, amenities, health care, education, arts, etc. We give back (yes, painfully through robust taxes) in accordance with our capacity (more or less). It's all good. My reply: That's an important question. To answer, we have to begin with a look at the basis of a social system. A society is not a system that stands by itself, but rather is a number of individuals living in an area, organizing themselves with a set of principles to guide their actions. For an individual, the guiding principle, if he is to survive, must first be to establish his own life and happiness as his standard of value and take all the actions needed to preserve and promote his life. An individual quickly recognizes that living in a society instead of on his own is a tremendous value, since it allows for a division of labour and exchange of values for mutual benefit.
For an individual to live his life he must be free to act on his reasoning, even if it turns out to harm himself, and in return he must be willing to recognize that everyone else in society has the same rights. In order for a society to protect the rights of all, a government is necessary, to which the retaliatory use of force is delegated (police, courts, prisons, military) and which serves as an objective arbiter of civil disputes (civil law and courts).

Business is absolutely about people - people who produce values trying to do so in a way that maximizes the value for their customers while creating value for themselves in exchange. An economic exchange only occurs when both parties agree that each will be better off after the exchange than before, thus a win-win is the normal expectation for all trade.

In a free society where rights are protected, every individual is free to create as much value for others as he is capable of doing. If he chooses to exchange his production at a low price and makes little profit, he will have little to use in the production of future value. If he produces at a loss, he will gradually destroy the value he has and also his ability to create future values. If he produces at a large profit he will have a lot of value with which to save and invest, thus increasing his ability to produce values in the future. It is this latter which is the path to a society of growing wealth, meaning more health, more choice, more education, more medical care, more literature, more travel, more charity and whatever else individual may choose as their values. In this sense, society advances only if the values created are greater than those consumed.

In a free society an individual is free to give away as much of what he has produced as he wishes, and there is no moral foundation for forcing him to give away more (or less) than he chooses. In practice, people of high productive ability living in freedom are very benevolent and usually use a part of their accumulated wealth to endow causes they are passionate about, from education to research, from the arts to entrepreneurship. It is only when people have their rights fully protected and are able to truly make choices that they full benevolence is enabled, otherwise they are acting under coercion and properly resent those doing the coercing.

In a rights-respecting society there is no need for sacrifice, which means the surrender of a high value for a lower value, or for no value. Just as it is not moral for me to sacrifice you for my wishes, so it is immoral for you to require me to sacrifice myself for your wishes. A proper society is not one of sacrifices at all, but one of voluntary cooperation.

Regarding giving back, in a society that protects rights people recognize that there is nothing to give back since nothing has been taken. Since free trade is a win-win exchange where both benefit, a man who accumulated wealth by creating value for a large number of fellow citizens has not left them worse off, but better than they would be without him. He may choose to give money away, but in no sense it there any moral obligation for him to "give back". Such a term may properly be applied only when a violation of rights has occurred, such as when a character like Robin Hood takes money from tax collectors and gives it back to those from whom it was taken under threat of violence.

Government in itself it not tyranny and taxation itself is not theft, but rather their methods may make them tyranny or theft. A government that violates the rights of the very citizens it is morally obliged to protect, when it goes far enough, is properly labeled a tyranny. Taxation that is exacted through the threat of seizure and imprisonment (force) is theft, whereas taxation through voluntary contribution to a government in exchange for access to civil court protections is fully moral. Rational people know that there are a few roles that only an objective government can perform, and would be willing contributors if their rights were otherwise protected. Consider this as similar to the military: only a military comprised of volunteers, not conscripts, is morally based. If a government believes that a particular military action is necessary to protect the nation yet it cannot raise enough volunteers, then clearly the citizens do not support the action. This same principle of non-coercion may be applied across the board to governmental actions.

Thus, we do not TAKE our way of life from Canada because Canada is nothing but a group of individuals acting together for mutual benefit, just like a corporation, a cooperative or another form of organizing large numbers efficiently. It is not possible for the people of a nation to take more than they produce, so the fundamental here is production, not consumption. A rights-protecting society in essence says "take as much as you want, and pay for it." It is the latter part that many people ignore or even wish to destroy - the part that requires that you PAY for your own way in life, and instead want to use government force to make others pay for their wishes and whims. This ideology leads to a society of mutual aggression and eventually the destruction of society - a la China, USSR, Vietnam, Germany, North Korea, Cuba, Venezuela, etc. Its dominant themes are aggression, force, compulsion, sacrifice, distrust, protectionism, regression, mean-spiritedness, pessimism, posturing, manipulation, cronyism, pain and fear. A society based on the protection of rights, meaning capitalism, is one of cooperation, benevolence, progress, happiness, freedom, confidence, respect, security and optimism. This is the type of society for which I advocate.

As a footnote, when did you adopt Marxism (from each...)? I recall a social studies course or two in CEGEP as being loaded with Marxist/collectivism/altruistic philosophy.

Democratic socialism is simply socialism via voting instead of revolution

Me, commenting on a Facebook post by Democratic Socialist, attempting to define socialism as benign and beneficial:

This fellow declares that people trading through voluntary cooperation and for mutual benefit (the free market) is not the right form of economic exchange, that some other form of economy is better.

He declares that socialism implemented through revolution (communism) is extreme, but that socialism imposed through voting is okay. Note that he does not examine the moral correctness of the end except through through the means. By that standard, slavery by military conflict is not okay, but slavery through the ballot box is just hunky dory.

He says the foundations of society must be provided through government force, ignoring that the very foundations he identifies did not simply pop into existence but were produced by the free minds he proposes to enslave.

He states he does not want to do away with free markets while he is bust advocating for an end to freedom. The system he is describing, where the pretense of freedom is maintained while the state dictates a million rules, is the form of collectivism known as fascism. In this he, clearly does not know how such democratic socialists as Hitler, Chavez and others came to power and what was the end result for citizens.

He asserts that people engaged in voluntary trade for mutual benefit are not working for the good of their community. He implies that working to further their own lives is not good for the community. What is? Sacrificing their lives for anyone except themselves and those they love.

He asserts that such services as firefighters, parks, medical care and the military would not exists without socialism, as if citizens left alone are not those who conceived of all these and would never think to value them and find ways to maintain them if left free to choose.

He thinks education is good and free if provided through the force of government but not good if people are allowed to choose and earn an education for their children; that it is somehow better if others are forced to pay for your children's education and if you are forced to pay for your own children's education through a state monopoly instead of having the freedom of choice.

In short, he is in favor of nothing less that a total dictatorship of the majority, which is simply pure democracy. This is not what the founding fathers envisioned. They saw a country of free individuals, with a constitution protecting them from exactly the kind of statist government he espouses, with police and objective laws protecting them from criminals and a military protecting them from aggressive countries. The country has lost the knowledge of the enlightenment-based founding fathers and has been in social decline almost from the start, as various forms of collectivism have eaten away at the principle of freedom from the state on which the country was founded. Very sad.

Commenter: Government programs come into existence when there is a lack or hole created by private endeavors or when privatization would be unethical, such as with law enforcement. In other words, every social program we have today came into existence because the free market was failing in that area.
My reply: Disagree. Aside from law enforcement, all other activities are better, more economically, and, most important of all, justly provided by free people acting without coercion. Socialization of services is most often justified on the basis of some people's wishes to get a better service without having to pay for it.

For example, so-called public transit is fantastically expensive and only survives on massive payments taken from some taxpayers and given to other taxpayers. No wealth is created in the process, only removed forcibly and given away, while extracting a high cost of operation to do so. A free market sees all the transportation options enough people want and can pay for springing forward as rational, profit-seeking entrepreneurs try to fill market demand.

If an activity is not profitable, that is to say it cannot be exchanged between a producer and consumer who both think it will improve their life and matches with their priorities, then it does not happen. Someone may look at the resulting situation and wish for a low priced bus to appear on the street, but wishes are not reality and coercing people's activities to accomplish the wishers' ends is not moral.

Further, once free choice is removed from the equation, then ever more coercion is required to maintain the illusion. Thus, in transit we have the creation of government monopoly, the prevention of competition, the political cronyism of contracts, the featherbedding by unions, the favoritism of routes, the lobbying for preferred price categories, the posturing for control of the system, the abrogation of negotiating rights through the declaration of essential services and it goes on and on, around and around. Never is the basic premise challenged, the premise that it is right for government to coerce citizens instead of protecting them from coercion.

Just because someone claims to need something cannot create a moral obligation on anyone else to produce it for them. For most of history, humanity needed to discover reason and the principles of a rational society but did not do so. Men needed food, clothes, shelter, health and security and no one gave it to them. They had to first discover the principles that make such a society possible an then tear their freedom from collectivists at a great price. Then they had to institute a society based on those principles and try to protect them. A great failure they made was to omit the moral case for freedom, recognize that human freedom and economic freedom are inseparable, and to separate government from economic actions. This is why the US has been in moral and political decline since its founding. Only a rediscovery of founding principles can save the country.

How to end political cronyism?

A recent Facebook exchange I had that started with a posting about the US Democratic Party and candidate Bernie Sanders holding opposing positions about a campaign finance law.

Dave: 

Politics has been corrupting money for too long. A separation of state and economy is way overdue.

Commenter: 

The Constitution of the US specifically grants Congress the right and responsibility to regulate commerce, so a complete separation would go against the Constitutional intention.

Dave: 

What did the founders mean when they included this? Did the same men who so valiantly cherished individual freedom and fought to establish a country based on individual rights intend that the state would control and restrict citizens' productive activity in pursuit of their own happiness? Did they intend to deny citizens the very freedoms the declaration of independence so proudly identified? Or was their intent to empower the federal government to act to ensure interstate commerce was not restricted and citizens of the country were allowed to trade freely? Did they mean regulate in the sense of modern regulators, who seek only the political power to control and restrict others, or did they mean it in the older sense of ensuring a free flow of trade and removal of obstacles from the path of citizens pursuing happiness through productive activity? Which position is consistent with all we know of the founder's explicit and implicit philosophy?

Think of the process of evolution of cronyism. First, government makes a rule that favors some citizens at the expense of others who have violated no rights of others and are thus by definition innocent. The rule may have been prompted by lobbying or not, but it is clearly improper in a free society for government to violate rights when its sole purpose should be their protection.

Now that such a rule exists, it pays for people to lobby either to become part of the favored group or to change the law to instead favor them. If corruption has not already been introduced into the equation, it certainly is now. And so various groups band together to lobby for their interests, specifically for the privilege of being the group to whom the interest of others are sacrificed, the privilege of benefiting from the pain of others. Groups raise money, fund campaigns, try to shape public opinion, advertise and in many other ways increase the corruption. Before long, lobbying is an essential requirement to protect your business from lawmakers who can be swayed by competitors or those who simply want to stop you from producing, the nihilists.

Ask yourself if it is the money, the agreed upon medium of exchange of produced values, that is the essential here? If a man is phenomenally successful at creating things greatly valued by fellow citizens, who exchanges such values in a trade of mutual benefit and has not spent the produced wealth, but rather reinvested to produce ever greater value for fellow citizens, if such a man is wealthy, is the money he may spend corrupt? This money is a result of the exercise of the highest virtues a man may exercise: reason, purpose, self-esteem, productivity being primary among them. It is not the money but the purpose that may be corrupt. If he spends it on a vacation for himself and his family, he is acting most morally. If he spends it lobbying for political favors it is corrupt.

Now how does a society fully engaged in such activity correct the problem? Do they change laws on lobbying? Do they adjust campaign finance rules? Do they punish honest and productive businessmen who are trying to protect themselves from attacks by political powers? What is the correct response to a society constructed and fueled by political pull?

I submit that the only rational, and thus the only successful method of combating cronyism is to end the possibility of there being rewards of cronyism. To do so means the government must not have any levers of political power and favoritism to pull. It means the disempowerment of the cronies and an end to the potential for their very existence. It means a populace living under a system of political freedom where government exists to protect their rights to life, liberty and the pursuit of happiness and has a legal system of objective laws and courts to deal with cases where citizens believe their rights have been violated. It means there is criminal law to deal with those who initiate physical force and civil law to deal with contract disputes. It means the implementation of the political-econonomic system known as laissez-faire capitalism, the system suited for homo sapiens, for man the rational being.

The injustices of March for Jobs, Justice and the Climate

A friend just made me aware of a political rally planned in Toronto that can be seen at the web site called March for Jobs, Justice and the Climate.  Having looked over the site it seems a good opportunity to explore some of the concepts used by the authors of the site and their misuse and even abuse of reason.

The notion of uniting the concepts of jobs, justice and global warming must surely rank as one of the greatest leaps of illogic of recent times.  Let's look at each of the three concepts briefly to see if there are rational links between them.

A job is something one earns by offering to exchange value for value with a willing trader - the employer.  A job is created only when both parties agree the contract will be mutually beneficial.  If one cannot find an employer willing to pay what you ask as compensation, the logical step is to lower your demand for wages until you are able to make a trade.  Of course, this is how things work in a free market, but we do not have that.  By dictating thousands of rules regarding employment, competing for wages and making it illegal for wage contracts below a fixed price, government massively distorts the market and creates unemployment.  Since there is an unlimited amount of work to be done to maintain and improve the human condition, only government intervention or an unwillingness to improve skills or be flexible on wage demands can create anything more than temporary unemployment.

Justice is the recognition of the facts of reality when it comes to judging the character and actions of men.  Justice means that a man receives what he is due and nothing more or less.  If a man earns a billion dollars through free exchange of values with millions of others, it is justice.  If a man takes one dollar from others through the initiation of force then it is an injustice.  The Naomi Klein's of the world invert the meaning of justice, often under the cover of package deals such as "social justice", which is really a demand for the massive initiation of force against producers for the benefit of non-producers.  As philosopher Leonard Peikoff states:

"Every man, they argue, is morally the property of others—of those others it is his lifelong duty to serve; as such, he has no moral right to invest the major part of his time and energy in his own private concerns. If he attempts it, if he refuses voluntarily to make the requisite sacrifices, he is by that fact harming others, i.e., depriving them of what is morally theirs—he is violating men’s rights, i.e., the right of others to his service—he is a moral delinquent, and it is an assertion of morality if others forcibly intervene to extract from him the fulfillment of his altruist obligations, on which he is attempting to default. Justice, they conclude, “social justice,” demands the initiation of force against the non-sacrificial individual; it demands that others put a stop to his evil. Thus has moral fervor been joined to the rule of physical force, raising it from a criminal tactic to a governing principle of human relationships."

With regard to jobs and justice, a proper relationship between these two concepts would be to recognize that an employment contract formed of free will by both parties is a just one and one that is formed when one or both parties is acting under force, especially the force of government, in an injust one.

Now to the connection between jobs and global warming, now euphemistically hidden under the package deal of climate change.  Economically, every person in the world could have a job instantly if we fulfilled the highest wishes of the carbon dioxide fear-mongers and banned all use of fossil fuels tomorrow, because every living person would be forced into immediate starvation, survival and protection mode.  Their supply of food, health care, transportation, education, communication, shelter and every other economic benefit of capitalism would cease within hours.  They would have a job (but no pay), one that requires 15 hour a day of effort and vigilance, yet still billions would die within months and civilization as we know it would end.  Philosophically, this would represent perfect justice - justice for having abandoned the great advances brought to us and the great virtues enabled by the discovery and construction of industrial scale energy systems.  Such devastation would be justice for having abandoned the highest virtue, the one that literally defines us as humans - rationality.

The link between justice and global warming the alarmists wish to draw is that they wish to use the excuse of planetary salvation to justify the massive use of force against innocents.  In their view, the people who have created wealth are the ones guilty of encouraging energy production and thus of, in the carbon dioxide zealot`s view, of destroying future life on Earth.  The fact that these people almost certainly created their wealth by producing goods and services highly valued by many fellow humans and that they are innocent of any action to violate the rights of others is immaterial to these people.  Under their view of justice, the producers should be shackled and forced to comply with the wishes of anyone who claims the right to do so on the basis of their not producing wealth.  This is the system brought to its fullest expression in the former Soviet Union and China, which we know resulted in the suppression and devastation of human life on an unprecedented scale.

The proper way, the just way to unite the concepts of jobs, justice and climate as they are distorted by the Naomi Kleins of the world would be to set aside a large piece of un-populated but fertile land and invite everyone on Earth who wishes to participate in a new society to move there without bringing any of the fruits of our fossil-fueled industrial civilization with them.  Justice would demand that we ask these people to put up or shut up - to demonstrate they can develop an advanced civilization and persuade the rest of the world to join them, or to cease their bleating about capitalism, industrialization and the associated marvels of modern energy systems.  That would be true justice.

The Pope is wrong to urge shifting of wealth to the poor

On May 10 Pope Francis was reported to have called for "government to redistribute wealth and benefits to the poor in a new spirit of generosity to help curb "the economy of exclusion" that is happening today." The Editorial Board of the Toronto Star demonstrate they are as economically illiterate as the Pope, when they make positive statements about the Pope's position.  I will make just a few points to illustrate this.

Generosity is the willingness to give to others and as such must be of a voluntary nature. It is not being generous when one is acting under coercion or threat.  Thus, the Pope contradicts himself when he says that government should be redistributing from those who have money to those who do not. His moral implication is that the use of force against innocent citizens is a moral role of government - if they do not voluntarily give enough to others to meet some arbitrary amount deemed as enough, then they must be forced against their will to give until someone else, presumably the Pope in this case, decides it is enough.

This morality is what philosopher Ayn Rand calls the morality of self-sacrifice, known as altruism. In an essay in her book "Philosophy, Who Needs It" Rand states "What is the moral code of altruism? The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue and value. Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice—which means; self-immolation, self-abnegation, self-denial, self-destruction—which means: the self as a standard of evil, the selfless as a standard of the good."

In an interview Rand said "But you must remember that religion is an early form of philosophy, that the first attempts to explain the universe, to give a coherent frame of reference to man’s life and a code of moral values, were made by religion, before men graduated or developed enough to have philosophy. And, as philosophies, some religions have very valuable moral points. They may have a good influence or proper principles to inculcate, but in a very contradictory context and, on a very—how should I say it?—dangerous or malevolent base: on the ground of faith."

Another of the Pope's contradictions is clear in his statement that a more equal form of economic progress can be had through " the legitimate redistribution of economic benefits by the state , as well as indispensable cooperation between the private sector and civil society."  Not only does this statement reiterate the notion that citizens are mere vessels of the will of the state and do not have a right to their own life, liberty and property, but it creates an artificial and improper separation between private individuals and so-called "civil society".  The implication is that when acting alone in furtherance of their own life and goals individuals are not part of "civil society" and that they are only moral when they are acting collectively to coerce others.  This is the recipe for totalitarian dictatorship such as the Church held over citizens for a thousand years during the dark ages.

So an all-out attack on individual rights, human progress and economic freedom (capitalism) is Pope Francis' first formal writing as newly elected Pope. While he has given some signs of relaxing a few of the more severe tenets of the Catholic Church, this Pope is clearly little different from the long line that has come before him and he should be criticized for his denial of basic human rights.

Discussion arising from "To curse machines is to curse the mind"

In April 2014 I posted a link to an article on Facebook. This prompted a response by a friend as follows:

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Machines are good because they decrease the amount of human labor necessary to perform certain tasks, sometimes by a factor of 100 or more. However, they do tend to exacerbate the problems already inherent in Capitalism, namely that anyone born without capital is dependent on others for their employment, and thus, their living. It is very difficult to get out of this position since within a Capitalist economy, a person with no capital has no leverage with which to raise themselves up. They must take what is offered or starve. 

The most faulty premise of Capitalism is the idea that a person is paid what they are worth. No, they are paid as little as the employer can get away with paying them. When a person has nothing to fall back on and must eat, that can be precious little. When a worker is paid so little that they can only afford the most basic necessities, then they cannot save, and if they cannot save money, then they will remain in a situation where they must take the low wages they are offered or starve.

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Naturally, I could not let such an attack on freedom go unanswered, so I composed the following:

Capitalism does not have inherent problems. The problems come from deviations from capitalism and to the degree of the deviations. This is not to say a free country under capitalism is a utopia since our survival and thriving require us to overcome the thousands of obstacles nature places in our way. 

Under capitalism every individual is responsible for his own life and cannot use force against others. Further, no group, no matter how large or how many votes they can obtain, can initiate force against individuals who have not violated the rights of others. Nature is metaphysically difficult to overcome - that is the challenge of survival we all face. To do it more effectively we think, create, innovate, build and produce, most often in cooperation with others via the division of labour. 

In a state of pure nature, man is a simple beast who fights for his life every minute of every day, killing and dying like other animals. Using his unique faculty of reason, man has learned to re-shape nature to make it more hospitable to his life. The re-shaping of his environment is man's most basic means of survival. A man in a capitalist society has an infinite advantage over one in a pre-capitalist society, since all the wonderful benefits of capitalism are already surrounding him and ready for him to leverage. All he requires is the use of his mind and he will be successful to the degree he applies reason to the challenges he faces. Capitalism abounds with stories of self-made men who started from nothing and reached the top of their field. 

The financial success of a man under capitalism is a pure function of how many of his fellow men are willing to trade values with him, and how much they value his product. It is not the man who produces a product who sets the price and value, it is his customers, who will use their own reasoning to decide what they are willing to pay, whose product offers them the highest value, and who they prefer to buy from. Under capitalism a producer has absolutely no power to compel anyone to buy from him at any price.

It is both logical and moral for an employer to pay the lowest wages the market will bear, since there is no other objective means of determining a price but by the market system. In a free market every consumer weighs all the alternative ways he could spend his money and prioritizes according to his individual preferences. The price system integrates all the preferences of all participants into a price hierarchy that is constantly adapting to men's shifting preferences. Producers who fail to offer buyers what they prefer are quickly run out of business while those who serve customer preferences are more likely to succeed. No one is guaranteed anything except the right to produce as rationally as possible and to spend as he sees fit for his own life.

If a worker is only paid subsistence wages, in a capitalist economy he is still infinitely better off than a subsistence worker in a pre-capitalist economy, where he would likely do physical labour from sunup to sundown yet still starve, suffer from horrible diseases, have little shelter or clothing, be disposed of by any random criminal who has no fear of justice, and die by the age of 25, having never had any of the rights protection enjoyed under capitalism.

The only solution offered by nature for a man who earns a low wage is to improve his value through the application of reason applied to the challenges of production - the same as we all must do. A capitalist society offers this man the very best opportunity to advance his goals since he benefits from the enormous knowledge capitalism has accumulated, benefits from the progress of all those who have come before, and gets to keep the product of his mind and labour. Until the discovery of capitalism, no society in history had accomplished even a fraction of what we have seen in just a couple of hundred years. A man who starts with nothing is not entitled to the product of others, not entitled to force others to pay him more than they wish and not entitled to steal from others (this is three ways of saying the same thing). Freedom and its corollaries are his only rights and capitalism is the system that fully recognizes this.

"Occupy" protesters unaware of capitalism

It is clear to me that the "Occupy" protesters have no idea about the economic system of a free society, known as capitalism.  We most certainly do NOT have a free society in Canada - we have a mixed economy with about half of it controlled by government.  The logical outcome of such a system is that groups are encouraged or even required to lobby for government pull to achieve their ends.  Some of these groups will naturally be corporations led by people who choose to use the levers of government force to suppress competition. 

It is not freedom, competition or capitalism that is the problem we face, it is the intervention of government in the economy.  The solution is the separation of economy and state in the same way and for the same reasons as for separation of church and state.  If the ability of the state to use force against peaceful citizens and their corporations is removed, it would end what is known as corporatism or crony capitalism, which is really not capitalism at all but statism or collectivism.

Protester Nathalie Cote is quoted as saying "we need a revolution of the mind" and she is quite correct, but perhaps not in the way she intends.  Philosopher Ayn Rand stated long ago that what society needs do is have an intellectual revolution, to discover for the first time that capitalism (the system that protects individual rights) is the ideal system.  It has long been recognized as the system that creates the most wealth and well-being for society, but it has never been implemented and defended on moral grounds, and so it fell victim to collectivism and altruism.

I wrote an article about this at
http://www.orleansstar.ca/web-article/3495/Get-Politics-out-of-Corporations-and-Money