Wednesday, April 30, 2008

May 2008 Meeting

Please join us for hors d'oeuvres and insight at our upcoming Bastiat meeting on Wednesday, May 7th, with our featured speaker Marty Zupan of the Institute for Humane Studies at George Mason University.

Topic: "Will the Next Generation Defend Capitalism?"
Time: 5 pm to 7 pm
Location: 175 King Street, Charleston, SC

We look forward to seeing you, and would be delighted if you bring a friend or two who is also interested in ideas and stimulating dialogue.

Please RSVP to Megan Rock

About our speaker...

Marty Zupan is President and CEO of the Institute for Humane Studies, based at George Mason University in northern Virginia. She joined IHS in 1989 as a vice president and in the mid-1990s led an expansion of the Institute's educational programs. In 2001 she was appointed president of the Institute for Humane Studies.

Prior to her career with the Institute, Marty was editor-in-chief of the monthly opinion magazine Reason. She has been published in several academic journals as well as the New York Times Book Review and the op-ed pages of newspapers.

She majored in philosophy and psychology in her undergraduate studies and completed a year of graduate study in economics at the University of Rochester. She has served on the boards of several nonprofits, including a private school in the Washington, D.C., suburbs.

Marty has enormous experience in helping tomorrow's leaders - today's college students - understand the virtues of capitalism and markets. What is the prevailing view of capitalism on college campuses today? She says its not a pretty picture. Will she offer any hope? Come and find out!

Tuesday, April 29, 2008

McDonald's Boom

Few businesses are better known -- or more often criticized -- than McDonald's. We often hear that McDonald's makes us fat, or that it offers nothing but dead-end jobs, or that it is a symbol of American economic imperialism.

Of course, McDonald's reputation was not helped by its fiercely competitive founder, Ray Kroc. He once said that if his competitors were drowning, "I'd put a hose in their mouth."

Kroc also said that the corporate decision to own the real estate for a restaurant location and sublet it gave McDonald's a "club" it could use over franchisees, "and by God there will be no more pampering or fiddling with them."

No one ever said business is a gentleman's game. But it is most certainly not evil. In fact, a research paper from a professor at the Wharton School of Business says Ray Kroc's creation is an engine of economic development, spreading valuable business know-how around the world.

You could say McDonald's is not only a great business; it is also a great business school.

The paper, entitled "McDonald's -- Much Maligned, But an Engine of Economic Development," appeared in the Global Economy Journal. The author is Adrian E. Tschoegl, who notes he ate his first McDonald's hamburger in 1960, and still eats at McDonald's several times a year, but "unhappily never bought its shares."

The article's abstract appears below:

"Critics have excoriated the US fast-food industry in general, and McDonald's most particularly, both per se and as a symbol of the United States. However, examining McDonald's internationalization and development abroad suggests that McDonald's and the others of its ilk are sources of development for mid-range countries. McDonald's brings training in management, encourages entrepreneurship directly through franchises and indirectly through demonstration effects, creates backward linkages that develop local suppliers, fosters exports by their suppliers, and has positive external effects on productivity and standards of service, cleanliness, and quality in the host economies."

On a lighter note, Ray Kroc is probably one of only a few successful businessmen whose life and words inspired a pop-music hit song, "Boom Like That," by Mark Knopfler (formerly of the group Dire Straits).

The song made it to the Top 40 in the United Kingdom in 2004. The lyrics tell Kroc's story, often in his own words.

Monday, April 28, 2008

Business, Religion and Freedom

Business is based on human freedom , and does best when regulated more by the marketplace than politics.

In a society, the loss of any one freedom usually means another one is going soon. Witness what is happening in Vladimir Putin's Russia.

After steadily cutting away the economic freedoms of Russian citizens, he now has made the Russian Orthodox Church the de facto state religion. All other religions are subject to political control (read "harassment").

When religious leaders make deals like this one, they allow religion to be used as an instrument of nationalism and state control. The history of such state religions is a long and bloody one.

Free enterprise and freedom of religion are merely variations on a single theme, that of human freedom. Anyone concerned about freedom should be concerned with what is happening in Russia.

The NY Times reports.

"Just as the government has tightened control over political life, so, too, has it intruded in matters of faith. The Kremlin’s surrogates in many areas have turned the Russian Orthodox Church into a de facto official religion, warding off other Christian denominations that seem to offer the most significant competition for worshipers. They have all but banned proselytizing by Protestants and discouraged Protestant worship through a variety of harassing measures, according to dozens of interviews with government officials and religious leaders across Russia.

This close alliance between the government and the Russian Orthodox Church has become a defining characteristic of Mr. Putin’s tenure, a mutually reinforcing choreography that is usually described here as working “in symphony.”

Mr. Putin makes frequent appearances with the church’s leader, Patriarch Aleksei II, on the Kremlin-controlled national television networks. Last week, Mr. Putin was shown prominently accepting an invitation from Aleksei II to attend services for Russian Orthodox Easter, which is this Sunday.

The relationship is grounded in part in a common nationalistic ideology dedicated to restoring Russia’s might after the disarray that followed the end of the Soviet Union. The church’s hostility toward Protestant groups, many of which are based in the United States or have large followings there, is tinged with the same anti-Western sentiment often voiced by Mr. Putin and other senior officials."

Saturday, April 26, 2008

Taboo in the Boardroom

"This basic notion -- that it is ethical for businesses to uphold the free market and renounce the use of politics -- seems elementary, yet it is virtually impossible to overstate the degree to which the point is lost on, if not altogether taboo for, those who sit in corporate boardrooms, no less today than in 1980. Even lip service is rarely paid to the idea."

Richard W. Wilcke, "An Appropriate Ethical Model for Business and a Critique of Milton Friedman's Thesis," The Independent Review IX, Fall 2004.

Friday, April 25, 2008

An Illegal Hot Dog?

From, the story of a small business versus the health department, and the unintended consequences of high-minded public policy.

Elizabeth Palacios sells hot dogs in LA. She also spent 45 days in jail for selling an illegal hot dog. Yes, that's right. An illegal hot dog.

Thursday, April 24, 2008

The Quotable Frédéric Bastiat

"The state is that great fiction through which everyone tries to live at the expense of everyone else."

Frédéric Bastiat

Wednesday, April 23, 2008

Boudreaux on "Cleaned by Capitalism"

"Before refrigeration, people ran enormous risks of ingesting deadly bacteria whenever they ate meat or dairy products. Refrigeration has dramatically reduced the bacteria pollution that constantly haunted our pre-twentieth-century forebears.

We wear clean clothes; our ancestors wore foul clothes. Pre-industrial humans had no washers, dryers, or sanitary laundry detergent. Clothes were worn day after day without being washed. And when they were washed, the detergent was often made of urine.

Our bodies today are much cleaner. Sanitary soap is dirt cheap (so to speak), as is clean water from household taps. The result is that, unlike our ancestors, we moderns bathe frequently. Not only was soap a luxury until just a few generations ago, but because nearly all of our pre-industrial ancestors could afford nothing larger than minuscule cottages, there were no bathrooms (and certainly no running water). Baths, when taken, were taken in nearby streams, rivers, or ponds, often the same bodies of water used by the farm animals. Forget about shampoo, clean towels, toothpaste, mouthwash, and toilet tissue.

The interiors of our homes are immaculate compared to the squalid interiors of almost all pre-industrial dwellings. These dwellings’ floors were typically just dirt, which made the farm animals feel right at home when they wintered in the house with humans. Of course, there was no indoor plumbing. Nor were there household disinfectants, save sunlight. Unfortunately, because pre-industrial window panes were too expensive for ordinary families and because screens are an invention of the industrial age, sunlight and fresh air could be let into these cottages only by letting in insects too. Also, bizarre as it sounds to us today, the roofs of these dwellings were polluted with all manner of filthy or dangerous things. Here’s the description by historians Frances and Joseph Gies, in Life in a Medieval Village, of the roofs of pre-industrial cottages:

"Roofs were thatched, as from ancient times, with straw, broom or heather, or in marsh country reeds or rushes. . . . Thatched roofs had formidable drawbacks; they rotted from alternations of wet and dry, and harbored a menagerie of mice, rats, hornets, wasps, spiders, and birds; and above all they caught fire. Yet even in London they prevailed.""

From "Cleaned by Capitalism" by Don Boudreaux.

Tuesday, April 22, 2008

Need a Speaker? Try Bastiat!

Do you need a speaker for your next event?

Are you looking for a speaker who can entertain and inform your audience?

Want to hear some good news?

Consider inviting the Bastiat Society to provide a speaker for your next event!

The Bastiat Society is a non-profit organization created to spread the message that business is an inherently moral as well as uniquely productive form of social organization.

The Society may be able to provide a speaker for your next convention or trade show. It may also help arrange speakers for civic, fraternal and social organizations. Our favorite topics include:

* Business People: Heroes of the Modern World
* The Engine of Progress
* Business and Society
* Why Politics is Not the Answer (Usually)
* Business, Faith, and Reason
* The Merchant Ape

Why use the Bastiat Society?

* We deliver a unique message: the world is getting better, and business is the key
* You work directly with your speaker, not a bureau
* We are experienced
* We are very affordable

As a non-profit organization, our message is more important than collecting a fee. If you can make a contribution to the Bastiat Society, we will gratefully accept it, but a contribution is not required. However, we do ask you to cover travel and lodging, if necessary.

To check available dates or request more information, click here to email Ben Rast, President of the Bastiat Society.

Monday, April 21, 2008

Business and the Human Order

How can we end poverty and human suffering? We cannot just "eat the rich." There aren’t enough of them.

How can we spread tolerance and peace? We cannot spread them by imposing speech codes, threats and intimidation. That is the very opposite of tolerance.

How can we promote the dignity of every human being over the privileges of a favored few? We cannot promote it by humanizing some more than others.

How can we protect the environment? We cannot protect it by binding our neighbor with chains and seizing his property.

These are among the most important questions in history. But too often, they are answered with well-intentioned political attempts to create a perfect human order. We yearn for a better world, and are easily tempted by a political promise of immediate results. We try to end poverty by taking money from those who earn it, and giving it to those who do not. We try to create tolerance and peace by accusing people of thought crimes. We try to promote human dignity by making some more equal than others. We try to protect the environment by restricting personal freedom and private property. Yet we stumble from one political failure to another.

There are better answers – ideas which emerged in the West just a few hundred years ago. Not Utopian ideas, but inspiring and effective ideas, the ideas of freedom. Ideas which proclaim freedom is a process, not a result. Ideas which proclaim individuals are better qualified to run their lives than bureaucrats; political power is better dispersed than concentrated in the hands of a few; and happiness is an individual pursuit, not a collective one. Ideas which promote individual liberty, free trade, private property rights, and the rule of law. Ideas so powerful that they lifted millions out of poverty, overthrew kings, freed slaves and eroded ancient privilege.

These ideas still animate the world. Today, they are called capitalism. And capitalism is so deeply ingrained in the culture of the West that we often take it for granted.

Taking capitalism for granted, we run the risk of losing it altogether.

The West grew rich believing in freedom. It will grow poor unless we believe again. The task facing us is to reignite wide-spread confidence in a social order based on freedom of the individual.

This task requires coordinated and long-term efforts in four key areas of human action:

• Intellectual – action in the world of ideas.
• Public Policy – action in the world of power.
• Cultural – action in the patterns of everyday life.
• Business – action that creates wealth.

On the intellectual front, there are already some great institutions committed to promoting human freedom – such as the Mont Pelerin Society, the Liberty Fund of Indianapolis, the Atlas Economic Research Foundation and the Institute for Humane Studies. But ideas change the world slowly, like slow currents in the ocean, and we humans are impatient. Today, the intellectual task of promoting freedom is made even more difficult because these institutions labor in a world that harbors the widespread belief that public policy is the immediate solution to every social challenge great and small, from terrorism to telemarketers.

In the public policy world, there are hugely effective bodies such as the Cato Institute, the Heritage Foundation, the Institute of Economic Affairs, and the Adam Smith Institute. But politics alone will never change the human order – at least not for very long. Public policy is the easiest thing to do and to undo: it happens with each election. Unless public policy is built around a cultural and intellectual insistence that individuals own themselves, public policy can never be a firm defense of the individual.

In the cultural sphere, organizations such as the Palmer R. Chitister Foundation and the Acton Institute promote a wider understanding of freedom in popular culture, what you might call the patterns of everyday life. These include, especially, entertainment and religion. Individuals such as John Stossel of ABC News bring the issue of personal freedom to the powerful medium of prime time television.

This leaves us only the area of business, the human activity of wealth creation. What is being done to promote confidence among business people in a human order based on freedom? The answer is, surprisingly, not much. Paradoxically, the people who make productive use of human freedom are left to find their own moral justification for their activities, a task made even more difficult by a culture and intellectual environment that overwhelmingly mistrusts businesses and the people who run them.

Not surprisingly, business people rarely hear the message that their business activity is inherently moral, socially beneficial, and economically necessary. With the notable exception of Forbes magazine, there are few institutions dedicated to promoting a principled case for freedom among business people – the wealth creator class. Business schools certainly do not. Business schools primarily license technicians, especially of the financial kind. When schools do talk about business ethics, morality or organizational behavior, it is usually in terms that make business sound more a homeless shelter than a wealth-creating adventure of liberty.

Successful business innovation is rooted in freedom. This is a conclusion so obvious that some of the most successful business people simply take freedom for granted. They mistakenly believe they can safely ignore the hostile ideas of intellectuals, public policy experts, and popular culture and simply concentrate on running their businesses as best they can. We believe this is a strategic mistake.

Some businesses go even further. Having created great wealth, they make well-intentioned, but disastrous philanthropic decisions. They hand over their wealth to individuals and institutions that then use that wealth to attack the integrity, morality and even the right to exist of businesses large and small. Unwittingly, these businesses are major contributors to their most dangerous opponents. We believe this could be fatal.

We created the Bastiat Society, a non-profit 501(c)3 foundation to be an organization of business people who are ready to publicly defend the productivity and morality of capitalism. We are not a chamber of commerce. We are a chamber of capitalists. We take our name from the great European statesman, economist and defender of freedom, Frederic Bastiat (1801-1850). We stand alongside the intellectuals, public policy experts, and cultural leaders who share our commitment to human freedom.

The Bastiat Society’s mission is to accomplish five socially important goals:

1. Defend business people as the most important agents of human material progress. They are the real anti-poverty heroes.
2. Defend the virtuous and moral role that business people serve in market economies. They are ethical leaders.
3. Improve the business community’s appreciation and understanding of the necessity for a large, international, and influential class of intellectuals sympathetic to capitalism. Ideas are capitalism’s main defense.
4. Redirect the philanthropic flow of business-created wealth to institutions that will defend and promote capitalism – rather than work to destroy it.
5. Promote our members’ self-interests, by building an international network of business relationships of the highest quality, integrity and mutual respect. The Society is a place to do first-class business.

The Society accomplishes its mission through monthly meetings, conferences, and the Bastiat Society Awards. The Bastiat Society Awards are given for accomplishments in the areas of Public Policy, Culture, Academics, and Business. These awards honor individuals who, in the course of their professional lives, have distinguished themselves in promoting free market ideas and a greater appreciation of peaceful commercial activity. They are awarded periodically by The Bastiat Society in the United States.

We believe the Bastiat Society fills an important but overlooked market, one where ideas and actions meet. It is a vital meeting point between the thinkers who defend capitalism in words, and the wealth creators who practice capitalism in deeds. Neither group can exist without the other. Our motto, “Those who work in freedom should know how freedom works,” reminds us that business people have a special responsibility in a free world.

We do not claim that business is perfect. Human beings are never perfect. But it would be a terrible tragedy for all mankind if we allowed capitalism’s detractors to focus on its failures, instead of proclaiming its success as the most moral, productive and humane form of social organization in history.

We do not believe in using public policy to grant special favors to business. We believe public policy should defend a free economy and free trade.

We do not want to preserve the status quo. A free and healthy economy must be dynamic. Companies will come and go, also, perhaps even entire industries. Competition is the world’s best economic development policy. The only unacceptable outcome of a free society is the loss of freedom itself.

We do care about environmental issues. We believe that wealth creation is a superior means of improving and protecting the environment, rather than centralized bureaucratic regulation.

The time has come for business people to arm themselves with the ideas that can protect the human progress of the last 300 years. Business people who ignore the force of intellectual ideas, or the power of public policy, or the influence of culture will one day – perhaps soon – wake up to discover their incomes, property and fortunes have been confiscated without mercy and to popular acclaim.

That has happened before. We must not let it happen again.

Yes, business fortunes depend on a renewed confidence in a human order based on freedom. But all humanity depends on business.

Sunday, April 20, 2008

Bastiat vs Obama

From Neal Boortz...


I found this in the regular Friday missive from the Georgia Public Policy Foundation. First we have a quote from one of my favorite books: "The Law," and then we have a quote from hyper-leftie Michelle Obama. Have fun.

Then: "The war against illegal plunder has been fought since the beginning of the world. But how is... legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay ... If such a law is not abolished immediately it will spread, multiply and develop into a system." - Frédéric Bastiat

Now: "The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more." - Michelle Obama

Saturday, April 19, 2008

Another Inquisition?

T. J. Rodgers, the CEO of Cypress Semiconductor Corp. — which owns solar-power manufacturer SunPower — says, “You serve people by making things people want.”

If people want green power and they are willing to pay for it, the private sector will make it. The politicians won't have to do a thing, except get out of the way.

What's the alternative to what we might call going green privately?

Going green publicly. And contrary to the feel-good propaganda, public green is not a comforting vision.

The scary thing about using government to engineer green power is the terrible naivety of those who advocate it. In the words of George Washington, government is not reason, it is not eloquence, it is force. The only issues we should turn over to government are those where we are convinced it is necessary to compel people to agree.

Here are the relevant questions anyone advocating government action should be prepared to answer:

Are you willing to fine those who do not agree with you?

Are you willing to send them to jail?

Are you willing to seize their property?

Are you willing to condemn them to death?

This is how government operates. This is the only way government engineers a social consensus.

The more we insist on political solutions to everything from our personal problems to the problems of the world, the greater we run the risk of another cruel inquisition and a persecution of the innocent.

Friday, April 18, 2008

Confused Social Responsibility

"What should worry us above all else, however, is a society that is confused about the difference between having a stake in something and being affected by it. That is the kind of society that cannot distinguish the moral from the beneficial, leadership from conformity, tyranny from liberty."

Doug Den Uyl, "Corporate Social Responsibility," in Business Ethics and Common Sense.

Thursday, April 17, 2008

Human History in 60 Seconds

Got 60 seconds?

For the harried business person who says, "I would read more, if only I had the time," here is a remarkable lecture in its entirety by Alan Charles Kors, George H. Walker Endowed Term Professor of History at the University of Pennsylvania.

He covers all of human history in just 60 seconds. Notice his emphasis on trade. Business really is one of the great stories of history.

* First, tribes: tough life.
* The defaults beyond the intimate tribe were violence, aversion to difference, and slavery. Superstition: everywhere.
* Culture overcomes them partially.
* Rainfall agriculture, which allows loners.
* Irrigation agriculture, which favors community.
* Division of labor plus exchange in trade bring mutual cooperation, even outside the tribe.
* The impulse is always there, though: "Kill or enslave the outsider."
* Gradual science from Athens' compact with reason.
* Division of labor, trade, the mastery of knowledge, plus time brought surplus, sometimes a peaceful extended order and, rules diversely evolved and, the cooperation of strangers - always warring against the fierce defaults of tribalism, violence, and ignorance.
* No one who teaches you knows what will happen.

Wednesday, April 16, 2008

The Fallacy of the Broken Glass

Every year -- perhaps every day -- someone makes the claim that the destruction of valuable property is, on balance, a good thing for society. After all, destruction creates lots of new jobs rebuilding things, and it stimulates lots of new spending. Aren't we left visibly better off?

We heard this claim after Hurricane Hugo smashed into South Carolina. We heard it again when Hurricane Katrina smashed into New Orleans. We will, no doubt, hear it the next time Mother Nature reminds us who is boss.

Bastiat heard the same claim in the 19th century. He wrote about it in one of his most famous essays, "That Which is Seen, and That Which is Not Seen." There, he used the example of a broken window to illustrate the truth that breaking things is not the path to national prosperity. A broken window will create work for the window repairman, but someone else loses work because the money that would have been used to buy something else goes into repairing the window. The window repairman is better off, but society is not.

Now, through the magic of movies, we have the pleasure of seeing the same claim surface in the 24th century. The following video is from the movie "The Fifth Element," a 1997 science fantasy about a set of stones that will determine -- what else? -- the fate of the human race. Gary Oldman plays the bad-guy Jean-Baptiste Emanuel Zorg, who serves the Great Evil.

Of course, the film reflects 20th century Hollywood morality. Bad-guy Zorg is a wealthy industrialist who looks like a hip Adolph Hitler and speaks with a Texas accent.

Tuesday, April 15, 2008

Machiavelli on Men of Ability

"A prince ought to show himself an admirer of talent, giving recognition to men of ability and honoring those who excel in a particular art. Moreover, he should encourage his citizens to ply their callings in peace, whether in commerce, agriculture, or in any other business. The man who improves his holdings should not be made to fear that they will be taken away from him; the man who opens up a branch of trade should not have to fear that he will be taxed out of existence. Instead, the prince should bestow prizes on the men who do these things, and on anyone else who takes pains to enrich the city or state in some special way."

Niccolo Machiavelli, The Prince, 1513

Monday, April 14, 2008

The Revolutionist's Handbook

The art of government is the organization of idolatry.

Liberty means responsibility. That is why most men dread it.

Vice is waste of life. Poverty, obedience, and celibacy are the canonical vices.

Economy is the art of making the most of life.

The love of economy is the root of all virtue.

Political Economy and Social Economy are amusing intellectual games; but Vital Economy is the Philosopher's Stone.

If you injure your neighbor, better not do it by halves.

From "The Revolutionist's Handbook and Pocket Companion" by John Tanner, M.I.R.C. ("Member of the Idle Rich Class), an appendix to George Bernard Shaw's play Man and Superman.

Sunday, April 13, 2008


"On a world scale the risk, intensity and severity of poverty has fallen more sharply in the past fifty years than in the preceding thousand years."

Michael Lipton, University of Sussex, quoted in The Progress Paradox by Gregg Easterbrook

Saturday, April 12, 2008

Fear and Faith in France

"Vaclac Klaus, the president of the Czech Republic, said that communism rested on two pillars : "fear and faith", and when at least one of those two pillars collapsed, the whole system collapsed. In France, we have not reached that stage yet. We are frightened, but of the unknown, of strikes, of socialists, of public opinion. And we still believe in State intervention. And yet we should trust ideas that are right. Bastiat said : "Unity should result from the universal feeling of free conviction and from the natural attraction that truth exercises on men's minds". Hayek was less optimistic. He said : "The day France becomes libertarian, to be sure the whole world will have become so before then"."

Pascal Salin holds a doctorate in economics and is professor of economics at the university of Paris-Dauphine. This paragraph came from a dinner-debate at the Bastiat Circle in France.

Friday, April 11, 2008

Unborrowed Vision

From The Fountainhead by Ayn Rand, Gary Cooper as Howard Roark defends "the men of unborrowed vision" who create everything that is new and glorious, in science, in art, and in business.

Thursday, April 10, 2008

Social Justice

"Divide the gross domestic product of the world by the world's population, and everyone gets $7,200 per year. What kind of basketball are we going to have if Shaquille O'Neal has to take a $21,422,800 pay cut? And a family of four in Tanzania making $28,000 will buy a used Toyota, which brings us back to global warming."

P. J. O'Rourke, "Nobel Sentiments," in Peace Kills: America's Fun New Imperialism

Wednesday, April 9, 2008

Get Involved!

"It's a mistake to applaud greater involvement in politics as if such involvement is by its very nature the best use of people's time and effort. A more serious delusion is that politics is the only -- or, at least, the most noble -- venue for each of us to get "involved" with our fellow humans.

In fact, though, we are involved even when we pay no attention to politics. We care for our families, support our friends, work at jobs that produce goods and services for millions of people and are active members of churches and clubs.Each of us is intensely involved, daily.

Indeed, we are involved better and more fully when we act privately (that is, outside of government) than when we act politically."

Don Boudreaux, George Mason University, in The Pittsburg-Tribune Review

Tuesday, April 8, 2008

Sunday, April 6, 2008

Cautious Pragmatism

Whether they know it or not, most business people belong to a school of philosophy known as cautious pragmatism.

No grand, sweeping social visions for these folks. Their lives and actions are a process of cautious trial and error in search of something that works.

They are cautious because they have money and reputation at risk. But business risk is not the same thing as gambling risk. Business risk is a search for a win-win result. Gambling risk is strictly the search for a win-lose. Business people try to build something of value. Gamblers try to take something of value from another party, i.e., to beat the house.

Business people are pragmatists because they search for something that works. They try something new -- a new product, a new strategy, a new organizational structure -- and measure the results. If it works well, they continue it -- hopefully, though not always. Business errors include discontinuing a successful innovation as well as heavily investing in an unsuccessful one. There is an old joke in business that makes light of the first kind of mistake: "Find what works. Then change it.".

Of course, any successful business wants to "beat" its competition. The competition between businesses is a form of win-lose competition. But more importantly, it is a form of information feedback that tells each business what it is doing right, and what it is doing wrong. Continue to do things wrong, and you lose, not because of some external risk (i.e., the house beat you), but because you did not deliver a superior win-win opportunity to the most important player in the drama: the customer.

To put it another way, business failure is nature's way of telling us it is time to try something else.

Cautious pragmatism is a humble philosophy. It does not claim to have enough knowledge or vision or skill to run the world, but it can run a hardware store, a software company, or any of the millions of businesses in the world. Such humility is a very good thing, because no one really knows how to run a world, despite the claims of political candidates running for high office.

Humanity is better served by the kind of people who run hardware stores than by the kind of people who run for office. Cautious pragmatism is better for humanity than reckless action.

As the Chinese philosopher Zhuangzi wrote in the fourth century BC, "I have heard of letting the world be, and exercising forbearance; I have not heard of governing the world."

Saturday, April 5, 2008


Culture and science define the boundaries of a civilization, but it is freedom that makes it possible for so many who know so little to live so well.

Friday, April 4, 2008

Bastiat Awards this Weekend!

The Bastiat Society is pleased to announce that Paul Atkins, Commissioner of the Securities and Exchange Commission in Washington, DC, and Kathy Gornik, President of Thiel Audio in Lexington, Kentucky, are recipients of Bastiat Awards. Mr. Atkins will receive the Bastiat in Public Policy Award, and Ms. Gornik will receive the Bastiat in Business Award. The awards will be presented at a gala dinner in Charleston, South Carolina on Saturday, April 5th, 2008.

The Bastiat Awards are given in four areas: Public Policy, Culture, Academics, and Business. The awards honor individuals who, in the course of their professional lives, have distinguished themselves in promoting free market ideas and a greater appreciation of the socially beneficial and inherently moral nature of peaceful commercial activity.

The Society and the awards are named after the French economist Frédéric Bastiat (1801 – 1850), one of the all-time great spokesmen for classical liberalism, who was famous for his ability to translate complex economic ideas into language anyone could understand.