Little Bits of Knowledge

In the late 19th and early 20th centuries, progressive intellectuals (a.k.a. socialists) looked on with envy as scientists enjoyed one stunning success after another in their attempts to explain the physical world. By borrowing the methods of the natural sciences, these intellectuals reasoned, they could invent a new kind of man, one liberated from the dead weight of tradition. They believed all of mankind's problems, from war to public health, could be solved by the intervention of modern science, recast as public policy.

Social scientists would correct social mistakes as certainly as their physical science brethren calculated atomic weights or described the laws that arrange the stars. Like elements in a chemical equation, citizens would live productive and meaningful lives according to a scientifically designed social order.

It did not work. Not only did it not work, but it lead to some of the most horrible crimes in history. Totalitarianism, eugenics, racism, nationalism, genocide, concentration camps, and gulags are all direct consequences of the attempt by progressives to substitute social calculations for traditions and individual choices.

Perhaps this is mankind's fate, to forever misapply the insights of one field of knowledge to another. Enthusiasm cannot overcome the limitations of infallibility. At best, we can hope to limit the size and scope of our mistakes, but we can never get rid of them altogether. They are our most reliable companions. They are part of our very nature.

But what is human nature? Human nature is tool for survival. It was built by a process of incremental discovery in a world of complex phenomena. Human nature is well-adapted to deal with small groups of individuals and little bits of information, but it is supremely confounded at trying to comprehend the sum and effect of all the knowledge in the system. Human nature struggles to conceive of the infinitely large and the very small. It is most comfortable in the middle-sized world of its own making: a world of predictable patterns, family, a few close friends, a couple hundred acquaintances, and a world where bits of knowledge are shared like food.

When people exchange knowledge because they are required to, we have an economy based on servitude. When that exchange occurs voluntarily, we have an economy based on cooperation. Either way, the exchange of little bits of knowledge is precisely what makes an economy. The more opportunity individuals have to specialize in a particular field of knowledge, the faster they can discover and exchange new knowledge with one another, and the faster the economy grows. Economic growth depends first on discovery, and discovery is an individual, not a collective act. It cannot be scripted, forced, or deliberately planned. It can, however, be encouraged.

The discovery and exchange of little bits of information results in yet another system far larger and more complex than any one person can comprehend, because that would mean that he already possessed all the little bits of knowledge owned by every actor in the system. Further, it would mean that he already knew how every other actor planned to use his little bit of knowledge, and how that use would affect every other exchange in the network, forever and ever. Humans do not possess such God-like knowledge. The 17th century French liberals had it right, "the world moves by itself."

Yet, our human nature still longs for a middle-sized world of understandable patterns. Consider something as simple as a football game. In the fall of every year, hundreds of thousands of football fans offer their predictions for "the game." Most of them are wrong. A few are right some of the time. None are right all the time.

The self-evident truth of football season this: we cannot consistently predict the outcome of even a simple game, a microcosm of human action where there are only twenty-two players on the field, and we have a wealth of information about each of them, and everyone knows the rules, and we have officials who enforce the rules. The outcome depends on events unseen, unanticipated, and unknowable.

If we cannot foresee the outcome of a simple game, what on earth leads us to believe that we can foresee the outcome of a world where there are 6.5 billion people discovering and exchanging bits of knowledge, hundreds if not thousands of different, shifting, sometimes conflicting rules, and no consistent enforcement?

Scientific socialism failed to deliver what it promised because it did not recognize the importance of individual knowledge in producing a larger social order far beyond anything one person intended. Socialism continues to succeed as a political faith because it appeals to that part of human nature that is awed and frightened by the vast phenomenon of human exchange that we call the economy. Socialism promises to reduce boundless life to a set of variables in a social equation, something one man can manage.

That is the enduring appeal of socialism. Like religious faith, it gives some structure to a mysterious world. Like religious faith, it uses a set of metaphors. Metaphors are useful, even necessary for human existence. But metaphors are not the same as physical laws, and people are not as predictable as physical constants. Like religious faith, it is all too easy to mistake metaphors for immutable truth.

Most BAs are BS

Scholar Charles Murray of the American Enterprise Institute argues that the most popular college degree, the BA, is overpriced and largely a waste of time. First, the BA is cast in an inflexible term of four years, regardless of how long it takes to acquire marketable proficiency in whatever is being taught. Second, the rewards of having a BA often have nothing to do with what was learned. Third, encouraging students to pursue a BA means large numbers of young people will spend valuable time and money trying to complete course work they may not have the ability to do. Finally, the BA system makes everyone who does not have that degree a second-class citizen, even though non-BA holders may make more money and accumulate more wealth over their lifetimes.

In short, Murray examines the question, "Is college worth it?" and answers "For most people, no." His alternative is a set of professional competency tests, like the CPA exam.

Read more here.

On a personal note, I tell my children there are only three skills you should possess as the result of an education, whether or not you possess a degree: the ability to think logically, the ability to express yourself clearly in writing and in speech, and the ability to perform math at a high level. All the rest you can learn as you need it.

Dirigisme and Helotism

Here are two bona fide but arcane English words that soon should be making a popular comeback, considering the political tilt of the times:

Dirigisme: (noun) economic planning and control by the state; also, state control of social matters.

Helotism: (noun) a system under which a nominally free social class or a religious, national, or racial minority is permanently oppressed and degraded.

There Must be A King Over Us

From over three thousand years ago, the voice of the prophet Samuel speaks, and reminds us of the danger of kings:

Samuel delivered the message of the LORD in full to those who were asking him for a king.

He told them: "The rights of the king who will rule you will be as follows: He will take your sons and assign them to his chariots and horses, and they will run before his chariot.

He will also appoint from among them his commanders of groups of a thousand and of a hundred soldiers. He will set them to do his plowing and his harvesting, and to make his implements of war and the equipment of his chariots.

He will use your daughters as ointment-makers, as cooks, and as bakers.

He will take the best of your fields, vineyards, and olive groves, and give them to his officials.

He will tithe your crops and your vineyards, and give the revenue to his eunuchs and his slaves.

He will take your male and female servants, as well as your best oxen and your asses, and use them to do his work.

He will tithe your flocks and you yourselves will become his slaves.

When this takes place, you will complain against the king whom you have chosen, but on that day the LORD will not answer you."

The people, however, refused to listen to Samuel's warning and said, "Not so! There must be a king over us.

We too must be like other nations, with a king to rule us and to lead us in warfare and fight our battles."

1 Samuel, Chapter 8, verses 10-20

Marx, Unbound

The view from the Old Left...and I mean the Far Left...or is it the New Left? Via the BBC:

Is the intellectual opinion of capitalism changing? British Marxist historian Eric Hobsbawm, "arguably our greatest living historian" according to the New York Review, discusses the current economic crisis and the problems with a free market economy.

Listen to it here.

The Elections of Kings and Princes

The American republic was designed to accomplish a singular objective: protect American citizens from abuse at the hands of their own government.

Thus it was that we had a federal government divided into three competing powers. 

Thus it was that we had a legislative branch divided into two competing bodies, one based on population and the other based on an equal representation from each state, regardless of population.

Thus it was that we had a division between the powers of the federal government, and those of the individual states. 

Thus it was that the republic encouraged each state to experiment with its owns laws and its own regulations, thereby discovering what worked and what didn't.

And thus it was that we had a long list of explicitly enumerated rights of the citizen that no government could ever take away. 

Alas, the American republic was not built to defend its citizens from the greatest threat to their liberty: the citizens themselves. 

Democracy is steadily dismantling the old restraints of a divided government. Voters no longer want to hear what the government can't do. They want candidates who can "get things done" with economic policy, industrial policy, education policy, energy policy, environmental policy, foreign policy, health care policy, homeland security policy, national defense policy, social security policy, tax policy, veterans benefits, women's rights policy, abortion rights policy, civil rights policy, immigration policy, the distribution of wealth policy, rural policy, technology policy, faith policy, judicial policy, fiscal policy, equality policy, transportation policy, drug policy, trade policy, agriculture policy, housing policy, stem-cell research policy, urban policy, water policy, fishing policy, endangered species policy, historic preservation policy, carbon policy, humanities policy, telecommunications policy, fleet fuel economy policy, national parks policy, public health policy, broadcast spectrum policy, obesity policy and school lunch policy.

In the new American state, limited government means that we get to elect our king every four years, and our princes every two or six. 

Unstoppable Solar Cycles

Before we attempt to manage human impact on the Earth's climate, perhaps we should ask the question, do we really understand what is happening at all?

Voting Schmoting

Economist Gordon Tullock explains why it is perfectly rational NOT to vote...unless everyone else thinks the same way. 

From the WGBH Lab open call for election videos...

As Democracy is Perfected

"[W]hen a candidate for public office faces the voters he does not face men of sense; he faces a mob of men whose chief distinguishing mark is the fact that they are quite incapable of weighing ideas, or even of comprehending any save the most elemental—men whose whole thinking is done in terms of emotion, and whose dominant emotion is dread of what they cannot understand. So confronted, the candidate must either bark with the pack or be lost… [A]ll the odds are on the man who is, intrinsically, the most devious and mediocre—the man who can most adeptly disperse the notion that his mind is a virtual vacuum. The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart’s desire at last, and the White House will be adorned by a downright moron."

H. L. Mencken, The Baltimore Sun, July 16, 1920

From Cafe Hayek.

I Wanna Be Elected

On the eve of the US elections, I offer what is perhaps the most complete expression of political ambition yet attempted in popular music: Alice Cooper's 1972 hit, "Elected."

The lyrics quickly capture the heady mixture of raw ambition, exclusive privilege, religious frenzy, and the desire to control the lives of others that has come to identify most political movements:

I'm your top prime cut of meat, I'm your choice,
I wanna be elected,
I'm your yankee doodle dandy in a gold Rolls Royce,
I wanna be elected,
Kids want a saviour, don't need a fake,
I wanna be elected,
We're all gonna rock to the rules that I make,
I wanna be elected, elected, elected.

By the way, Alice Cooper was NOT elected in 1972. That was the year Republican Richard Nixon crushed Democrat George McGovern. Two years later, amid the Watergate scandal, Nixon resigned in disgrace.

Free Markets and Moral Character

Over at the John Templeton Foundation, they have a deep conversation going on over the Big Question, "Does the free market corrode moral character?"

You can read the essays of famous intellectuals, politicians and celebrities, as well as leave comments of your own.

I didn't make the cut for the starting lineup, so here's what I said in the comments section:

"Perhaps the best way to answer this question is to ask another: does an un-free market improve moral character? Or, to phrase it differently, can coercion improve moral character? I think the answer is found in history. Rare is the man who can exercise such power over others without eventually being corrupted by it. As C.S. Lewis said: Aristotle was right; some men are fit to be only slaves; but I oppose slavery because I do not believe any man is fit to be a master."

Wealth, Work, Riches and Earnings

"Wealth is not so good as work, nor riches so good as earnings."

David Landes, The Wealth and Poverty of Nations.

Where's My Bailout?

From reason.tv...

Wage Slavery vs The Real Thing

Sometimes we hear the claim that capitalism turns people into "wage slaves." An odd kind of slavery it must be that allows people the freedom to walk away from the wage anytime they want to.

Consider the contrast with chattel slavery. Born into slavery and sold for the equivalent of $400 when she was just 12, she was raped for the first time by her master when she was 13. She eventually bore him three children. Two survived. Both were taken from her. For almost nine years, she had to work long hours in the fields and in his home without pay. If she did anything wrong or tried to escape, she was beaten. But after she fled and married a man of her own choice, she was charged with bigamy and sentenced to six months in jail. “No woman”, she says, “should suffer the way I did.”

Are we talking about a slave on a cotton plantation in the American deep South of the early 19th century? No, Hadijatou Mani lives in the 21st century. She also has the great misfortune of living in Niger, an African country where the government turns a blind eye towards slavery. According to The Economist, there are an estimated 43,000 slaves in Niger, and tens of thousands more in other countries in Western Africa.

If capitalism did nothing more than turn chattel slaves into wage slaves, it would still be a wonderful thing. Just ask a real slave like Haijatou.

And if you ever need confirmation of the questionable value of government paper, remember that the the 1962 UN Slavery Convention condemns chattel slavery, the curiously named 1981 African Charter on Human and People's Rights condemns it, and so does the Niger constitution and criminal law.

"Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters." - C.S. Lewis

The Pretense of Knowledge

Over at The Austrian Economists, Richard Ebeling comments on "the pretense of knowledge" and the "hubris of the intellectuals." He writes:

"What these debates about whether we are in a credit crunch or not; whether we are faced with a coming serious inflation or instead deflation; whether this will be a "normal" recession or a coming real depression, etc., etc., -- what this should remind all of us of is Hayek's points about the pretense of knowledge, or what Wilhelm Roepke called the hubris of the intellectuals.

In fact, neither Austrian Economists nor our Neoclassical and Chicago and Rational Expectations "colleagues" know what is happening in the economy -- nor exactly how and why it hit right now or where the present "crisis" is taking us.

The "deadly sin" of hubris clearly has been greater with our economist colleagues. So using all available information (i.e., statistical patterns of past events) and inserting it in the "correct" model of how the macroeconomic "really" works . . .

Did Robert Lucus or Thomas Sargent know this was going to happen, when and why? Hmmmm. Or did I miss that op-ed piece of theirs in the WSJ? (Oh, they kept it as private, secret information so they could make a "killing" in the market -- now I know who the evil "short-sellers" have been.)

But more seriously Austrians have long insisted that the laws of economics are essentially logical relationships, not empirical ones; that economics can "predict" but only in qualitative terms, not quantitative ones; that economics can only make "pattern" predictions.

This economic crisis may I suggest, again reinforces the reality of the Austrian approach to social phenomena.

Austrians (true to their theory of the logic of the interconnections between credit expansion, market rates of interest, the term structure of investment, and relative price and allocation effects caused by the non-neutrality of money) have often warned of the inflationary and destabilizing consequences from Fed policy over the last decade.

But no Austrian could (or did) claim to know when the cycle would turn, or what would set it off, and how the downturn would or could play itself out, i.e., in what in historical retrospect we will see from the vantage point of some future moment as the actual patterns and also unique time-sequence of the "micro" steps by which this will play out.

We could not and cannot know these things. As Karl Popper pointed out in "The Poverty of Historicism," knowledge of the future is logically impossible. If we live in a world in which knowledge changes, he said, then it is impossible to know tomorrow's knowledge today. Otherwise, it would be today's knowledge and not a knowledge of the future, the details of which can only be known when the future comes.

We know how the Great Depression of the 1930s played out because it is now history. We know, for example, that FDR ran on a "conservative" platform of balancing the budget, cutting taxes, maintaining the gold standard, limiting Federal intrusiveness in state-level affairs, etc.

And we know that he did the exact opposite of these things when actually in office.
But instead of reading histories of the Great Depression, suppose we went into the archives of the newspapers of the time -- the "Wall Street Journal," the "New York Times" -- and, say, from 1929 to 1935 read the stories, day-by-day, the analysis and the commentaries and interpretations of what was happening and where it was leading.

I would suggest that virtually no one knew where the process was leading. Because it depended upon the "complex phenomena" of individual decisions, political policy choices, ideological influences, and everyday actions based on the expectations held at each moment in time. And these intersecting actions and events generated the unique path-dependent process that we call the history of that time.

All of our analysis, expectations and predictions should be implicitly framed with the inescapable humility of what our limited minds can know about the workings of our world.

Indeed, this is the reason we Austrians are always suspicious of political solutions to our social and economic problems. The working through the problem -- including an economy-wide economic crisis -- requires more knowledge about the present and the future than any one mind or group of minds can master or ever possess.

So, are we suffering from "tight" or "easy" credit conditions? Has the stock market and housing market "bottomed out"? Will globalization be part of the solution to the problem, or will governments impose forms of trade restrictions to shore up domestic output and employment levels against foreign competition? Will the next president actually be more concerned with "spreading the wealth" or letting the market adjust so the "pie" can keep growing (or growing faster than wrong-headed policy would allow)?

We will know all the answers -- when some future economic historian (maybe even an "Austrian") writes the history of our times, and tries to tell those future readers how it all happened and why."

CEO = "Congressional Executive Officer"

Suddenly every politician knows how to run a business. For example, Congressman Henry Waxman attacked American International Group for spending $440,000 on a conference for its top-performing life insurance agents. 

No mention of the fact the agents were self-employed. No mention of the fact without top performing agents, the company would be in even worse shape. No mention of the morality and common sense of paying for performance. Just another cheap shot at a seriously wounded enterprise. Just another case of a politician willing to pretend expertise, so long as it grabs a headline, a contribution or a vote.

Read more from The Economist here.

Gabriel Over the White House

In this clip from Cato Weekly Video, Gene Healy, author of The Cult of the Presidency, discusses changing American attitudes towards executive authority. The film discussed, Gabriel Over the White House, was released in 1933 just after the election of Franklin Delano Roosevelt.

Who Will Be the Next Bastiat?

With this little story from Cafe Hayek, Professor Walter Williams of George Mason University takes the lead in the ongoing reality-show, Who Will Be the Next Bastiat?

"Today on my way to lunch I passed a homeless guy with a sign that read 'Vote Obama, I need the money.'  I laughed.  Once in the restaurant my server had on a 'Obama 08' tie, again I laughed as he had given away his political preference -- just imagine the coincidence.  When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need -- the homeless guy outside. The server angrily stormed from my sight. I went outside, gave the homeless guy $10 and told him to thank the server inside as I've decided he could use the money more. The homeless guy was grateful.  At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient needed money more.  I guess redistribution of wealth is an easier thing to swallow in concept than in practical application."

Initiative for Public Choice & Market Process

The Initiative for Public Choice & Market Process at the College of Charleston has launched a new web site at www.cofc.edu/ipcmp.

The Initiative for Public Choice & Market Process advances the understanding of the economic, political and moral foundations of a free market economy. The Initiative supports the growth and development of teaching and research at the College of Charleston School of Business and Economics while engaging students and the greater Charleston business community.

Check it out.

This is Not Your Father's Capitalism

Bill Gross, manager of the world's largest bond fund, says capitalism is not dead, but it has changed forever.

Listen to him here.

Capitalism is Dead, and I Don't Feel So Good Myself

Suddenly, socialism is cool, at least in places that never had to deal with a Great Leap Forward or a Great Proletarian Cultural Revolution.

For the rapidly shrinking population of native English-speaking capitalists, I offer distressing evidence of the current state of affairs from the best English-language magazine in the world, The Economist:



If capitalism is dead, what will take its place?

There is undeniably something deep and ineradicable in human nature that longs for the kind of relationships found in healthy families and in close friendships. "If only the rest of the world was like this" we say to ourselves, "it would be a better place." This explains, at least in part, the persistent appeal of political philosophies like socialism, communism, and communitarianism, and the draw of religious fundamentalism. They all promise a world that offers the reassurance of familiar small-scale human relationships.

Unfortunately, it is also a world that does not work very well. The problem is one of scale. Intense relationships don't scale up. Eventually, we run out of something I call emotional capital.

Like every other form of capital, the emotional capital of human nature is a limited resource. We must use it carefully and with discrimination. No one can honestly claim to treat everyone the same way. Such a thing would be an abomination to universally recognized primary relationships like those between husband and wife, parent and child, brother and sister, or the special relationship between close friends. In different times and in different places, these relationships have varied in relative importance and in form, but they are everywhere the most important forces of small-scale, long-term social cohesion.

Things quickly get more complicated when we try to build a larger social order the same way we build smaller ones. It's like trying to be everybody's best friend. Beyond a small number of relationships, human nature simply cannot monitor things well enough to avoid neglecting the people who really matter; or avoid being exploited; or avoid being made a slave to someone else's desires.

What, then, prompts otherwise cautious humans to rush towards social theories that raise the awful specters of neglect, exploitation and slavery? I can think of three reasons this might happen. Or, more appropriately, we could say that there are three kinds of people who are drawn to the idea of a social order where everyone is family and everyone is a friend. I call them the Faithful, the Prince, and the Frightened.

The Faithful are those people who genuinely believe small-scale, primary relationships are the right model for large scale social order. The Faithful are a combination of well-educated intellectuals and secular mystics who genuinely believe the power of the state can bring to every human relationship the kind of empathy we experience in our closest ones. These people are not evil. They are often likeable, even lovable, and can usually defend their beliefs well. They cannot or do not want to believe that emotional capital is a limited resource. Beyond their vision lies mostly disappointment.

On the other hand, the Prince is cynical, calculating, and solely self-serving. He does not invoke primary relationships to improve the social order. He wears them like a garment of public virtue, even while he sins in private. He uses them to acquire, keep, and gain power over others. Once powerful, he lays claim to all emotional capital. He demands more than respect. He demands to be loved, even worshiped. Beyond love and worship lie fear and cruelty.

Finally, the Frightened are driven to this kind of thinking by a crisis. When a distinct population, identified by geography, race, political boundaries, or some other marker, is attacked or otherwise threatened, either from the outside or inside, the members of that population will draw together around what they have in common. If the threat is large enough, what they have in common will actually become their primary relationship, supplanting all others.

From the Frightened comes the brave, and dulce et decorum est pro patria mori. Moments of crisis drive humans to make sacrifices they would not normally make, break human bonds they would not normally break, and submit to depredations they would normally resist.

But such a moment cannot last, not without a new crisis to sustain it, for human nature inevitably reverts back to the primary relationships that form the backbone of the social order. Humans can make stunning sacrifices, if they believe the sacrifices are necessary, and therein lies many noble acts and heroic moments worthy of our highest praise. But it is madness to expect endless years of such behavior. Beyond the vision of the Frightened lies the return to normal. Home. Hearth. Plow.

Capitalism is not dead so much as it has been abandoned. For their own reasons, the Faithful, the Prince, and the Frightened are driving us away from it. Before we go much further, we should ask, whose vision is likely to dominate? What lies beyond?

Prove It

"The GOP gets itself elected by telling us government programs don't work. Then they go to Washington and prove it."

Overheard on The Big Show

How to Save Capitalism

How to save capitalism? Try it first. 

In this interview with NPR, economist Joseph Stiglitz -- himself no fan of "free market fundamentalists" -- makes the point that the combination of private gain and social risk is properly called a mixed economy, not a free market one. 

Listen to it here.

The Fed Speaks in Charleston

The Fed speaks in Charleston Thursday night!

The Initiative for Public Choice & Market Process is pleased to announce the first BB&T Free Market Process Speaker Series.

Dr. Gerald Dwyer, Vice President, the Federal Reserve Bank of Atlanta, will present a current analysis of financial markets. This event is open to all faculty and members of the business community.

If you would like more information about this event please contact Peter Calcagno, Department of Economics and Finance, 843-953-4279, or email ipcmp@cofc.edu.

Date: Thursday, 23 October 2008
Time: 7 pm
Venue: College of Charleston Beatty Center, Wachovia Auditorium
Location: 5 Liberty Street, Charleston, SC

Blame the Occupants

Massive government intervention in the banking system is driving the political left into delirious pronouncements that the free market is finally dead.

It is also driving conservatives and libertarians into apoplexy for the same reason.

Neither side has it right. Since the creation of the Federal Reserve in 1913, the banking system has been a government construction, from its foundation to the top floor. Within this imposing structure, most bankers have tried to operate according to the laws of the market, but government has repeatedly destabilized those laws by arbitrarily ignoring or rewriting them.

Consumers and bankers are both the victims of a massive government failure, not a market failure. It was not greed that led consumers to borrow too much money, and it was not greed that led bankers to lend it. It was not greed that led investment banks to turn those loans into securities, and it was not greed that led investors to buy them. All along the way, through this chain of economic decision making, one thing remains constant: government encouraged consumers to borrow, encouraged bankers to lend, encouraged investment banks to securitize loans, and encouraged investors to invest. More than any other agent, government is to blame.

Blaming the market for the collapse of the entire structure is like blaming the occupants of a building for its shoddy construction, not the architects.

Acts of Genius

What does this phrase describe: "...complete freedom and a relentless pressure to produce?"

The dreams of Milton Friedman? Friedrich Hayek? The nightmares of Naomi Klein?

No. This actually describes the Princeton University math department in 1948 under its chairman, Solomon Lefschetz. In her bestselling biography of the Nobel laureate and Princeton graduate John Nash, A Beautiful Mind, Sylvia Nasar says that Lefschetz's goal was to get his graduate students producing original research as quickly as possible. Anything else was a waste of time.

In complete defiance of the traditional rules of university administration, the department "subjected its students to a maximum of pressure but a wonderful minimum of bureaucracy." The department had no course requirements. When a student took a course, he always received a passing grade, whether he attended class or not. Transcripts were "works of fiction" prepared "to satisfy the Philistines." Students could earn a passing grade in a foreign language competency exam simply by promising they would learn the text later.

In return for providing such freedom, Lefschetz expected a graduate mathematician to either brilliantly succeed or pack off to a lesser institution. At Princeton, the only thing that mattered was honestly achieved results. It was a pure meritocracy.

At its best, business is also a meritocracy. Unfortunately, there are many places where the creative spirit of business falls prey to the mindless and stultifying adherence to pointless rules. Creativity that changes the world cannot be planned, but it can be smothered.

We should always remember that a set of policies and procedures is not real genius. At best, it can create and sustain the conditions that encourage genius, the "freedom and the relentless pressure to produce." These are the essential conditions that have, can, and will open up the full range of human genius, in every kind of work and in every human endeavor. We are surrounded by acts of genius everyday; we just don't recognize them because they are not our kind of genius.

Beautiful minds don't all come from Princeton, but they do come from places that share the atmosphere of the Princeton math department in 1948.

Stossel's "Politically Incorrect Guide to Politics"

John Stossel's "Politically Incorrect Guide to Politics" will air on ABC's news magazine 20/20 on Friday, October 17 at 10pm ET.

Amid the claims and counter-claims of what one or the other candidate will do, we have to stop and ask: Are we voting for a competent human being, or hoping for a savior?

Stossel says, "Give me a break. Obama and McCain would have to be a combination of Superman and Santa Claus to do what their supporters say they will do."

Click here for more details.

Small Government, R.I.P.

From NPR...

"The idea that an economy serving 300 million souls in a dangerous world can be well-served by a "small government" was always silly — as silly as the idea that more government automatically solves more problems."

Read more here.

Denationalizing Drug Approval

"What one thing do you think that countries, companies or individuals must do to make the world a better place in 2008?"

Daniel Klein, economist at George Mason University, offers his answer to the Davos Question, saying that drugs approved in Canada, Britain, and other places gain automatic approval in the United States. The drug-approving agencies of recognized countries would become more responsive to the needs of humanity. The proposal is called Drug Approval Denationalization.

The Quotable Frédéric Bastiat

"I have not made an alliance with anyone; I have not joined either side. On each question, I have voted according to my own conscience."

The Great Danger Going Forward

Steve Forbes, a strong defender of deregulation and market forces, makes a case for the bailout, while adding cautionary notes about the future.

An excerpt: "The great danger going forward will be the political reaction. Will we apply growth-stunting regulations in the name of "never again"? Will we raise taxes in part to punish the "rich," harming the capital creation so necessary for growth? The answers will determine whether we have a Reaganesque recovery or the drawn-out stagnation of the 1930s."

Myth and Reality

From Arnold Kling at EconLog...

"The myth is that mortgage securitization reflects the genius of Wall Street. The reality is that it reflects the stupidity of the way that regulatory capital requirements are calculated...

...It is not widely understood, and most people would rather believe a different narrative. The Left wants to blame deregulation. The Right wants to blame lending to minorities. But this blog is giving you the true narrative. I have not seen anyone refute it."

Photos of Dismay

BB&T Free Market Process Speaker Series

The Initiative for Public Choice & Market Process is pleased to announce the first BB&T Free Market Process Speaker Series. Dr. Gerald Dwyer, Vice President, the Federal Reserve Bank of Atlanta, will present a current analysis of financial markets.

This event is open to all faculty and members of the business community. If you would like more information about this event please contact Peter Calcagno, Department of Economics and Finance, 843-953-4279, or email ipcmp@cofc.edu.

Date: Thursday, 23 October 2008
Time: 7 pm
Venue: College of Charleston Beatty Center, Wachovia Auditorium
Location: 5 Liberty Street, Charleston, SC

Patterned Principles of Justice

"Mistakes this huge require an impoverished political philosophy to grease the skids. Fannie and Freddie didn't design their horrific lending policies by chance. No, behind this lending fiasco lay the strong collective preference for the "patterned principles" of justice that Robert Nozick attacked so powerfully in his 1974 masterpiece, Anarchy, State, and Utopia."

Richard Epstein, "Robert Nozick Vs. the U. S. Congress"

November 2008 Meetings

In November, the Bastiat Society is offering two meetings.

In our first meeting on Monday, November 3rd, Professor Russ Sobel will discuss his book Unleashing Capitalism: Why Prosperity Stops at the West Virginia Border and How to Fix It. This book on West Virginia economic policy reform has been the subject of over 200 speeches and media appearances (including presentations to the West Virginia Governor and Legislature) and the book was named winner of the 2008 Sir Anthony Fisher Award for best state policy publication of the year.

Russell S. Sobel is Professor of Economics and holder of the James Clark Coffman Distinguished Chair in Entrepreneurial Studies at West Virginia University. He has published over 150 books and articles on economic policy, including a nationally-best-selling collegiate Principles of Economics textbook. Dr. Sobel served as the founding Director of the WVU Entrepreneurship Center from 2002-2006. His research has been featured in the New York Times, Wall Street Journal, Washington Post, US News and World Report, and The Economist Magazine, as well as appearances on CNBC, Fox News, CSPAN, and the CBS Evening News. He has received numerous awards for both his teaching and research.

Dr. Sobel gives lectures and teaches economic principles at various seminars across the country each year, including an annual course in economics for U.S. Congressional Staff. He also serves on the advisory boards of five major professional and academic organizations, and as Senior Economist and Director of the Center for Economic Growth for the Public Policy Foundation of West Virginia. He received his Ph.D. in Economics from Florida State University in 1994.

Date: Monday, November 3rd

Time: 5 pm reception, 6 pm presentation

Location: Imaging Arts Gallery, 175 King Street, Charleston, SC

RSVP: Diana Larson



In our second meeting for the month, on November 12th, Dr. Richard Ebeling returns to the Bastiat Society. Richard was formerly the President of the Foundation for Economic Education in May 2003.

Richard discovered the freedom philosophy as a teenager while attending Hollywood High in Los Angeles, when he came across The Freeman and the writings of Friedrich Hayek and Ludwig von Mises. He earned a B.A. in economics at California State University, Sacramento, an M.A. at Rutgers University, and a Ph.D. at Middlesex University in London, England.

A passionate advocate of free markets and constitutionally limited government, Richard has written, edited and contributed to over 30 books and published numerous articles. He lectures extensively in the United States and around the world and is a popular guest on radio and television talk shows.

He has not only written and lectured about the cause of liberty, but also lived it. In 1991, while consulting on market reform and privatization in the former Soviet Union, he joined the defenders of freedom and faced the Soviet tanks in Vilnius, Lithuania, and again in Moscow, Russia, during the attempted hard-line communist insurrection.

In 1996 he discovered the "lost papers" of Ludwig von Mises in a formerly secret KGB in Moscow and brought to America copies of virtually the entire collection of 10,000 pages. He is currently completing the editorial work of the papers, Selected Writings of Ludwig von Mises, published by Liberty Fund.

Date:Wednesday, November 12th

Time: 5 pm reception, 6 pm program

Location: Imaging Arts Gallery, 175 King Street, Charleston,

RSVP: Diana Larson

Beyond Talking Points

"Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so - or else..."

"Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror."

Columnist Jeff Jacoby, "Frank's Fingerprints Are All Over The Financial Fiasco," Boston Globe, September 28, 2008.

Who's to Blame

"To blame laissez faire for today's economic crisis is akin to blaming the human body's natural and normal functioning for the illness suffered by someone who's overdosing on heroin."

Economist Don Boudreaux of George Mason University writing at Cafe Hayek.

Minority Vices

Populism flatters the people, contrasting their virtue with the alleged vices of some minority -- in other times, Jews or railroad owners or hard-money advocates; today, the villain is "Wall Street greed," which is contrasted with the supposed sobriety of "Main Street."

Conservative columnist George Will, "A Vote Against Rashness," Washington Post, Wednesday, October 1.

BB&T Free Market Process Speaker Series

For more information, email ipcmp@cofc.edu

Dwyer Night Final - Upload a Document to Scribd

Buy Some Stock

Fading Capitalism

Chinese capitalism has run its course.

That is the conclusion of a new book by Yasheng Huang, a professor at the Massachusetts Institute of Technology. The Economist reports:

"Mr Huang has gone far beyond the superficial data on gross domestic product (GDP) and foreign direct investment that satisfy most researchers. Instead, he has unearthed thousands of long-forgotten pages of memoranda and policy documents issued by bank chairmen, businessmen and state officials. In the process he has discovered two Chinas: one, from not so long ago, vibrant,entrepreneurial and rural; the other, today’s China, urban and controlled by the state."

Read the rest here.

Business, Lies and E-mail

New research finds that business students lie more often in e-mail than when communicating using pen and paper. Christie Nicholson reports at Scientific American's podcast, 60-Second Psych.

The Call of the Entrepreneur

The Fox Business Channel is featuring The Call of the Entrepreneur at the following times:

Saturday, September 27 5:00 - 6:00 PM EST / 2:00 - 3:00 PM PST
Sunday, September 28 12:00 - 1:00 AM EST / 9:00 - 10:00 PM PST

To find your local station visit the FOX channel finder.

October 2008 Meeting

Wayne Crews of the Competitive Enterprise Institute will provide insight on the federal regulatory state at our next monthly meeting on Wednesday, October 1. His presentation will be based on his recent publication, Ten Thousand Commandments.

The Competitive Enterprise Institute is a non-profit public policy organization that acts as a leading voice on regulatory issues ranging from free market approaches to environmental policy to antitrust and technology to risk regulation.

Please feel free to invite a friend or two for an evening of hors d'oeuvres and stimulating dialogue.

Kindly R.S.V.P to megan.rock@imagingarts.com

About our speaker...
Wayne Crews is Vice President for policy and director of technology studies at the Competitive Enterprise Institute, and an adjunct scholar at the Cato Institute. His work includes regulatory reform, antitrust and competition policy, safety and environmental issues, and various information age concerns such as privacy, online security, broadband policy, and intellectual property. He is the author of the yearly report, Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, and he co-authored the recent reports This Liberal Congress Went to Market? a Bipartisan Policy Agenda for the 110th Congress and Communications without Commissions: A National Plan for Reforming Telecom Regulation.

Wayne is co-editor of the books Who Rules the Net: Internet Governance and Jurisdiction (2003) and Copy Fights: The Future of Intellectual Property In the Information Age (2002). He is co-author of What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism (2003), and a contributing author to others. Wayne has published in outlets such as the Wall Street Journal, Chicago Tribune, Forbes, Communications Lawyer, and the International Herald Tribune. He has made various TV appearances on Fox, CNN, ABC, CNBC, the Lehrer News Hour and others, and his regulatory reform ideas have been featured prominently in such publications as the Washington Post, Forbes and Investor's Business Daily. He is frequently invited to speak, and has testified before congressional committees on various issues.

Earlier Wayne was a legislative aide in the United States Senate to Sen. Phil Gramm, covering regulatory and welfare reform issues. He was an Economist and Policy Analyst at Citizens for a Sound Economy Foundation, and has worked as an Economist at the U.S. Food and Drug Administration and as a Research Assistant at the Center for the Study of Public Choice at George Mason University. He holds an M.B.A. from William and Mary and a B.S. from Lander College in Greenwood, South Carolina. He was a candidate for state senate as a libertarian while at Lander. He is a father of four.

The Dirty Dozen

Here is an interview with Chip Mellor of the Institute for Justice, discussing his new book The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom.

The Institute for Justice uses the court system to fight for private property and individual liberty.

Chip Mellor on economic freedom

"Just Business" Named One of the Bastiat Society's "Best Books for Business"

The Bastiat Society has named Elaine Sternberg's book Just Business: Business Ethics in Action as one of its "Best Books for Business."

Just Business is a rare and valuable work in the world of business ethics research and advice, a book of practical insights based on a deep study of philosophy. It reassures us that a business committed to maximizing the wealth of its owners can, in fact, be ethical. As Sternberg says, "Contrary to popular belief, it is not necessary either to emasculate or to adulterate business for business to be moral."

Sternberg offers closely held businesses and publicly traded corporations a simple and effective set of rules for dealing with ethical questions about corporate governance, personnel, and finance.

Elaine Sternberg has been an international investment banker, an academic philosopher, and head of a successful business. She earned her Ph.D. in philosophy at the London School of Economics, where she was a Lecturer and a Fulbright Fellow.

"I Am Changing My Name to Chrysler"

With all the news about government bailouts, I'm reminded of the government loan guarantees to save Chrysler in 1980. If memory serves me correctly, the government took either stock or options on stock as collateral, and ended up making money on the deal. 

Songwriter Tom Paxton and singer Arlo Guthrie captured taxpayer consternation with the Chrysler loans with the song, "I Am Changing My Name to Chrysler."

"I Am  Changing My Name to Chrysler"

by Tom Paxton

Oh the price of gold is rising out of sight

And the dollar is in sorry shape tonight

What the dollar used to get us

Now won't buy a head of lettuce

No the economic forecast isn't right

But amidst the clouds I spot a shining ray

I can even glimpse a new and better way

And I've devised a plan of action

Worked it down to the last fraction

And I'm going into action here today

CHORUS:

I am changing my name to Chrysler

I am going down to Washington D.C.

I will tell some power broker

What they did for Iacocca

Will be perfectly acceptable to me

I am changing my name to Chrysler

I am headed for that great receiving line

So when they hand a million grand out

I'll be standing with my hand out

Yes sir I'll get mine

When my creditors are screaming for their dough

I'll be proud to tell them all where they can all go

They won't have to scream and holler

They'll be paid to the last dollar

Where the endless streams of money seem to flow

I'll be glad to tell them what they can do

It's a matter of a simple form or two

It's not just remuneration it's a liberal education

Ain't you kind of glad that I'm in debt to you

CHORUS

Since the first amphibians crawled out of the slime

We've been struggling in an unrelenting climb

We were hardly up and walking before money started talking

And it's sad that failure is an awful crime

Well it's been that way for a millennium or two

But now it seems that there's a different point of view

If you're a corporate titanic and your failure is gigantic

Down to Congress there's a safety net for you

CHORUS

©1980 Accabonac Music (ASCAP)

How We Get What We Want

In this video, students ask New Yorkers to talk about free trade. Out of the mouth of babes...

Eternal Enemy of Politicians

"Unfettered private exchange cannot be limited -- as the Chinese  government thinks it can -- to things. Material items are indivisible from the knowledge of how to make them and the ideas upon which that knowledge is based. All the more so, now, in an "information age." Free markets lead to thinking, that eternal enemy of politicians."

P. J. O'Rourke, On the Wealth of Nations

Economic Sophisms

"In the middle of the 19th century, Frederic Bastiat, the French popularizer of classical economics, titled one of his most famous books Economic Sophisms. 'Sophism' is Bastiat's synoym for 'systematic error,' and he assings sophisms broad consequences: They 'are especially harmful, because they mislead public opinion in a field in which public opinion is authoritative -- is, indeed, law.' Bastiat attacks dozens of popular protectionist sophisms, for example, but does not bother to criticize any popular free trade sophisms. The reason is not that bad arguments for free trade do not exist, but that -- unlike bad arguments for protection -- virtually none are popular!"

Bryan Caplan, The Myth of the Rational Voter

Obstructing Social Responsibilty

"Social responsibility is exercised when individuals express their own values in their own acts, acting separately or in concert; it is not exercised when they force their views on others. A socially responsible individual objects to low wages by refusing to work for them. If he feels strongly about the evils of low wages, he can attempt to dissuade other workers from accepting them, and he can boycott products and producers who benefit from them. He can even try to persuade the owners of businesses to transform their firms into social welfare organisations. But if he acts to prevent other workers from accepting, or businesses from offering, wage levels that are acceptable to them both, he is obstructing social responsibility, not exercising it. Individuals have no more right to force other adults to adopt their moral priorities than they have to dictate their religious beliefs."

Elaine Sternberg, Just Business: Business Ethics in Action 

Not a Curse

"It is through exchange that difference becomes a blessing, not a curse."

Jonathan Sacks, Chief Rabbi of Great Britain

Nominated for "Sentence of the Year" at Marginal Revolution.

"A Lucid and Superb Writer"

"Bastiat was indeed a lucid and superb writer, whose brilliant and witty essays and fables to this day are remarkable and devastating demolitions of protectionism and of all forms of government subsidy and control. He was a truly scintillating advocate of an untrammeled free market."

Murray N. Rothbard, Classical Economics: An Austrian Perspective on the History of Economic Thought, quoted in The Bastiat Collection, Vol. 1.

"Let's Not Make that Mistake Again"

Ideas, both good and bad, are transmitted throughout a society by four important vectors.

First, there are the intellectuals, the truly original thinkers who first formulate the ideas. Second, there are those who control public policy where they use political power to implement the ideas. Third, there are the wealth creators, the business people who pay for the ideas. Finally, there are the leaders in popular culture, primarily in news, entertainment, and religion, who are the primary disseminators of ideas. 

With that in mind, consider this brilliant and funny video from the vector of popular culture. It is a clip from the television series South Park, a show that regularly takes a strong -- if irreverent -- individualist point of view.

The video illustrates the paradox of a consumer market success. Everyone hates Wal Mart  (called "Wall Mart" in the video) because everyone else shops there.

Assume you could do away with "Wall Mart" by convincing everyone not to shop there. What would be the result? The answer: the same mistake.

Political Extremes

Contrary to conventional wisdom, common political ground does not necessarily make it possible to forge a consensus. Instead, common ground may actually make every small difference between groups even more valuable as a tool for snatching donors and voters away from rivals. Indeed, the primary purpose of political parties is to create a group identity by exaggerating every difference between rival groups, and to obscure larger similarities sitting in plain view.

The reason political extremes fight one another so viciously is because they have so much in common. It is the job of the demagogue to convince you that it truly matters whether the chicken that laid the eggs you eat was white or black.

Money and Brains

Wealth is one way of measuring human accomplishment. It certainly is not the only measure nor does it measure all meaningful accomplishment, but what it lacks in breadth and quality it makes up for in ease of use.

What part of human nature is responsible for the creation of wealth? Is it intelligence? Determination? The willingness to risk failure and humiliation? The need for independence and control? Greed?

The question is an important one, both for individuals trying to take care of themselves and their families, and for societies trying to overcome mankind's natural state of poverty. The various answers determine various paths of action.

One study concludes that perseverance and determination are more important inputs for achievement than intelligence. Wasted genius is proverbial. Thomas Edison was right: "Genius is 1% inspiration and 99% perspiration."

Another article confirms what we all know: you don't have to be smart to be wealthy. "If you're an individual with relatively low intelligence, you shouldn't really believe that you're handicapped in achieving wealth," the author concludes. "Similarly, if you're intelligent, you shouldn't think you have an advantage in living the rich life."

Well, if being wealthy does not necessarily mean that you are smart, and not having money does not necessarily mean that you are stupid, at least we know with scientific certainty that money can buy happiness.

That is an accomplishment worth paying for.

What Voters Want

We all know that politicians make ridiculous promises. Could it be they only make the promises voters desperately want to hear? Are politicians merely delivering the product demanded by the marketplace? That is the view expressed in this passage from Robert Penn Warren's Pulitzer Prize-winning novel All the King's Men.

Warren modeled his story of the rise and fall of a character named Willie Stark on the real life of the populist Louisiana politician Huey Long (pictured at right). 

In the following passage, an idealistic and inexperienced Willie Stark is running for governor. Stark asks a jaded newspaper reporter, Jack Burden, how he thinks the campaign is going. Until this moment, Willie has been trying to reach the voters with facts, figures, ratios, and indexes, earnestly laying out the details of his plan to improve government. He is about to learn the brutal truth of politics.

If political promises are products manufactured to meet a persistant demand, they are nevertheless very unusual products: part necessity, part entertainment, part religious fervor, with the awesome power to either protect the life and property of every individual or to violently dispose of both.

"How you think it's going, Jack?"

It was one of those embarrassing questions like "Do you think my wife is virtuous?" or "Did you know I am a Jew?" which are embarrassing, not because of anything you might say for an answer, the truth or a lie, but because the fellow asked the question at all. But I said to him, "Fine, I reckon it's going fine."

"You think so, for a fact?" he asked. 

"Sure," I said.

He chewed that for about a minute and then swallowed it. Then he said, "They didn't seem to be paying attention much tonight. Not while I was trying to explain about my tax program."

"Maybe you try to tell 'em too much. It breaks down their brain cells."

"Looks like they'd want to hear about taxes, though," he said. 

"You tell 'em too much. Just tell 'em you're gonna soak the fat boys, and forget the rest of the tax stuff."

"What we need is a balanced tax program. Right now the ratio between income tax and total income for the state gives an index that --"

"Yeah, I said, "I heard the speech. But they don't give a damn about that. Hell, make 'em cry, make 'em laugh, make 'em think you're their weak erring pal, or make 'em think you're God-Almighty. Or make 'em mad. Even mad at you. Just stir 'em up, it doesn't matter how or why, and they'll love you and come back for more. Pinch 'em in the soft place. They aren't alive, most of 'em, and haven't been alive in twenty years. Hell, their wives have lost their teeth and their shape, and likker won't set on their stomachs, and they don't believe in God, so it's up to you to give 'em something to stir 'em up and make 'em feel alive again. Just for half an hour. That's what they come for. Tell 'em anything. But for Sweet Jesus' sake don't try to improve their minds."

The Chief Sources of Danger

"Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger....Every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy."

Milton Friedman, writing in reason 1978, quoted by Johan Norberg in "Defaming Milton Friedman," reason, October 2008.

The Quotable Frédéric Bastiat

"Certain nations seem particularly liable to fall prey to government plunder. They are those in which men, lacking faith in their own dignity and capability, would feel themselves lost if they were not governed and administered every step of the way....I have seen countries in which the people think that agriculture can make no progress unless the government supports experimental farms; that soon there will no longer be any horses, if the government does not provide studs; that fathers will not have their children educated, or will have them taught only immorality, if the government does not decide what it is proper to learn."

Initiative for Public Choice & Market Process

(Charleston, SC) The College of Charleston has announced the formation of the Initiative for Public Choice & Market Process, made possible by a generous gift from BB&T.

The purpose of the Initiative is to advance the understanding of the economic, political and moral foundations of a free society. It supports the growth and development of teaching and research, while engaging students and the greater Charleston community.

Economics traditionally focuses on the behavior of firms and consumers and how individuals interact in market settings. Public choice builds on the groundbreaking economic and political theories of Nobel Prize winning economist James Buchanan extending the tools of economics to analyze the behavior of voters, candidates, legislators, bureaucrats, and the institutions under which they operate.

The Initiative works to to enhance these economic and political theories for students and faculty through a variety of programs:

The BB&T Free Market Process Speaker Series invites speakers to address the underlying principles and institutions of a market economy. Students, faculty, and the greater Charleston community are invited to attend.

The BB&T Free Enterprise Award is a cash prize awarded to the best investigative paper or case study by a student that examines the underpinnings of a capitalistic economy and public choice theory.

The Initiative provides funding for faculty to develop courses that provide a solid understanding of public choice and free enterprise capitalism in the context of economics, business and philosophy. The program will also accept applications from faculty members for research support in the areas of public choice and free enterprise.

For more information, contact Dr. Peter Calcagno in the Department of Economics & Finance, 843-953-4279 or by email at calcagnop@cofc.edu.

The Charge Against Business

"The charge that business in general is exploitative can only be plausible if the nature of business is radically misconstrued. Coercion is not intrinsic to business, but to government; contrary to Marx, business can only be coercive if it acts against the law, or with the law's connivance. And despite confused ideological claims to the contrary, profits are no more theft than property is; business is not conducted at the expense of its non-owner stakeholders. In the long-term, owner value is unlikely to be maximized by an organisation that lies or cheats or steals, or even by one that is widely believed to do so. Business is by its nature based on contractual exchanges of value, voluntarily entered into; to be successful, business must therefore act in ways that encourage others to deal with it."

Elaine Sternberg, Just Business: Business Ethics in Action

Name That Country!

The leaders of this country have committed themselves to protecting human rights, including:

1. The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.

2. The right of every family to a decent home.

3. The right to adequate medical care and the opportunity to achieve and enjoy good health.

4. The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.

5. The right to a good education.

6. The opportunity to work.

7. That no disabled person be left without adequate mean of subsistence.

8. That no sick person be left without medical care.

9. That no child be left without schooling, food and clothing.

10. That no young person be left without the opportunity to study.

11. That no one be left without access to studies, culture and sports.

12. That no family be left without a comfortable place to live.

Answers:
1-5, President Franklin D. Roosevelt's State of the Union Address, January 1944
6-11, Constitution of the Republic of Cuba

Big Business and The Little Guy

Is big business taking all the business away from the little guy? Not if the little guy is smart, plays to win, and spends more time worrying about his customers than protesting.

"A Hatred for Those Who Are Happy"

Chandra Bhan Prasad, a former pistol-toting Maoist revolutionary who once urged his fellow untouchables to murder members of India's upper caste in the name of social justice, admits he was wrong. Now he understands that it is not violence that allows poor people to "escape hunger and humiliation."

Neither is it government welfare, nor a return to nature, nor affirmative action. It is India's economic liberalization that will "neutralize" the caste system and liberate the poor. In a word, it is capitalism. Prasad says those who oppose capitalism in India, “have a hatred for those who are happy.”