New Links

Check out what's new in the Bastiat Society's Free Market Links.

First, you'll find a link to Laissez-faire Books. LFB is a venerable institution that began in the dark ages when book catalogs were hard-copy publications; when they arrived only via US Mail; a time when a toll free number was high-tech; a time when people actually dialed a telephone; a time called 1972.

Second, you'll find a link to TV Liberty, a collection of videos including Walter Williams discussing "The Entrepreneur as American Hero."

Advice to Grads: "Make a Bunch of Money!"

P.J. O'Rourke has written the commencement address every newly-minted college graduate should hear, but won't.

Among his advice:

"Go out and make a bunch of money!

Here we are living in the world's most prosperous country, surrounded by all the comforts, conveniences and security that money can provide. Yet no American political, intellectual or cultural leader ever says to young people, "Go out and make a bunch of money." Instead, they tell you that money can't buy happiness. Maybe, but money can rent it.

There's nothing the matter with honest moneymaking. Wealth is not a pizza, where if I have too many slices you have to eat the Domino's box. In a free society, with the rule of law and property rights, no one loses when someone else gets rich."

Read the rest here.

The Quotable Frédéric Bastiat

"Try to imagine a system of labor imposed by force that is not a violation of liberty; a transfer of wealth imposed by force that is not a violation of property rights. If you cannot do so, then you must agree that the law cannot organize labor and industry without organizing injustice."

The More Things Stay the Same

When a business is not successful in the marketplace, it may try its hand at politics. Tariffs, quotas, taxes, and other laws will enrich a politically successful firm, but only at the expense of competitors, customers and taxpayers, and against their will.

This is nothing new. On May 6, 1850, Bastiat heard this plea for such abusive laws in France from the General Council of Manufacturers, Agriculture, and Commerce, asking:

"That science no longer be taught exclusively from the point of view of free trade (of liberty, of property, and of justice) as has been the case until now, but also, in the future, science is to be especially taught from the viewpoint of the facts and laws that regulate French industry (facts and laws which are contrary to liberty, to property, and to justice). That, in government-endowed teaching positions, the professor rigorously refrain from endangering in the slightest degree the respect due to the laws now in force." (The Law)

In other words, stop teaching free trade and start teaching students to obey the laws that favor French industry.

Plus ça change, plus c'est la même chose.

The Purpose of Business

What is the purpose of business? That is a simple question with many answers. Among them are:

To increase profits. (Friedman)

To balance the competing interests of stakeholders. (Freeman)

The purpose is unique to each firm; it is specialized and evolving. (Mackey)

To maximize owner value by selling goods and services. (Sternberg)

To create and keep a customer. (Drucker)

To meet society's needs. (Brown)

To "serve the community skillfully as well as faithfully in offices of trust" and “aid in maintaining sound financial morality.” (Khurana & Gintis, quoting Wharton)

To improve society. (Ebertz)

To act as a vehicle of economic progress. (Henderson)

To "increase the general well-being of humankind through service, a creative invention and ethical philosophy." (Hawken)

To serve the state. (Mussolini)

To expropriate the worker. (Marx)

Friedman on Business and Government

Thirty years ago in Reason magazine, Milton Friedman wrote about business:

“How many businessmen have you heard in the past 10 years who have been willing to stand up on some public rostrum and take issue with governmental policies? Many a businessman gets up and expresses general sentiments in favor of free enterprise and of competition, but very few get up and criticize particular measures taken by government. And I don’t blame them. They would be fools to do it!”

—Milton Friedman, “Which Way for Capitalism?”

The Birth of Freedom

A new documentary from the Acton Institute, "The Birth of Freedom," examines an often overlooked fact: freedom in the modern world has deep roots in religion.

From the Acton Institute web site...

"The American founders said that all men are created equal and are endowed with certain unalienable rights. That among these are life, liberty, and the pursuit of happiness. They called this a self evident truth. 87 years later, Abraham Lincoln reaffirmed this idea on the Civil War battlefield of Gettysburg. And in 1963 these same words echoed from the steps of the Lincoln Memorial as Martin Luther King, Jr. urged America to fulfill the promise of its founding.

But humans are separated by enormous differences in talent and circumstance. Why would anyone believe that all men are created equal? That all should be free? That all deserve a voice in choosing their leaders? Why would any nation consider this a self-evident truth?

For the millions around the world who have never tasted liberty the question cries for an answer."

The Teaser...


The Trailer...

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!

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.

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."

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.

An Illegal Hot Dog?

From reason.tv, 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.

The Quotable Frédéric Bastiat

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

Frédéric Bastiat
1801-1850

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.

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.

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.

Bastiat vs Obama

From Neal Boortz...

THEN AND NOW

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

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.

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.

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.

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.

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

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.

Poverty

"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

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.

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.

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

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

A Country of Starving Billionaires

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."

Freedom

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.

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.

April 2008 Meeting

The next Bastiat Society monthly meeting will be Wednesday, April 2nd. Our distinguished speaker for the evening will be Radley Balko, senior editor at Reason magazine.

Location: 175 King Street, Charleston SC

Time: 5 pm reception , 6 pm speaker

RSVP: Megan Rock

About our Speaker (in his own words):

I'm a 32-year-old writer and editor living in Alexandria, VA - just outside Washington, D.C. I live with my wonderful girlfriend and our dogs, a Sharpei/Lab mix named "Harper" (after Harper Lee) and a bulldog-terrier mix named "Isabel" (after Isabel Paterson).

I'm a former policy analyst with the Cato Institute, now a senior editor for Reason magazine. I'm also a biweekly columnist with FoxNews.com. I've been published in lots of places, from Playboy to the Wall Street Journal, and have done lots of TV and radio interviews. My work has also been cited in a Supreme Court opinion, helped get a guy off death row, and I've testified before Congress a few times.

I'm originally from Greenfield, Indiana. I attended Indiana University and graduated in 1997 with a BA in journalism and political science.

I'm a "small-l" libertarian.

I like to write. I'm a music buff, a sports nut and a political junkie.

One day, I'll teach one of my dogs to retrieve a beer from the refrigerator on command.

What Business is Not

1. The purpose of business is not to promote the public good.
2. Business does not exist to foster employees' physical or emotional well-being; still less is its goal their ultimate fulfillment.
   
3. It is not the aim of business to provide full employment for the nation's labor force
4. Business does not exist to provide jobs for local workers.
   
5. Business's purpose is not to serve the interests of customers or of managers or of the community.
6. Business's definitive purpose is not to produce goods or services, or to add value.
   
7. Business is not a charity or a church, a school or a club
8. Business is not, except incidentally, an agency of government or of social policy.
9. To focus on business's function as a producer, supplier or adder of value is to misconstrue business's purpose. If the nature of the goods or services, or the way they are produced, takes priority over maximising long-term owner value, then the activity involved is not business. An organization whose guiding principle is producing the absolutely best widgets (e.g., engines, books, healthcare) or the very cheapest ones -- independent of the consequences for long term owner value -- is not operating as a business...even if, incidentally, it sells the widgets profitably.
   

From Just Business, by Elaine Sternberg

Trade is Better than Battle

An editorial in Scientific American quoted a United Nations expert, Jan Egeland, who is happy that war is receding around the globe, but who complains that war is getting "crueler" because it now involves civilian populations, not just armies. Egeland says we could end war, if only politicians would muster the will to triumph.

The editorial goes on to warn that global warming might ignite a new round of environmental wars, spinning out of control.

I guess the only way to deal with that possibility is to find politicians with even greater will. I cringe anytime someone calls for a politician with the will to triumph, even when the topic is ending war.

From an evolutionary perspective, war is just one of the ways humans have struggled to survive, as victors on either offense or defense. There is no such thing as a war without cruelty. War is cruelty. United States General William T. Sherman said so when he was waging a war against a civilian population one hundred and forty four years ago.

The reason war is diminishing is that its survival value is declining. We have discovered that market economies and individual liberty are far better social arrangements for human survival. Trade is better than battle.

As for global warming, it need not ignite another war. Market forces are adaptable enough to deal with climate change. However, global warming is dangerous precisely to the degree that politicians try to "will" a solution.

Many lives have been lost in the triumph of the will.

Sternberg on Business Ethics

"There is, consequently, still a need to combat what can most appropriately be called the 'oxymoronic approach' to business ethics. In the early 1990s, this view was commonly associated with social responsibility; now it is more often described in terms of stakeholding. In whatever form it is expressed, however, the oxymoronic view holds that being ethical in business means replacing the pursuit of owner value with the pursuit of some other end -- social welfare, environmental protection or stakeholder interests, for example. Since, however, the essence of business is maximising owner value by selling goods or services, this view of business ethics is literally absurd: it makes refraining from business the condition of being ethical in business."

Elaine Sternberg, Just Business: Business Ethics in Action

Things I Thought I'd Never See

The Ritz Carlton sponsoring a NASCAR driver?

Life Gets Better

"Intellectuals and theorists have long expected, almost demanded, that average Americans would develop political antipathy toward the prosperous and vote to confiscate their wealth. Perhaps average Americans do not do this because they know they have spent the last several generations gaining on the well-to-do in significant ways. Whatever faults the United States and the European Union may have -- they are many -- in recent generations, both have methodically improved daily circumstances for almost everyone. The same social engine that in the United States and Western Europe is producing spoiled and insufferable billionaires is also producing steady, significant gains for the middle and for the poor."

Gregg Easterbrook, The Progress Paradox

Liberty and Economics

Far from being a body of abstract thought, economics is the study of what makes business possible. Get it wrong, and there will be no food in the stores.

This video introduces one of the great champions of free-market economics: Ludwig von Mises. He grew up in an intellectual environment that was even more hostile and contemptuous of business than the environment is today. As he described it:

"By 1900, practically everyone in the German speaking countries was either a statist or a state socialist. Capitalism was seen as a bad episode which fortunately had ended forever. The future belonged to the state. All others would be regulated in a way that prevented businessmen from exploiting workers and others."

Four Views of Human Progress

By any objective measure, life on earth is getting better.

Health? Infectious diseases kill about 50 people per 100,000 – a 14-fold reduction in death from infectious diseases in the last century. Longevity? From the mid-18th century to today, life expectancy in developed countries jumped from less than 30 years to about 75 years. Even in the poorest countries in the world, life expectancies have increased, in some cases by 50%. Infant deaths? In 1900, more than 1 baby in 10 died. In some areas of the US, 1 in 4 died. Today, only about 1 in 150 babies dies within the first year. Mothers dying in childbirth? One hundred years ago, the maternal death rate was 100 times higher than it is today.

The list of indicators goes on and on to an inevitable conclusion. Whether we look at diet and nutrition, the distribution of wealth, the state of poor Americans, the state of children and teens, the American worker, leisure and entertainment, housing, transportation and communication, invention and scientific progress, technology, education, safety, environmental protection, the supply of natural resources, social and cultural indicators, sports, the condition of women, racism, or the freedom of the individual, life on earth is clearly getting better.

Why don’t more people know it?

Why are people convinced the world is bad and getting worse?

Who or what is the agent of progress?

Answering these questions requires that we define the idea of progress. We immediately run into a problem. Not everyone views progress the same way. There are at least four different views of human progress in the modern world. We can classify these views as conservative, libertarian, socialist, and communist. Understanding these views can help clear up much of the confusion surrounding the idea of human progress.

The Conservative View of Progress
The conservative view of progress is profoundly skeptical. Sometimes – perhaps often – it rejects the idea of progress altogether. It may use phrases like “the end of progress,” “the limits of progress,” the “limits of growth,” or “mankind should not play God.” When presented with evidence that the world is getting better, the conservative simply claims we are measuring the wrong stuff, looking the wrong way.

In the conservative view, the present is a degenerate state filled with dangerous ideas masquerading as progress. Mankind has fallen from a Golden Age, an Eden, or a pristine state of nature. This is a view shared by groups as different as radical environmentalists and religious fundamentalists, no doubt to each group’s mutual outrage. The common theme in their world view is that unrestrained progress is a threat to whatever good is left the world. The only meaningful progress is that which restores what has already been lost.

In this view of progress, man’s task on earth is redemption. How this redemption is achieved is the distinguishing characteristic between conservative groups. Some groups see it in nature, some in faith, and some in patriotism. Individuals are not free to decide the path of their own redemption. Redemption must follow a course laid out by a proper authority such as a hereditary aristocracy, a religious leader, a group of secular moralists wielding political power, or a democratically elected official.

Whatever the type of authority in question, it is the driving agent of progress, not the individual. Authority guides the conditions, traditions, institutions and faith of all human activity in accordance with a divine or natural plan for the redemption of a fallen race. Authority sets the acceptable limits of individual behavior. Authority determines the difference between entrepreneurship and crime. Authority defines the social goals and the means to achieve them. Such a world view requires faith more than reason, tradition more than innovation.

The Libertarian View of Progress
The libertarian view of progress is organic and evolutionary. Society is organized by the self-interested economic activity of individuals in voluntary arrangements. Only the most successful arrangements survive. Predicting exactly what will survive in complex and constantly changing conditions is nearly impossible. Knowledge is too fragmented, dispersed, and fragile to collect and use for central planning. Only the decentralized process of the market can effectively use such knowledge.

Progress is messy and unpredictable, but creativity is very high. There are lots of individual goals, but there is no clearly defined social goal. Nor can there ever be one without interfering with the organic order. Social results are the unintended consequences of individual behavior. Business people and entrepreneurs are the agents of progress. The only limits imposed on their behavior are rules against force and fraud.

While tradition, faith, and reason are all present for individuals to use however they see fit, the libertarian view of progress does not require any individual to submit to any of them. What is essential in the conservative view is purely voluntary for the libertarian.

In the libertarian view of progress, there are no infallible guides toward an ideal social order. Progress is not a matter of redemption. It is a limitless evolutionary process with unpredictable social results. The world is always out of balance, in the middle of change, surging in some new direction. Progress is institutionalized innovation.

The Socialist View of Progress
In the socialist view of progress, human activity is best organized by human reason via political action. Its consequences are measurable and predictable. Progress is movement towards a clearly defined, socially desirable goal. The future is what man wants it to be. Reason is man’s essential planning tool, more useful than faith (which a socialist calls superstition), tradition (historical and social inertia), or free markets (chaotic production).

The agents of progress are technocrats who have both the technical expertise for the problem in question, and the political power to improve the organic order, i.e. the power to improve the marketplace of free and voluntary exchanges. In its mildest form, the socialist view of progress co-opts the very word in its name: Progressives. In its strongest form, it sees business people and entrepreneurs as the enemies of progress.

Today, it is almost impossible to imagine the immense confidence that early 20th-century intellectuals had in the power of planning, what was once called “socialist calculation.” They believed that all they had to do to make a better world was plug a few thousand variables into an equation, add a few thousand coefficients, and – voila! – achieve optimal outputs and a just distribution.

Before 1914, many sincere intellectuals praised pre-war Germany as a leading example of an advanced, scientific social order. “Unscientific” was the ultimate intellectual put-down, and it was often used by non-scientists to criticize the work of other non-scientists. Faith, tradition, and commerce were obstacles to progress. Remove them, and reason would achieve, at last, a more dignified life for mankind.

The Communist View of Progress
The communist view of progress is that history follows laws as reliable as the laws that govern the physical universe. History is not a chain of random events. History is the unfolding of the inevitable class struggle over the means of production. Each event expresses a historical necessity. At the present moment, mankind is not sufficiently developed to understand historical necessity. An enlightened few do, however, and these form a Party to act as the embodiment of the will of history. The Party is the agent of progress. Arthur Koestler described this view in his novel Darkness at Noon:

“The Party can never be mistaken…You and I can make a mistake. Not the Party. The Party, comrade, is more than you and I and a thousand others like you and I. The Party is the embodiment of the revolutionary idea in history. History knows no scruples and hesitation. Inert and unerring, she flows towards her goal. At every bend in her course she leaves the mud which she carries and the corpses of the drowned. History knows her way. She makes no mistakes. He who has not absolute faith in History does not belong in the Party’s ranks.”

The Four Views in Action
After nearly a century of ascendance, the Communist view of progress began dying out around 1980. Born out of the socialist ideals of the late 18th and 19th centuries, Communism left a wake of death, misery, and suffering unparalleled in human history, including the deaths of 10 million people from deliberate famine in the Ukraine in 1932 and 1933; the Gulags where millions suffered for crimes as small as making an anti-government joke; the occupation and misery of Eastern Europe; the Korean and Viet Nam wars; and the killing fields of Cambodia where nearly 2 million died. Communism was an intoxicating vision, built on grand ideas, logic, and careful conclusions, but it was an utter failure in the real world. It turned out to be an intellectual fairy tale with a horror-show ending. It smolders on in North Korea, Venezuela, and a few English departments. It has been abandoned in everything but name in China and Viet Nam.

Where did the Communists turn after their faith in the Party as the agent of progress was shattered? They retreated to the solace of the socialist view en mass, and that is where most of them are today. They reluctantly abandoned their belief in historical necessity – and with it, their willingness to sacrifice lives in the name of progress. They adopted the view that progress requires smaller individual sacrifices of liberty and property, offered up to the right people, acting according to the right reasons.

The world today is a volatile mixture of these three views of progress: conservative, socialist (composed of both original socialists and lapsed communists), and libertarian, each vying for supremacy. In reality, there is no clear dividing line between these views. They represent a continuum. However, for the purpose of exploring the idea of progress, it is helpful and not wholly inaccurate to treat them as distinct sets. Indeed, it is usually when these views overlap that trouble begins, because one view can quickly overrun another.

For example, people with differing views of progress might all accept the necessity of some form of government planning for infrastructure (defined here as transportation and communication networks). When a community builds a road, it faces a problem that is very difficult to solve solely by voluntary agreement. All it takes to shut the network down is one holdout. Some degree of enforced social planning, i.e., government, is required to deal with holdouts.

However, once we concede the necessity of government planning for infrastructure, we open the door to all kinds of mischief in the name of progress. Every problem can cleverly become an infrastructure problem. Unchecked, government planning leads straight to a struggle between those who would use it to redeem mankind (the conservatives), and those who would use it to build a scientific state (the socialists). The libertarians are notably absent. They would rather not use government at all.

Is it really true that something as familiar as the local zoning board is actually the scene of a political shootout between one group’s vision of redemption and another group’s vision of the scientific state? Of course it is. Conservatives use zoning to control adult businesses, and thereby moral behavior. The Greens (another brand of conservatism seeking redemption in nature) use zoning to control development, something they view as a moral issue. Socialists use zoning to rationalize unrestrained markets. All of these groups are arguing about the right way to use government, but they rarely argue whether it should be used at all. All of these groups seek the power of government because of the good they believe they can do with it, in the name of progress. They do not see in their efforts the danger of igniting bitter civil disputes. They only want what reasonable people want. In this, they are dangerously naïve.

Government power is not simply a social contract. The Nobel-prize winning economist Friedrich Hayek made that point decades ago when he said that the most minor government functionary has more arbitrary power over another individual than the wealthiest man in town. That is precisely why government can solve network problems: the most minor government functionary can command involuntary compliance under the threat of fine, seizure, or imprisonment. Or, as George Washington said almost two hundred years before Hayek, “Government is not reason, government is not eloquence, it is force.”

Until economics developed a substantive body of economic research on the actual operations of government– what is called public choice theory – the proponents of government planning had a relatively unobstructed field to promote planning in the name of progress. Public choice theory revealed the weaknesses in their plans. Government officials are only human. True to human nature, they tend to use their offices and powers for their own benefit, the benefit of their friends, and the harm of their enemies. Business is tempted to use government to limit competition or fix prices. Labor is tempted to use government to protect jobs and benefits. Consumers are tempted to use government to lower prices and dole out benefits. Politicians are tempted to use government to buy votes and shake down contributors. The end result of this orgy of temptation, self-interest, and force is a zero sum game where someone has to lose.

Public choice theory builds a powerful case against using government as a tool of progress. It teaches us that we must carefully distinguish between those things that government can do well in the name of progress, and those things that are best left to free individuals acting in their own self-interest in the market. Knowing where to draw the line between the two is difficult. Knowing that a line must be drawn is essential.

The future of human progress – defined here as a steadily improving standard of living – depends on well drawn lines. You might consider them guardrails. On one side, the conservative rail emphasizes tradition and culture, the unspoken rules of how we should deal with one another and the world around us. On the other side, the socialist rail emphasizes reason and the unique power of public solutions. Between the two, the libertarian view of progress rushes forward in an unpredictable rush of human creativity and change that looks subversive to the conservative and looks like unreasonable greed to the socialist.

So long as tradition and reason remain the guardrails that direct and contain human creative behavior, they serve a valuable purpose in promoting human progress. But that does not mean that individuals who hold those views – those who form the guardrails -- will approve of the results. There will be inevitable friction and even violent disagreements. The relative influence of each view will wax and wane among populations, but that is precisely how progress is born, where it lives and works, where it delivers its best results, and where it dies.

To summarize, progress is what happens when free men and women act creatively within -- and sometimes beyond -- the fluctuating cultural and political constraints established by their civilization. Sometimes, progress simply improves things. Sometimes, it changes them forever.

In conclusion, let me return to the questions I asked at the beginning.

Why don’t more people know the world is getting better? That fact does not fit into their world view.

Why are people convinced that the world is bad and getting worse? The more conservative or socialist a society, the more likely people will believe that the world is getting worse.

What is the engine of progress? It is the unlimited creativity of free individuals.

Hagrid's Advice

In the fifth book of the Harry Potter stories, Harry Potter and the Order of the Phoenix, the character Hagrid is sent as an ambassador to persuade the Giants to join the fight against the evil wizard, Voldemort.

His job is unusually difficult. Giants are known for being stupid and violent.

After Hagrid returns from his mission -- visibly bruised and battered -- he offers the following explanation that is useful advice for anyone involved in tricky negotiations, "If you overload them with information, they'll kill you just to keep things simple."

That's good advice for CEOs, economists, and anyone else making a presentation.

The Audacity of Hopelessness

Who's in Control?

A defining characteristic of this economy that produces such enormous abundance for us all (and yes, despite the current downturn, it continues to produce prodigiously) is that no one is "in control." Indeed, no one could possibly be "in control." A far greater danger to Americans' prosperity than a President with a poor speaking style and a penchant for standard-fare political shenanigans is the spread of the belief that economic salvation lies in having someone "in control."

Don Boudreaux, at Cafe Hayek

Balzac on The Machinery of Government

The year 1850 marked the death of two notable French intellectuals: the statesman, journalist and economist Claude Frédéric Bastiat, and the novelist Honoré de Balzac.

Balzac was known as one of the founding fathers of French realism. In the following passage from his novel Le Père Goriot, he quickly captures the dehumanizing reality of the French government bureaucracy.

This passage is from a translation by Ellen Marriage, available at Project Gutenberg.

"There is a race of quill-drivers, confined in the columns of the budget between the first degree of latitude (a kind of administrative Greenland where the salaries begin at twelve hundred francs) to the third degree, a more temperate zone, where incomes grow from three to six thousand francs, a climate where the bonus flourishes like a half-hardy annual in spite of some difficulties of culture. A characteristic trait that best reveals the feeble narrow-mindedness of these inhabitants of petty officialdom is a kind of involuntary, mechanical, and instinctive reverence for the Grand Lama of every Ministry, known to the rank and file only by his signature (an illegible scrawl) and by his title--"His Excellency Monseigneur le Ministre," five words which produce as much effect as the il Bondo Cani of the Calife de Bagdad, five words which in the eyes of this low order of intelligence represent a sacred power from which there is no appeal. The Minister is administratively infallible for the clerks in the employ of the Government, as the Pope is infallible for good Catholics. Something of this peculiar radiance invests everything he does or says, or that is said or done in his name; the robe of office covers everything and legalizes everything done by his orders; does not his very title--His Excellency--vouch for the purity of his intentions and the righteousness of his will, and serve as a sort of passport and introduction to ideas that otherwise would not be entertained for a moment? Pronounce the words "His Excellency," and these poor folk will forthwith proceed to do what they would not do for their own interests. Passive obedience is as well known in a Government department as in the army itself; and the administrative system silences consciences, annihilates the individual, and ends (give it time enough) by fashioning a man into a vise or a thumbscrew, and he becomes part of the machinery of Government."

Police State

I do not spend time watching MTV -- although I was young enough to be a member of the target demographic when it began. These two infomercials currently running on the cable channel are so thought-provoking, they may make me tune in again.

The critical question raised by these ads, however, was answered by F. A. Hayek almost sixty years ago. What leads to a police state? Central planning is the road to serfdom.

Via Scott Horton at Harper's Magazine.

Those Who Know Better

"...all poetical imitations are ruinous to the understanding of the hearers"

Plato, "The Republic," Book X

Plato was not the first well-educated intellectual to believe that he knew better than other men, but perhaps he has been the most influential. In his blueprint for a better world, The Republic (circa 360 BC), one of the social improvements he called for was banishing all poets, because poets do not tell the Truth; they just sell a bunch of lies.

Today, there is another group of well-educated intellectuals calling for banishing -- or, at the very least, the irreparable disgracing -- of another group of individuals on the basis of its departure from the Truth. The former group is made up of militant atheists. The latter group includes anyone who is religious.

The new militant atheists believe that religion is, in the words of one of their most outspoken advocates, Christopher Hitchens, "violent, irrational, intolerant, allied to racism, tribalism and bigotry, invested in ignorance and hostile to free inquiry, contemptuous of women and coercive toward children."

Of course, humans have used religion as an excuse to do horrible things to one another. But can we rely on human reason to do any better? Is reason that much more reliable than faith?

Most of the human atrocities of the 2oth century did not occur at the hands of men of faith; they occurred at the hands of men who believed they were acting according to reason and science. Lenin, Hitler, Stalin, Mao, Ho Chi Mihn, and Pol Pot all at least gave lip service to the idea that they were leading mankind away from a history of ignorance and superstition and towards an enlightened future. They believed they were the vanguards of human progress.

Hitchens gets around this uncomfortable fact by claiming that these guys were in fact religious leaders, not political ones. Granted, many of their political movements eventually acquired a religious fervor, but does not that prove that human nature needs a religion, and when it cannot find one it will create one out of whatever raw material is available?

Make no mistake, the power of human reason is a wonderful thing. But it is not great enough to coordinate the actions of six billion people in almost two hundred countries on seven continents. For that task, reason requires a companion, something more adaptable to individual and local conditions; something that does not depend on formal education as much as it depends on local knowledge passed from one generation to another in ways often unspoken.

We call that companion culture, and it is a kind of reason mined from the rich vein of all the human past. Religion is a very important part of culture. Religious forms, practices, and reputations will vary, but religion's universal presence attests to its value. Only a wise man or a fool would insist that we would all be better off without it.

He's Come Undone

The editors of National Review on Eliot Spitzer...

"If there is any comfort at all from this episode, it is that a man who pursued his political ambitions by any means will almost certainly not be trusted with public office again."

Emergence

One of the most exciting new areas of research is an area that crosses traditional academic borders. It is called emergent behavior.

Emergent behavior is what happens when a relatively simple set of rules goes through many iterations, eventually producing a result that is complex and desirable, but completely unplanned by the individual actors themselves.

Take the game of chess, for example. It is a game with fewer than two dozen rules. Yet, the possible game variations are greater than the number of atoms in the universe. Simple rules, complex results.

On a larger scale, everything from corporations to the entire economy appears to work the same way. Individually, each of us operates with a simple set of rules -- some we can articulate, and some we cannot -- distilled from the social and physical processes of trial and error.

Contrary to popular opinion, we certainly do not act on the basis of thousands and thousands of pages of policies and procedures, regulations, and laws. Our brains simply cannot retrieve that much information. Complex rules result in the very undesirable consequence of utterly confused behavior. This is bad news for those among us who believe there must be a policy statement for everything. Human behavior will always default to a simpler set of rules.

The only thing a complex set of rules can achieve is widespread contempt for the very idea of rules in the first place. The lesson for business management is this: keep your rules simple, and measure the success of your rules by the results.

Beyond a certain point, every new rule, added to a new policy, published in a new manual, amended by a new law, established by a new decree, governed by a new committee, enforced by a new official, is a step towards the kind of world Franz Kafka wrote about in this three great novels, The Trial, The Castle, and Amerika, a world of contradictory rules and arbitrary enforcement; a world where an individual can be guilty and still be ignorant of his crime; a world where men live more in fear than in hope; a world where it is safest to do nothing.

Image of Franz Kafka, source: http://www.zeno.org - Zenodot Verlagsgesellschaft mbH

Trust and Trade

"...trade is the best thing we can do to break down the natural animosities between groups. For trade to work, two individuals have to have a certain amount of trust. We know from game theory that once trust breaks down, subjects begin to defect rather than cooperate. What does it take for them to cooperate? Trust. What does trust take? Trust takes a number of exchanges in which there are no defections."

Michael Shermer, in reason, April, 2008

An Introduction to Frédéric Bastiat