Enrico Pallazzo, Part II: Books and More Books!

Adam,

I hope you didn't take my email the wrong way, I guess I was trying to add some sarcasm.  I still would like to meet up for a beer some night and discuss FDR, but several other items too.  A big question that I have is, why do some countries force their style of government/economy on others, e.g., democracy/capitalism has historically fought with communism/socialism.  Why do these countries care?  Why don't they worry about their own people?

I would also like to add to my reading list.  I believe I mentioned to you before that a buddy at church gave me a list of reading recommendations, some of them matched your book reports on your website, and yet a third source provided me with similar matches so I'm thinking these are good books to read:

The Federalist Papers

Road to Serfdom

Capitalism and Freedom

I'm also considering Economics in One Lesson.  I took a basic Econ class as a freshman in college but I dont remember a whole lot about it and I'm thinking I need a refresher.  I borrowed the text book from my hallmate to save money so I dont have anything to recall.  I've heard Animal Farm is a good book too.  Maybe that will help me answer my previous questions.  My friend also recommended a lot of books by Larry Schweikart, but some of his titles have me concerned I'll be getting a biased opinion.  I want to read objective opinions, not biased.

Anyway, maybe if our schedules permit we could grab a beer late next week (I'm just getting over a cold) and have a discussion.

Enrico

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Enrico,

We really need to get together.  The books and authors you express interest in are excellent resources, and the questions you raise are excellent.  I love this stuff and it rarely occurs that someone I know expresses interest in it.

The Federalist Papers are a tremendous insight into what the Constitution was designed to do.
Hayek's Road to Serfdom is a classic--a must read.
Friedman's Capitalism and Freedom I read for the first time just a couple years ago and is another good one.

And Economics in One Lesson is a great book.  It should be taught in every high school and in every Econ 101 college course.  I was considering rereading it and posting several thoughts on it on the site.  It is most likely a good thing you do not remember much from your college econ 101 course; at the risk of sounding flippant, it was probably not worth remembering.  That is, if it were like the one I took many years ago.

It is a good thing you're after objective insights.  So much of what we hear from "economists" is thinly-veiled partisan cheerleading.  They have a progressive, statist agenda and wrap economic "insights" around it in order to give it some public validity.  One important aspect of the "Austrian Economists" school of thought is that economics is the study of human action and interaction, therefore an objective study of society and civilization.  Why, for example, were the vast majority of humans destined to lives of hand-to-mouth poverty for thousands of recorded history right up to the Industrial Revolution, then almost instantly (from an historical point of view) the standard of living leaped forward to what we enjoy today? 

What's the reason for all this progress and leisure time that allows for human cultivation, the arts, etc.  Line workers can come home to heated and lit homes to spend hours not concerned how they will feed their families.  (I learned a love of reading from my father who worked for 35 years in an aluminum plant.  He came home and cultivated a family, always eager to discover life through books.)  The answer to that question comes down to the central theme of human freedom.  Whenever and wherever some of us are free enough to provide what the rest of us need an want, human civilization prospers.  Whenever and wherever humans are less free, they are concomitantly less prosperous.  It sounds un-sophisticatedly simple, but history and facts are stubborn things.  (As John Adams would say.)

That's a long-winded way of responding to your desire to go after non-biased opinions.  Frankly, the Austrian school and similar economists and thinkers are interested in the bare historical record and understanding and explaining why things are the way they are.  Yes, they have an opinion but that opinion is rooted in a good-faith effort to get to the truth of the matter, not the creation of truth outside of what we can gather from history, human nature, and empirical evidence.  The socialists have never been so interested.  They have opinions, but theirs are opinions rooted in speculations drummed up by Marx, seemingly out of thin air.   Starting with Marx and Engels, they from the outset have been interested in rewriting history and imposing upon society their vision and philosophy of how the world works.  They are interested in having some of us (government authorities and their elitist "intellectual" apologists) plan and control what the rest of us can and cannot do with our time, capital, labor, energies, all in order to control and shape society into an image of their choosing.  I've found anyone affected in the least with this thought will from the outset not be interested in unbiased reporting of history and events. 

This brings me to more book suggestions: Thomas Sowell's A Conflict of Visions lays out this split in world visions starting with the Renaissance right up to today (1995 when the book was published).  The Vision of The Anointed is another one of his dealing with this issue.  And his latest, Intellectuals and Society is sort of a summation of all his thoughts on the elitist statists mentality and the pro-freedom, we-don't-know-everything-so-

it's-better-to-let-society-shape-itself view.   Sowell has written many books for public consumption; his books read quickly and easily without all the economist mumbo-jumbo jargon.

This is a very long e-mail but I would be remiss if I were to not recommend Ludwig von Mises' Liberalism: The Classical Tradition.  If I had to recommend three pieces of literature for a rebirth of freedom to society they would be 1) this book, 2) Hazlitt's Economics in One Lesson, and 3) the US Constitution w/ the Declaration of Independence.  Mises also writes clearly and spares the reader all the jargon.

We have to get together!  This weekend is out, unfortunately.  I'll check about some things and maybe one night this week?

Adam

High Income Does Not Equal Being Wealthy

Leaving aside the impropriety of taxing rich Americans at a higher percentage, we should recall an important fact that is buried in all the claptrap going back and forth about the current tax rates.

That fact?: Income is not wealth.

Everyone who earns in one year more than whatever arbitrary demarcation line divides the "rich" from the proles is assumed to be wealthy.  (What is that number this week?  Last I heard it was inching up to $1 million a year.) This assumption leads to the next step of wanting to categorically tax these individuals' incomes as if they themselves are rich.

Yes, many "rich" people have high incomes, and many high income earners are "rich."  But many is never all.  High income earners and "the rich" is no exception.

The wealthiest safe-made people in America were not "rich" the first year they brought home $x or more.  Many people earning high incomes this year are not yet "rich" or are on their way down from being "rich" onto their way to being in the middle class. We just do not live in an economic caste system, all the bellicose class warfare bilge notwithstanding.

As Thomas Sowell points out in Intellectuals and Society, the Treasury Department (that bastion of people interested in abolishing the progressive income tax system) reported that among the highest income earners of 1996--the top 1/100 of 1%--a mere 25% remained "rich" by 2005.

This underlying assumption of this assumption holds that everyone getting hit with higher taxes has sooooo much loot lying around they can use their riches to buy, invest, and promote economic growth.  So tax, tax, tax away.  Wrong.  Tax high income earners who are not "rich" and you're confiscating out of their hands and the economy that much more possibility for real capital investment and growth.   

Again, we're leaving aside the debate over the propriety of progressively taxing some people more than others.  The above assumption is simply incorrect.  Moving along tax policy based on this assumption is simply not justifiable.  Using demagogue verbiage like "...the richest Americans" to push such tax policy is either a poorly thought out effort or just thinly veiled partisan chicanery.

The assumption articulated in the caption below is better grounded and more thought out than this high-income-equals-being-rich assumption.  And both are hilarious.

Germ-o-Phobia and Liberty

"[E]veryone is a 'progressive' by their own lights."  Thomas Sowell, Intellectuals and Society

I'm a germ-o-phobe.   I also love liberty.  Enjoy the confluence.

Progress and the status quo are primarily antithetical of one another.  Primarily because the goal at which one wishes to inch along society might well be something worth preserving or, put another way, not progressing away from.

Example: C.S. Lewis reminds us that washing the bacteria from our hands is a way of maintaining a very important status quo, the status quo of clean hands that predate dirty hands.  Every time we wash our hands we are retarding the progress of bacterial growth, hoping to regress toward the clean hands we had at one point in time before we had to interact with all those other germ-toting agents of disease we call other people in the petri dish we call society.

But regressing bacteria on one's hands and, consequently, one's community is a very progressive thing to do to.  Only a regenerate, uncouth, backwards-looking reprobate would knowingly build up and spread around bacteria in society.   Taken to an extreme, such a person could be considered a purveyor of biological warfare.

That would definitely be regressive.

(Side note: For the love of Pete please wash your hands after using the restroom,  blowing your nose, or touching anything you would not put directly into your own mouth.  If you think it is none of my business to request so much, think how many other people will have to touch the same door knobs and dollar bills that you grace with your disgusting fingers.  Come on, it's not 1802 anymore.  Don't let Louis Pasteur's life's work be in vain...) 

As Thomas Sowell points out in Intellectuals and Society, everyone believes they are progressive.  We all have an ideal for society we think best.  For self-described "progressives" that ideal is a society whose organization is primarily controlled--that is, regulated--by the decisions and planning of an elite few.

The crescendo of such command-and-control of society in the United States occurred during the New Deal of the 1930s.  The extent to which elites in government controlled everything from the price of pressing suits to how many hogs would be slaughtered while millions wallowed in hunger is what was new about the New Deal.  These drastic power grabs were certainly a break from the status quo of a primarily free market and concomitantly American free society.  And we have never washed our hands of the overreaching legacies of the New Deal.

Taking the long (and sad) view of freedom in world history, however, we need to ask: Just how progressive was the New Deal?  In this light, is such government control of society ever really a step forward?  

"Progressive" for liberty-minded conservatives, libertarians, and constitutionalists is a progressing away from the New Deal center of politics whereby state-control of the direction of the economy and society is the default setting for government policy.  Free and responsible people cooperating peacefully is the best way to organize society.  It's work every time it has been tried.  As Milton Friendman remarked, distrust of the "private sector" or "the market" is nothing less than a distrust of freedom itself, and a distrust of people to be trusted with freedom.  That's terribly patronizing and elitist, in addition to being regressive.  

Considering how America has always been the world's freest society (the New Deal notwithstanding) diminishing liberty was a terribly regressive policy, then and now.  And since the redistributive, bureaucratic model has had its tentacles in D.C. for over seventy years, at this point in time it would be very progressive to move beyond its premises and (re)embrace freedom.

To return to Lewis' analogy, if we are going to wash our cultural and political hands we have a great deal of government bacteria to wash off.  Ever since the New Deal, such infringement of liberty has been caking up like so many layers of germs eating away at liberty.  Clean hands would be nice, but at this point I'd be happy with cleaner hands.

Now go was your hands, America, both literally and figuratively.

"The Options Destroyers"

"The Options Destroyers" by Thomas Sowell originally appeared as a newspaper article; it is narrated in this video:


This piece dovetails with what I recently read in Sowell's Intellectuals and Society, as well as a recent video post by the folks at Reason.

Top-down regulations, by their very nature, reduce the number of options for consumers in the market.  That's what they are designed to do: reduce the number of perceived bad options that otherwise free people might act upon.  (Soon we will no longer have the option--freedom, that is--to purchase incandescent light bulbs.)  Real life choices become fewer as a result of the near-sighted effects of reform crusaders and their vote-catching politician allies in legislatures.  What's a recent and real world example?  Oregon's state wide ban on payday loan interests rates above 36%, mentioned in a recent Freedom Lessons post.  Poor and options-strapped folks in Oregon now are even more options-strapped.

Worse still, excessive regulations introduce a third set of terms between consumers and the purveyors of goods and services.  When left free to cooperate and interact freely, consumers and businesses make mutually beneficial transactions.  That's mutual consent between two parties.  Intrusive and short-sighted regulations introduce a third party--the options destroyer--and force a third set of acceptable terms into the transaction, thus providing disincentives for economic activity.

Rent control is a good example.  Landlords are forced to satisfy both their tenants' demands and the demands of local governments.  With less profit to make there is less incentive to upkeep buildings, let alone provide new living quarters to the public.  An artificially high number of people want to rent due to an artificially low rent, and an artificially low number of apartments are available to rent.  Real shortages occur, existing buildings deteriorate, slums crop up, and commuters are forced to travel great distances past empty and boarded up buildings.

In a free market unhampered by well-intentioned busy-body do-gooders pushing intrusive interventionalist policies upon us, we self-interested people who know best about what is best for ourselves would find a way to get by just fine.

Just think about all the options we would enjoy!

Control Freaks

Does anyone enjoy being called a "control freak"?  Put another way, who does not shrink from thought of being one?  The mere hint of the accusation causes most socially sensitive people to tone down the I-know-better-than-you, paternalistic, patronizing attitude toward other adults that precludes their acting according to their own judgment.

Most would say, "Oh, I'm sorry about that.  Please, I beg your pardon for being a nosy nanny.  Go on about your business."

That is, of course, if you are a bureaucrat institutionally vested in the regulatory state, a vote-catching demagogue politician, or a preening intellectual desirous of imposing through the coercive power of the government your vision of reality onto the rest of us poor unenlightened proles.  In any of these circumstances deciding for individuals what one believes individuals are incapable of deciding for themselves is lauded as "progressive" and mindful of some nebulous notion of "social justice" and the common good.

The more government takes it upon itself---and we as a society ask it to take it upon itself---making decisions we individuals are best suited to make ourselves, the less free we become as a market economy, and society.  From price controls to excessive regulation to protective tariffs,  every choice that is removed from individuals acting freely and cooperatively interacting within a free market is a choice made on our behalf using coercion.

In a free society the consumer controls 100% of the market through free exchange; in a socialist state central planners control the market through the use of force.  One is voluntary and the antithesis of everything a control freak would abide; the other is arbitrary and made to order for a control freak holding the regulatory reigns of power.

From Thomas Sowell's Intellectuals and Society: 
"The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arenas face no such inescapable feedback to fore them to adjust to the reality of other people's desires and preferences."

If only we could make those control freaks in government feel ashamed at being, well, control freaks over our otherwise free lives.