Saturday, January 22, 2011

The Philosophy of Liberty

Click here to see an animated introduction to The Philosophy of Liberty.

You own your life. To deny this is to imply that another person has a higher claim on your life than you do. No other person, or group of persons, owns your life nor do you own the lives of others. You exist in time: future, present, and past. This is manifest in life, liberty, and the product of your life and liberty. The exercise of choices over life and liberty is your prosperity. To lose your life is to lose your future. To lose your liberty is to lose your present. And to lose the product of your life and liberty is to lose the portion of your past that produced it.

A product of your life and liberty is your property. Property is the fruit of your labour, the product of your time, energy, and talents. It is that part of nature that you turn to valuable use. And it is the property of others that is given to you by voluntary exchange and mutual consent. Two people who exchange property voluntarily are both better off or they wouldn't do it. Only they may rightfully make that decision for themselves.

At times some people use force or fraud to take from others without wilful, voluntary consent. Normally, the initiation of force to take life is murder, to take liberty is slavery, and to take property is theft. It is the same whether these actions are done by one person acting alone, by the many acting against a few, or even by officials with fine hats and fancy titles.

You have the right to protect your own
life, liberty, and justly acquired property from the forceful aggression of others. So you may rightfully ask others to help protect you. But you do not have a right to initiate force against the life, liberty, or property of others. Thus, you have no right to designate some person to initiate force against others on your behalf.

You have a right to seek leaders for yourself, but would have no right to impose rulers on others. No matter how officials are selected, they are only human beings and they have no rights or claims that are higher than those of any other human beings. Regardless of the imaginative labels for their behaviour or the numbers of people encouraging them, officials have no right to murder, to enslave, or to steal. You cannot give them any rights that you do not have yourself.

Since you own your life, you are responsible for your life. You do not rent your life from others who demand your obedience. Nor are you a slave to others who demand your sacrifice.

You choose your own goals based on your own values. Success and failure are both the necessary incentives to learn and to grow.

Your action on behalf of others, or their action on behalf of you, is only virtuous when it is derived from voluntary, mutual consent. For virtue can only exist when there is free choice.

This is the basis of a truly free society. It is not only the most practical and humanitarian foundation for human action; it is also the most ethical.

Problems that arise from the initiation of force by government have a solution. The solution is for people of the world to stop asking officials to initiate force on their behalf. Evil does not arise only from evil people, but also from good people who tolerate the initiation of force as a means to their own ends. In this manner, good people have empowered evil throughout history.

Having confidence in a free society is to focus on the process of discovery in the marketplace of values rather than to focus on some imposed vision or goal. Using governmental force to impose a vision on others is intellectual sloth and typically results in unintended, perverse consequences. Achieving a free society requires courage to think, to talk, and to act - especially when it is easier to do nothing.

Life, Liberty, and Property

"Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place."

Frederic Bastiat

Tuesday, January 18, 2011

Unsurveyable Pattern

"It is no accident that many abstract rules, such as those treating individual responsibility and several property, are associated with economics.  Economics has from its origins been concerned with how an extended order of human interaction comes into existence through a process of variation, winnowing and sifting far surpassing our vision or our capacity to design.  Adam Smith was the first to perceive that we have stumbled upon methods of ordering human economic cooperation that exceed the limits of our knowledge and perception.  His 'invisible hand' had perhaps better have been described as an invisible or unsurveyable pattern.  We are led - for example by the pricing system in market exchange - to do things by circumstances of which we are largely unaware and which produce the results that we do not intend.  In our economic activities we do not know the needs which we satisfy nor the sources of the things which we get.  Almost all of us serve people whom we do not know, and even whose existence we are ignorant' and we in turn constantly live on the services of other people of whom we know nothing.  All this is possible because we stand in a great framework of institutions and traditions - economic, legal, and moral - into which we fit ourselves by obeying certain rules of conduct that we never made, and which we have never understood in the sense in which we understand how the things that we manufacture function.

Modern economics explains how such an extended order can come into being, and how it itself constitutes an information-gathering process, able to call up, and put to use, widely dispersed information that no central planning agency, let alone any individual, could know as  as a whole, possess or control."

Friedrich August von Hayek - The Fatal Conceit: The Errors of Socialism (page 14)

Prices convey information.  Price changes are contingent upon new and/or better information, and it is therefore extremely important that prices are dynamic, as opposed to static.  Central planning (a result of collectivism) disregards information and sets prices upon arbitrary determinations or what is believed to be "fair".  Clearly the idea of what is fair is subjective, and most maintain different beliefs on this principle of fairness.  To ask the federal government to determine what is fair in every industry of a nation made up of over three hundred million people is na├»ve, at best.  Central planning therefore ultimately leads to malinvestments, market dislocations, and ultimately shortages and rationing.  For these reasons; central planning always fails, wage and price controls are always to the detriment of consumers/patients/customers, and people are always best left to make their own voluntary decisions free of coercion or plunder (which are usually created in the name of "the greater good", despite the ultimate outcome).  This is an incredibly simple concept; yet the "leaders" of our country continue to expand central planning in agriculture, education, health care, energy, and retirement.

Wednesday, January 12, 2011

F.D.R.'s Domestic Policies Revisited

Despite what many of us are taught in school, more are starting to acknowledge that F.D.R's domestic policies exacerbated, compounded, and prolonged The Great Depression.  Another misconception is that President Herbert Hoover "did nothing" before F.D.R. "saved the day".  This could not be further from the truth, as Jonah Norberg writes in Financial Fiasco (page 105):

"One of the architects of Roosevelt's new policy program, Rexford Guy Tugwell, confessed years later, 'We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started'."

Further perspective on F.D.R.'s arrogant central planning can be found in the following books:
Burton Folsom:  New Deal or Raw Deal
Jim Powell:  FDR's Folly
Amity Shlaes:  The Forgotten Man

In the third and final installment (Part 1, Part 2, Part 3) of an article regarding the history of U.S. monetary policy, Jacob Hornberger states:

"It is impossible to overstate the significance of the Franklin Roosevelt administration’s confiscation of gold and its nullification of gold clauses in contracts. It is one of the most sordid episodes in American history. To get an accurate sense of Roosevelt’s actions, it would not be inappropriate to compare what he did with the domestic economic policies of a later 20th-century ruler, Cuba’s socialist president, Fidel Castro.

On April 5, 1933, newly inaugurated President Roosevelt issued Executive Order 6102, which prohibited the “hoarding” of gold by U.S. citizens. Americans were required to turn their gold holdings over to the federal government at the prevailing price of $20.67 per ounce.

Pursuant to Roosevelt’s executive order, anyone caught violating the law was subject to a federal felony conviction, 10 years’ confinement in a federal penitentiary, and a $10,000 fine. Soon after the confiscation, U.S. officials announced that the government would sell its gold in international markets for $35 an ounce, thereby devaluing the dollar by almost 70 percent and immediately “earning” a potential profit of almost $15 an ounce on the gold it had confiscated.

Two months later, Congress enacted legislation nullifying gold clauses in both government and private contracts, thereby requiring creditors in such contracts to accept devalued paper money in payment of such contractual obligations, even though the contract itself stipulated payment tied to gold.

Reflect for a moment on the significance of what Roosevelt did. Gold coins and gold bullion were private property, just like a person’s automobile, clothing, home, and food. On the mere command of the president of the United States, federal authorities simply confiscated gold holdings that were the private property of the American people and made it a grave federal offense to own such property in the future.

The gold seizure was no different in principle from Fidel Castro’s seizure of homes and businesses more than 25 years later in Cuba, an episode that U.S. officials still rail against while praising what Roosevelt did. Sure, Roosevelt paid Americans more money for the gold he seized than Castro paid Cubans and American companies for the property he seized, but the principle was the same: the rulers in both Cuba and the United States could appropriate people’s property at their whim."