Friday, December 29, 2006

Where The New York Times Is Coming From

Below are the headlines of four obituaries that have run in The New York Times. The first is that of the recent obituary of the Anti-Communist Augusto Pinochet. The next three are those of the obituaries of the Communist mass murderers Mao, Stalin, and Lenin. Please be sure to note how many are described as having ruled by terror.

December 11, 2006, Augusto Pinochet, Dictator Who Ruled by Terror in Chile, Dies at 91
September 10, 1976, Friday, . . . Mao Tse-tung Dies in Peking at 82; Leader of Red China's Revolution

March 6, 1953, Friday, Stalin Rose From Czarist Oppression to Transform Russia Into Mighty Socialist State; RUTHLESS IN MOVING TO GOALS
January 24, 1924, Thursday, ENORMOUS CROWDS VIEW LENIN'S BODY AS IT LIES IN STATE; Wait Hours in Snow and Zero Temperature Outside Moscow Nobles' Club. COFFIN CARRIED FIVE MILES Members of Council of Commissars Stagger Under Load, Refusing Gun Caisson. LENIN CALLED A CHRISTIAN Archbishop Summons Synod to Declare Founder of Bolshevism Member of Church. ENORMOUS CROWDS VIEW LENIN'S BODY
In these headlines we find utter condemnation of a dictator who was relatively mild as dictators go, but who was Anti-Communist; his leading characteristic was allegedly rule by “Terror.”

In contrast, in the case of Communist mass murderers we find non-judgmental tolerance in the headlines, along with a studious refusal to mention the incalculably greater terrors they caused. More than that, we find positive esteem and enthusiasm in the headlines for the Communist mass murderers. Thus Mao was the “Leader of Red China’s Revolution”; Stalin allegedly transformed “Russia Into Mighty Socialist State”; and Lenin’s funeral was described as a phenomenon of near worshipful enthusiasm: “…COFFIN CARRIED FIVE MILES Members of Council of Commissars Stagger Under Load, Refusing Gun Caisson…”

It is patterns such as this that lead some people to think that the reporting of The New York Times is colored by its politics and that the color of its politics is red.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Thursday, December 21, 2006

More on Pinochet and Marxism: The Necessity of Evil Means to Achieve Socialism

Some of the responses to my post on General Pinochet have reminded me that along with the fable of Santa Claus and his reindeer, which is so prominent right now because it is the Christmas Season, there is another fable that is still going around. And while the Santa Claus fable is innocent, serving merely to entertain small children, this one is definitely not innocent, but positively vicious. It is the fable that those who are responsible for the attempt to socialize a country’s economic system, such as Chile’s, are well-intentioned and therefore deserve to be immune from bodily harm and certainly do not deserve ever to be killed.

According to this fable, in a country such as Chile under Allende, Marxist boys and girls are happily singing and dancing, their faces glowing with love of the downtrodden, while they attempt the joyous task of building a socialist economic system. To be sure, there are also dark forces at work in the fable: again and again, wherever the innocent and happy Marxists go and accomplish their work—Soviet Russia, Communist China, Cuba, and all the other various satellites—impoverishment, enslavement, and mass murder inexplicably always seem to follow.

Of course, according to the fable, this cannot have anything to do with the nature of socialism and the actions of the Marxists who establish it. It just happens. Equally inexplicably, unless it be simply because of their evil nature, mean, nasty men appear, who for no good reason lay hold of the innocent Marxists and beat and kill them, as did Pinochet’s soldiers in Chile in response to the Marxists’ attempt to socialize the economy of that country. What a horror, what an outrage against good and innocent Marxists! Such evil surely deserves to be severely punished!

End of fable.

I have made it part of my life’s work to throw intellectual ice water in the faces of people who have allowed themselves to become so deluded as to accept such a fable. And here, straight from my book Capitalism, is a good-sized bucketful of that intellectual ice water:

“Let us begin by considering the means employed to achieve socialism. We observe two phenomena that are not unrelated. First, wherever socialism has actually been enacted, as in the Communist-bloc countries and Nazi Germany, violent and bloody means have been used to achieve it and/or maintain it. And, second, where socialist parties have come to power but abstained from wholesale violence and bloodshed, as in Great Britain, Israel, and Sweden, they have not enacted socialism, but retained a so-called mixed economy, which they did not radically or fundamentally alter. Let us consider the reasons for these facts.

“Even if a socialist government were democratically elected, its first act in office in implementing socialism would have to be an act of enormous violence, namely, the forcible expropriation of the means of production. The democratic election of a socialist government would not change the fact that the seizure of property against the will of its owners is an act of force. A forcible expropriation of property based on a democratic vote is about as peaceful as a lynching based on a democratic vote. It is a cardinal violation of individual rights. The only way that socialism could truly come into existence by peaceful means would be if property owners voluntarily donated their property to the socialist state. But consider. If socialism had to wait for property owners to voluntarily donate their property to the state, it would almost certainly have to wait forever. If socialism is ever to exist, therefore, it can only come about by means of force—force applied on a massive scale, against all private property.

“Further, in the case of the socialization of the entire economic system, as opposed to that of an isolated industry, no form of compensation to the property owners is possible. In the case of an isolated nationalization, the government can largely compensate the former owners by taxing the rest of the property owners to some extent. If the government seizes all property, however, and simply abolishes private ownership, then there is just no possibility of compensation. The government simply steals everyone’s property lock, stock, and barrel. In these circumstances, property owners will almost certainly resist and try to defend their rights by force if necessary, as they properly should.

“This explains why it takes the Communists to achieve socialism, and why the Social Democrats always fail to achieve socialism. The Communists, in effect, know that they are out to steal all of men’s property from them and that if they expect to succeed, they had better come armed and prepared to kill the property owners, who will attempt to defend their rights. The Social Democrats, on the other hand, are held back by fear from taking the steps that would be necessary to achieve socialism.

“In sum, the essential facts are these. Socialism must commence with an enormous act of theft. Those who seriously want to steal must be prepared to kill those whom they plan to rob. In effect, the Social Democrats are mere con men and pickpockets, who engage in empty talk about pulling the `big job’—socialism—someday, and who flee before the first sign of resistance by their intended victims. The Communists, on the other hand, are serious about pulling the `big job.’ They are armed robbers prepared to commit murder. This is why the Communists are able to implement socialism. Of the two, only the Communists are willing to employ the bloody means that are necessary to implement socialism.”

The preceding paragraphs appear on pp. 282-283 of Capitalism. For explanations of the necessity of terror, forced labor, and mass murder under socialism, such as characterized the bloody history of the Soviet Union, Communist China, and the numerous Communist satellites, see pp. 283-290 of

The above analysis applies to Chile at the time of General Pinochet’s coup. At that time, President Allende, despite having been elected with only 36 percent of the vote, was aggressively pressing ahead, as even The New York Times’ largely hostile
obituary admits, “with a Socialist program to nationalize mines, banks and strategic industries, split up large rural estates into communal farms, and impose price controls.” (Not surprisingly, such measures, as The Times notes, “soon resulted in steep declines in production, shortages of consumer goods and explosive inflation.”)

The essential point here is that a massive armed robbery on the part of the Marxist Allende government was actually in progress. It possessed armed “militias” and was using them to seize people’s property. According to The Wall Street Journal’s
obituary, the regime was also acting in clear defiance of the Chilean Supreme Court, which denounced it for “`an open and willful contempt of judicial decisions’” that created the threat of an “`imminent breakdown of legality.’”

So long as Marxists are content merely to write, speak, and otherwise fantasize about the destruction of capitalism and the establishment of socialism, they have every right to be left alone, just as every one else has who harms no one but himself. But when they begin to act out their fantasy in the real world and commit armed robbery, which, as I have shown, is the only means of achieving their goal, then they forfeit their rights, including their right to life.

The right to life, liberty, and property, which every man possesses, carries with it the right to self-defense. Exercise of the right of self-defense includes killing those who are an imminent threat to one’s life. It includes killing those who are an imminent threat to one’s life in one’s attempt to defend one’s property, which is what armed robbers always are, Marxist or otherwise. If the Marxists killed or beaten in Chile had wanted to avoid such treatment, they should have stayed home, written another book or article, given another lecture or speech, or gone to another protest meeting or rally. They should not have set out to steal other people’s property.

True enough, all the writing, speaking, and peaceful protest in the world have no prospect of ever achieving socialism, because they will never persuade very many people to voluntarily donate their property to a socialist state. So at bottom, it must all be futile, unless at some point it erupts into violent action.

The implication of this is that unless Marxists can be satisfied, as the Social Democrats have apparently learned to be, with merely partial and largely token movement toward their goal, such as provided by the establishment and expansion of the welfare state, they are doomed to permanent frustration. At the same time, those of them who continue to be committed to the actual achievement of their goal of socialism, cannot be expected to tolerate such frustration permanently. At some point, it would seem, almost inevitably, they must erupt into violent action, because that is the only path that can ever achieve their goal.

Such Marxists, such socialists, i.e., the serious, dedicated ones, are not at all saints or martyrs, but dangerous people with a criminal mentality.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Saturday, December 16, 2006

General Augusto Pinochet Is Dead

On Sunday, December 10, General Augusto Pinochet of Chile died, at the age of 91. General Pinochet deserves to be remembered for having rescued his country from becoming the second Soviet satellite in the Western hemisphere, after Castro’s Cuba, and, like the Soviet Union, and Cuba under Castro, a totalitarian dictatorship.

The General is denounced again and again for the death or disappearance of over 3,000 Chilean citizens and the alleged torture of thousands more. It may well be that some substantial number of innocent Chilean citizens did die or disappear or otherwise suffered brutal treatment as the result of his actions. But in a struggle to avoid the establishment of a Communist dictatorship, it is undoubtedly true that many or most of those who died or suffered were preparing to inflict a far greater number of deaths and a vastly larger scale of suffering on their fellow citizens.

Their deaths and suffering should certainly not be mourned, any more than the deaths of Lenin, Stalin, and Hitler, and their helpers should be mourned. Had there been a General Pinochet in Russia in 1918 or Germany in 1933, the people of those countries and of the rest of the world would have been incomparably better off, precisely by virtue of the death, disappearance, and attendant suffering of vast numbers of Communists and Nazis. Life and liberty are positively helped by the death and disappearance of such mortal enemies. Their absence from the scene means the absence of such things as concentration camps, and is thus ardently to be desired.

As for the innocent victims in Chile, their fate should overwhelmingly be laid at the door of the Communist plotters of totalitarian dictatorship. People have an absolute right to rise up and defend their lives, liberty, and property against a Communist takeover. In the process, they cannot be expected to make the distinctions present in a judicial process. They must act quickly and decisively to remove what threatens them. That is the nature of war. The fate of innocent bystanders, largely those who cannot be readily distinguished from the enemy, is the responsibility of the Communists. Had they not attempted to impose their totalitarian dictatorship, there would not have been any need to use force and violence to prevent them, and thus the innocent would not have suffered.

Contrary to the attitude of so many of today’s intellectuals, Communists do not have a right to murder tens of millions of innocent people and then to complain when their intended victims prevent their takeover and in the process kill some of them.

General Pinochet was undoubtedly no angel. No soldier can be. But he certainly was also no devil. In fact, if any comparison applies, it may well be one drawn from antiquity, namely, that of Cincinnatus, who saved the Roman Republic by temporarily becoming its dictator. Like Cincinnatus, General Pinochet voluntarily relinquished his dictatorship. He did so after both preventing a Communist takeover and imposing major pro-free-market reforms, inspired largely by Milton Friedman (who in large part was himself inspired by Ludwig von Mises). The effect of these reforms was to make Chile's the most prosperous and rapidly progressing economy in Latin America, Thereafter, in the words of his New York Times’—largely hostile—obituary, he used his remaining power to “set limits, for example, on economic policy debates with frequent warnings that he would not tolerate a return to statist measures.”

General Pinochet was thus one of the most extraordinary dictators in history, a dictator who stood for major limits on the power of the state, who imposed such limits, and who sought to maintain such limits after voluntarily giving up his dictatorship.

When General Pinochet stepped down, he did so with a guarantee of immunity from prosecution for his actions while in power. However, the present and previous regime in Chile violated this agreement and sought to ensnare the General in a web of legal actions and law suits, making the last years of his life a period of turmoil. This was a clear violation of contract, comparable to the seizure of property in violation of contract. Not surprisingly the regimes in question were avowedly socialist. As a result of their breach, it is now considerably less likely that the world will soon see any other dictator voluntarily relinquish his power. The Chilean socialists will have taught him that to be secure, he must remain in power until he dies.


Dictatorship, like war, is always an evil. Like war, it can be justified only when it is necessary to prevent a far greater evil, namely, as in this case, the imposition of the far more comprehensive and severe, permanent totalitarian dictatorship of the Communists.

Despite the fact that General Pinochet was able to use his powers as dictator to enact major pro-free-market reforms, dictatorship should never be seen as justified merely as a means of instituting such reforms, however necessary and desirable they may be. Dictatorship is the most dangerous of political institutions and easily produces catastrophic results. This is because a dictator is not restrained by any need for public discussion and debate and thus can easily leap headlong into disasters that would have been avoided had there been the freedom to criticize his proposed actions and to oppose them. And even when his policies may be right, the fact that they are imposed in defiance of public opinion operates greatly to add to their unpopularity and thus to make permanent change all the more difficult.

On the basis of such considerations, when asked many years ago what he would do if he were appointed dictator, von Mises replied, “I would resign.”

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Friday, December 08, 2006

You Can’t Have Trans Fats Because They’re Bad for You, Says New York City’s Board of Health

In recent weeks, the New York City Board of Health has displayed a pattern of profound aggression against the citizens of New York City. I dealt with one major instance of this in my last article, “Pick Your Gender and We’ll Enforce Your Choice, Says New York City’s Board of Health.” There I explained how the Board’s proposed rule to allow individuals to change the sex recorded on their birth certificates, without the necessity of undergoing any actual physical change in their sex, would compel other individuals to deny the evidence of their senses in order to comply with the law.

The Board’s
banning, last Tuesday [December 5, 2006], of the use of trans fats in restaurants is a second instance in which the Board shows that it has no compunctions about violating the sanctity of the human mind and its freedom to judge and to choose. The freedom of choice of the citizen apparently means nothing to the Board. Like a curt parent controlling the choices of a child and expecting that his “No” will be sufficient, the Board has taken away the power of choice from adult citizens and told them they will no longer be able to obtain food in restaurants that is prepared with trans fats.

What allegedly justifies this behavior by the Board is the mere fact that trans fats have supposedly been scientifically proven to be unhealthy. As reported by The New York Times of October 31, according to one of the speakers at the Board’s hearing on the subject the day before, “at least 6 percent of the deaths from heart attacks in the nation could be attributed to consumption of trans fats. `Everything we have learned about trans fats is damaging.’”
The meaning of this is that if something is shown to be bad, nothing else is required to put an end to its consumption: no cognition on the part of the individual consumer, no choice on his part. These count for nothing according to the New York City Board of Health and its alleged experts. They can simply be ignored and brushed aside.

Ignoring matters of knowledge and understanding, of choice and will, of voluntary consent, is certainly an appropriate way to deal with inanimate objects. However, it is not an appropriate, or practical, way to deal with the more intelligent animals, let alone children. It is absolutely not an appropriate or practical way to deal with adult human beings. It is the kind of method employed by criminals. Matters such as choice, will, and consent mean nothing to them. A rapist is perhaps the clearest example. Now, with its high-handed banning of trans fats, the New York City Board of Health has shown that it provides another example.

Such outrageous behavior on the part of government has become so common and ingrained that it well might pass as believable if someone were to claim that the following was an actual government plan being considered for enactment.

“Within ninety days, every citizen must report to a government authorized physician to be weighed, measured, and interviewed. On the basis of the data so obtained, the physician will determine the appropriate diet for the citizen in terms of calories, fats, proteins, and every other relevant category of nutrition.

“Within a further ninety days, each citizen will receive a ration book containing weekly allotments for the various nutritional categories. In buying food in supermarkets, restaurants, or anywhere else, the citizen will have to turn over whatever portion of his weekly allotments correspond to the nutritional values of the foods being purchased. All sellers of food will be required to determine the nutritional values of the foods they sell, if they have not already been determined. It shall be illegal to purchase food without surrendering the necessary allotment coupons. It shall be illegal to buy or sell such coupons.

“These measures are necessary because diets and other voluntary methods simply do not work. People are getting too fat. Diabetes is increasing. The government’s cost of providing medical care is increasing correspondingly.

“This program is what good health requires. The government already regulates alcohol and tobacco. The regulation of fats, sugars, and all other nutritional elements is no less necessary.

“Because of this program, overweight people will finally be compelled to lose weight, whether they want to or not. Diabetes and heart disease will be reduced. Health in general will improve. People will live longer.”

Such a program is implicit in the ideas people already accept. Indeed, nutritional values must already be printed on the packaging of practically all foods sold in supermarkets and grocery stores. At the same meeting at which it outlawed trans fats, the New York City Board of Health added a requirement that the calorie content of each food item be posted on the menus of hundreds of restaurants. It thus may well be only a question of time before such a program is actually proposed. If and when it is, there is presently no basis for expecting any principled opposition to it. The opponents will likely be of the kind who’ll think they’ve won a profound victory for “free markets” if they can make the ration coupons tradable.

The only basis of serious opposition is acceptance of the principle that there is something more fundamental and more important than mere physical health, that is, more important than the condition of man’s body considered as a mere hunk of mindless meat. And that is respect for the value of the human mind and of the individual’s freedom to act on the judgment of his mind. That is the principle for which libertarians must stand.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Friday, December 01, 2006

Pick Your Gender and We’ll Enforce Your Choice, Says New York City’s Board of Health

Separating anatomy from what it means to be a man or a woman, New York City is moving forward with a plan to let people alter the sex on their birth certificate even if they have not had sex-change surgery.

Under the rule being considered by the city’s Board of Health, which is likely to be adopted soon, people born in the city would be able to change the documented sex on their birth certificates by providing affidavits from a doctor and a mental health professional laying out why their patients should be considered members of the opposite sex, and asserting that their proposed change would be permanent.

Applicants would have to have changed their name and shown that they had lived in their adopted gender for at least two years, but there would be no explicit medical requirements.

The meaning of these statements is that if you’re a man and want badly enough to be a woman, or if you’re a woman and want badly enough to be a man, in New York City you soon will be able to be so. In New York City, at least according to the city’s government, wishing to possess a different gender will actually make it so.

The Times confirms this judgment when it explains that “the proposed change … is an outgrowth of the transgender community’s push to recognize that some people may not have money to get a sex-change operation, while others may not feel the need to undergo the procedure and are simply defining themselves as members of the opposite sex.”

So, in New York City, starting soon if this rule is adopted, all you’ll have to do is define yourself as a member of the opposite sex and, according to the city’s government, you’ll be a member of the opposite sex. True, this isn’t strictly all that’s required. You’ll have to change your name appropriately, e.g., from Al to Alice, or from Samantha to Sam. And you’ll have to show that you’ve lived in your “adopted gender” for two years.

Please observe. This is not a matter of individuals being free to indulge in their sexual fantasies in their own bedrooms or in private clubs, or in any other private facility whose owner is willing to allow it to be used for such a purpose, whether it be a bar, a hotel, or an athletic stadium for that matter. No one who upholds private property rights can make objection to such a thing, irrespective of his personal evaluation of such behavior.

What is present in the rule being considered by New York City’s Board of Health is an attempt to forcibly impose the fantasy of some people on everyone else. It is an attempt to elevate fantasy to the level of actual reality and to compel everyone else to accept it as though it were reality.

The validity of this conclusion is demonstrated by The Times’ account of a young man who claims to be female and who said “she wanted a new birth certificate to prevent confusion, and to keep teachers, police officers and other authority figures from embarrassing her in public or accusing her of identity theft.” The Times recounts that when this individual recently visited a welfare office, “she included a note with her application for public assistance asking that she be referred to as Ms. when her turn for an interview came up. It did not work. The woman handling her case repeatedly addressed her as Mister.” The Times also states that “[t]he eight experts who addressed the birth certificate issue strongly recommended that the change be made, for the practical reasons [this individual] identified.”

What New York City’s Board of Health’s new rule would do would be to compel whoever handled such a case to refer to this young man as a woman, to call her “Ms.” and in every other respect treat her as a woman. Refusal to do so would necessarily constitute an actionable offense of some kind. For it would be refusing to comply with an official, governmental designation and doing so to the alleged hurt and humiliation of the person so designated. Refusal in such circumstances would have aspects of a “hate crime.”

Everyone who came into contact with an individual officially designated as a member of the opposite sex, and who refused to accept that designation, could potentially be accused of some form of hate crime. Supermarket checkers, cab drivers, waiters, repairmen, sales help of all kinds, and landlords and their employees, would all be at risk, along with doctors and nurses, policemen and firemen, and numerous other categories of people.

To comply with the law and avoid possible prosecution, people would be put in a position in which they would have to deny the evidence of their senses. Confronted with someone obviously belonging to one sex but claiming to be a member of the opposite sex and officially so designated, they would be compelled by the law to deny what they saw with their own eyes and to affirm as true what they knew to be false. Thus, what the New York City Board of Health is setting the stage for is the forcible violation of the human mind. In spirit, but on a far more mundane scale that can show up in the everyday lives of ordinary people, it is the heir to those who threatened Galileo because of his loyalty to the facts.

In its vicious treatment of Galileo, the Catholic Church claimed that it was acting to defend the foundations of theology and morality, which it believed required the anthropocentric view of the solar system that Galileo overthrew. What the New York City Board of Health is acting to defend is nothing nearly so grand. What it is acting to defend is a mere species of literal insanity: the insanity of fantasy indulged not now and then for a few minutes or a few hours, in the knowledge that it is fantasy, but raised to the level of a day-in, day-out way of life and regarded as reality. It wants to impose on everyone who may come into contact with those suffering from such delusion an obligation to participate in the delusion and to affirm that it is not delusion but reality.

A classic illustration of insanity is someone believing that he is Napoleon Bonaparte. The same logic that is present in its proposed new rule on gender identity would require the New York City Board of Health to certify such an individual not as insane, but as Napoleon. If someone changed his name to Napoleon Bonaparte, walked around in replicas of Napoleon’s uniforms, with his right hand always tucked into his tunic, and called his wife “Josephine,” and did such things for two years, he would have to be certified as being Napoleon by New York City’s Board of Health and the New York City government, if they were logically consistent.

If the New York City Board of Health does in fact enact its proposed rule on gender identity, its members who vote for the rule will have demonstrated a major loss of their own capacity to distinguish between fantasy and reality. They will deserve not only to be thrown out of office but also, it could reasonably be argued, to be committed to a psychiatric hospital.

Of course, it is next to impossible that they would be committed, because the source of the rule they are considering is none other than New York City’s Department of Health and Mental Hygiene. In New York City, the inmates, or those who arguably should be inmates, are literally running the asylum.

Of course, it is an unjustified act of physical force to commit anyone against his will to a psychiatric hospital who has not himself previously initiated the use of physical force. And this applies to those who believe they are members of the gender opposite to their own. It also applies to those who may believe they are Napoleon.

So long as they do not initiate the use of force, they should be free to come and go as they please. But by the same token, no one should ever be threatened with the use of physical force merely for refusing to support their delusions or for contradicting them. That threat of physical force is what is coming out of New York City’s Board of Health.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Saturday, November 25, 2006

Penn and Teller Send Recycling to the Dump

I’ve never had much use for Penn and Teller, a pair of comedians that I’ve seen from time to time on television and then have quickly turned off. But the other day, a reader of my blog, Mr. Robert Groot, a Canadian Ph.D. student, was kind enough to send me a link to their internet show on recycling.

I have to say that this show has made me a fan of theirs. It was a scathing critique of the illogic of recycling, done in a way that at times was hilarious.

I should add that at least in this show, the pair come across as serious libertarians, in addition to being powerful critics of recycling.

The first few minutes of the show are a little slow, but within 5 minutes, things pick up. Whatever you do, be sure to watch at least the first 8 or 9 minutes. (The full length is about half an hour.) There’s a sequence in there that you may find so funny you’ll have trouble catching your breath.

Here’s the link:

Friday, November 17, 2006

Globalization: The Long-Run Big Picture


Globalization, in conjunction with its essential prerequisite of respect for private property rights, and thus the existence of substantial economic freedom in the various individual countries, has the potential to raise the productivity of labor and living standards all across the world to the level of the most advanced countries. In addition, it has the potential to bring about the radical improvement in productivity and living standards in what are today the most advanced countries, and to provide the strongest possible foundation for unprecedented further economic advance everywhere.

These overwhelmingly beneficial results are often hidden from view by the fact that at the same time globalization implies a substantial decline in the relative or even absolute nominal GDPs of today's advanced countries, the experience of which engenders opposition to the process. What is not seen is that to whatever extent globalization might reduce absolute nominal GDP in today's advanced countries, it reduces prices many times more, with the result that it correspondingly increases their real GDP, and that to whatever extent it reduces merely their relative nominal GDP, it again increases their real GDP many times more.

This article shows that by incorporating billions of additional people into the global division of labor, and correspondingly increasing the scale on which all branches of production and economic activity are carried on, globalization makes possible the unprecedented achievement of economies of scale—the maximum consistent with the size of the world's population. First and foremost among these will be the very substantial increase in the number of highly intelligent, highly motivated individuals working in all of the branches of science, technology, and business. This will greatly accelerate the rate of scientific and technological progress and business innovation. The achievement of all other economies of scale will also serve to increase what it is possible to produce with any given quantity of capital goods and labor.

Out of this larger gross product comes a correspondingly larger supply of capital goods, which makes possible a further increase in production, resulting in a still larger supply of capital goods, in a process that can be repeated indefinitely so long as scientific and technological progress and business innovation continue and an adequate degree of saving and provision for the future is maintained. The article shows that from the very beginning, the process of globalization serves to promote capital accumulation simply by dramatically increasing production in the countries in which foreign capital is invested, out of which increase in production comes an additional supply of capital goods.

Some critics of globalization, notably Paul Craig Roberts, do not understand how it promotes capital accumulation and instead believe that it deprives the advanced countries of capital. Others, notably Gomory and Baumol, view the effect of globalization on nominal GDP as though it were its effect on real GDP and are thus led to confuse competition for limited money revenue and income with economic conflict. This article answers both sets of errors, including related confusions concerning outsourcing.

To continue reading, please go to and follow the link to the article.

Thursday, November 16, 2006

Standards of Environmental Good and Evil: Why Environmentalism Is Misanthropic

It is very common for people to talk nowadays about environmental good and evil, but with virtually no explicit statement of the standards by which something is to be judged environmentally good or evil. People are unaware that a standard is always present and that there is more than one such standard. There are in fact two diametrically opposed and mutually exclusive standards of environmental good and evil. The following example will bring them out.

Thirty years ago, the land under the house I live in, in Southern California, was empty desert. Had I wanted to sleep in the same location that my bedroom now stands on, I would have had to bring a sleeping bag, take precautions against rattlesnakes, scorpions, and coyotes, and hope I could find a place for my sleeping bag such that I wouldn’t have rocks pressing into my body. If it rained, I would get wet. If it was cold, I would be cold. If it was hot, I would be hot. Going to the bathroom would be a chore. Washing up would be difficult or impossible.

How incomparably better is the environment provided by my house and my bedroom. I sleep on a bed with an innerspring mattress. I don’t have to worry about snakes, scorpions, or coyotes. I’m protected from the rain, the cold, and the heat, by a well constructed house with central heating and air conditioning. I have running water, hot and cold, a flush toilet, a sink, a shower, and a bathtub, in fact more than one of each of these things, and I have electricity and most of the conveniences it makes possible, such as a refrigerator, a television set, a VCR, and CD and DVD players.

It’s obvious to me that the existence of my house constitutes an enormous improvement in my environment compared with living at the same location on the bare ground, and that the same is true of the existence of virtually all houses in relation to the environment of their occupants. It’s further obvious to me that the process of improving the environment in this way starts with developers and contractors who bring in bulldozers and other heavy construction equipment to clear the tops of hills, level and compact the land, build streets, and utility connections, and construct houses.

Yet those who are called “environmentalists” describe the exact same process of development and construction as harming the environment. Why? Because they have a profoundly different standard of environmental good and evil than the one that is present in my example. The standard that is present in my example is that of human life and well-being. What is environmentally good according to this standard is the promotion of human life and well-being, notably, housing construction and the existence of houses. What is environmentally evil is what impairs human life and well-being, such as preventing housing construction.

The environmentalists call the construction of houses evil because, as I say, their standard of value is very different. Instead of taking human life and well-being as their standard of value, they take nature in and of itself as their standard of value. Nature, they say, has intrinsic value, i.e., value in and of itself, apart from all connection with human life and well-being. Thus, in their view, hillsides and empty land, as they exist in a state of nature, together with their wildlife, have intrinsic value. And it is those alleged intrinsic values that are harmed by development and construction. In other words, the harm the environmentalists complain about in such cases is harm only from a non-human, indeed, anti-human perspective.

Here is a classic statement of the doctrine of intrinsic value by one of its leading environmentalist supporters:

This [man’s “remaking the earth by degrees”] makes what is happening no less tragic for those of us who value wildness for its own sake, not for what value it confers upon mankind. I, for one, cannot wish upon either my children or the rest of Earth’s biota a tame planet, be it monstrous or—however unlikely—benign. McKibben is a biocentrist, and so am I. We are not interested in the utility of a particular species or free-flowing river, or ecosystem, to mankind. They have intrinsic value, more value—to me—than another human body, or a billion of them.

Human happiness, and certainly human fecundity, are not as important as a wild and healthy planet. I know social scientists who remind me that people are part of nature, but it isn’t true. Somewhere along the line—at about a billion years ago, maybe half that—we quit the contract and became a cancer. We have become a plague upon ourselves and upon the Earth.

It is cosmically unlikely that the developed world will choose to end its orgy of fossil-energy consumption, and the Third World its suicidal consumption of landscape. Until such time as Homo sapiens should decide to rejoin nature, some of us can only hope for the right virus to come along. (David M. Graber, in his review of Bill McKibben’s The End of Nature, in the Los Angeles Times Book Review, Sunday, October 22, 1989, p. 9.)
The doctrine of intrinsic value is present in such statements as the North Slope of Alaska is “a sacred place” that should never be given over to oil rigs and pipelines. It is present in such statements as, “There is a need to protect the land not just for wildlife and human recreation, but just to have it there.” It is present in all instances in which forests, rivers, canyons, hillsides, or any other natural formation is presented as automatically deserving to be preserved, irrespective of its value in being put to use by human beings. And, of course, it is present in all the numerous cases in which human life or well-being have been sacrificed for the sake of the preservation of this or that species of animal or plant. Such cases range from the sacrifice of the property rights of human beings for the sake of snail darters and spotted owls, to the sacrifice of untold millions of actual human lives. This last has occurred as the result of the resurgence of malaria because the use of DDT was prohibited in order to preserve the alleged intrinsic value of some species of birds.

It is crucial that people recognize the distinction between the two standards of environmental good and evil and that the standard of the environmental movement is fundamentally that of the intrinsic value of nature, not that of human life and well-being. Given its standard of value, it is certainly not possible to accept as sincere or well-motivated any of the claims the environmental movement makes of seeking to improve human life and well-being, whether in connection with its allegations about global warming, the ozone layer, acid rain, or anything else.

Indeed, environmentalism’s acceptance of the doctrine of intrinsic value implies a profound hatred of man and a desire to destroy him. Such statements as those of Mr. Graber, that I quoted above, expressing a wish for a virus to come along and kill a billion human beings, are not at all accidental. They are logically implied by environmentalism’s standard of value.

Acceptance of the doctrine of intrinsic value, as I wrote in Capitalism, “inexorably implies a desire to destroy man and his works because it implies a perception of man as the systematic destroyer of the good, and thus as the systematic doer of evil. Just as man perceives coyotes, wolves, and rattlesnakes as evil because they regularly destroy the cattle and sheep he values as sources of food and clothing, so, on the premise of nature’s intrinsic value, the environmentalists view man as evil, because, in the pursuit of his well-being, man systematically destroys the wildlife, jungles, and rock formations that the environmentalists hold to be intrinsically valuable. Indeed, from the perspective of such alleged intrinsic values of nature, the degree of man’s alleged destructiveness and evil is directly in proportion to his loyalty to his essential nature. Man is the rational being. It is his application of his reason in the form of science, technology, and an industrial civilization that enables him to act on nature on the enormous scale on which he now does. Thus, it is his possession and use of reason—manifested in his technology and industry—for which he is hated.” (p, 82)

The primitive hunter-gatherers who were modern man’s remote ancestors left virtually no mark whatever on the rest of nature. The alleged intrinsic values destroyed in their gathering and eating nuts and berries and in their hunting, killing, and eating animals were quickly and automatically replenished by nature. The pre-industrial farmers who were modern man’s more recent ancestors left an imprint on nature that was essentially limited to plowed fields and primitive villages. And though somewhat more enduring, it was still very limited in extent. Great limitation of extent characterizes the enduring mark left by the pyramids, the ruins of towns and cities built in antiquity, and the stone castles of the Middle Ages.

In contrast, the modern man of capitalism clears entire forests and jungles; he drains swamps and irrigates deserts. He changes the balance of nature by decimating and destroying entire species of plants and animals and, though not often mentioned, radically increasing the populations of others, whose characteristics he alters to suit him. He establishes mechanized farms, large numbers of major towns and cities, indeed, giant metropolises. He builds factories, roads, bridges and tunnels, dams and canals. He digs mines, sometimes moving entire mountains in doing so, and drills for oil and gas, often reaching depths of several miles. From the perspective of environmentalism and its doctrine of intrinsic value, these activities, which leave a large and enduring mark on a vast swath of the rest of nature, constitute the destruction of intrinsic values on a massive scale and thus characterize modern man as the doer of massive evil.

Keeping all this in mind, it follows that it is absolutely perilous for human beings to allow themselves to be guided by policies recommended by the environmental movement, especially when doing so would impose great deprivation or cost, such as would be entailed in having to make radical reductions in carbon dioxide emissions to combat global warming. Nothing could be more absurd or dangerous than to take advice on how to improve one’s life and well-being from those who regard one’s wealth and happiness as a source of harm, who accord one the status of vermin, and who wish one dead as the means of preserving nature’s alleged intrinsic values. Indeed, not only Mr. Graber, but also other prominent environmentalists have expressed a wish for human deaths on a scale that far surpasses all those caused by the Nazis and Communists combined.

The danger of accepting environmentalist claims, it must be stressed, applies irrespective of the scientific or academic credentials of an individual. If an alleged scientific expert believes in the intrinsic value of nature, then to seek his advice is equivalent to seeking the advice of a medical doctor who was on the side of the germs rather than the patient, if such a thing can be imagined. It is the equivalent of a Jew asking the medical advice of a Dr. Josef Mengele.

All advice, all policy recommendations emanating from the environmentalist movement must be summarily rejected unless and until they can be validated on the basis of a pro-man, pro-wealth, pro-capitalist standard of value. Such a standard will never imply such a thing as the destruction of the energy base of industrial civilization as the means of addressing global warming.

The environmental movement is the philosophic enemy of the human race. It should be treated as such. If we value the material well-being and, indeed, the very lives of billions of our children and grandchildren, we must treat it as such. We must treat environmentalism as our mortal enemy.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Wednesday, November 08, 2006

Two Ice Ages, With Up to 16 Times the Carbon Dioxide in the Atmosphere

In the last 500 million years, there have been two ice ages at the same time that vastly higher carbon dioxide levels prevailed in the earth's atomosphere—up to 16 times the present level.

This remarkable finding, along with others, was reported in yesterday’s (November 7, 2006) New York Times. For details, see the article by William Broad, “
In Ancient Fossils, Seeds of a New Debate on Warming.”

The article contains references to the work of a number of important scientists who aren’t supposed even to exist, according to the environmentalist propaganda machine, which brooks no opposition. The article deserves to be required reading for everyone who is seriously interested in the subject of global warming.

Tuesday, November 07, 2006

Freedom of Choice in New York City: Diet, No; Gender, Yes

From The New York Times of October 31, 2006:

Dozens of people appeared before the city’s Board of Health yesterday, offering a largely favorable response to proposed restaurant regulations that would ban all but a minute amount of artificial trans fats in food preparation, and require some restaurants to post calorie counts on their menus and menu boards.

The board has said it planned to vote on both proposals, which are supported by Mayor Michael R. Bloomberg, in December. The hearing yesterday was part of a process of public comment that also includes written responses.

The New York City proposals, which have drawn attention across the country, would establish some of the most rigorous limits on trans fats in restaurants and set requirements for menu labeling more rigid than in any other American city.

From The New York Times of November 7, 2006:

Separating anatomy from what it means to be a man or a woman, New York City is moving forward with a plan to let people alter the sex on their birth certificate even if they have not had sex-change surgery.

Under the rule being considered by the city’s Board of Health, which is likely to be adopted soon, people born in the city would be able to change the documented sex on their birth certificates by providing affidavits from a doctor and a mental health professional laying out why their patients should be considered members of the opposite sex, and asserting that their proposed change would be permanent.

Bottom line: Starting soon, in New York City, you won’t be able to buy a donut baked with trans fat, but you will be able choose your sex, irrespective of your anatomy.

If you think this is crazy, you’d better watch out and not say so. That’s because sooner or later, if there isn’t already, there will be a further regulation that bans such dissent as “antisocial,” “insensitive,” or “offensive.”

Even so, I can’t suppress the thought that if the hosts of, say, the Boston Tea Party, were alive, they might physically relocate New York City’s Board of Health to the streets below, perhaps with its office furniture wrapped around its members’ necks. A hostile response, I know. But then I’m feeling like that rattlesnake on a flag of my country’s Revolutionary War. His message to the world was, “Don’t Tread on Me.”

George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics. His web site is © 2006, by George Reisman.

Wednesday, November 01, 2006

Britain’s Stern Review on Global Warming: It Could Be Environmentalism’s Swan Song

To the accompaniment of much fanfare and hoopla, the British government has released Sir Nicholas Stern’s Stern Review on the Economics of Climate Change, a report that it commissioned but that it labels “independent.”

The report is a rehash of now standard environmentalist claims concerning alleged disasters that await the world if it continues with its wicked ways of fossil fuel consumption: the disappearance of islands beneath the sea, the flooding of coastal cities, more severe droughts and hurricanes, famines, disease, the displacement of tens of millions of people from their traditional homelands—it’s all regurgitated in the report. A couple of times, however, the report provides a hint of something even much worse:

Under a BAU [business as usual] scenario, the stock of greenhouse gases could more than treble by the end of the century, giving at least a 50% risk of exceeding 5°C global average temperature change during the following decades. This would take humans into unknown territory. An illustration of the scale of such an increase is that we are now only around 5°C warmer than in the last ice age. (p. ix of the Executive Summary.)

It remains unclear whether warming could initiate a self-perpetuating effect that would lead to a much larger temperature rise or even runaway warming . . . . (p. 10 of the full report, the Stern Review.)

The frightening allusions to “unknown territory” and “runaway warming” come very close to conjuring up old-time religious images of hellfire and brimstone as the fate of the world if it does not take Sir Nicholas’s Report to heart and repent of its ways. But Sir Nicholas never actually does make this threat. He leaves it merely to implication.

Perhaps if it were made, it would be easier for people to identify the environmentalists’ fears for the empty bugaboo that they are and dismiss them. Their response would need be only that if economic progress and the enjoyment of its fruits will consume the world in flames, and thus that living like human beings means we really will all go to hell, as the preachers have always claimed, then so be it. Better to live as human beings now, while we can, than throw it away for the sake of descendants living as pre-industrial, medieval wretches later on. (But, of course, we will never have to make such a choice, for reasons that will become clear shortly.)

Surprisingly, the actual negative consequences Sir Nicholas alleges that will occur from global warming are extremely tame, at least in comparison with hellfire. In his “Summary of Conclusions,” he writes:

Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.

Sir Nicholas’s use of the words “don’t act” is very misleading. What he is urging when he speaks of “action” is a mass of laws and decrees—i.e., government action. This government action will forcibly prevent hundreds of millions, indeed, billions of individual human beings from engaging in their, personal and business private action—that is, from acting in ways that they judge to serve their own self-interests. Thus, what he is actually urging is not action, but government action intended to stop private action.

Furthermore, he does not explain why he believes that global warming means the end of all subsequent economic progress, though that is implied in the words “now and forever.” He compares the dangers of global warming to “those associated with the great wars and the economic depression of the first half of the 20th century(ibid.),” yet seems to forget the stupendous economic progress that followed them.

According to Sir Nicholas, what we must do to avoid the loss of up to 20% of annual GDP, is ultimately to reduce our carbon dioxide emissions “more than 80% below the absolute level of current annual emissions.” (p. xi of the Executive Summary. My italics.) Lest one think that such drastic reduction lies only in the very remote future, Sir Nicholas also declares,

By 2050, global emissions would need to be around 25% below current levels. These cuts will have to be made in the context of a world economy in 2050 that may be 3 - 4 times larger than today - so emissions per unit of GDP would need to be just one quarter of current levels by 2050. (Ibid.)

In appraising Sir Nicholas’s views, it should be kept in mind that our ability to produce, now and for many years to come, vitally depends on the use of fossil fuels. These fuels are the source of most of our electric power and thus of our ability to use machinery. They propel our trucks, trains, ships, and planes. And, of course, their use entails the emission of carbon dioxide. Thus, it would seem that Sir Nicholas’s means of preventing even a 20% loss of GDP would entail a far greater loss of GDP than 20%. It follows that if it is output that concerns us, we would be better off simply accepting global warming, if that is what is in store, than attempting to avoid it in the way Sir Nicholas prescribes. We will certainly not produce 3-4 times the output in 2050 with 25% less carbon dioxide emission. Far more likely, if such a reduction is forced upon us, we will produce substantially less output, despite the probable existence of a substantially larger population by then.

Sir Nicholas appears to be as naïve in his estimate of the cost of replacing today’s technologies of fuel and power as he is in estimating the effect of their loss. Without evidence of any kind, he claims that while the cost of “inaction” is as much as 20% of annual global GDP, “the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year.”

Thus his program is designed to appear as really quite a bargain: the world’s governments will appropriate an additional mere 1% of global GDP each year in order to prevent their citizens from wantonly destroying as much as 20% of annual global GDP by foolishly pursuing their own self-interests. And it turns out that, in Sir Nicholas’s view, even this 1% is far more than is required by the governments for the actual development of new technologies. In his chapter titled “Accelerating Technological Innovation,” he writes that “Global public energy R&D funding should double, to around $20 billion, for the development of a diverse portfolio of technologies.” (p. 347 of the Stern Review.) Twenty billion dollars are a mere one-twentieth of one percent of the world’s current annual GDP of roughly $40 trillion. That’s supposed to be all that it takes to develop the technologies that will enable the world to eventually reduce carbon emissions by 80% from today’s levels.

How easy and simple it is all supposed to be, if only we will do as we are told, and get started doing so right away. All we have to do is sit back and leave the direction of our lives in the hands of the government. It will solve the problem of changing the global technology of energy production with the same success that the Soviets and the British Laborites pursued their respective varieties of socialism and with the same success that our own government has conducted its wars on poverty, drugs, and terror, and in Vietnam and Iraq. Did I say, “success”?

Sir Nicholas’s Review is characterized by an apparent belief in a kind of magical power of words to create and control reality. Thus, the actual fact,
as reported in The New York Times, is that “About one large coal-burning plant is being commissioned a week, mostly in China.” In the same report, The Times points out that “A typical new coal-fired power plant, [is] one of the largest sources of emissions, [and] is expected to operate for many decades.” Totally ignoring these facts, Sir Nicholas believes he has said something meaningful and significant when he writes,

Developing countries are already taking significant action to decouple their economic growth from the growth in greenhouse gas emissions. For example, China has adopted very ambitious domestic goals to reduce energy used for each unit of GDP by 20% from 2006-2010 and to promote the use of renewable energy. India has created an Integrated Energy Policy for the same period that includes measures to expand access to cleaner energy for poor people and to increase energy efficiency.” (p. xxiv of Executive Summary.)

To say the least, this represents the use of a mere statements of intent concerning action in the future in an effort to override the diametrically opposite character of China’s and India’s actual actions in the present, and in the foreseeable future as well if these countries are to achieve further substantial economic development.

Another illustration of the attempt to employ words as though their use could control reality, occurs in Sir Nicholas’s discussion of “learning and economies of scale” in connection with low-carbon technologies. He notes that “The cost of technologies tends to fall over time, because of learning and economies of scale,” and appears to conclude from this that low-carbon technologies can therefore eventually be as efficient as the high-carbon technologies they are supposed to replace when the latter are forcibly curtailed. He writes, “There have been major advances in the efficiency of fossil-fuel use; similar progress can also be expected for low-carbon technologies as the state of knowledge progresses.” (Stern Review, p. 225.) It apparently does not occur to him that there may be some necessary order of sequence involved and that the use of high-carbon technologies is the necessary foundation for the possible later adoption of low-carbon technologies.

Presumably, he does not believe that in the period 1750-1950, industrialization could have proceeded on the foundation of low-carbon technologies. For example, before such technology as that of atomic power could be developed, generations of industrial progress had to take place on a foundation of fossil fuels. And this was equally true for the technology of wind turbines and solar power. The ability to produce the materials, components, and equipment required by these low-carbon technologies rests on the existence of previously established highly developed carbon-based technologies. Further substantial economic development on the same foundation is required for the further development of low-carbon technologies.

Wherever the use of high-carbon technology is cheaper than that of low-carbon technology, forcibly curtailing its use implies the forcible reduction of the physical volume of production in the economic system, including its ability to produce further capital goods. Thus, forcibly curtailing the use of carbon-based technology cuts the ground from beneath the development of future low-carbon technology. It aborts the development of the necessary industrial base. (For elaboration of these points, see my Capitalism, pp. 178-179, 212, 622-642.)

Sir Nicholas’s and the rest of the environmental movement’s hostility to carbon technology, is ultimately contrary to purpose not only insofar as it prevents the development of the low-carbon technologies they claim to favor, but also in that it simultaneously, and more fundamentally, operates to deprive the world of the ability to counteract destructive climate change, such as global warming.

Whether or not they are aware of it, in attempting to combat alleged global warming, Sir Nicholas, and the rest of the environmentalists, are urging a policy of deliberate counteractive global climate change by the world’s governments. They want the world’s governments to change the world’s climate from the path that they believe it is otherwise destined to take. They want the world’s governments to make the earth’s climate cooler than they believe it will otherwise be as the next two centuries or more unfold. But their policy of climate control is the most stupid one imaginable. It’s more stupid than a modern-day equivalent of a savage’s attempting to control nature by the sacrifice of his goat.

The reason it’s more stupid, much more stupid, is that the goat that they want to sacrifice is most of modern industrial civilization—the part that depends on the 80% of the carbon emissions they want to eliminate, and which will not be replaced through any magical power of words to create and control reality, however much they may believe in that power. It is precisely modern industrial civilization and its further expansion and intensification that is mankind’s means of coping with all aspects of nature, including, if it should ever actually be necessary, the ability to control the earth’s climate, whether to cool it down or to warm it up.

If mankind ever really finds it necessary to control the earth’s climate, whether to prevent global warming or, as is in fact probably more likely, a new ice age, its ability to do so will depend on the power of its economic system. An economic system with the ability to provide such things as massive lasers, fleets of rocket ships carrying cargoes of various chemicals, equipment, and materials for deployment in outer space, with the ability to create major chemical reactions here on earth too, if necessary—such an economic system will have far more ability to make possible any necessary change in the earth’s climate. That is the kind of economic system we could reasonably expect to have in coming generations, if it is not prevented from coming into existence by policies hostile to economic progress, notably those urged by Sir Nicholas and the environmental movement.

What Sir Nicholas and the rest of the environmental movement offer is merely the destruction of much of our existing means of coping with nature and the aborting of the development of new and additional means. To the extent that their program is enacted, it will serve to prevent effectively dealing with global warming if that should ever actually be necessary.

A major word of caution is necessary here. The above discussion implies that the use of modern technology to control climate is infinitely more reasonable than the virtually insane policy of attempting to control climate by means of destroying modern technology. The word of caution is that in the hands of government, a policy of climate control based on the use modern technology could be almost as dangerous as the policy of government climate control by means of the destruction of modern technology.

In fact, a possible outcome of today’s intellectual chaos on the subjects of environment and government is a combination of major destruction of our economic system resulting from policies based on hostility to carbon technology and climate damage caused by governmental efforts to control climate through the use of modern technology. It’s not impossible that what we might end up with is an economic system largely destroyed by environmentalist policies plus the start of a new ice age resulting from government efforts to counteract global warming through the use of technologically inspired counter measures.

The only safe response to global warming, if that in fact is what is unfolding, or to global freezing, when that develops, as it inevitably will, is the maximum degree of individual freedom. (For elaboration and proof of this proposition, see Capitalism, pp. 88-90.)

Any serious consideration of the proposals made in the Stern Review for radically reducing carbon technology and the accompanying calls for immediacy in enacting them makes clear in a further way how utterly impractical the environmentalist program for controlling global warming actually is. The fundamental impracticality of the program, of course, lies in its utterly destructive character. But in addition to that, the fact that people are not prepared easily or quickly to make a massive sacrifice of their self-interests dooms the enactment of the program. Even if, in utter contradiction of the truth, the program were sound, it would simply not be possible to enact it in time to satisfy the environmentalists that the level of carbon buildup they fear will not occur. In other words, the world is quickly moving past the window of opportunity for enacting the environmentalists’ program for controlling global warming. (Concerning this point, see pp. xi-xii of the Executive Summary, especially Figure 3 on p. xii.) The implication is that either they will have to find another issue or different means for addressing the issue.

The only different means, however, are technological in character. Environmentalism thus stands a very strong chance of ultimately reverting to the more traditional socialism of massive government construction and engineering projects. It’s future may well lie with what is coming to be called
“geo-engineering.” We shall see.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Tuesday, October 24, 2006

The Green Business Racket: Con Customers, Cut Corners, Boost Profits

At the most fundamental level, environmentalism and the Green movement that represents it are hostile to business. The ethics of environmentalism and the Greens is one of human deprivation and individual self-sacrifice. Business in contrast rests on a foundation of the pursuit of happiness and the profit motive. The one represents a joyless existence devoted to selfless service to the “environment,” which is allegedly valuable in and of itself, i.e., is “intrinsically” valuable. The other represents progressive improvement in human life and well-being, i.e., the achievement of ever greater comfort, ease, and enjoyment of life, based on the recognition that human life and well-being alone are the proper sources of values for human beings.

Nevertheless, in utter disregard of their opposite natures and of the blatant contradictions involved, a philosophical monstrosity has been hatched that goes by the name “Green Businesses,” i.e., businesses infused with the spirit of environmentalism.

Not surprisingly, a so-called Green Business functions very differently than does a normal business. While a normal business seeks to add amenities to its offerings, a so-called Green Business seeks to subtract them, by means of pursuing a deliberate policy of corner cutting. Thus, for example, for some time, “Green Hotels” have been busy attempting to persuade their customers to forego the customary daily provision of fresh sheets and towels in guest rooms. And more recently, they have begun to replace the provision of fresh bars of soap each day with the installation of fixed liquid-soap dispensers, similar to those in public lavatories, even in showers and bathtubs, where they can actually be dangerous.

Of course, there are times when a normal business too cuts back on the amenities it offers, as when the cost of continuing to provide them comes to exceed what its customers are willing to pay for them. A Green Business, however, cuts back in conditions in which its customers clearly are willing to pay substantially more for the amenities being eliminated than the cost of providing them. In the case of sheets and towels in a hotel room costing two-hundred or more dollars per day, it would probably take a fairly significant deduction from the daily rate to get many people to choose to forego a daily change on economic grounds. The hotel would thus lose far more in revenue than it would save in costs. Precisely this is the reason that good hotels traditionally changed sheets and towels daily.

Green Hotels avoid this loss of revenue when they get people to accept less frequent changes. They do not offer the choice of a rate deduction great enough to induce customers to accept a less frequent change on the basis of their own self-interest. No. Instead, they prey on the ignorance, guilt, and general lack of self-confidence of many of their guests.

They tell the guests that the amenities are being reduced for “the sake of the environment” and to help “save the planet.” The guests are thus urged to think of their loss of amenities as a contribution to a noble and urgent cause, a contribution which also serves to make them personally, morally better people for having made it. Very few people in such circumstances will think of asking for a lower rate. To do so would appear to them to be asking to be compensated for behaving morally, which would be an utterly contradictory and profoundly immoral request when the morality that one accepts is precisely the morality of self-sacrifice.

Thus the Green Hotels are able to practice a racket that would be the envy of many a scam artist. They preach a morality of self-sacrifice to their guests and proceed to profit from their guests’ acceptance of that morality. For them the sacrifices of their guests are a simple cost saving, which allows them equivalently to increase their profits, since the reduction in amenities provided is not accompanied by any reduction in revenue. In other words, the Green Hotels are playing their guests for suckers and getting away with it. That is the essence of their Green Business.

In the long run, of course, the extra profit of the Green Hotels will be eroded. They will probably lose guests and may end up having to trim their rates after all, in order to stem that loss. They may also incur some additional costs, for example, in the form of having to contribute to environmentalist organizations in order to keep up recognition for their activities.

Irrespective of the effect on their profits in the long run, what the Green Hotels are doing is disgusting. It is part of a cultural assault on luxury and pleasure. One that works to make every day of everyone’s life one of unrelieved drudgery and sacrifice, to the point of there being no escape. Even vacations and holidays are now to be stamped with the mark of sacrifice. Sacrifice not even for other people, but for the “planet.”

The Green Hotels are becoming increasingly brazen in their racket. Until recently, it was enough to leave a card on a pillow if one wanted the sheets changed. Now it’s becoming necessary to call the hotel’s front desk. In addition, notification that sheets and towels will not automatically be changed is becoming much less prominent. Just last week, I personally experienced these things at what I would have expected to be a really first-class hotel, namely, the Hyatt Regency in Newport, Rhode Island. (This hotel also had a liquid-soap dispenser installed at the bathroom sink, though it continued to provide fresh bar soap each day. It was at the [Dis]Comfort Inn near Boston’s Logan Airport, that bar soap was entirely replaced with liquid soap dispensers.)

Hotel guests should protest vehemently against any loss in their comforts or conveniences for the alleged sake of the “environment” or the “planet.” They should demand lower rates as compensation for any sacrifices they are asked to make and tell the hotels that they resent being abused for the sake of a dishonest profit being made at their expense. Either in making reservations or at check-in, they should ask about the hotel’s policy with respect to sacrifices for the environment and have it noted that they want no part of it.

People need to tell the hotels that they’re vacationing for enjoyment, not self-sacrifice. And business travelers too should insist on their comfort. We human beings do not exist for the sake of the “planet.” We are not “stewards” of the planet. We are the lords of the planet. We have the ability to make it exist for our benefit—for our pleasure. And that is what we can and should do.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996) and is Pepperdine University Professor Emeritus of Economics.

Tuesday, October 17, 2006

Saving Versus Hoarding

Saving is the use of revenue or income by a business or individual for purposes other than expenditure on consumers’ goods (or consumers’ services). It is revenue or income that is not consumed.

Because what is saved is not spent by the saver for consumption, a popular fallacy has grown up that saving is synonymous with hoarding—i.e., with the retention of money in the manner of a miser. This fallacy is not so difficult to understand when committed by people with limited education, who thus know little beyond their own personal experience. Most such people are wage earners, who normally do not personally make any kind of expenditures but consumption expenditures. In the absence of wider knowledge, it is easy for such people to confuse consumption spending with all of spending and thus to conclude that what is not spent for consumption is simply not spent. But the fallacy is also prevalent in the press, which persists in equating an increase in the rate of saving with a decrease in the spending for goods. For example, whenever it is reported that some increase in the rate of saving has taken place, the press concludes that the effect must be economically dampening at the very least.

Worse still, the fallacy that saving is hoarding is prevalent among professional economists—notably the Keynesians and neo-Keynesians—who routinely describe saving as a “leakage” from the “spending stream.” (Such economists have taught the fallacy to the members of the press.)

Indeed, so complete has been the intellectual severance of saving from spending that for several decades it has been routinely taught in college and university classrooms not only that what is saved simply disappears from spending and depresses the economy, but also that what is invested virtually comes out of nowhere and financially stimulates the economy. This is a state of confusion that would be comparable to believing that the seeds a farmer scatters simply disappear, and that the crop that later comes up, comes out of nowhere. Yet such a state of confusion is the corollary of believing that saving is hoarding. If one recognized that investment comes from saving, one would have to recognize no less that saving goes into investment—that the two are merely different aspects of the same phenomenon. In that case, one would not view saving as depressing, nor investment as stimulating.

The Hoarding Doctrine as an Instance of the Fallacy of Composition

It should be realized that while any particular individual might save in the form of adding to his cash holding—that is, in the form of “hoarding”—it is not possible for the economic system as a whole to do so. Indeed, the belief that the economic system as a whole can save by means of hoarding is an instance of the fallacy of composition—the same fallacy encountered in connection with the belief that not only an individual industry or group of industries can overproduce, but that the economic system as a whole can overproduce.

The reason that an individual can save by means of hoarding cash, while the economic system as a whole cannot, is because whatever cash an individual adds to his holding, some other individual has had to subtract from his holding. If I sell my goods for $1,000, say, and decide to retain that sum in the form of cash, it is true that I increase my savings in the form of cash by $1,000. But in the very same period of time, the individuals to whom I have sold my goods have had to reduce their cash holdings, and thus their accumulated savings in the form of cash, by that very same $1,000. I have $1,000 more in savings in the form of cash, but they have $1,000 less in savings in the form of cash. Adding up the change not only in my position, but in theirs as well, it thus turns out that in the economic system as a whole there is no increase whatever in savings in the form of cash holdings. What some individuals save by means of adding to their cash holdings other individuals have had to dissave.

The situation of students in a classroom provides an excellent illustration of this proposition. At any given time, the members of the class have just so much cash in their possession. If the doors to that classroom were locked and that class became a “closed economic system” for an hour or so, with its members carrying on some form of production and buying and selling from one another, any individual student might increase his savings by adding to his cash holding over that interval of time. But then the rest of the class must decrease its savings in the form of cash holdings to exactly the same extent. There is no way that the class as a whole can increase its savings by increasing its holding of cash.

It follows that if there is to be saving in the economic system as a whole—that is, an increase in the savings of some or all members of the economic system that is not compensated for by a decrease in the savings of other members of the economic system—the only way it can take place is in the form of an increase in assets other than cash. The increase in the savings of the economic system as a whole must take the form of an increase in its capital assets, such as business plant, equipment, and inventories.

The only exception to the principle that the economic system cannot save by means of adding to its cash holdings exists insofar as there is an increase in the quantity of money. If, over a period of time, the quantity of money in the economic system increases, then, to that extent, there can be an increase in the holding of cash that does not imply an equivalent decrease in the holding of cash by others. But this is the only exception, and it obviously does not reduce spending. Moreover, it is inescapable inasmuch as the new and additional money must be added to the cash holdings of someone and in that capacity will constitute part of their savings.

This article is adapted from pp. 691-693 of the author’s
Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996). The article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is Pepperdine University Professor Emeritus of Economics.

Tuesday, October 10, 2006

A Root Cause of the Failure of Contemporary Education

Ask yourself if the following paragraph would seem believable to you if you were to read it a in a newspaper:

Washington, D. C., Oct. 10. Following in the footsteps of “No Child Left Behind,” the Department of Education is considering new requirements applicable to all colleges and universities benefiting in any way from federally financed programs, such as student loan and dormitory-financing programs. Continued eligibility for participation in the programs would require graduates receiving a baccalaureate degree to demonstrate at least a 9th-grade level of reading ability and a 7th-grade level of ability in mathematics.

I think that the deplorable state of contemporary education that is indicated in that paragraph is essentially accurate and that the paragraph would probably be accepted by the majority of informed people without challenge, as a straightforward news report.

In my book Capitalism, I explain a root cause of the collapse of contemporary education in terms of its essential, guiding philosophy. Here is my explanation. It begins with a quotation from W. T. Jones, a leading historian of philosophy. The quotation describes the philosophy of Romanticism, which appeared as a hostile reaction to the Enlightenment:
To the Romantic mind, the distinctions that reason makes are artificial, imposed, and man-made; they divide, and in dividing destroy, the living whole of reality—“We murder to dissect.” How, then, are we to get in touch with the real? By divesting ourselves, insofar as we can, of the whole apparatus of learning and scholarship and by becoming like children or simple, uneducated men; by attending to nature rather than to the works of man; by becoming passive and letting nature work upon us; by contemplation and communion, rather than by ratiocination and scientific method. (W. T. Jones, Kant to Wittgenstein and Sartre, vol. 4 of A History of Western Philosophy, 2d ed. (New York: Harcourt, Brace, and World, 1969), p. 102.
The Romantics held that “we are nearer to the truth about the universe when we dream than when we are awake” and “nearer to it as children than as adults.” (Ibid., p. 104.) The clear implication of the philosophy of Romanticism is that the valuable portion of our mental life has no essential connection with our ability to reason and with the deliberate, controlled use of our conscious mind: we allegedly possess it in our sleep and as children.

In its essentials, the philosophy of Romanticism is the guiding principle of contemporary education. Exactly like Romanticism, contemporary education holds that the valuable portion of our mental life has no essential connection with our ability to reason and with the deliberate, controlled use of our conscious mind—that we possess this portion of our mental life if not in our sleep, then nevertheless as small children.

This doctrine is clearly present in the avowed conviction of contemporary education that creativity is a phenomenon that is separate from and independent of such conscious mental processes as memorization and the use of logic. Indeed, it is an almost universally accepted proposition of contemporary pseudoscience that one-half of the human brain is responsible for such conscious processes as the use of logic, while the other half is responsible for “creativity,” as though, when examined, the halves of the brain revealed this information all by themselves, perhaps in the form of bearing little labels respectively marked “Logic Unit, Made in Hong Kong” and “Creativity Unit, Made in Woodstock, New York.” Obviously, the view of the brain as functioning in this way is a conclusion, which is based on the philosophy and thus interpretative framework of the doctrine’s supporters.

Now, properly, education is a process by means of which students internalize knowledge: they mentally absorb it through observation and proof, and repeated application. Memorization, deduction, and problem solving must constantly be involved. The purpose is to develop the student’s mind—to provide him with an instantaneously available storehouse of knowledge and thus an increasingly powerful mental apparatus that he will be able to use and further expand throughout his life. Such education, of course, requires hard work from the student. Seen from a physiological perspective, it may be that what the process of education requires of the student through his exercises is an actual imprinting of his brain.

Yet, under the influence of the philosophy of Romanticism, contemporary education is fundamentally opposed to these essentials of education. It draws a distinction between “problem solving,” which it views as “creative” and claims to favor, and “memorization,” which it appears to regard as an imposition on the students, whose valuable, executive-level time, it claims, can be better spent in “problem solving.” Contemporary education thus proceeds on the assumption that the ability to solve problems is innate, or at least fully developed before the child begins school. It perceives its job as allowing the student to exercise his native problem-solving abilities, while imposing on him as little as possible of the allegedly unnecessary and distracting task of memorization.

In the elementary grades, this approach is expressed in such attitudes as that it is not really necessary for students to go to the trouble of memorizing the multiplication tables if the availability of pocket calculators can be taken for granted which they know how to use; or go to the trouble of memorizing facts of history and geography, if the ready availability of books and atlases containing the facts can be taken for granted, which facts the students know how to look up when the need arises. In college and graduate courses, this approach is expressed in the phenomenon of the “open-book examination,” in which satisfactory performance is supposedly demonstrated by the ability to use a book as a source of information, proving once again that the student knows how to find the information when he needs it.

With little exaggeration, the whole of contemporary education can be described as a process of encumbering the student’s mind with as little knowledge as possible. The place for knowledge, it seems to believe, is in external sources—books and libraries—which the student knows how to use when necessary. Its job, its proponents believe, is not to teach the students knowledge but “how to acquire knowledge”—not to teach them facts and principles, which, it holds, quickly become “obsolete,” but to teach them “how to learn.” Its job, its proponents openly declare, is not to teach geography, history, mathematics, science, or any other subject, including reading and writing, but to teach “Johnny”—to teach Johnny how he can allegedly go about learning the facts and principles it declares are not important enough to teach and which it thus gives no incentive to learn and provides the student with no means of learning.

The results of this type of education are visible in the hordes of students who, despite years of schooling, have learned virtually nothing, and who are least of all capable of thinking critically and solving problems. When such students read a newspaper, for example, they cannot read it in the light of a knowledge of history or economics— they do not know history or economics; history and economics are out there in the history and economics books, which, they were taught, they can “look up, if they need to.” They cannot even read it in the light of elementary arithmetic, for they have little or no internally automated habits of doing arithmetic. Having little or no knowledge of the elementary facts of history and geography, they have no way even of relating one event to another in terms of time and place.

Such students, and, of course, the adults such students become, are chronically in the position in which to be able to use the knowledge they need to use, they would first have to go out and acquire it. Not only would they have to look up relevant facts, which they already should know, and now may have no way even of knowing they need to know, but they would first have to read and understand books dealing with abstract principles, and to understand those books, they would first have to read other such books, and so on. In short, they would first have to acquire the education they already should have had.

Properly, by the time a student has completed a college education, his brain should hold the essential content of well over a hundred major books on mathematics, science, history, literature, and philosophy, and do so in a form that is well organized and integrated, so that he can apply this internalized body of knowledge to his perception of everything in the world around him. He should be in a position to enlarge his knowledge of any subject and to express his thoughts on any subject clearly and logically, both verbally and in writing. Yet, as the result of the miseducation provided today, it is now much more often the case that college graduates fulfill the Romantic ideal of being “simple, uneducated men.”

The bulk of this article is an excerpt from pp. 107-109 of the author’s
Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996). The article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site is included. (Email notification is requested.) All other rights reserved. George Reisman is Pepperdine University Professor Emeritus of Economics.