Libertas

Inclined to Liberty is a short primer on liberty and the free market. Louis Carabini introduces his book by telling how a dinner with a friend and two professors sympathetic to socialism, and even Marxism, inspired him to write his reflections on that evening’s discussion. The discussion of the class struggle between owners and workers reminded him of the failure of communism and how any form of control of individual liberty ultimately fails in its goals. This book is his analysis of why that happens.

Carabrini questions his motivations in writing the book, knowing that he most likely will not convert anyone, though it would be nice if he could. People are either inclined towards Liberty, believing that individuals should have the right to peacefully live life as they see fit, or inclined to Mastery, believing that people should live life as others see fit.

To address problems of inequality the typical responses during the dinner were “we” ought to outlaw this or that, but it really meant using the State to enforce their ideas and solutions. Carabrini notes that if the response had rather been singular, that is “I,” to incarcerate others for an offence then it would have been obviously reprehensible.

The basis of these statements is a general contempt and resentment of the rich and belief that if the rich did not have so much then the poor would have more. Therefore, since there are “villains and victims,” “emancipators” (using the power of the State) must save the day.

The villain/victim mentality doesn’t really hold up to reasoning, but most people instead of thinking, follow a leader or group. Their unthinking insistence in holding to the leader’s or group’s ideas often leads to unintended consequences.

The villain/victim mentality is another example of the “them vs. us syndrome.” Instead of thinking and becoming self-reliant, people look for scapegoats to blame for their problems with politicians encouraging them on to gain power.

Politicians and the media typically use business as a scapegoat to curry favor. Whether or not they truly understand the economic situation doesn’t matter. The damage is done, by painting a false mental picture of profit gained through greed and fraud.

A typical problem in economic reasoning is the human difficulty in moving from thinking and behaving within a small group to thinking and behaving within a large group. What would seem nonsensical or reprehensible in a small group somehow becomes acceptable in a large group, such as using force to attain one’s goals.

The common belief that some are obligated to satisfy other’s needs means the State must decide how to redistribute wealth. The State robs through taxation, money creation, and borrowing in order to provide the not so free “Free Lunch.” Thus, even the poor end up paying for their “Free Lunch” because of fiat money and government debt.

Claude Frédéric Bastiat (June 30, 1801 – December 24, 1850) a French classical liberal theorist, political economist, writer and member of the French assembly.

The State, including the democratic State, is as Frédéric Bastiat said, “the great fiction by which everybody endeavors to live at the expense of everybody else.” This is done through taxation, and even more so, regulations. The “tragedy of the commons” in a democratic state leads people to believe they are entitled to as much as they can get, but it also leads to greater tragedies such as the famines in Soviet Russia and Red China.

Trade in free markets benefits both parties. Understanding that a seller and buyer both perceive themselves as wealthier from the exchange illustrates the folly of the belief in national trade imbalances.

Money developed from a bartering economy as a means to simplify trade in a society of increasing goods and services. Governments that produce fiat money are in effect stealing the wealth from society, especially the elderly and other savers, as the currency loses its value.

Increasing the supply of money does not increase wealth. However, the increase of goods and services is what increases wealth.

Statistics and viewpoints regarding the gap between rich and poor can be misleading. Certainly the idea that the “poor are getting poorer and the rich are getting richer” is false. Wealth is not a zero sum game where some increase in wealth at the expense of others.

Studies of the economic conditions of the countries around the world show that the percentages of income distribution remain about the same, but the amount of income in the freest countries is far greater, including in the lowest twenty percentile. Reducing the gap between the rich and the poor through government intervention does not help the poor but actually hurts them by limiting the increase in wealth in the country as a whole.

As wealth increases everyone benefits, those that create the wealth and even those at the bottom quintile, because their standard of living has also improved through the creation of new products and services. Everyone benefits in voluntary transactions, however in involuntary transactions, someone suffers.

Some view the inequalities between the rich and poor as unfair and seek to transfer the wealth from the rich to the poor. This would actually impair the productivity of the most productive and creative members of society, thus robbing all of society of the increase in wealth.

There is always wealth redistribution, either through voluntary transactions in the free market, or through the coercion of the State. The former is ethical and humanitarian; the later cannot be moral because it uses force or aggression to attain its ends.

The idea that employers cannot fire employees to increase profits in reality means that employers cannot reduce any expense because someone would suffer, and employers would be unable to hire workers to increase profits either.

Just as the increase in money does not create wealth or prosperity, neither does the increase in jobs. Jobs that create products and services desired by a community will produce prosperity, but make-work jobs take away from the community those same products and services potentially made in order to produce unnecessary and unwanted products and services. It is, in effect, a waste of time and resources.

When individuals are merely self sufficient, they barely create more than is needed for survival. However, both the individual and society are better off when there is a division of labor, because the production of goods and services is more efficient, thus creating more wealth and prosperity.

Just as there is not a limited amount of wealth where one gains at the expense of another, neither are there a limited number of jobs. The increase in jobs does not create more wealth and property. It is the increase in efficient production. More workers creating the same product, but less efficiently will reduce the overall wealth of society.

The increase in population or population density of an area does not create poverty and famine. Humans have been able to create new efficient ways of production. It is government intervention in human movement and markets that have created poverty and famine.

Theft reduces the overall productivity of a society because the thief is not producing and the productive members must spend time and energy to protect their produce. The State does the same in its taxation of production and further decreases wealth creation through subsidies that encourage sloth and inefficiency.

Different groups want to prohibit how certain people relate to each other. Some want to intrude into personal sexual relationships; others want to intrude into personal economic relationships. They all need to realize that with the power to intrude into the lives of others, they risk having others intrude into their own lives.

John Rawls in his book, A Theory of Justice, questions whether gifted or talented people deserve the wealth they produce because of accidents of nature. Carabini counters with the objection that gifted individuals would not be inspired to develop their talents if they were not able to keep the fruit of their labor. Besides, he continues, it doesn’t follow that others deserve it more than the producer or creator.

Some argued at the dinner that nobody should inherit wealth. Since the inheritors didn’t earn it, they don’t deserve it, but the State and whomever receives the wealth through the State didn’t earn it either. So why would they deserve it any more than the desired inheritors would?

Anyone who supports State policy must recognize or accept their condoning of force against others. Thus, they cannot consistently reject slavery when they have condoned mastery over others.

Karl Marx (May 5, 1818 – March 14, 1883)

Though Karl Marx wanted a better world for humanity, his vision blinded him to the realities of his day and kept him from understanding that capitalism brought prosperity to everyone. His followers, instead of accepting the evidence, also insisted on his vision, using force and eventually committing genocide.

When the State equalizes consequences, it creates moral hazard. Under State reliance people are less cautious in their actions. Self-reliance however encourages people to make better and more thoughtful decisions.

The evidence shows that spontaneous order brings about greater order and harmony than “intelligent design.” Central planning is incapable of understanding or knowing all the information to make correct decisions.

The history of social engineering disasters in areas such as poverty, drugs, health care, and education shows that these policies “not only do not work, but can not and will not work.” The free market can better adjust to the various problems of society compared to the various social engineering plans.

Because of the inability of governments to solve society’s problems, the Nation-State will weaken in power. While many will fear this development, those who value freedom will welcome the change, seeing it as an increase in liberty and prosperity.

From a philosophical point of view, Daniel Robinson describes four possibilities of the good life, the contemplative life, the active life, the hedonistic life, and the fatalistic life. There are probably more. Nevertheless, because we are unique individuals, no one can dictate what the good life is for anyone else,.

Prosperity is a by-product of liberty. Liberty, however, is a state of mind for each individual, and does not require the conversion of others.

Recommended Reading:

Inclined To Liberty by Louis Carabini

The Sovereign Individual: Mastering the Transition to the Information Age by James Dale Davidson, William Rees-Mogg

“What Is A Sovereign Individual”