Government Financing: Heads I win, tails you lose

In Ayn Rand’s Capitalism: The Unknown Ideal, she writes,

Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others. By what criterion of justice is a consensus-government to be guided? By the size of the victim’s gang.

The logic behind this statement is simple and largely self-evident, though often ignored in policy discussions. It should be noted that the article I write about below has nothing to do with the above quote – which is precisely the problem.

A November 19th article from The Economist ponders the question of how governments can best raise revenue through taxes. To the author’s credit, he states in the first paragraph:

Although spending cuts could, and should, be the preferred route to prudence, taxes are all too likely to be part of the mix—at least judging from the experience of those countries that have already acted.

Unfortunately, the article concludes that developed countries would do best to focus on “efficiency” rather than “fairness.” If a government’s goal is to pursue the utilitarian goal of the “greatest good for the greatest number,” this preference for efficiency over fairness would be correct. However, any government with such utilitarian goals is an abomination.

The author does make some important points about alternate tax systems. Taxes on consumption, including a value-added tax (VAT), are regressive; meaning the lower an individual’s income, the higher he is taxed. Consumption taxes do, as the author points out, encourage saving – but they simultaneously discourage spending. Corporate taxes, it is noted, are particularly market-distorting. The critical numbers of the article can be found in the graph below (click to enlarge).

The author also illustrates an interesting phenomenon that often goes overlooked. Very collectivist (communist, socialist, fascist, etc.) have government revenues that make up a relatively large percentage of GDP, when compared with economically liberal countries such as the U.S. Russia, for example, has government revenues equal to 47.7 percent GDP, while the U.S. has government revenues equal to 33.7 percent GDP. But these percentages do not tell the whole story. It is also important to look at the components that make up these percentages. In Russia, non-tax revenues (largely related to state-owned oil companies) make up 14.5 percent of GDP, while in the U.S. non-tax revenues comprise only 5.7 percent of GDP.

At first, this may seem to be a much more efficient way for governments to raise revenue (though, to be sure, the article never makes this claim). It is easy to understand why a person unfamiliar with the record of history may see no difference between a government-run entity earning revenues and a private firm collecting profits. Is there any real difference between the Russian government selling oil and ExxonMobil selling oil?

The answer is a definite “yes”.

History and economics  both teach us that no central body can determine the amount of goods and services needed by individuals. Only the invisible hand of market forces can provide society any degree of efficiency. So even if government raises its revenue through so-called production instead of taxation, there will still be massive transaction costs and inefficiencies on both the supply and demand side. And of course, the government has incentives that conflict with offering the best product at the best prices. Governments typically have two goals: 1) gain power, 2) create social value. Yes, these are often at odds;  and yes, the second is often a means to the first. Regardless, governments are not motivated by profits. And the profit motive is the driving force behind real economic efficiency.

But all of this talk of efficiency misses the point. I’ll return now to the point of the quote I began with.

When reading such articles, it’s easy  to get wrapped up in the author’s arguments and lose the ability to distinguish the forest from the trees. Though the free market is far more efficient than a centrally-planned market, is that really a concern when so many tax systems and government sources of revenue violate individual rights? ExxonMobil has vast resources at its disposable to best its competition. But the one thing it does not have is the ability to coerce by force. Only by offering its customers the greatest value at the lowest price can it win in a free market. While the Russian government (or any other government) only has to pass laws – backed, of course, by men with guns – to maintain its supremacy. Take the U.S. Post Office, for example. If FedEx and UPS were allowed to carry mail, would the USPS have any chance at remaining viable? Of course not. Only by regulation and force can the USPS continue to provide income for the U.S. government.

So whether you are concerned with efficiency or freedom, the property confiscated by government should be reserved only for the protection of our individual rights.

One final thought from Ayn Rand on the subject:

There can be no compromise between freedom and government controls; to accept “just a few controls” is to surrender the principle of inalienable individual rights and to substitute for it the principle of the government’s unlimited, arbitrary power, thus delivering oneself into gradual enslavement. As an example of this process, observe the present domestic policy of the United States.

TABOR

Gerald Prante of the Tax Foundation has an interesting take on what TABOR means for the foundations of the American political system.

TABOR, for those unfamiliar with the term, refers to Colorado’s Taxpayer Bill of Rights provision that imposes exogenous limits on the amount state and local government spending can grow in a state. Similar provisions are being proposed in those two states. But is it necessary?

If government always acted in the best interest of society, TABOR would never be needed. Therefore, the supposed need for TABOR is derived from a lack of trust of the representative democratic system. TABOR is kind of like the Bill of Rights in the U.S. Constitution: the Founding Fathers imposed restrictions on Congress (representatives of the people) from passing laws that restrict speech, establish religion, etc. If the Founding Fathers thought that Congress would always do what’s in society’s best interest, we wouldn’t have needed a 1st Amendment that starts with the phrase “Congress shall make no law…” The Bill of Rights is inherently anti-democratic.

Maybe as a first-best solution (in a world of a purely benevolent government), the First Amendment isn’t the best policy. But it’s probably a second-best solution given that Congress isn’t to be trusted when it comes to actively regulating speech, religion, etc.

And that’s the ultimate question with TABOR. If government was purely benevolent, the first-best solution would be some optimal tax-spending mix. But if government is pre-disposed to get larger and larger (when left to its own devices) and be at a size that is far above optimal, a TABOR has the potential to improve societal well-being. It’s likely not to lead to a perfect outcome, but it shouldn’t be compared to what a perfect, purely benevolent government would do. It should be compared to what an imperfect government is actually doing (and likely to do in the future).

That being said, for TABOR to be successful at improving social well-being, it must be the case that there is a significant amount of waste in the state’s spending. If politicians aren’t interested in maximizing social well-being (which is the necessary condition for TABOR in the first place), then who is to say that the spending cuts they make in response to TABOR are going to be right ones?

If the politicians decide to cut funding for some wasteful project as a result of TABOR, then society wins. Resources that were being wasted are now being put to better use (via lower taxes). But if those politicians, in response to TABOR, cut spending that actually has a high marginal social value (higher than the total marginal cost from taxation), social well-being could be made worse off as a result of TABOR. (Just saying that because government spending / GDP fell that such a policy change is good is nonsense. It depends on what type of spending was cut.)

In summary, TABOR would undoubtedly improve social well-being if politicians cut the least valuable government service in response to TABOR’s enactment. But given that TABOR is necessary because we can’t trust the politicians in the first place to do what is right for society, what is the probability that they are going to cut spending in response to TABOR that has a value to society less than the taxes that TABOR would be cutting? That’s the second-best question for both TABOR opponents and TABOR supporters that is most important, yet rarely asked.

The main point here is one that is rarely brought up but extremely important. All government spending is not created equal. Some government spending is absolutely necessary (i.e. police, fire protection, and military spending), some is beneficial but not critical (education spending), and some is no better than putting money into a pile and burning it (subsidies for failing industries). Unfortunately, it seems that the more useless – or even harmful – the type of spending, the more effective a tool it is for politicians to buy votes from various groups (rather than representing the interests of the individual).

This brings us to the issue of TABOR as an “anti-democratic” measure – which it absolutely is, as is the Bill of Rights. But this anti-democratic nature is by no means a negative. Democracy, by its very nature, is anti-freedom. Democracy is rule by the majority, and if history has taught us anything, it is that a majority will frequently find cause to violate the rights of the minority. Freedom can only mean one thing: individual liberty. The concept of  “collective rights” is an absurdity. No group of people, no matter the number, can possess rights. Only individuals possess rights. And when we are dealing with questions of government spending and taxes, we are dealing with one of the most sacred category of rights: property rights. Any legislative body that has any control over its citizens property (i.e., any legislative body that levies taxes) must be subject to severe anti-democratic measures.

Faith and the Free Market

I have faith, in things I can see and buy and deregulate. Capitalism is my religion.

- Jack Donaghy

The above quote is from the Emmy and Golden Globe Award-winning television series 30 Rock. The character, Jack Donaghy, is an extremely wealthy and powerful executive of the GE Corporation, and an avowed capitalist. The show portrays his free market beliefs as antithetical to faith and, even moreso, religion.  Here is part of a letter from Ayn Rand to Barry Goldwater, written in 1960:

The Communists claim that they are the champions of reason and science. If the Conservatives concede that claim and retreat into the realm of religion, it will be an act of intellectual abdication, the kind of intellectual surrender that the Communists’ irrational ideology could never have won on its own merits.

The conflict between Capitalism and Communism is a philosophical and moral conflict, which must be fought and won in men’s minds, in the realm of ideas; without that victory, no victory in the political realm is possible. But one cannot win men’s minds by telling them not to think; one cannot win an intellectual battle by renouncing the intellect; one cannot convince anybody by appealing to faith.

Capitalism is perishing by default. The historical cause of its destruction is the failure of its philosophical advocates to present a full, consistent case and to offer a moral justification for their stand. Yet reason is on the side of Capitalism; an irrefutable rational case can be, and must be, offered by its defenders. The philosophical default of the Conservatives will become final, if Capitalism—the one and only rational way of life—is reduced to the status of a mystic doctrine.

I am not suggesting that you should take a stand against religion. I am saying that Capitalism and religion are two separate issues, which should not be united into one “package deal” or one common cause. This does not mean that religious persons cannot crusade for Capitalism; but it does mean that nonreligious persons, like myself, cannot crusade for religion.

Granted, some of this letter is dated. Capitalism (a necessary component of freedom) is no longer at war with communism, per se. Individual rights now faces the much broader threat of collectivism. However, most of what Rand said still rings true today. The collectivists largely control academia, so they have been able to convince many that “progress” and “reason” are on their side. While conservatives (those mediocre champions of individual rights) frequently take up causes backed only by a subjective morality, or faith. For all the reasons stated in the letter above, this approach will lead to the victory of the collective over the individual.

It has been made clear by brilliant individuals (Milton Friedman, Ayn Rand, Adam Smith, F.A. Hayek) that free market capitalism is the political system that is consonant with man’s nature and the system that is supported by reason. But it is often asked whether or not a person of faith can also be a supporter of the free market. As both a Christian and an ardent proponent of capitalism, I believe that capitalism and faith are absolutely compatible. In fact, I would go so far as to say that free market capitalism is the only system compatible with the Christian religion. If one holds man to be created in the image of God, then it must follow that the individual is the highest object in the temporal realm. It is at this point that the atheist, agnostic, and deist alike come to the same conclusion: man is supreme on this earth. Any system of government must therefore be centered around man. As man’s nature is that of an individual and not as a collective, any system of government must be centered around the individual. As free market capitalism is the only political system built around individual rights, it is the only moral political system.

Let me be clear, I completely agree with Ayn Rand that capitalism can and should be argued by reason, not faith. However, many people of faith seem to believe that capitalism, because it requires at least a degree of selfishness, is incompatible with their religion. I would remind those readers that capitalism does not prohibit sacrifice in any way. The important point is that it does not enforce it. A collectivist society forces selflessness on its members, at which point sacrifice is no longer moral because it was not done by choice. Capitalism, on the other hand, leaves every individual free to pursue their own goals – allowing disparate beliefs to thrive without the violation of individual rights.

Side note: for anyone interested the American Enterprise Institute is holding an event on faith and capitalism called “Can Christians Be Capitalists?” on September 30th in Washington, D.C.

Cass Sunstein: Regulatory Czar

Our new unelected, unconfirmed, unaccountable, and unconstitutional Regulatory Czar is Cass Sunstein, a law professor and longtime adviser to Barack Obama. In 1999 Sunstein co-authored an article entitled “Why We Should Celebrate Paying Taxes”. To call the article “appalling” is an understatement. It begins by, basically, crediting government with all of civilization’s progress.

“It’s our money, and we want to keep it!”

“Why should the IRS take our money, when the government wastes it and we want to spend it on ourselves!”

These are piercing sentiments, especially on April 15. But are they defensible? In what sense is the money in our pockets and bank accounts fully “ours”? Did we earn it by our own autonomous efforts? Could we have inherited it without the assistance of probate courts? Do we save it without support from bank regulators? Could we spend it (say, on the installment plan) if there were no public officials to coordinate the efforts and pool the resources of the community in which we live?

Do not get up tomorrow and drape your house in black! For tax day is not a day of national mourning. Without taxes there would be no liberty.

Without taxes there would be no property. Without taxes, few of us would have any assets worth defending.

Cass Sunstein is crediting government with creating wealth, implying that property rights emanate from government. I believe it’s self-evidently logical to equate “taxes” with “government” when reading Sunstein’s article. Government is not responsible for individual innovators and entrepreneurs. If these men of the mind did not put their faculties to use and create wealth, there would be nothing for the tax collectors to collect. As for the emanation of property rights; I’ve stated before my firm belief that they are a natural by-product of man’s right to his life.

There should be no question that man’s life is his and his alone. If we accept this basic premise, we see also that he has an inalienable right to his property. If, by his time (i.e. his life), he has produced property (this would also apply to maintaining property, such as land) he has the right to that property. When man works, he is, in effect, trading his time (a portion of his life) for whatever it is that he is producing. Because he had a right to his time/life, he has a right to whatever thing he traded it for.

As for Sunstein’s claim that government coordinators are necessary to effectively allocate resources – it’s barely worth responding to. The record of history is indisputable that (with the exception of certain non-rivalrous, non-excludable goods and services) the invisible hand of the free market (i.e. individuals acting in their own selfish interests) is far superior to any centrally-planned effort.

But perhaps I’ve jumped the gun. Cass Sunstein offers some examples of the validity of his ideas:

Indeed, property owners are more deeply “dependent” on government than food-stamp recipients. The man who purchases several news organizations owes more to legislative, adjudicative and administrative action than the woman who sleeps under one newspaper at a time.

While it is true that the property owner may be subject to more legislative, adjudicative, and administrative action than the homeless woman, he is hardly “dependent” on government. To the contrary, government is a roadblock in his path of fulfilling his potential as a human being. Government protects property rights because that is a more efficient system than each individual protecting his own property.

Even if we lived in a perfect world, there would still be some need for a government to protect against the possibility of looters attempting to attack the rights of human beings. Perhaps in Cass Sunstein’s perfect world, businessmen are extremely dependent on the government – or to put it more accurately: in Cass Sunstein’s perfect world, the individual is dependent on the collective. I, for one, would call this type of world a hell on earth (those unfortunate soul’s who lived in Soviet Russia under Joseph Stalin would likely agree with me). Some might say that I’m reading too much into Sunstein’s comments. Sadly, this is not so. Sunstein goes on to say:

This is all a truism, in a way. But it has yet to become a commonplace. Its implications are seldom thought through. Most importantly, the dependency of individual freedoms on collective contributions has not sufficiently penetrated the American debate over our basic rights and the proper limits of the state.

Unfortunately for Sunstein and his depraved philosophy, observable reality does not support his premises. There is no such thing as “collective contributions” because there is no such thing as a “collective” among mankind. Man exists as an individual. Any contributions come from an individual mind. This, to me, is self-evident. Spiritual notions about a “collective” aside, can any one name one invention, discovery, work of art, or idea that has come from a “collective” mind? No. Individuals may collaborate and work together, but they are merely using their individual faculties in concert – each specific action, idea, contribution comes from an individual mind. Individual freedoms depend on absolutely nothing. Individual rights are possessed by every human being as an inherent and inalienable quality that is an integral part of his or her nature.

Sunstein continues on in his ignorance and rejection of basic human dignity:

Unlike fees, levied on those who directly enjoy a service, taxes are levied on the community as a whole, regardless of who enjoys the benefits of the public services funded thereby. Most rights are funded by taxes, not by fees. This is why the overused distinction between “negative” and “positive” rights makes little sense. Rights to private property, freedom of speech, immunity from police abuse, contractual liberty, free exercise of religion–just as much as rights to Social Security, Medicare and food stamps–are taxpayer-funded and government-managed social services designed to improve collective and individual well-being.

For all rights–call them negative, call them positive–have that effect. There is no liberty without dependency. That is why we should celebrate tax day. As Oliver Wendell Holmes, the great Supreme Court justice, liked to say, taxes are “the price we pay for civilization.”

There is much in these statements that could be attacked – but every above blasphemy against the individual rests on two statements found in the preceding paragraphs. The first is the notion of “collective well-being”, and the second is the sentence “There is no liberty without dependency.”

What, exactly, does “collective well-being” mean? It could mean whatever allocation of resources is best for every individual member of society. The first problem with this view is that it is highly unlikely that, in a society of millions, one given scheme for allocating resources is optimal for every member. The second problem is that this would require (if we reject a free-market system as Sunstein clearly has) that some central body dictate the uses of every individual’s property. Not only is this abhorrent to anyone who values his freedom, history has shown time and time again that it leads to ruin.

The second possible meaning of “collective well-being” is even more grotesque than the first. This meaning holds that the “collective well-being” is the best allocation of resources for the majority of people – in other words, the greatest good for the greatest number. But if we practice this philosophy, if even one member of society is harmed for the sake of the rest, we have turned the slighted minority into sacrificial animals. If we hold down one to raise up another, we have, as Ayn Rand said, become a society of cannibals.

As for “no liberty without dependency”, this is just false. It is true that in a free market system, individuals depend on one another – but only when they have chosen to. The type of collectivization that Sunstein would like to see take place in America would force dependency on American citizens. For centuries, mankind operated in societies based on dependency. From the earliest human tribes, to ancient Egypt, to feudal Europe, to Soviet Russia: everyone who lived under these systems was dependent, but none were free. Not until the United States of America, where the individual was held to be sacred above all else on earth, was freedom truly understood and practiced (albeit to a limited extent at first, but still to a far greater extent than had previously been known).

Cass Sunstein’s ideals are antithetical to the ideals of the Founding Fathers. They should be abhorrent to all Americans, and his very presence in the White House should be viewed as an abomination to our country, and as a blasphemy against the sanctity of individual rights.

Freedom of Conscience

Most Americans will, at least, pay lip service to the Freedom of Religion. It is the first right guaranteed in the Bill of Rights and very few Americans would openly oppose it. But many U.S. citizens either do not apply it consistently to their political beliefs or they construe it far too narrowly. The first case is easy to find examples for – the most glaring being conservatives with their opposition to gay marriage and their use of religion-based pro-life arguments. The second type of inconsistency (construing freedom of religion too narrowly) is, in my opinion, not as recognized but just as fatal.

Terms such as “freedom of religion” and “separation of church and state” are somewhat outdated. They come from a time when religion and morality were seen to be inseparable. The terms we should be using – to more accurately describe the application of individual rights to the moral, philosophical, and spiritual aspects of our lives – are “freedom of conscience” and “separation of morality and state”. For the former, I must thank Eric Rassbach, who recently went to court to defend his client’s right to sacrifice goats. He also penned an excellent WSJ op-ed on the topic.

Some people just give me a funny look and say nothing. Others say, “Goat sacrifice?,” laugh nervously, and look for the nearest exit. Only the most forthright ask me directly: Why in the world would I go to court to defend my client José Merced’s religious practice of killing goats in his home in the Dallas suburbs? I then explain, often to dubious ears, that Mr. Merced is a priest of the Santería religion and must sacrifice goats in order to ordain new priests. Without goat sacrifice, his religion would die out. Sometimes my questioners nod in agreement, sometimes they don’t.

The simple fact is that freedom of religion doesn’t mean much if it protects only those beliefs that the government, or the general populace, decides it likes. It is first and foremost unpopular beliefs that need the protections afforded by the First Amendment and international human rights treaties like the Universal Declaration of Human Rights.

No student of history could disagree. A constant in world history has been the marriage of despotism and the suppression of conscience. Pharaoh forbade the Jews to worship God in their own way. Socrates was executed for supposedly not believing in Athens’ gods. The Romans called Christians “atheists” and threw them to the lions for failing to worship Caesar. Heretics of one sort or the other–including agnostics and atheists–were executed during Europe’s religious wars. Hitler killed Jews as well as ministers like Dietrich Bonhoeffer who rejected his crimes against humanity. Stalin persecuted Jews, Orthodox Christians, Muslims, and many others. Mao closed almost every house of worship in China.

From the very beginning, the United States has taken freedom of conscience far more seriously than many other countries, making it the first principle in our Bill of Rights, coming before even freedom of speech. But the United States has had its fair share of government suppression of religion, from the hanging of Quaker ministers in Puritan Massachusetts, to the anti-Catholic laws of the 19th Century. And many modern Americans–from both the right and the left–would choose a coerced moral conformity over the individual conscience. Religious freedom will remain at risk, even in the United States, for as long as one group of people is tempted to employ state power to suppress another group’s peaceful attempts to act on conscience [emphasis mine] .

Which brings us back to Mr. Merced. Last week the federal Court of Appeals in New Orleans put itself on the side of freedom of conscience, ruling for Mr. Merced and telling the city he lives in–Euless, Texas–to let him start sacrificing goats again. The Court did not decide whether Mr. Merced’s beliefs were right or wrong, orthodox or unorthodox. It simply held that as long as he is not endangering public health or safety, the government had to leave those beliefs up to him and his gods.

It is a small victory for religious freedom in this country, not just for Mr. Merced, but for everyone who believes the human conscience is a precious gift to be protected. Of course, Christians, Jews, Muslims, or others may want to convince Mr. Merced that his beliefs are in error, and the same religious liberty will protect their right to try to persuade him. That’s the point: Persuasion, not state coercion, is the way all of us should engage our fellow citizens as they seek to obey the “still small voice” of conscience.

So ask not why I defend goat sacrifice. Ask me how you can too.

The most important point made by Mr. Rassbach is that we must broadly define the First Amendment. Many in this country (liberals, in particular) believe in the absurd concept of the “common good”. I won’t attempt to argue against it here, for the purposes of this post we’ll assume that it is, in fact, moral for society to pursue the “common good”.  Does this then give the government (or a majority of citizens) to enforce this morality of the “common good” on a minority? Absolutely not. Just as Christians or Muslims cannot, in accordance with the natural rights of man, coerce their fellow man to follow their religious dictates (even if the Christians or Muslims comprise a majority), society cannot coerce individuals to sacrifice themselves for the collective. Freedom is a black/white issue. There is no area of gray. True, some oppressive governments are more severe in attacking freedom than others, but that is only a difference in degree, not principle. A benevolent dictator is still a dictator. And a violation of an individual’s rights for the sake of the “common good” is still a violation of that individual’s rights.

Conservative Contradictions

Peter Berkowitz writing in the Hoover Institution’s Policy Review:

Both the quest for purity and the quest for unity [among conservatives] are misguided. This is because modern conservatism in general and certainly American conservatism in particular is a paradoxical orientation. The central paradox pervades the writing of Edmund Burke. Rightly recognized as having informally and unofficially but powerfully launched modern conservatism in 1790 with his Reflections on the Revolution in France, Burke cherished two fundamental goods, liberty and tradition, that do not obviously cohere and sometimes obviously conflict. Constitutional government in America intensifies the paradox. Insofar as American conservatism involves the conservation of the Declaration of Independence and the Constitution—and how could it not?—it puts a revolutionary doctrine and a founding document, forged by men in the heat of the political moment and constructed with numerous painful compromises, at the heart of the conservative mission.

I think this phenomenon is, in large part, a symptom of the problem that many conservatives – though claiming to advocate individual liberty – have not rejected certain collectivist principles. Many still argue for free market capitalism on practical grounds (i.e. it produces the greatest good for the greatest number of people). Conservatives must return to a principled stance in defense of the individual rights, for the sake of the individual (no practical arguments for the “common good” needed). Only when conservatives once again stand on principle, can the various factions of the conservative movement be reconciled and their policy conflicts resolved.

Quote of the Day

“The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities.”

~ Ayn Rand

Temporal Savior? No Such Thing

In troubled times, a nation often turns to a strong leader with vision and answers to society’s problems. This usually has disastrous results. History overflows with examples: Joseph Stalin, Mao Tse Tung, Adolf Hitler, Benito Mussolini, Gamal Abdel Nasser, Mahmoud Ahmadinejad, Franklin Delano Roosevelt – all offered their nation a way out and some portrayed themselves as temporal messiahs.

Before I continue, let me make clear that I do not equate Franklin Roosevelt with Adolf Hitler (or any other dictator mentioned). What all of these figures have in common is their solutions to societal problems hinged on force and their belief that the collective good was to be pursued at the expense of the individual. To be sure, all of these leaders had (or, at least, claimed) altruistic motivations for their actions. Joseph Stalin was moving society towards a utopia, Adolf Hitler was eliminating the “inferior” in order to create a stronger human race, Mahmoud Ahmadinejad claims to be doing God’s will, and Franklin Roosevelt was merely acting on behalf of the common good. But there is a fatal (literal and figurative) flaw in the thinking of each of these leaders. They, as many people do today, assumed that such a thing as the “collective” or “common” good exists.

Man does not exist as a collective, there is nothing common among mankind’s members. Man is an individual being – not a member of a beehive. What is good for most is not good for all. And if even one individual is sacrificed for the “common good” it is destructive to the entire society. If a society does not hold every individual life as an irreplaceable value, as an end and not a mean, then that society is, at best, the equivalent of an ant colony and, at worst, the equivalent of a tribe of cannibals. How can one man value himself (i.e. possess self-esteem) while he has attempted to morally justify the sacrifice of his neighbor?

This generation of Americans has ignored history and turned to a new temporal messiah: President Barack Obama. He is using government (i.e. force) to solve all of America’s problems. Our government is currently in a rapid process of devaluing the individual and establishing the “collective” as the end goal. Never in history has this approach produced prosperity, it defies the law of causality and the basic principles of economics. The news is full of protests and angry groups of citizens rising up against the rapid growth of government, but many of these are surely the same citizens who long ago accepted collectivist principles. Until we once again learn to regard the individual as the end and not the mean, we will not know liberty.

By Mutual Consent, To Mutual Advantage

I will not attempt to add to the excellent practical arguments against a raise in the minimum wage – my colleague has already covered that ground. I will only ask one of, if not the, most important questions facing any government action: by what right? In a capitalist society, no man’s interests need be at odds with another man’s interests. Each party comes to the trading floor under the same objective laws, with no special privileges or restraints applying to anyone. If an employer and employee come to the table and cannot agree on a fair price for the worker’s labor, both parties have the freedom of disassociation. If they can agree on a wage, they form a contract and trade by mutual consent and to mutual advantage. But now government has decided to step in, once again, and hold a gun to every employer’s head forcing him to act outside his own interests.

For anyone who views my assertion that the government is holding a gun to employers’  heads as hyperbole or a metaphor, please let me correct the error now. Every action government undertakes is by force – at the point of a gun. It is impossible for government to do otherwise. This brings me back to one of my favorite topics: the nature of government. Government does not exist in nature, it is created by man. In order to live in a civilized society, man delegates much of his right to the retaliatory use of force to the government (imagine the chaos if each individual was responsible for administering his own justice when a grievance arose between himself and another member of society). So government is, in essence, “a legal monopoly on the use of force” (Rand, “The Nature of Government”). To see this theory in practice, take even the smallest offense. Let us say I parked in a “no parking” zone, and an officer leaves a ticket on my windshield. If I do not send in a check to pay the fine, I will eventually be summoned to court. If I refuse to appear in court or appear and refuse to comply with the judge’s verdict, officials will be sent to seize my property. Should I stand in my doorway and refuse to allow the officials entry, police will be sent to subdue me. If a company does not pay the minimum wage, force can be used to seize property or take the officers of the organization to jail.

Does an employee, believing he is worth more than he and his employer formerly agreed to, have the right to use force against his employer to obtain a raise in his wage? If the answer is “no” for this individual, then it must be “no” for government as well. For the following reasons: a) government’s power emanates solely from individuals, b) as such, government can have no power not possessed by an individual, c) everything government does is done by force. Accepting these premises, how can we advocate for (or even  tolerate) a minimum wage?