Political and miscellaneous commentary by Orat.

Monday, March 21, 2005

The Power of Principles


    We often hear people speak of “principles” but few ever define exactly what they mean and why they’re needed. With this blog, I will attempt to do just that.

Principles in Ethics
    In the same way matter is composed of atoms, every issue is composed of one or more abstract principles.

    Principles are comprehensive. They transcend individual issues, thus serving as a guide to action even in uncharted territory. Their transcendental nature means that all thoughts, actions, and beliefs are logically consistent, whereas without principles, separate individual positions on an assortment of issues with no guiding principles can easily come into conflict. Principles enable one to see to the core meaning of a given issue and discover its true deepest nature, rather than only seeing its surface, superficial implications.

Principles in Science
    In a less esoteric field, the value of general and universal principles can be easily seen. Consider the principle of gravity, or the principle of magnetism, or any number of mathematical principles. An orange plus another orange is two oranges, but what if we add two apples together? If we do not grasp the abstract principle of one plus one equals two, then we would be left to ask such ridiculous questions as this. Each time a new situation arose, we would have to start at square one. Therefore we must recognize and identify the general, abstract principle that unifies and explains each individual case. The same is true in the field of ethics.

Why We Need Principles
    It isn’t enough to know what you think on a particular issue. You should know why you think what you think, and know what principle guided you to your conclusion. Whether you consciously recognize principles or not, every stand you take on an issue carries with it one or more implicit principles. For example, a stand against slavery carries with it the principle of the dignity and sovereignty of the individual, which has implications far beyond the issue of slavery alone.

    But if we do not consciously define our principles, we are bound to promote conflicting ideas, as I will presently demonstrate:

    To again use slavery as an example, it is a contradiction in principles to oppose slavery, but support Socialism. Both ideas state, in principle, that the fruits of a man’s labors do not belong to him, but rather to someone else. And on a deeper level, they both rely upon the principle that a man is not an end in himself, but only a means to the ends of others.

    Another example of such a conflict would be opposition to racism, but support for racial “pride” parades, holidays, and other events where people extol the virtues of a particular race. The former stand rejects the principle of identifying and valuing an individual according to their race, while the latter stand embraces it.

    People adopt such contradictory positions because they fail to consciously identify their abstract principles.

Principles versus Pragmatism
    There is an alternative method of evaluating issues and arriving at conclusions, and that method is known as “Pragmatism”. Pragmatism takes the short-term view of an isolated situation and decides on a course of action without regard for the principles underlying in those actions. With pragmatism, the ends are often seen as justifying the means. Pragmatism also is often confused with being “practical”. But in the long-run, pragmatism is no more practical than it is practical to ignore the principle of gravity, or principles of mathematics.

    An example of the folly of pragmatism would be an individual who wants to discourage racism and also wants to counter its effects through unprincipled, pragmatic actions. Let us suppose such a person supports policies of racial preferences, for example giving jobs or scholarships to people largely based upon their race. Their pragmatic reasoning is that since racism exists and therefore has certain negative effects, they will simply attempt to reverse those effects by preferring the discriminated race. After all, that seems like the “practical” solution. The noble goal certainly seems like an end worthy of the means of applying racial preferences. But in fact, such a person’s principles (conscious or unconscious) are confused and in conflict because they have not taken the time to define their principles and act according to them. Instead, they have only looked at the one isolated situation and decided on an expedient solution without considering the broader implications.

    Beware when people plea for the “practical”, because this usually means they are trying to ignore the principles involved and instead pursue the expedient.

Summary
    We have seen how principles are important in the decisions we make and the stands we take, how they allow us to adapt to new situations, and how they help us avoid adopting contradictory positions. Be sure to make a conscious effort to identify your principles and then to apply them to your life by testing each of your ideas against them, looking for inconsistencies.

Wednesday, March 16, 2005

The Power Market

    Corruption, graft, fraud – these are all features we’ve come to associate with so-called “crony capitalism”. From the Enron disaster to the Haliburton sweetheart deals, it seems as though graft and corruption are running rampant. And most disturbing is that our own political leaders appear to be involved on some level. But what do we do? What can we do to stop this when those supposedly enforcing the laws appear to have little regard for the law?

    As the phrase “crony capitalism” implies, much of this problem can be traced back to instances where certain individuals and entities were afforded special “favors” from their friends in the government, in return for other favors of some kind or another – such as campaign donations, etc. But what is the root cause of this problem? While it has practically been accepted as a definitive characteristic of politicians to be dishonest and prone to what we will diplomatically refer to as “influence”, the question remains, if this is such an inherent trait to politicians, what can we do to stop, or at least curb this? After all, as much as we may want to, we cannot live without politicians of one kind or another. At some level, bureaucracy must exist. So are we doomed to live with the inherent flaws of having human politicians?

    Fortunately, the answer is no.

Political Power is a Commodity
    Since we’ve established that politicians, in general, being human as they are, are susceptible to “influence” and therefore corruption, and since this is not a feature of human nature we can eliminate without eliminating the humanity of the politician, we must find a way to contain, or “defang” the politician, rendering his flawed human nature harmless. “How can we do that”, you ask? The answer is by recognizing the existence of, and subsequently eliminating the “Power Market”.

    What is the Power Market? It is the hypothetical place where political power, wielded by the hand of the politician, is traded like a commodity in exchange for other commodities. Where does this market exist? Everywhere and nowhere. But we can see its stock in trade everywhere we look. It’s easy to spot if you know what to look for. You can see where such trades have taken place by looking at the payment doled out by the politicians. This payment takes the form of things such as corporate welfare, subsidies, protected monopolies, and special rules and exemptions intended to give one group an advantage over others, among other things.

The Vulnerability of All Political Systems
    So the question naturally follows, if the Power Market is the source of the corruption, can it be defeated by moving away from a system of trade to some other political/economic system? If history is any guide, the answer is no. Political systems of all kinds have witnessed this problem to varying degrees, and the more authoritarian the system, the worse the problem – even in countries where market economies were virtually banned.
    We thus see that attempts to restrict the trade of the Power commodity have been futile. So we must take another approach: If we cannot restrict trade of this commodity, let us ban the commodity altogether!

The Solution of the Leashed Legislator
    The way to eliminate the trade of political power for favors is by eradicating the commodity itself. The answer to the question of how to keep a business interest from “buying” political influence is by making it so there is nothing to buy. The answer to the question of how to keep politicians from “selling out” is by giving them nothing to sell. By this means we can drain the Power Market of its lifeblood.
    Would this mean the politician is utterly powerless? Certainly not. After all, what would be the purpose of a powerless politician? But if we can strictly limit their power to only those proper functions of their position – that is, of securing and protecting our rights – then we will have little fear that they will sell “favors”. After all, the only “favor” they could extend would be that of protecting one’s rights.

    In addition to eliminating business influence in politics, and political influence in business, the adoption of the above we would likely also see a decrease in the amount of corporate corruption overall since these corporations would be left to make profits only through their own productivity and not through any favors or exceptions extended to them. But whenever the path of least resistance is to use political power (the power to use force) to gain values; whenever that Pandora’s Box of a tool exists to be wielded by the unscrupulous to gain advantages, corruption is inevitable – both in business and in government alike.

Friday, March 11, 2005

Social Security “Privatization”

(Note: It should be pointed out that the remote possibility exists that some in Congress will promote Social Security “Privatization” that actually involves tax-payers being able to freely invest their Social Security money in truly private accounts that they truly own and over which they will have full control. This would undoubtedly be a positive development. However, as stated above, the possibility that such a bill will pass both houses is indeed remote. With that in mind, the following commentary should be taken and understood in the context of the variations of “privatization” that are more likely to emerge. It is these far less “private” variations that are the subject of the following blog.)

An “ownership society”?

    When President Bush tells us that he wants to see an “ownership society”, how can we disagree? After all, doesn’t it make plain horse sense that the nation would be better off if everyone owned their own home, car, property, etc? Don’t people act more responsibly with things they own themselves? Of course! All of this is true.

    But when we hear this term “ownership society” applied to Social Security “Privatization”, what are we really talking about?

    The current fairytales being peddled in conservative circles tell of a fantastic world where each taxpayer will actually own a personal, private investment account in place of the current Social Security arrangement. According to the legend, this private account will be under complete control of the person who owns it, all the money they pay in will go only into their private account, and the federal government will be powerless to deprive them of the earnings or to otherwise interfere with it.

    Such a reform that places this level of independence, self-reliance, freedom, etc, into the hands of the individual is the stuff dreams are made of… literally. Those who actually think this is what is planned are dreaming.

Behind the buzz

    As with most mythology, the myth is much more fantastic than the reality. Social Security “Privatization” is no exception. The reality is that, in the best case, this “Privatization” scheme will mean personal investment accounts that are subject to government regulation, meaning you only get from them what the government says you get with no guarantees that you’ll actually get back even a fraction of what you paid in. After all, if they can pass a law tomorrow lowering your Social Security benefits, they can pass legislation taking back your “personal” investment account so long as Social Security is in their hands. What the government giveth, the government can taketh away. So there is no guarantee that this investment will ultimately make it back into your hands when you retire.* (Remember, this is the best case!) In the worst case, the only major change is one for the worse by putting Social Security revenues into the stock market allegedly to earn a better return for the government on the money, leaving the benefits to be doled out the same as they are at present – that is, at the government’s sole discretion.

    Why would I say that investing the money in the stock market would be a change for the worse? I hear protests saying, “But wouldn’t this mean a huge shot in the arm for the economy by dropping a mountain of capital into productive circulation?” It may mean that, yes. But it means much more. It means that the government would have controlling interests in the economy. Let’s elaborate on this point.

Politicizing the portfolio – the feds set the menu

    First of all, it ought to go without saying that federal bureaucrats, not wanting to be held responsible for massive losses, are going to pass guidelines requiring that Social Security funds only be invested into approved firms. If you thought the government was going to be an “equal opportunity investor”, you’re in for a wake-up call. This means the feds will have to establish a list of approved stocks, and they will likely go as far as micromanaging how much is invested in which companies, all depending on whose version of the measure eventually passes both houses. But in either case, it won’t be up to the tax payer to choose how they want their money invested. In the best case, look for the government to give you a list of investment options you get to choose from. In the worst case, it will be entirely out of your hands, as will be the profits earned from the investments.

    Even assuming the best case, we have a list of government-approved stocks. And don’t you know that every company out there will be fighting their hardest to get a piece of the massive government cash cow being offered? This puts the federal government in the stock market’s driver’s seat as probably the single largest investor in the market. In addition to being in position to greatly steer the market, the federal government could potentially become a majority share holder in many corporations, effectively bringing that corporation under direct control of the government. i.e. Fascism.

From stock market to favor market

    In addition to federal bureaucrats having great influence over the market in general and even possible direct control through majority share holdings, they would also be in position to elicit favors from corporations in exchange for the privilege of having their company added to the list of approved stocks. The prospect of getting millions upon millions of tax-payer money by being added to the approved list would likely drive corporations to do just about anything to be approved. And when something’s in high demand, it asks a high price. Subsequently, look for bureaucrats to ask for some big favors in exchange, some of them under-the-table. If you liked Enron, you ain’t seen nothin’ yet!

    No longer would the stock market trade merely in stocks, it would then trade in government favors and political power. The potential for this to incubate corruption both in big business, as well as in government, is virtually unlimited. The more favors the bureaucrat has to offer, the more “product” he has to “sell” to the highest bidder. The more favors there are for the businessman to “buy”, the more he’ll try to “buy” the bureaucrat. If we want politicians to stop selling out to special interests, then we need to give them nothing to sell. If we want big businesses to stop buying politicians, we need to give them nothing to buy. That which the politician would sell, and that which the businessman would buy is, in a word, power. This is why the limitation of government power and influence must be curtailed.

The “compelling interest” of the “public good”

    Given a few years of this entanglement of the stock market with the government, and the security of Social Security will be seen by many to be imperiled by the regular ups and downs of the stock market. Reactionaries (of which Washington has no shortage) will quickly call for government action at the first sign of a bear market. Now that the government’s Social Security program has a vested interest in the stock market’s performance, many in Congress will argue that the government now has a “compelling interest” in tightly regulating the market in an attempt to avoid losses in the Social Security accounts. Thus we will have welcomed in a giant Trojan Horse -- a Trojan Horse that will bring with it even more government-business entanglement and corruption.

There’s no going back

    After this amount of capital is invested in the stock market, there will likely be no going back. Once invested, any withdrawal of Social Security funds from the market would constitute an unprecedented sell-off and would likely signal a massive depression. So should we change our minds about this all being a good idea, it will be extremely difficult, perhaps even dangerous, to turn back. Any planned withdrawal would have to be conducted with extreme care and would have to be very gradual.

    But even at that, it is unlikely that bureaucrats, after having tasted such power and influence over the nation’s economy, will agree to hand over the reigns. And likewise, the special interests that stand to benefit from having their sweetheart politician in the position to dole out favors and competitive advantages are going to be reluctant support the phasing out of the very program which makes those favors possible. Thus it will be a self-perpetuating behemoth.

Market Nationalization

    Rather than actually privatizing anything, Social Security “privatization” would likely lead to an unprecedented nationalization of our economy. The nation’s economic center of gravity would shift drastically toward Washington and the individual tax payer would have little or nothing more to show for it. In short, Social Security “privatization” would be anything but private.

___________________
* In 1960 the Supreme Court ruled in Flemming v. Nestor that Social Security is a payroll tax, and as such, tax payers are not entitled to any guaranteed benefits.

  online casino