Category Archives: Henry Hazlitt

When you have virtually unlimited, stolen resources at your disposal and no accountability, you can build pretty libraries

I came across a blog post by Dale Husband who claims to have “completely debunked” Libertarianism once and for all. (I don’t care to link to his page, but if you Google “dale husband the-ultimate-discrediting-of-libertarianism“, you will find his post.)

Dale’s proof? — this “jaw dropping” transformation in McAllen, TX of an old, abandoned Walmart building into a public library

Dale’s claim is that the Walmart was a product of free-market capitalism and that it failed (as a profitable business). And as a result, the city of McAllen did “something that libertarian dogmas said was impossible, because private industries were by nature better than public agencies. When something has been proven to be a lie, it should be abandoned, period.

I asked why he thought Libertarians believed it impossible for government to create something beautiful from the ashes of private industry.

Dale’s response? (my apologies for the language)

My point is that government created that incredible library, Wal-Mart did not. Why did that Wal-Mart location fail? Because it was not profitable enough. That failure no doubt threw many people out of work. But local, state, and federal governments create jobs just as much as private industry does, and they do NOT need to make a profit to function. As a result, they can accomplish more than private industry can with the same financial and material resources. The city of Allen did not just sit by and wait for another private company to buy that former Wal-Mart property and use it, but took taxpayers’ money and did something extremely useful with the place. So next time some Libertarian extremist claims that “taxation is theft”, I will just tell that idiot to fuk off!


I know. I know. There’s so much awesome failure here that I don’t even know where to begin.

Here goes.

I don’t know any of the background concerning this Walmart building. Is it still owned by the company? Was it rented? Did they sell it to the city of McAllen? What was the total price that was paid by Walmart (including all the structure, utilities and land preparation that the new owners benefited from) and how much of that was recouped? It wouldn’t be unreasonable to think that Walmart Corp took a loss on the transaction, meaning the McAllen City Government benefited and got a deal because Walmart just wanted to walk away.

Regardless, let’s look at Dale’s thought process.

I’ve yet to hear any Libertarian claim that anyone (whether an authoritarian state official or a non-profit charity or an individual) is incapable of creating anything of beauty simply because they’re not private industry. If you have bottomless coffers, of course you can use some of those funds to build libraries, parks, arbors, or even Mount Rushmore.

(I don’t know why beauty requires money to be created in the first place. Some of the most beautiful things in God’s creation simply exist in nature.)

I believe Libertarians would assert that governments are NOT THE ONLY ones capable of creating beautiful structures, parks, or educational facilities to be enjoyed by members of the community. The Art Institute of Chicago enjoys corporate sponsorship from the likes of Bank of America, Target, the Terra Foundation For American Art, the Elizabeth F. Cheney Foundation, to name just a few.

But even more impressive than “Private Industry” supporting neighborhood beautification are examples of Voluntary participation or beautification in the midst of Anarchy.

This series by Reason.TV shows how the once great city of Detroit, killed off by government corruption and overregulation, is starting to rise from the ashes thanks, in some part, to Free Association / Voluntary Exchange.


Another curious series of mental backflips that Dale makes are that 1) Walmart’s closure cost some of their employees their jobs and 2) governments create just as many jobs as private industry does but isn’t burdened with the requirement to make a profit.

AND 3)

As a result, [government] can accomplish more than private industry can with the same financial and material resources.

Let’s move quickly past the fact that any lost jobs that resulted in Walmart’s closure wouldn’t have existed in the first place if Walmart was never in McAllen. Is it possible / likely that overregulation and taxation caused Walmart to pull out of McAllen? It wouldn’t be the first time.

Instead, let’s focus on the jobs the government “created” without having the burden of profit. I’ve written numerous times about government job “creation”. Here and here are couple recent examples.

What exactly is Profit? When a business sells a product or a service, it’s just the amount left over above their cost to produce. It could be a very thin profit as is the case with most Food Service businesses. Or it could be a very large margin of profit as is the case with most luxury items.

Profit is not a dirty word. It’s a sign that your good or service is worth enough to the consumer that they’re willing to pay for what you are providing. The more in demand your service, the wider your customer base, the more profit you are likely to enjoy. In an Open Market, if a competitor can do it better, faster, cheaper, or with better results, your product or service isn’t going to last.

What about government services or goods? The problem is that they usually have a monopoly and, by law, are not subject to competition. There’s no incentive then for any improvement or accountability. Some would argue that you can’t put a price on some of the services that government provides like Law Enforcement, Courts, or Muh Roads. I would argue EVERYTHING can be priced in the market. Watch Reason’s second installment on Private Security, for example.

When governments have no incentive to cut spending because they can just raise taxes / fees to increase revenues, are not subject to competition because they have a monopoly, and they are not held accountable for any results / return on their spending . . . well then yes, you might get some pretty libraries and parks to be built, using your money, to keep you content and pacified. Did everyone that was taxed want that library? Are there citizens in McAllen that would have rather seen the money used for schools or health care or more border patrol? What if (gasp!) some of the citizens of McAllen just wanted their tax burden lowered so that they could decide how to spend their own money?

See, government beautification programs are a smoke screen used to pacify the subjugated. Many people love the idea of having a beautiful library for the public, but what they don’t see are the other things that could have been purchased / saved as a result of less government spending.

Finally, I know Dale has already made up his mind that Taxation isn’t Theft, but I’ve clearly laid out previously how it is, in fact, the very definition of theft. He’s justifying the theft, as all Statists do. But it’s still Theft.  From Dale’s own words – “The city … took taxpayers’ money and did something extremely useful with the place.”

Fellowship 3.0

Been seeing this clip trending on Facebook recently and it got me thinking. I understand what the author is trying to convey, that we should try to make connections with people. His premise is that by staring into a little phone display or your computer screen, you’re not really engaged with people. (The irony is that my friends are using Facebook to promote the notion to stop using Facebook so much. But I’m guilty of doing the same on other topics.)

What’s interesting to me is that the cover photo for the “Look Up” video clip shows 2 ladies at a bus stop using their phones and one woman without. The imagery is supposed to make us feel like we’re all isolated because of technology. What you don’t see (and yes, I’m bringing in Bastiat’s / Hazlitt’s “Seen and Unseen” into a post about relationships) is what the 2 ladies on their phones are doing.

Maybe they’re texting their spouses or their children.

One of them might have just found out about a loved one’s serious illness.

Maybe there’s breaking news about a controversial vote.

Who knows?

As I had shared in a previous post, the issue isn’t the mode
of communication we choose to use.

I know of at least 2 friends that found their spouses through playing games on the internet. Both couples have been happily married now for almost 15 years and they have lovely children.

The internet is responsible for my family getting to know, and eventually meet, some dear friends of ours. We’re going down to the Houston area this weekend to celebrate Jami’s high school graduation (I’m still coming to grips with the idea that little Jami is now an adult and transitioning into the next chapter of her life.)

Focus on fellowship, by whatever means available to you.

Government Job creation

Related to my post “Is Taxation Theft“, I wanted to clear up and define something that gets misused so frequently that the average person may have missed it. You may often hear government officials talk about their various agencies and programs and how they are stimulating the economy. Some bureaucrat may point to the thousands of government workers they pay each month and how they ‘created’ those jobs.

If you’ve ever owned a successful business, then the steps you took before you started probably went something like this. You did some research to answer a few basic questions. Are your goods or services in demand? Are people willing to pay for them? How much? What would your costs look like? What would be the expected return on your investment? How would you finance your business? Would you have to take out a loan or do you have cash on hand that you’d invest in starting up? What are alternatives that you need to consider (opportunity costs) in which to spend your time and money instead of this business?

Finally, if you had a large enough plan and it proved to be successful, you might even have decided that you needed to hire employees. When you did, THAT WAS JOB CREATION. Your business model, investment, time and energy proved to add something valuable to the marketplace and thus created a job or jobs for people that did not exist previously. It is also completely funded by the revenues of business.

Now, take a look at how government jobs work. For the most part, they are funded by taxes which I have already established is a form of theft. They are largely not held accountable for any kind of return on those funds. There are some exceptions out there. The State Lottery, for example, may bring in millions of dollars to help fund education.

The point is that any job ‘created’ by the government which is funded by taxes is an oxymoron. This is simply taking stolen funds from taxpayers and appropriating them to special needs and projects that some central planner has deemed worthy. Nothing was ‘created’. Instead, something was stolen.

There are many different examples that you can search for online, but this clip where John Stossel explains the Broken Window Fallacy is crystal clear.

Don’t be fooled. Whenever you hear a government bureaucrat or lobbyist talk about needing more money or to remove more of your freedom in order to create jobs, they are talking about theft.

What is your plan and how do we get there?

As a Libertarian, I’m often challenged to lay out my plan for the world. Skeptics want to know every scenario of every issue, with concrete examples and facts to prove that my plan will meet their litmus test of change. “What about the poor? Who will protect the environment? Who will keep the terrorists off of our shores? Muh roads! Who will keep restaurants clean and safe? How can we get prayer back in school? How do we get Creationism (or Evolution) in / out of the textbooks that are used to teach our children?”

So let me start w/ putting the same question to those on the Left and Right. What exactly is your ideal, Utopian society? And further, how do we get there?

Being a former political conservative, here’s some points that may get the Right to nod their heads:

  • Big military, i.e. limitless spending if it supports the military
  • Bigger jails and more of them
  • Global interventionism / pre-emptive action against potential threats around the world
  • Christian-American values indoctrinated into our common law including what we teach in schools, what we permit on TV / radio, who can be married, the pledge of allegiance, Manger scenes in Town Hall at Christmas
  • Pro-Life for the unborn / Pro-death penalty for convicted criminals
  • War on drugs, except for tobacco, alcohol, and ‘legal’ pharmaceuticals
  • No restrictions or regulation on guns / firearms
  • Corporate welfare / Cronyism
  • Tariffs / US Only / government subsidized protectionism of American businesses and interests
  • Closed borders with jail time for illegals
  • English only. Period.
  • Screw the environment

     

On the left, you may hear things like:

  • Special treatment for protected groups like minorities, women, homosexuals, disabled, elderly, and the poor by way of quotas, lowered standards, redistribution of wealth, Hate crime / speech protection
  • Completely equal pay from top to bottom.
  • 100% job security, i.e. cannot be terminated against your will
  • No religious connotation or affiliation in any aspect of public life
  • Education for enrichment / enlightenment only, no grading / testing because failure can be traumatic
  • War on drugs if it creates ‘too much profit’ for greedy corporations
  • Anti-corporatism / capitalism / profiteering
  • Free / subsidized Health Care, Housing, Food, Education, Clothing, Transportation, Postal Service, Internet Service, and Cell Phones for the poor and other protected classes
  • Free abortions for everyone regardless of age or term
  • All schools are public schools with the same curriculum / teaching / facilities available to anyone / anywhere. Education experts will decide what to teach. Atheist / science-based teaching only
  • Make all guns and firearms illegal, except for law enforcement personnel
  • The environment and animals have equal rights as humans and must be protected

 

I’m sure there are more on both sides of the political spectrum, but I’ve tried to hit the hot topics. Interestingly, both sides historically are in favor of increased government spending. They just like to spend our money on different things. The Right wants to keep funding the military / spying war machine and their business cronies. The Left wants to spend it on everything else by taxing the rich. Both sides see no problem with the FED and printing more money to make up any shortfalls.

The other thing that’s curious is that on some issues, it appears the difference in whether the Left or Right support / oppose it depends on who is in the White House. Spying / Pro-War and the use of drones were big Right Wing hot buttons during the W administration and the Left vehemently opposed. Now that Obama is the President, the support roles seem to have been reversed.

So, getting back to my opening comment here – does anyone get a sense that there are well-tested, laid out plans on either side to achieve any of these ideals?

Does the Right have an answer for how much spending / resources and lives to keep pressing into our global police force or is it really limitless? How many wars should we be actively leading? Are we making any progress in keeping ‘Murica / the World safer?

What about the War on Drugs? Do we just keep on staying the course?

How do we plan to enforce an English Only agenda? Are we saying it should be illegal to speak any other language in the country?

For the Leftists, I realize bringing up Economics is a taboo and often frowned upon because ‘not everything is just about money’. But, as I’ve said before, it can’t simply be ignored either. Things / services have costs. Even if your proposal is to completely do away with money and private property, Adam Smith proved many years ago that people will barter with things they have to create their own economies (see my previous post On Health Care).

The other point for Leftists is that they are oftentimes guilty of focusing on only the things that can be seen today. But economists like Henry Hazlitt will point out the obvious truth that every decision that can be SEEN includes countless UNSEEN decisions that are being made. You pull on one thread, there are consequences, both intended and unintended, that will take place as a result. You tell the CEO that he can’t make any more money than the janitor, who’s going to want to take the responsibility of being the CEO anymore? And will the company even survive the next fiscal year when you do so with whoever is left leading the company?

So now, where’s my plan? The answer is I don’t have all the answers. I can’t possibly tell you how to fix every problem in the world today (and those that have yet to come to pass). Libertarians don’t even completely agree on how to ‘solve’ the world’s problems. There’s no magic formula (which involves the use of force) to get people to behave. That’s the point of Liberty.
BECAUSE there is no one-size-fits-all solution and there is no human being or group of human beings that could possibly know what’s best for everyone everywhere, Libertarians generally oppose the use of force to achieve a political goal. Instead, we favor the unobstructed, voluntary, grass-roots, God-given authority for each individual to lead his own life, to reap the benefits and pay the consequences for his decisions, and to enter into his associations without coercion. The only exception would be when your choices prohibit or cause harm to another person’s equal freedom to choose (see my previous post on the Limits of Personal Liberty).

That’s my plan. That’s my solution. I don’t know what the results will look like yet, but I do know that people acting as their own agents will take power away from faceless, centralized planners that are not held accountable for the results of their decisions. Instead, people will be empowered to act in their own best interests.

The graphic below is often passed around on the internet for Libertarian political groups. Like any catch phrase or bumper sticker logo, it’s meant to be simple and generalized. But if I have to choose between the Left, Right or Liberty, I’m definitely still here in the Liberty camp.

 


 


On Health Care

A friend on FB posted this link (Medical Bills Bankrupt Families of Mentally Ill Children) with no comments and of course, I had something to say about it. But, I restrained myself and decided to opine here instead.

The point of this story, of course, it to drum up anger and frustration. Surely, in a modern civilized society, families should not be losing their entire life savings over something as basic and fundamental as health care. They should get the care they need regardless of how much it costs. Don’t they have free health care in Europe and Canada? Why can’t we?

For a moment, let’s ignore the fact these so-called ‘progressive’ countries suffer from huge limitations on elective (and even some urgent) medical care because of rationing. There are two problems with this argument of ‘need’-based provision. 1) How do we determine which are the greatest needs? and 2) Can a centralized bureaucracy effectively administer (by force) the resources to meet those needs?

Until someone invents the Star Trek replicator converting energy into any kind matter we wish, scarcity will be the most basic truth of consumption. Since there’s only so much stuff available (whether it’s land, beef, gold, oil, time, Justin Bieber front-row seats, or Mickey Mantle rookie baseball cards), not everyone can have everything they want or even need. Further, not everyone values stuff the same way. I have absolutely no use or appreciation for the original 1960’s Batmobile but someone paid over $4 million for it.

Still not convinced? Let’s think about the question of how we determine greatest needs in a society. Whose needs should rank at the top of the list? The sick and dying? Women and Children? Health care is a commodity just like baseball cards and Batmobiles. It requires resources like materials, time, training, space, and energy to produce. Let’s just pick one of these resources – TIME.

Suppose we as a society used all available Time in the production of Health Care for all. Morning, noon and night, our Time was devoted to Health Care. Doesn’t take long to figure out that if this happened, we wouldn’t have anyone planting crops, raising animals, turning power and water on, building houses, etc.

Since we can’t devote all of society’s time to one cause or need, we have to use something less than ALL of our available resources. THUS, we will have scarcity which requires choices to be made by both producers and consumers. Producers have to choose what to make and how much. Consumers have to choose which products to purchase over another. In a free market, PRICE is where the two meet.

Some proponents of socialized medicine will argue that it is possible to provide the fundamental needs for free for all. In other words, take the Consumer’s choice dilemma above out of the equation. When you do that – guarantee unlimited supply to Consumers – you create infinite demand. What you’re left with, however, is the Producer’s choice. How will Producers of Health Care choose what to provide, how much of it, and for what price?

Stop and think about this point. If you are a Health Care Producer – whether you’re a doctor, pharmacists, EMT, dietician, drug maker, wheelchair manufacturer, prosthetics designer – you know that Consumers are guaranteed unlimited access to your goods or service. What would stop you from charging $1 million for a flu shot? Well, you’d say, who would pay that much for a flu shot? I would say, who’s paying for anything if it’s guaranteed? Without exception, unless the government sets a ceiling for prices and a maximum of procedures / services it can afford to guarantee, it will go bankrupt overnight. And once this rationing takes place, this question of whose needs get met first does not go away by simply guaranteeing the service. In fact, the guarantee for all creates an even worse situation than without it.

Why is it worse? Think of the Producers and their incentives. Invariably, the prices the government sets for goods and services will be well below the market rate – many times below actual cost to produce. So if I’m a drug manufacturer and know that all my R&D and manufacturing costs for Preventix will come to about $10 / pill plus $10 in profit I’d like to make, but the government is already setting my maximum price I can charge at $8 / pill, why would I stay in the drug manufacturing business? I wouldn’t even cover my costs. Let’s say they set the price at $12. I could still make a profit to cover my cost. But if I’m a business owner and know that I could take that $10 / pill investment and make more by instead just buying condos to rent or planting corn or even investing in bonds, again, WHY would I stay in the drug manufacturing industry? For altruism?

Let’s suppose Government takes over all the Production of Health Care. Just Health Care. Everything else is done “free market” style. Think of what the implications of this are. Education, Operations, Production, Manufacturing, Distribution. ALL under government control. And since it’s all owned by the Government and there is no longer any competition in the market, innovation and efficiency will disappear as well. No incentive for the best and brightest young students to someday create miracle drugs or procedures. No reason for college students to compete over getting into Harvard Medical School vs. Havana Medical Correspondence. For that matter, Harvard would probably get out of Medical School education and concentrate on producing more Economists and Lawyers.

Make no mistake about it. Socialists have a singular agenda – to remove all Choice from the world. They mask their agenda behind sob stories of families buried under costly care and union workers being out of jobs or teachers having to buy their own pencils for their classes. When they shove stories like these into mainstream media, what they neglect to tell you are the alternative that they’re suggesting. As Bastiat and Hazlitt have taught, the difference is not only recognizing that which can be seen, but also the things that are unseen.