Leading the Revival of Individualism & Self Reliance

Preface: Why I Chose to Live-Blog The Road to Serfdom

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There can be no denying the important role that F.A. Hayek’s The Road to Serfdom has played on the study of free market economics. And while the book is responsible for swaying public opinion and presenting an alternative to centrally planned economies, the book was written in such a way that may be hard for many modern readers to comprehend. And many suspect that Hayek may have actually intended the book to be this way.

This is precisely why I decided to take it on as a liveblog challenge: I believed it was extremely important to present a modern, millennial approach to a book with a timeless message.

During the course of my undergrad career, I took several classes that presented a similar viewpoint of the world. As with most institutions of higher education, my campuses political science department was dominated by contemporary liberals and far-leftists convinced that collectivism was the only answer to the problems facing our country.

But in the midst of this leftists agenda, I managed to find one professor who challenged this viewpoint. And it was this professor who assigned the first Hayek reading that I was ever exposed to.

Reading passages from Hayek’s Constitution of Liberty, I was floored at how this point of view had never been presented in any of my previous courses. And while my professor spoke briefly of Hayek’s classic, The Road to Serfdom, it was never assigned to the class in its entirety.

I did not think much about Hayek again until I discovered the former Congressman from Texas, Ron Paul. When asked during an interview what young people should read in order to better understand free market economic principles, Paul listed The Road to Serfdom as essential reading.

And while I tried to complete the reading after this suggestion from the former congressman, I got swept up in the excitement of the 2012 elections and completely forgot that I had only made it three chapters into Hayek’s classic book.

As the 2016 elections came and went, I found myself once again in arguments with many leftist trying to condemn the free market in favor of socialist policies. As collectivism began running rampant on both sides of the political aisle, I realized it was time to tackle Hayek’s Road to Serfdom once and for all.

Do Not Give Into Collectivism

Each page of The Road to Serfdom is filled with Hayek’s wisdom. And while there are numerous themes that could be detected within the body of this book, Hayek’s real purpose is to warn against the abusive power of the collect.

Hayek is a staunch individualist. Any doubt of this can be remedied by reading his brilliant essay, “Individualism: True and False.” This unwavering belief in the importance of the individual is present throughout the Road to Serfdom and is viewed as the remedy for collectivism.

When I began liveblogging this book, the Charlottesville riot had just occurred. And while much was said about this event, what scared me the most was the collectivism present on both sides of the argument.

Whether supporting nationalism while yielding tiki torches or advocating for collective violence while carrying the communist flag, both crowds had given in to the dangerous groupthink.

This type of collectivism was particularly frustrating for Hayek.

In the wake of WWII, which saw horrific brutality committed at the hand of the collective, Hayek saw America heading in a similar direction. But the worst aspect of this trend was that collectivism had managed to rebrand itself in such a way that many people did not realize they were getting into bed with the same beast that created all the chaos in Europe.

Hayek wanted to use this book to warn the world that they were headed for disaster if they could not recognize that no matter what their preferred brand of collectivism may be, it would always lead to a loss of liberty for the individual.

How to Use This Series

This series is in no way a substitute for reading Hayek’s book, but it can serve as a modern guide. When writing each installment, I selected themes that were of particular interest to me. Usually, these themes were modern applications of Hayek’s lesson. In one installment, for example, I explain how Hayek warned about Obamacare long before its inception.

The book is filled with examples showing that Hayek’s warnings have already manifested themselves in our current political and economic climate. This is what makes The Road to Serfdom so timeless. As we drift further and further down this dangerous road, the book grows in importance.

But the most important lesson we can take away from The Road to Serfdom is that we are not doomed. Individuals are capable of altering our course at any time. The book is a call to action that asks readers to heed Hayek’s warnings and learn from history in order to ensure that the world does not become subject to complete state control and that the indivual is free to prosper. 

 

The Fight Continues: Keynes and Hayek on Spending

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John Maynard Keynes and F.A. Hayek were both influential men of their time. But, as discussed in the first two parts of this series, they both had very different views on how the economy should operate.

In the previous installment of this series, we discussed how both Hayek and Keynes differed on their views regarding planned economies and government intervention. As we have already seen in my liveblogging of Hayek’s The Road to Serfdom, Hayek was a staunch supporter of individualism and stood in opposition to planned economies because he felt they would result in less freedom for the individual.

For Keynes, government intervention was the only way to achieve desired ends for the national economy as a whole, even if this meant individual rights were squashed along the way. But the differences between the two economists do not end there.

One of the most contentious issues between Hayek and Keynes was the matter of spending as a means of instituting economic prosperity.

Spending Your Way to Prosperity  

Most rational human beings understand that if they are having financial problems, they cannot spend their way to prosperity. And while individuals seem to grasp this point quickly when their own personal money is at stake, many economists and state planners still have not learned this lesson. And unfortunately, Keynes is one of the main reasons this “spend your way to prosperity” myth still exists today.

Keynes viewed spending as one of the primary driving forces of the economy. In fact for Keynes, when countries are experiencing economic recessions, government spending holds the answer to the problem. Keynes viewed the free market as a beast that needed taming, frequently referring to the “animal spirit” of the marketplace, so it is no wonder he did not trust in the market process.

Keynes believed that when the economy was doing well, which in his mind meant unemployment rates were low and and growth continued steadily, the state should rein in spending. But when the national economy was not doing so hot, he believed that both spending and deficits should be increased.

Keynes did not trust in the free markets ability to self-regulate and make the proper adjustments needed in order to correct itself in times of economic recessions or depressions. Instead, he believed that by increasing spending, the government could encourage job growth and give the economy the jolt it needed to get going again.

It is for this reason that today we see many members of Congress call for an increase in government programs even in the midst of economic uncertainty. Rather than trust the “do nothing” approach and let the business cycle run its course, these bureaucrats want a proactive approach that also aligns with their own agenda, which often consists of creating new agencies or programs that further increase our national deficit.

But while spending may seem like the simple solution to so many of these subscribers of the Keynesian school of economic thought, classical liberalism offers another side to this spending story.

Broken Window Fallacy

This idea that spending is prosperous for the national economy has been discussed at length by both Hayek and Bastiat. Bastiat’s “What Is Seen and What Is Not Seen” essay focuses on the absurdity of what has been dubbed the “broken window fallacy.”

If a store owner begins his day by discovering that his storefront window had been smashed by a hooligan with a rock overnight, few people would see this as an opportunity for economic growth. But to the Keynesian, since the business owner has to replace his window, he is stimulating the economy by having to purchase new glass and have it installed.

But as both Hayek and Bastiat have explained, this does not result in economic stimulation. Since the business-owner now has to pay for the glass twice, once during the initial installation and again to replace the broken glass, he has doubled his losses. If the store owner did not have to spend his precious resources on replacing the window, imagine where the money could have been spent.

It could have gone to another sector, who in turn, spends the profits on another sector, and so on and so forth. This is true economic stimulation.

Yet, the broken window fallacy remains among the most popular economic myths influencing governments today. It is for this reason that after a natural disaster you see Keynesian talking heads praising massive destruction for the economic stimulation that will result from having to rebuild.

This is the very same line of thinking that fueled Keynes and it is why he believed deficit spending would benefit the national economy. And temporarily, this might be true our own national deficit situation shows that this type of stimulation does not work. The glazier now tasked with having to repair the storefront window may see a temporary boom, but it does not account for what Bastiat called the “unseen.” In this scenario, this would be the sector that is missing our on the store owner’s business because the funds that might have otherwise been spent, are now being directed towards rebuilding what was already there.

While it is simple for most individuals to grasp this concept, it is one that Keynesian economists continue to cling to rather than yielding to the wisdom of classically liberal economists like Hayek and Bastiat.

The Fight Continues: The Differences between Keynes and Hayek

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John Maynard Keynes and F.A. Hayek are two of the most controversial economic figures of the 20th century. Both made huge contributions to the field of economics and both stand in direct opposition to each other, which is one reason why they have presented such a fascinating juxtaposition over the last century.

For Keynes, the government’s involvement was integral to the field of macroeconomics, which treated the entire economy as one whole entity, rather than several individual moving parts. As has been discussed in The Road to Serfdom, this failure to understand the individual’s role in the economy is one of Hayek’s main concerns.

For Keynes to achieve his economic goals, which included such things as the idea of “full employment,” the government would have to commandeer the entire economy in order to direct it towards a given end. While some may not see this as being as terrifying as it truly is, Hayek reminds us of in Road to Serfdom that without economic freedom, there can be no freedom. And in Keynes’s ideal world, the government would be running the entire show. But the differences between the two men exceed far beyond this fact alone.

Over the course of a few essays, I will be diving into the differences between these two economists and why they both matter in our modern day. But before diving into the differences there are two videos that may help lay a foundation for understanding these two fascinating men.

In 2011, two parody rap videos were released in which two actors depicted the two economists debating their different stances on the economy. While economics is not usually the “hippest” topic to rap about, the videos made their way around the internet and suddenly everyone was talking about Hayek, Keynes, and Austrian economics.

The videos were released at the height of the Ron Paul movement when F.A. Hayek and his issues with Keynesian economics were suddenly being discussed as if it were celebrity gossip. And while the videos laid a strong foundation for the discrepancies between the two men, it is important to elaborate on a few of those differences, as I will be doing over the next few weeks.



 

 

Tax Reform? The Sixteenth Amendment Took Away Our Property Rights.

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As is normal in our hopelessly politicized environment, there are points of view on both ends of the spectrum regarding the “tax cuts” recently passed by Congress and signed into law by the President. Some even want to describe this tinkering as “Tax Reform”. Individualists know that the very concept of income taxes is anathema to the individual economic freedom that is fundamental to economic growth and universal betterment.

Frank Chodorov was a writer who made this point forcefully and repeatedly. His book Income Tax: The Root Of All Evil is definitive on this point.

He was also a committed Individualist – his book One Is A Crowd contains some inspirational essays.

In the following piece, originally published at Mises Institute, Chodorov jolts us into the realization of just what a fundamental usurpation of individual freedom took place with the Sixteenth Amendment – the introduction of the income tax.

  1. The income tax completely destroys the immunity of property. It flatly declares a prior right of the State to all things produced.
  2. Worse, the income tax gave the State the means of effectively attacking the immunities of mind and of person; it transferred to the State that sovereignty which, according to the American theory, is lodged in the individual.
  3. The income tax bought more sovereignty for the state and less for the individual. Politicians become well-financed, and are able to buy votes by selling back confiscated incomes to various voter groups.

So let’s not be diverted by the chimera of tax reform. The income tax is our complete and utter surrender to the state.

The full version appears below.

It all began, as you know, with the Declaration of Independence. The Americans stated their case, both as to the disabilities put upon them by the British Crown and as to the kind of government they considered it fitting for men to live under.

The indictment was rejected and the issue was joined in battle. The god of war decided in favor of the Americans, insofar as removing the grievous rule was concerned; but in the establishment of a government to their liking the victors were on their own. Nobody could help them.

Even history could not make a suggestion; for never had there been a political establishment constructed or operating on principles laid down in the Declaration. These principles, moreover, were quite metaphysical, completely outside the realm of experience. They were: (1) that all men are created equal, and, (2) that all men are endowed with inalienable rights. When you come down to it, the two metaphysical concepts are really one. For the postulate of equality did not apply to human capacities or attributes, which are quite unequal and far beyond the scope of government, but to the enjoyment of rights or prerogatives.

In that respect, they maintained, all men must be considered on a par. This was a brand-new base for government. In all political science hitherto known it had been an axiom that rights were privileges handed down to subjects by the sovereign power; hence there was nothing positive about them. A new king or a new parliament could abrogate existing rights or extend them to other groups or establish new favorites.

The Americans, however, insisted that in the nature of things all rights inhere in the individual, by virtue of his existence, and that he instituted government for the sole purpose of preventing one citizen from violating the rights of another. Sovereign power, they said, resides in the individual; the government is only an agency of his will. If it fails to carry out its duties properly, or if it itself presumes to invade his rights, then the moral thing to do is to kick it out.

But, government is not an abstraction; it consists of people, and the inclination of all people is to improve upon their circumstances with whatever skills or capacities they possess and by whatever opportunities they meet up with. The power placed in the hands of this agency — to enforce the observance of an equality of rights — is in itself a temptation from which only the saintly are delivered.

The Founding Fathers were therefore confronted with a difficult contradiction: men being what they are, a government is necessary; and government being what it is, men must be safeguarded against it. Their recipe was the Constitution. Whether or not the ensuing government would materialize the metaphysics of the Declaration, the Constitution was, at any rate, a definite pattern; and when it was ratified and put into operation, it became the end-product of the Revolution.

To be sure, the Constitution cut corners around the doctrine of natural rights. We must remember that it was, after all, a political instrument, concocted by men. Only in its preamble can such an instrument serve the moralities; its working parts must be geared to the interests of the dominating groups in society, and hence it must be a compromise; to effect the compromise the moralities must be watered down. The Constitution was no exception. The assumed equality of rights was distinctly out of line with the profitable slave trade; owners of large estates wondered how it might affect their business; merchants and manufacturers deemed it dangerous to their preferred position. The Constitution was therefore so framed that the doctrine could not be employed to disrupt the status.

There were many Americans who contended that the profit of the Revolution was liquidated by the Constitution and at their insistence a Bill of Rights was included.

The Basic Social Struggle

The Founding Fathers forged well. Putting aside what it might have been, the Constitution did pay homage to the doctrine of natural rights. It did so by the simple expedient of putting restraints and limitations on the powers of government. We learn from their published statements that the intent of the Founding Fathers was to prevent the despised “democrats,” should they come into power, from using it for spoliation. They were quite forthright about it, and not a little could be said in favor of their thesis. In recent years the “mob” they feared has indeed come into power and the result seems to support the contention of Madison, Adams, and Hamilton.

But regardless of their argument and regardless of their intent, the Constitutional shackles did in fact, though perhaps inadvertently, protect the people in the enjoyment of their cherished rights.

From this we learn a little heeded lesson in social science, namely, that the real struggle that disturbs the enjoyment of life is not between economic classes but between Society as a whole and the political power which imposes itself on Society. The class-struggle theory is a blind alley. True, people of like economic interests will gang up for the purpose of taking advantage of others. But within these classes there is as much rivalry as there is between the classes.

When, however, you examine the advantage which one class obtains over another you find that the basis of it is political power. It is impossible for one person to exploit another, for one class to exploit another, without the aid of law and the force to back up the law. Examine any monopoly and you will find it resting on the State. So that the economic and social injustices we complain of are not due to economic inequalities, but to the political means that bring about these inequalities.

If peace is to be brought into the social order it is not by accentuating a class struggle, but by restraining the basic cause of it; that is, the political power. To bring about a condition of equal rights, which is a condition of justice, the hands of the politician must be so tied that he cannot extend his activities beyond the simple duty of protecting life and property, his only competence.

To the extent, then, that the Founding Fathers delimited the powers of the new government — by the system of checks and balances — to that extent did they render inestimable social service. And to that extent did they insure the victory of the Revolution.

For about a century and a half the American citizen enjoyed, in the main, three immunities against the State: in respect to his property; in respect to his person; in respect to his thought and expression. Pressure upon them was constant, for in the pursuit of power the State is relentless, but the dikes of the Constitution held firm and so did the immunities. Only within our time did the State effect a vital breach in the Constitution, and in short order the American, no matter what his classification, was reduced to the status of subject, as he was before 1776. His citizenship shriveled up when the Sixteenth Amendment replaced the Declaration of Independence.

The income tax completely destroys the immunity of property. It flatly declares a prior right of the State to all things produced. What it permits the individual to retain is a concession to expediency, not by any means a right; for the State retains the liberty to set rates and to fix exemptions from year to year, as its convenience dictates. Thus, the sacred right of private property is violated, and the fact that it is done pro forma makes the violation no less real than when it is done arbitrarily by an autocrat. The blanks we so dutifully fill out simply accentuate our degradation to subject status.

Demagoguery loves to emphasize a distinction between human rights and property rights. The distinction is without validity and only serves to arouse envy. The right to own is the mark of a free man. The slave is a slave simply because he is denied that right. And because the free man is secure in the possession and enjoyment of what he produces, and the slave is not, the spur to production is in one and not in the other. Men produce to satisfy their desires and if their gratifications are curbed they cease to produce beyond the point of limitation; on the other hand the only limit to their aspirations is the freedom to enjoy the fruits of their labors.

That fact, deep rooted in the nature of man, accounts for the progress of civilization when and where the right of property is recognized, and for the retrogression that follows from its denial. Property rights and human rights are more than complementary; they are identical.

The income tax did more than revoke the immunity of property. It gave the State the means of effectively attacking the immunities of mind and of person; it transferred to the State that sovereignty which, according to the American theory, is lodged in the individual. In the final analysis, sovereignty is a matter of dollars. The more dollars the more sovereignty. The individual is no longer sovereign when his living is dependent on a superior will, when that will becomes dominant by the economic strength behind it.

The edicts of the State are not self-enforcing, since they lack the voluntary support of public opinion, and are therefore only as effective as the size of the police force; but the police force must be paid, and since the payments must come out of the property of those upon whom the edicts fall, there is no standing up to it. Without an FBI, military conscription — which violates the immunity of person — would be impossible; it failed during the Civil War simply because Lincoln did not have the funds to support such an agency. The Espionage Act — which violated the immunity of mind — would have been but a piece of paper but for the thugs hired by the State to enforce it.

Bribing the Constitution

Further, the wealth acquired by the State at the expense of the producers enabled it to buy its way into sovereignty. The Founding Fathers put a check on the central power by clearly delimiting its scope, specifying that all other prerogatives, named and unnamed, shall reside in the component and autonomous commonwealths. They knew from experience what a far-away and self-sufficient authority could do to human liberty, and sought to avoid that danger by making local government the residuary of all unspecified power; not that the local politician is different in kind from the national politician, but that his proximity to the people makes him more sensitive to their will.

However, with the advent of the income tax this safeguard lost all meaning, for from then on the local politician was less and less under obligation to his constituents; on the other hand, they fell under his obligation by his ability to hand out gratuities derived from federal grants, for which he gave up nothing but the dignity vested in him by the Constitution. His political preferment is now largely a matter of dispensing federal patronage. The American no longer regards his local government as anything more than an agency of the State.

Thus, the original federation — the Union — has been superseded in fact by a single, centralized power, and the citizen of the commonwealth has become a subject of that power. The income tax alone made this possible, inevitable.

The transmutation of the Constitution by bribery has also been effected through private channels. The income tax has made the State the largest single buyer in the country and, since “the customer is always right,” it is unthinkable that the recipients of its patronage would oppose the State on any issue important to its purposes. Subvention of agriculture, education, and the press has been supplemented by gratuities to sundry pressure groups, all easing the shift of sovereignty from the individual to the State. To top it all off, the capital absorbed by the State, via the income tax, has put it into business in a big way, so that it is now the largest employer in the nation; loyalty to a boss of that potential breeds a peculiar kind of freedom of conscience.

Lost Will for Freedom

Our forefathers were not unaware of the inverse ratio of taxation to liberty. Their experience with the British Crown was still fresh when the Founding Fathers came up with the Constitution, and they scrutinized its taxing provisions most carefully. About the only fiscal power generally conceded to the federal authority was a levy on imports. Hamilton knew this would hardly yield enough to support the establishment contemplated and pleaded with great acumen for the right to levy internal excise taxes. His argument prevailed, but only because, as he pointed out, without this revenue the government would be compelled to ask for the unthinkable: a land tax or an income tax.

And, until 1913, the federal establishment had to get along as best it could with what it picked up from custom duties and a few excise taxes. Its sovereignty was thus contained.

In 1913 the relationship between the State and Society was reversed. Areas which had heretofore been considered within the private domain, sacred ground so to speak, were now invaded by the arrogant and enriched State, and within thirty years the individual was squeezed into a corner so small that even his soul lacked elbow room. His case was far worse than it was in 1776; in exchange for an income tax King George III would have conceded every point made against him by the colonists, and might even have done penance for past sins. But, such was the character of these Americans that they challenged him to battle because he presumed to impose a miserable tax on tea. What they won at Yorktown was lost by their offspring one hundred and thirty-two years later.

Were the disposition of the current crop of Americans comparable to that of their forbears, a new revolution, to regain the profit of the first one, would be in order. There is far more justification for it now than there was in 1776. But, people do not do what reason dictates; they do what their disposition impels them to do. And the American disposition of the 1950s is flaccidly placid, obsequious and completely without a sense of freedom; it has been molded into that condition by the proceeds of the Sixteenth Amendment. We are Americans geographically, not in the tradition. In the circumstances, a return to the Constitutional immunities must wait for a miracle.

Hip-Hop and Spontaneous Order Have More in Common Than You Think

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Netflix recently released an original documentary series called Hip-Hop Evolution. Already intrigued by this topic, I devoured the entire series in one evening.

Hip-hop and the spontaneous order of free markets are inseparable: a fact that was reinforced after watching the series. It was born out of the unregulated exchange of ideas. And it has become what is arguably the most organically market-oriented musical genre existing today.

Intellectual Property

Hip-hop was built upon taking someone else’s art, putting your own spin on it, and creating something new. In other words, it is the antithesis of intellectual property.

The most obvious example of this free exchange of intellectual property is Grandmaster Flash. From a young age, Flash was obsessed with anything that spun: washing machines, bicycle wheels, and most of all, record players.

He began “scratching” by finding breaks within song tracks, a place where there was a natural pause in the music. He would then “spin” the record, making his own melodic remixes. Marking the exact spot where these breaks occurred on the record with a crayon, he would be able to remember where these breaks occurred while DJing in a dark club on the weekends.

By taking something someone else created and literally putting a “spin” on it, he created an entirely new genre of music.

Dubbed the “Turntable God” by Bronx locals, he became a legend. Eventually, other aspiring DJs began putting their own twists on his style, something he boasts about with pride:

“I’m so proud that my science has been taken to so many levels, and I see so many DJs do super-incredible things, but the real fact of the matter is… it would be totally impossible to do any of those things without what I invented.”

And he’s right. All these original “new and improved” upgrades to “scratching” and “spinning” came from his method. And because of it, more music was put forth into the world.

 

 

 

 

Inhibited by Government 

Hip-hop arose from the underground of some of New York City’s roughest neighborhoods. These were the streets un-patrolled by police and essentially left to their own devices. However, in the absence of government there was a unique opportunity to form tight-knit communities that looked out for each other. “Turfs,” so to speak, were created and while there were surely instances of violence, the real turf wars were fought on stage. By providing alternative means to solving disputes, violence was mitigated and these communities were able to have open discourse among themselves.

It is not by mere coincidence that the “gangsta rap” sub-genre came around when it did. Like many things in popular culture, hip-hop was a response to what was happening in the world, and more specifically, in the country.

Many of these communities were those most impacted by the drug war. As such there was an inherent distrust for government. No one in these neighborhoods was ignorant to what had been going on; they knew the role government had played and they knew they could not rely on them for assistance.

Each neighborhood had its own hip-hop group with its own unique sound and a place at the community table. When there were larger issues at play that impacted a larger sphere of communities, the hip-hop groups were often the ones who would come together and attempt to solve the problem.

Truthfully, hip-hop is spontaneous order at its finest. Absolute consensus was important and each of these neighborhoods, viewed as underdogs in the outside world, were given the chance to voice their opinions, as the documentary series shows.

As the years progressed and the escalating drug war decimated these communities, the distrust for the state grew and was expressed more and more throughout the music. NWA, Public Enemy, and others used their platforms to express dissent and expose the state for its maltreatment of vulnerable communities.

Upward Mobility

Above all, hip-hop is a genre centered on the ability to write one’s way out of poverty and take control of individual destinies. It is a means to an end. As this is a topic I have touched on before, I will be brief on this topic but it is one that should always be highlighted. Hip-hop is the most capitalistic music genre ever created.

In addition to being a vessel for raising one’s standards, success within the genre relies on practicing smart entrepreneurial skills. Hip-hop artists are not just selling their music, they are selling a brand.

Whether it was selling a “cool” look with matching tracksuits back in the earlier days, or selling actual clothes as is typical of modern hip-hop artists, they each have appeal beyond just the music. There is a survival aspect about, a need to survive by thriving in wide array of facets.

As the documentary highlights, the popular group Run DMC was able to use their style to partner with the shoe brand Adidas. Shoes, or “kicks” as they were called in these circles, were vital to mastering your hip-hop style and Adidas was at the top of the hierarchy of cool shoes. Eventually recording a song called “My Adidas,” the group was able to gain an endorsement while also selling records. A genius entrepreneurial move.

Likewise, West Coast rapper Dr. Dre has created an entire empire of high-end headphones with his “Beats by Dre” line, which has allowed him to expand beyond just his music. Both Kanye West and P Diddy have also expanded their brand by creating their own unique clothing lines.

Entrepreneurism and Hip-Hop: Two Peas in a Pod

For anyone who is as entranced by the connections between free market libertarianism and hip-hop as I am, Hip-Hop Evolution is an enlightening experience. It took the observations I had always suspected and tied them together without having to bluntly spell it out. Of course, that may just be that I went into the series with the topic on my mind. Either way, hip-hop and libertarianism are a match made in free market heaven.

How a Classic Christmas Movie Can Teach Us about Human Action

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As a Millennial, I will admit that I’ve never seen the original Miracle on 34thStreet. However, the 1994 remake of the film holds a special place in my heart. While watching the film again for the first time in almost 15 years, I realized something I had never noticed before: the film is a wonderful lesson in human action and the basic principles of free market economics.

The story focuses on a struggling Manhattan department store, Cole’s. Having just narrowly escaped complete financial ruin, the department store is now indebted to a nameless big bank and must find a way to repay its debts while also making enough of a profit to stay afloat.

However, the store’s path to success is blocked by Shopper’s Express, Cole’s rival department store. Shopper’s Express is rooting for Cole’s failure so it can swoop in and buy out the store. To save the business, Cole’s needs nothing short of a Christmas miracle.

Luckily, our “department store in distress” happens upon on the real Santa Claus, who, coincidentally turns out to be a marketing genius.

After being hired to play Cole’s Santa Claus, the real Saint Nick begins telling parents where they can find all the items on their children’s Christmas lists for the most affordable prices. Unfortunately, this means Kris Kringle is often sending parents to Shopper’s Express and other department stores offering lower rates. While this seems counterproductive to Cole’s holiday sales goals, Santa has a trick up his sleeve.

Before upper management has time to crack down on this rogue Santa’s act of marketing treason, a Cole’s executive is approached by a stern customer, determined to give him a piece of her mind. While he is expecting a verbal beating, he is surprised when this confrontation goes in a completely different direction.

After a lecture about Cole’s outrageously expensive prices, this typical, everyday mother explains that Santa’s behavior demonstrates the store’s willingness to put the customer ahead of the “almighty dollar at Christmas,” and for this, she is pledging her consumer loyalty to Cole’s. She completes this sentiment by adding, “I’ll be coming here for everything but toilet paper and bananas.”

A Risky Move

By listening to its consumer base and realizing that consumers value something more than just low prices, Cole’s seizes this opportunity and launches a campaign centered on the theme: “Our Santa will find you the best prices, even if that means sending you somewhere else.” As it turns out, this risky business endeavor works in Cole’s favor and business begins to boom thanks to Jolly Old Saint Nick.

As a result, Shopper’s Express begins rapidly losing customers to Cole’s. However enraged this makes Shopper’s Express, it has only itself to blame. By failing to acknowledge other market incentives that might appeal to consumers beyond just low prices, Shopper’s Express has failed to adjust its model to market demands.

Infuriated that Cole’s has managed to avoid financial ruin yet again, Shopper’s Express stoops to desperate measures to ensure Cole’s demise.

Rather than compete with Cole’s incomparable Santa Claus and his brilliant, parent-friendly campaign, Shopper’s Express chooses to do what many companies do when they cannot compete organically in the free market; they turn to the government in order to stomp out the competition, a perfect illustration of cronyism.

A plan is set in motion and Mr. Kringle is set up by Shopper’s Express to appear violent and is then prosecuted by the state on the grounds that he is mentally unfit to live outside of the state’s custody. A dramatic court case ensues and the state’s attorney asks the court to condemn Mr. Kringle to life in an asylum, all thanks to Shoppers’ Express.

In the end, however, Cole’s consumer loyalty pays off tenfold as all of Manhattan rallies behind Cole’s and Kris Kringle, who miraculously wins his case just in time to deliver presents to all the world’s children on Christmas Eve.

While Santa was able to avoid spending the rest of his days in a state asylum, the real winner in this story is Cole’s. By taking a risk and trying an unconventional campaign centered on the market’s response to consumer demands, Cole’s was able to save their store, save Kris Kringle, and ultimately, save Christmas.

Lessons from the Road to Serfdom

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The lessons that can be learned from F.A. Hayek’s The Road to Serfdom are so numerous it would be almost impossible to list them all. But after taking the time to dive into this classic piece of economic literature, I compiled a list of what I consider to be the most important lessons one can learn while strolling down The Road to Serfdom.

Trust the Process

For those who favor as little government intervention as possible, or no government intervention at all, there will be moments when reading Hayek may seem a bit challenging. As you follow his thought process throughout the book, you may find yourself agreeing and even cheering his apparent disdain for market intervention.

Yet, while his logic would make one assume that he favored almost no government intervention at all, Hayek tends to draw conclusions that often seem contrary to the processes that led him there. It is for this reason that when diving into Hayek, the reader needs to remember to focus on the arguments made by Hayek rather than the conclusions he derives therein.

In chapter two of The Road to Serfdom, for example, almost every argument made by Hayek would lead one to believe that he is against any form of state interference. Yet, he never quite gets there.

For readers who may prefer Mises’ uncompromising approach to market intervention, fear not. If you put your faith in Hayek’s process and less stake in the conclusions he draws, you will see a great deal of Mises’ influence.

What is Past is Prologue

Of all things, The Road to Serfdom serves as a warning to readers. But in order to properly heed Hayek’s warnings, the reader must be able to recognize that history repeats itself. And if we as a civilization cannot see this, we are doomed to revisit the mistakes of the past.

Hayek is not merely telling a story of the bad economic policies that led to the chaos and destruction in Europe before and during the Second World War. He is using the recent catastrophe to explain how we can avoid such horrors in the future.

As Hayek says, this book is an opportunity for readers to correct the errors of the past and to stand up to the critics and false philanthropists who claim that planned economies are good for all when, in reality, they are good for a small few.

Economic Ignorance

Pericles said, “ You may not have an interest in politics, politics has an interest in you.” However, a more Hayekian approach to this quote would be to say, “You may not have an interest in economics, but it has an interest in you.”

Unless we completely isolate ourselves, there is almost no way for an individual to avoid participation in the economy. Every time we arrive at work we are conducting an economic transaction. By demonstrating value to our employer, we receive compensation. Each time we purchase food or clothing or pay rent we are also conducting economic transactions.

To simply dismiss economics as irrelevant to our lives is not only foolish, it allows state planners to legislate as they please without having to fear repercussion from individuals. And while many on the socialist side of the ideological spectrum may claim that individuals should not have to worry about such things, as we have seen, this is impossible because it impacts each of us constantly.

Understanding how totalitarians use the economy as a means to seize power is extremely important and requires at least a basic understanding of how the economy works and how we are each active participants.

Collectivism is Dangerous; Individualism is the Key

Above all, Hayek is an individualist. This comes across in The Road to Serfdom within the first few pages as well as in his essay “Individualism: True and False.” The greatest enemy of individualism has always been and will always be collectivism, which is why Hayek touches on this theme over and over again in his writing.

Collectivism seeks to belittle the individual by neglecting personal preference and spontaneous market order in favor of planned policies that are catered to groups of people rather than the individual person. The classical liberal traditions that America was founded on focus on the importance of individualism, something Hayek touches on often in this book.

Planned economies will always neglect the importance of the individual. The mere act of planning in itself assumes that a group of bureaucrats are familiar with the needs of each individual. But as Hayek has pointed out in his work on the knowledge problem, this is impossible.

No one can ever know the wants and needs of each person. The best any planner can do is base his policies on the wants or needs of the “greater good.” And while this happens all too often, this type of planning is harmful because it makes the individual subservient to the collective.

Equality

When we speak in terms of economic equality, many assume this means that resources and goods are divided evenly and distributed among people. And while socialists would claim that this is the only way to achieve true equality, they do not fully understand what this means.

For Hayek, and other supporters of the free market, equality means having an equal access to opportunity. To elaborate further, it means that each individual should be free to seek out his own economic prosperity without having to fear obstacles or retribution from the state.

No one should, for example, be forced to obtain an occupational license before having to work. This type of barrier prevents individuals from being able to provide for themselves and better their circumstances.

While socialism will claim to be the ideology most devoted to equality, the opposite is true. When state actors or authority figures seek to make everyone equal by force, they only succeed in making everyone equally miserable.

True equality comes from the individual’s ability to live, work, and function without a constant fear of state oppression. This equal access to happiness and fulfillment is the truest form of equality in existence.

Now Is The Time For Us All To Chart Our Own Individual Course.

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On the Road To Individualism, we chart our own course. That is certainly the spirit of America. Our stories and traditions include the original pilgrims sailing from Leyden across a dangerous ocean to unknown lands; the founding fathers who crafted a local revolution against the dominant global military superpower of the time; and the settlers who poured westwards across a vast continent to establish new lives and find new opportunities.

We Are Steered Off Course By Authority.

But lately, the freedom to chart one’s own course has been increasingly narrowed. From the very beginning of our lives, we are directed to take paths dictated by authority. We attend state schools –often bussed there on yellow state school buses – and memorize what the state wants us to know, since we are unable to accept responsibility for our own learning. Some of us go on to state-shaped and state-subsidized colleges. Others take licenses and certifications dictated by state authorities and industry cartels. We accept jobs in hierarchical authoritarian corporations and climb the corporate ladder to complete our pre-planned career and accumulate the corporate pension. We comply with restrictions on our behavior in order to borrow money from a big bank or to pass through an airport or to drive an automobile. We take the drugs the FDA allows us to, and wear DOT-mandated helmets on our motorcycles.

Governments are trying to make charting one’s own course even harder. The Chinese government, for example, is developing the concept of “social credit”. Using advanced technologies including facial recognition, internet data analytics and artificial intelligence to feed an opaque rating system, the Chinese authorities can deem any individual to have high or low Social Credit. Low social credit can result in exclusion from “privileges” such as freedom of travel, or even in the ultimate loss of freedom in the form of detention and imprisonment.

Maybe our own government will not go that far. Yet, the more you think about it, the more you’ll realize the extent to which your course is not your own. And you might despair that your individual freedom is ebbing inexorably away.

Happily, there is hope.

Design Your Own Education.

Firstly, the time is rapidly approaching when we can design our own education. Education on demand via interactive, software-enabled online lessons and courses will transform both sides of the learning platform. New providers of knowledge will put content on the platform, and consumers of knowledge will have new choices and the benefit of unbiased peer reviews to guide their selection. We will be able to assemble and combine our own degrees, certifications, badges and qualifications, adjusting on the fly to the changing demands of the job marketplace.

Knowledge on demand will be our support throughout a lifetime of learning. We will be able to access what we need to know when we need to know it, whether in the form of a technical manual for a home device, turning us into repair experts, or a survey of legal precedents for the case we are working on. The qualification we earned years ago in some sanctified institution will no longer be relevant or needed.

Make Flexible Work Choices.

Thus armed and in charge of our own cognitive development, will be able to make flexible work choices based on our personal values and life stage. What is important to me? What is meaningful? Shall I experiment for a while with a new and unusual work activity? Shall I create a new work timetable, working when others don’t and enjoying recreation when others are working? Shall I embark on frequent job changes so as to accumulate a unique lived experience? Shall I take a project-based approach to employment, creating revenue streams from multiple clients? Or shall I try a start-up, knowing that I can always utilize whatever experience and learning it delivers?

You can take a variable life path instead of a fixed one. Instead of defining yourself as, say, a teacher, you can redefine yourself as an individual who is on a quest to solve humanity’s learning challenges. You are not an engineer, but someone who harnesses technology to solve problems and you’re constantly searching for new problems to solve.

Your Values Are What’s At Stake.

What’s at stake? Our parents used to tell us that we should demonstrate consistency because that is what authority values. But what’s at stake is not the blessing of authority. What’s at stake is the authentic, values-driven life. You are the stakeholder in your own future. You can take the winding path of creativity and achieve more fulfillment for yourself and do more good for society.

You can construct your own personal brand, establishing an iconic and influential presence with a peer group of your choice in a field of your choice. A definition of iconic that you might use is to be acknowledged for distinctive excellence. Distinctive is the same as individual, and excellence represents your performance in your chosen métier. Charting your own course is the path to distinctive excellence.

The Road To Individualism: Signposts.

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The Road To Serfdom is a trenchant warning of how a western nation built on principles of freedom can easily and swiftly descend into collectivism, socialism and totalitarianism. All it takes is the abandonment of principles. Our politicians and bureaucrats do that every day, cheered on by some segments of the commerce and culture complexes.

Brittany Hunter has made clear the continued – indeed heightened – relevance of F.A. Hayek’s book, written in 1944, by live-blogging each chapter on www.centerforindividualism.org. We’ll shortly offer an e-book of every one of Brittany’s posts, with added Preface and Conclusions sections, as a free download.

Today, we can take a different road. The new direction would constitute The Road To Individualism. We see the roadsigns and we are able to interpret them.

Increasingly, individuals are charting their own courses.

On the road to serfdom, authorities tell us what to do and where to go. In education, religion, culture and government (via its octopus reach into legislation and regulation, money and banking, business and commerce, the environment, agriculture, housing, transportation, energy, health, trade, and security), there are ever-present and ever more powerful institutions who claim authority to direct us in our everyday activities and our life direction.

Individuals can recognize the myth. There is no such thing as authority, at least not legitimate authority. And the institutions who claim authority have pointed us in the wrong directions. The entire structure and process of education is questionable. Religious institutions are losing their supporters because the promise of religion has failed. And the same is true of government – the level of trust is at rock bottom because government has actively abandoned its principle of “for the people, by the people”.

Each of us is free to make our own decisions, and we look less and less to institutions for guidance.

New tools are becoming available to augment individual capability.

The prospect of charting one’s own course may sound formidable, but there are plenty of new tools to help. These tools will become universally available in short order, because the tools are technological and the tech industry has mastered the vertical adoption curve, along which deep global penetration is achieved at a fantastically rapid rate.

Technologies Of Individualism.

Artificial Intelligence can be made to sound ominous. It’s better to think of A.I. as Augmentation for Individuals. Each of us will be granted connection and access to unlimited knowledge, classified by our field of expertise and our areas of need. The interface will be voice-based natural language – ask a question and receive an answer. One term for our own personal A.I. is cognitive assistant, our own little software robot. These robots have already emerged as Siri, Alexa, Bixby and OK Google. They’ll evolve and grow through machine learning (which means figuring out what is most useful to its human partner).

The augmented individual will enjoy greater capability and self-efficacy.

Global exchange platforms enable individuals to connect to anyone and any organization in the world, to sell and to buy, to trade knowledge, to assemble project teams and to enter into any kind of collaboration. The individual can be an enterprise of one, with global scale, a customized supply chain and personnel team, and all the business tools and metrics that corporate managers use. The individual will have more control and flexibility than any corporation ever dreamed of.

Cloud computing supports this scale by making access to effectively unlimited computing power available via the internet in the precise units the individual enterprise requires. The apps and services embedded in the cloud alongside the server capacity can activate any business model instantaneously and reliably.

Blockchain technology cuts out the intermediaries who make commerce slow and expensive. There will be banking without bankers, contracting without lawyers, settlement of asset exchanges without brokers, visual design without designers, and 3D printing without factories. All of these decentralized and distributed processes will run at high speed, low cost and complete efficiency. All of the cost of intermediaries – both financial costs and efficiency costs – can be eliminated, making the individual as effective as the corporation, and releasing untold resources back into the productive economy.

These are technologies of individualization. They all place more power in the hands of the individual for self-reliance and self-management. Here are some of the implications.

An open market for capabilities.

An individual entrepreneur, managing his or her own work life and revenue streams, can refine the offering of their unique skills by finding just the right client, project and assignment on platforms like Upwork. On the other side of the platform, hirers can engage better talent for their jobs. Everyone can be an entrepreneur. The culture of dependency on employers for jobs will change to an open system of matching the best individual talent to the right project.

Networked advancement.

In the emerging new world of Individualism, the formula for advancement is knowledge + networking. We each will be responsible for continuously adding to our unique store of individual knowledge, and we will need to network to the right collaborators, partners and project owners to apply our knowledge through sharing and working in teams. LinkedIn is building the economic graph that aims to assemble smart profiles of every individual, every project and every hiring company, and to enable its automatic matching to place the right individual in the right job on the right team throughout the global economy.

Run your self-scaling business on a mobile device.

Every day, many more businesses are being created to run entirely on mobile platforms. Alibaba provides all the infrastructure for these kinds of businesses, from web support to cloud storage, to supply chain assembly, to payments services and inventory management. Alibaba is not just a company, it’s an economy – an economy of independent entrepreneurs setting up their digital storefronts and trading all over the world on mobile devices.

Self-learning rather than education.

Our institutions tell us that education is a passage for the first quarter of our lives, and that we must attend school, learn, pass exams and then, armed with the institution’s certificate of intellectual fitness, pass into the world of work never to return to the halls of learning. Technology is changing that view. Learning is something we will administer for ourselves. We’ll learn continuously throughout our lives. We’ll learn on-demand, creating knowledge when and where we need it. Applications like Udemy will give us our learning consumption choices, and platforms like Google For Education will provide support for teachers and content originators.

Self-financing.

Traditionally, the access to financing for entrepreneurs has been a bottleneck. Institutions control the financing supply, and dictate the conditions and the price. Today, crowdfunding sites like Ourcrowd can match willing individual investors directly to eager innovators with bright ideas in an efficient market for investment funding. No need for intermediaries.

Peer-to-peer contracting and settlement – law without lawyers.

The evolution of smart contracts on the Ethereum blockchain will disintermediate the legal structures and make law a distributed system. When law is software, there will be less call for judges and legislation, and less need for the pretentious buildings that house them and the outdated robes they wear.

Permissionless innovation.

In his book, Adam Thierer defines permissionless innovation as entrepreneurs being free not to seek the blessing of public officials when experimenting with new technologies and business models, or before developing and deploying new devices and services. This freedom will become the standard for interconnected entrepreneurs and our political institutions and protected special interests will not be able to stand in the way of innovation.

Crypto-currency competing with monopoly fiat currency.

In the 1970’s, F.A. Hayek published a pamphlet under the title of Denationalization Of Money. He could not have anticipated blockchain, bitcoin, ether or litecoin. However, he did anticipate competing private currencies, and a distributed exchange system to let the market decide on which private issuer of currency would earn the market’s trust. We have known for a long time that it is the government monopoly on money, and it’s profligate creation of more money, as well as the illegal fractional reserve banking of its licensed subsidiaries that create all the boom and bust problems of state capitalism. It is now possible that Hayek’s vision for competing private currencies will emerge into the forefront of a new private entrepreneurial economic system.

As more and more of us follow the signposts on the Road To Individualism, we will find that the old institutions crumble and we will open up the possibility for new systems and better lives.

Photo by Diego Jimenez on Unsplash

The Road to Serfdom Shows Us That What Is past Is Prologue

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When I decided to read and live-blog The Road to Serfdom by F.A. Hayek, I will admit I did not fully understand what I had signed up to do. Reading excerpts from the book is one thing, but endeavoring to read the book in its entirety and also write my accompanying thoughts was an entirely different feat altogether.

Even though I knew ahead of time that I would not always agree with Hayek, I was well aware of his incomparable intellect. And I knew I needed to do my due diligence to pay his prize-winning work the respect it deserved. As it turns out, doing so took a lot of effort not only through reading Hayek’s work, but through understanding the historical setting in which it was written.

But understanding the economic and political factors of the two World Wars alone wasn’t enough because Hayek doesn’t limit his economic perspective to only that of the recent events of his own day. Instead, he briefly but concisely explains the very foundations of liberalism and how the modern political trajectory was threatening to undo all the progress of the 19th-century.

Hayek takes the reader on a historical journey that traces the roots of free market economics along with the rise of totalitarian governments. Both topics of course not being mutually exclusive to Hayek’s primary cause of writing the book.

While the bulk of Hayek’s work is contained within 15 chapters, in the final sixteenth chapter, Hayek concludes his work and spells out his final message to the reader: Do not let history repeat itself.

What Is Past Is Prologue

Hayek is quick to point out that, “The purpose of this book has not been to sketch a detailed program of a desirable future order of society.” And while he may not have painted a picture of what his ideal society may look like, he does tell the reader what types of government coercion we should avoid at all costs.

Above all things, this book presents an opportunity for the reader to have a positive impact on history by first learning from it. Hayek has taken a justifiably ominous tone while explaining how totalitarians rise to power and then devastate the economies and people they oppress.

Yet, as hopeless and frustrated as Hayek may seem at times, the book is at its core a beacon of hope that, if used correctly, illuminate the future path toward freedom.

As Hayek says:

A great deal will depend on how we use the opportunity we shall then have. But, whatever we do, it can only be the beginning of a new, long, and arduous process in which we all hope we shall gradually create a world very different from that which we knew during the last quarter of a century.

Continuing, Hayek says:

The important thing now is that we shall come to agree on certain principles and free ourselves from some of the errors which have governed us in the recent past.

Hayek’s ultimate hope is that each reader of his book will understand the important role they play as individuals. As Hayek has demonstrated in his book, the individual is the greatest threat to the totalitarians and the collectivists of the world. The individual has been a thorn in the state’s side that has prevented it from total abuse of power since the beginning of time.

But it is up to each reader of the book to heed Hayek’s warnings and prevent the past from occurring once again.

As Hayek writes:

If we are to build a better world, we must have the courage to make a new start—even if that means some reculer pour mieux sauter [strategic withdrawals]. It is not those who believe in inevitable tendencies who show this courage, not those who preach a “New Order” which is no more than a projection of the tendencies of the last forty years, and who can think of nothing better than to imitate Hitler.

So as I finish this book, I would implore others to read it and take a lesson from F.A. Hayek. If he believed the country was in grave economic danger in 1944, the stakes are even higher in our present day.

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