Leading the Revival of Individualism & Self Reliance

The Unstoppable Changes In Today’s Organizations And Institutions.

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Today, we think of organizations, both in the commercial and the non-profit fields, as legal entities with operations, a budget, a structure (e.g. of business units and their supply chains), and a cadre of mostly permanent employees, remunerated via wages and salaries.

Society is questioning today’s forms of organization.

There are some questions that begin to arise about the continued functionality of this form of organization. People worry about an excessive focus on the short-term, and about unseemly bonuses for C-Suite managers tied to profit targets, and about reported violations of ethics and norms. Hierarchies feel oppressive and unresponsive to new ideas. Social impact, quality of life impact and community development impact become part of a skeptical analysis.

Today’s organizational forms will disappear.

It’s entirely reasonable to think about this organizational form declining in the future, perhaps disappearing.

Organizational evolution is tending towards firms as a cluster of projects, each project having a specific end in mind. The project will assemble labor and capital as needed, and the specific types of labor and capital can be flexibly added and subtracted at each project stage as needed. Many contractors and vendors are rented rather than owned, and consumed by the unit – an hour of computing power, a crane leased for a day or a week, a loan to finance inventory for as long as it takes to get from China to New York.

Some of the contract labor might be engaged in the same way – entering the project with specific skills to address specific tasks, and exiting when the task is done, to go on to another project at another company. The walls of these firms are permeable, with labor and capital moving in and out as needed. Teams and resource clusters are ad hoc, flexible and ever changing. These companies and many others are already redefining the work structures that will replace the old hierarchical models.

Our institutions will change, too.

With all of this organizational change going on, we can expect to find our institutions changing, too. The term “institution” can be a little bit loose in modern parlance. Let’s take it to mean the norms of behavior that people in a society or nation follow. The organizations that become institutionalized follow from the norms of behavior.

The emergent norm of “No taxation without representation” gave rise to the U.S. Constitution, Congress, the Executive branch of government and the administrative state, and the Judiciary. Norms of behavior such as “Get a high school diploma and a college degree to advance in the workforce” gave rise to our current educational institutions and an institutionalized pathway for most of us. “A career is upward progress on the rungs of the corporate / professional hierarchical ladder” is a norm giving rise to institutionalized jobs, training and assessment.

The new norm may be something like “Make yourself as uniquely useful as you can as a collaborator with other knowledgeable actors” and may result in institutionalized education, institutionalized professions, and institutionalized jobs withering away to be replaced with totally new forms.

The individual drives all this change.

In all these future scenarios, uncertain as they are, there is one consistency. The individual is at the center. It’s a heightened responsibility for your own future; it’s a call for active management of your life path while happily bearing the future uncertainty. It’s the entrepreneurial attitude.

You’ll think of it as knowledge gathering and curation, and you are in charge. You will actively navigate your own career, making frequent changes of emphasis and taking new pathways from time to time as circumstances change around you. You might be an employee for part of your career, a freelance contributor to projects and teams for another part, and an entrepreneur for a third part. You will be at the center of your own health care: managing your own wellness, taking charge of all your data, managing your behavior in response to the data and the diagnostics available to you, and choosing your own team of doctors and specialists and healthcare service providers (presuming that healthcare can be made universally accessible and affordable with choices through the healthcare system). You will be at the center of your own media cloud, acting as your own editor, taking responsibility to be sure the news information you receive is useful, accurate, and aligned with your interests.

Opportunity and Responsibility.

The new individualism comes with great opportunity and some responsibility. It requires us to take charge, assess ourselves and our contribution objectively, augment ourselves with the right technology and assemble the right tools, always embracing continuous change and lifelong learning.

It’s unstoppable.

The institutional resistance may be high, but the progress of individualism promises to be unstoppable.

Spontaneous Order Can Be Found All around Us

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The world we live in is full of unpredictable, individual actors. This alone has been enough to justify state intervention in almost every aspect of our lives since the very first governments were formed among men. Yet, even though the world is full of chaotic moving parts, there is an organic order that occurs when individuals of all species are left to their own devices.

The belief in this natural alignment is what Hayek referred to as “spontaneous order” and examples can be found all around us, both in human society and in nature.

Music Festivals

Throughout our lives, we have been told that there must be some sort of authority present in order to keep humankind in line and lead us to desired ends. This, it is believed, is the only way in which a society of individuals can be made to conform and coexist with each other.

But this is not so, as anyone who has ever attended a music festival can attest.

In my adult life, attending music festivals has not been a main priority. But set on trying new things, I accepted an invitation to electronic dance music (EDM) festival.

I will admit that upon walking through the gates of the Atlanta Motor Speedway, I was intimidated by the hordes of people all marching to the beat of their own drummer. As an avid individualist, I thought this would be my own slice of heaven, but I was mostly just terrified by the eccentricities of other festival goers. How would we all be able to dance next to each other without anyone fighting or getting hurt?

As I began walking toward the main stage where a crowd of thousands had gathered to watch their favorite DJ, I was taken aback by what I saw before my eyes. From a distance, it appeared that the entire crowd was moving as one. But this couldn’t be possible. I had walked around with these people all day and there was no way each unique spirit had made a coordinated effort to dance in unison.

But as I made my way through the crowd and to the very center of the action, I had a different perspective. There was no unity at all, in fact, each dancer still maintained their individuality perfectly. Yet, everyone was dancing to the same beat.

In the world of EDM, there are a few moments within in each song where the beat begins to escalate. Before this happens, each individual in the crowd is his own. He, or she, dances and sways in whatever capacity they feel so inclined. And believe me, this can manifest itself in all sorts of ways.

But as the music builds and intensifies, something quite extraordinary happens to the crowd, they work as one without sacrificing their individualism and without being led by any being.

And while I didn’t have the words to describe what I was witnessing at the time, I would later watch a lecture that perfectly summed up my music festival encounter.

Synchronized Individuals

Mathematician Steven Strogatz presented a TED Talk some years ago on the topic he refers to as “sync.” Explaining how all organisms are capable of “syncing” together and working as one without some sort of puppet master pulling the strings, Strogatz begins his talk by asking the audience to clap.

With any precognition, the audience manages to clap as one. But even more fascinating, the audience begins to pick up speed in unison as well. Again, this group had never been gathered together before this presentation. There was no plan in place and aside from the Strogatz inviting them to applaud, there was no leader. Yet somehow, the crowd managed to clap as one.

Explaining this phenomenon Strogatz says:

This is a room full of intelligent people, highly sensitive, some trained musicians out there. Is that what enabled you to synchronize? So to put the question a little more seriously, let’s ask ourselves what are the minimum requirements for what you just did, for spontaneous synchronization. Do you need, for instance, to be as smart as you are? Do you even need a brain at all just to synchronize? Do you need to be alive? I mean, that’s a spooky thought, right? Inanimate objects that might spontaneously synchronize themselves. It’s real. In fact, I’ll try to explain today that sync is maybe one of, if not one of the most, perhaps the most pervasive drive in all of nature. It extends from the subatomic scale to the farthest reaches of the cosmos. It’s a deep tendency toward order in nature that opposes what we’ve all been taught about entropy. I mean, I’m not saying the law of entropy is wrong — it’s not. But there is a countervailing force in the universe — the tendency towards spontaneous order.

Anyone who has ever watched a nature documentary has seen this occurring within the animal kingdom. Flocks of birds flying in unison and even swerving as one in order to escape a predator. Human beings are no different.

Commenting on spontaneous order as it applies to the animal kingdom Strogatz says:

There are just three simple rules. First, all the individuals are only aware of their nearest neighbors. Second, all the individuals have a tendency to line up. And third, they’re all attracted to each other, but they try to keep a small distance apart. And when you build those three rules in, automatically you start to see swarms that look very much like fish schools or bird flocks. Now, fish like to stay close together, about a body length apart. Birds try to stay about three or four body lengths apart. But except for that difference, the rules are the same for both.

What was particularly fascinating about these rules is that they are the same that I observed at the music festival while attendees were dancing. Commenting on the fourth rule Strogatz says, “There’s a fourth rule: when a predator’s coming, get out of the way.”

At music festivals, where alcohol is sold in abundance, predators come in the form of rowdy dancers who may not be completely aware of their surroundings. But again, without any preplanning, the crowd is able to swerve and sway and hold space in order to protect themselves. And while it appears to be done as a group it is not. As Strogatz says, “Even though it looks like they’re thinking as a group, they’re not.”

Similar observations can be made on a crowded Manhattan street. Anyone looking down from a skyscraper window would be amazed that so many people are capable of walking, each at their own pace and to their own respective destination, without colliding. Yet, every single day this happens and individuals are able to bob and weave and navigate their way around each other without placing a great deal of thought on the matter.

Central planners will often use the unpredictability of individuals as grounds for legislating almost all aspects of our lives. But when individuals are left to their own devices, not only does the world continuing spinning as it always has, people actually benefit from this great freedom.

Halfway Point: Suggested Readings to Accompany the Road to Serfdom

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Reading The Road to Serfdom while simultaneously liveblogging my thoughts has been far more intellectually grueling than expected. However, taxing as it has been, I am pleased to say that I have finally made it to the halfway point of my Hayekian liveblogging journey.

Looking back on the first half of the book, there is a lot of reading I wish I had done beforehand. And as many have expressed that they have been reading the book along me, I thought it might be useful to provide some helpful reading suggestions. 

Individualism: True and False

Understanding the role individualism plays in the economy is one of the most important concepts to grasp before diving into The Road to Serfdom. But for those who may not want to dive headfirst into Hayek’s essay Individualism: True and False before beginning this classic, here are ten essential takeaways.

The Law

Before digging into the heart of free market economics with The Road to Serfdom, it is important to understand the foundation of the classical liberal tradition. The reoccurring themes of natural law, government restraint, and ominous warnings of socialism found throughout Hayek’s work can all be traced back to Bastiat’s The Law. Though as you will see later, Bastiat was hardly the first to write of such things.

This timeless body of work is still so extraordinary today largely because it managed to articulate in 75 pages, what took many philosophers thousands of pages to explain. The Law is essential to understanding these basic principles that are the basis for much of Hayek’s beliefs.

The Second Treatise on Government

Without John Locke’s Second Treatise on Government, The Law may well have never existed. What Bastiat’s sums up, Locke traces in absolute detail. From natural rights to contract theory, Locke took from philosophers throughout history and laid out what he believed to be the most civilized society capable in a world of individual choice.

His work continues to be the staple for any belief that government should be restrained for the sake of individual liberty.

Know Your History 

It is important to understand the political and economic climate in which Hayek conceived The Road to Serfdom.

The very real threat of state totalitarianism was fresh in the minds of every single person around the globe. These warnings are not hyperbolic by any means. The individuals alive in the world during its time were tired of war and were desperate to prevent this same global devastation from ever occurring again.

Perhaps the greatest and most easily digestible books on this matter that I could suggest come from a series called, Uncle Eric written by Richard Maybury. The series, while aimed at young adults, offers the most compelling and well-summed up histories on the topics of both WWI and WII. They will give you a very clear picture of the time this book was written and the economic factors involved.

The Curse of Machinery 

There is a common thread you will see throughout Hayek’s work and my own corresponding liveblogs: A very real fear of technology and its impacts on economic policy. To understand the commonality of this problem, Henry Hazlitt’s chapter “The Curse of the Machinery” in his classic Economics in One Lesson is an essential read. 

Hazlitt uses history to explain the myth that this technological progress is bad for workers. This is most helpful to understanding our current climate where fear of innovation is used to justify policies like the universal basic income.

 

Will California Save Democracy?

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There is a robust stream of thinking that Democracy has run its useful course and has failed or is on the way to failure.  And California is one of the states where corruption in government, one of the signs of decay in a democracy, is highly developed. According to FiveThirtyEight.com, in 2014, California ranked #2 in number of corruption convictions and #9 in a survey of political reporters to identify the most corrupt of the 50 states. The combination of those two metrics probably puts California at the top of the political corruption league table.

Happily, it is often the case in our dynamic culture that the most pressing problem generates the most energetic search for innovative answers. California, besides being the epicenter of political corruption, is also a cauldron of new ideas. Unsurprisingly, therefore, we find a cluster of exploratory thinking about new and better forms of democracy.

Here are four ways of solving the problem.

The digitization approach.

Out of Y-Combinator comes a new conceptualization called liquid democracy (it would not be acceptable in Silicon Valley if it did not have a cool-sounding and paradigm shifting name). It’s a little bit hard to describe exactly what liquid democracy is, because Silicon Valley speaks in generalizations (“devise a new model to make the current one redundant”). However, there are some interesting elements to the digital exploration of democracy. One is individual sovereignty, implying a return to the Madisonian idea of “We The People” being sovereign, which was never realized. Equality is cryptographically protected so that everyone’s vote is equal and guaranteed. And voting can take place on mobile devices, which should increase participation. Every issue could be voted on, implying that so-called representative politicians will not be able to usurp the role of the people by pursuing their self-interested political careers while pretending to represent their constituents.

Digital technologies have a tendency to develop spontaneously along pathways of their own, especially when they disintermediate authority. The potential is promising.

The restructuring approach.

A non-digital yet no less disruptive idea is to drastically restructure the traditional political institutions. California has 40 elected State Senators and 80 elected Assembly (lower house) members in the legislature. This number hasn’t changed since the first California Constitution, yet the state population has increased from 100,000 to almost 40 million. The resulting representation ratios are, by a massive degree, the worst in the 50 states. The huge electoral districts demand huge advertising and campaigning budgets, opening up the process to the corruption of special interest money that pays for elections in return for favorable legislation from the winners.

The Neighborhood Legislature concept aims to fix this problem by making electoral districts much smaller – 100 times smaller, in fact. They would be neighborhood-sized, hence the name (although it certainly seems that a Silicon Valley naming squad could do a better job).

This is an interesting idea, in that the political districts would now be focused on very local matters. Parties might not matter any more, or, alternatively, there might be hundreds of parties, like, let’s say, the Lower Chinatown Residents Party. Politics would focus on water supply and the price of electricity and the quality of neighborhood schools and the role of the police, rather than on big money issues like climate change.

Eventually, it seems possible that these locally focused political districts might start the drift away from centralization to effective secession or local independence.  Which leads us right to the next idea in Californian Democracy.

The secession approach.

Tim Draper is a venture capitalist who takes a direct path towards new solutions. He has decided that California is ungovernable. Therefore let’s get rid of California. He proposed to break it into 6 states.  California has a direct democracy option, where so-called “initiatives” like Draper’s can collect public signatures to place them on the statewide ballot during major elections. The so-called Six Californias initiative failed to collect the requisite number of signatures to qualify. So Draper has returned with another initiative, this time to split the state into 3 states.

Many supporters of reform believe that smaller political units are more democratic than larger ones. Centralization magnifies the unrestrained power of rule-making bodies, and decentralization tends to make legislatures more responsive to voters. Mr. Draper’s initiative is a step in this direction, and mirrors a tendency towards secession that we have seen in Britain, Catalonia and elsewhere.

The lawsuit approach.

If all else fails, sue. We are a litigious people, so let’s harness our strength. Citizens For Fair Representation is suing the state on behalf of 21 Northern California rural counties, on the grounds that they are inadequately represented in a so-called representative democracy. 11 of the counties share 1 state senator, whereas Los Angeles County has 11 state senators. The result is one-sided legislation that favors the cities and discriminates against the rural counties. The lawsuit aims at a rebalancing so that individual counties have a fairer access to representation at the state level.

The cradle of the next stage of democracy.

These are just four ideas out of many more that have been hatched in California (seasteading is another one, for example). We can take some encouragement in the fact that, although our incompetent, corrupt, generally stupid and always partisan politicians stand resolutely in the way of progress, there are plenty of idea generators who will attempt to find a path to the system that replaces our failed democracy.

Hurricane Season and the Broken Window Fallacy

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In the wake of natural disasters or other acts of God, mainstream economists love to perpetuate the myth that unnecessary destruction is somehow good for the national economy.

As hurricane season hit the United States earlier this fall, the same typical accusations were made. Economists and other pundits were quick to suggest that while devastating, hurricanes Harvey and Irma were somehow good for the economy.

In late August and early September, the usual headlines sprung up claiming that “Devastating Storm May Actually Boost US GDP.” But worse than this false rhetoric is the fact that many do fall prey to this line of thinking and begin to subscribe to it. 

And while classical liberals and Austrians will be the first to tell you that “creative destruction” is an integral part of the market process, this is definitely not what they had in mind.

Luckily, 19th-century French economist Frédéric Bastiat predicted this situation nearly two centuries ago when he wrote his great parable, the broken window fallacy.

What Is Seen

When economists falsely predict economic stimulation after a disaster leaves wreckage in its wake, they are only seeing one very small portion of the problem. As Bastiat points out in his What Is Seen and What is Not Seen:

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”

What is obviously seen after a disaster, is an economic boom arising in specific industries during the aftermath of a horrible storm. Since storms create massive wreckage in need of repair, there will almost certainly be an influx in the economy when it comes to corresponding industries. And, to play to Bastiat’s parable, one such example is the glass industry.

Since many windows will have been broken in both residential neighborhoods and metropolitan areas, it is certain that these disasters will benefit the glass industry. And since there is a boost in that one particular area, economists falsely believe that this boom will trickle down and positively impact the entire economy as a whole. But this is simply not the case.

You cannot observe a net positive in one area without also taking note of how this impacts other sectors as well.

As Bastiat writes:

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.”

Yet, many scoff at this warning and believe that the obvious consequences are all that matter.

Describing a similar scenario Bastiat writes:

“Have you ever been witness to the fury of that solid citizen, James Goodfellow, when his incorrigible son has happened to break a pane of glass? If you have been present at this spectacle, certainly you must also have observed that the onlookers, even if there are as many as thirty of them, seem with one accord to offer the unfortunate owner the selfsame consolation: “It’s an ill wind that blows nobody some good. Such accidents keep industry going. Everybody has to make a living. What would become of the glaziers if no one ever broke a window?”

But what of these unseen consequences? Well, many of these mainstream economists neglect to see beyond the obvious.

What Is Not Seen

 Continuing to explain why so many economists comprehend this situation incorrectly, Bastiat writes:

“Suppose that it will cost six francs to repair the damage. If you mean that the accident gives six francs’ worth of encouragement to the aforesaid industry, I agree. I do not contest it in any way; your reasoning is correct. The glazier will come, do his job, receive six francs, congratulate himself, and bless in his heart the careless child. That is what is seen.”

But in the instance of storms, the individual families or businesses that now have to buy new panes of glass are spending valuable resources to rebuild what existed only a few days ago. They are essentially double spending. Had a storm or disaster not hit, that money could have been spent elsewhere. So these mainstream economists fail to account for consequences that were initially unseen.

Bastiat writes:

“But if, by way of deduction, you conclude, as happens only too often, that it is good to break windows, that it helps to circulate money, that it results in encouraging industry in general, I am obliged to cry out: That will never do! Your theory stops at what is seen. It does not take account of what is not seen.”

If that money was, instead used to pay for something else in a different sector, economic stimulation still would have occurred. However, it would not have come at the expense of something that was already paid for, like the initial window prior to the storm. Bastiat comments on this as well, saying:

“It is not seen that, since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library. In brief, he would have put his six francs to some use or other for which he will not now have them.”

Why Does this Myth Survive?

It is far easier to explain to people what can easily be seen in front of their eyes. The money spent on reconstruction immediately after a storm, for example, is very tangible. Many are experiencing these initial “booms” in corresponding sectors.

But trying to Explain what is unseen is much more of a feat. But without the consideration of both the seen and the unseen the entire economic picture is not complete.

“And if we were to take into consideration what is not seen, because it is a negative factor, as well as what is seen, because it is a positive factor, we should understand that there is no benefit to industry in general or to national employment as a whole, whether windows are broken or not broken.”

He continues:

“Two very different masters teach him this lesson: experience and foresight. Experience teaches efficaciously but brutally. It instructs us in all the effects of an act by making us feel them, and we cannot fail to learn eventually, from having been burned ourselves, that fire burns. I should prefer, in so far as possible, to replace this rude teacher with one more gentle: foresight…”

Both these two “masters” as Bastiat calls them, are vital to understanding the economy. You must account for both. Otherwise, this fallacy continues to be spread as if it is economic doctrine, just as it does each time hurricane season rolls around.

Bastiat sums up his argument by writing:

“From which, by generalizing, we arrive at this unexpected conclusion: “Society loses the value of objects unnecessarily destroyed,” and at this aphorism, which will make the hair of the protectionists stand on end: “To break, to destroy, to dissipate is not to encourage national employment,” or more briefly: ‘Destruction is not profitable.”

Regulations Harms and Voluntary Exchange Repairs

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Like all entrepreneurs, Beto Matias saw an opportunity to support his family while simultaneously creating value for his community.

Finding a prime spot right outside UC Berkeley’s football stadium, Matias began selling his craft hot dogs to willing consumers. No one complained about the quality of Matias’ hot dogs, nor did anyone have any objections to his presence outside of the stadium. But that didn’t stop the state from intervening.

Street Theft

Officer Sean Aranas approached Matias as he was going about his business and asked to see identification. Matias, in complete compliance with the officer’s demands, began sifting through his wallet in search of his identification. But this is where the story took a devastating turn.

Before Matias was given the opportunity to hand Aranas his ID, the wallet was ripped from his hands. And instead of merely examining his identification, Officer Aranas proceeded to confiscate the $60 Matias had in his wallet at the time. It was not until after this strong-arm mugging that the officer finally explained to Matias that he was being cited for failing to obtain a business permit.

Luckily, one of Matias’ customers filmed the entire encounter on his smartphone and the video has since gone viral.  

Martin Flores knew something wasn’t right when he saw the officer reach for Matias’ wallet. Thankfully, as so many of us are trained to do in the digital age, he pulled out his smartphone and immediately began documenting the encounter. And he did so just in the nick of time.

In Flores’ footage, viewers see the wallet physically taken from Matias as his hard-earned money is stolen right before his eyes. In the background, Flores can be heard saying, “That’s not right.”

Flores even took his role in the matter one step further and while filming, inquires why the officer deemed it necessary to target this innocent vendor over the loud display of public intoxication that was occurring directly across the street. The only response Aranas supplied Flores with was, “Yeah, well he doesn’t have a permit. He doesn’t have a permit.”

Penalized for Hard Work

To be sure, Matias never denied his lack of a business permit. But he was shocked and taken aback by Aranas’ actions. To be handed an arbitrary citation is one thing, but to have your cash simply snatched by an officer of the law is especially egregious.

Matias later told Telemundo 48:

I had already shown him my ID. They saw that I was not doing anything wrong, neither stealing nor anything, I was just working to support my family.

Unfortunately, this kind of thing happens every day.

The most innocuous activities now require state permission: from selling hot dogs to playing tennis. No one can economically survive without a job. And yet, for many, our government makes it impossible to do so without first running an obstacle course of red tape. For a country founded on freedom of opportunity, something has gone horribly wrong.

In the American workforce, over 30 percent of jobs require an occupational license before an individual can legally earn a living. To make matters worse, many of these permits and licenses target those in the most vulnerable socioeconomic brackets. Not only are these licenses often expensive and require a great deal of paperwork, they are completely arbitrary.

As often as “public health and safety” is cited as justification, licensing does very little to ensure this. It doesn’t matter how well-intentioned the state may be, a permit cannot prevent food poisoning. Occupational licensing has, however, been extremely successful in limiting the number of individuals entering a given work sector. It has also helped protect established industries from unwanted competition, for example, shutting down a “rogue” hot dog vendor operating without a license.

But of the many things licensing does, protecting the consumer is most certainly, not among them.

The market has its own means of protecting consumers through feedback. Even before platforms like Yelp and Google allowed for a free flow of review culture, word of mouth has always served to help keep business owners accountable.

Additionally, consumer loyalty says a lot about a product or service. This is not the first time Matias has sold hot dogs from his cart, and his consumers keep coming back. And “shockingly” enough, no one has died or even reported any instances of foodborne illnesses.

The quality of a service speaks for itself, and this is something that cannot be obtained through a government license.

Outsourcing Justice

Stories like Matias’ occur every day in this country. Unfortunately, many victims of state abuse are never vindicated. But our digital age is changing all this.

Not only is video footage like Flores’ helping to keep law enforcement accountable for their actions, but crowdsourcing is helping to right the wrong done to Matias, something the state is unlikely to do anytime soon — or ever.

After the footage went viral, social media activists started a GoFundMe page to mitigate the financial losses felt by Matias and his family. The original fundraising goal was set at $10,000. But since the campaign’s launch on Monday morning and the continuous sharing of the footage of the encounter with the officer, over $80,000 has been raised to help cover Matias’ pay for legal fees and recoup his losses. And the donations keep pouring in.  

As for the officer involved, an online petition calling for his immediate termination has already garnered 20,000 signatures. However, the university seems apathetic to the entire incident, claiming that the officer was conducting business as usual.

A representative did make a statement saying:

We are aware of the incident. The officer was tasked with enforcing violations related to vending without a permit on campus. UCPD is looking into the matter.

In other words, Officer Aranas was “just doing his job.” And unfortunately, the promise of the UCPD “looking into the matter,” does little to calm the fears of many Americans who are tired of having to read about these stories on a weekly basis. Even worse, are the many Americans forced to become part of this narrative as a result of bureaucratic licensing.

But fortunately, social media has acted as the arbiter of justice. And while Officer Aranas’ future in law enforcement is probably just as secure as it was before the incident occurred, at least voluntary crowdsourcing has provided the means to keep the Matias family afloat and perhaps, help him expand his venture and add even more value to his community.

Individuals Should Be in Control of Their Own Economic Fates

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Typically, Hayek’s chapter titles leave nothing to the imagination. But as I encountered the “Who, Whom” title of chapter eight in The Road to Serfdom, I had to do a doubletake.

Having the modern luxury of Google at my fingertips, I soon learned that Hayek’s title was actually a Bolshevist slogan made popular by Lenin in the 1920s. It was later shortened by Leon Trotsky who used it in his article titled Towards Capitalism or Towards Socialism?

“Who, Whom” refers to the overall question of who will overtake whom. Or, put differently, which ideology will survive: socialism or capitalism.

But what was most unfortunate about this slogan was the corresponding propaganda campaign that was used by these socialists to entice followers to join their ranks; it all became about class struggle and equality. But what socialists view as equality and what equality really means in the marketplace are two entirely different beliefs.

There Is No Equality

Those who believe in the power of markets believe that true equality comes from each individual’s ability to equally pursue his or her dreams without fear of intervention from a governing authority.

But the socialists have distorted this term into something that can never exist, no matter how much they may wish it. The socialists would like to see everyone made equal through some planned economy directed to a specific end. That end being equal pay and status.

Unfortunately, no two people are born the same. Each person has unique skills and experiences that set him apart from all others. The only way in which two people can be made to be the same is through a complete government takeover of every aspect of our lives. Or, in other words, nothing short of ultimate force would bring about this goal. Which is exactly what Hayek warns about in chapter eight of The Road to Serfdom.

What socialists forget, or perhaps never understood to begin with, is that the free market is the only vessel from which equal access to our ambitions can be achieved without trampling on the ambitions or rights of others.

Under free market capitalism, a man is not prescribed his destiny at birth. The child born in the streets and swaddled in rags can grow up to be an entrepreneur, creating value, jobs, and driving the economy. So long as he has the ambition and will to do so, of course.

But this ability to change one’s stars belittles this notion of class warfare because in true capitalism one can move from one station to the next, making socialism completely irrelevant to the equation.

As Hayek says:

Under competition the probability that a man who starts poor will reach great wealth is much smaller than is true of the man who has inherited property, it is not only possible for the former, but the competitive system is the only one where it depends solely on him and not on the favors of the mighty, and where nobody can prevent a man from attempting to achieve this result.

Resentment

But through socialist doctrine, it was instilled in many that each of us deserves equal success just by simply existing. And even worse still was this underlying resentment that led many prominent socialists to believe that those born in lower classes are somehow more deserving of this success than someone born into “privilege.”

Hayek attributes much of this line of thinking to compulsory education.

Textbooks assigned during the course of government-forced education tell of greed and oppression at the hand of wealthy. And of course, the heroes are the working class underdogs who have managed, in spite of capitalism, to form labor unions and pass regulations all intended to make us all more equal.

As Hayek writes:

The resentment of the lower middle class, from which fascism and National Socialism recruited so large a proportion of their supporters, was intensified by the fact that their education and training had in many instances made them aspire to directing positions and that they regarded themselves as entitled to be members of the directing class.

Instead of seeking to change their situations through their own efforts, an entire generation now believed it was owed to them.

While the younger generation, out of that contempt for profit-making fostered by socialist teaching, spurned independent positions which involved risk and flocked in ever-increasing numbers into salaried positions which promised security, they demanded a place yielding them the income and power to which in their opinion their training entitled them.

But what is neglected here is a clear definition of who will be in charge of bringing about this great utopia where all things are equal. Such a system would have to be controlled by some all-powerful entity.

Arbiter of Fairness

For forced equality to occur, some entity has to be responsible for directing resources to make it so. And as history has shown us, this is always a role given to the state, by the state. As Hayek says, “In so far as government does anything at all, its action will always have some effect on “who gets what, when, and how.”

But somehow, socialists have convinced themselves that the state is a neutral source of redistribution, immune to succumbing to its own ends over the “common good” of the people. But this gives the state complete control over just about everything imaginable, as Hayek also warns:

What these people forget is that, in transferring all property in the means of production to the state, they put the state in a position whereby its action must in effect decide all other incomes.

He further adds, “That a government which undertakes to direct economic activity will have to use its power to realize somebody’s ideal of distributive justice is certain.”

Fight for Fifteen

We are seeing this play out today in our modern world with the “fight for fifteen” minimum wage movement. Desperate to achieve “fair” pay for all, many entry-level workers have demanded that the government take complete control of setting wage rates. But in reality, all this does is take the power to control one’s destiny out of the hands of individuals and into the hands of government.

Instead of working to earn this success, it is demanded that the government simply give it to us. Entry-level positions that were once seen as stepping stones to greater career ambitions are now seen as the ends themselves.

The young man flipping burgers desires to make as much as his supervisor because he feels it is owed to him. But that supervisor was once flipping burgers himself. It was his own ambition for something more that led him to want a higher status in life. And that drive resulted in him picking up extra shifts and proving himself until he reached an elevated position. This ability in itself is true freedom.

As Hayek says:

It is only because we have forgotten what unfreedom means that we often overlook the patent fact that in every real sense a badly paid unskilled worker in this country has more freedom to shape his life than many a small entrepreneur in Germany [1944] or a much better paid engineer or manager in Russia.

No human being can ever eradicate the differences that exist among individuals. And no one should want to. These differences have given us the robust marketplace we have today. Our different abilities and skills are proof that we live in a society where individuals determine their destiny and not some arbitrary authority.

As Hayek says:

There will always exist inequalities which will appear unjust to those who suffer from them, disappointments which will appear unmerited, and strokes of misfortune which those hit have not deserved. But when these things occur in a society which is consciously directed, the way in which people will react will be very different from what it is when they are nobody’s conscious choice.

So, the question of “who, whom” is rather important because what this slogan really makes one reflect on is who is control of whom. For the socialists, they believe the government should control one’s status in life. For the capitalist, it is the individual and only the individual who is in charge of determining his own destiny.

The Entrepreneurial Individual’s Checklist

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The entrepreneurial individual is the one best equipped to navigate a pathway through the changing world of work, revenue streams and economic opportunities. Follow these guideposts.

Check your dependency

Are you relying on an employer or an industry for your career? Are you dependent on the hierarchy for the chance to climb up some kind of ladder? Do you feel dependent on any other person, company or institution? Are your opinions your own? Are you your own editor amidst the flood of propaganda? Take a personal audit to make sure none of these dependencies apply. Any that you find, discard them. Authenticity starts with self-efficacy

Who Am I?

Ask yourself the question, “Who Am I?” It’s not an HR question about strengths and weaknesses. Those are concepts manufactured to keep you in your place on the ladder. The important question is a self-assessment of your values. Entrepreneurship is a moral activity – understanding others’ needs and serving them. Valuing others is what will guide your behavior, sustain your drive, and underpin your achievements.

What do I know?

Every one of us has a unique set of knowledge, sharpened by our individual experience and perspective. That’s a starting point. Then think of knowledge not as a fixed stock, but as an activity. Knowledge is acquirable, a renewable resource. Augment yourself with new knowledge every day, and be aware of its unique value. The economics of individual entrepreneurship are based on the value of individual knowledge.

Who Do I Know?

In the old economic world, your history, where you went to school, and which companies were on your resume were the raw materials for an assessment of you by others. Today, all that is irrelevant. Your network is the most important asset. Like knowledge, networking is an activity, and connections can be acquired. The term social networking implies a two-way relationship: you must give in order to receive, and maintain that exchange over time to keep a network relationship. Once you are in that two-way mode of behavior, there are few, if any, network relationships that are closed to you. Be an active networker.

What resources are available?

The entrepreneur asks, “What are my resources?” before asking, “What can I do?” The great difference between the old economic world and the new is that resources are connections rather than high-cost fixed assets. You can download computing power from the cloud, you can engage and manage programming experts anywhere on the globe, you can buy highly specialized services on global exchange platforms, and you can engage experts on global talent portals. Financing can come from private peer-to-peer lending platforms, and office space from incubators or shared work centers. The great skill is to be a super-connector – to be exceptionally good at making, keeping and managing these connections.

How can I contribute?

We live and operate in a service economy. Service means filling a need felt by another, solving a problem encountered by another, or addressing a dissatisfaction that is bothering another. Service is both the creativity and morality of the entrepreneur. You make others’ lives better by filling the need, solving the problem and addressing the satisfaction in a new way that is better than anything previously available. The operative word is “new”. Find your target audience that feels the need, develop the understanding and empathy required to meet it, and establish your niche as the unique provider of a better solution.

How do I fit in?

Ecosystems already exist. Your new solution is never a standalone solution. It needs to be compatible with delivery systems and channels. It may need to meet regulations. It must be easy to understand. It cannot require a huge change in behavior, but rather a better experience resulting from behaviors that consumers have already exhibited.. Your skill at connecting must also include interconnecting to those parts of the ecosystem that will sustain your new solution.

Your goals will emerge.

It may seem odd to you to place goals so low on this list. Isn’t the idea to set goals and then devise the means to accomplish them? In the new world of entrepreneurship, it is OK for initial objectives to be ambiguous. First you understand your own values, then you assess your knowledge, network and resources, and identify where you can contribute and how to fit in. You have become an entrepreneur, which is a lifestyle choice. Don’t worry if the goals, in terms of numbers and time and metrics, are unclear at the outset. You want to work within your resources. You want to find partners. You want to find customers and to please them. Your goals will emerge from this process; don’t stress too much about them at the outset.

Be the happy bearer of uncertainty.

The future is unpredictable. The entrepreneur lives in the future, looking forward to better things based on entrepreneurial sacrifice today. You work without salary, or with borrowed money. Your time preference is long term: your economic reward lies in the uncertain future. If it weren’t for entrepreneurs who feel this way and work this way, we’d have no progress, and we’d experience no improvements. Take joy in the role.

Take charge of your life

The ultimate reward lies in self-reliance. It’s important to recognize what you can and can’t control. You can’t control the economy or interest rates or social change or your competition. But you can control your own entrepreneurial execution, your team selection, your technology choices, and your business model. You can ensure that you operate on the basis of your own values and, if you are building a firm, ensure that those values become the culture of the organization. You can control all of the relationships you have established, at least on your side (and abandon those where the partner does not live up to your standards). There is great reward in controlling the things you can, and ceasing to worry about those you can’t.

There is No Political Freedom Without Economic Freedom

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Hayek is truly at his best in the seventh chapter of The Road to Serfdom, “Economic Control and Totalitarianism.” In past chapters, he has rationalized moderate state intervention in the economy. But here, we see him destroy the notion that economic control is not directly linked to the rise of tyranny and the loss of individual liberty.

His arguments are so convincing, in part, because he highlights the indisputable fact that everything in our lives is tied to economics.

Rule of Experts

The impact that the field of economics has on our daily lives is not easily recognized by the majority of people. Preoccupied with our immediate needs and daily tasks, the state of the economy not only seems disconnected from our lives, it feels almost completely irrelevant.

And since something as complex as the national economy is usually left to the great “experts” to decide, many also assume that it is an issue completely out of their control. This presumption is something economic planners rely on to maintain their authority.

But economics is intrinsically connected to almost every single aspect of our lives. From the clothes we wear to the food we eat, to our jobs and our education: economics is in all things. And without economic freedom, there can be no liberty. Period.

Anyone having any doubts that economic control will necessarily lead to tyranny and oppression need only look to Venezuela.

Why Detest Commercial Freedom?

It has always been peculiar to me that socialists believe so fervently in social freedom and yet detest economic liberty. This is why many proponents of socialism and other forms of state control will advocate for economic restrictions, without a concern for civil liberties. They believe them to be separate entities, each existing without impacting the other.

But once economic control has been seized by the government, the stripping of our individual rights will soon follow. And today, we have the unfortunate opportunity of witnessing a once prosperous country completely succumb to the tragedy of a controlled economy.

The situation in Venezuela has become so dire, it would fit perfectly into the plot of any dystopian novel. What started as an economic crisis has now escalated to a humanitarian nightmare of which there appears to be no end in sight.

Venezuela once housed the world’s most abundant oil reserves, which its national economy relied on heavily. In fact, these reserves were responsible for 95 percent of all export earnings. At its height, the country was capable of producing 3.5 million barrels of oil per day. But after Chavez came to power and an oil worker strike ensued, the leader decided to fire those on strike and instead, bring in workers who were loyal to his government.

Unfortunately, this takeover of the country’s primary source of wealth meant that those experienced in the field were now pushed out, and replaced with inexperienced workers. And after years of continued mismanagement and poor decision-making at the hand of the state, the oil output began declining significantly.

As of earlier this year, the country was down to producing around 1.7 barrels of oil each day, but its continued decline is inevitable.

According to the logic held by those who refuse to acknowledge the connection between economic liberties and civil liberties, this situation should not have had an effect on the day to day lives of Venezuelans. But this is simply not the case.

As Hayek warned:

Economic planning would not affect merely those of our marginal needs that we have in mind when we speak contemptuously about the merely economic. It would, in effect, mean that we as individuals should no longer be allowed to decide what we regard as marginal.

The authority directing all economic activity would control not merely the part of our lives which is concerned with inferior things; it would control the allocation of the limited means for all our ends. And whoever controls all economic activity controls the means for all our ends and must, therefore, decide which are to be satisfied and which not. This is really the crux of the matter.

And this is exactly what has happened in Venezuela.

As the economic situation worsened, the residents lost control over their own lives. Since electricity is now scarce, the government is in control of determining where its use is directed. But this doesn’t merely mean residents will be left sitting at home in the dark. It meant that places of business would also have to close, sometimes without notice.

One vendor told of his frustration when he was trying to run a consumer’s debit card as payment. Since the entire country is subject to a loss of power when the state deems it necessary, the electricity went out right as he tried to process the payment. Of course, he was unable to make that transaction which resulted in a loss of money and the consumer was unable to obtain what they needed.

Without the freedom to work, there is no money to be made and no economic prosperity to be had.

But that is not where the chaos ends.

Controlling Economic Lives

Food and necessities, like toilet paper, are not only in short supply; they are also completely under state control. Those wanting to acquire these items must wake up long before the sun has risen and stand in long lines. While waiting in these lines, these “consumers,” if you can even still call them that, are sitting ducks for thieves.

It has become common for thugs and others with malicious intent to hold people at gunpoint and rob them of whatever wealth they have left. Last year, one man was killed in line in an attempt to guard his cellphone.

Meanwhile, as he lay dying, the line did not break, because to lose your place in line, even to attend to the wounded, meant that you may not get to feed your family. But waiting in these lines does not mean you will receive what you need, or what the state thinks you need. Many times Venezuelans will spend their whole day in line only to discover that the store is completely out of supplies.

For frustrated citizens who want to change things or at least let their opinion be heard, free speech has been all but decimated. Any vocal opposition against the state and you might find yourself in a jail cell, where you are unable to help anyone.

This catastrophe has even spread to hospitals. Since water and electricity are scarce, hospitals have been unable to sterilize equipment or even wash the bloody sheets from surgical beds. Infant mortality rates have skyrocketed, because children being born under these unsanitary conditions, and with no access to food have such a low chance of survival.

And as horrific as each of these examples are, the situation grows worse by the day as individuals continue to be stripped both of their rights and their ability to choose.

Meanwhile, President Maduro continues to praise socialism and demonize free market capitalism. He has even said that “Venezuela must deepen socialism to improve the economy.” He has even denied foreign aid from humanitarians aligned with capitalist countries.

But of course, Maduro himself is not suffering as his people are. Prior to Castro’s death, he even spent hundreds of thousands of dollars on an extravagant birthday party in celebration of one of the cruelest dictators in modern history.

As Hayek says, “And whoever has sole control of the means must also determine which ends are to be served,” And Maduro is serving no ends save his own.

Free Markets are Liberation

So many who fall prey to the concept of a planned economy believe that it will liberate individuals from the mundane task of having to choose. Forgetting, that it is our right to choose that makes us free in the first place.

“Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another…And if one way of achieving our ends proves too expensive for us, we are free to try other ways.” Hayek aptly says. And he is correct. In Venezuela, citizens cannot simply choose to buy toilet paper from a different vendor instead of having to wait in a line.

When the government took control in the wake of economic tragedy, the power to choose was given to the state. And the state does not care which brand of toilet paper you use or what price point you are comfortable paying. It does not care what medicine is vital in order for you to function. It chooses based on its own set of blanket value scales in which everyone is equal simply because everyone is equally let unsatisfied.  

And there is almost nothing the people can do about it, making the situation far worse because as Hayek also states, “Nothing makes conditions more unbearable than the knowledge that no effort of ours can change them.”

What is worse, is that proponents of socialism praise this lack of choice as liberating. Now that the state has decided when, where, and at what cost something can be purchased, individuals have been relieved of this heavy burden. Hayek describes these types of people by saying:

But few want to be relieved through having the choice made for them by others. People just wish that the choice should not be necessary at all. And they are only too ready to believe that the choice is not really necessary, that it is imposed upon them merely by the particular economic system under which we live. What they resent is, in truth, that there is an economic problem.

And that is exactly what befell Venezuela: a devastating economic problem. And this problem was used as a vessel to suppress the freedom and choice of the individual in the name of a planned economy.

So for those who would still like to believe that economic factors are separate from individual liberty, Hayek says:

Economic values are less important to us than many things precisely because in economic matters we are free to decide what to us is more, and what less, important.

Licensing Boards Are Inhibiting Free Competition in the Market

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Imagine attempting to open a bakery that specializes in cakes. But before the business can even get off the ground, the government pays you a visit and informs you that unless you also bake and sell pies in addition to the cakes, it will not allow you to legally open your bakery.

This sounds silly to you at first, but the government insists that since pies and cakes are traditionally both sold in bakeries, that is just how the law works. You can either comply or abandon your dream of owning a specialty cake bakery.

Regulations Are Stranger Than Fiction

While this may be nothing more than a fictional scenario, regulations this outrageous do exist. And what is worse, they prevent many from obtaining their entrepreneurial dreams. In fact, a similar situation is currently happening in North Carolina, where one makeup artist’s dream of opening a cosmetology school is being stifled by a peculiar occupational licensing law.

North Carolina resident, Jasna Bukvic-Bhayani wants to open a school where hopeful cosmetologists can come to learn the tools of the trade. As a makeup artist herself, Bukvic-Bhayani found teaching makeup artistry to others to be both rewarding and lucrative. But the state shut her down before she could even begin.

As a certified cosmetologist, she has already obtained all the permits and licenses necessary to practice her craft in exchange for compensation. But even though she is permitted to practice cosmetology she is forbidden from teaching this craft to others unless she also teaches esthetics.

The field of esthetics involves procedures like microdermabrasion, body waxing, and facials, none of which Bukvic-Bhayani desires to teach at her school. Even still, the North Carolina Board of Cosmetic Art Examiners told her that unless she intends on turning her school into an esthetic school as well as makeup artistry the state will not allow her to open up for business.

But incorporating esthetics into her curriculum isn’t as easy as simply taking a few weeks to go over the basics. Instead, this will force her to spend at least $10,000 on esthetic equipment in addition to the hundreds of wasted hours she will spend teaching a skill she doesn’t want to teach. For a student to be a state-certified cosmetologist they must complete at least 600 hours of esthetic training, whether they want to practice this skill or not.

Bukvic-Bhayani has insisted that esthetics is not a part of the business model for her school, but the state doesn’t care. Since many cosmetic schools also teach esthetics, the state claims that this should be the norm for anyone wanting to open a school involving cosmetology in any way.

Surveying the Competition

What is even more disturbing than the fact that Bukvic-Bhayani is being prevented from reaching her entrepreneurial dream is how the state came to learn of her school’s existence in the first place.

In order to attract prospective students to her school, Bukvic-Bhayani paid for online advertising. Unfortunately, the North Carolina Board of Cosmetic Art Examiners makes a habit of monitoring facebook ads in an attempt to catch those who may not be following their rules. This is exactly how Bukvic-Bhayani came to be on the board’s radar.

And this type of monitoring is not specific to the realm of cosmetology. A year ago, a mother was fined after a health inspector caught wind that she was selling Ceviche that was not first approved by the state’s health department. By scouring facebook groups that serve almost as digital farmer’s markets, these regulatory boards have prevented many individuals from earning a living.

These boards also encourage a dependence on the state before one is able to put forth an entrepreneurial idea and getting ahead in life.

In the Road to Serfdom, F.A. Hayek even warns often of the dangers that follow when a state bars entry to certain vocational fields. It is certain he would be disgusted today to see just how far this practice has expanded.

These regulations are usually crafted by those already in the field. By setting all these hefty regulations, they can limit who is allowed to enter the field. In other words, they are given the unjust privilege of deciding who is allowed to compete in the free market, and who is not. 

Luckily, the nonprofit organization, Institute for Justice has come to Bukvic-Bhayani’s aid and is helping her fight for the right to earn a living. And they have found a rather creative way to combat this regulation.

The First Amendment protects an individual’s right to speak for a living. But this protection does not extend only to the individual’s right to speak out against the government. It also extends to one’s profession. This serves to protect speakers, authors, journalist and yes, even makeup artists.

Institute for Justice has a long track record of doing its best to fight for the rights of those who want nothing more than to earn a living without fear of government intrusion. Hopefully, this story will end with the opening of Bukvic-Bhayani’s cosmetology school.

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