Wow, the daily news is grim. Civilization is collapsing all around us. Corruption is everywhere. The political parties are falling apart. Here’s the problem. If I weren’t reading this stuff, none of it would affect me in the slightest bit.
Nick Offerman is disappointingly not as liberty-minded in real life as the beloved Ron Swanson character he portrayed in the series Parks and Recreation. But in a video released a few months ago, Offerman gets a taste Swanson’s anti-regulatory sentiment when he tries to open a whiskey distillery and is met with obstacles from the government.
Offerman has been painstaking leftist on Second Amendment issues and endorsing political candidates — a huge contrast from the character that has become a reference point for libertarians attempting to explain their political beliefs to family members, who have no idea what it means to be neither Democrat nor a Republican.
Red Tape
While Offerman has not been a champion of liberty in his offscreen life, his love of fine whiskey may be the one issue that turns him from statist celebrity to libertarian hero.
In his video entitled, Nick Offerman’s ‘The Offerman Distillery’, the actor attempts to open his own distillery but soon learns that the government requires an occupational permit in order to do so. Confused and irritated that opening a distillery is such a monstrous bureaucratic feat, Offerman highlights one of the most frustrating forms of government red tape, preventing otherwise productive individuals from earning an honest living.
Expressing his desire to combine his love of whiskey with his love of doing good for other people, Offerman tells his viewers why this distillery is so important to him. Wanting to open his appropriately named “Offerman Distillery” in Scotland’s Isle of Sky, he stakes his sign in the fresh ground and sets off to work.
Aptly demonstrating how all governments seek to control the economies of their various nations, Offerman soon discovers that Scotland has just as much entrepreneurial red tape as the United States.
Can’t Use Your Name?
Just as he begins telling viewers why his whiskey is sure to beat out all the others, his phone rings. A bureaucrat is on the other end of the line, telling Offerman that he needs to apply for a permit, have a full background check conducted, and — taking a swipe at intellectual property — informs him that he does not have legal permission to use his own last name in the distillery, since another company has already had his name trademarked.
A frustrating and relatable montage ensues in which Offerman learns he needs a license before he can apply for the required permit and then proceeds to endure a round of irrelevant questioning from the faceless agent of the state. Finally, after being subjected to the horrors of “on hold” music for what seems like hours, someone finally answers, only to tell him he will be placed on hold yet again.
After calculating the amount of paperwork and various government procedures that he must complete, Offerman resolves that it will be at least 23 years before he is able to produce his first bottle of whiskey.
As is government’s specialty, the state’s hurdles crush Offerman’s entrepreneurial spirit. Realizing how tedious it is to set up an above-board distillery, Offerman moves his business to the “black market,” selling his whiskey from a homemade booth akin to lemonade stands run by children in the summer.
Unfortunately, he is quickly told that his actions are illegal and he abandons his effort entirely.
While Offerman’s comedic skills make this experience both hilarious and infuriating to the viewers, he has, perhaps unknowingly, channeled his inner Ron Swanson.
While it may have only been for a few moments, Offerman shows that even celebrities have at least one issue where their views are, often unknowingly, libertarian. And for this Parks and Recreation star, the government better keep their hands off his whiskey.
Young Americans like myself have come of age in a climate where arbitrary rule has steadily become the norm. Civil liberties, once guaranteed by the Bill of Rights, are now conditional; they are regularly disregarded in the pursuit of a specific end.
The war on terror, for example, ushered in an era where the government was given the power, or rather gave itself the power, to do anything it needed in order to keep the country secure. As long as the state’s violations against our inalienable rights were done in the name of national security, or prosperity, they were considered just, necessary even.
The Constitution that was specifically intended to protect the American people against this kind of rule has now just become a list of suggestions. President Bush is even rumored to have referred to it as a “goddamn piece of paper,” when confronted about his refusal to act within its bounds during the height of the War on Terror.
And in the wake of this “anything goes” rhetoric, the War on Terror was and continues to be used to suspend free speech, restrict travel, detain American citizens indefinitely, and even defend the American President’s use of a “secret kill list.”
It was with this jaded view of government restraint that I began reading the Sixth Chapter of The Road to Serfdom. Hayek uses this chapter to dig into the concept of the rule of law.
Hayek’s Day
Initially, I was surprised to find Hayek’s enthusiastic support of the belief that a government is capable of limiting itself within legal boundaries. I attributed this to modern hindsight. How on earth could Hayek know that the September 11th attacks would all but demolish the rule of law in this country?
But Hayek watched Hitler rise to power through constitutional means. He was no stranger to the very real possibility of arbitrary rule. Something he is certain to point out:
It may well be that Hitler has obtained his unlimited powers in a strictly constitutional manner and that whatever he does is therefore legal in the judicial sense. But who would suggest for that reason that the Rule of Law still prevails in Germany?
And yet, even though Hayek acknowledges its shortcomings, he still shows a great deal of reverence towards this oft-disregarded concept.
But this respect, while possibly naive, is not unfounded. Even if our government no longer adheres to the rule of law, it was an idea completely unheard of prior to the rise of classical liberalism. And without the rule of law, it is certain that mankind would have already succumbed to absolute despotism.
Credit Where Credit is Due
The concept of the rule of law was integral in the history of human progress. And not just in western civilization. Even though it may not have worked as well in practice as it did in theory, its implications were nothing short of revolutionary.
In 1215, when the landholding barons led an uprising and forced King John to sign the great charter, or the Magna Carta as history would come to know it, the rule of law experiment officially began. And the world was well on its way to finding out whether or not a king or some other authority could be tamed by written laws.
This idea floated around for a few centuries and was tried to varying degrees until it became a preoccupation for many classical liberal scholars. If the actions of state authority could not only be limited, but also predicted, the individual would be able to maintain his freedom, or so they thought.
So important was this principle to the concept of individual liberty, Hayek even claims that it is an essential feature of any country claiming to be free from tyranny.
Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.
Thomas Jefferson expressed a similar sentiment during the time of America’s founding saying:
The two enemies of the people are criminals and government,
so let us tie the second down with the chains of the Constitution
so the second will not become the legalized version of the first.
It is important to understand that this idea had never been tried before in human history. The idea that a ruler would restrict his or her power seemed completely unfounded. Especially since prior to the American Revolution, the “divine right of kings” doctrine was so steadfastly believed.
Since a King was allegedly anointed by God, his word was beyond contestation. The only referee between the people and their ruler was God. And unfortunately, only the king had his direct line.
Given this bleak situation, you can imagine how empowering it must have been to be given the opportunity to live in a land where the ruler was bound, not just by fallible men, but by concrete doctrine.
The idea that government ought to be bound by written laws was pivotal to the American founding. It is what inspired our written Constitution and specifically, our Bill of Rights. A list of things government cannot do. And while in hindsight we might see that its power to restrain government has been exaggerated, it did change the world.
Dead Letter Law
It’s easy to lambaste Bush for calling the Constitution nothing but a piece of paper. But in a sense, he was correct. The Bill of Rights has become dead letter. When the people stop valuing the liberties that the law is supposed to protect, the entire system crumbles because no one is holding government accountable.
The Second Amendment, for example, is an explicit limitation on our government. By encouraging an armed populace, it also encourages politicians to stay within their limits for fear of just rebellion.
Yet today, the history behind the right to bear arms is disregarded as unimportant, unnecessary, and even dangerous. Without the ideological substance to back these ideas we seek to bind our leaders to, there can be no follow through. Each right we relinquish is a right we may never get back.
So while governments may always be looking for ways to violate the rule of law, it is important that as individuals we remember to keep them accountable as much as is humanly possible.
Today’s most prominent tech and entrepreneurial leaders have been agitating for a Universal Basic Income (UBI) in what has become a growing movement. Richard Branson recently joined Mark Zuckerberg, Elon Musk, Bill Gates, and others by throwing his support behind this massive welfare program, citing, like the others, the fear of automation and technological unemployment.
In late summer, he said:
With the acceleration of [artificial intelligence] and other new technology… the world is changing fast. A lot of exciting new innovations are going to be created, which will generate a lot of opportunities and a lot of wealth, but there is a real danger it could also reduce the amount of jobs.
He continued:
This will make experimenting with ideas like basic income even more important in the years to come.
There are many reasons, both economic and philosophical, to be against the idea of a UBI.But since the UBI is often justified on the grounds that automation is a threat to American employment, it is important to debunk this myth separately.
The first portion of what Branson says is accurate. Our modern world is incredible. As automation advances, the consumer wins by gaining access to higher quality products and services.
We have all experienced the convenience of using a self-checkout station at the grocery store or ordering food from an automated kiosk. Some of us have even experienced the joy of having a delicious cupcake dispensed out of a “cupcake ATM.” Others, like myself, spend a fair portion of our time barking commands at our Google Homes or other personal assistants that we rely on to keep track of our daily schedules and news updates.
Our lives are automated now. They will only get more so with the passing of time. And that is a good thing.
As for opportunities and wealth, Branson is also correct.These technological advancements are creating whole new sectors providing more jobs and more opportunities for more human beings.
But unfortunately, while Branson does express this sentiment, the last portion of his statement seems completely contrary to the words that preceded it. Technological progress does not come at the catastrophic cost of human labor as he and others assert.
The Curse of the Machinery
In his 1946 classic, Economics in One Lesson, Henry Hazlitt spends an entire chapter discussing this phenomenon. “The Curse of the Machinery,” as he calls it, describes the hysteria that has always accompanied technological progress throughout history.
Wasting no time making his point, Hazlitt opens this chapter by saying:
The belief that machines cause unemployment, when held with any logical consistency, leads to preposterous conclusions. Not only must we be causing unemployment with every technological improvement we make today, but primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat.
What makes this chapter of Hazlitt’s book truly fascinating is his use of historical examples to support his point.
Workers during the Industrial Revolution may have never dreamed of a world where automation was integrated into the lives of average Americans. But they did fear a world in which labor-saving machines “threatened” to put them out of work.
In the stocking industry, for example, fear of machines was so intense, massive riots erupted as soon as workers were introduced to the new mechanical knitting machines known as, “stocking frames.” In the midst of all the chaos, new machines were destroyed, houses were burned, inventors were threatened, and peace was not restored until the military eventually intervened. These machine-wreckers were called “Luddites,” and thus a term was born.
During the Great Depression, a group known as the “Technocrats” was formed in direct opposition to new machinery. When the economy goes to hell, everyone is eager to point fingers. And according to Hazlitt, in 1932 the American “Technocrats” cast the blame in the direction of machinery.
“It is enough to say that the Technocrats returned to the error in all its native purity that machines permanently displace men—except that, in their ignorance, they presented this error as a new and revolutionary discovery of their own. It was simply one more illustration of Santayana’s aphorism that those who cannot remember the past are condemned to repeat it.”
Already, in 1932 those terrified of technology displacing workers thought themselves revolutionary in their discoveries. Yet, their fears were just a modern manifestation of an age-old fear. Likewise, those in Silicon Valley are misled to believe that automation will cause massive unemployment. But as Hazlitt says, “Not only should we have to regard all further technical progress as a calamity; we should have to regard all past technical progress with equal horror.”
And even though the fear of machinery has recurred throughout history, the reality has never seemed to turn out the way the scaremongers claimed it would.
The Market Corrects
In the case of the British stocking knitters, it is true that as many as 50,000 were left jobless in the wake of mechanical stocking frames. However, as Hazlitt points out, “But in so far as the rioters believed, as most of them undoubtedly did, that the machine was permanently displacing men, they were mistaken, for before the end of the nineteenth century the stocking industry was employing at least 100 men for every man it employed at the beginning of the century.”
Likewise, 27 years after the invention of the cotton-spinning machine, which was met with similar hostility as the mechanical stocking frame, the number of workers employed in the industry had grown from 7,900 to 320,000, a rate of 4,400 percent.
When innovation abolishes the need for labor in one specific sector, a period of displacement or correction may occur. But it is never long before new jobs are created elsewhere.
Hazlitt says:
This looks at first glance like a clear loss of employment. But the machine itself required labor to make it; so here, as one offset, are jobs that would not otherwise have existed… After the machine has produced economies sufficient to offset its cost, the clothing manufacturer has more profits than before…At this point, it may seem, labor has suffered a net loss of employment, while it is only the manufacturer, the capitalist, who has gained. But it is precisely out of these extra profits that the subsequent social gains must come. The manufacturer must use these extra profits in at least one of three ways, and possibly he will use part of them in all three: (1) he will use the extra profits to expand his operations by buying more machines to make more coats; or (2) he will invest the extra profits in some other industry; or (3) he will spend the extra profits on increasing his own consumption. Whichever of these three courses he takes, he will increase employment.
There are already examples of this happening presently. Uber, for example, may soon be significantly decreasing its need for human Uber drivers as self-driving cars become a reality. But that does not mean these drivers will be left destitute or jobless. Instead, Uber has simultaneously been expanding its delivery services. From flu shots, meals, and even puppies, Uber offers a variety of services that, at this point in time, still require human employees. If, in the future, drones are capable of replacing human delivery services, it will only be a matter of time before new opportunities become available on the market.
Progress does not come without an initial shake-up of traditional norms as the market adjusts to new technology, but this change should be embraced. As the stocking makers and cotton spinners have taught us, innovation should never be discouraged because with technological progress comes more opportunities for the human race.
And for those who may doubt that jobs do not need to be lost in the name of technology, many may be surprised to learn that despite the advanced weaponry available today, there are more blacksmiths now than at any other point in history.
The great minds of Silicon Valley need not worry, then. As long as innovation continues and markets are left relatively free, there will be no need to fear the mass displacement of employees as a result of automation.
Millennials have been major catalysts in changing the rules of the traditional marketplace. Impatient and eager to move on to the next big thing, we are a generation born to innovate. But venturing into uncharted territory, though groundbreaking, means that we have to force the traditional market to evolve with our revolutionary methods.
From the sharing economy to food trucks and hipster-made craft beer, millennials have found a way to make money in a manner that fits their unique lifestyles. As with most successful market endeavors, the only thing preventing millennials from making an even greater impact on the economy is government bureaucracy.
Rebecca Mueller left her career in the finance world to pursue her dream of being a fashion designer. After graduating from fashion school in Chicago, Mueller decided not to relocate to greener pastures and instead set out to contribute to the local economy.
Planning to buy all her supplies from local vendors, Mueller wanted to open up a mobile boutique that would operate like a closet on wheels. Confident in her interpretation of the city statutes on peddler licenses, Mueller headed to City Hall full of hope and ready to make her dream a reality. It didn’t take long for her dream to turn into a bureaucratic nightmare. At City Hall, she was denied her peddler’s license.
Mueller had purchased a 25-foot truck and had planned to stop at different locations around the city and sell her original clothing. Unfortunately, the city informed her that in order to qualify for a tradition peddler’s license, she would not be able to park her mobile boutique and set up shop. This is a problem that many foods truck owners have faced while attempting to start their businesses.
The city assured Mueller that they were working on legislation to cater to innovative businesses like hers, but there was no clear answer as to when this would actually happen. After months without any real answers, Mueller was no closer to opening up her boutique.
Enter Institute for Justice
Desperate to get the wheels rolling, she decided to seek help from Institute for Justice’s (IJ) law clinic on the University of Chicago campus. IJ was able to tell Mueller what the government neglected to, that in fact there was a license available that would allow her business to operate her unique business.
The “emerging business license” was created in 2012 to accommodate for innovative businesses which do not fit into preexisting regulations. The emerging business license gives the entrepreneur two years to operate their business. The understanding being that in those two years, the local government will work to create reasonable regulations. However, prior to Mueller’s inquiry, the license had only been issued once since 2012. Fortunately for Mueller, she was able to get approved for the emerging license and after large amounts of time and money were spent, her mobile boutique was able to open up earlier this month.
When it comes to innovative Millennials trying to start new businesses, Mueller’s sentiment expressed in her local op-ed really drives the point home:
I hope the next novel business to make its way to City Hall is met with a red carpet instead of a maze of red tape.
You probably agree that the purpose of health care should be at least to keep you alive, and ideally to improve your health and wellbeing. But the designers of single payer healthcare tell us, in their own words, that this is not the case.
Elsewhere at https://centerforindividualism.org, Brittany Hunter has demonstrated the folly and negative consequences of centrally planned healthcare. She points out that F.A. Hayek predicted how bad Obamacare – not in name but in principle – would be for healthcare consumers.
Today, we can shine an even brighter light on the dangers of single payer healthcare, thanks to Dr. Ezekiel Emanuel, who was a leading architect of the ACA, also known as Obamacare. Today, he is an advisor to President Trump on healthcare policy. He describes himself as a “medical ethicist”.
He is clear-eyed about the most significant consequence of the single-payer healthcare system he advocates: when government is paying, healthcare will be rationed. He wrote a revealing article about how he would propose to administer the rationing system: Principles for allocation of scarce medical interventions, published in the authoritative medical science magazine The Lancet (www.thelancet.com Vol 373 January 31, 2009).
He proposes an allocation principle he calls the Complete Lives System. Briefly, allocation of scarce healthcare will be prioritized for people between the ages of 15 and 40. Prior to age 15, Dr Emanuel believes that society does not have enough invested in that young life, therefore it’s OK to sacrifice it.
“Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments. Similarly, adolescence brings with it a developed personality capable of forming and valuing long-term plans whose fulfilment requires a complete life.”
After age 40, according to Dr. Emanuel, people have an insufficient number of “quality-adjusted life years” to contribute to society, and therefore do not merit further investment of scarce healthcare resources.
Dr. Emanuel states:
When implemented, the complete lives system produces a priority curve on which individuals aged between roughly 15 and 40 years get the most substantial chance, whereas the youngest and oldest people get chances that are attenuated (figure).
The priority curve to which the doctor refers is reproduced below. It is exactly as published in The Lancet article, with the addition of the two explanatory overlay panels in blue.
In simple language, if you are aged less than 15, and medical resources must be rationed, the system will let you die. If you are older than 40, in an emergency where medical resources must be allocated, the system will make you die.
We often hear that “Everyone has a right to healthcare.” “How can you deny people healthcare?” Well, Dr. Emanuel has explained how: we’ll pretend to offer healthcare for everyone, then address the unaffordability of that promise through rationing. Let the young die, make the old die, and reserve healthcare for those years when people are working and paying taxes to the government.
All collectivist promises are like that: unaffordable, and requiring government decisions as to who gets what. Individuals in groups that the government favors will gain disproportionately: in this case, taxpayers who are still paying the government money. Those unfortunate individuals without collective support, including infants who don’t yet pay taxes, and the middle-aged and elderly who are in their declining taxpaying years, will be excluded.
That’s one of the consequences of seeing people not as individuals, each of whom has worth, but as members of collectives, which can be ranked in importance by people like Dr. Emanuel.
Professor Deirdre McCloskey is a distinctive voice for common sense. She trashes all the prevailing theories of her colleagues in the economics professoriat, as well as the practices of the social engineers in government and think tanks. In an essay on her website titled Populism Is Zero Sum Under Majority Rule, she succinctly summarizes her case (which she has made most unsccinctly yet supremely engagingly in her Bourgeois Trilogy series of three 600-page books: The Bourgeois Virtues, Bourgeois Dignity and Bourgeois Equality).
Here, we present a 10-point summary of the case the good professor makes in the paper. We’ve substituted the term individualism (which she does not use) for terms like classical liberalism (which she does use) because we look through the individualist lens and we think that’s a good modern expression for what the professor means. Please do judge for yourself by reading the original.
Individualism is a win-win proposition. Populism, liberal democracy, socialism and all the other theories of social order are zero sum.
The principle of zero sum is clearly expressed in redistributionist policies such as progressive taxation. One group can be made richer only if another is made poorer. Tax those who are successful and redistribute the loot to the poor.
Zero sum is default thinking for humans. It’s deeply natural: the herd mentality. Everyone should be equal.
Unfortunately, if the herd rules, it will do so violently, by forcefully seizing the wealth of those who succeed more than others.
The herd’s forceful readjustment is after-the-fact. Equality is imposed as an end-state.
After individuals have exerted their efforts to serve their fellows well, have increased economic growth and created prosperity, the redistributionist police intervene to confiscate the fruits of individuals’ labors. They punish some (those who have created the prosperity) and reward others.
Individualism, on the other hand, promotes the beneficent process, not the egalitarian end-state.
Individualism wants everyone to be free and equally equipped at the beginning, in order to try their best, each in their own way. The market – the voluntary decisions of individuals to exchange goods and services in a win-win exchange – delivers a verdict on which efforts are worthy of reward by customer acceptance. Professor McCloskey calls the outcome of the process “trade-tested betterment”. Trade means voluntary exchange. Tested means the market decides and the consumer is judge. Betterment means win-win for all participants.
Zero sum thinking assumes no growth.
Your gain will be my pain. That’s the assumption, which includes the conviction that there will be no economic growth or it will be so slow as to be negligible. In these circumstances, riches can be accumulated only by evil means. Entrepreneurs are to be viewed with suspicion, if not outright hatred.
Such feelings may have been appropriate for the middle ages, when there really was no growth. Now they are reasserted because of the slow growth theories that are popular in the professoriat again today. Same idea, same feeling, same suspicion.
The truth is that there has been tremendous economic growth over the last 200 years and it has benefited everyone.
Professor McCloskey puts numbers on the economic growth of the last 200 years: a 3000% percent – equivalent to 30X – improvement. She calls it the Great Enrichment. The improvement has gone to the workers. Their real wage is 20-30 times what it was. And this doesn’t include the hard-to-measure improvements in quality, from better health care to air conditioning to big screen TV’s. The return on capital had stayed pretty much static, while the return on work has soared.
Exchange-tested betterment made poor people rich.
It is true that poor people were once very poor. They struggled with a low quality of life. Subsistence farming labor was the lot of most people before the Great Enrichment. There were famines and starvation. The new truth is that this low quality of life is largely eliminated.
Economists get this all wrong. Why is that?
Professor McCloskey cites two main reasons why economists don’t understand the win-win of individualism. First, economists don’t understand economic growth. Their theories don’t predict it, so the empirical evidence can’t be accepted.
Second, they don’t understand the efforts of individuals to seek their own distinctive way of serving others, in order to create value for their customers which they can exchange in markets. Economists invented an idea they call “perfect competition”, which means that no-one should have any advantage over anyone else. If they do, the redistribution police will intervene.
But in reality, the whole point of economics is that each of us tries to find our own individual advantage, the thing that we do best that is unique to us. We exchange that on the market with others who have found exactly the same advantage for themselves, except in a different field, or in offering a different service, or in making a different product. There’s even an economists’ term for this: comparative advantage. But it’s been discarded.
The right is as bad as the left in opposing individualism.
The left wants to confiscate and redistribute. The right wants to maintain hierarchy. Someone has to be the boss, to tell others what to do. Hierarchy is just another form of suppression of individualism. It results in intervention, and forceful imposition of the status quo.
We need a positive theory of “no bosses”.
Economists and social engineers believe that social order requires bosses. It is achieved only by “the continuous attention of authority”. We’ve written elsewhere that the opposite is true.
Order is the result of the spontaneous dynamics of adjustment. Each of us is free to do our best, and our ideas are tested in the marketplace. Some are accepted, some are not. Each of us makes adjustments accordingly. We may not be able to predict exactly how these adjustments are going to play out in the future. We simply continue to generate new ideas and new knowledge and make new exchanges.
It is necessary for us to be free to do so. We should not have to ask permission in advance from any authority or expert or boss.
Over the past several years, there has been a crackdown on child entrepreneurs. Where homemade lemonade stands and bake sales once represented the innocence of childhood curiosity, they are now being shut down by local authorities who demand these children obtain licenses before they can make a profit. But the crackdown isn’t limited to food-based businesses alone.
This last summer, a local news outlet in Alabama reported that in the city of Gardendale, teens mowing lawns for extra summer cash have been routinely stopped and accosted by local authorities for failing to obtain a government license permitting them to earn money. The license these young entrepreneurs are being asked to obtain costs a whopping $110 dollars. For these teens who are only charging about $20 per lawn, this cost is a huge burden.
Highlighting just how ridiculous this enforcement of occupational licensing has been on minors, John Stossel ran a segment on his show a few years ago explaining how tedious it has become to open up something as simple as a child-run lemonade stand. In fact, if these children were to comply with state regulations, Stossel estimated it would take several months and a decent amount of cash just to open a simple lemonade stand.
Luckily, one state is taking the lead on protecting children from the long arm of the state.
The Beehive State Comes to the Rescue
Tucked away in the Rocky Mountains, the state of Utah is known as the industrious beehive state because of its tradition of hard work. While other states have been quick to shut down children wanting to learn about the free market, Utah has taken preemptive measures to protect minors in their quest to earn money.
Connor Boyack, a Utah resident and a longtime advocate for liberty has made a full-time job out of protecting the rights of Utah citizens. As president of the burgeoning Utah think tank, Libertas Institute of Utah, Boyack began running his new nonprofit from his home, while he made plans to grow his operation and find a more suitable location. It was during this time that Boyack was alerted by city officials that he was not allowed to run a business out of his home without the proper permits. Of course, as a nonprofit Boyack was not bringing in any money that was not spent directly on Libertas’ initiatives, but the city regulators didn’t seem to care about that vital detail.
Learning the hard way that you can’t fight city hall, Boyack decided to take a different approach against the burden of occupational licensing: focusing on the children.
Won’t Somebody Please Think of The Children!
When compared to other states, Utah has actually been very friendly towards child-run businesses and the Libertas Institute would like to keep it that way: which is why they worked with the state legislature to craft a bill that would prevent minors from having to comply with the burdensome regulatory process.
Prior to the bill being passed, residents of Provo, Utah held a children’s market in the parking lot of a privately owned inn. Boyack’s own children participated in this endeavor, selling homemade marshmallow shooters constructed by the children out of PVC pipes. Each shooter retailed for $3 and came with a small bag of marshmallows.
Since the market took place on private property, there was not much local law enforcement could do to stop it. However, this fact alone gave Boyack inspiration for the language of the bill.
Originally, the bill protecting childhood entrepreneurs sought to guard home-based businesses against state intervention. However, many child-run lemonade stands are not operated solely on privately owned property. Often, these amateur businesses are operated on neighborhood street corners or sidewalks, which are unfortunately considered public property.
Perhaps the greatest aspect of this bill is that by focusing on the children, it helps entrepreneurial adults as well. Boyack was able to tap into sympathies that played well with state legislatures, after all, no one wants to be responsible for killing legislation aimed at helping children.
Senate Bill 81 amends existing laws requiring occupational licenses and permits for certain businesses, specifically those run by minors under the age of 18. However, it also helps adults by demolishing any fees associated with the required permits. True, Utah residents over 18 will still have to obtain the government’s permission before operating a home-based business, but they will no longer be forced to pay exorbitant fees.
In fact, by eliminating the fees associated with home-based occupational licensing, the state of Utah stands to lose about a million dollars in annual revenue previously collected from those looking to run their own businesses out of their home.
While the overall goal is still to eliminate all occupational licenses, protecting minors in their entrepreneurial pursuits is an excellent starting point and has made a huge impact across the state.
As Boyack himself put it, “Let’s at least give kids a taste of the free market before the crushing bureaucracy weighs in upon them.”
Dr. Javier Busquets of ESADE School Of Business in Spain has investigated metaphors as a source of knowledge.
Metaphors are expressions we use to represent and explain reality. They reflect our experience and they include both what we know and what we don’t know but may imagine. They play this role because we use them to include an entire representation, even though they are truly a combination of the known and the unknown.
For example, if we describe a leader as a lion, we are representing strength and power and aggressiveness without fear, and we also are expressing low levels of trust, since we don’t associate lions with trustworthiness.
The attribute of metaphors as representing complete things can lead us astray. Professor Busquets evokes Kepler and Newton, two seventeenth century scientists attempting to explain the workings of the universe and the motions of the planets. Kepler’s metaphor was a clock – a piece of machinery in which all the motions of the components are linked together. Newton’s metaphor was a balance of forces. Kepler was able to identify some useful findings, but Newton’s metaphor led him to greater, longer lasting and more significant findings.
Professor Busquets offers us another example of changing metaphors revolutionizing actual practice, this time in sports. He cites the Spanish national soccer team that won the World Championship in 2010 and FC Barcelona, who were dominant in club soccer at the same time.
The metaphor for soccer, like many sports, had traditionally been war. Beat the enemy, attack, defend, win the fight, destroy the other team. The metaphor determined organization. There were attacking players, whose job was to score. There were midfield players, whose job was to pass to the scorers. And there were defenders whose job was to stop the enemy from scoring.
The Spanish team changed the metaphorical language from that of war to that of jazz. In jazz, everyone needs to understand the full game; certain individuals may take the lead from time to time during periods of improvisation, while all remain connected, and anyone can pass on the lead to any other at any time. In soccer, this metaphor translated into re-thinking the playing field, identifying “strategic areas for problem solving” (as opposed to the traditional attacking, defending and midfield zones). Each area is managed by a leader but anyone can take over at any time. Anyone can play any position, and anyone can try to score. Everyone is a connector; some players with special expertise are super-connectors.
In this new language, there is no “attack”, there is a possession phase, when the team has the ball. There is no “defense”, but there is a “recovery phase”, when the opponent has possession of the ball and the strategic problem to be solved is to recover possession. The objective is not to destroy the enemy, but to create new ways to succeed; not to win the fight but to learn and become the best, and enjoy the process.
The team that mastered the new metaphor and pursued it to its logical conclusions became dominant. They were able to innovate continuously and at speed. While organizing themselves in new ways based on the new metaphor, they were able to create doubt and uncertainty in opponents’ organization. For example, the Spanish team might play with no “attackers”, since everyone is a connector who can pass to anyone and anyone can score. How does a traditionally organized team “defend” against one that does not “attack”?
When there is a need for innovation or new solutions to strategic problems, check your metaphor and see if a new one might lead to new insights and breakthroughs.
We spend a lot of time here at https://centerforindividualism.org on the subject of entrepreneurship. One of the metaphors of entrepreneurship is that of a future problem solver. In this metaphor, the entrepreneur identifies a consumer dissatisfaction that can be solved in the future with a new solution no-one has offered before. It takes time to assemble the resources to create the new solution but, ideally, there is relief in the future for both parties: the consumer solves their dissatisfaction and the entrepreneur resolves the uncertainty of the development and assembly period with a successful outcome.
There is, however, a different metaphor that is not so time constrained, and therefore less subject to the stresses of uncertainty. The entrepreneur today is an orchestrator, a super-connector of knowledge, technology, collaborators and capital. All of these inputs are available in real time as a result of today’s technologies. The entrepreneur decides how they can contribute, based on their individual relationship to the inputs of knowledge, technology, collaborators and capital, by answering the question, “What kind of a connector am I?” In this metaphor, the entrepreneur is no longer a solver of future problems, but a creative orchestrator of inputs in real time.
The adoption of this new metaphor can change entrepreneurship and accelerate the pace of innovation and economic growth. We can all be connectors, and some of us can be super-connectors. There are unlimited opportunities today to connect all over the globe via internet platforms, and to connect to massive amounts of specialized knowledge in the context of special individual interests, skills and preferences, and thereby to create a unique individual entrepreneurial business. It is the connecting that creates new knowledge and new solutions.
Let’s all start connecting! Let’s stop trying so hard in the metaphor of solving problems, and focus on the metaphor of connecting people, knowledge and technology, so that problems solve themselves.
What would Hayek say if he was around to see the ongoing fiasco that is Obamacare? Well, for one thing, he probably wouldn’t be surprised, but he would be deeply saddened. And while he could never know the specifics of our country’s progressive strides towards universal health care, he managed to predict the overall situation quite perfectly in the fifth chapter of The Road to Serfdom.
It is impossible to plan for an entire national economy comprised of individual beings. Each has different goals and desires, making one-size-fits-all economic policies unfeasible, to say the least. It’s also an expensive endeavor to attempt.
Yet, the Affordable Care Act sought to do just that. Economics and logic went out the window in favor of the supposed “general welfare” of the American public. So long as the end result was increased–if not universal– health coverage, then the means were rationalized.
And while it was fought by many who had read Hayek and heeded his warnings, Obamacare was approved by both chambers of Congress and was eventually upheld as constitutional by the SCOTUS.
Advocates championed this as a democratic victory. The American people had finally taken control of their health care back from the greedy, capitalist health care sector.
But just as many free market economists had predicted, Obamacare was a complete disaster both economically and democratically. And while many have been shocked by the implications of giving the government so much power over an entire market sector, Hayek warned of these dangers long before Obamacare’s conception.
The Individual Gets Left Behind
Among other things, Obamacare claimed to know the health care priorities of every single American. From dictating what coverage must be provided by employers to fining individuals for not choosing to buy health insurance, Obamacare took away the ability to choose and replaced it with coercion.
But even worse, it cost the taxpayer $42.6 billion in the fiscal year 2017 alone. So not only did this lead to increased government control over health care, it was also a financial black hole. And it completely neglected the individual consumer by assuming that a small body of experts was better suited to make these intimate decisions in their stead.
But how could they be? Each of these alleged health care experts is incapable of knowing the wants and needs of every single American.
In the chapter fifth chapter of The Road to Serfdom, “Planning and Democracy” Hayek writes:
The point which is so important is the basic fact that it is impossible for any man to survey more than a limited field, to be aware of the urgency of more than a limited number of needs. Whether his interests center round his own physical needs, or whether he takes a warm interest in the welfare of every human being he knows, the ends about which he can be concerned will always be only an infinitesimal fraction of the needs of all men.
And sure enough, health care consumers were mad because they were not getting what they wanted or needed. President Obama’s infamous line, “If you like your plan you can keep your plan,” turned out to be nothing more than rhetoric. In fact many Americans lost their plans altogether, or couldn’t afford to pay the increased premium costs.
Many advocates of state-run health care excused this blunder by suggesting that perhaps this was in the people’s best interest. Maybe their original insurance premiums were insufficient, at least according to the new government standards. Perhaps Obamacare was doing these health care consumers a favor by stripping them of their prior coverage.
But even though the facts were staring every single American in the face, many still believed these “insignificant,” shall we say setbacks, were worth the result of increased national coverage.
And to be fair, there was increased national coverage. Fining or “taxing” citizens for not purchasing health care works as a powerful incentive. But it stifled individualism.
Anyone who dared to speak out against the state’s intervention in the health care industry was quickly made to feel selfish. Clearly, if you weren’t in favor of government interference in health care, you were unconcerned with what happens to those who can’t afford coverage.
Consequences be damned, if the desired end result of increased coverage was eventually obtained, that was all that really mattered.
But opponents of Obamacare are hardly selfish. They just understand that planning for an entire nation is an impossible task. The individual always loses.
As Hayek wrote:
This is the fundamental fact on which the whole philosophy of individualism is based. It does not assume, as is often asserted, that man is egoistic or selfish or ought to be. It merely starts from the indisputable fact that the limits of our powers of imagination make it impossible to include in our scale of values more than a sector of the needs of the whole society, and that, since, strictly speaking, scales of value can exist only in individual minds, nothing but partial scales of values exist – scales which are inevitably different and often inconsistent with each other. It is this recognition of the individual as the ultimate judge of his ends, the belief that as far as possible his own views ought to govern his actions, that forms the essence of the individualist position.
The Problem with Democracy
It is odd that proponents of Obamacare often use the “greater social good” as their excuse since the implementation of a government controlled health care system necessarily leads to a breakdown of social order, or rather, a crackdown on individual liberty.
Hayek understood this far too well. But acknowledging this point was almost unavoidable in Hayek’s time since the world watched in horror as European empires sacrificed the individual in the name of nationalism.
But if it was difficult for Hayek to get this point across to others in his day, even as WWII was unfolding, it is not hard to understand how those in 2017 could easily forget and dismiss these historical lessons. Though this hardly makes it less frustrating.
When opponents of universal health care policies voice concerns over the power Obamacare gives a very small group of people, they are dismissed as hyperbolic and irrational. Clearly, this is what the people wanted, and needed! Those with hesitations should consider the great strides Obamacare has given people. If not for this intervention, the breakdown of the health care system would have resulted in chaos to the consumer. This is the only policy suited to meet the needs of the greatest number of people!
Of course, Hayek spoke to these fallacies too:
The fashionable concentration on democracy as the main value threatened is not without danger. It is largely responsible for the misleading and unfounded belief that, so long as the ultimate source of power is the will of the majority, the power cannot be arbitrary the contrast suggested by this statement is altogether false: it is not the source but the limitation of power which prevents it from being arbitrary.
But this power is absolutely arbitrary and untamable. Obamacare ushered in a new era of increased state control and brokedown constitutional “limitations” by increasing the scope, and thus the role of the federal government in healthcare. The rule of law was demolished, or at least broadened.
Not to mention, procedural rules were broken or bent in order to ensure its passage. “We have to pass it to see what’s in it,” Nancy Pelosi famously said when many members of Congress were enraged to have been given an absurdly long bill and only a short time to actually attempt to read its contents.
But again, Hayek predicted all this too:
And to make it quite clear that a socialist government must not allow itself to be too much fettered by democratic procedure.
And make no mistake, a socialist government is essentially what a post-Obamacare America is. And while Trump has made some rollbacks, the government will continue to encroach on the health care sector, which is precisely why constant vigilance is of the utmost importance. It’s also why everyone should read Hayek.
“The cry for an economic dictator is a characteristic stage in the movement toward planning,” Hayek astutely says. Whenever the people, or perhaps just the congressional leaders who claim to speak on their behalf, assert that economic or social chaos is coming, they often relinquish their sovereignty or do not even realize it has been taken from them until it is already gone.
In theory, democracies are supposed to safeguard the will of the people. And to be sure, democracy on its own is not necessarily negative, or at least it doesn’t have to be according to Hayek.
Hayek ends this chapter by arguing that a democracy, adequately limited in scope can serve as a safeguard to the individual. But unlimited democracies will always be the enemy of individualism. And unfortunately, our real-world experiences with democratic societies have proven to have more of a tendency towards the latter.
As Hayek says:
Democratic control may prevent power from becoming arbitrary, but it does not do so by its mere existence. If democracy resolves on a task which necessarily involves the use of power which cannot be guided by fixed rules, it must become arbitrary.
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