Leading the Revival of Individualism & Self Reliance

Modern Poetic Justice Warrior Shelby Steele Has Exposed the Secret Weapon of the Progressive Left

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The renowned philosopher and economist Adam Smith is famous for saying “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” For fans of the economic way, this is objective reality. For fans of the political way, this is horribly divisive. In today’s politically religious culture, this is blasphemy.

The Pavlovian response of elected officials and their wannabes, from both the so-called left and right, are continual pleas for unity while denying the reality of free markets. For them, their public schooled audience isn’t supposed to see the division being sown is designed to keep the politicos powerful and wealthy.

Author, documentary filmmaker and Poetic Justice Warrior Shelby Steele has identified these contradictions, and the false premises that support them. In a recent cable television interview with Jeanine Pirro, Steele analyzed the essence of the political division,

The left says that we’re racist, that we need to leave that old, ugly America. The conservatives on the other hand, people on the political right, tend not to make high moral claims. They can’t give society the moral innocence it seems to long for.

He concluded, “it seems to me we’re trying to work that out, but not very well.” And they won’t, so long as both sides of the political debate pander to their crony corporate and foundation donors. However, to the credit of the left, they have successfully seized the moral high ground. This is despite their false premise of a Malevolent Universe – success, happiness, and achievement are not available without our fealty to their collectivist tribe.

To the right’s credit, they seem to hold a benevolent universe creed, but for only pragmatic reasons. Its premise is that our capacity for reason is perfectly human, but the right fails to defend reason as fundamental to lives of purpose and pride. As a result, the conservative argument for free market capitalism is the “common good.” That is the collectivist’s turf.

To further explain those who favor the political way, Steele adds,

What you see makes no sense, except as a power grab. The left is saying this country is shameful. We reserve power because we are innocent of that other past. The right says we want law and order. They are right, yet not claiming the high ground.

To claim that one’s country is shameful, without offering context, is itself shameful. At its core, shame can only belong to individuals who adopt anti-life behavior. When these like-minded souls organize themselves, these groups attain political power, and their influence permeates a large segment of the culture, then we have a problem. In American history, that would be the Democratic party.

In the wake of their handling of the Wuhan virus inspired supply-side economic disaster, the Republican party also deserves scorn. Not the least of which is their pathetic defense of capitalism and its requirement for objective law. In the context described by Shelby Steele, conservative media has failed to make a strong moral case for law and order. Instead, they serve up images of cops as good deed doers, for the common good.

Of course, nearly all of them are, and so are the countless butchers, bakers and brewers whose livelihoods are being wiped out by government and anarchist looters. In reality, these officers would love to protect the business operators, for the sake of their individual productiveness. That is the morally defensible purpose. Regarding the events we are witnessing at the moment, Steele observes,

As we speak, we see the enormous power the left has simply claiming themselves to be more innocent than the rest of us. Political correctness has taken one institution after another, where you are required to express your innocence over America’s past.

Inversion, when vice becomes virtue, manifests itself when mobs demonstrate their innocence with spray paint, ropes and gasoline to deface and destroy monuments. Ironically, many of the statues being desecrated actually glorify Democrats. So it makes sense that when reason and reality are abandoned, this behavior is hailed by partisan Democrats in media and Washington who share the attitudes of their forebears, to this day. Shelby Steele continues,

So if you’re in a position, at a university for example, to exploit that, that’s how you get ahead in American life now – to nurture that innocence. The left more and more claims its innocence, the right more and more is frustrated by that.

Bear in mind, this cabal of politicians, chanting marchers, and thugs have no idea how paint, rope and gasoline are produced, not even a Pencil. Those things just happen. What they do know is how to produce mobs. Malevolent life is good when a mob is confused with legitimate protest. Armed with pedestrian slogans and bricks, they aspire to show the world their clean hands and individuality.

Conformists all of them, if they lived in the 17th or 18th century, the DNC would be the chieftains selling their brothers and sisters, and their media partners would be the merchants transporting them to market under the trademark BLM. The protesters would be buying them, assuming they had the wealth to do so. That is not likely, unless they had the political pull.

However, lacking wealth doesn’t matter when need is virtue, independence and ability are punished, and the coin of the realm is envy and guilt. This is where Steele identifies the looters house of cards,

What people on the right do, you can say in one word. They practice deference. We defer more and more to the moralism of the left. Will that get it? The left comes back with something else for us to prove our innocence. That’s power in American life today.

Deference is defined as humble submission and respect. When questions of morality are involved, to submit requires the acceptance of guilt. However, to accept unearned guilt is the highest moral crime someone can commit against themselves. This is Steele’s achievement, to expose the deference offered by innocent Americans as the left’s only weapon, and weakness. Guilt can, and must be, refused and withdrawn.

Whether the looters are politicians, journalists, social justice warlords, or anarchists, they have nothing if they don’t have the unearned guilt of their victims. Their power over American life would be crushed without it.

The cure to sanctioning one’s own victimhood is reason, individualism, and capitalism. In his book The Content of Our Character, Steele confirms America’s founding principle – the protection of the greatest minority, the individual,

Whites must guarantee a free and fair society. But blacks must be responsible for actualizing their own lives. The barriers to black progress in America today are clearly as much psychological as they are social or economic.

As Poetic Justice Warriors, Frederick Douglass was a self-made man in the era of Democratic slavery, Booker T. Washington taught the virtues of economic independence in the Democratic Jim Crow south, Marva Collins taught children how to create lives of understanding and purpose despite the Democratic Chicago school system, and economist Thomas Sowell demonstrated the rising living standards of two parent African American families before Democratic Great Society dependence and despair took over.

Shelby Steele has shown us that a morally vigorous defense of capitalism must be our campaign. As Poetic Justice would have it, Adam Smith brilliantly wrote The Theory Of Moral Sentiments before publishing The Wealth Of Nations – in 1776.

 

 

Markets Signaled Early That COVID-19 Was A Negligible Factor. Politicians-Market Deniers- Refused To Listen.

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Strategas’s Jason Trennert has pointed out over the years that ADP, a payroll processing company, produces at no cost to the taxpayer an extraordinarily thorough accounting of U.S. employment before the Bureau of Labor Statistics does. ADP is very much in the business of knowing what the BLS spends hundreds of millions to know.

This column has pointed out that Visa produces endless reports on consumer spending, borrowing, levels of debt, debt in arrears, etc. Well, of course it does. As a credit card company, there’s a reason for Visa to know these things, and to know them as far in advance as possible. Translated, Visa doesn’t wait for the U.S. Bureau of Economic Analysis to calculate consumer spending. Neither do sophisticated investors. Bank on it.

All of this should offer a clue to readers of something that’s not been said enough over the last several months. Markets don’t wait. The new coronavirus was a news item in January. It was known then that the virus had originated in China. U.S. companies derive enormous amounts of sales from the very Chinese customers who produce so much for American consumers. To export is to import, by definition. This is a long, or short way of saying that investors had a good sense long before politicians panicked in March that irrespective of the growing alarmism among politicians and doctors, the virus wasn’t terribly lethal. If it had been, there’s no way that U.S. equity markets would have reached all-time highs in late February. Again, markets don’t wait for politicians to respond, nor do they wait for doctors and entities like the CDC.

This truth brings to mind what Ken Fisher routinely tells audiences he speaks to. What you know, assuming it’s true, is already priced. Markets are relentless processors of information, good and bad. What you think, or what someone told you at a party to think is, if valid, already processed.

This is worth a thought in consideration of the growing investor focus on “volatility.” As the Wall Street Journal’s Gunjan Banerji explained it on Saturday, “In recent years, volatility has gone from a specialty of derivatives traders to a vehicle for trading in its own right. Investors big and small are wagering hundreds of billions of dollars on volatility.” Call it the politics trade.

Volatility speaks to big lurches in market sentiment rooted in surprise. Since markets are on their own feverishly processing information, it’s not as likely for the day-to-day vicissitudes of life to produce too much surprise. Markets yet again don’t wait, so it’s logically true that “news” about unemployment, shrunken sales, mild or lethal viruses, and reduced production in Bangalore is already known and priced well ahead of when we read about these things in newspapers.

To offer up yet another example, former Fed Chairman Alan Greenspan was known to call FedEx CEO Fred Smith with great regularity. To export is to yet again import, so Smith has a keen sense of global economic activity based on shipments, and well before official figures are released.

Notable about Smith, and as was pointed out here a few weeks ago, his company has a big, 907 employee operation in Wuhan. Smith knew long before the hideous lockdowns that the virus had thankfully not killed any of his Wuhan employees. Had it proved extraordinarily lethal, we consumers of news would have known this truth long before March given the exposure of all-too-many public companies to China, along with Wuhan, the virus’s epicenter. These realities, good or bad, would have reached equity prices first, only for them to reach newspapers and news organizations after. Professional investors are paid not for being late to information, but for being early. That there was no market alarm in January or February about the coronavirus should once again have readers wondering….

Bringing it back to the Journal’s Banerji, he contends that markets “were once dominated by bulls who thought stocks would go up and bears who thought they would go down.” Investors focused on volatility don’t much care about the direction of shares as much as they care about big movements. In short, volatility traders are focused on politics.

Politicians are the wildcard. Way-too-powerful responders to news that markets have already processed, their responses to information that investors have been pricing for a lot or a little time helps create the volatility that is increasingly a trade. Because politicians are powerful, their decisions have economic impact.

But since politicians are members of the human race, it’s not always predictable what they’ll do. If it were, or if their power was limited, they couldn’t create volatility. Unfortunately, it’s neither true that their actions can always be known in advance, nor is it true that their power is so hemmed in that their actions don’t matter.

Which to a high degree explains volatility. Big market movements are a function of surprise, and politicians responding to yesterday’s news create the surprise.

Imagine then, the economic growth lost to the volatility trade that is in so many ways a politics trade. Think how much further along the global economy would be if hundreds of billions weren’t directed toward hedging the volatility of statesmen, and instead toward the ideas and businesses that drive progress. Most of all considering the troubled present, imagine where the global economy would be today if politicians had listened to the markets over their own, highly emotional and vain, selves.

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com).

The COVID-19 Lockdowns In The US Represent The Most Destructive And Unjustified Policy Error Since The Iraq War.

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In April 2005, Charles Duelfer, the CIA’s top weapons inspector in Iraq, admitted in the CIA’s final report that after an extensive search, no weapons of mass destruction could be found.

“After more than 18 months, the WMD investigation and debriefing of the WMD-related detainees has been exhausted,” wrote Duelfer, the leader of the Iraq Survey Group. “As matters now stand, the WMD investigation has gone as far as feasible.”

Today it’s generally accepted that the presence of WMD was the primary basis for the Iraq War. Naturally, the absence of such weapons shook the world. The media blamed the politicians, the politicians blamed US intel, and the intelligence actors involved mostly defended their work.

The official word, chronicled in the Robb-Silberman report, concluded that “the Intelligence Community didn’t adequately explain just how little good intelligence it had—or how much its assessments were driven by assumptions and inferences rather than concrete evidence.”

The Iraq War WMD debacle is arguably the greatest expert “fail” in generations. The holy triumvirate—lawmakers, bureaucrats, and media—all failed to sniff out the truth. If any of them had, a war that cost trillions of dollars and claimed the lives of 100,000-200,000 people likely could have been avoided.

It would be difficult to surpass the Iraq blunder, but emerging evidence on COVID-19 suggests the experts—again: lawmakers, bureaucrats, and media—may have subjected us to a blunder of equally disastrous proportions.

A new NPR report suggests the global response to COVID-19 may have been reached on a flawed premise.

Mounting evidence suggests the coronavirus is more common and less deadly than it first appeared.

The evidence comes from tests that detect antibodies to the coronavirus in a person’s blood rather than the virus itself.

The tests are finding large numbers of people in the US who were infected but never became seriously ill. And when these mild infections are included in coronavirus statistics, the virus appears less dangerous.

“The current best estimates for the infection fatality risk are between 0.5% and 1%,” says Caitlin Rivers, an epidemiologist at the Johns Hopkins Center for Health Security.

That’s in contrast with death rates of 5% or more based on calculations that included only people who got sick enough to be diagnosed with tests that detect the presence of virus in a person’s body.

Many people will recall the fatality risk debate that took place prior to and in the early stages of the lockdowns. There was much discussion over how deadly the virus was and what the collective response to the virus should be.

Some voices exercised caution.

“The public is behaving as if this epidemic is the next Spanish flu, which is frankly understandable given that initial reports have staked COVID-19 mortality at about 2–3 percent, quite similar to the 1918 pandemic that killed tens of millions of people,” Jeremy Samuel Faust an emergency medicine physician and an instructor at Harvard Medical School, wrote in Slate. “Allow me to be the bearer of good news. These frightening numbers are unlikely to hold.”

Similarly, on March 5 vaccine expert Paul A. Offit, who holds the Maurice R. Hilleman Chair of Vaccinology at the University of Pennsylvania, told Factcheck.org that he believed that the World Health Organization’s 3.4 percent fatality rate figure was too high, suggesting it was well below 1 percent.

“We’re more the victim of fear than the virus,” Offit said, adding that the world was witnessing a “wild overreaction” to the disease.

Voices like those of Faust and Offit were quickly drowned out, however. The 24-hour news cycle fanned collective fear and outrage that more was not being done. Runs on toilet paper and masks ensued. Neil Ferguson, professor of mathematical biology at Imperial College London, predicted millions would die in the “best-case scenario.”

Following the example of China, one of the most authoritarian regimes in the world, most of the developed world was placed in indefinite lockdown by their own governments.

The social and economic costs of the lockdowns soon became apparent. The US alone has seen 40 million jobs lost, many of which aren’t coming back. Recession looms. Hundreds of thousands of businesses have already been wiped away. The federal debt has surged to $26 trillion.

Unfortunately, the COVID disaster and the aforementioned Iraq War fit a familiar pattern. As the historian Paul Johnson has observed, most of the worst events of the 20th century were perpetrated by experts who used collective power to shape world events in a direction they believed was beneficial.

“One of the principal lessons of our tragic century, which has seen so many millions of innocent lives sacrificed in schemes to improve the lot of humanity, is—beware intellectuals,” Johnson wrote in The Intellectuals. “Not merely should they be kept away from the levers of power, they should also be objects of particular suspicion when they seek to offer collective advice.”

Nobody denies the immense cost of the lockdowns, but what was gained by them remains a subject of contention.

A May report from JP Morgan, as well as other evidence, suggests the lockdowns had little to no impact on the spread of COVID-19.

Marko Kolanovic, a physicist and strategist for JP Morgan, pointed out that a majority of nations saw declines in infection rates after the lockdowns were lifted.

“Unlike rigorous testing of new drugs, lockdowns were administered with little consideration that they might not only cause economic devastation but potentially more deaths than Covid-19 itself,” Kolanoviche said.

Jon Miltimore@miltimore79
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Similarly, a Bloomberg analysis in May found “little correlation between the severity of a nation’s restrictions and whether it managed to curb excess fatalities.” Meanwhile, Norway’s top health official recently stated that lockdowns were not a necessary step to tame the virus.

On the other hand, the Washington Post this week cited studies claiming the lockdown orders prevented hundreds of millions of COVID-19 infections and saved millions of lives.

These findings come with caveats, however. First, one of the studies was submitted on March 22—well before the vast majority of COVID cases had even occurred. The other study was conducted by researchers at the Imperial College of London, the same school from which Ferguson hailed. (He has since resigned after it was discovered that he broke the lockdown protocol he helped design by allowing his married lover to come to his home.)

Ferguson, who in 2005 said up to 200 million might die from bird flu (about 100 did), was asked by The New York Times in March what the best-case scenario was for the US during the COVID pandemic.

“About 1.1 million deaths,” he responded.

As of June 10, Ferguson is off by about a factor of ten. Why we should continue to listen to schools that have already proven to be so disastrously wrong is anyone’s guess. The “chicken little” story comes to mind.

In 2003, state actors led the world into a bloody, years-long struggle in Iraq to protect the world from nuclear weapons that didn’t exist—only to eventually learn how little US intel experts actually knew about Iraq’s nuclear capabilities.

In 2020, central planners from around the world decided to shut down the global economy to protect people from an invisible, highly contagious virus that will result in no or mild symptoms for up to 90 percent of its carriers.

Some lessons, it seems, are hard to learn.

The Way Out Of The Current Crisis Lies In The Fundamental American Principle Of Individualism.

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There is only one way out of our current crisis, but it is not a message that the people are in the mood to hear right now. With images of police killings, calls to defund the police, mass protests, rioting, looting, and generalized mayhem on our minds, most Americans are not in the mood to hear that the answer lies in us. It lies in each of us. It lies in the fundamental American principle of individualism.
On all sides, Americans are hearing the opposite message right now. They are hearing that what matters most is their group identity: their racial identity, their socio-economic identity, their gender, their age. Americans have additionally been lumped into groups in the response to the coronavirus pandemic. We are told, in the most intimate ways, whether we can work, where we can eat, whether we can socialize or come together to see sporting events or plays or engage in religious observances (but protests are okay).
The answer to all these problems, we are told, lies in collectively restricting our liberty.It is in this dry-tinder atmosphere that the police killing of George Floyd is the spark that has set our society aflame.The answer, although Americans don’t want to hear it right now, is individualism. Still, it merits saying now so that when passions are cooler, we can consider it and begin to use this principle to restore our society.
The principle is individualism, as in “the individual versus the collective.” America was founded on the principle that the government has only one purpose: to protect the rights of individual Americans. It was not to protect groups of Americans as such, whether identified by race, gender, socio-economic status, age, or any other designation. The relevant unit is the individual, not the collective.
The government protects the individual by protecting our individual rights. In the original formulation by the philosopher and political theorist John Locke, this is our individual right to life, liberty, and property. It is these principles that became the inspiration for the principles enshrined in the American Declaration of Independence: the right to life, liberty, and the pursuit of happiness. And in calling for a revolution against British tyranny and the formation of a new American government, our Declaration said, “To secure these rights, governments are instituted among men.”This principle has always only been imperfectly applied within the United States. It was not applied to African-Americans, and a civil war and long civil rights struggle had to happen to begin to make this so. It did not fully apply to women, and the women’s suffrage and women’s rights movements had to happen before women were fully included. But the principle was first implemented here, in the United States, where an entire society built on this principle of individualism appeared for the first time in history.The root of the principle of individual rights is that it is the individual that matters, not the collective that he or she belongs to. Only an individual can act to pursue his or her own happiness, and it is only by protecting an individual’s rights that his or her happiness can be pursued. A collective does not have feelings of happiness or anything else. Only individuals do.

Although America has made tremendous progress in extending and fully protecting individual rights, for example by extending them to African-Americans and women, in our culture, sadly, we are now moving away from the principle of individualism.

In the response to the coronavirus pandemic and the George Floyd killing, but even earlier, we are being pressured on all sides to identify ourselves fundamentally, not as individuals, but by our group identity. We are asked to identify ourselves primarily by our skin color, our socio-economic “class,” our gender, whether we are a foreigner or native-born, whether we are Red-state, or Blue-state, and whether we deserve such collective guilt-inducing labels as “privilege” or “oppressor” or its opposite, “victim.”

Mass protests and mob violence further pressure Americans, almost as a self-defense mechanism, to identify themselves by group affiliation. There is psychological safety in numbers. This is a profoundly unAmerican way in which to view ourselves. It has and will lead to disaffection, violence, and maybe even a new civil war. It certainly is playing itself out in an intensely polarized group-versus-group politics. In the midst of all this, the rights of the individual are lost.

The slogans and protests and violence all have the effect of pulling us to identify ourselves primarily by our membership in a particular group, not to identify each of us by our own unique, individual identity. George Floyd had his individual rights violated. Yet, the collective memes and protests are trying to make us forget our individual identities and accept blame or to seek comfort and protection solely on the basis of group identity.

This can only lead to a war of all against all.

We must assert and demand that our individual rights are protected, both by the state and from the state. But before we can do this, we must remember that what matters is our fundamental identity as individuals, not the characteristics we share with a group. One’s characteristics — including characteristics of race, gender, and socio-economic status — are characteristics possessed by each of us. But such characteristics are irrelevant for our character, which is ours alone, and is the result of our choices.

It is with regard to our character that we must judge ourselves and others. Martin Luther King, Jr., in his famous “I Have a Dream” speech captured this idea when he said, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.”

We must judge ourselves and others by the content of our character, not by the color of our skin, our gender, socio-economic class, or any other group characteristic.

We Must Turn to Individualism to Find the Way Out

Consider some ways (this is not an exhaustive list, just examples) that applying the principle of individualism and its corollary — individual rights — can help navigate a way out of the current crisis.

Take the killing of George Floyd, and all unjust killings and uses of force by the police. Individualism can begin to point the way to a solution of this problem. The most important individualist principle is individual justice. The police officers responsible for George Floyd’s death have been arrested and will face trial in a courtroom.

Longer-term, laws must be eliminated that create unnecessary encounters with the police. Each encounter with police is potentially violent, and the fewer of them the better. Along these lines, eliminate the host of unnecessary laws against commerce that invite unnecessary interactions with the police.

An example is the laws that criminalize everyday economic activities, such as the unnecessary, silly and ultimately deadly law against selling individual untaxed cigarettes that led to the chokehold death of Eric Garner in New York City six years ago. There are many more such laws that criminalize ordinary commerce and unnecessarily invite interactions with police. These laws violate individual rights. They should be repealed.

On a much larger scale, we must recognize that our right to life means that we own our own bodies. Ingesting particular drugs, whether alcohol, marijuana, or heroin, is a personal choice and an aspect of a person’s right to their body. Eliminate the drug laws that result in the unnecessary arrest and imprisonment of hundreds of thousands of people. Fully 46% of federal prisonersand 20% of all 2.3 million prisoners at all levels, federal, state, and local, are incarcerated due to drug laws. 38% of all prisoners are African-Americans and many of them are in jail for drug offenses.

Respecting this individual right by repealing the drug laws will reduce the number of encounters with police, each of which carries the risk of excessive use of force.

The principle of individualism says that each one of us is responsible for our own health. We can choose whether and how to protect ourselves from coronavirus by using masks, socially distancing, and avoiding large crowds. The government lockdown has unjustly impoverished millions by shutting down their businesses and preventing them from working. It is this atmosphere of mass unemployment and shuttered businesses that helped create the tinder for such a widespread reaction of looting and violence in response to the George Floyd killing.

The solution to our country’s problems lies in individualism. Empower the individual by repealing laws that violate the individual right to life, liberty, property, and the pursuit of happiness. Enforce justice when those rights are violated. This is the way forward out of this crisis, not group identity politics.

Raymond C. Niles is a Senior Fellow the American Institute for Economic Research and Assistant Professor of Economics & Management at DePauw University.

How Entrepreneurs Build Beautiful Businesses.

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In his book, Narrative Economics, Robert Schiller, Nobel Prize-winning economist, tells us that the greatest influences on the nation’s economy come from the stories we tell ourselves about it.

A depression lasts longer when people tell themselves and each other that it’s going to be a long time before things turn around. Recoveries accelerate when people turn optimistic and tell each other that the good times are just over the horizon and will be back soon. Currencies lose their purchasing power when people tell each other prices are going up and its best to exchange cash for products now and not wait for the higher prices. Trade unions are vilified when people start talking about excessively high wages pushing up inflation. Schiller has a lot of stories, or narratives, as he calls them.

These are macroeconomic tales, about trends in GDP, and the price level. But the same is true at the microeconomics level. The reason why there is so much negativism about business, capitalism and free markets is that people are telling each other negative stories about business aggressiveness, unsustainability, lack of sympathy and general coldness. We’re angry at business, it seems.

One source of this anger are the business school instructors, and their textbooks and business biographies and histories that portray businesspeople as a warrior class and business competition as warfare. Invading industries, taking beachheads, fighting for market share. The Art Of War by Sun Tzu is often cited as the most popular business book, and a source of business strategies.

Another military metaphor is defensive – protecting your castle. “You need a “moat” — essentially, a barrier that can protect your business from potential encroaching forces”, says one writer in Medium.

The military narrative is a horrible metaphor for business. The blood and gore and destruction and operational chaos that war metaphors bring to mind have no place in our image of what businesses do and the service they provide. Customers buy products and services only if they believe that, by so doing, they’ll make their lives better in some way. Otherwise they wouldn’t buy. Businesses exist to generate this sense of betterment, of satisfaction, of well-being among their customers. If they are not good at it, they’ll lose the patronage of that customer to a business that pleases them better. Consequently, businesses are always trying harder to understand what will make their customers happy, and to perfect their own knowledge of how to deliver that happiness.

We need a new narrative of business formation and business action that is an alternative to the military metaphor, especially so that we can teach our kids in school that business is a channel for their aspirations, not a regimen to which they are to be subjected. We need a business-is-beautiful metaphor. That its purpose is to serve and to please and to make life better. That it’s the source of what’s good: income to nurture families, products and services to nurture life.

One business guru who is leading us in this direction is Per Bylund, a professor at Oklahoma State University’s Spears School Of Business. He writes about business owners and executives and managers building an island – an island that is inviting enough to attract visitors who will enjoy their time there, and perhaps become residents. An island that’s separate but well connected by bridges and ferries and transportation to bring people comfortably to and fro. Like any island, it’s unique. No two are the same.

Professor Bylund calls them “islands of specialization”, designed by entrepreneurs and their management teams to serve customers in a specialized way that will merit their patronage, keep them visiting, and make them loyal. His strategic advice to businesses has no military overtones.

“Aim to please” is his first principle of beautiful business. To attract people – customers – to the island is simply a matter of understanding what will please them. This requires empathy – understanding people, their hopes and dreams and desires and preferences, and catering to them. It’s a matter of discovery and translation. Business strategy, in this vision, is not aggression but deference: seeking to please others.

“Don’t copy – move beyond” is the next principle. The military metaphor sees competition as conducting wars over business territory, or fighting for customer attention. That’s a misconception of the economic concept of competition. In the economic way of thinking, there is no new value for customers when a firm merely copies what is already offered by others. Value emerges from what’s new and better and different. Smart entrepreneurial island builders assess the current landscape, predict where the customer will be in the future, and navigate to that place to build a new island.

Once they establish the new location, entrepreneurs build from strength. They distinguish what is unique about their resources that can be of benefit to customers. Much of the uniqueness is subjective – the owners’ or the business’s identity, their unique knowledge and expertise, their relationships and interconnections that can co-ordinate the assembly of specific solutions. It’s not about arraying more destroyers on the battle lines than the opponent; it’s arraying a set of uniquely desirable and attractive brand features and attributes that are attractive to the customer.

And the island builder keeps on building. Not for scale or market share or maximizing output. The direction of growth is to maximize value. Value is a feeling of satisfaction in the customer’s mind. Maximization, in this view, refers to higher levels of satisfaction, over a wider range of experiences, for more customers on more occasions. Maximization is not a quantitative or mathematical concept, to be compared with rivals to ascertain who is “winning”. It’s a qualitative concept – what quality of value has been experienced, and how can it be improved.

The four guiding principles – aim to please, in unique ways, based on your own identity and strengths, always thinking about the value that’s experienced by customers – lead to beautiful businesses. If you are developing visual island imagery in your mind’s eye as you read this, think of a balmy climate, vibrant flowers and trees, bubbling streams and distinctive animals and birds. Perhaps there’s an attractive resort hotel welcoming and catering to customer-guests. Let your imagination run free in conjuring up beauty – that’s what entrepreneurs do as the start, grow and sustain their businesses.

Per Bylund, PhD, is assistant professor of entrepreneurship and Records-Johnston professor of free enterprise in the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management and economic organization. He is author and editor of four books.

Francisco d’Anconia Combined the Virtues of Clark Gable and the Vices of Rhett Butler

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The character of Francisco d’Anconia, from Ayn Rand’s epic novel Atlas Shrugged, was portrayed in this series’ May 15th article as the moral defender of money. It was presented as the keystone of civilization, and central to the virtues of honest economic dealings. What he explained to those desperately clinging to the collectivist idea that money is the root of all evil,

Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion; when you see corruption being rewarded and honesty becoming a self-sacrifice, you may know that your society is doomed.

Two weeks later, this column featured d’Anconia as a financial scoundrel and philandering playboy. His d’Anconia Copper had attracted the investment dollars of his closest crony friends, and squandered it.

Mr. Rearden, do you know where most of those new aristocrats keep their hidden money? Do you know where most of the fair-share vultures have invested their profits? In d’Anconia Copper stock. Safely out of the way and out of the country.

However, Francisco’s contradictions of character go much deeper than that. Publicly, he was celebrated for his flamboyant lifestyle, wealth producing ability, and willing cooperation with government social programs. Privately, he crushed the relationship with the love of his life, and systematically bankrupted his family’s namesake.

In real life, it’s nearly impossible to find an enigmatic character that remotely resembles the fictional one. Of course, fiction is just that, and Rand’s heroes were idealized versions of what is possible. One such personality was an American hero from the European theater of World War II. Prior to enlisting, his wife had been promoting the sale of government bonds to help fund the war against fascist oppression. When Carole Lombard’s plane crashed in Nevada on her way home, it was a crushing blow. According to Lombard biographer Michelle Morgan,

Clark Gable rode his motorcycle recklessly, drank and smoked heavily. He kept Lombard’s bedroom unchanged. He signed up for the U.S. Army Air Corps in 1942 and told friends he didn’t care if he lived or died.

Journalist Robert Dorr reported years later,

At age 40, Gable didn’t feel that he and Lombard had done enough. He volunteered, and was trained as a photographer and aerial gunner. Because of his Hollywood connections, he was part of the First Motion Picture Unit.

At the time, Gable was the most admired leading man in the world, had earned unimaginable wealth, was living his values in the outdoors and on his ranch, and in the company of his equal until she was taken. It takes a living spirit to give meaning to material values, and Gable had lost a good chunk of that spirit.

Dorr continues, Former Tech. Sgt. Ralph Cowley recalled events after the 351st arrived at Polebrook, England, and began flying bombing missions over the Third Reich: “Records indicate that Gable flew five combat missions but Cowley and other veterans remember that he flew many more.”

Similarly, Francisco advised Henry Rearden, after Henry’s best friend disappeared and they were observing their grand achievements together,

If you want to see an abstract principle, such as moral action, in material form – there it is. Look at it Mr. Rearden. You have the capacity to judge, the courage to stand on the verdict of your mind, and the most ruthless consecration of doing what is right.

In Francisco’s case, he didn’t lose the love of his life, Dagny Taggart, in a tragic accident. He became the accident. While Gable went to war trying to regain Lombard’s spirit, Francisco ended the relationship to engage in war defending the human spirit. As he explained to Dagny,

It’s you that I’m fighting, not your brother James or Wesley Mouch. It’s you I have to defeat. I am out to end all the things that are most precious to you right now. Now you may hate me, from your stand, you should.

In addition to that, Gable didn’t blow up the bridges of his movie career, he postponed fame and fortune while helping produce war movies for Hollywood. Conversely, Francisco literally blew up copper mines, the value of his company’s stock, and described the goal to Dagny,

I shall destroy every last bit of it and every last penny of my fortune and every ounce of copper that could feed the looters. I shall leave it as Sebastian d’Anconia found it – then let them try to exist without me!

This is why d’Anconia adopted the alter ego of Clark Gable’s character in Gone With the Wind, Rhett Butler. However, the persona of a charming and cynical womanizer was merely an elaborate ruse. His affection for Dagny and his family’s good name were concrete, primary values. When Dagny asked about the strikers who had vanished, Francisco answered,

I was one of the first of them. Wasn’t it the worst of what I did to you? That I left you looking at the cheap playboy who was not the Francisco d’Anconia you had always known? I know what it did to you.

While Rhett Butler may have walked out of his marriage in search of charm and grace in another world, Francisco d’Anconia walked away from his relationship with Dagny to restore it in theirs. He was determined to preserve the charm and grace of Nathaniel Taggart’s, Henry Rearden’s, and Sebastian d’Anconia’s world – the virtues of reason, rational behavior, and productiveness. The objective of d’Anconia’s war was to expose the secret weapon used by their destroyers. As he tries to convince Rearden,

You have been called selfish for bearing responsibility for your own life. Have you asked, by what code? No, you have borne it all and kept silent. You bowed to their code and let them brand you as immoral. You have been paying blackmail for your virtues.

Like Clark Gable was devoted to preserving Carole Lombard’s sense of life and spirit after her passing, Francisco d’Anconia was devoted to Dagny’s during her lifetime. To save her from her only sin, the acceptance of unearned guilt, he sacrificed two very high values for a higher one – to help her find out for herself, as he did, that she was feeding the beast of her own destruction.

 

Economic Collapse Has Turned Many Europeans against the EU.

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Since the beginning of the year, the corona crisis has monopolized news coverage to the extent that a lot of very important stories and developments either went underreported or were ignored altogether. One such example was the very surprising ruling that came out of the German Constitutional Court in early May, which challenged the actions and remit of the European Central Bank (ECB).

In essence, the court’s decision made it clear that the ECB’s quantitative easing (QE) program did not respect the “principle of proportionality,” abusing the ECB mandate, while the German government failed to challenge the bank’s policies as it should have. The ruling also mentioned the side effects of the program and of the ECB’s overall ultraloose policy direction, such as the penalizing of savers and pensioners. As was highlighted in the official decision, “the ECB fails to conduct the necessary balancing of the monetary policy objective against the economic policy effects arising from the program. Therefore, the decisions at issue…exceed the monetary policy mandate of the ECB.” As a result, the court issued an ultimatum and directly asked the Bundesbank to comply with its ruling and therefore to stop buying government bonds under the ECB’s QE program in the next three months.

Although the German court ruling had nothing to do with this latest wave of easing and money printing triggered by the coronavirus crisis, its timing puts the present situation in a different perspective.

This crisis has served as a “judgment day” of sorts. It has revealed the countless failures, the incompetence, and the disarray at the very core of most institutions, not just in Europe, but globally. The more decentralized nations fared relatively better than those with a high degree of centralization, the latter unfortunately being the majority. In the more centralized nations the lack of consistency and of clear leadership, the contradictory messages, the failures of public healthcare that cost countless lives, and the political decisions that cost millions their jobs and livelihoods all exposed the defects of centralization and the unreliability of both national governments and international organizations. And that’s just the first wave of disasters, the ones immediately seen and felt. There are even more grave consequences and aftereffects in the pipeline, which most citizens haven’t even realized yet, such as the inevitable breakdown of welfare systems and the debt time bombs in most major economies.

Specifically in the EU, the moral shortcomings, the small-time power games, the hypocrisy, and the sheer panic of the bloc’s leadership were laid bare for all to see. All that talk of friendship and cooperation between European nations, all the speeches about “solidarity” and the great European family, instantly proved shallow when this perfect union was confronted with the COVID threat. Shipments of medical supplies destined for one nation were seized in transit by its neighbor, drugs were hoarded, borders were shut down, trade was frozen. The first and hardest-hit member of the “family” went unaided and was helpless for weeks. The first EU rescue package, meant to help keep the economy alive in the face of the forced shutdown, was delayed by political horse trading, all while entire industries were decimated and millions rendered unemployed.

The scale of the economic disaster is only now starting to become clear, and the future looks bleak even without all the risks being understood and accounted for yet. The deterioration and the economic downturn that is just beginning is projected to be comparable to or possibly worse than the Great Depression, and it could last longer too. Already the eurozone economy has seen the steepest decline in its history, according to Eurostat figures, while the unfolding recession is projected to be much worse than the last crisis. The “cures” that worked before are unlikely to stop this tsunami, while the unprecedented levels of spending we now see in most member states are not sustainable. The “emergency checks” and worker protections cannot stick around forever. Not unless they are formalized and normalized as we saw in Spain, where a basic income scheme is being introduced, the first ever in Europe, which the Spanish government hopes will indeed “stay forever.” This of course is no “solution,” but simply the nationalization of the economy. Central planning, income redistribution, and the state takeover of the private sector are all at the core of various “rescue” efforts and ideas being pushed at the moment, and we know where this road actually leads. If the countless historical examples aren’t enough to demonstrate the inevitable and inescapable results of these policies, one only need look at contemporary China.

lazyload

Still, the economic pain is already so widespread that demonstrations and new movements are starting to have an impact. Antilockdown protests, rent strikes, and clashes with police have all been increasingly frequent in many European capitals. The political winds are also shifting, and once again public sentiment is turning decisively against the EU. According to a recent survey by Tecné, 42 percent of Italians said that they would leave the EU, up from 26 percent in November 2018, while 88 percent felt that the EU failed to support their country. Over in France, around six out of ten people “do no not trust” Brussels according to a Jacques Delors Institute study.

Therefore, this idea of nations taking back control of their economies couldn’t have come at a worse time for the EU and those who see an opportunity to push for further centralization in the corona crisis. Support for measures that would lead to tighter integration and even more power handed to Brussels is high among institutional figures; however, these plans are very unlikely to be popular among citizens.

Although the north-south economic divide has grown exponentially deeper in just a few months, the corona crisis has arguably managed to bridge political gaps. Citizens of the hard-hit south, especially in countries such as Italy and Spain, have become markedly more mistrustful and disillusioned with the EU and are turning away from it, as they feel that it turned away from them in their hour of need. On the other hand, citizens of the more prosperous north see exactly how this “rescue” effort is going to end, as it has a thousand times before, with them having to foot the bill to support southern economies that were already failing long before the coronavirus ever made it out of Wuhan.

What Lies Ahead

Overall, it is unlikely that the legal challenge from the German court will make a practical difference in the unlimited QE plans of the ECB. Especially at a time like this, negative interest rates and money flooding the markets are simply a fact of life, and there is no conceivable way for the ECB to just stop, the same way that it is impossible for governments to reverse course in their massive spending sprees anytime soon. The scale of the damage that has been done to the economy, the destruction of any kind of private productivity, the job-killing shutdowns, and the desperation among officials to plug the holes of a sinking ship all render these measures necessary, both politically and realistically.

What the court’s ruling might achieve, however, is not a monetary change, but a political one. It could serve as a signal that national sovereignty is still on the table, still worth debating and defending. In this regard, we do seem to be approaching a crossroads and there’s a choice to be made.

We either passively accept a centralized future, where the individual becomes irrelevant, valueless, and expendable, or we reclaim control, through the principles of subsidiarity, in which decisions are made on the lowest possible level and all voices are heard. In the aftermath of the corona crisis the latter option already seems to be gaining momentum, and understandably so. After so many were let down, betrayed, and ignored, after basic rights were trampled and the promise of security in exchange for freedom has proven to be a very bad deal indeed, it is no wonder that alternatives are sorely needed and that a hard turn toward individual responsibility, independent thought, and decentralization is already underway.

This article was originally published at claudiograss.ch.

John Taylor Gatto Coached the Natural Individualism and Independence of His Students

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On July 25, 1991, the Wall Street Journal published an op-ed by Poetic Justice Warrior John Taylor Gatto. It was a letter for his former employer, the New York City Public Schools – I Quit, I Think. In his resignation, Gatto teaches,

Government schooling is the most radical adventure in history. It kills the family by monopolizing the best times of childhood, by teaching disrespect.

Since Poetic Justice rewards virtue and punishes vice, Gatto’s form of resigning was the latter. Gatto shoved the disrespect endemic to government schools right back in their faces. He was 1991’s State Of New York Teacher of the Year.

Disrespect comes in various forms. One is to reward mediocrity. Another withholds recognition for what is good. These combine when mediocrities (envious people whose self-esteem belongs to their tribe) start making demands, and their victims kneel. Gatto continues,

An exaggeration? Hardly. Parents aren’t meant to participate in schooling, rhetoric to the contrary. My orders are to make children fit an animal training system, not to help each find his or her personal path.

If the personal path is thwarted by compulsory schools, that leaves the path of collectivism wide open, which is the point. Its fundamental lesson is that individual lives have little value, except “public service.” Because critical thinking requires context, Gatto offers some,

The blueprint of school procedure is Egyptian, not Greek or Roman. It grows from faith that human value is a scarce thing, represented symbolically by the peak of a pyramid.

To preserve the illusion that schooling is education, we got the failed Common Core standards, and now STEM (science, technology, engineering, and math). Here, Gatto anticipated the defensive, science-denier rhetoric to be used against anyone who challenges the premises of government climate and economic conformity,

That idea passed into American history through the Puritans. It found “scientific” presentation in the bell curve. Talent apportions itself by some Iron Law of biology.

Gatto also anticipated the rants we’ve seen on the protest signs of “peaceful protesters:” No Justice, No Peace! What does this mean? The beatings will continue until morale improves? There will be no justice – and there will be no peace? Gatto explains their demand: Kneel!

It’s a religious idea and school is its church. New York City hires me to be a priest. I offer rituals to keep heresy at bay. I provide documentation to justify the heavenly pyramid.

Do people schooled as fish understand the moral concept of justice? Are protest marches and blocking traffic merely a ritual for Mediocrity Worship? I Quit, I Think tells us, “Socrates foresaw that if teaching became a formal profession something like this would happen,”

Professional interest is best served by making what is easy seem hard. School has become a vital jobs project, contract-giver and protector of the social order to allow itself to be “re-formed.” It has political allies to guard its marches.

How did anti-conceptual slogans become proof of intellect? Why does joining a mob pass for courageous self-expression? When did the threat of violence and mass looting of innocent lives become justice for the sadistic murder of George Floyd, but not David Dorn’s? To solve contradictions, Gatto identifies false premises,

I almost never met a “learning disabled” child or “gifted and talented” one, either. These are sacred myths. They derive from questionable values we never examine because they preserve the temple of schooling.

Poetic Justice teachers Maria Montessori and Marva Collins disproved and reformed the government myth of “learning disabled” decades ago, and Gatto’s resignation letter attests that the object of compulsory government schooling is human mediocrity. Its premise is incompetence, and their means is conformity.

That’s the secret behind short-answer tests, bells, uniform time blocks, age grading, standardization, and school religion punishing our nation. We don’t need state-certified teachers to make education happen. That guarantees it won’t.

Over the last two weeks, Gatto’s proof is plastered throughout TV news broadcasts, and this group think is celebrated by TV news personalities. Yet there is no rational justification for these mass demonstrations in a civilized society. That is the last step before armed insurrection against an oppressive dictatorship, but America is the most free, open, and prosperous society the world has ever known.

Today’s short-answer question – America is defined by, a. White privilege b. Capitalist greed c. Systemic racism d. Inequality e. Police brutality. Yet this is old as dirt, and straight out of terror group Weather Underground’s 1974 playbook titled Prairie Fire.

Around the same time, comedy troupe Second City had a hit musical titled Lemmings. In the role of stage announcer was John Belushi, who blasted, “If you’re not a black, homosexual, working class woman, your an oppressor, pig. And you deserve to die!” Fifty years later, slave traders Don Lemon, Chris Cuomo, and Al Sharpton are coaxing their Lemmings over the Brooklyn Bridge while posing as cutting edge human rights oracles.

In a 2011 interview titled, The Ultimate History Lesson, A Weekend with John Taylor Gatto, he tells his audience that nature is diametrically opposed to group ritual.

Individualism and independence are human nature. Throughout history, management has failed to manage independent units. Do not assume what anyone says is truth, especially from upper levels of authority structure.

To deny nature is to avoid reality. To disrespect independence and individualism is to manufacture cowards and fools. Because of Gatto’s ability for developing critical thinking skills, his classes were frequently audited by adults. Here, state certified teachers witnessed Gatto at work,

I challenged my students to ask, why are we doing this? The teacher must prove why they believe what they are teaching. I asked myself first, then I asked my classes to ask me.

But did these teachers learn anything? Since Gatto’s resignation, another generation has been schooled by progressive public education, and group think has never been stronger. Gatto warned in the interview,

Schools prevent students from making neural connections. Short answer tests are easier, they don’t require connectivity, only memorization of someone else’s connections.

When our culture teaches that reality is not knowable, and morality is subjective, all answers are correct. To mold cowards and fools, the choices to the question above are the only answers allowed. Memorize that! By design, they are random concepts without context. Context, as explained by Poetic Justice teacher Lisa VanDamme, is essential. Ten years ago, Gatto painted a stark picture,

The nation is schooled to the point of extinction. George Bush and John Kerry are Yale fraternity brothers – Skull and Bones! How could that happen unless Chutzpah, unless this feeling of contempt for ordinary people was very dramatic.

As social justice would have it, the 2018 death of John Taylor Gatto coincided with the introduction of a new curriculum. The 1619 Project, proctored by the Compassionate Communists at the New York Times, demands that you answer a, b, c, d and e to their question, kneel, accept guilt for your white privilege, and you will be absolved. So you think.

However, the latest attacks on police are really a 50-year-old attack on personal liberty. The attackers know the intended goal of police is to protect individual rights. In his book Dumbing Us Down, Poetic Justice Warrior John Taylor Gatto explains,

Education should make you a unique individual, not a conformist. It should allow you to find values which will be your road map through life. It should make you spiritually rich. It should teach you what is important.

Do not apologize for what is important – happiness, ability, and achievement. The looters in government and city streets demand our acceptance of guilt because its all they have. Gatto challenged us to think, not kneel. Stand for the Declaration of Independence, it is the only antidote to racism.

In This Cultural Civil War, We Must Kneel To Ask Forgiveness For Sins We Did Not Commit.

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This is the week America woke up to a moment of clarity: we are in the midst of a great cultural civil war.

The country was largely unified when we all saw the terrible video of George Floyd’s tragic death – unified in anger and frustration, in wanting justice and punishment for a cop who, whatever his motivation, went too far and murdered a citizen for the crime of passing a counterfeit bill. Ever since then, we’ve been coming apart.

The cultural civil war that has been simmering underneath the surface is now boiling. Consider that as much as the protests can largely be described as peaceful, they have now led to more than a dozen deaths and hundreds of millions of dollars in property damage and theft. Consider the image of Senator Tim Kaine, the former Vice Presidential nominee of his party, kneeling on the ground like he’s a hostage, as if only the penitent white man will pass. Consider the footage from the Minneapolis mayor being shouted down for refusing to defund the police.

It sets up a clash for the fall between the politics of revolutionary racial radicalism and defunding the police on the one hand, and law and order on the other. As Charles Murray noted yesterday, “The ‘abolish the police’ movement is the final piece needed to replicate the mentality of the New Left in the late 1960s–positions so crazy that only people completely out of touch with reality can advocate them with a straight face.” But farcical Maoism is still Maoist, and the struggle session doesn’t become less so just because it’s conducted by lunatics.

The images of woke white protesters brought to their knees across the country, apologizing to the mob for sins they did not commit, is jarring and disturbing. At the heights of elite power – in the corporate board rooms that have decided to blast us with emails touting their payment of indulgences to cement their status as “allies”, and at institutions like The New York Times – leftist campus antagonism has now been made powerful and tangible as it entered the real world.

Many of us warned this would happen after a decade of the Ivy Leagues churning out these aggressively woke children. They insist that they are only exposed to thoughts that are safe, and never wrong. And if you do it, you will kneel, or you will pay. Better get to decolonizing that bookshelf, right quick. Don’t wait for them to find your wrongthink.

As David Harsanyi wrote this weekend: “My parents came to the US to make sure their kids wouldn’t have to kneel.” Joshua Lawson has more.

The kneeling phenomenon demanded by the radical left in the wake of George Floyd’s death—and embraced by those guilted into submission—creates a two-tiered social stratification of “kneelers” and “those who refuse to bend the knee” that’s wholly un-American.

Mobs resulting from years of citizens saturated in “critical race theory” and grievance studies have pressured far too many into believing they bear guilt for the past sins of others. Now they kneel in fealty to that false reality or be exiled from society.

Unfortunately, it’s also moved beyond just kneeling. A crowd in Webster, Massachusetts, recently forced Police Chief Michael Shaw to lie face-down on the ground for eight minutes. In Cary, North Carolina, a group of Caucasians washed the feet of black organizers to “ask for forgiveness.” Not to be outdone by the latest woke trends, Canadian Prime Minister Justin Trudeau took a knee at a massive anti-racism protest at Parliament Hill in Ottawa.

Worse, kneeling—either figuratively or literally—doesn’t even satisfy the mob. Minneapolis Mayor Jacob Frey said all the “right” things to the radical leftists holding Guilt Court but was still heckled out of a public square for refusing to defund the police department. The truth is, even mobs tire of the readily subservient and easily obedient.

That’s the dirty little secret of this moment the smarter woke practitioners understand. Kneeling won’t be enough to cause the real fear. That comes later.

Ben Domenech is the publisher of The Federalist

There Are Doctrines And Practices That Make It Rational For Some To Fear The Police “Brand”.

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In economics, branding serves an important purpose. Brands allow people to economize on knowledge, a scarce resource. We make decisions with imperfect information, and brand labeling and trademarks help us navigate these decisions. As Thomas Sowell writes:

When you drive into a town you have never seen before and want to get some gasoline for your car or to eat a hamburger, you have no direct way of knowing what is in the gasoline that some stranger at the filling station is putting into your tank or what is in the hamburger that another stranger is cooking for you to eat at a roadside stand that you have never seen before. But, if the filling station’s sign says Chevron and the restaurant’s sign says McDonald’s, then you don’t worry about it.

He goes on to add that “brand names are substitutes for specific knowledge.”

You don’t know much about the particular bottle of ketchup you may be buying—the quality of the factory it was produced in, the farmer who grew the tomatoes, or the recipe used—but if it says Heinz on the label, you have a good idea of what you’re going to get. The need to economize on knowledge is so important that in the Soviet Union, people began to learn how to read barcodes to know whether or not they were getting products from reliable factories.

In customer service industries, this is also the purpose of a uniform. Customers can quickly identify the person they need to talk to in a retail environment, and the uniform conveys certain expectations. The electronic retailer Best Buy dresses its computer technicians, called the “Geek Squad,” in comically cliché “geek” uniforms—white shirts and black clip-on ties—in an attempt to help customers distinguish the employees with specialized computer knowledge from those who sell televisions.

But brand names, trademarks, and uniforms don’t always convey the information that companies want them to convey. For instance, if a customer had a bad experience with an incompetent Geek Squad agent, they may see the uniform as an indicator of somebody whose computer advice should not be trusted. Similarly, McDonald’s famous golden arches may inform a potential customer about the consistent quality of their hamburgers, as Sowell points out, but some consumers may see this as a sign of where not to eat. People always economize on information, but not necessarily in the way that companies hope.

This is why companies are so protective of their brand and trademarks. Any dilution of their reputation hurts the value of their product in the eyes of the consumer, not because the quality itself is lowered, but because when consumers face greater uncertainty in their economic decisions they are less likely to buy a given product.

As in the customer service industry, a police officer’s uniform conveys information to civilians. In the idealized vision of police, the uniform should convey security. Most of us were taught as children that if we get separated from our parents, we should avoid strangers but find a police officer. Even though the officer is also a stranger, children are taught to see the police uniform as an indicator of trustworthiness in the potentially dangerous uncertainty of human interaction.

This example also illustrates Sowell’s observation that brands are substitutes for specific knowledge. We do not know whether any individual is trustworthy or not, but, ideally, a police uniform should be a consistent marker of trustworthiness. But the converse may also be true. Just as I avoid the McDonald’s arches because I don’t like their food, the information conveyed by a police uniform is not always consistent with the idealized vision of police.

Any given police officer may be a kind, helpful person who only wants to serve and protect, as the police mantra claims, or he may be a scoundrel who enjoys asserting violent authority over others. This is the uncertainty that people face every time they interact with a police officer. But the uniform does convey some consistent, reliable knowledge that helps people know whether to feel safe or threatened.

For instance, thanks to the doctrine of qualified immunity, all police officers are immune from the consequences of excessive and unnecessary force, even in cases that result in the death of unarmed, nonresisting civilians. Certainly not all police take advantage of this immunity. Social media loves heartwarming stories of cops helping people or simply showing kindness. Many cops are not needlessly violent—in fact, it’s likely that the vast majority of them are not. But the uniform does not inform civilians of whether or not a cop will be gracious or abusive; it merely informs us that if they want to commit violence they can do so without fearing the consequences that the rest of us would face.

The result is that, in contradistinction to what we are taught as children, many people rationally feel unsafe interacting with a police officer than they do with a random civilian stranger. I stress the word “rationally” because their feeling of insecurity is not the product of a delusional prejudice or false propaganda, but rather of the reasonable weighing of possibilities in the face of uncertainty. They do not have knowledge of the specific officer’s temperament and character, but they do have knowledge of the legal immunity that will protect the cop if he abuses his authority.

Similarly, practices such as civil asset forfeiture become attached to the police uniform in the minds of civilians. Many cops, I’m sure, would never steal a person’s life savings or confiscate their legally owned property just because the law allows them to do so—but the law does allow them to. In the face of uncertainty, this is the knowledge that people have. If somebody has cash on their person or in their vehicle, as people often do when buying a used car off the internet or conducting a similar legitimate transaction, they don’t know whether a given cop will steal their money—they only know that the officer can.

And just as when a company hurts their brand by consistently providing poor service or a disappointing product, the frequent stories of police brutality and extrajudicial killings re-create the image of police conveyed by the uniform. The lack of accountability in these stories amplifies the effect. The actions of individual officers, even if we accept that they are anecdotal and not representative of the majority, convey information that people rationally attach to the uniform of all cops.

In short, people increasingly feel unsafe around police, because, frankly, it would be irrational to feel otherwise. It is impossible for anybody to know what a given cop will do, but thanks to the perverse incentive structures created by courts and tough-on-crime legislators, as well as the poor behavior of individual officers, who are virtually never brought to justice, people make their judgments of the police based on what officers can do. As long as we live in a world of imperfect information, it would be silly to expect people to make assumptions about police according to any other standard.

 

Chris Calton is an economic historian. He is writer and host of the Historical Controversies podcast. This article first appeared at mises.org.

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