Leading the Revival of Individualism & Self Reliance

The World’s Have Nots Flock To America To Participate In Our Capitalism For The Common Good.

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Quick question: how many friends, relatives or acquaintances can you the reader name who have moved to Buffalo, NY, Charleston, WV and Jackson, MS in the past five years? Do you even need a minute, or minutes to come up with an answer? Conversely, how many of the same do you know who’ve moved to New York City, Dallas, or San Francisco during the same period?

These basic questions came to mind while reading Sen. Marco Rubio’s latest self-flagellation related to his failure to have any kind of impact on the 2016 Republican presidential primaries. Rubio was only a factor insofar as his existence unearthed the ultimate line from the execrable GOP debates about “Little Marco.” Love or hate Donald Trump, he’s at least funny at times. Some times extraordinarily funny.

In a recent piece for National Review in which Rubio made a case for “Common-Good Capitalism”, the Florida senator tied the “disruption of the Industrial Revolution” with “the rise of socialism.” The problem with the two is that they’re unrelated. Or at least unrelated in the way that Rubio imagines.

To the Senator, socialism is the logical consequence of great industrial leaps given the alleged hurt feelings of the so-called “have nots” amid the leaps. No, that’s not how it works. As we’ve seen throughout history, the world’s have-nots have routinely risked everything (including their lives) to get to the most industrialized, economically unequal country on earth. That country would be the United States. And then within the United States we see to this day that the have-nots looking for a better life never migrate to where people are most equal; rather they move to where the richest of the rich live and work. They do so for obvious reasons. Opportunity is greatest where wealth is greatest. It’s really very simple.

An inconvenient truth for members of the left who think wealth creation harms the poor, along with individuals like Rubio who are convinced that wealth creation kind of harms them, is that the actual poor disagree. Their constant migration away from where poverty is greatest, and to locales where wealth is greatest, is the surest sign that the relentless capitalism that has Rubio in the fetal position is what the supposed victims of capitalism (the poor) aim to be a part of.

So what about the socialism that Rubio laughably claims is a consequence of industrial advance? It’s not as he thinks. Abundant wealth creation doesn’t galvanize the poor as much as it’s often a lure for those who’ve already enjoyed the fruits of capitalism (think Marx and Engels, along with AOC, Sanders and Warren in modern times), but who want more of it. In short, wealth creation begets socialism by virtue of it giving opportunists who desire the fruits of wealth a way to access it without creating it.

AOC, Sanders and Warren don’t live like socialists, and that they don’t is a statement of the obvious. Their socialism is a consequence of immense wealth creation by others that gives them a platform, and that gives them a way to reach as many people as possible (think the internet, to use but one example) on the way to fame, and ultimately fortune. Rubio yet again has it incorrect. Unfettered capitalism is a magnet for those without, and it at the same time exists as an opportunity for the haves (think yet again AOC, Sanders and Warren) who want more, but who don’t want to endure the actual work required to create it. So they embrace socialism in order to attain the fruits of capitalism.

Rubio adds in seemingly “benevolent” fashion that “businesses have a right to make a profit, but they also have an obligation to reinvest those profits productively for the benefit of the workers and the greater society. Similarly, workers have a right to share in the benefits of the profits they helped create.” Actually, none of what Rubio writes (or that more likely was written for him) is true.

Businesses are owned by individuals, and individuals have no obligation to please Marco Rubio. As individuals we have endless rights that pre-date Rubio, and that exist simply because we’re humans. No politician need state that we have a right as shareholders to be owners of profitable enterprises. For Rubio to presume to bestow upon us a right is for the Senator to presume a power vested in government that doesn’t exist. After which it’s the job of businesses to turn a profit unless said business has owners who don’t care about profits.

What about workers? Do they “have a right to share in the benefits of the profits they helped create” as Rubio states? Actually no. Figure that the owners in any business are taking all the risks, they lose all of their investment (investment that is the source of all job creation) if the business goes under, so assuming Rubio had the power to decree worker rights, which he doesn’t, one could logically conclude that workers who enjoy a profitable upside should also help foot the bill for any unprofitable downside. Of course they’re not expected to do that, nor would the generous-with-the-money-of-others Rubio make such a case. In his or his ghostwriter’s delusional view of the word, those who take on the least risk should get all of the upside and none of the downside, by decree.

So while workers have no explicit rights to profits as Rubio (or ghostwriter) naively contends, the beauty of capitalism is that workers usually enjoy what can’t possibly be decreed insofar as businesses are profitable. On the high end, members of the New York Yankees baseball team earn enormous salaries, and employees of highly valuable companies like Apple, Google and Amazon earn well while attaining valuable equity stakes in those companies insofar as those companies profit. Too rich for your blood? Ok, at Starbucks baristas increasingly enjoy high wages, health insurance and free college education. Employees of Disney have student loans paid off. At Wal-Mart, enormous sums are spent educating entry-level employees so that they can move into management.

You see, contrary to what Rubio or his ghostwriter dreams, profitable businesses don’t need a law. They get that way by spending copious amounts in order to retain their workers. Translated, it’s incredibly expensive for them to lose those who help them achieve profits, so they spend a great deal in order to hire these workers, and spend more to keep them hired.

Of course, all of the above is obvious to those who choose to look. You see, just as the poor routinely migrate to where the rich are, they also migrate to where the richest, most profitable companies are. They do because those are the ones that pay the most, by far. Rubio, in his desperate attempt to matter, wants to command what’s already being done voluntarily. Rubio is the embodiment of superfluous.

Not surprisingly, this most redundant of politicians decries Wall Street and the “financial flows” that allegedly harm workers, except that investment is always and everywhere the driver of job opportunity. All that, plus it’s the corporations most courted by Wall Street that have the greatest means to compensate workers the most handsomely. Translated, Rubio can’t even be bothered to be right, or reasonable. He or his ghostwriter merely spout lines that are most often heard in college dorms before the kids are mugged by reality.

Which is why Rubio’s comments about China won’t even be addressed. It’s not fair to the reader. But as a hint, Senator Redundant claims that “China,” unlike any other country in the history of mankind, can plan wondrously profitable outcomes for its people.

Of course, Rubio’s droolings about China likely explain why he believes what he does about capitalism. In each instance, the Senator believes capitalism can be planned by those like him who have no experience with it. Sorry, but capitalism is far too glorious for politicians to engineer, which is why the U.S. has been a magnet for so long to the world’s strivers. They’ve been escaping “Little Marco” types around the world for centuries.

John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks.

Economics For Individuals:An Old Banana As Artwork Explains The Economic Concept Of Subjective Value.

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Recently, Miami art gallery Art Basel sold, for $120,000, a piece of art composed of a banana duct taped to a wall. At least one other identical piece sold for a similar amount. A third piece was priced at $150,000. The banana used in the display is a real banana, and on Saturday, a performance artist named David Datuna ate some of it.

Datuna’s stunt merely illustrated what everyone should have already known: the value of the artwork had almost nothing to do with the banana itself. Its value came not from the amount of labor that went into it or from the cost of the physical materials involved. A spokeswoman for the museum summed up the real source of the item’s value, noting, “He [Datuna] did not destroy the artwork. The banana is the idea.”

In other words, the people who purchased the art weren’t actually purchasing a banana and tape. The person who purchased the art was buying the opportunity to communicate to peers that he or she was rich enough to throw around $120,000 on a work of art that would soon cease to exist. This was a transaction that involved purchasing status in exchange for money. The banana was only a tiny part of the exchange.

Moreover, the transaction offered the opportunity for the gallery, the art seller, and the art buyer to all further increase their status by being the topic of discussion in countless news articles and discussions in social media. As was surely anticipated by the artists and everyone else in the banana sale, the media could be counted on to act as if this art was something new, outrageous, or exciting. “Art world gone mad,” the New York Post announced on its front page. Hundreds of thousands of commentators in various social media forums chimed in to comment on the matter.

One wonders, however, how many times this shtick can be repeated over and over until people lose interest. Apparently: many times. After all, this sort of art is not a new thing. For decades, avant-garde artists have been using garbage and other found objects to create art. And people with a lot of disposable income have been willing to pay a lot of money for it. It’s all basically an inside joke among rich people. And regular people have the same reaction over and over again.

But there’s absolutely nothing at all that’s shocking, confusing, or incomprehensible from the point of view of sound economics. Transactions like these should only surprise us if we’re still in the thrall of faulty theories of value, such as the idea that goods and services are valued based on how much labor and materials went into them. That’s not true of any good or service. And it’s certainly not true of art.

Is It Garbage or Is It Art?

In fact, two identical items can be valued in two completely different ways simply if the context and description of the objects changes.

According to the Daily Mail, a 2016 study suggests that people value ordinary objects differently depending on what they are told about the objects: “According to the new research, being told that something is art automatically changes our response to it, both on a neural and a behavioural level.”

In this case, researchers in Rotterdam, the Netherlands, told subjects to rate how they valued objects in photographs. When told that those objects were “art” people valued them differently.

In other words, the perceived value of objects could change without any additional labor being added to them, and without any physical changes at all.

The value, it seems, is determined by the viewer, and we’re reminded of Carl Menger’s trailblazing observations about value:

Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.

One moment the viewer may think he’s looking at garbage, which he has likely learned is of little value. When told that said junk is really “art,” the entire situation changes. (Of course, we would need to see their preferences put into real action via economic exchange to know their preferences for sure.)

The change, as both Menger and Mises understood it, is brought about not by changes to the object itself, but by changes in context and in the subjective valuation of the viewer.

A glass of water’s value in a parched desert is different from that of a glass next to a clean river. Indeed, a glass of water displayed in a museum as art — as in the case of Michael Craig-Martin’s “An Oak Tree” — is different from water found in both deserts and along rivers. Similarly, the value of a urinal displayed in a museum as art — as with Marcel Duchamp’s “Fountain” — is different from a physically identical urinal in a restroom.

The Daily Mail article attempts to tie the researchers’ observations to the theories of Immanuel Kant on aesthetics. But, one need know nothing about aesthetics at all to see how this study simply shows us something about economic value: it is, to paraphrase Menger, found in the “consciousness of men.”

And it is largely due to this fact that centrally planning an economy is so impossible. How can a central planner account for enormous changes in perceived value based on little more than being told something is art?

Is a glass of water best utilized on a shelf in a museum, or is it best used for drinking? Maybe water is best used for hydroelectric power? Exactly how much should be used for each purpose?

When discussing the problems of economic calculation in socialism, Mises observed that without the price system, there simply is no way to say that a specific amount of water is best used for drinking instead of being used for modern-art displays. Nor is the fact that people need water for drinking the key to determining the value of water. (See the diamond-water paradox.)

In a functioning market, consumers will engage in exchanges involving water in a way that reflects how much they prefer each use of water to other uses. At some moments, some consumers may prefer to drink it. At other moments, they may prefer to water plants with it. At still other moments, they may want to contemplate an art display composed of little more than a glass of water. The price of water at each time and place will reflect these activities.

Without these price signals, attempting to create a central plan for how each ounce of water should be used is an impossible task.

Do we need to know why people change their views of an object when told they are art? We do not. Indeed, were he here, Mises would perhaps be among the first to remind us that economics need not tell us the mental processes that lead to people preferring different uses for different objects, although we can certainly hazard a guess. It’s unlikely that the buyer of the taped banana bought it because he or she planned to eat it.

But even if we are wrong about the buyer’s motivation, the fact remains that the buyer valued the banana at $120,000 for some reason — and the value was subjective to the buyer.

Similarly, we can’t know for sure why each individual values water for drinking over “art water” or vice versa. And a government planner or regulator — it should be noted — can’t know this either.

Free Market Capitalism Is Morally Superior To All Other Economic Systems.

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Dr. Richard Ebeling, professor of economics at The Citadel, The Military College of South Carolina, and my longtime friend and colleague, has written an important article, “Business Ethics and Morality of the Marketplace,” appearing in the American Institute for Economic Research. Its importance and timeliness is enhanced by so many of America’s youth, led by academic hacks, having fallen prey to the siren song of socialism.

In a key section of his article, Ebeling lays out what he calls the ethical principles of free markets. He says: “The hallmark of a truly free market is that all associations and relationships are based on voluntary agreement and mutual consent. Another way of saying this is that in the free market society, people are morally and legally viewed as sovereign individuals possessing rights to their life, liberty, and honestly acquired property, who may not be coerced into any transaction that they do not consider being to their personal betterment and advantage.”

Ebeling says that the rules of a free market are simple and easy to understand: “You don’t kill, you don’t steal, and you don’t cheat through fraud or misrepresentation. You can only improve your own position by improving the circumstances of others. Your talents, abilities, and efforts must all be focused on one thing: what will others take in trade from you for the revenues you want to earn as the source of your own income and profits?”

For many people, profit has become a dirty word and as such has generated slogans such as “people before profits.” Many believe the pursuit of profits is the source of mankind’s troubles. However, it’s often the absence of profit motivation that’s the true villain. For example, contrast the number of complaints heard about profit-oriented establishments such as computer stores, supermarkets and clothing stores to the complaints that one hears about nonprofit establishments such as the U.S. Post Office, the public education system and departments of motor vehicles. Computer stores, supermarkets and clothing stores face competition and must satisfy customers to earn profits and stay in business. Postal workers, public teachers and department of motor vehicles employees depend on politicians and coercion to get their pay. They stay in business whether customers are satisfied with their services or not.

In a free-market society, income is neither taken nor distributed. Income is earned by serving one’s fellow man. Say I mow your lawn. When I’m finished, you pay me $50. Then, I go to my grocer and demand, “Give me two pounds of sirloin and a six-pack of beer that my fellow man produced.” In effect, the grocer asks: “Williams, what did you do to deserve a claim on what your fellow man produced?” I say, “I served him.” The grocer says, “Prove it.” That’s when I pull out the $50. We might think of dollars as “certificates of performance,” proof of serving our fellow man.

Free markets are morally superior to other economic systems. To have a claim on what my fellow man produces, I’m forced to serve him. Contrast that requirement to government handouts, where a politician says to me: “You don’t have to get out in that hot sun to mow your fellow man’s lawn. Vote for me and I’ll take what your fellow man produces and give it to you.”

Ebeling says that those deserving condemnation are those who use government coercion to gain at the expense of others. There are thousands of such examples: government subsidies at taxpayers’ expense, paying farmers not to grow crops or guaranteeing them a minimum price paid for through tax dollars and higher prices for consumers, regulations that limit entry into various professions and occupations, regulations that limit consumer choice, and corporate handouts and bailouts.

In a word or so, our protest should not be against capitalism. People should protest crony capitalism, where people use the political arena to buy government favors. If millennials and others want to wage war against government favors and crony capitalism, I’m with them 100%. But I’m all too afraid that anti-capitalists just want their share of the government loot.

Decivilization: Negative Interest Rates Mean It Makes No Sense Any Longer To Produce And Save.

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When I was asked to write an article about the impact of negative interest rates and negative yielding bonds, I thought this is a chance to look at the topic from a broader perspective. There have been lots of articles speculating about the possible implications and focusing on their impact in the short run, but it’s not very often that an analysis looks a bit further into the future, trying to connect money and its effect on society itself.

Qui bono?

Let us begin with a basic question, that lies at the heart of this issue: Who profits from a loan that is guaranteed to pay back less than the amount borrowed? Obviously, it is the borrower and not the lender, which in our case is the government and those closely connected to it. Negative rates and negative yielding bonds, by definition favor the debtors and punish the savers. In addition, these policies are an affront to basic economic principles and to common sense too. They contradict all logical ideas about how money works and they have no basis and no precedent in any organic economic system. Thus, now, in addition to the hidden tax that is inflation, we also have another mechanism that redistributes wealth from the average citizen to those at the top of the pyramid.

Thus, this very concept of a central authority being able to bend and twist the rules, even when the result is illogical, has implications that extend way beyond daily economic activities. In fact, it ultimately divides society into two classes: those who profit from this arbitrary and unilateral re-writing of the rules, and those who are forced to pay the price, even though they never agreed to it; in fact, they weren’t even asked.

A system of collective corruption

Of course, we can also look at it from the collective perspective of the so-called “Social Contract” of Rousseau, and argue that this system of overt (taxation) and covert (monetary policy) redistribution is therefore legitimate, or even benign. You might still believe that the state will take care of you in the future, and thus you are willing to sacrifice a part of your wealth and savings today to make sure that happens. In that case, it is useful to remember that the current central banking system is not that old. It’s only been around for about 100 years or two long-term debt cycles combined. The first cycle ended when President Nixon officially tried to demonetarize gold in 1971, empowering a centralized system whereby a few decide who receives the currency first and at what interest rate, allowing them to create bubbles in certain asset classes, protect different key industries and to use it to finance wars and enrich politicians and those close to them.

So far, total credit on a global scale stands around $240 trillion. It’s hard to conceive of such number, but if you consider that 1 trillion seconds are equal to 31,709 years, you might begin to wrap your head around just how leveraged the system has become. We should never forget that debt is always consumption brought forward. That being said, debts need to be paid back or forgiven – there is no other outcome. In addition, the amount of debt that a system can take on is limited and when a credit-based system can’t grow any further, the logical outcome is the collapse of the whole system. As Ludwig von Mises described this a long time ago:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved”.

This is the reason why central banks started trying to avoid this systemic collapse by taking interest rates below zero and allowing the big players to take on debt for free and to reduce at the same time their debt burden. This, of course, is something that we already witnessed extensively during the past decade and it is just a matter of time until more central banks, including the Federal Reserve, use the same fraudulent tactic to let some air out of the balloon and to deleverage the debtor at the cost of the saver. However, it is very questionable if this can be successfully managed, especially since demographics have been a problem for decades in the West and therefore growth becomes a problem too. Governments enforced a mass-immigration policy to fight against this aging population trend, yet its execution has been disastrous; instead of rejuvenating nations and spurring productivity, it ended up crushing the national welfare systems.

It is thus clear that the current path that governments and central bankers have selected is utterly unsustainable and their attempts at short-term “patches” have little hope of stopping the inevitable implosion, that has already been decades in the making. Pretending otherwise is as futile as it is naive. As Ayn Rand would have it: “We can ignore reality, but we cannot ignore the consequences of ignoring reality.”

The “de-civilization” effect 

Negative interest rates are a great example of these short-term patches, only in this case, they are not just useless as a cure for our economic ills, but they actually do more harm than good.

The basic motivation for each individual to get up in the morning and to work hard to achieve a higher living standard is removed and time, therefore, turns into a dimension without any value. If people can’t save any longer, by government decree, then there is no other way than to consume. And with all traditionally safe investment options gone, they are only left with the option of speculating in rigged financial markets, and the massive risk that comes with it, especially now, when we’re nearing the end of a long-term debt cycle.

The individual is thus turned more and more into a state dependent, as the basis for a free life is the ability to increase financial independence and have savings on the side that keep you self-reliant. The fundament of a successful system requires individuals that live a decent life, knowing that they must first produce before they can consume.

“Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce.” 

Jeff Deist, President of the Mises Institute in Auburn (AL)

The masses are trained and forced to consume and spend money they don’t have to buy things they don’t need. Our monetary system in combination with this kind of public policy is therefore the cause for mass-overconsumption, the destruction of wealth, capital consumption and the destruction and exploitation of nature.

People significantly add value to society if they are able to save, as this allows them to invest at a later stage, once they have accumulated as much as needed, and thereby aid others in their own efforts to succeed and to reach their financial independence. Parents can help their children and investors can help budding new companies that bring innovative ideas that benefit the economy and society as a whole. As this virtuous cycle continues, based on productivity, long-term thinking and responsible financial management, “the rising tide lift all boats”.

To the contrary, when this natural process is forcibly disrupted and reversed, the effects are deleterious and far-reaching: mass-overconsumption, the destruction of wealth and the exploitation of nature and the environment are all symptoms of this institutional and massive push towards short-term thinking and of being forced to focus just on today, at the expense of tomorrow.

Wider implications  

Thus, what is at stake is not only the world economy, but the accelerating decline of western culture which, based on liberalism (personal freedom and private property rights) and Christianity (personal responsibility), laid the foundation of a decentralized Europe, that allowed for competition of goods and services, but especially the competition of ideas. This dangerous decline is nothing new either, as it began after WWI, when Europe turned towards a more centralized approach, with all sorts of collectivist ideas causing all kinds of schisms that we still see today in modern societies. Today, we see a rapid acceleration of this decline, as our economic system can barely remain standing and as our politics and our societies devolve even faster into tribal or more precisely into “political identity” groups, fighting each other over meaningless feuds. All the while, they are distracted from the real threat, the one that governments and central banks pose to their future and to their children’s future.

As long as people are afraid of liberty and falsely delegate their self-responsibility to a central authority, hope is dim. It’s time to think independently about whether today’s centralized system really makes sense, if it is sustainable and for how much longer. If the answers to these questions scare you, it is pointless to expect solutions to come from above. It is then time to act directly and responsibly, with a solid plan, hard physical assets privately owned and long-term strategy that does not depend on the whims and caprices of those in charge.

“It is easier for governments to control the spending of people in debt than those with savings. A person with financial resources is free, while debtors are hostage to their creditors.”

H.S.H. Prince Michael of Liechtenstein, President of the Foundation Board of the Liechtenstein think tank European Center of Austrian Economics Foundation (ECAEF)

Claudio Grass, Hünenberg See, Switzerland.

Originally published under www.executive-global.com

Working In Amazon’s Fulfillment Center Is Quite Fulfilling, And Can Open The Gate To A Better Life.

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Having spent half of a year experiencing firsthand the labyrinthine bowels of an Amazon Fulfillment Center, I must ask:

“What are all the complaints about?”

Employment at Amazon was not perfect.  Then again, no job will be.  But for those wanting to establish themselves with a job history or get back into the routine of full-time employment, being at Amazon isn’t the torturous ordeal some have described.  Coming off a year’s sabbatical and being a technical writer before that, work at an Amazon facility was a shining opportunity to regain some lost footing.

In retrospect, I can’t but be thankful for that.  It wasn’t just the financial boon, but also the chance to persevere that elicited and encouraged growth and strength in both physical and mental senses.

Getting hired by Amazon was almost too easily achieved.  Applying online hearkens back to the glorious days of spinach-green Game Boy screens.  Pass a series of ridiculously simple mini-games and you are almost guaranteed an offer of conditional employment.  Show up for a scheduled orientation a few days later and there’s a rundown of various tasks, basic processes, and of course the benefits.

Speaking of benefits, they are more than liberal for an operation of Amazon’s size and scope.  Need time off?  The company is fairly flexible about that.  Employee discounts?  Offered out the wazoo.  Want to follow your dreams toward your one true career?  Stick around for a year and Amazon pays for most of your school tuition and books.  Want health benefits?  You get ‘em, your family gets ‘em, your dog gets ‘em.  The pay itself is better than average.  The one perk that I saw employees constantly begging for but were forever denied was free Amazon Prime.  And that’s no reason to gripe if it’s the worst that the corporate honchos refused to grant.

After that came the training: straightforward and comprehensive.  It could be the most fluid and forgiving training regimen that I’ve seen.  The learning curve was not particularly demanding, and new hires were given leeway as they gained a sense of their assigned tasks.

Every night’s shift began with everyone in the department doing “stand-up”: gathered around the supervisor of the evening,  we were given a brief summary of the night’s work, a rundown of any issues, and encouragement about what to look forward to during the next several hours.  A few stretching exercises and then it was off to the races.  For the next ten hours we were on Jeff Bezos’ time clock.

Is the labor hard?  At times, yes.  Especially during “Peak Season” between Thanksgiving and Christmas Eve.  Otherwise it’s much like… gasp!… real work.  My schedule was Wednesday through Saturday nights, 6 p.m. until 4:30 in the morning.  There were two fifteen-minute breaks and one unpaid half-hour for lunch around 11.  The break room had six large-screen TVs and forty microwave ovens.  The vending machines were loaded with enough confectionary to feed a Texas county.

My primary mission was stowing.  It means pushing a cart of merchandise around the warehouse, finding bin space that a product can fit in, using a laser scanner on the bar codes and then physically moving the item into the bin.  The facility’s inventory system was at all times tracking the associate’s rate of work as well as accuracy.  Several times during the night the rates were posted so that each employee could see how he or she was faring.  And as many who have written about working at Amazon have already noted, the managers are looking hard at those rates…

My stowing during those first few weeks?  Abysmal.  In fact, I was the very worst of the lot from our orientation group.  Getting fired would be a decision born within the circuitry of the Amazon master computer somewhere in Seattle, not any human judgment.  My career came a few steps too close to ending during that first month or so.

Instead the managers on site approached me with concerns about my performance, and then worked with me to improve my effectiveness.  For them my status as an employee was an asset to be stimulated to the best of my ability.  Amazon employees aren’t meant to be readily disposable: they require an investment of time and effort to make the most of them.  That was afforded to me, as it should be afforded to any employee under most circumstances.  It was an investment that I wanted to give a fair, honest, and thorough return on.

Their approach succeeded: during the next few nights I was achieving higher and higher rates.  By the end of peak season my rates were among the highest of the stowing department and sometimes the highest, period.

Safety was the highest priority issue at our facility.  I believe it is much the same for other fulfillment centers.  During every stand-up we were drilled with how to properly handle heavy merchandise so as to avoid injury.  The “safe” routes of transit across the facility were clearly marked off: stay in the green and you’d be fine, but venture into the lanes delineated with red and you risked being hit by a forklift or other vehicle.  Only the very careless would find complaint about such restrictions.  As with so much else in life, there are boundaries to respect.  And though some have complained about the heat within the facilities, there is no real getting around that.  But water dispensers were spread throughout the place, and we were told often to stay hydrated.

What truly earned my respect was how they accommodated a disability.  For a decade and a half I have dealt with the diagnosis of bipolar disorder.  Mania and depression at times dogged my steps during those long traipses through the aisles as I worked.  The average Amazon warehouse is so vast that at times two people can be a hundred feet apart with no clue that there are others in the building.  And every so often the silence and sense of loneliness would intrude upon my labor.

So I told my managers about it.  And they collaborated with me.  During those occasions when the manic-depression was worst they assigned me to each-receive: the part of the process where carts are loaded with merchandise after coming in off the trucks.  There is no being alone on each-receive.  Again, rates were measured.  Right out of the gate mine soared to the top of the chart.

To be a stower at an Amazon facility is to walk the most of any department’s associates.  And walk you will.  On an average night I was walking about sixteen miles.  It took about two weeks for my legs, long unused to such distances, to adjust.  We had been warned during orientation about the acclimatizing.  They were right.  Work at Amazon is tough.  But it wasn’t significantly harder than other jobs I had previously.

Peak Season has been made out to be like a scene out of Ben-Hur when Charlton Heston and his fellow prisoners are rowing that galley to the beat of a drum.  Such comparisons are ludicrous.  Obviously we were driven to give nothing less than our best performance, but the treatment we received was not draconian or overbearing.  In fact, management went out their way to make the experience a cheerful one.  Black Friday evening saw a live band performing near the entrance to the main floor.  Extended mealtimes (and paid at that) were scheduled with rich helpings of holiday food.  Raffle tickets were handed out generously as reward for exceptional work and answering questions about Amazon history.  The prizes were far from measly: big-screen televisions, iPhones, and a Bahamas cruise for two.

Yes, we worked, but we had fun also.  When you discover your cart has a scale model of the U.S.S. Indianapolis beneath a pile of plush shark toys, you know that someone else shares your warped sense of humor.  To say nothing of coming across something called “Poopsie the Surprise Unicorn,” or the geek-loaded thrill of finding the latest Warhammer 40,000 starter set in your cart.

I have issues with Amazon founder and CEO Jeff Bezos in regard to his policies regarding the Washington Post.  But let’s give Bezos credit where it is due.  Amazon was his idea, and a business plan he formulated over a quarter century ago.  Its first product was a textbook sold out of his garage.  Today Amazon brings practically everything imaginable to our front door.  And along the way Bezos has wound up employing hundreds of thousands of people, who otherwise might not have jobs and those excellent benefits, or have a first step toward greater things.

Amazon, we were told by managers themselves, isn’t likely to be a lifetime career for most people.  And it doesn’t have to be.  Six months after orientation I had been quietly told that I was being eyed for a management position.  Instead they bid me all the best as I prepared for a rewarding career helping others with mental-health issues.  I don’t know if that would have happened were it not for the time spent working at Amazon.  And hey, I worked through an entire Amazon Peak Season with no time off.  I can be proud of that accomplishment.

First steps are rarely glamorous.  But more often than not they lead to a much better and brighter future.  And when a person reaches that place, he or she can look back upon the oftentimes broken road that came before.  And then revel in the sense of their own achievement.

That’s something that no “easy” job can grant a person.  Or any handout for that matter.

Christopher Knight is a mental health peer support specialist and before that an Amazon Fulfillment Center associate.  He’s also trying to hack it as a writer.  Follow along at theknightshift.com and on Twitter @theknightshift.

 

The Inspiring Teacher and Leader With The Incredible Power to Heal Broken Spirits – Marva Collins

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In 2010, the National Governors Association established The Common Core State Standards Initiative. Its goal was to set consistent standards for achievement in English and math for each grade in public schools across America. Theoretically, this would better prepare students for success in two and four year college coursework or workforce advancement. This is based on the following premises –  that compulsory public education is morally justified, the 19th century Prussian model for mass indoctrination should be continued, and aspiring to 12th grade academic standards in English and math that are lower than the 6th grade standards of 1920 is a whiz-bang idea.

A truly productive idea would have been for one of these governors to invite her 49 colleagues to watch the 1981 documentary Success! The Marva Collins Approach with her. Here, they would have learned that high quality, life-affirming education starts with one essential ingredient, extraordinary teachers who are driven to succeed. As Poetic Justice Warrior Marva Collins tells us about her teaching philosophy, “Determination and perseverance move the world; thinking that others will do it for you is a sure way to fall.” This is what she expects of herself and her teachers, and it is the example for the self-reliance she teaches her students.

For Whom the Bell Curve Tolls

It is an unassailable fact that education is achieved with willing and active participation by both teachers and students. This is its nature, and as such, it cannot be an entitlement. Learning is not a commodity that can be consumed, it requires active minds. This is why her 1992 book, Ordinary Children, Extraordinary Teachers, a compilation of her writing, speeches, and poetry, starts with teachers. Teacher dedication to excellence is why her results are so extraordinary, and why Common Core is an embarrassing failure. For teachers, Collins explains, it starts within yourself, then the classroom, then the home. Independence is paramount, “We have to lead ourselves instead of looking for others to lead us. If we don’t think for ourselves, others will do our thinking for us.”

Collins began her teaching career in 1957, moved to Chicago in 1959, and took a job as a full-time substitute teacher for Chicago Public Schools. After fourteen years of low learning levels, a rapid decline in the quality of the school system, and the onset of ghettos on Chicago’s west side, she did something radical. Collins founded the Westside Preparatory School in the top floors of a brownstone at 3819 West Adam Street in West Garfield Park. Armed with only $5000 borrowed from her teachers pension and no teaching degree, Collins rejected the bureaucratic methods. Instead, she continued developing the ones that were working for her public school students, the children that had been labeled “learning disabled” and written off.

As Carrie-Ann Biondi writes about this beginning stage of Collins’ teaching breakthrough,

To support her convictions, Collins sought hard data. She administered Stanford-Binet tests, which showed that all of the children improved significantly in reading and math. Indeed, these students performed anywhere from one to four years above their current grade levels.

Nearly twenty years later, the co-author of 1994’s controversial psychology book The Bell Curve, Charles Murray, claimed that the extraordinary results being recorded at Westside Prep “were too good to be true.” The thesis of his book is that cognitive ability predicts socially desirable behavior, and that group differences are better explained by intelligence than socio-economic status. When asked about Collins’ achievement, Murray claimed that her methods were ineffective despite having attempted no research into them. The inherent bigotry of all this caught the attention of Morley Safer at CBS and was included in a 1995 60 Minutes national broadcast.

In contrast, psychologist Edwin Locke, a pioneer of Goal-Setting Theory, has discovered that we create our life’s meaning through free will. We do this by accumulating knowledge and skill, cultivating moral virtues, and building habits of effort and persistence.

 Speak Up Honey, You’re Brilliant!

Regarding Murray’s faith in IQ, Locke teaches that high IQ does not equal achievement; highly intelligent people must also work hard to achieve their values. This is consistent with what Collins discovered with the students who “were never taught to read, write, compute, or reason.” She knew that if she didn’t give them a philosophy for living “they will automatically hate themselves.” That philosophy is rational egoism,

Trust yourself. Think for yourself. Act for yourself. Imitation is suicide. Success is not coming to you, you must come to it. You have the choice, the right to choose what kind of person you want to be. You are not in school for your parents, for your teachers, or for anyone else. You are here for yourselves.

Collins led her students to a world outside of their government-induced Garfield Park ghetto. By ditching the look-say public school method for teaching reading, Collins taught her students phonics. Instead of owning a 1500 word vocabulary by fourth grade, Westside Prep students had 24,000 word vocabularies. The 93 basic sounds in the English Language allowed her students to comprehend everything they heard or read, all of the time. Teaching phonics led to spelling, story concepts, and composition. This is an example of the hierarchy of conceptualization that is critical to effective education, and is missing in progressive education curricula like Common Core. Accordingly, she did not teach abstract concepts in isolation, they were given context. As Biondi explains,

During a discussion of Sophocles, the class shifted to Greek and Roman gods, including Jupiter, then to a science lesson on the solar system, and a conversation on astronomers from Ptolemy to Carl Sagan. Collins welcomed this kind of organic discussion, it helped students see the flow of knowledge.

The fourth grade students interviewed in the original 1979 60 Minutes feature were asked who their favorite authors were. Some of the answers were Dostoevsky, Shakespeare, Tolstoy, Chaucer, or Kipling. One learning method was Socratic dialogue, and years later Collins explained that since they’re great at memorizing rap lyrics, Plato becomes easy. Like her contemporary Pygmalion of the Soul,

I’m a teacher. A teacher is someone who leads. There is no magic here. I do not walk on water. I just love children. Just as Michelangelo thought there was an angel locked inside every piece of marble, I think there is a brilliant child locked inside every student.

Like Maria Montessori‘s schools, Collins’s classrooms include students of different ages and levels of cognitive development. It challenges them individually, unlike the one size fits all Common Core nonsense. However, Collins’ motivations are not altruistic,

I do what I do very selfishly. I wanted to create citizens in my own school whom I would want as my neighbors, whom I would want as my friends, whom I would want as my doctors, because they are precise. They take pride in what they do.

Like Harper Lee, Collins knew very well the importance of strong fathers at home. Marva’s read literature, newspapers, and poetry with her every night while growing up in Jim Crow Alabama. In 1981, Cicely Tyson and Morgan Freeman starred in her movie The Marva Collins Story. And as poetic justice would have it, Marva Collins made a brief appearance in Prince’s 1994 music video, The Most Beautiful Girl in the World.

The Christmas season is a celebration of life, and here we celebrate the peace, good will, and benevolence of Poetic Justice Warrior Marva Collins who taught “Peace will always rule the day where reason rules the mind.”

 

 

The Next Stupid Move Of Our Political Class Will Be To Tell Us We Must Become More Like China.

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Since a few things became clear to me last year, I’ve consistently forecasted a significant worsening in U.S.-China relations and remained adamant that all the happy talk of trade deals and breakthroughs is just a lot of hot air.

What first appeared to be a unique quirk of Donald Trump has morphed into bipartisan consensus in Congress, and clear signs have emerged that the general public has likewise become alarmed at China’s growing global clout.

Due to this, as well as a litany of other factors outlined in prior posts, it’s highly unlikely the current trajectory will reverse course and result in a return to what had been business as usual. Instead, we’re probably headed toward a serious and historically meaningful escalation of tensions between the U.S. and China, with what we’ve seen thus far simply a prelude to the main drama. If I’m correct and the ship has already sailed, we should focus our attention on how we respond to what could quickly become a very dicey scenario filled with heightened emotions and nefarious agendas. There’s a good way to respond and a bad way.

In our individual lives, we face various daily challenges, but every now and again something really big hits us, a personal crisis of sorts, and how we respond to these major events determines much of our future. The same thing happens to nation-states, particularly in the current world where virtually all human governance is structured in a highly centralized and statist manner. When such an event hits nation-states the public tends to be easily manipulated into a state of terror and coerced into granting more centralized power to the state, an unfortunate state of affairs that accurately summarizes the reality of 21st century America. With each crisis, the empire has grown stronger, the public weaker, and two decades later we find ourselves in a neo-feudal oligarchy where one half of the public is at the other half’s throat for no good reason. This is what happens when you respond poorly.

Three major crisis events have rocked the U.S. this century, and much of the public has embraced, or at least accepted, the worst possible response in all cases.

  • The first was the attacks of 9/11, which officially ushered in the modern national security surveillance state and all but obliterated the 4th amendment.
  • The second was the financial crisis, where the response from Bush/Obama was to bail-out the criminals, destroy any semblance of the rule of law by jailing zero Wall Street executives, and to ensure the Federal Reserve (and mega-banking institutions in general) became stronger and more powerful than ever.
  • Finally, there was the shock election of Donald Trump. Rather than take his ascendance as a warning about centralized power, the faux “resistance” has been obsessed with removing him, celebrating intelligence agencies/military aggression, bemoaning free speech, and rehabilitating George W. Bush.

Three crises, three horribly destructive responses. This entire century has been an unmitigated march in the direction of stupidity.

I’ve become convinced the next major event that will be used to further centralize power and escalate domestic authoritarianism will center around U.S.-China tensions. We haven’t witnessed this “event” yet, but there’s a good chance it’ll occur within the next year or two. Currently, the front runner appears to be a major aggressive move by China into Hong Kong, but it could be anything really. Taiwan, the South China Sea, currency, economic or cyber warfare; the flash points are numerous and growing by the day. Something is going to snap and when it does we better be prepared to not act like mindless imbeciles for the fourth time this century.

When that day arrives, and it’s likely not too far off, certain factions will try to sell you on the monstrous idea that we must become more like China to defeat China. We’ll be told we need more centralization, more authoritarianism, and less freedom and civil liberties or China will win. Such talk is total nonsense and the wise way to respond is to reject the worst aspects of the Chinese system and head the other way.

If you’re horrified by China’s human rights abuses, then push for an end to murderous U.S. wars abroad based on lies. If the Chinese surveillance panopticon concerns you, we should move in the exact opposite direction with less corporate and state surveillance, not more. If China launches a state-sanctioned digital currency system designed to monitor, and if desired, restrict transactions, we should reject this approach and embrace open, decentralized and permissionless systems like Bitcoin. We should fight lack of freedom with more freedom.

Given our track record this century, I’m skeptical Americans will respond in a positive and productive way to increased tensions with China,although perhaps I’ll be pleasantly surprised. I hope we can finally face a challenge without cowering in fear and surrendering more freedom in order to feel safe and powerful. I hope we can recognize that empire is not an asset, but a liability. That empire strengthens the state and weakens the public. I hope we can be wise enough not to embrace further authoritarianism to defeat authoritarianism. For once this century, I hope we can respond in a thoughtful and intelligent manner.

Anti-Capitalism Is Trendy But It Totally Ignores The Data Regarding Prosperity And Exit From Poverty As A Result Of Capitalism.

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You can’t escape it; capitalism has a bad rap.

Recently, thousands of anti-capitalist protestors took to the streets in capital cities across the world. Wearing V for Vendetta-inspired Guy Fawkes masks (most of which are made in China), these self-styled “anti-establishment” demonstrators, who took part in annual Million Mask March, sought to express their dissatisfaction with the capitalist system and the unfair outcomes it allegedly creates.

More than 70 percent of Millennials would likely vote for a socialist candidate.

Large anti-capitalist protests like those we saw last night are, of course, nothing unusual. In August, French police resorted to using water cannons and tear gas to disperse thousands of anti-capitalist demonstrators who were protesting in the French coastal town of Bayonne, during the G7 summit which was taking place in a nearby resort.

But it is not just during protests that we see disdain for capitalism. All over our newspapers there are headlines such as, “Capitalism is in crisis,” “Capitalism is failing,” or most recently “Capitalism is dead,”—the latter being a recent quote from billionaire Salesforce CEO, Marc Benioff, who amassed his fortune thanks to the capitalist system.

Public View of Socialism

The consistent bombardment of capitalism in our media and on our streets has culminated in a recent YouGov poll showing that nearly half of all Millennials and Gen-Z’ers hold an unfavorable view of capitalism. The same poll also found that more than 70 percent of Millennials would likely vote for a socialist candidate.

It is fundamentally trendy to be socialist, and to decry the alleged ills of capitalism. But does this persistent condemnation of capitalism hold up to scrutiny?

Every year, the Fraser Institute, a Canadian think tank publishes its Economic Freedom of the World (EFW) report in order to find out which countries have the freest (i.e. most capitalist) economies. The EFW ranks the level of freedom of 162 economies, using 43 indices, across major policy areas: size of government, legal systems and property rights, sound money, freedom to trade internationally, and regulation.

More than 27 percent of people in the most socialist economies live in extreme poverty but that number is just 1.8 percent in freest economies.

The idea behind the EFW report is that if you can find out which countries have the most capitalist economies, you can then use this information to see if more capitalist countries have better outcomes for their citizens when compared to their more socialist (or at least: less capitalist) counterparts. To analyze the correlation between economic freedom and human wellbeing, the EFW splits the 162 economies into quartiles, based on their level of economic freedom. And the results are staggering.

The average income in the most capitalist quartile of countries is an astonishing six times higher, in real terms, than the average income in the least capitalist economies ($36,770 and $6,140 respectively). For the poorest in society, this gap widens even more. The bottom 10 percent of income earners in the most capitalist countries make, on average, seven times more than the poorest ten percent in the least free economies.Similarly, more than 27 percent of people in the most socialist economies live in extreme poverty (as defined by the World Bank as an income of less than $1.90 a day), whereas just 1.8 percent of people in freest economies live in extreme poverty—a figure that is still too high (the optimal number is zero), but vastly better than the level that persists in the least free countries.

Economic measures aside, people living in the most capitalist countries also live on average 14 years longer, have an infant mortality rate six times lower, enjoy greater political and civil liberties, gender equality, and to the extent you can measure such things, greater happiness too—when compared to the least capitalist economies.

Take Hong Kong, for example, which is the world’s freest economy according the EFW report. In 1941, journalist and travel writer Martha Gellhorn visited the city-state with her husband, Ernest Hemmingway and noted “the real Hong Kong…was the most cruel poverty, worse than any I had seen before. Worse still because of an air of eternity; life had always been like this, always would be.” But just a few years after Gellhorn’s visit, the surrender of the Japanese in 1945 meant that British rule returned to the island and with it came a largely laissez-faire approach to the city’s economy.

We should remember; the data simply doesn’t support the anti-capitalists.

In 1950, the average citizen in Hong Kong earned just 36 percent of what the average citizen in the United Kingdom earned. But as Hong Kong embraced economic freedom (according the EFW, Hong Kong has had the most capitalist economy every year bar one since 1970), it became substantially richer. Today, Hong Kong’s GDP per capita is a whooping than 68 percent higher than the UK’s. As Marian Tupy, editor of HumanProgress.org, notes, “the poverty that Gellhorn bemoaned is gone – thanks to economic freedom.”We can see far bigger gaps whenever we pair a broadly capitalist country with an otherwise similar socialist country: Chile vs. Venezuela, West Germany vs. East Germany, South Korea vs. North Korea, Taiwan vs. Maoist China, Costa Rica vs Cuba, and so on. (Yes, I know: none of that was “real” socialism. But then, it always is real socialism, until it isn’t.)

Decrying the ills of capitalism on a placard or in a newspaper headline is a trend with little sign of going away any time soon, but when we see such unsubstantiated claims, we should remember; the data simply doesn’t support the anti-capitalists.

This article is republished from the Institute of Economic Affairs.

Adhering To The Law Is No Longer Obligatory For The Democrats’ Favored Groups.

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Our Founders created a nation in which the rule of law would prevail and be applied equally to citizens from all walks of life and also would act as a restraint on the power of our leaders.  The tradition also includes the assumed duty of all Americans, including our political leaders, to live within the established and agreed upon laws of society.

The Democratic Party’s increasingly progressive, left-leaning, radical political agenda contests this fundamental and longstanding American tradition of the law applying equally to all our citizens.  Whether I am walking on the streets of my city or viewing the news, I am witnessing on a daily basis increasingly uncivil, lawless, and visibly politically corrupt conduct being tolerated by our country.

Democratic Party policies today support the idea that adhering to the rule of law is no longer obligatory for several designated and politically favored groups selected by them.  Progressive politics is attempting to move Americans to accept and adopt a multi-tier justice system based on the unequal application of the law, whereby treatment by the system is increasingly dependent on subjective political considerations.

On a local level in many cities and communities, Democrats in power are by their actions undermining the rule of law.  For example, expected compliance with the law in several of our leading cities run by Democratic Party leaders, including most notably New York, San Francisco, Los Angeles, and Seattle, is now often based on a person’s economic and immigration status, race, sex, sexual orientation, and increasingly an indication of a person’s political and religious affiliations.  The reason for these exemptions being granted is based on the dual ideologies of identity politics and social justice.

The creation of an implied multi-tier justice system expressly violates our fundamental value of the law applying equally to citizens from all walks of life and most importantly results in the increasingly intolerable and dangerous conditions existing on the streets of these cities and an overall perception of communities in decline.  It has led to environments where ordinary people feel increasingly unsafe due to a lack of enforcement of quality-of-life crimes such as rampart homelessness and loitering, open drug use, and the willing accommodation of numerous illegal aliens performing criminal acts.

Their policies absolve individuals belonging to their politically favored groups of their responsibilities to adhere to our agreed upon laws and act in civil ways.  They contend that challenging social and economic conditions are responsible for criminal and antisocial behavior rather than the individual person acting in a negative way.  Progressive leaders in these locations are resisting enforcing the law, especially against quality-of-life violations, because they label these actions as the criminalization of poverty and accuse the police of the ongoing use of racist tactics.

Thirty years ago, America’s urban centers faced similar issues, leading New York City to adopt under the combined leadership of Republican Mayor Giuliani and his police commissioner, William Bratton, strict law enforcement policies that became to be known as “broken windows’ policing.  These policies were based on the lifelong and collaborative work of criminologist George L. Kelling and political scientist James Q. Wilson, who became best known for publishing an essay in The Atlantic in 1982, called “Broken Windows.”

It emphasized community policing, proactive enforcement of the law, and maintaining order in public places by either arresting or dealing with people for even minor crimes such as drunkenness; vagrancy; prostitution; and, in NYC at that time, subway turnstile–jumpers and the infamous squeegee men.  All of these minor crimes were being overlooked, inviting even greater criminality.

The effect of implementing “broken windows” policies by the police in New York City and, soon afterward, across many other cities starting in the 1990s resulted in a dramatic decline in crime, including, most importantly, a significant drop in homicides committed.  This crime-fighting approach was fundamental to altering the quality of life of many of our cities and significantly contributed to many of them becoming highly desirable places to live.

The current deterioration of living conditions in many of our cities and communities led by Democratic Party leaders and their progressive policies can be directly attributed to their moving away from the proactive community policing that was previously so effective and created environments that discouraged criminality.  Many of these locales are starting to lose population.

In addition, apparently included as one of the favored groups permitted to operate outside the acceptable bounds of civility and the law are Democratic leaders themselves in their ongoing and unrelenting pursuit of power.  In Washington, the Democrats are attempting to subvert the will of the majority of the American people, as expressed by the election results in 2016, by executing and plotting orchestrated campaigns to remove President Trump from office before the next election.  These efforts range from the recently unsuccessfully perpetrated Russia collusion hoax, which is now being followed up by an illegitimate impeachment drive by the House.

These operations also revealed the mostly clandestine activities of a permanent and extensive Deep State, also labeled “the swamp,” actively working with the Democrats to subvert President Trump.  A broken environment exists in Washington that contributes to the perception that too many of our elected officials feel free to participate in and to tolerate corruption without being held accountable for their actions.  It is highly discouraging for many Americans that up to this point, there have been no legal consequences or viable restraints in place to curb these types of actions that are so fundamentally dangerous to the very foundations of our country.

As a nation, we can look back at the great success the implementation of broken windows enforcement policies and practices as a potential guide to current-day challenges of maintaining a just and civil society both in Washington and across our nation.  The crucial and pragmatic next steps in re-creating a proper environment of deterrence in our country against lawless conduct, including misconduct by government officials, will be the impending actions of Attorney General William Barr and U.S. attorney John Durham.

The key question is whether their lengthy investigations of improper activities associated with attempts to remove President Trump from office will lead to the suitable punishment of all the players responsible without exception.  If these efforts are unsuccessful, the Deep State wins, and all our freedoms are at risk.  A lack of decisive action against these participants will signal to many in government that they are free to operate outside the rule of law with impunity in their pursuit of political power.  At risk is our Founders’ design for an enduring nation, in which the rule of law would prevail and be applied equally to citizens from all walks of life — and also would act as an ongoing restraint on the power of our government.

 

America Is Hooked On Transferism. It’s Not Quite Socialism, But It’s Definitely Not Capitalism.

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The United States has never had a meaningful socialist tradition or even a semi-serious socialist party. Socialism in the United States is a fringe movement at best and always has been. This makes the sudden acceptability of socialism all the more surprising. But with one avowed socialist, Bernie Sanders, campaigning for the presidency for a second time, and another, Alexandra Ocasio-Cortez, rising to national prominence from her post in the House of Representatives, American socialism is more mainstream now than at any point in our history.

Complicating matters, socialism exists entirely as a response to capitalism, as has been the case from the time Marx first put pen to paper. And as if that weren’t enough, the very usage of the terms “capitalism” and “socialism” has evolved past the point of clear meaning.

These terms were once very clearly defined. Socialism is state control of the means of production. The intent is that these means are to be used for the public good. By contrast, capitalism is simply private ownership of the means of production. The intent is that these means are to be used to advance the interests of those who own them, which will in turn create conditions of general prosperity that can be enjoyed by all.

It appears that what Americans really have in mind when they think about socialism is not an economic system but particular economic outcomes.

When polled, Americans express relatively well-defined views on both. And while nowhere near a majority of the American electorate favors a completely socialist system, a recent Gallup poll indicates that more than four in ten Americans think “some form of socialism” is a good thing. But what is “some form of socialism?” A society is either socialist or it isn’t. The state either owns the means of production or it doesn’t. There is no middle ground. Even our openly socialist politicians rarely advocate anything near as drastic as government control of the means of production.

It appears that what Americans really have in mind when they think about socialism is not an economic system but particular economic outcomes. And their thoughts seem to focus most often on the question of what people should have. The answer they arrive at most often? More than people typically get in a system based on the pursuit of profit. Capitalism, they believe, is immoral because it is a system in which some do without while others have more than they could hope to use in multiple lifetimes.

These four in ten Americans, and the politicians who speak for them most vocally, are not advocating socialism at all; they are advocating what we should really call “transferism.” Transferism is a system in which one group of people forces a second group to pay for things that the people believe they, or some third group, should have. Transferism isn’t about controlling the means of production. It is about the forced redistribution of what’s produced.

Federal transfers are money the federal government gives directly to people or to state and local governments. These are not purchases. To be a transfer, the money must be given in exchange for nothing. The earned income tax credit, income assistance, and payments from various welfare programs are transfers. So, too, are Social Security benefits. While workers tend to regard Social Security benefits as returns on their Social Security taxes, legally, Social Security taxes are simply part of the government’s tax revenues. Workers are not entitled to Social Security benefits. Who says so? The Supreme Court in Flemming v. Nestor (1960). In reality, Social Security benefits are simply transfers—gifts—from the federal government to retirees.

At least at the federal level, our government has fully embraced transferism.

Federal transfers to persons have risen from 11 percent of federal spending in 1953 to 53 percent today. As with persons, the federal government also sends transfers to state and local governments. Federal transfers to persons and state and local governments have risen from 17 percent of federal spending in 1953 to 69 percent today. As of today, almost 70 percent of what the federal government does involves simply taking money from one group of people and giving it to another. Less than one-third of the money Washington spends is spent in the name of actual governance.

At least at the federal level, our government has fully embraced transferism. And both parties are responsible. Among the four presidents under whom transfers were greatest, two were Democrats (Obama and Clinton) and two Republicans (G.W. Bush and Trump). Transfer payments increase steadily over time. Partisan differences are a matter of rhetoric and public perception, not a reflection of any underlying reality.

Federal transfers as a fraction of total federal spending.

Contrary to type, politicians speak in very clear terms about the benefits they would like to finance by transferring money from one group to another, and they have had predictable success with it. Most Americans cannot imagine a country without Social Security, Medicare, and the Earned Income Tax Credit. And politicians never seem to run out of new ideas regarding what they might be able to achieve with even more transfers of wealth. New ideas are typically well-defined, at least on the benefit side. Student loan forgiveness, universal basic income, Medicare for All, and every other piece of proposed redistributive legislation offers an obvious benefit for an equally obvious group of people.

The lack of clarity comes when the politicians get around to explaining who will pay for all of it. Their answer is inevitably some form of “the rich,” who will finally, we are told, pay “their fair share.” None of this is ever defined, which explains the United States’ present $23 trillion debt. Transfers are tricky political business because politicians need to point to who benefits and by how much while at the same time hiding who will actually be paying.

And just as transferism is not actually socialism, the system against which transferists rail isn’t capitalism, either. When they think of “capitalism,” transferists imagine a monied class that defrauds customers, pollutes the environment, and maintains monopoly power, all because the monied class is in bed with government. But capitalism is simply the private ownership of the means of production. What people are actually describing is something more appropriately called “cronyism,” which can manifest in a socialist system as easily as in a capitalist one. Cronyism isn’t a byproduct of the economic system at all; it is a byproduct of politics.

For current examples, one need look no further than North Korea, Cuba, and Venezuela. Socialists say these aren’t examples of “real socialism,” and they’re not. There was a time when these countries were indeed socialist, just as there was a time when the United States was capitalist. But cronyism has overtaken these countries’ economic systems, just as it did in humanity’s grandest socialist experiment: the Soviet Union. Life was simply different for inner-party members than it was for workers. This is the real danger that all countries face, regardless of the animating principles of their economic and political structures.

The obvious question that never gets asked is how much transferism we actually want.

And this is where the dangers of transferism should become manifestly clear, because transferism is simply another form of cronyism. In the United States’ current iteration, the cronies are not a monied elite who buy off powerful politicians for their own benefit (although that still happens, too). They are voters who reward the politicians who promise them a growing list of benefits year after year.

The obvious question that never gets asked, almost entirely because of our increasingly confused understanding of the words socialism and capitalism, is how much transferism we actually want. The intellectual shorthand that socialism and capitalism allow turns out to be broadly inapplicable to our present circumstances, but our insistence on the categories virtually guarantees that we will get nowhere with the present discourse.

We need to answer the core question: how much transferism do we want?

In order to figure this out, we need to come to terms with the fact that any transfer is a confiscation of wealth from the people who created it. That confiscation will decrease wealth creation in the long term by decreasing an important incentive to take the risks necessary for creating wealth. Second, we have to recognize that transferism is addictive. No matter how much we transfer, people will always want more. The United States’ $23 trillion debt, the largest debt the world has ever seen, has come about because of American voters’ voracious appetite for transfers combined with politicians’ obvious incentive to provide them.

In the end, we have polluted our political discourse with two words that no longer have much meaning: socialism and capitalism.

The solution politicians have found is to pass off the cost of the transfers to taxpayers who haven’t yet been born by borrowing the money, thereby leaving to the next generation the problem of repaying the debt or enduring unending interest payments. It’s a house of cards to be sure, but from their perspective, it will be someone else’s house of cards.

In the end, we have polluted our political discourse with two words that no longer have much meaning: socialism and capitalism. In the process, we don’t call the animating principle of modern American politics what it actually is: transferism. The only winners have been the politicians who manage to gather votes by keeping the electorate in a near-constant state of friction. And they keep winning if people keep thinking in categories that ceased to have any real meaning years ago.

Dr. Antony Davies is the Milton Friedman Distinguished Fellow at FEE, and James R. Harrigan is Managing Director of the Center for Philosophy of Freedom at the University of Arizona, and the F.A. Hayek Distinguished Fellow at FEE. 

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