The "Free Market" R Us!

Yesterday Bird Dog over at Maggie's Farm posted a link to JR Nyquist's cogent article, "Saving the Free Market," which references Ludwig von Mises' book: "The Anti-Capitalistic Mentality." I've discussed this brilliant book here on several occasions.

Mises spent a lifetime studying, explaining, defending and advocating something called the "free market." I often wonder if the man on the street really understands the concept.

Bird Dog's post pulls the following quote out of Nyquist's article:

According to Mises, “The profit system [of the free market] makes those men prosper who have succeeded in filling the wants of the people in the best possible and cheapest way.” The free market is a daily plebiscite, he explained, in which “every penny gives a right to vote … who should own and run the plants, shops and farms.” Rather than giving everyone an equal share in running the economy, the free market places in charge those best able to provide for the many. In this arrangement, everyone must produce. Everyone buys and sells. “This is what the modern concept of freedom means,” noted Mises. “Every adult is free to fashion his life according to his own plans.

This quote, of course, accurately describes the workings of the free market, but it really doesn't say what the free market is. Some would read the paragraph above and be filled with cynicism and horror. They might argue:

"The profit system" is rigged in favor of the 1%, the big, wealthy corporations that create our consumer society. The rich and powerful corporations fill the airwaves with advertisements that make people want to buy stuff they don't need. Then they exploit our cheap labor to build the stuff. Then they sell it back to us in big, corporate, box stores at exorbitant prices we can't afford.

We might be able to vote with our "every penny" on who runs things, but the fat cats are voting with dollars not pennies. They always win. A rich man may be able to "fashion his life according to his own plans," but the poor man is trapped. Markets may be "free," but they are definitely unfair.

To understand what the free market really is we must cast aside the rhetoric and the economic jargon. Forget words like profit, loss, supply and demand. Forget the big concepts like the economy and the market place. Ask yourself some basic questions instead, like:

Is the money I earn mine?

Most Americans would answer, of course, it is mine. Whose else would it be? Well, it might be the landlord's. He takes a huge chunk of it every month. Or the grocer's. Or the shoe store owner's. Or Uncle Sam's. He takes his share before you ever see your paycheck.

Upon reflection, it should be easy to see that some of these individuals don't really take your money. You voluntarily give it to them in exchange for things you need and want. If you don't like the things they give you in exchange for your money, you can change trading partners, i.e., rent from a different landlord, buy from a different grocer or patronize another shoe store. However, your relationship with Uncle Sam is a bit different.

Uncle Sam confiscates his share of your paycheck without asking and gives you in return...well, what does Uncle Sam give you in return? Roads? Police services? Fire services? Schools? Not really. These things are given to you in return for your taxes by local cities and towns. What do you get in return for the tax money you send Uncle Sam in Washington, DC?

While you're thinking about that, ask yourself what your options are if you're dissatisfied with the things you're getting back from Uncle Sam. You can't buy military protection from another Uncle. You can't mail your first class letters from another Post Office. You can't patronize another Medicare store or Social Security office.

The truth is where Uncle Sam is concerned you have no choice in the matter. You're stuck with the stuff your parasitic Uncle wants to give you in return for money he takes without asking.

So I ask again: Is the money you earn really yours?

It should be obvious that the answer is no, at least not the part confiscated and used by Uncle Sam.

The next question to consider is: Which do you prefer? Owning and controlling your own money? Or having it confiscated by someone else who may or may not give you something you want or need in return?

Most people are most satisfied owning and controlling their own money. They are most comfortable making their own decisions about what to buy and from whom to buy it.

Of course it's not an either-or proposition. Obviously, the United States swings both ways. On the one hand, you send a big chunk of money to anonymous bureaucrats in Washington DC who do with it as they please. On the other hand, you get to own and control what's left.

But, then again, it's not really that simple. Because the more powerful these anonymous bureaucrats become the more rules and regulations they pass, rules and regulations that tell you under penalty of the law how you can or cannot spend the portion of your money you got to keep for yourself.

If the portion of your money you own and control is actually controlled by Washington rules and regulations, who really owns your money? The answer should be obvious. You don't. Uncle Sam does.

So what is a free market? It's not Uncle Sam and his faceless minions doing what they want with money they've confiscated from you. It's YOU, doing what YOU want with money YOU earned -- with absolutely no interference from Uncle Sam. 

Now I've got another question for you: How large is the free market in the United States? That is, how large (or small) is that portion of the money you earned that Uncle Sam let's you keep and that you get to spend exactly as you want to spend it without interference from Uncle Sam?

50%? 40%? 20%? I can't tell you. You have to tell me. Maybe a quick check of your federal, state and local income and property tax returns will help you decide. If you're a numbers person, maybe the graph below will help. Of course the graph only shows the growth in the portion of your money Uncle Sam controls. It doesn't show the portion of your money your state, county, and local politicians control. But you get the point.

As the graph shows, the size of the free market in the United States has been dwindling drastically over the years. At the turn of the century individuals in America got to own and control over 90% of the wealth they produced. They got to spend that wealth on themselves and their families exactly how they wanted and with whom they wanted. Uncle Sam owned and controlled less than 10% of the wealth they produced.

Today Uncle Sam owns 40% of the wealth individual Americans produce, and he controls considerably more. After the new Affordable Health Care for America Act (ObamaCare) fully kicks in, and local, county and state controlled wealth is added, Uncle Sam and company will control well over half of all the wealth produced by individuals in these United States. The free market -- in other words, YOU -- will own and control what's left, maybe 40%! The trend is clear. The free market in this country is going, going, gone.

The very saddest part of this story is the ending. Many, many individuals in this country are pleased to see the free market disappear. They do not want to be part of a free market. They want Uncle Sam in all his reincarnations to spend their hard-earned money for them. These naive and trusting souls apparently believe that politicians are more responsible, more honest, more hard working, more productive and more caring than they themselves are providing for themselves in a free market.
  
I don't believe it for an instant. Do you?

"Gold Is Where You Find It"

At the end of her column, titled "America's Crisis of Character," the often insipid and ever saccharine Peggy Noonan comments: "Something seems to be going terribly wrong."

Of course, Noonan is referring to our American culture, "or rather the flat, brute, highly sexualized thing we call our culture." After deploring juvenile "flash mobs," a groping TSA agent reducing a woman to tears, the four-day, regional orgy of the General Services Administration, whoring Secret Service agents, US troops in Afghanistan posing with enemy body parts and public school teachers having sex with students, Noonan finishes with a suggestion: "Maybe we have to stop and think about this."

Really, Peggy? The best you can come up with is contemplating our collective navel?

Come on!

I'm an aficionado of old movies made in the 30's, 40's and 50's. If you want to learn why our American culture and character has deteriorated over the past sixty or seventy years and how tragically that deterioration has progressed, watch an old movie and compare it to the trash being made nowadays. Contrast the wholesome and virtuous characters with the vacant, amoral individuals Noonan decries in her column, and the mirror-image characters common in today's films.

I watched a movie a day or so ago called "Gold Is Where You Find It." [SPOILER ALERT!] Made in 1938, starring Olivia de Havilland and Claude Rains, the movie documents the conflict between hydraulic gold miners and farmers during the California gold rush circa 1860. The slurry and waste water from the mines contaminates the farmers' crops and wells. The farmers take their case to court, but a battle erupts anyway. Eventually, the California Supreme Court upholds the farmers' violated property rights.

Even though the plot is free market and pro-property, it is not remarkable. Westerns of that era regularly dealt with conflicts over property rights and upholding the law in the face of resistance by vigilantes. Westerns were popular morality plays, but so were many films of yesteryear.

What is remarkable about the film is the culture of the frontier characters. They are depicted as polite and cooperative people. They don't curse. Claude Rains is the very definition of a gentleman and father. Even when his children disagree with him, they honor him. The heroic farmers treat each other with respect and tolerance. They are strong, self-reliant, reasonable and honorable men who instinctively recognize right and wrong, good and evil. They show deference and respect, sexual and otherwise, to their women. Even in conflict the dialogue is thoughtful, sympathetic and erudite. All this in what is billed by the studio as a "lusty, brawling saga."



Earlier that day I watched "She Couldn't Say No," a 1954 comedy celebrating small town America, starring Robert Mitchum and Jean Simmons. Mitchum plays a doctor who helps the town get through the trouble caused by Simmons whose efforts to repay the town for saving her life bring about unintended consequences. The trailer is below. The clip below the trailer gives the flavor of the film. Some today would call the film naive, but the honesty and genuine human kindness and cooperative sociability exhibited and portrayed by the townspeople is in short supply today. Note Mitchum delivers the baby for the going price of $75, or two pigs taken in barter. No need for ObamaCare in Arkansas in the 50's!





Speaking of Mitchum, one of my favorite movies of all time is "Heaven Knows, Mr. Allison." Made in 1957 the film is set in World War II. Mitchum plays an adopted street tough turned US Marine who is marooned behind enemy lines on a tropical island in the South Pacific with a Catholic nun, a missionary, played by Deborah Kerr. The deference and respect Mitchum shows Kerr tells a lot about the character of the men and women of the time. Mitchum is genuinely polite and protective of Kerr, and though he is attracted to her he treats her with the utmost regard and sexual restraint and respect. It's a film that could never be made today without corrupting the integrity of the film and the virtue of the characters.

Talking about movies that could not be made today, how about "Angels In The Outfield?" I know the original, 1951 version that I saw recently was re-made by Disney in 1994, but I bet the remake is a real goofball, irreverent farce (I didn't see it). The original, starring Paul Douglas and Janet Leigh, was a comedy in a loose sense of the word. The movie was touching and reverent. The angels helping Douglas' team win were not farcical but almost believable. The film was filled with Christian life lessons, moral virtues and family values. Mutual kindness and respect win the day.




I could go on and on: The Bells of St Mary’s (1945); The Miracle of Our Lady of Fatima (1952); Going My Way (1944); Boys Town (1938); Come to the Stable (1949); The Miracle of the Bells (1948);The Hoodlum Saint (1946); The Sign of the Cross (1932); and It’s a Wonderful Life (1946). In the 30's, 40's and 50's films with Christian, Catholic, formal and informal religious themes were commonplace. These films illustrated and explored a cultural, social and moral innocence that no longer exists in this country, an innocence born of deep faith in God and family and a belief in something greater than self. The Americans portrayed in these movies were good people, decent people, modest people, steeped in unapologetic Christian values and morality.

THAT'S what is missing in the American culture and character of today, especially in our big cities and among the young: Christian values and morality! Too many today have embraced a self-centered, amoral, hedonist, "anything goes" lifestyle.

The antidote is not meditation and self-psycho-analysis. The antidote is regaining and practicing our unabashed and lost innocence!

On Believing In Something Greater Than Self

My wife and I had a long and deep discussion last night. It was occasioned by my father's depression. He's in his upper 80's and in failing health. He had seen a television report on euthanasia and had asked me to research the possibility for euthanizing him.

As you can imagine, such a request could spur a whole range of topics, but the one we got stuck on was the "why" of my father's depression. Yes, when health breakdowns begin to severely restrict an elderly person's options for life activities, depression is understandable. However, as my wife and I talked, we began to realize that different people react to such circumstances in different ways. Many elderly people we know are dealing with old age and it's vicissitudes quite admirably.

My mother, for instance, is only two years younger than my father, but she does not tend to be depressed. She is upbeat and outgoing. She is also deeply religious, which my father is not.

My wife and I concluded that in general not only the elderly but also people in general handle life's curve balls in different ways. It seems the common denominator, at least by my and my wife's reckoning, is a committed belief in something or Someone greater than one's self.

Both my father and her mother, who is quite younger, are prone to fits of depression or, more accurately, periods when they are mad at the world for one reason or another. They are both self-centered individuals who are quick to blame others or circumstances for their misery. Neither is the type who will accept responsibility for the consequences of their actions. Neither can see the world for what it is with a healthy perspective that they are a small part of that world. They take life's bumps and bruises personally. Neither is able to love unconditionally, or commit themselves to a specific philosophy of life greater than their own ego. As a consequence, they tend to be needy. When they get in one of their moods they can drain the energy out of whoever is nearby because they feel the world owes them a better shake.

Unfortunately, my dad is an old dog and adopting a healthy belief in a God greater than himself or even a philosophical principle greater than himself is not going to happen. Such attitudes must be learned and committed to early in life, or at least early enough to be sincerely cultivated in order to deal with the ravages of advancing age.

My wife and I then realized something profound, but extremely scary. Many of our young people today are being brought up in an environment where they are catered to and coddled. They are being taught in our schools to be self-centered egoists with an entitlement mentality. The further they advance in our educational institutions, the more they are trained by leftists who disparage family, religion, self-reliance, self-responsibility, meekness and humility. They begin to feel the world literally owes them things, if not a living, at least an education, health care and security in their old age.

In short, many young people today are being groomed and trained to be individuals exactly like my dad and my wife's mom, bitter individuals unable to see any Being or principle greater than their own self.

It's a sad situation that doesn't bode well for either their future or the future of our society.

NOTE: Unfortunately, it is necessary to point out to over sensitive readers that I am not saying ALL young people are self-centered and heading for an unhappy old age. Many young people today have excellent parents with their heads screwed on straight. Consequently, these young people have acquired strong morals and a healthy sense of prospective and self. They are our hope for a healthy future society.

We've Lost Our Way

There is a scene in the movie "The Good Earth" in which townspeople, ravished by famine, break into the home of one of their own, a peasant with a reputation for prudence, hard work and frugality. They suspect their friend of hoarding food. Amid righteous demands that their friend share his "good fortune," they tear the cover off the pot on the stove and discover it contains nothing but simmering water and earth.

Those of us with grey hair remember an America quite different than it is today. Neighbors respected each others privacy and their private property. They kept to themselves but were, nevertheless, friendly and quick to lend a helping hand if warranted. They were God-fearing people who understood the difference between right and wrong. They taught their children self-reliance, self-discipline, enterprise, tolerance and the Golden Rule. They insisted their schools do the same.

They failed.

Today even adults are brats, spoiled by a lifetime of coddling, privilege and a righteous sense of entitlement. Schools don't teach civics and godliness anymore. They teach reverence for the self and for what the collective can provide the self. In the old days of America what citizens demanded and fought for was simple opportunity. Now the brats demand their natural-born right to everything from health care to transportation to food -- free of charge -- and they are willing to bash in the skulls of others who have the wherewithal to provide it.

In the old days shame was real. It was what you were made to feel when you let your parents down, or slacked off, or accepted help without the solemn intent to return the favor in kind. Today, no one feels shame because no behavior -- no matter how undignified or raunchy -- is considered shameful.

I got an email today from some brat named Stephanie Cutter. Apparently, she's the Deputy Campaign Manager for something called Obama for America. Stephanie emphatically reminded me that having to pay for something yourself -- in this case, birth control pills -- amounts to a "dangerous overreach" and someone else "having the power to decide what's best for you."

In Stephanie's new America getting what you need free of charge from someone else is a human right. No American today should find this philosophy shocking or disagreeable. For years we've dutifully allowed our taxes to support free-of-charge public schools where "progressive" educators fill our children's heads with such tripe. That these children graduate spouting the values of Karl Marx rather than Ben Franklin should not be surprising.

When times are good, when the harvest is lush and plentiful, these newfangled ideas are mere laughable curiosities. No one could possibly take seriously the idea that charity can be righteously coerced by a government bureaucrat, or that the demands of a hungry and needy majority can trump an individual's right to his own private property, or that having to pay for something yourself can be construed as tyranny.

However, when times turn bad, when famine hits, normally reasonable individuals lose their heads. They band together with their neighbors to form a mob. The come to your house knocking, shouting, demanding. Then, the sudden fearful realization hits you that these people are not only serious but they are also willing to kill you and your family to get what they want.

Don't worry. It is but a fleeting fear. For soon these brats will discover the laugh's on them. Why? Unbeknownst to them, their coddling victims have embraced their brat philosophy. As a result, the cupboards are empty. There is nothing left to steal but a simmering pot of water and good earth.

Food Regulation: The Canary In The Mineshaft?

Articles like David Limbaugh's "Just When You Thought Our Fiscal Nightmare Couldn't Get Any Worse" at Human Events are scary. I found the article via Maggies Farm and Doug Ross.

Limbaugh's article spells out the fiscal and monetary mess we face in this country. I am moved to make a couple of observations.

First, the economic problems the country faces are real. Glenn Beck and others have been criticized for fear mongering, i.e., exagerating the problem and the danger. Beck's perfect storm scenario is indeed the worst case. He predicts food shortages, violence in the streets and martial law. I will deal with the food shortage issue in a moment. Regarding martial law, I predicted four years ago and I still predict that martial law will be declared in this country before Obama's first term ends. But back to the economic problems we face. Unemployment is high. Monetary inflation is policy. Public debt is at World War levels. The dollar faces imminent collapse. Austrian economics has been predicting this crackup for many, many years. the day of reckoning is at hand. And politicians in Washington either do not know what to do or know and will not do it.

Second, are the current President and his sycophants merely economically stupid or, as Rush Limbaugh alleges, purposely steering the nation on the road to disaster? I happen to believe both. Mr. Obama is a trained socialist. He is ideologically married to the leveling Marxist philosophy of from each according to his ability and to each according to his need. I make this judgement based on Obama's rhetoric, background and policies. I do not pretend to know his motives. But I can speculate.

I believe Obama sees the United States as the last bastion of “unreformed” capitalism. By that I mean capitalism which has not been “gentled” by European-style “compassionate” progressivism. In my previous post I discuss the private market versus the public market. The U.S. is probably about 60% public and 40% private, and this is a conservative estimate. The public market is growing everyday by leaps and bounds. Obama will not rest until the public market comprises over 90% of the American economy. He probably operates under the illusion that when the mighty engine of American capitalism is “harnessed” by having its vast wealth redistributed, not only this country but the entire world will experience an economic new morning of prosperity. Of course he does not realize that the wellspring of American production, wealth and prosperity is the private market. By destroying the private market he destroys the greatest productive engine the world as ever seen. With it he destroys the prosperity Americans take for granted.

What better way to rapidly expand the public market than by allowing a fiscal and monetary crisis to bloom? Keep in mind, American voters lean heavily to the left. Arguably Dwight Eisenhower was our last conservative President. Slowly but surely we have been electing Presidents who are more and more liberal. Obama is simply the latest, though the most fervent. However, we almost elected Al Gore and John Kerry, men who rival Obama's leftism. When a fiscal and monetary crisis hits, when Americans' steady supply of goods and services becomes tight, when the dollar collapses, the American public will eagerly sign on to any "emergency" measure Obama suggests will save the day. There is no greater danger in this country than that presented by ignorance and fear in the populace AND a leftist community organizer in the White House eager to pander to both.

Third, mitigating the effects of a fiscal and economic crisis is the tenacity and resiliency of what's left of the private market in the United States. From personal experience I can testify that business, most especially small business, will not go quietly into the night. Small businessmen are used to adversity. They are fighters. They have cash reserves. Never count them out so long as they draw any breath at all. Small business men and women are the spine of our economy. If the destructive policies of the left can be overcome, small businesses will be the institutions that save us.

Fourth, there are wildcard forces at work in this nation that may be too powerful even for small business to resist. There is the mainstream media that is as economically illiterate as the American public and almost as ideological as the President. They cheerlead Mr. Obama's policies and coverup his flaws. And when economic crisis strikes, they will pimp the President's plans. This is a media caught up in meaningless and shallow celebrity, reality TV and courtroom drama. A fearful public doesn't have a chance against them.

Then, there is the popular culture. This is not the America of your grandfather or of your father. This is a nation of risk-averse and righteous individuals who are spoiled rotten. They feel they have a right to be comfortable. They have never experienced hardship. They are caught up in the fluff of modern culture: toneless jungle beat music with sappy, sexual lyrics, hollow social media blabbering, self-mutilation, selfless political correctness, artificial politeness, and a savage and unending stream of video and audio violence. Flash mobs are all the rage, and flash mobs that turn violent are merely an exciting curiosity. What will such individuals do when their toys and other of life's more essential necessities (like food, jobs and government welfare payments) are taken away? We need only look to Greece, Spain and Britain for the answer. In the face of wanton and greedy anarchy, small businessmen will react like the rest of us. They will pack up their things and take cover.

Fifth, in my opinion the canary in the mine shaft that will signal the beginning of this misery is food production and distribution. By and large, despite some federal oversight, the food industry is a thriving member of the private market. So long as it is left alone, it will be tenacious and resiliant. However, once the government begins to pay serious attention to the food industry, once it starts to hamstring it with overbearing regulation (see the latest nutritional and labeling requirements that threaten to remove certain, popular food types from the market), be they environmental, nutritional or egalitarian, production and distribution will slow. Shortages will hurt. Public complaints will be heard. Price controls and rationing will be the death knell of the industry. The canary will die.

What are the chances such calamities will befall us? You have eyes and a brain. Decide for yourself.