Privilege, Servitude, and the GOP Budget

Both houses of Congress passed budget blueprints designed to balance the federal budget in 10 years. The budget calls for a reduction in projected spending of 5.5 $trillion. Needless to say—and leaving aside the details of the budget—the Left is not happy with the budget, and offers the usual smear tactics, lies, and false generalities in rebuttal.

For example, the New Jersey Star-Ledger titles their rebuttal The GOP has spoken: The wealthy and powerful could use more help. What “help” they do not say. Nor can they, because the alleged “help” is really a modest reduction in the amount of money seized from the “wealthy” and redistributed to those who did not earn it. The Star-Ledger drivels:

The GOP-dominated House and Senate passed their budget resolutions last week, and in the process proved beyond reasonable doubt that the majority party is less interested in governing than in sending symbolic valentines to the wealthy.

As usual, this will lead to the same ideological war that consumes our politics, but this budget also represents a war against cognitive function, because only in the fantasies of ideologues can one expect to make $5 trillion in cuts over the next 10 years without raising any taxes.

Unless, of course, you do it by advancing a budget that promotes the existence of a privileged class and a servile class. [emphasis added]

The S-L goes on to bemoan proposed cuts in Food Stamps (more on that in my next post), Pell Grants, and Medicaid; repeal of ObamaCare “because anything that improves the lives of 16.4 million working people cannot possibly be a good thing”; “guts” Dodd-Frank (reduces regulation); and “doesn't create jobs, address infrastructure, raise the minimum wage, reduce college debt, promote scientific research, or deal with income inequality”: In other words, the GOP budget doesn’t do enough to advance the Left’s statist agenda. (For perspective, the GOP would actually increase annual spending from $3.8 trillion to $5.1 trillion, for a 10-year total of $43.2 trillion—a reduction of about 11% from current projections. Note also that, other than ObamaCare, no welfare programs are slated to be eliminated.)

I left these comments:

We already have “a privileged class and a servile class”: It’s called the regulatory welfare state.

The privileged are the political class, which has garnered enormous power to regulate and redistribute the wealth of the servile class—the self-reliant and the productive. The privileged class feeds off of the “needy and the poor,” an ever-expanding class of dependents feeding off of the loot collected from the ever-shrinking, ever-more-regulated servile class.

The sinister nature of the welfare state is not just that it rewards moochers, however. It’s not that simple. It’s that it drives decent people into dependency. The welfare state drives up the cost of goods and services, setting up a dynamic that makes government handouts “necessary.” The soaring cost of college, driven up by subsidies, grants, and easy-money loans, is a clear-cut example of this. Worse, the welfare state turns millions of self-reliant people into a hybrid monstrosity—a combination slave and parasite. E.G. Social Security, which taxes you all of your working life to support other people, and then leaving you with living off of the earnings of others as the only means of collecting your promised “earned benefits,” because your SS taxes were not invested in your name but spent. Welfare statists are not content to “help” the poor. If they actually did care, they’d be unrepentant free market capitalist “ideologues.” They’re not, because they love the poor. It’s the source of their power and their very reason for being. That’s why their actual goal is to relentlessly expand the ranks of the poor, until the vast, once self-reliant middle class is turned into a vast, dependent welfare class. It is a dependency society, not a self-reliant society, that is the ultimate goal of the power-lusting privileged class.

The regulatory welfare state is immoral at its core, because it is built on legalized looting and rights-violating regulations and fostered by envy and hatred of economic flourishing masquerading as “economic justice” and the phony problem of “income inequality.” The fact that there are beneficiaries such as the 16.4 million ObamaCare “insured” doesn’t mitigate this fact. Every tyranny has beneficiaries, including Soviet Russia, Nazi Germany, and socialist Venezuela. The ends don’t justify the means.

Unfortunately, the debate in Washington is only about the size of the welfare state, when we should be debating how best to least disruptively phase it out. That said, it’s laudable that the GOP is offering these cuts, even though their goal is to save and perpetuate the welfare state. Every dollar cut from the gargantuan federal budget is another dollar left in the hands of the people who earned it. Cutting spending wherever politically feasable is the right thing to do, albeit being only a small first step in the right direction.  

Related Reading:

A "Liberal" Newspaper Acknowledges the Welfare State Dilemma

Washington Budget Debacle Highlights Extent of Our Dependence on Government

The Evil Genius of the Welfare State

Free Speech, not Self-Censorship, is the Answer to 'Offensive' Free Speech

The Charlie Hebdo assault has exposed hidden danger; the danger of self-censorship. The New Jersey Star-Ledger’s Paul Mulshine discusses the dangerous consequences for civilization. In The Charlie Hebdo case: Killers’ apologists owe us an apology, Mulshine recalled the Iranian Ayatollah Khomeini’s 1980s fatwa (death sentence) against Salman Rushdie for “insulting Islam with the publication of ‘The Satanic Verses.’” Mulshine noted that “no sooner was the fatwa issued than various deep thinkers arose to denounce Rushdie for provoking death threats he could not possibly have anticipated.” Mulshine goes on:

Perhaps the worst example came from Bill Donohue of the Catholic League for Religious and Civil Rights. In a press release titled “Muslims Are Right to Be Angry,” Donohue wrote the boilerplate “I don’t condone violence, but …” passage before going on to say this:

“Stephane Charbonnier, the paper’s publisher, was killed today in the slaughter, It is too bad that he didn’t understand the role he played in his tragic death. In 2012, when asked why he insults Muslims, he said, ‘Muhammad isn’t sacred to me.’ Had he not been so narcissistic, he may still be alive.”

Many apologists make a slippery-slope argument to the effect that chaos would ensue if society permitted people to utter inflammatory thoughts on topics like religion and race.

There’s a slippery slope here, all right, but it’s a slope on which our right of free expression slides away.

I left these comments:

“There’s a slippery slope here, all right, but it’s a slope on which our right of free expression slides away.”

And it’s a really scary slope.

What Donohue and his ilk are essentially advocating is something arguably worse than overt government censorship—self-censorship. If people must filter their judgement about what to express through a strainer labeled “offensive,” it will be the end of rational discourse and, consequently, a civil society. Virtually any idea—whether “reasonably” presented or not—can offend somebody. A free society requires the free flow of ideas. It’s the only way to filter out the bad ones and advance the good ones peaceably.

Donohue’s call for self-censorship is a cowards way out. The only moral way to counter ideas one doesn’t approve of is to use one’s own freedom of speech in rebuttal.

----

Mulshine added in reply to my comments: “Also, it's extremely naive to pretend that the Muslims had a right to ‘peaceful’ protest since leveling the charge of blasphemy carries a threat of execution.” Returning to the article, Mulshine observed:

Donohue’s statement has much competition, especially in the comments I’ve read on the internet. None of the commenters seem to realize their attitude sets a standard by which they themselves could be slaughtered by anyone who took umbrage at their inanities.

Exactly. People have all sorts of deeply held beliefs, and not all of these beliefs are limited to religion. As an Objectivist—Objectivism being the philosophy of Ayn Rand—I have to put up with all sorts of ignorant insults of me, my philosophy, and especially of Ayn Rand. I’m not talking about rational disagreement—even hard-hitting disagreement. I’m talking about uniformed insults and smears; inanity. I admire Ayn Rand and agree with her philosophy. In a sense, her ideas are sacred to me. Why is offending me by smearing her, whom I admire, any different than offending a Muslim by smearing Muhammad, who Muslims admire?

According to the principle espoused by the Hebdo terrorists apologists, Objectivists need only threaten harm or execution to justify others’ responsibility to “voluntarily” keep quite (or at least tone down their remarks, which in principle is the same thing). Of course, Objectivists would never demand such a thing, because a rational person understands that the best weapon against “offensive” speech is using one’s own free speech rights in rebuttal.

And here is the fundamental point: When you demand censorship—legal or “voluntarily” self-imposed—you’re own free speech, and ultimately everyone’s free speech, goes out with it. And it’s naive to find solace in an imagined distinction between legal censorship and “voluntary” self-censorship in fear of physical harm. Once the idea of voluntary self-censorship is accepted as legitimate in a culture, it’s only a matter of time before legal censorship follows: Politics always follows cultural trends. Freedom of expression is fundamental and indispensable to Western Civilization and any kind of free society. What we must recognize is that there is no “right” not to be offended, and so need for protection against offensive speech, so long as freedom of speech—properly understood—is absolute.

Related Reading:

Constitutional Distortions: Free Speech vs. Freedom of Speech

On Freedom and Liberty

Related Listening:

NEW EPISODE OF THE YARON BROOK SHOW: CHARLIE HEBDO AND THE THREAT TO FREE SPEECH

Minimum Wage Amendments Violate Rights and Subvert Proper Constitutions

Most states legally mandate minimum wages. But Colorado, Florida, and New Jersey have actually amended their constitutions to impose minimum wages.

Any government action to impose mandatory minimum wage rates is not only economically destructive but fundamentally immoral, because such measures violate employers’ and job-seekers’ moral rights to freely contract.

But as if Minimum wage laws are not bad enough, using the constitution to impose minimum wages, on whatever governmental level, compounds the evil. Such political tactics subvert the very crucial role of constitutions in protecting our liberties from governmental encroachment.

As philosopher Ayn Rand explains:

There are two potential violators of man’s rights: the criminals and the government. The great achievement of the United States was to draw a distinction between these two—by forbidding to the second the legalized version of the activities of the first.

The government was set to protect man from criminals—and the Constitution was written to protect man from the government.

These principles necessarily apply to government at any level. Otherwise, if the federal constitution protects rights, but the state constitutions can violate rights with impunity, then the federal constitution is in essence a hollow document. It is not. Though our constitution was approved on a state-by-state basis, it was instituted by “We the People,” not “We the States.”

Under minimum wage amendments and like “economic” constitutional provisions, man’s protection from the government vanishes. Rather than limiting the government to protecting individual rights, such provisions invert the constitution, turning it into a rights-violating tool of economic aggression at the behest of any victorious voting bloc.

As stated in the Declaration of Independence, the philosophic blueprint for the constitution, “. . . to secure these rights, Governments are instituted among Men.” If liberty is to be preserved and fully restored, Americans must rediscover the vision of the Founding Fathers as regards the proper role of government and purpose of a constitution.

Related Reading:

New Jersey Voters Elect to Violate Rights and Harm the Poor

Some Fallacies Behind the Drive for the NJ Minimum Wage Increase Amendment

NJ Voters Should Vote NO on the New Jersey Minimum Wage Increase Amendment

Minimum Wage Issue is Not "about what it’s like to live on $7.25 an hour"

Selflessness vs. Egoism: Or, ‘Real Education’ vs. Real Education

Last October, the New Jersey Star-Ledger ran an editorial titled From Kentucky State U., a lesson in real education. The first sentence:

Nancy Astor, the complex American socialite who became the first woman ever to sit in the British House of Commons, once described “real education” as something that “should educate us out of self into something far finer; into a selflessness which links us to all humanity.”

I left these comments:

“Real education should educate us out of self into something far finer; into a selflessness which links us to all humanity.”

Translation: Everybody is important, as long as it’s not you. You are nobody. If this principle applies equally to everybody, then all of your self-renunciation is for a bunch of nobodies.

But this begs the question: For every act of selflessness, there is someone profiting from your selflessness. Basic logic. “Humanity”, after all, is made up of individuals. Just who is “humanity”? It turns out to be every moocher who thinks the world owes him a living. Who are the people who get stuck selflessly serving “humanity”? Anyone who takes this rubbish seriously, makes something of themselves, and finds—as his “reward”—a hoard of parasites waiting to drain him of his dreams, efforts, and wealth. The “educational” lesson: To the extent you succeed and produce, you are a slave; to the extent you fail, you get the unearned. From each according to his ability, to each according to his need. The “educational” lesson: Why bother trying? Other people owe me. The ultimate triumph of vice over virtue.

The biggest winners of all: power-lusters who claim the title of “public servants”—the politicians who get the job of distributing the largess of the selfless serfs who play it straight according to the ethics of selflessness. Convince a person he doesn’t own his life, and you’ve got him. Convince everyone of the morality of selflessness, or altruism, and everyone ends up living for the state.

Collectivism is the ultimate fraud: It crusades under the banner of benevolence and good will, to clear the way for the reign of parasites and power-lusters.

After the horrors of 20th Century collectivism, it is shocking to see these ideas once again openly espoused. Reject it, and embrace rational self-interest and self-reliance; not in the conventional mean-spirited, lone wolf sense—which is a straw man—but as a means to peaceful coexistence and mutual benefit.

The real purpose of education should be to prepare children for an independent, self-reliant adulthood so they can take care of themselves. They should be taught not to be a slave to “humanity” nor wait greedily for “humanity” to give them something they didn’t earn. They should be taught how to rationally choose their values and goals, work to achieve them, and be proud of what they do achieve—not for lesser achievers, or for “humanity”, or for “something far finer” than self—but precisely for self. One’s own life—the only life any of us will ever have—should be one’s highest value. Live for yourself and your own long-term happiness and rise by your own thought and effort. The Declaration of Independence, not the Communist Manifesto. That will breed self-respect and its corollary; respect for others and their achievements—and, by the way, genuine generosity toward people one cares about, rather than guilt-ridden handouts.

That is the ideal education.

Astor’s quote has nothing to do with a CEO taking a salary cut to give out a few raises. The issue is much more fundamental: Does your life belong to you, or not? “Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime.” The question is not linkage, but the basis of that linkage. The choice has always been either-or; selflessness and mutual predation, or self-reliance and mutual respect. Live for others and demand others live for you, or live for yourself, and respect others right to live for themselves. Deal with others as slave and master, giver and taker; or as equals exchanging value for value, neither self-sacrificing for others nor demanding others self-sacrifice for you. Lose-win, or win-win. Mutual profiteering on sacrifice, or self-reliance. Chains or freedom. Altruism or egoism. Run from anyone who preaches the former, for they are not lovers of humanity. They are either moochers or power-lusters—the collectors and/or distributors of your sacrifices.

Selflessness in education has political appeal for power-lusters. The purpose of an education based on selflessness is to create adults who will readily submit to authoritarian rule, because they are not morally equipped to selfishly defend their values and their rights to life, liberty, and property.

Related Reading:

Individualism vs. Collectivism, Profit vs. Non-Profit, In the Education Debate

Education: It’s the Philosophy, Stupid!

The Comprachicos—Ayn Rand

Individualism vs. Collectivism: Our Future, Our Choice—Craig Biddle

Teaching Johnny to Think—Leonard Peikoff

On Religion, The First Amendment Works Both Ways

A letter published in the Hunterdon County Democrat screamed, “Tragedy Looms!” Robert A. Loss writes:

Hearing some of the preliminary talk regarding the 2016 presidential election, I sense a true tragedy in the making, [the election of] another liberal, un-American president” who doesn’t understand that “the Constitution is the ‘supreme law of the land.’”

Apparently, Loss doesn’t understand the constitution, either. His very next paragraph reads:

The First Amendment of our Constitution states we have the right to free exercise of religion, so why does any court entertain any lawsuit pertaining to the display of a nativity scene or any other Christian celebration? Any religion has the Constitutional right to exercise their religious beliefs and there is nothing in the Constitution that says anything about “the separation of church and state” - whatever that means.

In the comments, David Ivester did a pretty good job of explaining to Loss exactly what “separation of church and state” means:

I’m happy to answer Mr. Loss’s question.It is important to distinguish between "individual" and "government" speech about religion.The constitutional principle of separation of church and state does not purge religion from the public square--far from it. Indeed, the First Amendment's "free exercise" clause assures that each individual is free to exercise and express his or her religious views--publicly as well as privately. The Amendment constrains only the government not to promote or otherwise take steps toward establishment of religion.While figuring out whether someone is speaking for the government in any particular circumstance may sometimes be difficult, making the distinction is critical. [sic]

I left this reply to Ivester, under my screen name “Zemack”:

I would add that freedom of religion extends beyond religion to all personal belief systems. The Founding Fathers used freedom of religion and liberty of conscience interchangeably. They intended that government be neutral, promoting (establishing) neither religious nor non-religious beliefs, and protecting the free exercise and expression of all personal belief systems.

I would also add that the Constitution cannot be understood outside of the context of the Declaration of Independence, the philosophic blueprint for the Constitution. The meaning of “unalienable rights” is that the exercise of one man’s rights cannot infringe on another’s. “Unalienable” establishes the parameters within which one may exercise his rights, and beyond which his exercise cannot go, and best summed up by the saying, “Your right to swing your arms ends where my nose begins.” This means no one may force others to pay for their “free exercise of religion,” which is exactly what happens when religionists want to use tax-funded government property such as courthouses to display their religious symbols. Loss wonders “why does any court entertain any lawsuit pertaining to the display of a nativity scene or any other Christian celebration?” But this issue only pertains to government buildings such as courthouses and schools. If such displays are allowed, it implies government sanction or establishment. No one has ever suggested that private individuals be forbidden to express their beliefs on private property, or privately on public property. On the other hand, if an employee of the government, such as a public school teacher, uses his position as a government employee to express his religious beliefs, that cannot be tolerated under the First Amendment.

Loss apparently forgot the rest of the First Amendment, such as the part that states “Congress shall make no law respecting an establishment of religion,” which precedes the part about free exercise he references. Perhaps if he read the whole thing, he’d understand what separation of church and state actually means. Legally walling off religion and political power is the only way to protect freedom of religion and conscience, and foster peaceful coexistence among people of all beliefs.

As I wrote in Freedom Of Religion Demands Freedom From Religion for The Objective Standard:

In a political context, freedom means the absence of initiatory physical force or coercion. Those who promote the idea that there is no freedom from religion undermine the First Amendment, reject the separation of church and state, and seek to impose their religious beliefs through government force.

If freedom of conscience is to continue in America—which means: if America is to continue being even semi-free—Americans must understand and embrace the principle that freedom of conscience entails and requires freedom from religion.

Related Reading:

Freedom Of Religion Demands Freedom From Religion

My Commentary on Church-State Separation

America Was Not Founded as a Christian Nation

How Business Productivity Makes Us Wealthier and Safer

This is a followup on Gary Faraci’s letter titled Economic status quo must change, which was published in the Asbury Park Press and also appeared in the print edition of the New Jersey Star-Ledger.

Gary Faraci posted this rebuttal to my comments, discussed in my last post on 3/19/15, “Only Free Markets Can Fairly Determine Economic Success”:

Contrary to what you say, in today's system big business investors don't risk their capital - they use our tax dollars in the form of grants, subsidies, tax abatements & deferments. The billions the oil companies get from us, and the billions in breaks we give them are good examples. And big business investors are guaranteed a return - just look at the TARP bailout of the financial industry. Increased productivity also means less labor needed, thus less not more earning power for many. And climate change indicates business has NOT led to a safer, healthier human environment. The only thing we agree on is the first responsibility of a CEO is to maximize shareholder value. But that is not in any way a MORAL responsibility, as the other stakeholders are not considered. And that is immoral.

My Reply:

Today’s system is seriously corrupt in many ways, and I agree the TARP bailouts are terrible. But mixed economy corruption aside, investment, production, and trade drive progress.

I also agree that any actual subsidies—direct payments from taxpayers to companies—should end. That includes the massive, decades-long subsidies to so-called “renewable” energy companies. But tax breaks are not subsidies. They are companies keeping more of what they have earned. And oil companies earn their profits by producing the indispensable values—energy and myriad petroleum-based products—that we voluntarily buy.

“And climate change indicates business has NOT led to a safer, healthier human environment.”

This is the most fantastic statement imaginable. Where would we be without central heating and a/c; water purification and delivery systems; sturdy structures; advanced sanitary waste disposal; advanced medicine; electrification; modern transportation; modern agriculture; modern communications; stores stocked with products to meet every imaginable need and desire. The list goes on and on. We are saturated in the wonders of business, big and small. In the midst of plenty, you see only “climate change,” ignoring the monumental benefits. This is irrational prejudice. Well, climate danger, not climate change, is and always has been the real threat. And we’re better protected from climate danger than ever before. Before the capitalist era of business prominence, life for all but the very wealthiest ruling elites was a brutal day-to-day, hand-to-mouth struggle to stay one step ahead of the next drought-induced famine or storm or infectious disease or cold wave. If what we have today is not a safer, healthier human environment compared to what existed back then, then how exactly do you define safer and healthier?

--

Now let’s explore in more depth Faraci’s statement that “Increased productivity also means less labor needed, thus less not more earning power for many.”

Increased productivity does cost jobs in the short term, and these workers who lose their jobs can face hardship if they don’t find an alternative livelihood.

But productivity works both ways. The workers who remain are more productive, and thus, over time, earn higher wages. Furthermore, lower costs lead to lower prices, resulting in increased sales that tend to mitigate the shrinkage of the more productive company’s workforce. And as existing industry gets more productive and sheds workers, the way is paved for the birth of new technologies and new industries—including those that produce the new, labor saving technologies. This process leads to more goods at more affordable prices, and more jobs.

Steady economic progress has been the history of capitalism. Before free market capitalism gave birth to the industrial revolution, almost everyone worked on the basic necessities of life—food and clothing. That was all most people had time for. As recently as 1870, at least 70% of the U.S. population worked in agriculture. Today, only 2%. Add in the productivity-led shrinkage of jobs in the textile industry to 2% of the labor force, and—according to Faraci’s logic that productivity is regressive—we should have 90% unemployment today. Not only is that obviously not so, we are all immensely wealthier than in pre-industrial times. We have indoor plumbing, electrification, autos and planes, central air conditioning and heating, amazing healthcare, cell phones, television, the internet, plentiful food, much better protection from the natural elements, and whatever else one cares to add to this list. And we live almost twice as long, with a wealth of job opportunities unimaginable 250 years ago.

Faraci doesn’t explain specifically what he means when he says that a CEO’s duty to maximize shareholder value “is not in any way a MORAL responsibility, as the other stakeholders—the community, the employees and the environment—are not considered.” But we can surmise. Apparently, Faraci believes businessmen’s interests are to be subordinated to the “community”—i.e., anyone other than the owners and operators of the business; and that the world owes “employees” a living, which it is business’s moral duty to provide for, whether or not the employee is any longer needed and regardless of his level of competence. As to the environment, Faraci apparently believes that the natural environment is safe, and businessmen have made it less safe—the exact opposite of the truth. Does Faraci prefer a pre-industrial existence over today’s comparatively thriving industrial, technological civilization? Or is Faraci demanding that  business somehow produce what we need without affecting the natural world? Your guess is as good as mine.

Of course, capitalism balances and harmonizes everyone’s interests, through the mechanism of trade, so that no one’s interests are sacrificed to anyone else’s. This is so because, under capitalism, individual rights are protected equally and at all times, under a government constitutionally limited to that purpose. Capitalism is the system of self-reliance and respect for the rights of others. It is the system that liberates producers to transform the natural world, with all of its inherent dangers, into a safer, livable human life-centered environment. Parasites, power-lusters, and “Mother Earth”—worshipping primitives have no place in a capitalist society, and that’s what makes capitalism the only moral social system.

Related Reading:

Elizabeth Warren's Flawed Understanding of the Source of Worker Productivity

End All Corporate Welfare

Businessmen—Ayn Rand

Only Free Markets Can Fairly Determine Economic Success

A recent letter titled Economic status quo must change was published in the Asbury Park Press. (It also appeared in the print edition of the New Jersey Star-Ledger.) It is an interesting letter in that it exposes the soul and the ignorance of the anti-capitalist. The writer is Gary Faraci.

Faraci calls for a “cultural change” away from “the mantra that success is measured solely by maximizing stockholder value.” Instead, he says, “Economic success must be measured by maximizing all ‘stakeholders’ values. Stakeholders include the community, the employees, and the environment. Not just stockholders.” Faraci goes on:

Maximizing stockholder value by the continually driving costs out of the system allows companies to have workers living below the poverty line, which then results in the workers relying on the government for food stamps and health benefits. And this narrow pursuit of profits also allows businesses to neglect and ignore the detrimental effects they have on the community systems and infrastructure, and the environment. Unless the welfare of the community, the employees and the environment are balanced with the interests of the investors, any economic success will be short-lived. And only for those at the top. Long term economic survival depends upon liveable wages, disposable income, sound infrastructure, and a safe environment. Not just higher stock prices.

I left these comments:

Business creates the products our lives and flourishing depend on at a price people can afford, the remunerative jobs that enable us to buy the products we need and desire, and by extension the tax revenue that supports our schools and infrastructure. All of this starts with the entrepreneurs and investors who risk their capital rather than keep it “safe” in bank accounts or bonds. Investors (shareholders) are not guaranteed a return. For the company and thus the investors to profit, their business must attract and keep customers. To attract customers, the business must create ever-increasing value at ever-decreasing costs, which is achieved by investing in technologies that increase the productivity—and thus the earning power—of labor. To create that value, businesses must pay and treat employees in a way that attracts and holds a dedicated, motivated workforce. This is what it means to “maximize shareholder value”—the first moral responsibility of the CEO.  

As to the environment, human beings survive and thrive by turning the Earth’s raw materials into life-enhancing material goods, thus transforming a hostile, pristine natural environment into a safer, healthier human environment. By far the leader in this virtuous transformation of the environment is business. For that, we owe business a huge expression of thanks, not a demand for them to sacrifice their best interests.

This virtuous cycle requires a social system that harmonizes the interests of “all stakeholders.” That system is the “unknown ideal,” free market capitalism—the system of voluntary, peaceful coexistence through trade, backed up by limited, individual rights-protecting government. Any means of “harmonizing interests” other than voluntary cooperation is the means of a thug. Today we don’t have capitalism. We have a mixed economy—un-free markets bogged down with government controls. That’s what “the culture” needs to learn.

--

Faraci raises the question of how economic success is measured:

Businesses need to stop pursuing, governments need to stop legislating to, and educators need to stop teaching the mantra that success is measured solely by maximizing stockholder value. Economic success must be measured by maximizing all “stakeholders” values. Stakeholders include the community, the employees, and the environment. Not just stockholders.

Faraci implies that “economic success” is an arbitrary construct that can be redefined on a whim. But, in fact, economic success has an objective basis; the market. As Ayn Rand has observed, “The economic value of a man’s work is determined, on a free market, by a single principle: by the voluntary consent of those who are willing to trade him their work or products in return.” It’s not enough to invest, work hard, and so on. On any level, from the janitor to the CEO, one’s economic success is measured by what others are willing to pay you.

But while an employee has only one consideration—the level of his compensation—the businessman has two concerns. Not only must he have people willing to pay him for his product; they must be willing to pay him more than it costs him to produce it. Faraci sees “Maximizing stockholder value by the continually driving costs out of the system . . .” as a vice. In fact, it is the greatest virtue of successful businesses. The “continually driving costs out of the system” is what creates mass markets of goods that not just the rich but the average person can afford. It is what lifts the general standard of living. The average person never had it as good as under businesses liberated by capitalism.

Faraci’s reference to “sound infrastructure” is puzzling. Business is the mainstay of the economy, and as such, generates—directly and indirectly—most of the taxes that fund the building and maintenance of our infrastructure. It’s true that our government-owned infrastructure is crumbling. But we all use it, not just business. I guess, given his anti-business bigotry, Faraci can’t help pinning the blame for every conceivable problem on business.

I’m not done with this letter. I’ll finish up with Faraci in my next post.

Related Reading:

Businessmen are Not Beasts of Burden

"Trickle-Down Economics": Anti-Capitalists' Insulting Portrayal of the "Common Man"

"Wage Theft": A Marxist Weapon for Robbing Businessmen

To Whom Does the American Worker Owe His Prowess?