Showing posts with label Economics and Morality. Show all posts
Showing posts with label Economics and Morality. Show all posts

Saturday, August 12, 2023

QUORA: ‘How can libertarians justify wealth inequality since people are lucky for being born with natural talents as a result of the genetic lottery?’

 QUORA: ‘How can libertarians justify wealth inequality since people are lucky for being born with natural talents as a result of the genetic lottery?’


I posted this answer:


The question implies a false premise—that luck is the driver of economic achievement. So, I would counter this question with one of my own: How can economic Egalitarians justify forced wealth and income redistribution through coercive government policy—taxes and regulations—in the name of achieving wealth equality? 


Economic success is not based on a “genetic lottery” or luck. Natural talents don’t automatically transform magically into economic achievement, like winning some kind of lottery. The same goes for luck. It takes mental and physical effort and good character virtues, exercised over time, to turn whatever “luck” or “natural talents” one is born with into economic success. Plenty of people “win the genetic lottery,” but not all succeed. Why? Plenty of people get lucky breaks, but not all make something of that luck. Because. Some make bad choices, some are unmotivated, some simply misuse their natural endowments. Neither natural talents or luck are anywhere near not enough. They are a starting point, nothing more. Character and effort (and other factors like personal choice and relationships) vary from individual to individual, so wealth outcomes will vary. This human diversity leads to wealth inequality. That’s perfectly natural and morally just. 


Of course, it’s perfectly rational to question how a person achieved his wealth, but not that he has more wealth than the next person. Did he achieve it by honorable means, like work and trade, being respectful of other people’s property and liberty? Or did he appropriate it by force or fraud. Honorable people earn their wealth. Burglars forcibly take from others. But this is not a question of wealth inequality. It’s a question of justice. The fact is, there is only one valid way to reduce wealth inequality, if that is your focus—refuse to buy the wealthier person’s product. Any government policy to coercively reduce wealth inequality is legalized burglary.


If by “libertarian,” the questioner refers to advocates of free market capitalism, the libertarian has nothing to justify. Wealth inequality is not a flaw of Capitalism. It is a feature of Capitalism—that is, of a free society, because freedom allows every individual to advance as far as one’s talents, values, initiative, temperament, and moral character—and, yes, to some extent luck—will carry them. That’s one of the features that makes free market Capitalism the only moral social system.


The best resource for understanding wealth inequality in a free society that I can recommend is Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins and Yaron Brook.


Related:


My QUORA answer to “How do capitalists justify the inequality/high disparity part of a capitalistic society that a socialistic system tends to stop?”


My QUORA answer to “ How do investment bankers justify earning 7 figures?”


Related Reading:


Free Market Champions Must Defend Economic Inequality


Billionaires' Likening of Today's Campaign Against the Rich to Nazi Germany is Frighteningly Close to the Mark


Hatred of Happiness, not Justice, Motivates the anti-Economic Inequality Crusader


Obama's Corrupt "Equality" Campaign and the 99/1 Premise


QUORA: ‘How do capitalists justify the inequality/high disparity part of a capitalistic society that a socialistic system tends to stop?’


QUORA: How do investment bankers justify earning 7 figures?


An Economic Egalitarian Acknowledges: Ending Income Inequality’ Begins With Legalized Theft.


The Justice of Income Inequality Under Capitalism by Ari Armstrong  for The Objective Standard


The Left’s Egalitarian Trap (and Why Republicans Must Not Step In)


Contra Obama’s Pandering to Cuba’s Dictator, Economic Inequality is America’s Strength and Equality is Cuba’s Tragedy


Sunday, April 2, 2023

Climate Crisis-Mongers’ New Orwellian Mantra: Poverty Is ‘Abundance’


Hot on the heels of Alissa Quart’s assault on American Individualism comes Rebecca Solnit’s assault on the consequence of that individualism, prosperity.


What if climate change meant not doom — but abundance? By Rebecca Solnit


The article is long on high-minded cliches but devoid of concrete substance. But Solnit’s guilt-drenched, nihilistic message comes through loud and clear.


Solnit wants us to believe that material and spiritual enrichment are opposites—that it is either-or. 


But the creation of material abundance requires spiritual virtues like rationality, learning, inventiveness, entrepreneurship, perseverance, cooperation, and hard work. Material and spiritual abundance compliment and build on each other. Today, thanks to freedom and abundant, economical, reliable energy, mainly fossil fuels, we live amazingly prosperous lives, with an amazingly bright future of greater prosperity. 


So why the doom and despair? Because of the manufactured climate “crisis.” The climate crisis-mongers have infected too many people with a wholly unwarranted doom and gloom. This is especially true of the young, who are victims of mental abuse at a time they should be looking ahead with eager anticipation. Today is the best time in human history in which to be a teenager, the inheritors of unprecedented opportunities for building flourishing lives. The despair and anxiety so many of them feel is real. But it is the climate crisis-mongers who inflicted it. This is not just educational malpractice. It is child abuse.


Solnit’s premise is not new. The environmentalists’ anti-human goal is the same. She just reframes prosperity as poverty, and poverty as “abundance.” This is just a new version of Christianity’s Dark Age glorification of poverty. She speaks of “building stronger societies and being better citizens, on caring for the people,” and then glorifies disasters as paths to joy and “moral beauty.” 


This, the glorification of disaster, is where Solnit’s true colors come through. The Great Enrichment of the past 250 years, the era of Capitalism, freedom, and fossil fuels, has made us safer than ever from climate dangers, and much better able to mitigate the damage of such disasters—with promises of more safety to come. Solnit proposes to abandon the material prosperity that makes this climate mastery possible, and once again make humanity at the full mercy of nature’s fury. That is what Solnit means by her new form of “abundance”—rather than an abundance of money and stuff, an abundance of misery. This is what she terms “spiritual abundance.”


We should be grateful to fossil fuels for the wonderful lives we have today, celebrating the abundance of fossil fuels needed to power further progress in the decades ahead, and advocating to preserve the freedom necessary for the innovation that will eventually lead to better energy sources that can not only grow our economies but make us ever more resilient to future climate dangers. 


Having been lecturing us for years about how our industrial flourishing is destroying the planet, we are now being told that the unprecedentedly enriched lives we enjoy is bad for us. Reject Solnit’s bleak call for a future of scarcity and phony spiritual “enrichment.” It’s just repackaged climate hysteria. Instead, embrace human flourishing. Reason’s Ronald Bailey presents a better vision, as does Alex Epstein.


Related Ruling:


The End of Doom: Environmental Renewal in the Twenty-first Century by Ronald Bailey


Fossil Future: Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas--Not Less by Alex Epstein


The Anti-human Tyrade of an Ungrateful 16-Year-old


We Owe Our Children a More Technologically Advanced Society, Not 'Preserved' Nature


The Collectivist Left Media Launches Major ‘Climate Crisis’ Propaganda Campaign


CLIMATE VULNERABILITY AND THE INDISPENSABLE VALUE OF INDUSTRIAL CAPITALISM—Kieth H. Lockitch

Monday, November 14, 2022

New Jersey Legislature's Monstrous Interference into the State’s Giant Pension Fund

NJ public employees and retirees be aware: You are about to be thrown under the bus by your elected representatives, on the absurd rationalization of "the fight against climate change." 


As Steven Rodas and Derek Hall report for NJ.com in N.J. could divest its $92B pension fund from fossil fuels. What it means financially and for climate change:


New Jersey would join a growing list of states to divest its pension fund from fossil fuel companies if a long-stalled bill crosses the finish line in Trenton this fall.


The legislation (A1733), now in its fourth iteration after it was first introduced in 2017, has gained new momentum in recent weeks as the fight against climate change intensifies nationwide. It will be considered Thursday by the state Senate’s environment committee.


This is a purely political move. There is no economic, scientific, or financial justification for this order. 


Morally, this is monstrous. Energy is the industry that powers every other industry. Therefore, the availability of reliable, cost-effective energy is vital to every aspect of our lives. Fossil fuels provide 80% of that energy, and will continue to be needed for decades to come, as it continues to grow both in the U.S and worldwide in the current absence of any viable alternative or competition. By joining in the suicidal movement to starve the fossil fuel industry of investment capital, the legislature is courting with a monumental human catastrophe that would dwarf any problematic climate side effects of burning fossil fuels.


But it is also illegal. According to the U.S. Department of Labor, the people managing pension funds in America are fiduciaries. This is what the department explains under the heading Fiduciary Responsibilities


The Employee Retirement Income Security Act (ERISA) protects your plan's assets by requiring that those persons or entities who exercise discretionary control or authority over plan management or plan assets, anyone with discretionary authority or responsibility for the administration of a plan, or anyone who provides investment advice to a plan for compensation or has any authority or responsibility to do so are subject to fiduciary responsibilities. Plan fiduciaries include, for example, plan trustees, plan administrators, and members of a plan's investment committee.


The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan's investments in order to minimize the risk of large losses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA.  They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit parties related to the plan, such as other fiduciaries, services providers or the plan sponsor.


Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.


[emphasis added]


I don’t see how this conclusion can be avoided: Fossil fuel divestment is a major violation of the NJ pension managers' fiduciary responsibility. The fossil fuel industry is a major component of the common stock investment universe, and provides 80% of American energy. It is the industry that powers every other industry, and thus provides an indispensable product crucial to everyone’s short and long-term well-being. This obviously includes NJ public employees and retirees.  It follows that fossil fuels are crucial to a diversified portfolio, and thus a major component of investors' long term financial health. By cutting fossil fuels from its investment portfolio, the NJ pension fund is being forced to act against its sacred fiduciary trust to act only on the best interests of its public employee and retiree clients. 


The NJ legislature's coercive political interference in NJ's public employee pension fund injects a major conflict of interest into the management of the plans, another ERISA violation. It is explicitly forcing the pension fund investment managers to ignore an entire industry. This is outrageous. How can this order possibly be reconciled with the fund’s ERISA and fiduciary responsibilities? 


The entire NJ legislature should recuse itself from any power to micro-manage or affect in any way the investment decisions of the pension plan managers, who are legally duty-bound to comply with ERISA requirements specifically and to honor their moral responsibility to present and future retirees more generally.


Related Reading:


When Climate Dogmatism Meets Energy Reality


The “Divest-Invest Philanthropy” Movement and its Statist Roots


 RELATED: Protecting Oil Companies’ Rights is Not a Government Subsidy

Monday, February 3, 2020

Forbes Turns to an Anti-Capitalist


I often have more of a problem with fellow pro-capitalists than anti-capitalists because the pro-caps tend to accept the anti-caps’ basic premises, thus letting the anti-caps frame the issue and capture what they can’t on their own, the moral high ground.

But sometimes I get outraged, as I did when I read the Forbes Inside Scoop column titled Capitalism, Built To Last, written by Randall Lane, the chief content officer and editor of Forbes, and published under the tag “Billionaires”.

Randall Lane writes,

Forbes publishes the Just 100 in partnership with Just Capital, a non-profit company started by hedge fund billionaire and Robin Hood Foundation founder Paul Tudor Jones, one of the keenest capitalists. For him, the Just 100 was born of patriotic duty. "There is no bigger threat to our democracy than wealth disparity. It is a story normally reserved for monarchies, dictatorships and plutocracies," Jones tells me. "And yet we got in this pickle because over the past 40 years the corporate focus on profits took on manic proportions relative to other stakeholders such as employees, communities and the planet.” [my emphasis]

The Just 100 statement reads  

Shareholder returns mean nothing if a company's workers, customers, communities and environments aren't considered, too. That's the reasoning underlying the third annual Just 100, our ranking of America's best corporate citizens with our research partner Just Capital.

As it is every year, the Just 100 is a reflection of the issues that matter most to Americans and a ranking of how the nation’s largest publicly traded companies perform in these areas.

The relationship between shareholder returns and workers, customers, communities and environments is important but not relevant here. I covered this issue in depth here and here. My concern here is the Lane quote above.

Jone’s (and Lane’s) implication is that there is no difference between capitalist fortunes built on enriching willing consumers through voluntary trade, and the fortunes acquired by thieving monarchs, dictators, and plutocrats throughout pre-capitalist history! Is there anything the anti-capitalist Left can propagandize that approaches the destructiveness of lumping fortunes by productive work and fortunes by looting into the same package?

NO! This equivocation of capitalist fortunes with the looters’ fortunes of old into a package deal is a central feature of the free enterprise-hating egalitarian socialist Left. With “defenders” of capitalism like Paul Tudor Jones, who needs the socialist Left? And who needs Forbes? Shame on Forbes for bringing the anti-capitalist fox Jones into the capitalist henhouse. This, published in an allegedly pro-capitalist magazine! It is straight out of Elizabeth Warren’s playbook. I’m glad I canceled my Forbes subscription.

My answer to Jones’s disgusting equivocation is, thank you capitalism, including those who thrived over the last 40 years! Let’s consider just one. Ben Silbermann became a billionaire “on paper” when in April 2019 he brought public the company he’d spent the last decade building. That company is Pinterest, which, at the time it made Silbermann a billionaire, boasted 250 million active subscribers, a group that includes my wife. It has now surpassed 300 million! How does that put Silbermann (and his co-founders Paul Sciarra and Evan Sharp) in the same category as monarchs, dictators, plutocrats, and other like thieves? How many of those grew their fortunes by creating a product that 300 million people find beneficial enough to voluntarily subscribe to?

My answer to Lane’s lauding of Paul Tuder Jones and his misnamed Robin Hood Foundation is, thank you to Michael Dell and Bill Gates for the computer upon which I am typing this post and to Sergey Brin and Larry Page for the Google Docs and Blogger I’m using—and, on behalf of my wife, to the newest billionaires like the Ben Silbermanns. You guys are part of a class that is only possible under the glorious, “pursuit of happiness” freedom of capitalism--a class that represents the greatest humanitarians that ever existed.

Related Reading:












Monday, February 8, 2016

Sterba’s ‘Liberty’ to Steal: Marxian Evil by Any Other Name . . .

Karl Marx secularized religious ethics by advocating an egalitarian social system based on the principle that each person must work according to his ability, but consume just enough to satisfy his needs. Despite the horrendous humanitarian disasters that this principle has wrought, it keeps resurfacing.


The latest incarnation of Marx’s principle that I have seen comes from University of Notre Dame Philosophy Professor James P. Sterba under the guise of libertarianism. (Yes, libertarianism!) In an article for Philosophy Now magazine, titled Liberty Requires Equality, with the subtitle “libertarianism implies a right to welfare.” As we'll see, the term "welfare" way understates Sterba's argument. The article appears in the October/November 2015 issue of the magazine. The cover subject is “Liberty and Equality” and includes several articles besides Sterba’s on that subject.


Sterba contends that “the ideal of negative liberty”—understood as “the absence of interference by other people from doing what one wants or is just able to do”—inevitably leads to “conflicting liberties,” and thus must be rejected. Sterba’s example of conflicting liberties should tell you all you need to know about his argument: The example goes as follows, which I condensed to its essentials:


Now, in order to see why libertarians are mistaken about what their ideal requires, consider a conflict situation between the rich and the poor.


[Conventional Libertarian view, as Sterba sees it]:


[T]he rich . . . have more than enough resources to satisfy their basic needs. In contrast, imagine that the poor lack the resources to meet their basic needs even though they have tried all the means available to them [i.e., political and economic freedom] that libertarians regard as legitimate for acquiring such resources.


[S]ince . . . the liberty of the poor is not at stake . . .,
the rich should not be required to sacrifice their liberty so that the basic needs of the poor may be met.


[Sterba’s Libertarian View]:


In fact, however, the liberty of the poor is at stake in such conflict situations. What is at stake is the liberty of the poor not to be interfered with in taking from the surplus possessions of the rich what is necessary to satisfy their basic needs.


There are basically only two ways for human beings to interact; by physical force or by voluntary agreement. I would say that’s the basic alternative faced by all political theorists. Anyone who advocates any manifestation of a “right” to material goods that others must supply necessarily obliterates any distinction between the two alternatives. That’s exactly what Sterba does, by asserting that the ideal of liberty must be “viewed as a conflict of liberties.”


To justify his “conflict of liberties” premise, Sterba must obliterate any moral distinction between force and voluntarism. And that’s exactly what he does.


To Sterba, liberty means doing whatever the hell you feel like, no matter the consequences or effects on others. Doing an honest day’s work, volunteering time to Habitat for Humanity, and grabbing a gun and going out and robbing what you believe to be your neighbor’s “surplus” wealth are morally equal. (As regards the armed robbery, it makes no difference if the government is your hired gun. Electing politicians to be do the crime of forced redistribution of wealth is still a crime. The only difference is, when government does it, the crime is organized and the victims are stripped of governmental protection of their property rights; the government having become the criminal rather than remaining within the moral and constitutional bounds in its proper function of rights-protector.)


What facts of reality support Sterba’s view? None. The observable facts of human nature provide only evidence of the “negative” view of liberty. Material goods, whether basic or surplus, don’t pre-exist in nature, like rocks, poison ivy, or contaminated streams. Only raw materials exist. Human life and flourishing requires turning those raw materials into resources, and those resources into material goods. The creation of goods requires someone’s work. Productive work—reason-guided physical labor—requires a long-term effort. Long-term effort and planning requires peaceful coexistence, including being safe from human predators. If people are “free” to take by force what they please when they please, how can anyone engage in the productive work his life depends on? The facts of reality support only a moral code that incorporates the non-initiation of force principle. The non-initiation of force principle necessarily invalidates any notion of the “liberty” of the poor, or anyone else, to take from others by force; i.e., to steal.


But Sterba advocates the right to take only “surplus” wealth, you might ask?  But what does surplus mean? A Yacht or a 20,000 square foot mansion or a 3-karat diamond ring might be one poor man’s conception of surplus wealth, while a second car or a 2000 square foot house might be another poor man’s idea of surplus. Besides, most of the surplus wealth of the rich is tied up in the production of material goods, including basic goods of necessity. Once the production stops for lack of investment capital, which has been seized by poor people as surplus wealth of the rich, how will anyone’s needs be satisfied?


Lest anyone misunderstand where Sterba is going with this, consider what he advocates as “A Peaceful Road to Justice.”


Clearly, the political and social changes required by my argument are both massive and wide-ranging. Just imagine a world where each person has just enough resources she needs to meet her basic needs, for a decent life, but no more, and think about the many changes that we would have to undergo to get from here to there.


The emphasis is mine. There can be no misunderstanding. He is not an advocate of, nor is he trying to justify, the modern welfare state, which features a government-imposed “safety net” but otherwise leaves people more of less free to earn and keep as much surplus wealth as she can, after taxes. Sterba forbids “surplus wealth” altogether; i.e., he forbids human flourishing. Haven’t we seen this movie before? We’ve seen Sterba’s ideal in action in every socialist country ever created, from Soviet Russia to Venezuela, but especially in Soviet Russia, which featured the socialist ideal of a single world-encompassing communist state as the goal. (The communists’ cousins, the fascists, advocate national socialism; the tailoring of socialism to individual societies’ unique cultures. It’s a distinction without a fundamental difference.)


Of course, Sterba doesn’t advocate leaving to each person the liberty to determine what constitutes surplus wealth, what constitutes basic needs, and the “right” to take matters into his own hands the job of “taking from the surplus possessions of the rich what is necessary to satisfy their basic needs.” Even Sterba would probably acknowledge that every man for himself in this way would be chaos. So who, in the end, would be in charge of deciding such issues? Why, the state, of course, through the only method possible; totalitarian democratic powers over our economic lives on a world scale. Universal acceptance of Sterba’s “should lead us to take steps to transfer our present and future surplus [to] appropriate institutions to guarantee that everyone has the resources for a decent life. . .”


Sterba pays lip service to voluntarism, as he fantasizes over a scenario in which “the entire adult population of the world came to accept my argument and began to act in accord with it.” But it’s clear that his “massive and wide-ranging” changes require that the state must have the final say, and the unfettered power to enforce the ideal. Why? Because all it will take to blow up Sterba’s ideal, if it is rooted only in voluntarism, is one or more people of self-esteem to say “no,” and assert their legitimate, “negative” rights to be free from forcible interference.


What kind of a life is it where basic needs, not justice, is the standard—and enforced at the point of a governmental gun? When government guarantees basic needs, and forbids surplus wealth—the ultimate ideal of economic equality—the result is universal grinding poverty; poverty as the ideal, the end to be achieved, with every person a slave to everyone’s else’s needs. Sterba’s moral code is just another version of “from each according to his ability, to each according to his need.” Who would wish such a hopeless existence on their fellow human beings?


I am not a philosopher. But one doesn’t need a philosophy degree to recognize the evil, and silliness, of Sterba’s perpetually unworkable economic ideal. Given its history, there is no excuse for Sterba’s peddling of this new version of Marx’s ideal. There is no place for freedom in Sterba’s egalitarian ant-colony world; and no place for rational human beings. What kind of person has the most to gain from such a system? The parasites and the seekers of unearned accolades, for sure. But the power-lusters will be the biggest winners in such a need-based system, and always have been. Just ask Ivy Starnes, heiress to the Twentieth Century  Motor Company fortune and that company’s “Director of Distribution.”


Related Reading:




Why Marxism—Evil Laid Bare—an article by C. Bradley Thompson for The Objective Standard


Related Viewing


Related Listening:

Radical Capitalist Episode 13: Why Socialism Won't Die—Yaron Brook