Horwitz has an article on the “myth of merit”-

In his various chapters and essays on the “mirage” of the concept “social justice,” F. A. Hayek makes a claim that is very often overlooked by those who support the market. He argues that markets generally do not reward “merit.” That is, the people who become wealthy in the marketplace do not do so, for the most part, because they are somehow “better” people than those who are not as wealthy. The wealthy are not necessarily more intelligent, more moral, or even harder-working than the rest of us. However meritorious we think those attributes are, they are not what the market rewards. The market rewards the creation of value in the form of providing goods and services that other people want. Period, end of sentence.

Paraphrasing one of my comments, the free market is not a meritocracy.

—

O&M has a post on “cognitive dissonance.”-

[Chen] basically demolished 45 years of experimental results in social psychology that claim to have discovered cognitive dissonance in choices. According to this literature, it is among the best-documented results in psychology that people change their preferences after making a choice so as to rationalize the choice and make themselves feel better about their decision. Chen argues — persuasively — that essentially all these results are statistical artifacts. At a much more sophisticated level, social psychologists have fallen victim to the igon value effect.

An interesting interview with Jagdish Bhagwati where he talks about protectionism and free trade. He mentions global warming too-

I think it depends on the way you do it. First, you’ve got to decide whether there is a problem of an externality. I have doubts about these scientists who claim to have a consensus on global warming because, you know, Freeman Dyson, a great scientific figure, says these guys are really low-level scientists and I’m told by many that they, in fact, are. And if they reach a consensus, I don’t care. I mean, that’s the consensus of incompetents.

But so long as only the scientists were talking about global warming, nobody paid the slightest attention. Remember, not a single senator voted for the Kyoto resolution back in the ’90s. Even Al Gore and Clinton had to walk away from Kyoto. But then the polar bears were threatened, the glaciers began to melt, and then that great French film about the penguins which touched all our hearts came out. So these were three whammies. Even if you live in Peoria you will understand, wrongly maybe, that global warming is a problem. I tell all my students: If they think of something like that for free trade, please let me know.

Parochialism is not a new phenomenon in politics. Neither is hypocrisy. Therefore, when Raj Thackeray is criticized for his “sons of the soil” position on employment, and nothing is said when such discrimination is practiced at the national level, one shouldn’t be surprised. I am referring to this statement by Tharoor-

“As far as our basic policy is concerned, we would certainly be hesitant to offer employment to a foreigner for a job which could be done by an Indian in India.”

He sounds as if its he who’s doing the hiring, and even paying the wages out of his own pocket. If he has a problem with the Chinese (and Chidambaram with migrants from Bangladesh), a diplomatic problem, a “national security” problem, he should be open about it and not talk in terms of who has the first right to a job. Unfortunately though, such small-mindedness is hardly limited to India. Even the bastion of free market capitalism (I am joking), the United States of America, suffers from this mentality—the protectionist one.

Don Boudreaux made a nice point in an open letter regarding the same, to someone who asked what he would do if someone “stole” his job-

My answer to it is this: I’ll find a way to feed my family. I’ll get another job (or jobs). I’ll cut back on less-essential expenses. If I must, I’ll rely on my family and close friends as I hope they would rely on me if they were in dire straits.

But I will not, under any circumstances, use my economic misfortune as an excuse to violate the freedoms of others.

A protectionist is a person who believes that being born in a particular family/ community/ nation gives him an automatic first claim on the property and services of his fellows, and that if they bypass him, he has the right to beat them up, physically and financially, through the use of goons, or the government. He is, in fact, no better than a thug.

—

Wired has an article on the man behind Minerva (via K). The US mission of spreading democracy worldwide has been a great success when it comes to South Korea-

Today anonymous dissenters are unlikely to be punished in democratic countries. But the law in South Korea makes it easy for the government to unmask troublesome writers. Every account on Daum and other major sites is associated with a national ID number. In Minerva’s case, Daum promptly handed over his IP address, which led the police directly to Park’s door.

[...]

For 103 days, the South Korean government held Park in a 50-square-foot cell at a Seoul detention center. Interrogators asked about his family, whether he had a girlfriend, whether he was a spy. He tried to keep calm, meeting with his volunteer legal team and studying the writings of the early-20th-century Italian Marxist Antonio Gramsci. “I felt so isolated,” he says. “They accused me of selling out my country. No! I’m not a spy. I wanted to help through my criticism. I had thought that South Korea was a democratic country. I felt as though my nation betrayed me.”

[...]

It is very difficult to find anyone in the South Korean government willing to talk about Minerva. The prosecutors say they can’t discuss the case until the appeal is over. Two spokespeople for the Korea Communication Standards Commission explain that they weren’t directly involved with the case, though they do have as many as 50 employees watching Daum and other sites at any given time. “We have to protect our children and our public,” one of them explains. “That’s the government’s job, to maintain a nice, clean Internet.” A spokesperson for the Ministry of Strategy and Finance says Park was beneath their notice. “If his theories were made by a publicly recognized institute, we might have some comment. And it is not appropriate for the government to comment on forecasts published by citizens on the Internet.” Months before, the head of the same ministry had argued that Minerva’s influence over exchange rates had cost billions. Now, however, the government had nothing to fear. Once again, as it had been during his whole previous life, Park could be treated like any other nobody.

Stay on the right side of people who are in a position to cause grave harm, especially those in government, and you will be okay. Otherwise you will be persecuted. That’s the lesson one learns from all this. If this is the situation in one democracy, this is what happens (via Reason) in, again, the freest country on the planet-

In a case that raises questions about online journalism and privacy rights, the U.S. Department of Justice sent a formal request to an independent news site ordering it to provide details of all reader visits on a certain day.

The grand jury subpoena also required the Philadelphia-based Indymedia.us Web site “not to disclose the existence of this request” unless authorized by the Justice Department, a gag order that presents an unusual quandary for any news organization.

[...]

Morrison replied in a one-sentence letter saying the subpoena had been withdrawn. Around the same time, according to the EFF, the group had a series of discussions with assistant U.S. attorneys in Morrison’s office who threatened Clair with possible prosecution for obstruction of justice if she disclosed the existence of the already-withdrawn subpoena — claiming it “may endanger someone’s health” and would have a “human cost.”

[...]

Bankston has written a longer description of the exchange of letters with the Justice Department, which he hopes will raise awareness of how others should respond to similar legal demands for Web logs, customer records, and compulsory silence. “Our fear is that this kind of bogus gag order is much more common than one would hope, considering they’re legally baseless,” Bankston says. “We’re telling this story in hopes that more providers will press back and go public when the government demands their silence.”

Sauvik has an article in Mint on private money, plus his daily antidote where he demolishes the ET editorial on the “barbaric metal.” The editors at ET are puzzled about gold’s “intrinsic value.” What applies to beauty and the beholder also applies to all economic goods. All values are subjective in nature-

Gold was some $30 an ounce when Nixon de-linked the dollar from gold, in the early 70s, thereby putting the entire world on a purely fiat money system. Gold has shot over $1000 an ounce now. This is why ordinary common people “respect” gold. These editors worship State-issued papers with Gandhi’s photu on them.

They doubt whether gold possesses “intrinsic value.” Actually, nothing has “intrinsic value,” not even gold. All “value” lies in the minds of valuers. Value is “subjective.” The common people who are buying gold “respect” the value of gold. What, indeed, is respect? The first article of mine ET ever published was titled “Respect Must Be Earned.”

The power to issue fiat money must be taken away from government. But, at the same time, so must the power to tax. In a state where the government has the power to tax, private property can never be safe. Even this position is dodgy though, because Rothbard turned Mises’ impossibility of economic calculation in the Soviet Union argument against the provision of “public goods” by the state. I’ll leave that for another day. This dialogue, however, fits-

Auda: Now! I will tell you what they pay me, and you will tell me if this is a servant’s wages. They pay me, month by month, one hundred golden guineas.
Lawrence: One hundred and fifty, Auda.
Auda: Who told you that?
Lawrence: I have long ears.
Auda: And a long tongue between them.
Lawrence: A hundred; a hundred and fifty; what matters? It’s a trifle…a trifle which they take from a great box they have…
Ali: In Aqaba.
Auda: In Aqaba!
Lawrence: Where else?
Auda: You trouble me like women.
Lawrence: Friends, we have been foolish. Auda will not come to Aqaba.
Auda: No.
Lawrence: For money.
Auda: No.
Lawrence: For Feisal?
Auda: No.
Lawrence: Nor to drive away the Turks. He will come because it is his pleasure.

[...]

Auda: Paper! Paper! There is no gold in Aqaba. No gold! No great box!
Lawrence: Did Auda come to Aqaba for gold?
Auda: For my pleasure as you said, but gold is honorable, and Aurens promised gold. Aurens lied.

“Aurens” promised, and lied. Just like the state.

Abhishek and K.M. have already commented on this idiotic NYT “book review.” But Jeff Tucker at the Mises blog says it best-

Whatever your opinion of her work, it is a great thing to encounter a figure who believed very seriously in the notion that what you believe about the world really matters. In fact, she arguably took this notion too far, believing that ideas are the foundational source of all ownership – even to the point of owning the ideas themselves. The book that draws attention to this is Goddess of the Market by Jennifer Burns. This book caused my own admiration of what she accomplished to go way up. To me, this book is a model of what a serious biography of a serious person should be like.

In contrast, there is Ayn Rand and the World She Made, by Anne Heller of Esquire and Redbook, a book that focuses on Rand’s sex life and loves and any other prurient details she can dig up at the expense of the ideological core of Rand and her life. The author apparently can’t conceive of the possibility that Rand’s life was really all about ideology and ideas and why they matter. So guess which book gets the headlines in the New York Times while Burns’s serious work is relegated to a parenthetical statement? To ask the question is to answer it.

Reason has a quote from Burns’ book on Rand, about her aesthetics-

According to Rand, Aristotle believed that ‘history represents things as they are, while fiction represents them as they might be and ought to be.’ However, as two scholars sympathetic to Rand conclude, this attribution ‘misquotes Aristotle and misrepresents his intent.’ … It appears that Rand drew this concept not from Aristotle, but from Albert Jay Nock. In Memoirs of a Superfluous Man (New York: Harper and Brothers, 1943), 191, Nock writes, ‘History, Aristotle says, represents things only as they are, while fiction represents them as they might be and ought to be.’ In her copy of the book, Rand marked this passage with six vertical lines.

This, whether Rand read many philosophers in the original, has been the subject of much debate. It has been said, for instance, with respect to Kant. Similar questions have been raised in the past about Karl Popper w.r.t. Hegel. I think that its not a big deal as long as the philosopher has not been “misrepresented.” And I don’t think Rand does that.

From a comment I made some months back-

About the real world, I don’t know if you have read Rand’s The Romantic Manifesto, but if you haven’t you might want to do that. Rand is a disciple of Aristotle when it comes to metaphysics, epistemology and aesthetics. Doesn’t mean she borrowed everything wholesale, only that she built upon Aristotle’s works and ideas. In his Poetics, Aristotle writes-

It is, moreover, evident from what has been said, that it is not the function of the poet to relate what has happened, but what may happen – what is possible according to the law of probability or necessity. The poet and the historian differ not by writing in verse or in prose. The work of Herodotus might be put into verse, and it would still be a species of history, with meter no less than without it. The true difference is that one relates what has happened, the other what may happen. Poetry, therefore, is a more philosophical and a higher thing than history: for poetry tends to express the universal, history the particular. By the universal I mean how a person of a certain type on occasion speak or act, according to the law of probability or necessity; and it is this universality at which poetry aims in the names she attaches to the personages. The particular is – for example – what Alcibiades did or suffered.

Rand says-

The most important principle of esthetics of literature was formulated by Aristotle, who said that fiction is of greater philosophical importance than history, because “history represents things as they are, while fiction represents them as they might be and ought to be.”

She called her aesthetics “romantic realism.” The “real” exists, but the people who inhabit the “real” are not your average beggars, alcoholics, rapists, murderers, thieves etc but good people, virtuous people, man as man “ought” to be. And the story is mainly about them.

The same passage from another translation of the Poetics, this one from “The Works of Aristotle”-

From what we have said it will be seen that the poet’s function is to describe, not the thing that has happened, but a kind of thing that might happen, i. e. what is possible as being probable or necessary. The distinction between historian and poet is not in the one writing prose and the other verse—you might put the work of Herodotus into verse, and it would still be a species of history; it consists really in this, that the one describes the thing that has been, and the other a kind of thing that might be. Hence poetry is something more philosophic and of graver import than history, since its statements are of the nature rather of universals, whereas those of history are singulars. By a universal statement I mean one as to what such or such a kind of man will probably or necessarily say or do—which is the aim of poetry, though it affixes proper names to the characters; by a singular statement, one as to what, say, Alcibiades did or had done to him.

I don’t think anyone reading this passage will say that Rand, or Nock for that matter, has misrepresented Aristotle. Its as clear as daylight that she hasn’t.

Update: The two sympathetic Rand scholars. This is their book. I read about them and their book (and even an article of theirs in JARS) some months back, here. Their point is that Aristotle doesn’t imply “ought to be” in the passage I have quoted above. It is my position that probability reduces to might, and necessity to ought.

I don’t know what the pc term for “barber” is, hair technician probably. Their association once left Billu without a last name. But they, some of them, are at the receiving end of Nevada’s bureaucracy-

Nevada doesn’t allow out-of-state barbers to transfer their licenses here, a procedure known as reciprocity, because it’s usually done along the lines of, “If you trust our barbers, we’ll trust your barbers.”

No trusting here. In Nevada, barbers must provide their records and then apply and take tests for a new license.

[...]

“I had a letter saying they had known me to be a barber for 20 years and the board said, no, they only wanted someone who knew me for the last five years,” Williamson said.

[...]

We called up … and asked … why Nevada doesn’t offer reciprocity for out-of-state barbers.

“Because we don’t, that’s just why.”

“A government of laws, and not of men,” eh?

Frank van Dun has an interesting article on “hostile encirclement” in a libertarian world. His thesis is: when freedom and property rights conflict, the latter should give way to the former.

There may be cases where there is a conflict between claims on behalf of one person’s freedom and claims on behalf of another person’s private property. In such cases, the question arises, which claims should prevail? Unquestionably, the libertarian answer should be freedom before property. Unfortunately, many libertarians are reluctant to give up the conception of “freedom as property” that (1) serves them so well in their critiques of interventionism and collectivism and (2) underpins their notion that the law of a libertarian order is merely the rigorous application of the so-called nonaggression principle.

I believe that his argument is flawed and that it is based on a mistaken view of freedom. The principled case for a libertarian polity—I am not interested in any other—cannot rest on a hierarchical notion of freedom, like the egalitarian ideology of the communists—only when everyone is provided with a bicycle will someone else be allowed to make use of a car. If freedom, man’s right to his life, follows from man’s nature, the right to property necessarily follows from such a right to life. The right to property is not a gift, or an unimportant add-on, but a necessity. What you have in the end is one complete all-or-nothing package, not a bundle of rights from which specific rights can be removed under certain circumstances, but not under others. In Rand’s words, “the right to life is the source of all rights—and the right to property is their only implementation.” Further, contradictions cannot exist in a sane world. Admitting that one faces a contradiction is admitting to a mistake in the thinking process. At least that’s how things work in Aristotle’s world; Hegel lives in a universe of his own making. Therefore, if one man’s freedom comes into conflict with another man’s right to his property, it can only be because one of them is, or both of them are, mistaken.

Now, consider Dun’s case of “hostile encirclement.” What would A do if B and his gang control all the property around, above and below him. Dun writes-

Two logical points should be stressed here. The first is that if throwing an innocent person in a cell deprives him of his freedom then so does building a cell around him even on those occasions when one succeeds in doing so without touching him or his property.

A pragmatist argument—if two courses of action produce the same result, then they are the same. So, throwing someone in jail is similar to buying property around him and refusing him the right of way. But the difference should be clear to any non-pragmatist. That one action involves aggression, the other doesn’t.

From the idea that freedom is a “supreme libertarian value,” Dun concludes that judges and law enforcement agencies in a libertarian world should force B to provide a right-of-way. Actually, every property owner should be forced to provide such right-of-way so that A (and others like him) is not isolated.

He also writes-

If, as many libertarians believe, freedom is a natural right then we should be clear about whether it entitles one to destroy the freedom of others if only in ways that do not involve direct interference with their property. If it does then freedom can hardly count as a fundamental value in the sense of political philosophy; if it does not then the nonaggression principle can hardly count as the basic principle of libertarian law. Either way, there seems to be something wrong with equating libertarian law with the rigorous application of the nonaggression principle.

That should not come as a surprise. The principle does not refer to freedom, only to property; it would be adequate as the axiomatic law of freedom only if freedom and property were synonymous — but they are not. To paraphrase Anthony de Jasay, we do not need a theory of “freedom as private property” any more than we need any other theory of “freedom as something else.”

thereby creating a concept of freedom which isn’t anchored to anything and which can be used to chop away at the roots of the freedom of everyone.

This is what I ask. Why should the exception be limited to roads? What if B & Co. corner the market in food grains on the whole planet? Surely A and everyone else cannot live without food; a dead man is not free. The food grains are B’s property. But since A’s “freedom” comes before B’s “freedom as something else,” B should be forced to empty his granaries till the situation improves. If this is an outlandish scenario, consider another one, something similar to what Mukul Sharma used a couple of weeks back. B is an inventor who has invented a vaccine for a killer disease. But he refuses to disclose the formula. Is A’s freedom greater than B’s right to keep the formula a secret? Would the answer be different if the formula was written on a piece of paper and locked in B’s safe instead of B’s mind?

A political philosophy which doesn’t divorce itself from morality will always say no, that A has no right to claim that B is obliged to do something to help him. Its by carving out such exceptions that the foundations of politics are weakened. The disaster that is the modern day United States is proof of that.

I was intrigued by the buzz surrounding Jennifer Burns’ book on Rand (the first chapter can be downloaded from Amazon) and headed over to Google Books to see what it was all about. What was her opinion on Mises given the fact that he was a Kantian in metaphysics and epistemology, and a utilitarian in ethics?

Rand looked more favorably on Ludwig von Mises… As she explained to Leonard Read, Mises made mistakes when it came to morality, going “into thin air, into contradictions, into nonsense” whenever he discussed ethics. But at least he was “for the most part unimpeachable” on economics. Unlike Hayek, Mises was unwilling to consider political compromises that restricted the free market. Like Rand, he considered capitalism an absolute, and for that Rand was willing to forgive his failure to understand and reject altruism.

And Hayek? She saw through his ifs and buts and maybes-

Rand cast a gimlet eye on Hayek. In a letter to Rose Wilder Lane…she called him “pure poison” and “an example of our most pernicious enemy.” The problem was that Hayek was considered conservative, yet acknowledged there could be an important role for government-sponsored health care, unemployment insurance, and a minimum wage. “Here is where the whole case is given away,” Rand noted in her copy of The Road to Serfdom. Addressing Lane, she compared him to Communist “middle of the roaders” who were most effective as propagandists because they were not seen as Communists.

Our “moderates.” Further down the page-

“The man is an ass, with no conception of a free society at all,” she scribbled in the margin of his best-seller. She assaulted Hayek on multiple fronts. She reacted angrily whenever he discussed how competition or societies might be guided or planned, or when he spoke favorably of any government action. She was unwilling to admit he had a point: “When and how did governments have ‘powers for good?’”…When Hayek spoke about the needs of different people competing for available resources Rand retorted, “They don’t compete for the available resources—they create the resources. Here’s the socialist thinking again.” Hayek didn’t truly understand either competition or capitalism, she concluded.

—

Searching for Nietzsche, I came across this part about the plotting of The Fountainhead which comes early in the second chapter. A portrait of the egoist-

In its earliest incarnations the novel was Rand’s answer to Nietzsche. The famous herald of God’s death, Nietzsche himself was uninterested in creating a new morality to replace the desiccated husk of Christianity. His genealogy of morals, a devastating inquiry into the origins, usages. and value of traditional morality, was intended to clear a path for the “philosophers of the future.” Rand saw herself as one of those philosophers. In her first philosophical journal she had wondered if an individualistic morality was possible. A year later, starting work on her second novel, she knew it was.

“The first purpose of the book is a defense of egoism in its real meaning, egoism as a new faith,” she wrote in her first notes, which were prefaced by an aphorism from Nietzsche’s Beyond Good and Evil. Her novel was intended to dramatize, in didactic form, the advantages of egoism as morality. Howard Roark, the novel’s hero, was “what men should be.” At first he would appear “monstrously selfish.” By the end of the book her readers would understand that a traditional vice—selfishness—was actually a virtue.

To effect this transvaluation of values Rand had to carefully redefine selfishness itself. Egoism or selfishness typically described one who “puts oneself above all and crushes everything in one’s way to get the best for oneself,” she wrote. “Fine!” But this understanding was missing something critical. The important element, ethically speaking, was “not what one does or how one does it, but why one does it.” Selfishness was a matter of motivation, not outcome. Therefore anyone who sought power for power’s sake was not truly selfish. Like Rand’s neighbor, the stereotypical egoist was seeking a goal defined by others, living as “they want him to live and conquer to the extent of a home, a yacht and a full stomach.” By contrast, a true egoist, in Rand’s sense of the term, would put “his own ‘I,’ his standard of values, above all things, and [conquer] to live as he pleases, as he chooses and as he believes.” Nor would a truly selfish person seek to dominate others, for that would mean living for others, adjusting his values and standards to maintain his superiority. Instead,”an egoist is a man who lives for himself.”

What sounded simple was in fact a subtle, complicated, and potentially confusing system. Rand’s novel reversed traditional definitions of selfishness and egoism, in itself an ambitious and difficult goal. It also redefined the meaning and purpose of morality by excluding all social concerns. “A man has a code of ethics primarily for his own sake, not for anyone else’s,” Rand asserted. Her ideas also reversed traditional understandings of human behavior by exalting a psychological mindset utterly divorced from anything outside the self.

As Rand described Howard Roark, she reverted to her earlier celebration of the pathological Hickman from “The Little Street” again mixing in strong scorn for emotions. “He was born without the ability to consider others,” she wrote of Roark. “His emotions are entirely controlled by his logic…he does not suffer, because he does not believe in suffering.” She also relied liberally on Nietzsche to characterize Roark. As she jotted down notes on Roark’s personality she told herself, “See Nietzsche about laughter.” The book’s famous first line indicates the centrality of this connection: “Howard Roark laughed.”

I don’t read tabloids regularly; perusing the daily “mainstream” newspapers is a masochistic enterprise in itself. Happened to read the Mirror today, and found N. Vittal’s article-

Close on the heels of the austerity drive of the Congress leaders, Salman Khurshid, the minister for corporate affairs, came up with advice to companies to refrain from “vulgar” salaries….

The minister’s remarks are a Freudian slip exposing an unmentioned or unmentionable aspect of our politics. Forty years of socialism has ingrained a mindset of envy against successful people in our society. As Gurcharan Das observes in his recent insightful book The Difficulty of Being Good, if greed is the sin of capitalism, envy is the weakness of socialism…

I put his comment down to Congress’ fascist mentality. I think the Party misses the good old days when people had to kiss the backsides of the powers that be to get things done. If 1990-91 hadn’t happened, we would still be watching Doordarshan and wondering about the strange phenomenon known as the internet. The Party can’t tolerate freedom—liberalism, and it won’t give up its attempts to curb freedom voluntarily. This reminds me of “you will not give, I ‘ll take!”