Too much to lose

CNBC ran a show – Meeting of the Minds: The Future of Capitalism – last night. It had a power packed panel pontificating on the causes and effects of the recession, and the road ahead. My first impression was – crazy minds. I changed my opinion somewhat, but not much, by the end of the show. The only people who were talking some sense were Welch and El-Erian.

Welch talked, among other things, about what level of government-as-a-percentage-of-the-economy would people be comfortable with – 30 from the current 15 or so? He was worried about an attack on meritocracy, and the size of government.

Asness wasn’t too optimistic. He was the one, if you remember, who wrote the open letter to Obama.

El-Erian talked about how savings is important when it comes to growth. Further, he made an important distinction between what “ought” to happen, and what is “likely” to happen. He also talked (I think it was him) about the “rule of law,” the sanctity of contracts and property rights.

Pandit said he isn’t aware of any textbook or theory about the present mess (and he’s the head of the world’s largest bank).

Fink of Black Rock is a very irritating character. So were his ideas, none of which I recollect.

Shelly of Ogilvy and Mather is fascinated with people getting “permission” to “feel.” She also loves “plans.”

Morial believes in “fair” growth. He grudgingly accepts that a meritocracy is needed, but he is not in favor of an “aristocracy.”

Eight people talked for an hour, and I don’t recollect a single good, concrete idea that came out of all the pontification. The minds could have done something better with their time.

Its depressing to see that no one in the business world, particularly the so called “big” organizations is willing to stand up for absolute rights. All of them accept regulation, accept the theory that society can choose how to distribute wealth (Welch), accept the role of the government in the economy in various ways. Most of them have too much invested in the present system to speak their mind (Asness agrees that if the government is only planning to take over the economy in the short run, there’s nothing wrong with it). Not a good sign.

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  • mohit  On June 2, 2009 at 10:40 am

    Hi Aristotle,

    You write a great blog. I’m a fan. A few questions:

    What do you have to say about “equality of opportunity”? If you do believe in it, then what mechanism do you recommend to implement it?

    And what about childrens’ rights? If a poor couple is irresponsible and has 10 kids does society owe something to the kids?

    • Aristotle The Geek  On June 2, 2009 at 1:58 pm

      # “What do you have to say about ‘equality of opportunity’?”
      I don’t believe in it, nor in a related concept – equality of outcome. Both are morally untenable. To use law to enforce them – which is how they can ever be implemented – is to make a mockery out of freedom.

      I understand how egalitarianism can be appealing, or appear to be “just” – on the basis of past discrimination, or simply on its own – but the fact remains that if X is not directly responsible for Y’s current position, whatever it may be, X cannot be forced to give up something in favor of Y. X can, on his own, try to help Y in whatever way he can, but he cannot be forced to. It is unethical, and can definitely not be termed as “justice.” So age, sex, religion, caste, color, disability, language or something similar cannot be used to demand favorable treatment for anyone.

      What egalitarianism as a whole attempts to do is to bring in equality – of a metaphysical nature – by force. You can find more on it here. The philosopher John Rawls was one of the most influential purveyors of the notion of “equality” and “fairness” in the 20th century.

      # “And what about childrens’ rights?”
      Rights are a political concept derived from ethics – that’s how I see it. Every “right” of an individual lays an obligation on every other member of society. Hence it must always be defined in a negative manner – as freedom from coercion of some kind. Thus the right to life, and the derivative right to property, means that others in society are morally, and legally obliged to refrain from coercing the individual in question, or use his property without his permission. Within this framework, children have as much a right to life and property as any adult, but nothing more.

      A simple answer to the “10 kids” question would be – the society owes them nothing. There is no moral duty. And hence, there cannot be a legal one. But I don’t think a society like this would survive for too long. In practice, there will be a mechanism in place that helps unfortunate people to the best of the ability of those who are doing the helping. Its in societies where egalitarianism runs riot that the “unlucky” ones suffer the most.

      On the question of rights of children in general, you can read Rothbard.

      • Mohit  On June 27, 2009 at 1:25 am

        “In practice, there will be a mechanism in place that helps unfortunate people to the best of the ability of those who are doing the helping. Its in societies where egalitarianism runs riot that the “unlucky” ones suffer the most.”

        So, what happens in the libertarian Utopia?

        • Aristotle The Geek  On June 27, 2009 at 2:29 am

          I don’t know. What I can talk about is what is ethical and what isn’t, and what areas laws can rightfully deal with. Beyond that its up to those who form society whether the existing one, or the utopian one.

          • Mohit  On June 29, 2009 at 1:06 pm

            “Beyond that its up to those who form society whether the existing one, or the utopian one.”

            Your ethics stem from an objective worldview. Someone else might believe in God and a holy book. Your ethics might conflict.

            In practice, societies reflect an aggregate ethic.

            If I want society to move in a particular direction, (less government, more individual liberty for instance), then I must consider the alternative that will possibly emerge.
            If that society is less desirable than this society, then I’d rather have an unethical society today.

            What does “more desirable” mean you might ask next. That is a question that I still do not have an answer for, but I would hesitate to equate it with “more ethical” if it comes at a major cost.

            • Aristotle The Geek  On June 30, 2009 at 2:03 am

              # “Your ethics stem from an objective worldview. Someone else might believe in God and a holy book. Your ethics might conflict.”
              No it doesn’t. I am an ethical subjectivist (not relativist), and it makes me uncomfortable. That some choices can be subjective – aesthetics etc, I can agree with. But when it comes to many crucial ethical issues, though I subscribe to the natural rights theory – man’s nature leads to some necessary conclusions when it comes to his life – the fact that different people believed different things about the same situation at different times, and continue to do so, makes it a little difficult to accept that an objective morality can exist per se. As I say in the post I linked to in response to your first comment, I am trying to reconcile my views. Let’s say I have arrived at a particular destination but am not too happy with the path I took. I prefer that there were only one road to it.

              This should explain the “conflict.” That someone believes something doesn’t mean I won’t pass judgment on their actions. Unlike relativists, I can still judge particular actions right or wrong. If there is a conflict, let it be.

              # “If that society is less desirable than this society, then I’d rather have an unethical society today.”
              Long before I read Rand’s books as one does philosophical ones, I happened to encounter Descartes’ pontifications on evil geniuses and malevolent universes. I didn’t know it then, but it reflects a world view. Rand subscribed to something called the “benevolent universe premise.” Meaning, the universe might not be helping you, but it isn’t scamming you either. It follows then that a society which is based on freedom – not the do as you please one – would at least not turn into hell. If it does, the universe isn’t a benevolent place. Too bad.

              # “What does ‘more desirable’ mean you might ask next.”
              Reading my mind? You guessed it right, this time. I will definitely ask that.

              Let me try to answer that. I am a misanthrope – at the very least, I like calling myself that. So I don’t believe in the whole world is one big family crap. Over the years, having dealt with people of all kinds, especially back stabbers, I came up (I think I heard something similar, and adopted it) with a thumb rule. In any normal society, 10% people are always “good,” “ethical,” “incorruptible.” Another 10% are scum – can’t correct them. The remaining 80% play “follow the leader” in varying degrees. If you want a “desirable” society, you need “rule of law” etc etc. But you also need plenty of “good people.” Without them, the best laws written by the best jurists will be worthless. That’s why I keep writing about “like minded” people.

              Depending on your world view, “desirable” and “ethical” would be attributes that are positively correlated. The “libertarian utopia” would be a largely ethical and hence largely desirable place. But you cannot convert any existing place into one. I don’t think that will happen – thousand of years of civilization and we still have the most educated people believing the most stupid theories. I don’t need to go too far to know that – personal experience. Can’t wait for everyone to have their very own epiphany; you will be waiting forever. You will need to discover a better way to do that – create the “desirable” place.

  • Pravin  On June 28, 2009 at 12:04 pm

    Unrelated but relevant question re. force

    I am all for private property rights, but am extremely troubled by the fact that the history of nations has been rife with forcible acquisition of other people’s property. The nation of USA has been built on forcibly grabbed land.I am pretty sure the conquests of the Mughals (and the aryans if you believe in the eurocentric Aryan invasion theory -pretty bogus and bigoted IMO)and the numerous rajas who pillaged each others countries have led to lots of feudal lords and land grabbing over centuries.

    Given this backdrop,it would be difficult to defend the rights of the current property holders -considering it may have been appropriated by force by his ancestors.If we take this argument to absurdity,we may have to drop the idea of nationhood.Infact the idea of a country/nation etc seems to be a collectivist idea but something we all identify with sans any compunction/second thought.

    That being said, I dont understand how libertarians can be anything by anarchists if they are true to their moral compass.

    • Aristotle The Geek  On June 28, 2009 at 4:18 pm

      I’ll respond. Give me some time.

    • Aristotle The Geek  On June 29, 2009 at 2:24 am

      # “Given this backdrop,it would be difficult to defend the rights of the current property holders…”
      Just because there exists a possibility that some property owner might not be the rightful owner of his property, it does not follow that all property rights are not valid, or cannot be enforced.

      A “right” is a political concept. A “right” does not exist when a Robinson Crusoe is alone on his island. It only comes into being when Friday makes his appearance. Only then can we talk about the morality of rights, and their protection and enforcement.

      Further, property rights come into existence when someone homesteads a particular piece of property. You don’t own the whole of the Earth by virtue of being born on this planet. Or an entire continent just because you set foot on it first. Or all the air, space, crust etc above and below your plot of land. That’s how “new” kinds of property can be owned by people other than those who own “conventional” property – airwaves, seas, skies etc can be homesteaded as well. They are not – should not be, rather – “public” or “common” property. That’s where all the problems arise, including censorship (in the US). The one who first makes use of the land, or whatever, becomes the rightful owner of that piece. He can then transfer it by contract, or whatever.

      Once this part is understood, you will realize that the Native Americans didn’t “own” America. I believe, and I could be wrong here, that they didn’t have any concept of property rights. And Ayn Rand made precisely this argument (am not sure where – this is a passable, but not very satisfactory description).

      Coming back to the “stolen property” idea, we need to proceed on the basis of evidence. If you claim that I stole your property, you should prove that I did. Otherwise, the property is mine. You cannot reverse the burden of proof and ask everyone to prove that their title is genuine. In this chapter of his “The Ethics of Liberty,” Rothbard covers this point extremely well based on the natural rights theory. You should read it if you haven’t done so already; I will quote his summary-

      To sum up, for any property currently claimed and used: (a) if we know clearly that there was no criminal origin to its current title, then obviously the current title is legitimate, just and valid; (b) if we don’t know whether the current title had any criminal origins, but can’t find out either way, then the hypothetically “unowned” property reverts instantaneously and justly to its current possessor; (c) if we do know that the title is originally criminal, but can’t find the victim or his heirs, then (c1) if the current title-holder was not the criminal aggressor against the property, then it reverts to him justly as the first owner of a hypothetically unowned property. But (c2) if the current titleholder is himself the criminal or one of the criminals who stole the property, then clearly he is properly to be deprived of it, and it then reverts to the first man who takes it out of its unowned state and appropriates it for his use. And finally, (d) if the current title is the result of crime, and the victim or his heirs can be found, then the title properly reverts immediately to the latter, without compensation to the criminal or to the other holders of the unjust title.

      Also read chapters ten and eleven which deal with homesteading (the above Crusoe example) and other related issues of legality and enforcement.

      # “If we take this argument to absurdity,we may have to drop the idea of nationhood.”
      Nations don’t have any rights of their own. There are only individual rights. A nation, or country, or state is simply a particular territory with a name. And a government exists which has a monopoly on the governance of this territory.

      If you keep this in mind, nationhood as such is not harmed. As for your view that the true libertarian must be an anarchist, I am beginning to come round to that view though I am still waiting to see if a government is a metaphysical necessity. You see, Mises was a minarchist. So was Rand. But Rothbard is an anarchist.

      Mises writes in “Planned Chaos”-

      Freedom and liberty always mean freedom from police interference. In nature there are no such things as liberty and freedom. There is only the adamant rigidity of the laws of nature to which man must unconditionally submit if he wants to attain any ends at all. Neither was there liberty in the imaginary paradisaical conditions which, according to the fantastic prattle of many writers, preceded the establishment of societal bonds. Where there is no government, everybody is at the mercy of his stronger neighbour. Liberty can be realized only within an established state ready to prevent a gangster from killing and robbing his weaker fellows. But it is the rule of law alone which hinders the rulers from turning themselves into the worst gangsters.

      His is a utilitarian case. And Rand simply dismissed all anarchists as kooks with faulty ideas (see her “The Nature of Government”). Her example, of competing defense agencies fighting on the roads is, to my mind, a utilitarian argument against anarchy. But Rothbard comes and asks – tell me how does the state get the authority to govern? How am I bound by its laws when I haven’t signed any contracts. I haven’t read much of Rand or Mises on this. But I don’t think they have an answer.

  • K. M.  On June 29, 2009 at 9:04 pm

    Here is my principled (not utilitarian) argument.
    To implement the non-aggression principle, people must agree on what constitutes aggression, not just at a philosophical level but at a more detailed level. For example, firing a gun in the air is not aggression but firing it close to someone’s residence is. Even if I am a champion shot and the bullets do not hit anyone. That might not be the best example, but the point is that some of these distinctions are not philosophical but merely a matter of convention or reasonable definition. If such distinctions are not made beforehand, then the non-aggression principle is meaningless. Establishing the process by which people can agree to such distictions is what politics is (should be) all about. Saying that each person must form his own answer and never commit to any answer (committing would mean agreeing to be bound by it) is an abdication of politics. As you mentioned, politics only arises in a social context and therefore must involve social processes. Because these distinctions depend on convention (by necessity, not for any lack of good philosophy), there is a need for legislation – a process by which people can agree to and modify (when necessary) conventions.
    So the answer to Rothbard’s question “how does the state get the authority to govern?” is:
    By the delegation of those who choose to form a state. Ideally, the state would be formed by those who subscribe (philosophically) to the non-agression principle. If someone does not recognize the authority of the state, he is not harmed by the state. Unless he breaks its institutionalized definitions of aggression. As long as the state does not break its own definitions of aggression and as long as the definitions are not philosophically wrong, the mere existence of a state is not aggression against any individual.

    As I wrote above anarchism is an abdication of politics. It is merely a moral position that states: man should not submit to be bound by legislation. The answer to that position is merely “Don’t submit”. The funny thing is: I dont know of any sane anarchists who follow that moral position. A seemingly political way of framing anarchism would be: “In an ideal society, no organization of people should have a monopoly over the exercise of force.” But that is a thorougly contradictory position. What sort of monoply is being referred to here? Metaphysical or existential? If it is metaphysical, then we already have anarchy, since no state can have a metaphysical monopoly on force (or on anything else). If it is an existential (or de facto) monopoly that the anarchist wants to abolish (not the right word, but there is no right word), then the anarchist is claiming that other people should not grant their consent to a monopoly on force. But then, that is a moral position.

    Psychologically, an advocate of anarchism is saying:
    I refuse to be bound by any institutionalized principles. Even if I agree with those principles today. I do not wish to take responsibility for my beliefs. The desire for anarchism is not a desire for freedom from aggression – it is a desire for freedom from responsibility.

  • K. M.  On June 29, 2009 at 9:17 pm

    I have posted the comment I wrote above here. I would prefer if you post your responses there rather than on this somewhat unrelated post. If that is not convenient, I would like to copy over any ensuing discussion in an update to my post at some point, if you agree.

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