A Lesson From Bastiat and Marx

I was at the “Evening Like it Used to Be” at the theater in Hampton and met an old friend. He mentioned The Alternative and said he disagreed with me; that there needs to be some government. Well heck, did I ever say I think there should be no government?

Anyone who has read this column before, knows the long list of activities that I believe should be “… reserved to the States respectively, or to the people.” That quote comes from The Tenth Amendment. The role of government is at the root of every issue in the public sphere today.

There are a lot of important and interesting stories in the news nowadays. It was a hard choice to go back to basics. But without a firm understanding of what the role of government means, how are we supposed to put these stories in perspective?

A foundation for understanding what the role of government can be are spelled out in two excellent books that should be required of any student before he sets out to impact the world around him. The first is The Law (1850) by Frederic Bastiat. The second is Marx and Engels’ The Communist Manifesto (1848).

A quote from Bastiat’s The Law answers my friend’s concerns so well I see no point in paraphrasing:

“… Every time we object to a thing being done by government, the socialists conclude that we object to it being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

Bastiat leaves it up to you and me to be productive in service to society. In return, our neighbors do the same thing and an aggregate of all these specialized skills meet society’s demands by way of a free pricing system.

Marx’s collaboration with Friedrich Engels, The Communist Manifesto, sees “class struggle” as the path to an equitable society. Individuals don’t exist in that world, only groups, notably the proletariat, workers who are exploited by the other main group, the bourgeoisie, who control the means of production.

The role of government comes in where these two opposite philosophies need to be enforced by something more peaceful than the gang warfare used in the illegal drug trade.

In Bastiat’s example, all law is predicated by the sovereignty of the individual. Marx’s system depends on elimination of the individual as a means to enrich the good of all.

The (ever shrinking) free economy in the United States, based on an expectation of a reward for our efforts, drove us to the luxurious society we enjoy today.

To enforce Marx’s ideal in Ukraine, as an example, private property was abolished. The most successful farmers, called Kulaks, had their farms taken and given to “the people.” Grain in storage and in the fields was confiscated. Gleaning (collection of leftover crops) of fields was even made illegal, often leading to the death penalty. Stalin’s Holodomor resulted in up to 10 million deaths from starvation because the farmers were viewed as exploiters of the collective. Individuals were not important.

Let’s not forget that NAZI stands for national socialism and can’t be separated from Soviet, Chinese, and other socialist movements that murdered a total of almost 130 million people in the last 70 years. All this in the quest for social justice.

Equality is a huge deal nowadays. But a distinction should be made between equality of outcome, as promoted by Vladimir Lenin, and equality of opportunity. Equality of opportunity results in the closest thing to equality of outcome because no one has a favored status dictated by the elites necessary for enforcing equality of outcome.

If this seems a bit hard to digest, look at it this way: Do you see the people responsible for spreading the wealth around living in squalor? Where is the greatest concentration of wealth in the United States? The answer: The neighborhood around Washington D.C.

I’ve always found a bizarre relationship between the so-called Left and Right. The Left used to oppose war. The Right used to oppose the welfare state. They are both equally destructive and the common thread between the two is they both require huge, intrusive and confiscatory government to exist.

The conflict reported in the news between the Left and the Right is contrived in order to make it seem like there is no such thing as the alternative, a limited government that works. This is because there is just too much to be gained by those with connections to the unlimited government for any limits to gain traction.

Government limits opportunity and limited opportunity limits equality. If you doubt this, try selling your house and then and buying a similar one near D.C. with the proceeds.

So in this column I try to attack the Left and the Right equally. I want to be fair.

Thanks for reading The Alternative. I’d love to hear back from anyone who agrees or disagrees. Please let me know if you would like to stop receiving this. And, as always, permission is granted for sharing in any way you want.

Fritz

“The Biggest No-Brainer In the History of Mankind”

Back in 1977 I got a letter from my grandpa in Dumont. This was different. Grandma was always the one who wrote. But she was in the nursing home dying of cancer.

At 27 years of age I figured I’d survived the choker-setter life well beyond the odds and so I struck out for Iowa. My mom and sister were tied down and I looked forward to being Grandpa’s friend instead of a distant stranger, as had been the case forever.

But this column is about investing. I’ve been an accidental investing genius. The first one is a personal thing so I’ll just say that my wife, Dawn, is the best investment I ever made. Second best was the 1963 Chevy pickup I bought in Portland in 1978 for $500.

That pickup served us well on the farm for thirty years hauling hogs, feed, and seed. We just sold it for $500 to a young man who plans to use it to pull his camper. Good investment?

I could list some bad investments I’ve made but they are too embarrassing, so I’ll just discuss some investments that other people have made. But before I go on, a word about the word: investment. I’ve found the word is passed around by politicians like cigars in a maternity ward. Invest in education, invest in jobs, invest in national security, and invest in equality come to mind. Those things are not investments any more than Medicare is insurance.

There is a huge difference in the old Chevy and the investments made by politicians. I worked for the money I invested. Politicians simply take the money from one person and hand it to another, claiming it will be spent more wisely there.

A good example of a great investment would be “put options” on Morgan Stanley Dean Witter (who occupied 22 floors in the twin towers) in the three days before the 9/11 attacks. Volume of buying these bets against the international banker’s stock increased 1200% in those three days. The result was $10 million in profit for someone when trading resumed. The same thing happened with the airlines involved in the disaster; United and American.

After the attacks by mostly Saudi Al-Qaeda, the United States attacked Iraq (go figure), beginning a $4 trillion spending spree by our defense department in the Middle East. Take a guess on how defense industry stocks have fared in the last sixteen years.

But let’s be fair. Government doesn’t only lay waste in phony “defense” schemes. Here are some statistics on our “investment” in the War on Poverty. The year 1964 has the same significance as September 11, 2001 as a turning point.

Children from fatherless homes are more likely to drop out of school, die by suicide, join gangs, and commit crimes. In 1960, 22% of black children were raised in single parent families. After a generation of living with the investment of the War on Poverty, that number jumped to 75%.

It is no coincidence that the initiation of Lyndon Johnson’s Great Society was a turning point in the decline of equality for black people. For 100 years with no investment but a granting of freedom, blacks made steady progress. Then along came the academics, civil rights leaders, and politicians who believed investing can’t be left to individuals but can only work when guided by superior beings like themselves.

Rather than blame the sad state of equality on something that happened a hundred years prior to that, the blame should go on the welfare state that obviously started it.

As the radio ad for some investment scheme goes, “It’s the biggest no-brainer in the history of mankind.” We were not using our brains when we decided we can’t invest for ourselves; that it has to be done by people whose primary skill is getting elected.

The case of Iowa government giving Apple $208 million dollars is a good example of extortion. When the payoff is so minuscule one has to wonder why. Does the governor get a sticker?

Here are some facts to consider:

$208 million given to Apple will “create” 50 jobs at over $4 million apiece.

The claimed “up to” $100 million Apple will invest in local infrastructure in return uses the same misleading terminology as the Volkswagen diesel scandal’s “up to” 40 times of emissions standards. “Up to” in Apple’s case would only happen if unrequired expansions occur. Like VW’s emissions, neither is certain.

Governor Kim Reynolds claimed that tax credits are not the same thing as subsidies. Check the balance sheet and get back to me.

Apple just gave rabid hate group, the SPLC (Southern Poverty Law Center) a million dollars. Whether SPLC is right or wrong in their activities is not as important an issue as the fact that Iowa government has no place funneling taxpayer funds through Apple toward any advocacy group. I just happen to hate SPLC myself.

Donald Trump endorsed such economic development extortion in December saying … “they can negotiate good deals with the different states and all of that.”

Economist Richard Florida, in a 2012 study found… “virtually no association between economic development incentives and any measure of economic performance.”

Another study found even slower growth associated with these handouts because management ignored real business efficiencies as they focused the extortion of taxpayer money.

Iowa State economist, David Swenson says of the Microsoft and Google data centers already in Iowa, “They’re just big, sterile, hot boxes that don’t feed into Iowa’s economy.” In fact, employment there has shrunk as computer babysitters are replaced by automation.

Doesn’t this, and other economic development scams still smell like Iowa’s film incentive program that resulted in several felony corruption convictions? Profit, earned through willing transactions between people free to walk away, has no victim except through fraud. Government has no such restraint with dollars confiscated through taxation.

Another thing, having traveled around this country before settling in Iowa, I see it as sinful to cover Iowa soil with “hot boxes” when there is plenty of unproductive soil to build on elsewhere.

For those who feel the need to hate success, there is the fact that some single mom in Waukee is donating to the richest company in America and probably doesn’t even know it.

I can’t see any benefit to anyone in this except for a politician needing a rose pinned on their nose. Might there be something we are missing?

Dearest Editor,

Love, Fritz

In the news this morning, “Nearly 300 members of Sioux City’s Iowa Air National Guard 185^th Air Refueling Wing will be deployed overseas beginning in October.” Also in the news, Iowa’s aging roads and bridges are in desperate need of repair.

As I drove through Dumont the other day I saw a neighbor and his crew eating lunch by their worksite. I stopped to say hello. The neighbor’s main helper had just quit to take a job with the windmills (which wouldn’t exist if not for your tax money). It was also the last day for two young men who were quitting to go out for the football team. To me, that’s three more productive people lost to a declining civilization.

As a kid, I was an LA Rams fan. (The team that inspired the label on modern consumer goods, “choking hazard.”) Then I adopted the Oakland Raiders because I moved there and because they were a team of misfits and has-beens. I look at the colonists of 1776 as being in the same groove. Now the Raiders are moving to Sin City (Las Vegas), where their bad boy image will fit better anyway. I can easily abandon any dedication to the modern day version of Karl Marx’s opiate of the masses. No big loss for me.

Adding to my disdain for the NFL is a new study of CTE (chronic traumatic encephalopothy) published in the Journal of the American Medical Association. The gist of this study is that 87% of brains donated for study from deceased football players from high school through the NFL showed signs of CTE. The kicker is, of the 111 brains donated for the study from NFL players, all but one showed evidence of CTE.

No amount of improved protective technology will eliminate the danger to our kids. The brain makes sudden moves because it is there. One commentator said the best way to make football safer would be to eliminate helmets and let self-preservation take over. Other body parts can be repaired or heal but as Steelers’ quarterback, Ben Roethlisberger says, “You can’t have a brain transplant.”

The Iowa National Guard has a responsibility to guard Iowa and the nation, not Qatar, United Arab Emirates, or Kuwait. How is it that no connection is made between sending able bodied workers and cash over there, and the same to football practice or a bunch of wasteful bird killers?

Some of us voted for a man who claimed to see the folly of intervention, both foreign and domestic, but nothing changes. Local tradesmen lack not for skilled workers provided by state schools, but for workers who care about their work.

The state can’t outguess the market. Young people entering the workforce should be free to find their niche without distortions like government trade schools, foreign intervention, phony energy schemes, or modern-day gladiator events.

The evidence is now available; football risks permanent disability, foreign intervention doesn’t bring peace, and domestic intervention (such as government trade schools) diverts scarce resources to wasteful uses.

Much of this is out of our hands. Government officials are mere tools of industry. Their original purpose of preserving our rights as individuals was sold a long time ago. But there is something we can do. As parents, we have a responsibility to help our kids find alternatives to football.

“Government never of itself furthered any enterprise, but by the alacrity with which it got out of its way.” -Henry David Thoreau

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwieqOjhur7VAhVpi1QKHQ7DDrgQjRwIBw&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FChronic_traumatic_encephalopathy&psig=AFQjCNH8USWP1gVqBMGD9te-9erZhiiqWw&ust=1501966267833360

I’m writing this in the middle of fair week. No, that doesn’t mean everything is fair this week and unfair the rest of the time. The Franklin County Fair is one of the great perks of living here. It is also the topic at the top of my unscientific survey for requested topics.

There are still enough independent livestock farmers to do competitive livestock shows at the fair, not to mention other judging events. There’s the antique farm machinery and demonstrations, and the draft horse pull. There’s the midway that we walk through to get somewhere else, but produces lots of noise and excitement to keep the atmosphere charged. There’s fair food. All these things make for the uniqueness of the week.

We rush to get done with things at home to make time for the fair. I’ll never forget the night that Craig, who runs the local radio station, wanted to do a live interview with me because I was running for Iowa Secretary of Agriculture. He asked me if I liked the fair. What I said would have passed as mainstream in other markets, but people don’t talk like that outside a close circle of friends out here in the country. As far as I know, the FCC (Federal Communications Commission) never came after Craig. Maybe they were busy with 9/11 truthers or JFK conspiracy theorists instead. The government lost my Selective Service records too. It shows we’ve got a ways to go to become an efficient totalitarian state.

This afternoon Dawn and I work in the ice cream stand, possibly the most popular attraction at the fair. We are so fortunate to have a friend like Marcus who asked us to work there. He and Robin and the other fair board members deserve all this praise that is heaped upon them all the time. If everybody worked that hard, there wouldn’t be a market for economy cars.

While I’m on the subject of individuals as an essential element of a whole I can’t help but mention a letter to the editor that was published in the Hampton Chronicle last week. The writer was pointing out how vocal music director, Jesse Bunge, had evolved from focusing on groups to a focus on individual achievement as a path to success as a group. (Jesse is moving away. His contribution to the school vocal music program was notable but he helped mold the individuals in Franklin Chorale into an exceptional group as well.)

What struck me, was how this writer saw the same thing as I did in Jesse’s career. The philosophy of the founders of this country are symbolized by Jesse’s approach as described in the article.

Thanks to all those individuals out there who bring the pieces together for the rest of us in this beautiful community.

I can’t remember a more spectacular fireworks show than what we had at the fairgrounds in Hampton July 3rd. I suppose Thomas Jefferson was pounding away on his keyboard on that day, 241 years ago.

We were at the Municipal Band concert and hadn’t planned on staying for the fireworks due to the yawners they used to have out at Beeds Lake. But the show that night came awfully close to the degree of genius of that declaration penned so many years ago.

Steve Huling did a fantastic and heartfelt job singing the Lee Greenwood classic, “God Bless the USA,” at the concert. It occurred to me that a lyric in that song embodies why we are burdened with this ongoing debate about healthcare.

“And I won’t forget the men who died, who gave that right to me”

Men gave that right to me? I don’t think so. Jefferson had it right; we are endowed by our Creator (or any amorphous form you personally deem responsible). A man may have died to preserve those rights or guarantee those rights, but no man gave us those rights. Those words may apply to slaves and slave-owners, but not a citizen of the country founded on the words in The Declaration.

If a man can give us rights, he can take them away. The reason we have this vast pool of wealth the single payer advocates want to tap into, is because of the guarantees provided by government that we may be enriched by our own efforts.

The number of people on the dole for healthcare may be thirty percent since Lyndon Johnson’s Great Society began in 1964. But the dollar amount is much greater. Medical costs skyrocket after age 65. Two thirds of medical costs in this country were borne by government even before The ACA (Obamacare).

Goods and services with no government subsidies or interference have shrunk to a quarter of their cost of 60 years ago in terms of hours worked. Healthcare has quadrupled during that same time with the help of government’s elimination of most of the competitive marketplace in 1964.

There are other reasons for higher costs such as the limiting of the number of doctors and hospitals that trade associations lobbied for over the years. Truman’s establishment of IRS deductibility for employer-provided health insurance distanced the patient from healthcare decisions and that led to increased demand with less restraint on costs. Nixon’s wage and price controls further isolated prices from patient choice.

The problem really is that the productive people who fund all this are starting to step aside. There have been 250,000 jobs lost due to the 50 employee cap on exclusion from mandated employer insurance. The businesses not started and not expanded because the extra work only went to taxes can’t be measured. Who wouldn’t want to simply enjoy life rather than work for free?

What to do? The money will run out. The haters who look at medical care as something they rightfully own will want to protect it like anyone would protect their property from thieves. These people must be appeased or they will become increasingly violent. Remember the so-called conservatives screaming, “Keep your hands off my Medicare!” a couple years ago? They thought it was theirs too.

Appeasement to me looks like continuing the socialist system for those who’ve planned their lives around it but advocacy of an insurance industry that only insures individuals and adjusts rates to reflect risk. Smokers, race car drivers, and Sumo wrestlers should pay what the insurance company offers or find a new lifestyle and pay less.

To blame high medical costs on free markets is to ignore the facts. That Jefferson guy said government will grow and liberty will shrink. A good first step would be to stop celebrating liberty that doesn’t exist, recognize the problem, and notice that immediate gratification is a sign of an uncivilized society. That is what single payer is. It is legalized theft that is not justified by wishful thinking.