On Government, Morality and Competition

== The age-old enemies of competition ==

As part of my eclectic and contrarian approach to life, I subscribe to a number of conservative and libertarian newsletters and sites... and some rather lefty ones, too. While I am skeptical of all prescriptive-simplistic dogmas, I do keep searching for that germ or core concept or variation that might be worthwhile. As a result, and despite my well-known views about the noxious New Confederacy, I nurse some concepts and notions that shock my left-leaning friends.  Indeed, what follows is sure not to please dogmatists of any stripe. Still, you might learn something.

One of the more hard-hitting, Rothbardian-Libertarian sites is Casey Research, headed the brash but smart and sorry-but-I-can’t-help-liking-him master-provocatuer Doug Casey. One of Doug’s Fellows, Mr. Paul Rosenberg, just issued a manifesto assailing the core morality of “government”… a central catechism of the Rand-Rothbard-Cato wing that has taken over libertarianism, for more than a generation. You should read this missive; it will give you a better understanding of the incantations that transfix many of your neighbors. (Hey, you have your own glib and oversimplifying incantations – are you honest enough to admit it?)

I generally shrug off the polemics while sifting for pearls in manure. In this case, however, I felt I simply had to respond. Go have a look… then come back here.

== Hatred of all government - enabling an older enemy of freedom ==

Alas, amid his blanket denunciations of “government” as inimical to liberty, Mr. Rosenberg ignores the elephant in the room -- the failure mode that destroyed freedom and competitive markets and enterprise in 99% of human cultures, across the last 6000 years.  Feudal lordships in which owner-oligarchs crushed the hopes of the great masses of peasants below, while quashing any advances that might destabilize their family grip on power.  Steep pyramids of power, in which a few bullies with swords owned everything and used hired priesthoods to declare "it is GOOD that our sons will own your sons!"

Compare the horrific "morality" of any feudal oligarchy to the flawed but often progressively positive morality of a modern, western state.  This is not a comparison that Mr. Rosenberg's jeremiad can survive... so he evades the contrast, altogether.

Mr. Rosenberg knows darned well that owner-oligarchy is the great failure mode.  The one denounced by Adam Smith as the relentless market destroyer.  The calamity against which our American founders rebelled.  Yet, he is part of the campaign to yell "squirrel!" and point our attention elsewhere.

To be clear, competition is the greatest creative force in the cosmos.  Adam Smith focused on the positive outcomes when competition can be engendered in the best ways.  Competition made us! But in nature it is vicious and inefficient, working slowly, atop mountains of corpses.

It is seldom much better in human affairs. Look across the centuries; we see almost every renaissance of competitive creativity (e.g. in markets) is almost always quickly suborned and ruined by cheaters.  By conniving men with swords or deeds of ownership over everything.  The rentier caste that Adam Smith denounced.(Indeed, even Ayn Rand denounced Olde Money cheaters... though her New Lords would quickly become more or the same; that's why she never showed her Galtian characters having kids!)

Competition that is open, fair and productive has only survived more than one generation  - anywhere - when it was regulated to minimize cheating. Exactly as Smith recommended.

In fact, that success, getting the good, positive outcomes from creative competition, while excluding the nearly automatic cheating modes that always ruined it in the past, has truly only happened for more than two generations in a row once in all of the history of Homo sapiens... during this marvelous western renaissance we are living in.

You'll notice that my portrayal of the situation fits into neither the simplistic model of the Left nor that of the Right!  

One side's lunacy is to ignore the fantastic fecundity of competition at generating such vast amounts of wealth that we can then afford to do progressive things. 

The contrasting insanity of the right is to ignore those 6000 years and pretend that competition's fecundity and productivity can happen amid the usual, festering swarm of opportunist-cheaters!

= Prevention of cheating requires...regulation! =

I can prove all of this with one spectacular example. 

The exact parallel is professional sports, one of the tightest-regulated realms of human experience.  Yes, most of the regulations are decided by cabals of team owners. But I never said regulation has to be "governmental"! It simply has to prevent the failure modes (cheating that Adam Smith said always ruin markets.

  What is key is that most of the regulations in a sporting league are intended to level the playing field and eliminate cheating.  Because if cheating reigns, then the system fails to deliver the desired product... excited fans, eager to buy tickets.  (Do you deny that individual players and teams would cheat, if they could get away with it? Or that the sports franchises become valueless, when the customers notice rampant cheating?)

Adam Smith knew all of this and recommended state endeavors to balance out the inevitable rise of cheaters and to do what F. Hayek later demanded... to maximize the number of skilled competitors!

You liberals, forget your cliches about Smith!  Actually read and rediscover the founder of your movement.

Smith wanted free public education, state financed infrastructure and health measures, the breaking up of monopolies and other reforms that would ease the way for bright sons of the peasantry to compete with the sons of owner-lords.  The very first acts of the American Founders, after the Revolution, included seizure of half the land in the former colonies from a few lordly families and redistribution, in order to create a (somewhat more) level playing field.

Indeed, many of the reform movements since then have revolved around spreading that circle of fairness.  Not just because it's nice, but because it is stupid to waste talent and let cheaters stifle competition by the maximum number. In other words, it takes some socialism to deliver the world that Hayek recommended!

None of which is part of today's libertarian doctrine!  All talk of level-flat-fair-open competition and Smithian libertarianism is quashed, replaced by the New Dogma -- idolatry of unlimited, lordly accumulations of private ownership... which (let me reiterate) was THE failure mode for 6000 years.

Property is now the libertarian god! Competition is shrugged off and never appraised for what it is, an explosively creative force that must be maintained, like an engine, lest the grit of cheating destroy it.

== To be clear... ==

While I hold many liberal or progressive views, I also proudly and unabashedly proclaim others that are Smithian-Heinleinian Libertarian, in that I deem healthy suspicion of government over-reach to be fit and proper! But I can turn my head and see such dangers - abuse of power - looming from all directions. 

(Can you?)

Yes, "government" can be captured by crony oligarchs!  That is why the democrats (and never republicans) de-regulated away and erased captured agencies like the ICC and CAB and broke up AT&T and gave an unregulated Internet to the world. 

Worth-noting: all of those deregulatory measures were opposed by the GOP at the time. The only industry that the GOP has ever de-regulated (despite all the rhetoric) is finance and Wall Street.  And you know how that went.

Keeping a close eye on government, skeptical to all over-reach, is a fine role for a sane libertarianism, and it inspired my book: "The Transparent Society: Will Technology Make Us Choose Between Privacy and Freedom?"

But assuming we do keep the bureaucrats leashed, then it is proper to recall that they... and the scientists too... are "elites" we can use to counterbalance the inevitable cheaters-from-oligarchy who betrayed freedom and competition in every other era.  Indeed, the war on science and all other castes of "smartypants" expertise is being funded precisely by those who want feudal oligarchy to come roaring back.

== But is capitalism a good thing? ==

Guardedly, you bet! In that market competition is the engine of our cornucopia and the wealth that enabled us to then take on progressive causes!

  Indeed, healthy market capitalism should be viewed as a top victim of crony-oligarchy. Indeed, You liberals need to admit that the issue of "globalization" is not settled and your reflexes were dead wrong.  Aside from the two billion people rising rapidly in China and India...

...read about potential real progress in three more countries that together contain 1.5 billion people.  Nor are these the only such examples.

Have investments in infrastructure, education, science RandD and public health paid off? According to one of the top (still-sane) conservative economics research houses, that “social capital” of shared investment in the future is responsible for most of our current standard of living.

“The United States and the rest of the post-industrial, developed world owe their epic rise in living standards to the underlying “social capital” that properly incentivized innovation, entrepreneurship, and thus technological transformation over the last two centuries.” - says Worth Wray of Mauldin Economics, a noted conservative investment newsletter:

“MIT Professor Robert Solow would agree with us on this front. Solow’s work on the US economy – which has become a textbook economics lesson – explains that innovation has accounted for more than 80% of the long-term growth in US per capita income, with capital investments accounting for only 20% of per capita income growth.” 

So much for supply side (voodoo) economics (SSVE), which proclaims that the only way to engender growth and development is huge tax cuts for the uber-wealthy… even at the cost of cutting back on infrastructure, education, science R&D and public health… exactly opposite to the prescription cited by Adam Smith.

Funny thing. Not one prediction ever made by SSVE has ever, ever, ever come true.

Liberals, this is your fault too.  Again... until I am blue in the face -- instead of bad-mouthing capitalism, you must embrace Adam Smith and declare true, healthy, flat-open-fair capitalism to be a top victim of the campaign of crony-cabal grabbing by the New Lords.  Investments in infrastructure, education, science R&D and public health are what feed and engender a thriving market economy.