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Business & Markets

In Praise of the Businessman

Writes Yaron Brook on What We Owe Steve Jobs:

If dedicating your life to creating the values that advance it is a
moral achievement, then there is nothing greater or nobler than the
creative geniuses whose productive ability has created our modern world:
a world where we live more than three times as long as our ancestors;
where our homes are heated in the winter, cooled in the summer, and lit
at night; where we can travel across a continent in a matter of hours;
where we can say goodnight to our children from the other side of the
globe.

But far from holding up the great producers as moral exemplars, we lump them in with the Al Capones and the Bernie Madoffs as people who must be stopped or at least shackled until they learn to selflessly serve others. Even Jobs was criticized because he devoted his life to Apple rather than philanthropy.

How to Be Profitable and Moral: A Rational Egoist Approach to Business

How to Be Profitable and Moral: A Rational Egoist Approach to Business” by Jaana Woiceshyn

The book is intended for “thinking managers:” with a lot of concrete examples, it shows how rational egoist principles apply to business. John Allison, Doug Arends, Carl Barney, and Andrew Bernstein wrote nice endorsements.

From the book’s conclusion:  “Being both profitable and moral is possible for business. Egoism holds—and shows—that being moral is in fact a fundamental requirement of long-term profitability. To sustain maximum long-term profitability requires that businesspeople reject both altruism and cynical exploitation of others and adopt egoism as their moral code. This means seeking objectivity—consistency with the factual requirements of human survival and flourishing through the use of reason—in all our choices and actions, as demonstrated by the philosophy and conduct of the BB&T Corporation. To achieve long-term profitability requires that we adopt and apply rational principles consistently. The virtues of rationality, productiveness, honesty, justice integrity, independence and pride, as identified by Ayn Rand, specify the actions that achieving long-term profitability entails. The main substance of this book consists of examining these virtues and showing how they apply to business, with the hope you can put them in your tool kit and use them the next time you encounter a moral dilemma in business.”

For those who wish to pre-order the book Jaana Woiceshyn writes:

How to pre-order:  Contact the customer service department of Rowman & Littlefield (the parent company of Hamilton Books, my publisher) *before November* by calling 1-800-462-6420 or by e-mailing custserv@rowman.com and give my name and the book title. I don’t think the ISBN number is necessary, but here it is for reference: 978-0-7618-5699-3. They will ask for your credit card number.

The hardcover price is US$ 40 per copy. Your credit card will not be charged until the book is shipped to you in February.

Full disclosure: as a part of the contract with Hamilton Books, I am obligated to pre-order 70 hardcover copies by November. If you think the book would be valuable to you, or as a gift to someone, please consider pre-ordering from Rowman & Littlefield to help me fill the quota. But please do this only if you think the book is worth it (it will be available through Amazon, probably for less). If you do pre-order from Rowman & Littlefield, please let me know (jwoiceshyn@gmail.com) so I can keep track of the numbers.

 

Scott Holleran Interview with John David Lewis

From Scott Holleran’s blog:

The goal of a war is to defeat an enemy’s will to fight. So argues the author of Nothing Less than Victory: Decisive Wars and the Lessons of History (Princeton University Press, 2010), who makes the case that a strong military offense can win a war and establish lasting peace while playing defense often leads to destruction. This study of six major wars, from the Second Punic War to World War 2, by historian John David Lewis, contrasts the use of overwhelming force, such as the Greek victory over Xerxes’ army and navy, with a lack of reason, purpose, and commitment to fight. On the eve of the 10th year since the worst attack in American history, I turned to my friend John Lewis, a visiting associate professor of philosophy, politics, and economics at Duke University and teacher at Objectivist Conferences (OCON), to discuss today’s war from an historical perspective. Dr. Lewis is the author of Solon the Thinker: Political Thought in Archaic Athens and Early Greek Lawgivers.

Scott Holleran: What is the theme of Nothing Less Than Victory: Decisive Wars and the Lessons of History?

John David Lewis: That wars are driven and caused by people’s decisions to fight and that those decisions are based on the ideas they hold. This has enormous implications for what victory means, because it means discrediting the ideas we’re trying to defeat. For example, one could never explain Germany’s massive attacks [against other countries] or Japan’s massive attack on America, in which they launched into intercontinental warfare, without understanding the ideals that they held. The theme of Nothing Less Than Victory is that one must defeat the enemy by discrediting his ideas.

Scott Holleran: How was Nothing Less Than Victory suggested by your students?

John David Lewis: I was teaching a class on ancient and modern warfare and it became clear that a comparative history would be useful. My students posed good questions.

Scott Holleran: While writing about the rise of the Nazis, did The Ominous Parallels: The End of Freedom in America by Leonard Peikoff help your understanding?

John David Lewis: Yes, because it’s the only book I know of that places philosophical ideas as the lesson of history. It’s not only an explanation of Nazi Germany in terms of ideas but, much more deeply and widely, it demonstrates how ideas move history.

Scott Holleran: The current administration supports military involvements in Iraq, Afghanistan and Libya, as well as other underreported incursions in nations such as Yemen and Pakistan, with something other than, or less than, a purpose let alone a victory. The Oxford English Dictionary defines warmonger as “a person who seeks to bring about or promote war.” As a commander-in-chief who supports and initiates militarism with no purpose or end, is President Obama a warmonger?

John David Lewis: I think he’s incompetent but I don’t think Obama is a warmonger. He inherited those wars but he’s simply unable to bring those wars… [Read the rest at Scott Holleran’s blog.]

Audio: Was the creation of the Federal Reserve in 1913 has been a boon or a bust for the U.S. economy?

George Selgin, of the University of Georgia, talks with EconTalk host Russ Roberts about whether the creation of the Federal Reserve in 1913 has been a boon or a bust for the U.S. economy. Drawing on a recent paper with William Lastrapes and Lawrence White recently released by the Cato Institute, “Has the Fed Been a Failure?” Selgin argues that the Fed has done poorly at two missions often deemed to justify a Central Bank: lender of last resort and smoother of the business cycle. Selgin makes the case that avoiding bank runs and bank panics does not require a central bank and that contrary to received wisdom, it is hard to argue that the Fed has smoothed the business cycle. Additional topics discussed include whether the Fed has the information to do its jobs well, the role of the Fed in moral hazard, and the potential for the gold standard to outperform the Fed.

Listen to George Selgin talk on the Fed over at the EconTalk: Library of Economics and Liberty.

TEDx VIDEO: Dr, Eric Daniels on The Moral Case for the Free Market

Dr. Eric Daniels of Clemson University’s Institute for the Study of Capitalism has lectured internationally on the history of American ethics, American business, and entrepreneurship, as well as the American Enlightenment. He has also appeared on C-SPAN and is widely published in the field of economics.

You can also hear Dr. Daniels speak at this year’s OCON Conference.

Video: The Doctor Cog in the Obamacare Washington Machine

Health Care Reform: Setting Doctors Free [Livestream]

Dr. John David Lewis: Obamacare is a moral assault on free people, and an attack on human life itself.

Government medicine treats doctors as cogs in a giant machine, run from Washington, as if treating patients required no independent thought or action. Twenty-eight states have filed suit against Obamacare, claiming it is unconstitutional. But it is much worse than that. It is a moral assault on free people, and an attack on human life itself. John Lewis has a unique perspective on this issue, both as an advocate for individual rights and as a cancer patient. Don’t miss this hard-hitting lecture on the deepest evil of government medicine.

John David Lewis is a Visiting Associate Professor in the Philosophy, Politics, and Economics Program at Duke University, and a senior research scholar in history and classics at the Social Philosophy and Policy Center, Bowling Green State University. He has taught at the University of London and Ashland University, and is a fellow of the Anthem Foundation for Objectivist Scholarship. He has a PhD in classics from the University of Cambridge. He is an outspoken proponent of free market medicine.

Profiles in Business Courage: George Buckley CEO of 3M

Writes Richard Salsman at his blog on Forbes on  Bravo For George Buckley, A Righteous CEO:

Since his party’s failure in the mid-term elections, President Barack Obama has been posing as “pro-business” and a “centrist.” There’s not a single reason to believe it. Obama is a phony — on this and many other issues — just as he was during his 2008 campaign. If Obama is “pro-business” in any way, like most politicians today he claims to be so only to extract tax revenues and campaign funding. That’s the sole extent of it. Business is a mere host to his political parasitism. Yet his hostile attitude isn’t much different from that seen in the GOP.

[…] That Obama is being disingenuous is clear from the avalanche of new regulations, controls and dictates now piling atop America’s businessmen, whether due to ObamaCare’s further socialization of the health care sector, or to Dodd-Frank’s scheme to further invade the financial sector, or to the EPA’s latest crusade against nearly every sector by calling CO2 a “pollutant.” […] In his essay on regulation Obama also conceded that many “unreasonable burdens on business” have “stifled innovation and have had a chilling effect on growth and jobs,” yet he refused to call for the repeal of any set of regulations, or the abolition of a single regulatory agency. He keeps sponsoring and signing laws that impose still more burdens.

[…] For an alternative assessment — i.e., with refreshing honesty and candor — consider a recent interview of a courageous business executive who dares to describe Obama’s actual policy toward business: legalized looting. According to George Buckley, CEO of 3M Corp. since 2005, “We know what [Obama’s] instincts are: they are Robin Hood-esque. He is anti-business.”

Buckley further explains that “there is a sense among companies that the U.S. is a difficult place to do business,” and “it is about regulation, taxation, seemingly anti-business policies in Washington, attitudes towards science.” He adds that “politicians forget that business has choice. We’re not indentured servants and we will do business where it’s good and friendly. If it’s hostile, incrementally, things will slip away. We’ve got a real choice between …

Read the rest of Richard Salsman’s article at his blog on Forbes:  Bravo For George Buckley, A Righteous CEO.

Video: The Government Can

The hilarious Tim Hawkins’ take on the Candyman can.

(Hey everybody! Gather ’round! I’m here to give you anything you like! You want a car, money, mortages?! Whatever you like! You have come to the right place! Why? I’ll tell you why!)

Who can take your money? (Who can take your money?)
With a twinkle in their eye? (With a twinkle in their eye?)
Take it all away and
Give it to some other guy

[Chorus]
The Government (the Government)
The Government can! (The Government can!)

Who can tax the Sun rise? (Who can watch the Sun rise?)
Who can tax the trees? (Who can touch the trees?)
Let you run a business and
Collect up all the fees

[Chorus]

The Government can ’cause
They mix it up with lies and
Make it all taste good! (Make it all taste good!)

The Government takes
Everything we make
To pay for all of their “sollutions”
Healthcare, Climate Change, Pollution
(Throw away the Constitution)

Who can give a bailout? (Who can give a bailout?)
Tell us to behave? (Tell us to behave?)
Make the Founding Fathers
Roll over in their graves

[Chorus]

The Government takes
Everything we make
They’re power hungry
And malicious

The economics are fictitious
Soon we’ll have to eat our dishes
Mmm! Delicious!

Who can be a failure? (Who can be a failure?)
In so many ways? (In so many ways?)
Instead of getting fired, HEY!
We’ll give ourselves a raise!

[Chorus]

The Government can ’cause
He mix it up with lies and
Make it all taste good! (Make it all taste good!)
And your Uncle Sam can ’cause
He mixes it with lies and
Makes it all taste good! (Makes it all taste good!)

And I feel so good
Because the Government
Says I should! Oh!…

Hazlitt on the U.S. Housing Crisis

WHAT AN ECONOMIST SAID ABOUT THE U.S. HOUSING CRISIS – DECADES AGO

 “The case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages [for homes]. … Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to ‘buy’ houses that they cannot really afford. They tend to eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment.” — Henry Hazlitt, Economics in One Lesson (1979)

The Moral and Practical Case for Open Immigration

by Harry Binswanger, Ph.D.

This is a defense of phasing-in open immigration into the United States. Entry into the U.S. should ultimately be free for any foreigner, with the exception of criminals, would-be terrorists, and those carrying infectious diseases. (And note: I am defending freedom of entry and residency, not the automatic granting of U.S. citizenship).

An end to immigration quotas is demanded by the principle of individual rights. Every individual has rights as an individual, not as a member of this or that nation. One has rights not by virtue of being an American, but by virtue of being human.

One doesn’t have to be a resident of any particular country to have a moral entitlement to be secure from governmental coercion against one’s life, liberty, and property. In the words of the Declaration of Independence, government is instituted “to secure these rights”–to protect them against their violation by force or fraud.

A foreigner has rights just as much as an American. To be a foreigner is not to be a criminal. Yet our government treats as criminals those foreigners not lucky enough to win the green-card lottery.

Seeking employment in this country is not a criminal act. It coerces no one and violates no one’s rights (there is no “right” to be exempt from competition in the labor market, or in any other market).

It is not a criminal act to buy or rent a home here in which to reside. Paying for housing is not a coercive act–whether the buyer is an American or a foreigner. No one’s rights are violated when a Mexican, or Canadian, or Senegalese rents an apartment from an American owner and moves into the housing he is paying for. And what about the rights of those American citizens who want to sell or rent their property to the highest bidders? Or the American businesses that want to hire the lowest cost workers? It is morally indefensible for our government to violate their right to do so, just because the person is a foreigner.

Immigration quotas forcibly exclude foreigners who want not to seize but to purchase housing here, who want not to rob Americans but to engage in productive work, raising our standard of living. To forcibly exclude those who seek peacefully to trade value for value with us is a violation of the rights of both parties to such a trade: the rights of the American seller or employer and the rights of the foreign buyer or employee.

Thus, immigration quotas treat both Americans and foreigners as if they were criminals, as if the peaceful exchange of values to mutual benefit were an act of destruction.

To take an actual example, if I want to invite my Norwegian friend Klaus to live in my home, either as a guest or as a paying tenant, what right does our government have to stop Klaus and me? To be a Norwegian is not to be a criminal. And if some American business wants to hire Klaus, what right does our government have to interfere?

The implicit premise of barring foreigners is: “This is our country, we let in who we want.” But who is “we”? The government does not own the country. Jurisdiction is not ownership. Only the owner of land or any item of property can decide the terms of its use or sale. Nor does the majority own the country. This is a country of private property, and housing is private property. So is a job.

American land is not the collective property of some entity called “the U.S. government.” Nor is there such thing as collective, social ownership of the land. The claim, “We have the right to decide who is allowed in” means some individuals–those with the most votes–claim the right to prevent other citizens from exercising their rights. But there can be no right to violate the rights of others.

Our constitutional republic respects minority rights. 60% of the population cannot vote to enslave the other 40%. Nor can a majority dictate to the owners of private property. Nor can a majority dictate on whom private employers spend their money. Not morally, not in a free society. In a free society, the rights of the individual are held sacrosanct, above any claim of even an overwhelming majority.

The rights of one man end where the rights of his neighbor begin. Only within the limits of his rights is a man free to act on his own judgment. The criminal is the man who deliberately steps outside his rights-protected domain and invades the domain of another, depriving his victim of his exclusive control over his property, or liberty, or life. The criminal, by his own choice, has rejected rights in favor of brute violence. Thus, an immigration policy that excludes criminals is proper.

Likewise, a person with an infectious disease, such as smallpox, threatens with serious physical harm those with whom he comes into proximity. Unlike the criminal, he may not intend to do damage, but the threat of physical harm is clear, present, and objectively demonstrable. To protect the lives of Americans, he may be kept out or quarantined until he is no longer a threat.

But what about the millions of Mexicans, South Americans, Chinese, Canadians, etc. seeking entry who are not criminal and not bearing infectious diseases? By what moral principle can they be excluded? Not on the grounds of majority vote, not on the grounds of protecting any American’s rights, not on the grounds of any legitimate authority of the state.

 

THE MORAL AND THE PRACTICAL

 

That’s the moral case for phasing out limits on immigration. But some ask: “Is it practical? Wouldn’t unlimited immigration–even if phased in over a decade–be disastrous to our economic well-being and create overcrowding? Are we being told to just grit our teeth and surrender our interests in the name of morality?”

This question is invalid on its face. It shows a failure to understand the nature of rights, and of moral principles generally. Rational moral principles reflect a recognition of the basic nature of man, his nature as a specific kind of living organism, having a specific means of survival. Questions of what is practical, what is to one’s self-interest, can be answered only in that context. It is neither practical nor to one’s interest to attempt to live and act in defiance of one’s nature as a human being.

Yet that is the meaning of the moral-practical dichotomy. When one claims, “It is immoral but practical,” one is maintaining, “It cripples my nature as a human being, but it is beneficial to me”–which is a contradiction.

Rights, in particular, are not something pulled from the sky or decreed by societal whim. Rights are moral principles, established by reference to the needs inherent in man’s nature qua man. “Rights are conditions of existence required by man’s nature for his proper survival.” (Ayn Rand)

Every organism has a basic means of survival; for man, that means is: reason. Man is the rational animal, homo sapiens. Rights are moral principles that spell out the terms of social interaction required for a rational being to survive and flourish. Since the reasoning mind cannot function under physical coercion, the basic social requirement of man’s survival is: freedom. Rights prescribe freedom by proscribing coercion.

“If man is to live on earth, it is right for him to use his mind, it is right to act on his own free judgment, it is right to work for his values and to keep the product of his work.” (Ayn Rand)

Rights reflect the fundamental alternative of voluntary consent or brute force. The reign of force is in no one’s interest; the system of voluntary cooperation by mutual consent is the precondition of anyone achieving his actual interests.

To ignore the principle of rights means jettisoning the principled, moral resolution of conflicts, and substituting mere numbers (majority vote). That is not to anyone’s interest. Tyranny is not to anyone’s self-interest.

Rights establish the necessary framework within which one defines his legitimate self-interest. One cannot hold that one’s self-interest requires that he be “free” to deprive others of their freedom, treating their interests as morally irrelevant. One cannot hold that recognizing the rights of others is moral but “impractical.”

Since rights are based on the requirements of man’s life as a rational being, there can be no conflict between the moral and the practical here: if respecting individual rights requires it, your interest requires it.

Freedom or force, reason or compulsion–that is the basic social alternative. Immigrants recognize the value of freedom–that’s why they seek to come here.

The American Founders defined and implemented a system of rights because they recognized that man, as a rational being, must be free to act on his own judgment and to keep the products of his own effort. They did not intend to establish a system in which those who happen to be born here could use force to “protect” themselves from the peaceful competition of others.

 

ECONOMICS

 

One major fear of open immigration is economic: the fear of losing one’s job to immigrants. It is asked: “Won’t the immigrants take our jobs?” The answer is: “Yes, so we can go on to better, higher-paying jobs.”

The fallacy in this protectionist objection lies in the idea that there is only a finite amount of work to be done. The unstated assumption is: “If Americans don’t get to do that work, if foreigners do it instead, we Americans will have nothing to do.”

But work is the creation of wealth. A job is a role in the production of goods and services–the production of food, of cars, computers, the providing of internet content–all the items that go to make up our standard of living. A country cannot have too much wealth. The need for wealth is limitless, and the work that is to be done is limitless.

From a grand, historical perspective, we are only at the beginning of the wealth-creating age. The wealth Americans produce today is as nothing compared to what we’ll have two hundred years from now–just as the standard of living 200 years in the past, in 1806, was as nothing compared to ours today.

Unemployment is not caused by an absence of avenues for the creation of wealth. Unemployment is caused by government interference in the labor market. Even with that interference, the number of jobs goes relentlessly upward, decade after decade. This bears witness to the fact that there’s no end to the creation of wealth and thus no end to the useful employment of human intelligence and the physical effort directed by that intelligence. There is always more productive work to be done. If you can give your job to an immigrant, you can get a more valuable job.

What is the effect of a bigger labor pool on wage rates? If the money supply is constant, nominal wage rates fall. But real wage rates rise, because total output has gone up. Economists have demonstrated that real wages have to rise as long as the immigrants are self-supporting. If immigrants earn their keep, if they don’t consume more than they produce, then they add to total output, which means that prices fall (if the money supply is constant).

And, in fact, rising real wages was the history of our country in the nineteenth century. Before the 1920s, there were no limits on immigration, yet our standard of living rocketed upward. Self-supporting immigrants were an economic benefit not an injury.

The protectionist objection that immigrants take away jobs and harm our standard of living is a solid economic fallacy.

 

WELFARE

 

A popular misconception is that immigrants come here to get welfare. To the extent that is true, immigrants do constitute a burden. But this issue is mooted by the passage, under the Clinton Administration, of the Personal Responsibility and Work Opportunity and Reconciliation Act (PRWORA), which makes legal permanent residents ineligible for most forms of welfare for 5 years. I support this kind of legislation.

Further, if the fear is of non-working immigrants, why is the pending legislation aimed at employers of immigrants?

 

OVERCROWDING

 

America is a vastly underpopulated country. Our population density is less than one-third of France’s.

Take an extreme example. Suppose a tidal wave of immigrants came here. Suppose that half of the people on the planet moved here. That would mean an unthinkable eleven-fold increase in our population–from 300 million to 3.3 billion people. That would make America almost as “densely” populated as today’s England (360 people/sq. km. vs. 384 people/sq. km.). In fact, it would make us less densely populated than the state of New Jersey (453 per sq. km.). And these calculations exclude Alaska and Hawaii, and count only land area.

Contrary to widespread beliefs, high population density is a value not a disvalue. High population density intensifies the division of labor, which makes possible a wider variety of jobs and specialized consumer products. For instance, in Manhattan, there is a “doll hospital”–a store specializing in the repair of children’s dolls. Such a specialized, niche business requires a high population density in order to have a market. Try finding a doll hospital in Poughkeepsie. In Manhattan, one can find a job as a Pilates Method teacher or as a “Secret Shopper” (two jobs actually listed on Craig’s List). Not in Paducah.

People want to live near other people, in cities. One-seventh of England’s population lives in London. If population density is a bad thing, why are Manhattan real-estate prices so high?

 

THE VALUE OF IMMIGRANTS

 

Immigrants are the kind of people who refresh the American spirit. They are ambitious, courageous, and value freedom. They come here, often with no money and not even speaking the language, to seek a better life for themselves and their children.

The vision of American freedom, with its opportunity to prosper by hard work, serves as a magnet drawing the best of the world’s people. Immigrants are self-selected for their virtues: their ambitiousness, daring, independence, and pride. They are willing to cast aside the tradition-bound roles assigned to them in their native lands and to re-define themselves as Americans. These are the people America needs in order to keep alive the individualist, hard-working attitude that made America.

Here is a short list of some great immigrants: Alexander Hamilton, Alexander Graham Bell, Andrew Carnegie, most of the top scientists of the Manhattan Project, Igor Sikorsky (the inventor of the helicopter), Ayn Rand.

Open immigration: the benefits are great. The right is unquestionable. So let them come.

 

Dr. Binswanger, a longtime associate of Ayn Rand, is a professor of philosophy at the Objectivist Academic Center of the Ayn Rand Institute. Special Offer: Dr. Binswanger moderates Harry Binswanger’s List (HBL)–an email list for Objectivists for discussing philosophic and cultural issues — a free one-month trial is available at: www.hblist.com.