SECTION 5: CULTURE 34. CAPITALISM AND CULTURE October 1995

From left and right, capitalism is condemned for all the cultural failings of the modern world—everything from mindless TV to dirty books to slatternly art to trashy movies to debasing music. It’s an extension of the left-liberal habit of blaming a system for what are actually the failings of individuals.

Ludwig von Mises identified Victorian art critic John Ruskin as the intellectual source of this ceaseless griping. Ruskin saw civilization, embodied in the arts, as going down the tubes, and he labeled the market economy as the cause. This allowed him to be a socialist without surrendering upper-class affectations or having to prattle about workers and peasants.

Ruskin thus qualifies, said Mises, as “one of the grave-diggers of British freedom, civilization and prosperity.”

“A wretched character in his private no less than in his public life,” Ruskin eulogized the ancient producer cartels called guilds. “Government and cooperation are in all things the laws of life,” wrote Ruskin in Unto This Last (1862), “anarchy and competition the laws of death.”

Nowadays, practically everyone with a college degree is a tacit Ruskinian. Americans may understand the productive power of the market, but many are blind to its virtue as a civilizing agent, to its ability to sustain tradition, create what’s beautiful and grand, and preserve what’s right and good.

The left (still essentially Marxian) wants us to think of capitalism as modern and industrial. More correctly, capitalism is just a name for the social recognition of private property, trade, and contract enforcement. It was as much a part of ancient Athens as nineteenth-century America. In its total absence, civilization would crumble, and the arts vanish.

In modern times, the confusion usually starts this way. Someone flips on the television to find the usual rotten show and offensive commercials. He concludes that’s the market at work: base, vulgar, and insulting to our intelligence.

Once on this track, the anticapitalist mentality runs wild. The decadence of the cash nexus appears everywhere. Strip malls and yellow M’s in the sky. Boxing, moshing, tabloids, rap, and low pay for intellectuals. It’s all horrible, sniffs this person, and it’s all capitalism’s fault.

If this theory were correct, the prophets, saints, and ancient philosophers were wasting their breath. They called on people to abandon sin and adopt virtue, when they could have taken the fast track to social salvation by condemning free exchange and private property.

What the great moralists knew, and we’ve forgotten, is that people and cultures are products of human choice. Good lives can flourish in any social setting, whether the prison camp, the Wild West, or even Washington, DC.

Sin and stupidity will, of course, always be with us. From an economic perspective, our goal should be to make sure sinners pay for their sins, and that minimal resources are used to cater to them. In this process, capitalism is our ally. In addition to making prosperity possible, the whole point of economics and markets is to make sure the minimum amount of resources is used to satisfy any particular demand of any particular group.

The free economy is efficient because it deals with tastes and preferences as a given, it organizes resources in an economically practical way, and it arranges for the consumer to get what he wants at the least possible cost to everyone else.

The junk on television may indeed speak volumes about our culture. People should care about more important things. Thanks to capitalism, however, society isn’t wasting excess resources on it. Trash is delivered in the least costly manner, leaving more resources for the pursuit of what really matters.

Entrepreneurs have learned to provide services to even the smallest niche. When I watch television—and I don’t very often—the most intelligent network is EWTN. It features 50-part lectures by learned academics on subjects like Scholasticism.

This is a profitable enterprise that would be considered wasteful in a socialist country—not to mention politically incorrect. In a less prosperous society, it couldn’t survive. Yet I can’t remember anyone crediting capitalism for making St. Thomas Aquinas accessible to the masses.

It used to be said that government had to fund the arts for them to be of good quality. That argument no longer flies. Take a look at the malevolent and stupid creations of the National Endowment for Arts. The government’s “sculptures,” “architecture,” and “music” have littered the country with rubbish.

Economists say that the market “internalizes externalities.” This means, in part, that people who are offended by some goods and services can structure their lives to avoid exposure. That’s mostly true, especially in the case of sleazy television and movies, pornography, and weird services like telephone sex. Thanks to capitalism—which restricts such services to the people who purchase them—the rest of us don’t have to be affected.

A shop selling Satanic trinkets recently opened up in Auburn, Alabama. “Anything for a buck,” people sneered, until the store went belly-up for lack of business. It’s true that some people will do anything for a buck, but in a market economy, they have to be subservient to the consuming public.

The market delivers plenty of similar good news, though most of it goes unremarked. Let’s consider the case of big cities, which the productive public has been clawing its way out of for decades.

The government has done everything in its power to make cities uninhabitable by regular people. Government welfare has fostered a whole class of citizens that is at once indolent and criminal. Public housing and rental subsidies have destroyed settings that were once middle-class. Many cities today are only “cultural” centers if you like freaks and muggers.

Yet, thanks to capitalism, there is hope. Private individuals and developers take buildings that appear beyond repair and revive them. House by house, block by block, whole sections of cities have been gentrified. It’s not charity work. Without a system of profit and loss, it wouldn’t happen.

Yet you can’t satisfy those with an anticapitalist mentality. They invariably complain that gentrification raises property values and “squeezes” out the poor, while forgetting to notice how much better off everyone is when degraded resources are made more valuable.

Beach housing has long been a magnet for cultural complaints against capitalism. High-rise buildings were routinely called evil for destroying the view from a mile away. Yet it is this type of structure that makes beach living possible for the masses in the first place.

Some architects, in revulsion against beach high rises, have worked with investors to buy miles of property on the beach. Then they create communities with quaint houses and shops. The result is magnificent, and entirely private, if affordable only for a few.

These architects think they’re repudiating the tackiness of capitalism. They fail to realize that their private, planned communities are as much a part of capitalism as the high rises. Far from making a left-wing ideological point, they are catering to different tastes, marketing a product, and vastly increasing the value of property as a result. High rises and private communities both represent capitalism at work.

What about the materialism of capitalism? This too is a misnomer. Strictly speaking, capitalism is not about material goods; it’s about exchangeable goods. Leisure, love, beauty, and art are all exchangeable, and as much a part of economic life as Big Macs and Must-See-TV.

It’s said that markets bring about short-term thinking. Quite the contrary. Markets often focus on the extreme long-term, in ways the government never can. Consider the wine industry. It can take decades before a vineyard produces a really great bottle of wine. Even common table wines require that entrepreneurs plan many years in advance. The more forward-looking the capitalist, the more he can be rewarded for setting aside temporary pleasures.

Every good and service has a timetable, and the entrepreneur must plan in the most cost-effective manner. It’s bureaucratic man—not the mythical economic man—who is prone to consumption and immediate gratification. And the more the state intervenes in an economy, the more it penalizes long-term thinking and rewards short-term. Inflation is the most obvious example.

But hasn’t the capitalist mentality forced everyone in the family to work 60 hours per week, just to keep up with material desires? In fact, it’s the government that has brought it about. A conspiracy against sound money and private property is what drove wives and mothers into the workforce in the 1970s and 1980s. A return to unfettered capitalism would allow those who desired it to return home, so that we could restore family and community life, both of which thrive under laissez-faire.

As Schumpeter noted, every socialist is an enemy of the bourgeois values of home, family, community, property, honesty, diligence, and hard work. The more socialist our economy becomes, the more vice displaces virtue in public and private life.

As for the culturally uplifting aspects of capitalism, the profit and loss system makes possible—to take just a few examples—our economy’s amazing bounty of recorded classical music, the greatest cabernets in the world, an abundance of culinary treats even kings couldn’t imagine two centuries ago, and some good movies. If that doesn’t convince, consider that it’s under capitalism that the Bible became the all-time best-selling book.

35.
WHO’S THE AMERICAN TALIBAN?
January 2002

The political buzz for weeks has centered on whether the Democrats are going to employ the “Taliban Strategy,” claiming that the Republican Party’s right flank is the “Taliban Wing.”

How does the left get away with describing right-wing thought as Talibanish, especially when compared to the left-wing agenda of speech codes, economic regulation, and authoritarian intervention in every aspect of American private life?

Recall that the Taliban consisted of a pack of young people just out of specialized Islamic school where their heads were filled with political ideology stemming from a maniacal rendering of a handful of books they considered holy writ. Once in power, they attempted to impose this rendering on the entire population in the hopes of creating a kingdom of God on earth.

That is also a short description of the career of countless numbers of left-wing reformers in America, where colleges and universities filled their heads with otherworldly socio-political theory that they then attempted to impose on a resisting population.

Eggheaded utopianism is only one similarity between the Taliban and the American left. Who favors:

• punishing and even criminalizing speech and thought that contradicts egalitarian ideology on issues of race, sex, disability, and sexuality;
• enacting national restrictions on eating fast food or driving fast cars;
• police enforcement of rules against smoking, drinking, gambling, or otherwise indulging in traditional but socially harmless “vices;”
• punishing people for failing to piously separate their own private garbage, can by can and bottle by bottle, into five types of recyclable material;
• spying on families to discover whether they are spanking their kids and/or failing to expose them to politically correct attitudes and a sufficiently diverse social circle;
• regulating the content of films and music to ensure that they do not send messages to youth that the politicians regard as culturally inappropriate;
• making end-runs around parents by having public schools indoctrinate children in all the recent political priorities of the ruling regime;
• abolishing the freedom of association and mandating adherence to detailed government rules concerning all uses of private property in hiring, firing, consumer service, and housing;
• curtailing property rights in the name of federally protected species and plants, and even claiming omniscience in seeking to alter weather patterns one hundred years in the future;
• restrictions on the right to advertise;
• outlawing mining, drilling, logging, and other forms of commerce considered insufficiently devoted to holy mother earth;
• cracking down on any form of humor that pokes fun at any politically favored group;
• imposing ceilings on the ability of lenders to charge market-determined interest rates and passing other forms of anti-usury laws (as favored by the Taliban);
• special protection for women in the law on grounds that they constitute an inherently weaker sex that would otherwise be exploited by powerful men;
• restrictions on the right to display religious symbols or otherwise reveal religious preferences that are contrary to political priorities;
• regulating the right to reproduce to prevent supposed overpopulation;
• extreme regulations on the ability of individuals and families to acquire weapons of self-defense, on grounds that all people ought to entrust their safety to public employees;
• consolidation of all political power in the center to prevent that emergence of local leaders who might enact policies contrary to the ruling ethos.

Sure, there are people on the right who may go along with such policies, though in doing so they contradict their general principles favoring freedom and limited government. On the left, however, such extreme measures of social, cultural, and economic control are endemic to the ideology itself. We can only imagine the type of controls that would weigh on our national life if the left had its entire way.

For reasons hard to fathom, however, the political left still enjoys the reputation of favoring civil rights, civil liberties, and the rights of individuals. But it has been years, even decades, since that was true in the United States. All the old talk of civil liberties and free speech turn out to have been a ploy to gain power so that the left could impose its own form of controls. Look at what they have imposed on the universities they control!

What’s more, the regimes with which the left has variously sympathized over the years—Soviet and Chinese communism—have been the most despotic antifreedom regimes in the history of the world. After all this, the left has lost any right to claim the mantle of freedom, much less to contrast itself with the tyranny of Talibanism.

The problem with the right in America isn’t that it is like the Taliban. It is that it is too often willing to abandon libertarian principles and kowtow to the intrinsic Talibanism of the left, which is just another variant of big-government control.

36.
MISES ON THE FAMILY
January 2002

The family is an anarchistic institution, G.K. Chesterton wrote. He meant that it requires no act of the state to bring it about. Its existence flows from fixed realities in the nature of man, with its form refined by the development of sexual norms and the advance of civilization.

This observation is consistent with a brilliant discussion of the family in Ludwig von Mises’s masterwork Socialism, first published in 1922. Why did Mises address family and marriage in an economics book refuting socialism? He understood—unlike many economists today—that the opponents of the free society have a broad agenda that usually begins with an attack on this most crucial bourgeois institution.

“Proposals to transform the relations between the sexes have long gone hand in hand with plans for the socialization of the means of production,” Mises observes. “Marriage is to disappear along with private property. ...Socialism promises not only welfare—wealth for all—but universal happiness in love as well.”

Mises noted that August Bebel’s Woman and Socialism, a paean to free love published in 1892, was the most widely read left-wing tract of its time. This linkage of socialism and promiscuity had a tactical purpose. If you don’t buy the never-never land of magically appearing prosperity, then you can focus on the hope for liberation from sexual responsibility and maturity.

The socialists proposed a world in which there would be no social impediments to unlimited personal pleasure, with the family and monogamy being the first impediments to go. Would this plan work? No chance, said Mises: the socialist program for free love is as impossible as its economic one. They are both contrary to the restraints inherent in the real world.

The family, like the structure of the market economy, is a product not of policy but of voluntary association, made necessary by biological and social realities. Capitalism reinforced marriage and family because it insisted on consent in all social relations.

The family and capitalism thus share a common institutional and ethical foundation. By attempting to abolish them, the socialists would replace a society based on contract with one based on violence. The result would be total societal collapse.

When the democratic socialists Sidney and Beatrice Webb traveled to the Soviet Union, a decade after Mises’s book, they reported a different reality. They found women, liberated from the yoke of family and marriage, living happy and fulfilled lives. It was as much a fantasy—actually a bloody lie—as their claim that Soviet society was becoming the most prosperous in history.

No sane intellectual embraces full-blown social economics anymore, but a watered-down version of the socialist agenda for the family is the driving force behind much of US social policy. This agenda goes hand in hand with the hobbling of the market economy in other areas.

It is no accident that the rise of free love in the United States accompanied the rise of the fully developed welfare state. The goals of liberation from work (and saving and investment) and liberation from our sexual natures stem from a similar ideological impulse: to overcome fixed realities in nature. The family has suffered as a result, just as Mises predicted it would.

While the advocates of the family and the proponents of capitalism should be united in a single political agenda of smashing the interventionist state, they typically are not. Family advocates, even conservative ones, often decry finance capitalism as an alienating force, and advocate ill-advised policies like tariffs, union monopolies, and wage floors for married people.

At the same time, free enterprisers show little interest in the genuine concerns of family advocates. And neither seems interested in the radical attack on both freedom and family life that government policies like child labor laws, public schooling, Social Security, high taxes, and socialized medicine represent. In Mises’s view, this breech is unnecessary.

It is no accident that the proposal to treat men and women as radically equal, to regulate sexual intercourse by the state, to put infants into public nursing homes at birth and to ensure that children and parents remain quite unknown to each other should have originated with Plato,

who cared nothing for freedom.

Neither is it an accident that the same proposals these days are pushed by people who have little to no regard for family or economic law.

37.
WHY PROFESSORS HATE THE MARKET
June 2000

The anticapitalism of college professors is legendary even if its genesis and basis are somewhat mysterious. If anything should be clear to those who care about evidence, it’s that the market economy is superior to all forms of economic planning. Even minimal amounts of government intervention produce sector-specific stagnation.

Compare Fed-Ex, for example, to the post office, or public schools to private schools, or the unregulated high-tech sector with the highly regulated and unionized steel industry. Many heroic professors today do understand this. But that’s not the norm. Why is it that so many professors in so many fields, particularly in elite institutions, and despite all evidence and good sense, still hate the market?

A clue comes from this year’s hiring season. It turns out that college graduates, particularly in fields touching on computers and business, are hugely in demand. Colleges are flooded with recruiters vying for the students’ attention. They are being courted as never before: wined and dined by executives, offered sign-up bonuses, paid salaries unheard of a decade ago.

But here’s the kicker: the large majority are not planning to attend graduate school. Apart from a real vocation to teach and research, why should they, especially in this extremely tight job market? Their skills are marketable in business and that’s where the money is.

In one case cited by the New York Times, Columbia University once had 70 percent of its graduating class planning to go forward with higher degrees. Now, only 20 percent are planning to do so. That’s only one out of five students, at a prestigious school where you might expect that most students would seek higher degrees.

What does this imply about the remaining 20 percent? Among them, there are probably some potentially great scholars, people whose calling it is to live and work in the world of ideas. On the other hand, college officials fear that many of them are going on, not because they are brilliant, but precisely for the opposite reason: that they can’t cut it in the marketplace. As the Times puts it, “this trend makes many college officials fear that a smaller, and possibly less capable, group will choose to become professors.”

It makes sense that grad school will be less attractive to people in boom times. But the Times also reveals that the trend is very conspicuous in the reverse as well: it turns out that grad schools are most in demand during times of recession. Bad economic times equals high enrollment. It’s no wonder that the intellectual class tends to hate the market: their very fortunes are bound up with creating more recessions, if only to fill seats in the classroom.

Ludwig von Mises once speculated, in his 1956 book The Anti-Capitalistic Mentality, that the socialism of the professors was driven in part by government funding of universities, but also by the psychological factor of envy. Intellectuals consider themselves to be society’s most valuable assets, and look around to find businessmen, entertainers, and sports stars earning vastly more than they do.

They conclude that the market is fundamentally unfair in the way it distributes resources, and resolve to do what they can to destroy it through teaching and writing. The current sorting trend is bound to increase the likelihood of professors in top schools being filled with envy toward capitalism. And the vast gulf that separates academic and business elites will grow ever wider.

Now, the university faces a problem of an additional kind: not only leftism but also a general dumbing down. If the economic boom continues, and students continue to enter the marketplace rather than grad school, elite universities will no longer be the place where the best and brightest dwell.

This process of dumbing down has actually been going on for some time, and not only because the smartest are entering the business world. Affirmative action and politically correct degrees (women’s studies, black studies, Chicano studies, etc.) have dramatically diminished the prestige of graduate schools in general. And with police-state-style thought control and severe restrictions on intellectual life in general, campuses have lost the air of freedom that is necessary for creating a vibrant intellectual life.

The people who are inclined to put up with this are not going to be the fighters and the independent thinkers. Rather, they are the types who appreciate an environment of safe leftism, enjoy conformism to rigid socialist ideologies, and fear and loathe the rough and tumble of the market economy. They are inclined to do what they are told, adopt a conventional PC curriculum that avoids all controversy, and otherwise play it safe.

On the one hand, this kind of stagnation is a benefit to colleges because it permits them to squeeze out the troublemakers. On the other hand, their product will become less and less attractive to smarter people, and the social status of professors will decline. The decline will tend to feed on itself, with inferior teachers teaching inferior students at universities that once had the best reputations.

Thank goodness, the sad situation in elite schools is not representative of all universities. I know a historian who had impeccable credentials but had a hard time finding a position that reflected his qualifications. There was no other reason than that he was the wrong color (white), wrong sex (male), and held the wrong political views (conservative and free market). He ended up at a small college hardly anyone has heard of. On the other hand, he was astonished to find a very competent faculty filled with like-minded colleagues. It was a veritable haven of white male conservatives who had been shut out of name universities!

His story is a common one. Why did he and the thousands like him decide to pursue the academic life despite all the frustrations, low pay, and degrading treatment from the elites of the profession? Because they have a calling to teach and research, and can do no other. That is the original idea of the academic life, while the original idea of the university was a place set aside where others can benefit from their wisdom. In the long run, it is the body of thought taught by these idealists that will shape our world.

If the flight from elite academia ends up leaving only drones in place, who end up teaching only those whom the market rejected, while the brilliant few find alternative means of doing the hard and essential work of advancing knowledge, it will have been all to the good.

SECTION 6: CIVIL RIGHTS

38.
HOW GOVERNMENT PROTECTS POTENTIAL WORKPLACE KILLERS
July 2003

On July 8, Doug Williams, a 48-year-old assembly-line worker at the Lockheed Martin plant in Meridian, Mississippi, walked out of a meeting with managers on how to get along with fellow employees—just the sort of meeting encouraged by federal law to assure that everyone appreciates the merit of diversity and that no one is being harassed in the workplace. Minutes later, he returned with shotgun and a rifle. He shot two people in the room and three more on the factory floor. Then, he killed himself.

Co-workers were not surprised. He had long threatened people. He had been to anger counseling. He made it known that he was mad as heck that black employees were getting promotions and he wasn’t. Only last month, he put on a KKK hood and paraded around the plant. Told to take it off, he chose instead to leave the factory and stay away for five days.

Perhaps it is too much to speculate that federally mandated affirmative action (practiced with great élan in companies like Lockheed, which specialize in federal contracts) pushed this guy over the edge. Even so, some reasonable questions present themselves:

Why would a company continue to employ a person who posed a potential threat to others?

Why wasn’t he fired rather than put through seminars on working and playing well with others?

In short, what the heck were his supervisors thinking in continuing to keep him around?

There’s a short answer: The Americans with Disabilities Act, a law passed 13 years ago by the first Bush administration that protects disabled people from job discrimination. It may have sounded like a good idea. The idea of turning someone down for a job he or she can otherwise do solely on grounds that he or she is in a wheelchair offends our sense of fairness.

People often feign surprise at how the law has come to be a lawsuit machine while doing virtually nothing to help the disabled. As the economists at the Federal Reserve Bank of San Francisco concluded,

at the end of the 1990s, despite seven straight years of substantial economic growth, a smaller fraction of working-age individuals with disabilities worked and a larger fraction relied on federal disability income transfers than ever before.

But anyone who looked at the law closely knew what was going on. The definition of disability was so vague that it clearly represented yet another massive encroachment of the government and its courts into the workplace. It made the disabled more expensive and more risky to hire. It made them more difficult to fire, and hence less likely to be hired. If anything, workplace discrimination against them has increased rather than decreased. Employers would rather find sneaky ways to keep them at bay than to risk unending lawsuits.

And then there are the absurdities. You see, the ADA covers people with mental impairments. This includes, according to the EEOC’s online guide, “any mental or psychological disorder, such as... emotional or mental illness,” examples of which include major depression, anxiety disorders, obsessive compulsive disorder, schizophrenia, and “personality disorders.”

The ADA covers such disabilities if they “limit one or more major life activities” such as “learning, thinking, concentrating, interacting with others.” The disability is covered if it

significantly restricts the condition, manner, or duration which an individual can perform a life activity, as compared to the average person in the general population.

The more severe the disability, the more bound the employer is to accommodate it. Take, for example, the worker who is consistently hostile to fellow employees and bosses. The more hostile he is, the more the worker enjoys a right not to be fired: “consistently high levels of hostility, social withdrawal, or failure to communicate when necessary,” is a sign of disability. If they are “long-term or potentially long-term, as opposed to temporary,” it is enough “to justify a finding of ADA disability.”

Can the employer ask about the existence of an emotional or psychiatric disability before hiring the person? The EEOC is unequivocal: “No.”

What if the employer begins to suspect that the person poses a direct threat? In this case, the employer can inquire, but such inquiries

must not exceed the scope of the specific medical condition and its effect on the employee’s ability, with or without reasonable accommodation, to perform essential job functions or to work without posing a direct threat.

So let’s say an employer suspects he has a nutcase working at the factory. Once all the bureaucratic hurdles have been cleared, can the employer fire the guy? Not yet. The employer must first make “reasonable accommodation.”

For example, room dividers, partitions, or other soundproofing or visual barriers between workspaces may accommodate individuals who have disability-related limitations in concentration.

What is reasonable accommodation? The courts are still working on that. They’ll get back to you in a few years. Or maybe never.

Does this mean that violent people are protected in civil-rights law? It would seem so. But the EEOC says otherwise: “nothing in the ADA prevents an employer from maintaining a workplace free of violence or threats of violence.” An employer can discipline an employee, to be sure, so long as discipline is “job-related for the position in question and consistent with business necessity.”

What if a person poses a “direct threat” to others? Can he be fired then, simply as a safety precaution? The EEOC purports to explain that a person who is a direct threat can be fired.

See if you can follow this:

Under the ADA, an employer may lawfully exclude an individual from employment for safety reasons only if the employer can show that employment of the individual would pose a “direct threat.” Employers must apply the “direct threat” standard uniformly and may not use safety concerns to justify exclusion of persons with disabilities when persons without disabilities would not be excluded in similar circumstances.

The EEOC’s ADA regulations explain that “direct threat” means “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” A “significant” risk is a high, and not just a slightly increased, risk. The determination that an individual poses a “direct threat” must be based on an individualized assessment of the individual’s present ability to safely perform the functions of the job, considering a reasonable medical judgment relying on the most current medical knowledge and/or the best available objective evidence. With respect to the employment of individuals with psychiatric disabilities, the employer must identify the specific behavior that would pose a direct threat. An individual does not pose a “direct threat” simply by virtue of having a history of psychiatric disability or being treated for a psychiatric disability.

Thus do we see that there is a way that a violent person can be tossed out on his ear, provided all similarly behaving nondisabled people have been and would be treated the same way, the threat is significant and high, that the threat is truly job related, and that it cannot be reasonably accommodated using the newest and best available medical knowledge.

In short, if you are preparing to fire someone on grounds that he or she is dangerous, you had better have darn good legal counsel! Chances are you will be sued. Chances are that you will have to settle either with a large cash payment or go to court. You might win in court or you might not. In either case, you will have expended massive resources just to exercise what the free enterprise system should guarantee in the first place: the right to hire and fire.

So, yes, in the end, it might be true that Lockheed could have fired Doug Williams. But who is to say for sure? In retrospect, it is clear that he was a direct threat. By the standard of good sense, it is clear he was a threat before. But that is not enough. The whole bias of the law works against any definitive judgment to prevent violence before it happens. The culture of the workplace, especially in large corporations, is to overlook oddities, even potentially violent oddities, accommodate them in whatever way, or otherwise keep good sense on the shelf in the name of human rights.

We have no way of knowing whether Williams’s supervisors wanted to fire the guy but feared doing so on grounds of the ADA. But it would make sense if Lockheed’s managers were far more attentive to the particularities of the law than the safety of the workplace. That is precisely what laws such as the ADA have done. In this case, a federal law ostensibly devoted to making sure employers respect the dignity of life has cost five lives. It has surely cost American employers the right to keep their payrolls free of nutcases who would snap and mow down their fellow workers.

There is no way that the federal government can spell out the particularities of every employment situation and regulate them with an eye toward economic and managerial good sense. If the EEOC did fix up its regs to make it easier to fire the likes of Williams, other cases will come along that similarly cry out for reform. There is really only one alternative to the ADA: let the employers manage their workplace, and let employees choose among them.

39.
THE TRIAL OF LOTT
December 2002

Following the media campaign against Senator Trent Lott, many people were astonished by the Senator’s willingness to jettison all political principle for the sake of saving his status as Majority Leader. Why would a conservative Republican suddenly find himself embracing the full panoply of the left-wing racial agenda and flog himself so mercilessly?

Consider what a Chinese political prisoner under Maoist Communism had to say about the role of self-criticism, denunciation, and confession:

It doesn’t take a prisoner long to lose his self-confidence. Over the years Mao’s police have perfected their interrogation method. ...Their aim is not so much to make you invent nonexistent crimes, but to make you accept your ordinary life, as you led it as rotten and sinful and worthy of punishment, since it did not accord with the police’s conception of how life should be led. The basis of their success is despair, the prisoner’s perception that he is utterly and hopelessly and forever at the mercy of his jailers. He has no defense, since his arrest is absolute and unquestionable proof of his guilt. (The Black Book of Communism, p. 510)

Such means are the tried and true method of assuring the supremacy of an ideology. Lott was accused of segregationism and racism for saying something kind about the presidential bid of Senator Strom Thurmond in 1948. Most likely, his comments reflected an affection for the attempt by the South to resist federal encroachments against the liberties and rights of the states after the Second World War. But you would never know that by listening to either Lott or his critics. As under Mao, the accused was already guilty as charged so he had only one right: to repent of his errors. If he appeared insufficiently repentant, the attacks were renewed until the accused was completely destroyed.

Even at the outset, it was clear that no effort would be made to understand the deeper issues involved about the history or political issues. There would be no tolerance for anyone who might say that Thurmond’s bid reflected a just political aspiration, that his States’ Rights Party might have had a point to make that extended beyond race hatred. The thousand-year struggle for liberty made possible by decentralized political orders was swept away or completely recast in light of racial politics—as if the United States had not been founded as anything but a unified state, and as if this conclusion were never in question.

No, there was one goal at the outset of Lott’s trial: extract a confession, an apology, and bring about what the Chinese communists called “rectification”: a visible sign that one accepts the reality of one’s ideological apostasy, and declares publicly that the regime is right and you are wrong. Anything short of that is regarded as a personal indictment and further evidence that you, as the enemy, must be vanquished.

Even so, perhaps it is worth examining the deeper historical and political issues. It is not true that supporting the Dixiecrats in 1948 necessarily reflected a racial bias against blacks. The real issue was not race; it was the place of freedom and federalism—concepts that are apparently not understood by the national press or by any of Lott’s critics right and left—in the post-war period. Both parties were split on the direction they would take after long years of depression and war. The industrial planning of the New Deal was shocking enough, but the wartime planning of the Second World War was as bad as the fascist governments the United States opposed on the battlefront.

The crucial political question concerned the direction the country would take in the future—pushing headlong into the welfare-warfare state or returning to founding principles—just as the country faced this same question in 1989 at the end of the Cold War. In 1948, the key domestic question concerned the uses of federal power for purposes of social planning and redistribution. On the international front, the Marshall Plan had already been passed, shocking many in both parties who had a principled opposition to foreign aid and international management on this scale. And Truman and his advisers were already embroiling the United States in a Cold War against Russia, a government that had been a close US ally only a few years earlier.

Many Democrats had hoped that FDR would be an aberration—a man who betrayed his 1932 election promises (for a balanced budget, for limited government, for lower taxes, for peace) for personal power. A strong faction hoped for a return to the older style Democratic Party that favored free trade, decentralization, peace, and other Jeffersonian policies.

Harry Truman, meanwhile, was untested by any presidential election until 1948. It was unclear until the convention that year which part of the party would be dominant. What the limited-government faction had underestimated was the extent to which the party had come to depend on vote-buying through welfare schemes for its very lifeblood, and many in the libertarian-oriented faction of the Democratic Party saw the foray into civil-rights politics as nothing more than an extension of the same scheme.

A similar split had emerged in the Republican Party, whose Congressional wing had largely resisted the New Deal and the drive to war. One faction hoped to deep-six this “negative” attitude toward consolidation—pushing for the Cold War and for retaining the New Deal—while another faction favored free enterprise, spending cuts, and small government at home and abroad. The issue came to a head in 1952 with the great battle between Dwight Eisenhower and Robert Taft, a battle that was won (through the basest convention trickery) by the nationalist-consolidationist faction.

Triangulation was taking place all around. Truman had hoped to outflank the nationalist and anticommunist faction of the GOP with his Cold War rhetoric, while the militarists within the GOP hoped that an embrace of the welfare-warfare state would win enough votes to break the stranglehold that the Democrats held over the White House. Neither of the dominant branches of either party saw much electoral advantage in calling for radical cuts in government or returning to a foreign policy of peace and free trade. The vote-buying and industrial subsidies of the previous twenty years had reduced the Jeffersonians in both parties to an extent that few but the most pessimistic observers had anticipated.

J. Strom Thurmond’s faction of the Democratic Party bolted after it became clear who would dominate the party. It founded an optional party that it hoped could compete, which of course it could not (as most every third party discovers within a system constructed by the dominant two). Today it is said that Thurmond’s party pandered to the racist elements in the South, but it is more correct to say that the dominant factions of the major parties were pandering to the always-present desire on the part of pressure groups for special favors from the federal government.

Thurmond’s party announced its first principle in the platform of the States Rights Party:

We believe that the protection of the American people against the onward march of totalitarian government requires a faithful observance of Article X of the American Bill of Rights which provides that: “the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

A long train of abuses and usurpations of power by unfaithful leaders who are alien to the Democratic parties of the states here represented has become intolerable to those who believe in the preservation of constitutional government and individual liberty in America.

The Executive Department of the government is promoting the gradual but certain growth of a totalitarian state by domination and control of a political minded Supreme Court. (Citing, e.g., “national domination and control of submerged oil-bearing lands in California.”)

By asserting paramount Federal rights in these instances a totalitarian concert has been promulgated which threatens the integrity of the states and the basic rights of their citizens.

We believe that the Constitution of the United States is the greatest charter of human liberty ever conceived by the mind of man. We oppose all efforts to invade or destroy the rights vouchsafed by it to every citizen of this republic. We stand for social and economic justice, which we believe can be vouchsafed to all citizens only by a strict adherence to our Constitution and the avoidance of any invasion or destruction of the constitutional rights of the states and individuals. We oppose the totalitarian, centralized, bureaucratic government and the police state called for by the platforms of the Democratic and Republican conventions.

We stand for the checks and balances provided by the three departments of our Government. We oppose the usurpation of the legislative function by the executive and judicial departments. We unreservedly condemn the effort to establish nation-wide a police state in this republic that would destroy the last vestige of liberty enjoyed by a citizen.

We favor home rule, local self-government, and a minimum interference with individual rights.

The above points, which are more prominent in the platform than anything concerning race, are eminently defensible by any libertarian or conservative. But in the current climate, a taboo exists against expressing any regret for the astonishing centralization of power in American politics since World War II. Question that, and you will have few friends and legions of opportunistic enemies. We are supposed to accept this reality, which stands on its head every hope of the Founding Fathers.

It is nonetheless true that federalism of the sort mentioned in this platform is the essential genius of the American republican system of government—its great contribution to the modern political experience, as Lord Acton noted. In American law, federalism is guaranteed by the enumerated powers in the Constitution, which restrict the federal government to only a few functions while leaving the rest to the states and the people, as the Tenth Amendment says.

In the American lexicon, federalism is the same as the Jeffersonian phrase “states’ rights,” which means that the states as legal entities have rights over the federal government. “The true theory of our Constitution,” wrote Jefferson, “is surely the wisest and best—that the states are independent as to everything within themselves, and united as to everything respecting foreign nations.”

As James Madison said, summing up the American structure of government:

The powers delegated... to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite.

FDR himself affirmed his dedication to this idea in 1930:

As a matter of fact and law, the governing rights of the states are all of those which have not been surrendered to the national government by the Constitution or its amendments.

In this way, America was different from Prussia or any other nation-state of the old world that had a unitary state apparatus that exercised sole sovereignty. In American federalism, we saw the embodiment of divided sovereignty, political tolerance, and decentralization—the expression of the liberal conviction that society can manage itself and needs no central plan. As for government, its power should be close to the people and shared only by consent. As Montesquieu wrote:

this form of government is a convention by which several small states agree to become members of a large one, which they intend to form. ...As this government is composed of small republics, it enjoys the internal happiness of each.

No, the system of federalism and states’ rights does not lead to perfection in every way. But it provides a check on corruption and despotism from the center, and the political tolerance of federalism permits flexibility and competition between legal regimes, which provides a check on petty despotisms. It is this very flexibility that would have best handled the issue of race relations in the period after World War II. It was an enormous error to scrap foundational American principles for the political expediency of the moment, and we’ve paid a big price in freedom for having done so.

As for segregation, the platform of the States Rights Party did endorse it, but it also endorsed “the constitutional right to choose one’s associates” (free association, once a pillar of liberal theory) as well as the right to “accept private employment without governmental interference, and to earn one’s living in any lawful way.” When was the last time a party platform so unreservedly embraced liberty as a principle of the labor market? These principles have been overthrown by the regime, and now what was once taken for granted as part of the fabric of liberty is neither discussed nor understood.

In 1948, most Southerners, however, understood that the federal government wanted to do more than end legally sponsored segregation at the state level, which was on its way out in any case. They understood that the federal government wanted to take charge of their schools and communities, not only ending legal segregation but also managing their lives by prohibiting voluntary choice in the exercise of private property rights. They worried about the effects of a new social planning attempt, complete with mandatory and subsidized demographic upheavals. This is what they predicted and this is what occurred.

So intense was the campaign for centralization that in 1950, journalist John T. Flynn wrote of the “War on the South,” which he described as an attempt to use racial conflict to shore up support for the New Deal planning state. And let’s not forget, too, that the South was put through a cruel “Reconstruction” after the Civil War; 83 years earlier, the right of self-government was taken from the South and military governments were installed. All people everywhere resent imperial government intrusion, but Southerners could speak with experience on the question. That memory was still alive in 1948, and the threat that another round was coming was everywhere perceived.

Instead of allowing segregation to fade away, the federal government usurped state functions and created a very ugly backlash in the South, pitting blacks against whites and vice versa. This has resulted in unnecessary racial conflict and the consolidation of federal power. This has not been helpful to American race relations, and it has taken away essential freedoms and property rights from all Americans.

Today we see every manner of socialistic meddling imposed on the states, not just in the South but in all states and against all businesses and communities and schools. The assumption is that DC managers know best how to bring about social cooperation, and that people cannot be trusted in their daily lives to treat each other humanely. Instead, we are told, they need inhumane bureaucracies to tell communities how to run their schools, to tell businesspeople whom to hire and whom not to fire, to tell cities how much public housing to build and how much to distribute by way of welfare dollars.

Would the country have been better off had the Dixiecrats won in 1948? Of course this is conjectural history, and Lott was wrong to imply that we can know the answer with certainty. If Thurmond’s party behaved the way the Democrats and Republicans typically behave—betraying election promises in favor of building the welfare-warfare state—the party might not have made any difference at all.

However, we can say that the country would have been far better off by preserving freedom and federalism rather than empowering a managerial, therapeutic state that today intrudes itself into every aspect of public and private life, often in the name of quelling racial conflict but in fact only creating more.

In every state, there is racial conflict, and we should hope and pray and work for an end to it and the laws that inflame it. But it does not compare to the suspicion and anger that dominate race relations in Washington, DC, a place where the racial divide is obvious to anyone with eyes to see. In Washington, the home of the people who claim they know what is best for everyone in the country, crime and poverty are higher, and the races can’t manage the everyday civilities that Southerners take for granted.

Lott might have apologized for any misunderstanding his remarks created, owing to the lack of historical understanding of our nation’s press corps and punditry class. Moreover, there is no evidence that Lott had any clue about these underlying issues. Like the jailed dissident in Mao’s China, he embraced his guilt and pleaded for mercy. But no one should have to apologize for being a defender of freedom and federalism, and an opponent of the Leviathan state, which uses any excuse, including race, to trample on the essential rights of all.

40.
THE ECONOMICS OF MARTIN LUTHER KING, JR.
February 1991

We’re supposed to venerate Martin Luther King, Jr., but that’s not easy for a believer in economic liberty. Time and again, King called on us to “question the capitalistic economy” and “restructure America.”

“You see, my friends,” said King, “you begin to ask the question, ‘Who owns the oil?’ You begin to ask the question, ‘Who owns the iron ore?’ You begin to ask the question, ‘Why is it that people have to pay water bills in a world that is two-thirds water?’”

Privately owned oil and iron ore mean rational use, whereas government-owned resources, as in the USSR, mean chaos and poverty.

Although America’s water systems—municipalized or regulated—are not exactly free enterprise in action, we have to pay for water for the same reason we have to pay for anything valuable. Fresh, clean water is scarce, and the price system ensures that it will not be squandered, while encouraging further production.

When government intervenes in the price system, as it does to sell water to agriculture at below-market rates, the results are waste, and shortages elsewhere.

When the Soviets invaded Afghanistan, they didn’t collectivize agriculture, but they did collectivize agricultural water distribution. Within months, there was no water at all, as centuries-old private distribution channels silted up.

Only a capitalistic water system—with private property rights in water and freely adjusting prices—can ensure that there is enough water for all who want it, instead of allocation through nonprice political battles with the most powerful pressure groups winning out.

King had no use for the price system, calling it “violence” responsible for blacks paying “higher consumer prices” than whites. “Do you know,” he asked, “that a can of beans almost always costs a few cents more in grocery chain stores located in the Negro ghetto than in a store of that same chain located in the upper-middle-class suburbs?”

This led, said King, to black “disillusionment and bitterness.” But why, unless—as a recent New York Times poll tells us is more and more the case—blacks believe their plight is the result of a white conspiracy?

In a free market, prices are set by consumers when they buy, or don’t buy, a particular product. If storeowners set prices too high, even by a few cents, competitors will make a profit by undercutting them.

The ghetto has far too little of the “cutthroat competition” King so often denounced. Non-black businessmen can be greeted with hostility; rampant street crime is a barrier to entry; widespread welfare blunts the desire to work while encouraging a short-term orientation; and government holds sway to a degree found elsewhere in this country only on Indian reservations, which are also poverty stricken.

King, however, believed in government sway, calling capitalism a system “permitting necessities to be taken from the many to give luxuries to the few.” The “profit motive” has “encouraged smallhearted men to become cold and conscienceless.”

What was his alternative? The loss motive?

The profit motive means that resources are not systematically wasted, as under the political motive, and that innovation, entrepreneurship, and hard work are rewarded. Surely this, rather than the reverse as under socialism, is the moral system.

King claimed that the “good and just society is neither the thesis of capitalism nor the antithesis of communism, but a socially conscious democracy which reconciles the truths of individualism and collectivism.”

In fact, the good society, upon whose back big government sits like a succubus, is composed of cooperative endeavors from the corporation to the church, from the family to the university. Bureaucratic intrusion weakens and destroys these endeavors, whether it’s justified in the name of “socially conscious democracy” or any other high-sounding but low-acting construct.

King favored a “higher synthesis”—part individualism, part collectivism—as in Sweden. But one of the least-known aspects of the antisocialist revolution has been its effect on Sweden, which has been getting poorer and poorer thanks to decades of redistributionism. Today, the people are demanding lower taxes and less government, much to the consternation of the Swedish establishment. As Ludwig von Mises demonstrated, the mixed economy is inherently unstable. It must tend toward either statism or the free market; there is no economically rational way of reconciling the two.

“When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered,” said King.

Aside from the fact that “The Giant Triplets” sounds like a companion film to “Attack of the Killer Tomatoes,” there are enough false dichotomies in that one sentence for a Congressman. Suffice it to say that it is people who build and use machines and computers, which have much improved people’s lives; that property rights are the most important people’s right, with their absence leading to economic fiasco; and that there’s nothing wrong with people desiring material improvements in their lives.

Naturally King disliked that engine of capitalism, the entrepreneur, whom he called responsible for “thousands of working people displaced from their jobs with reduced incomes as a result of automation while the profits of the employers remain intact.” Automation, he said, is “skimming off unskilled labor from the industrial force. The displaced are flowing into proliferating service occupations.”

The “individual capitalists of the West” also invest “huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries.”

But King was advancing a left-wing myth. Foreign investment in the third world has put bread on the tables of millions impoverished by socialist governments. That is real “social betterment.” And automation, i.e., improved technology, raises standards of living.

Electric clothes washers save homemakers much hard labor, and “cost” the jobs of laundry workers, but so what? Homemakers, and society as a whole, are much better off. And so are the laundry workers, who can get better jobs in a more prosperous society.

If automation were evil, we could ban all motorized transportation between New York and Los Angeles, and “create jobs” for drivers of horse-drawn wagons. Does anyone think we’d be better off?

Nor are service jobs less desirable than industrial, although socialists have always been partial to large industrial entities which seem easier to centrally plan, and to unionize.

“The Negroes pressed into these services need union protection, and the union movement needs their membership to maintain its relative strength in the whole society,” said King. Yet unions are organized rip-offs, using their privileges to enrich themselves at the expense of nonunion workers and businessmen. By helping bring about a centralized labor market (through minimum wages and closed shops), unions have deliberately injured unskilled workers, many of them black, by shutting them out of the market.

But King had far more in mind than unionism:

If a city has a 30 percent Negro population, then it is logical to assume that Negroes should have at least 30 percent of the jobs in any particular company, and jobs in all categories rather than only in menial areas.

To bring this about, he wanted “preferential treatment”—a racial test for hiring and firing, promotion and transfer, and all other personnel decisions. How this squared with his dream of a society based on “the content of a person’s character” rather than the “color of their skin,” he didn’t say.

Whether people were working or not, said King, there should be a government-guaranteed “minimum—and livable—income for every American family” as part of a “radical reconstruction of society itself.” Nothing else would cure America’s “interrelated flaws of racism, poverty, militarism, and materialism.”

What good can come of taking the earnings of some families by force, skimming them in DC, and bestowing the remainder on other families? As we have seen all too clearly, welfare makes the economy less efficient, the recipients less independent, the taxed less productive, and the government bigger.

King also advocated massive federal compensation for blacks because “for two centuries the Negro was enslaved,” although “all of America’s wealth today could not adequately compensate its Negroes for his centuries of exploitation and humiliation.”

He didn’t mention that the people who would be getting the money were not the victims and the people paying it were not the perpetrators.

Race-based public policies create social conflict, and King knew it. But his answer was more government: a “federal program of public works, retraining, and jobs for all.”

The received wisdom on the right these days is that King would have rejected the excesses of the modern civil rights movement. But that clearly isn’t the case. Indeed, David Garrow in his Pulitzer Prize-winning biography says that in private gatherings King endorsed “democratic socialism,” while making “it clear to close friends that economically speaking he considered himself what he termed a Marxist.”