Reason as the Leading Motive

Posts Tagged ‘Free Market’

Government Stimulus During a Recession

Posted by Jerry on May 22, 2008


While you’re waiting for the free market to correct itself in the event of a depression or a recession, there are real people facing dire situations–going hungry, losing their jobs, struggling to make ends meet, and so on. In such situations of widespread economic crises, shouldn’t we allow at least for a temporary stimulation by the government in the form of investments, bail-outs, jobs, infrastructure projects, etc.? It would only be for the short-term, till the recession or depression is over, and then we can revert to free market normalcy. The problem with the free market is, while it is self-correcting, we can never guess how long or how quickly it might take to rectify a situation; in the meantime, we cannot leave people helpless, jobless, and starving. Can we?

My response:

From all appearances, the above question seems to be focusing on a pragmatic situation–specifically, a concrete economic scenario of nationwide economic depression or recession. The question seems to be about politics and economics and about the role of government. The question implies that it is in agreement with free market capitalism, but wants to allow for some government concessions in times of emergencies.

However, if you carefully consider this question, you will realize that it is actually a question about ethics–philosophy. It is asking about the proper ethical response that society must provide in times of economic crises. This is not primarily a discussion on the concretes of an economic crises but a discussion on the merits of rational egoism.

The question has already conceded the grounds to altruism; it mounts a challenge to rational egoism from the platform of altruism and the terrace of politics. The only proper response to this kind of a question is to offer an ethical alternative to choose from: does one man’s dire suffering morally justify the enslavement or sacrifice of another man? The answer to this will inexorably lead to an answer to the above question.

No amount of need in this world justifies human sacrifice. The only consistently logical foundation for laissez-faire capitalism is the ethics of rational self-interest; no other ethical system can logically justify capitalism without inherent contradictions. Thus, if capitalism is your goal in politics and economics, then rational self-interest in your means to get there. You cannot shortcircuit the ethical means and replace it with altruism and still hope to achieve the goal of capitalism. It just won’t work.

Now, specifically, with regard to those suffering the most during an economic crises, if you discard the hidden assumption that only the government can provide the best aid in such times of need–if you discard the altruistic premise that one man’s need becomes a moral obligation on another man–then you will be open to innovatively imagining how the free market can mobilize enterprising individuals and corporations to voluntarily, generously, perhaps even profitably, help those in dire need until normal conditions are restored.

My friend Dexter once pointed out to me how the Catholic Church–the richest Church in the history of human civilization and the one with the largest membership–is fully funded on a voluntary basis. Every church-goer is a voluntary contributor to the functioning of the mega-monumental church that the Universal Catholic Church is. Think about it: the Catholic Church owns its own country, even! And it manages to control, mobilize, and deploy funds to practically any corner of the globe; and all of that money comes from regular, faithful, individuals who enjoy the value of their religion and their membership in the Church.

Posted in Economics, India, My Theories and Ideas, Objectivism, Philosophy, Political Issues, The Best of Leitmotif, Uncategorized | Tagged: , , , , , , | 4 Comments »

Private Ownership of Roads

Posted by Jerry on February 11, 2008

I decided to make this comment into a post after all; that way, relevant comments can proceed under this post.

When we think of privatizing roads, the scenario is so far removed from anything we have witnessed in real life that we respond–almost instinctively–with concern… of uncertainty, anarchy, and unpredictability. Our ability to imagine the operations of a free society is not inhibited our by level of intelligence but by the strictures of thought that we–and the current philosophical system–have placed upon our minds; the concept of the government is so entrenched in our socio-political thinking that life without government produces a mental blank-out.

This is a good test of whether you hold your philosophy as a body of abstract, rationalistic principles or as a properly integrated system that you use in daily living, and which you can readily apply to concrete situations.

The effort required is much like shrugging off theism and stepping into a world without a god, which appears at first to be daunting, anarchic, amoral, uncertain, and even barbaric.

1) We just have to think about analogous situations that most closely resemble the operations of a free market; I submit that in a free society most people will not have to pay for practically any use of the roads. As analogous situations, think of your use of the Internet and the radio. The vast resources of the Internet are available to most of us for free. The Internet operates in such a way that there’s not only an abundance of voluntary content generators but also massive revenue generators: the revenue is generated by amazingly innovative methods that would be simply impossible were the Internet to be a government-regulated operation. The people who invest and wish to make money from the Internet are making their profits (provided they have been sensible in how they went about it), and those who simply wish to derive the benefits of using the Internet are doing it for FREE (like myself. :)) And note that the Internet is a globally free phenomena, at least in all the places where governments have not been foolish enough to interfere.

2) The radio is another similar example. Most of us do not pay for radio, and yet we derive the pleasurable and important benefits of it. Radio frequencies were only recently privatized in India; if our broadcast TV frequencies were also privatized likewise, then–as in America–we would even be enjoying high-quality broadcast programming for free on TV (however, since this is not the case, we have rampant cable thievery instead).

3) Who pays for all this? To a communist or socialist, it seems incomprehensible that such awesome benefits on the radio, television, and the Internet is being offered for free; to that kind of mindset, the limitation is not necessarily a low level of intelligence, but the accepted premise that man should not (indeed, cannot) be free to devise his own ways and means of living, trading, producing, and pursuing happiness.

4) In a society where roads are privatized–like radio air frequencies–I envision most roads to be of superior quality and mostly free for people to use: corporations and businesses that are situated alongside these roads will make it a point to have their access roads in good condition with ample parking space for customers to visit their stores and businesses.

5) Utility (water, electricity, telephone, etc.) and cable corporations will contract with road owners to gain access to establishments situated on their roads; they will pay the road owners a certain amount of money or percent of profits for laying their wires and pipes on top of or under these roads. The road owners, in turn, will ensure that these wires, pipes, cables, etc. are laid in place quickly, efficiently, and esthetically in order to maintain the high value of their property. The utility companies will pay the road owner a fee for access to residents, businesses, and the use of the owner’s property. This can be one of the many revenue models for private roads. (Objectivist blogger Qwertz made this point persuasively and at length in his post; I am indebted to him for this idea.)

6) Roads with all installed utilities and esthetic considerations will have high-property values, which would translate to high property rates for residents and businesses in that neighborhood and the surrounding area; property owners will be able to command higher prices for their property–either in rentals or in a sale. Thus, road ownership will be a big and thriving business, which means, more investors will be interested in ownership of roads and highways. This will invariably lead to increased competition, competitive rates, higher benefits and services on these roads, and a greater value for consumers, business owners, advertisers, restaurants, etc. The cost to the end user of these roads will be either very minimal and competitive or simply nothing at all.

7) I imagine monthly or annual subscription passes for the use of those few roads that are not free (perhaps, major expressways); and these passes could be highly subsidized by advertising, competition, rest-stop areas, or other perks that road owners might want to sell or include on their roads

8.) One of the best benefits of privatized roads (especially for India) would be the non-existence of public protests on the streets, processions, road blockages, and vandalism: corporations, businesses, and road owners would not want their private property to be clogged, their customers to have no access to their businesses, and their brandnames and reputation associated with such hooligans. Therefore, they will ensure and pay for strict security measures to enforce safety and brand value. Perhaps, these private corporations will threaten with the withdrawal of advertising revenue or legal suits if the operators of these roads become lapse in their duties to ensure safety and prevent road protests or blockages.

9) Finally, street hawking will become illegal only if the owner does not permit it or the vendor has violated certain parameters. I do not see why hawking will be extinguished entirely. I believe that some neighborhoods might wish to project a certain kind of charm to their area and thus encourage streetside vendors who are consistent with their neighborhood theme: for example, Chinatown, Little Italy, Indian Village, Little Mexico, Greek Town, etc., could be neighborhood themes that can attract tourism, business, night revellers, and much revenue. Therefore, street vendors could add to the charm and distinctness of such areas, and it could be entirely within the operations of a free society with privately owned roads.

Posted in Culture, Economics, General Work/Life, India, Mumbai, My Theories and Ideas, Objectivism, Philosophy, Political Issues, The Best of Leitmotif, Uncategorized | Tagged: , , , , , , , , , | 12 Comments »

Financing the Government in a Free Society

Posted by Jerry on January 29, 2008

The other day, a friend and I were discussing the issue of financing the government in a free society. Needless to say, the topic is of incredible depth; and its particularly complexity is intensified further because one doesn’t have any real-life examples to look at and examine in practice. There has been no completely free society on earth with a purely laissez-faire capitalist system and a government of protection.

But a few points are absolutely clear:

A free society is not an ideal, utopian fantasy. Don’t let people who say that fool you. They are the same ones who insist that Communism is utopian and has never been consistently instituted on this earth. History is testament to the fact that there was nothing utopian about Communism: it was instituted consistently, it was practiced as advocated, and it lead inexorably to the evils, genocides, corruption, and socio-psychological wreakage that was inherent in itself as an ideology.

A free society is the only moral society possible for human beings: therefore, since it is a system derived from the nature of humans and our relationship to reality, a free society is a perfectly practical and realizable vision.

A free society will be radically different in every fundamental way from what we are used to imagining about the structure of society. For example, a free society may have a radically different geographic structure, with the absense of a continuous, uninterrupted geographic boundary–a “nation” might refer to and include private pockets of property that may even lie 1000s of miles apart, independently. The concept of citizenship will be wholly voluntary and assumed by parents for their children until the latter turn of the age of consent. Citizenship will have nothing to do with the accidental location of birth, but with the voluntary consent of assuming responsibilities–including tax and financial responsibilities–with regard to the nation of one’s citizenship, and owning of property within that chosen nation.

Also, police in a free society might function very differently from what we see today; perhaps, they might more likely resemble bodyguards or private security agencies of today. Also, I envision the role of the courts and the judicial system to be the most important in a free society, with only foreign national security policies (among other things) being the domain of the executive branch.

Finally, it stands to reason–and historical precedent has shown–that people do not need to be forced to protect what they value, or pay for the protection of that which they value. Take the case of the military draft: there was the fear that if citizens are not forced to join the military and serve the State, they won’t volunteer for it. This fear is absolutely unfounded, and the United States military is just one evidence of it.

Certainly, nations with oppressive regimes will need to force people into their armies because–without coercion–people wouldn’t risk their lives for a government they despise and a nation they do not value. This simply highlights the need for a government to be cognizant of its role, actions, and boundaries with respect to how it treats the people under its protection.

If young men and women are willing to voluntarily offer their life–their most precious value–in defense of a nation’s right to exist (and therefore, their own personal right to live in liberty), then why would it be inconceivable similarly for a nation’s people to voluntarily offer some money (in proportion to how much they can afford or some other legal arrangement) for the protection of their way of life, their property, their security, their nation, their values?

The end of the military draft and a switch to a volunteer force did not spell doom for the nation’s defenses: in fact, it attracted the best men and women of the highest character, who are motivated to fight on grounds that they accept, believe in, identify with, and wish to protect–not on the basis of compulsion by the State and servitude to an ideology of self-sacrifice.

Likewise, the exchange for money or capital to finance a government of protection on a perfectly voluntary and contractual basis is entirely reasonable and realizable. Indeed, a voluntary system of financing the goverment would additionally serve as one of many efficient checks and balances on the power of the government, because people who disapprove of government activities in any manner (if it is demonstrated that the government has overstepped its bounds) can effectively withold or reduce their finances until their grievances are reddressed contractually, bilaterally, or in the courts. Voluntary financing, thus, would serve not only as working capital for the government but also as an incentive (or disincentive) for a job well done (or badly done). The government and its agencies–like any other private and corporate entity or NGO–would be forced to monitor its own behavior for its own survival. 

This is much like in a volunteer army, soldiers have a right to stop fighting or quit if they believe the war is baseless, immoral, or illegitimate (of course, I’m aware that this is not currently permitted, and I agree that this serious action must be supported by objective evidence and facts proving the illegitimacy of government actions).

This whole issue is very complex and I don’t intend to address or explore all of the issues here. I am myself not very clear on how things might function in a free society, because–as I said–we have nothing in history or in reality to look towards for a demonstration. I have much to read and learn on this topic, which I haven’t done to well enough yet. It’s a very concrete-bound issue, albeit a very important one because it anchors the abstractions of a free capitalist society and makes the principles easier to grasp.

The principles themselves, however, are solid, undeniable, and objective: a free society is the only fully moral society of individuals; since it is fully moral, it is also a fully practical society for individuals to live in and flourish.

Posted in Culture, Economics, General Work/Life, My Theories and Ideas, Objectivism, Philosophy, Political Issues, Rights and Morality, The Best of Leitmotif, Uncategorized | Tagged: , , , , , , , , , , , , , , , , , , | 9 Comments »

Onkar Ghate Debates

Posted by Jerry on October 4, 2007

Podcast from BusinessWeek:

Universal Health Care, Yes or No?

Philosophies clash when Harvard School of Public Health professor Katherine Swartz and Ayn Rand Institute senior fellow Onkar Ghate react to reader comments about their recent health-care debate.

Posted in Ayn Rand, Culture, Economics, Objectivism, Philosophy, Political Issues, Rights and Morality, Uncategorized | Tagged: , , , , , , , | Leave a Comment »

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