Stop the bailout bank robbery

By Howard Hyde

28 September 2008

Government intervention in the economy, meddling and fiddling, fiddling and meddling, is what got us into this mess in the first place. More government intervention, artificial price supports and an unprecedented $700 billion taxpayer bailout won’t get us out.

Think it through, people. You want this problem solved, so you relinquish $700 billion more of your money … to the US Congress? Do the math people! That’s $1.3 billion per congressperson and senator, on top of the $2.5 trillion per year that we already give them. Politicians rail against the greedy rich, those making a whopping $250 thousand, and then demand that THEY (the congresistas) be put in charge of 24,000 times that --- apiece!

And for what? Mortgage delinquency rates of 6.4 percent? Unemployment at 6.1 percent? A dozen bank failures per year, the biggest of which has already been resolved in the market? Stock prices lower than what some would prefer? Housing prices falling to… reasonable levels? We’ve had much worse in the past, and the rest of the world, even much of Europe, lives with much worse all the time.

Never mind that Congress is a den of scoundrels. We could replace them tomorrow with 535 of the most wise, honorable and non-partisan sages in the nation, and they STILL wouldn’t be qualified or morally warranted to take on this task. They don’t have the information, the incentives or constraints to be able to judge the right thing to do for each of the hundreds of millions of the rest of us.

$700 billion dollars of new taxpayer liabiltiy is a radical interventionist/socialist solution to the problem which won’t work. What’s needed is a radical laissez-faire capitalist solution that actually will.

To the extent that free-market capitalism is still permitted to function in this county, it is already working. Bank of America bought Countrywide and Merrill Lynch. JP Morgan Chase bought Washington Mutual. The players who didn’t let themselves be swept away by the currents of moral hazard unleashed by the Fed and Congress are now in the relatively strong position to take charge of the assets which were mismanaged by those who did.

And so it goes. Joseph Shumpeter called it ‘creative destruction’. John Maynard Keyenes referred to ‘animal spirits’, which, as long as they are given free rein, will never be in short supply.

The various players in our economic and political system each have a role to play in the solution. Here are my recommendations:

The Fed: Stop trying to force the interest rate where YOU want it, and start targeting it to where it would be if YOU didn’t exist. Stop fighting the will of a hundred million savers and investors who have their own market information (better than yours), time preferences and demands for rates of return. Stop counterfeiting dollars, debauching our currency. Peg the dollar to gold at a nice round number like $1000 an ounce (you don’t have to tell anybody, just do it) and take the credit for the ensuing monetary strength and stability.

Congress: Give yourselves a raise, say, $250,000 (tax free), and then get out of the way. Reduce the federal government footprint on the economy so that the forces capable of realizing the recovery can do their jobs. Cut marginal income taxes, abolish the death tax and the double-whammy capital gains tax. The best income tax cut strategy would be simply to remove all bracket-based rates except for the bottom one; everyone pays the same low flat rate from above the the poverty line to Barack Obama, Cindy McCain and beyond. The Laffer Curve effect will ensure that this results in MORE revenue, not less, to the treasury. Embrace your inner John F. Kennedy.

While you’re at it, lift all the unreasonable restrictions and bans on resource development, including offshore drilling. We can EASILY push the price of a barrel of oil below $50 while creating thousands of new jobs and business opportunities, which will contribute handily to enabling us to weather the monetary storm (of course, cheap energy is anathema to the radical environmental movement and they will oppose it tooth and nail in the fraudulent name of ‘saving the planet’).

The president (and presidential candidates): Thank you for a sincere effort. Please sign the bills lifting the federal boot off of our throats.

Taxpayers earning $250,000 or more. Keep your money; spend it, save it and invest it as you see fit. You have proven by your hard work, productivity and judgement that you are the most capable of making the right decisions, judging real asset values, and creating jobs. YOU are the saviors in this crisis, not Congress, not the president (regardless of party).

Speculators: Keep speculating. Keep the politicians and corrupt CEOs honest. If you’re right, you’ve done a public service and received your reward. If you miss, you’ll have less resources with which to influence the market in the future, and that’s as it should be.

But what about regulation?

The legitimate purpose of regulation is to prevent and punish murder, assault, robbery, theft, rape, persecution, conspiracy and fraud. So by all means, if any players have acted in criminally fraudulent ways, then hold them to account and institute regulation which minimizes the risk of unscrupulous players getting away with it in the future.

But let us never lose sight of the root fraud of all of this: It came from Congress, chartering and conferring indefensible privileges upon its favored companies Fan and Fred which predictably morphed into corrupt behemoths threatening the stability of the entire economy with their implicit taxpayer guarantee, as the Wall Street Journal has been warning for at least six years (http://online.wsj.com/article/SB121599777668249845.html?mod=article-outset-box); and it came from the Fed, inflating the money supply and expanding credit, a recipe for disaster that Ludwig von Mises and his disciples have been warning about for nearly a hundred years (http://mises.org/story/3128).

But what about affordable housing? It’s time to laugh that canard out of Barney Frank’s office and out of Washington. Housing was attempted to be made more ‘affordable’ by the classic political means: forcing the rate of interest below that which would have prevailed in a free market (and easing other requirements --- can you spell Subprime lending? Liar Loan? Countrywide?). But how in the world was ‘affordable housing’ served by the housing bubble --- prices rising year after year at 2, 3, 5 times the rate of inflation? Shouldn’t there be rejoicing in the streets now that the bubble has burst and prices are more ‘affordable’?

Some people, myself included, enjoyed the inflated home equity while it lasted. But that sentiment doesn’t qualify as a moral principle upon which to base public policy. It certainly doesn’t justify a massive expansion of federal government power.

Legalize captialism; the only solution.

---

Resources:

• The Rescue Package Will Delay Recovery by Frank Shostak
  
• The Great Bank Robbery of 2008 by Robert P. Murphy
  
• Fannie Mayhem: A History (a compendium of The Wall Street Journal's recent editorial coverage of Fannie and Freddie)
  
• The Bailout Reader (Mises Institute Compendium and Bibliography)
  
• Is Capitalism on the Ropes? by Larry Elder
  
• Bush’s Billionaire Banker Bailout: Are You Kidding Me? by Walter Moore, candidate for Mayor of Los Angeles
  
• Bailouts Will Lead to Rough Economic Ride by Ron Paul
  

The Stockholders of Pemex

Leer en Español

Energy reform in Mexico seems like a very complicated subject that only the specialized politicians and elites can understand. But fundamentally, it’s not really that complicated. The fact that Pemex, the national oil company, is failing in spite of record world market prices per barrel illustrates a fundamental and timeless principle of economics: socialism doesn’t work; it’s not a solution but rather the road to serfdom.

The United States does not have a national oil company, yet americans are not any poorer for lacking one.

President Felipe Jesús de Calderón Hinojosa is heading up the movement to reform the energy industry in Mexico, which includes the possibility of privatizing Pemex. His former rival for the presidency, Andrés Manuel López Obrador (‘AMLO’) is rallying the political left against any privatization, arguing that the oil belongs to all mexicans and that it would be robbery (or even rape) of the national patrimonio to sell shares to foreign (read: north american) companies [‘Patrimonio’ is a rich spanish word with meaning somewhere among ‘estate’, ‘inheritance’, ‘heritage’ and ‘fatherland’, in the PAT-riotic sense].

The principles of capitalism will show the way to the ecomically correct solution even if politics can always cause a derailment. Those principles are: if it doesn’t have to do with murder, assault or robbery; if has to do neither with theft, nor fraud, rape, persecution nor conspiracy, then government should not interfere. The purpose of government is to defend the rights of the citizens; rights to life, to security against the violence of other citizens or foreigners, to liberty and to property. It is not the proper role of government, with its monopoly of violence, to promote the interests of one group of citizens against those of other groups or individuals.

Therefore any activity which has nothing to do with defending the lives, security, liberty and/or property of the citizens must be located in the private sphere, that is, outside of government. To act otherwise leads by nature to the violaction of these rights and to economic inefficiency. This is exactly what we are witnessing in the energy sector in Mexico today: privileges for a chosen firm, the absence of market freedom and discipline, exclusion by force of other, non-favored participants, and a poorly-served public.

If the mexican citizens are the rightful owners of Mexico’s petroleum, as Obrador asserts, then the management and bureaucracy of Pemex is cheating these owners. These owners are not enjoying what true proprietors deserve. The management and well-connected politicians run the company for their own benefit, and the people receive no dividend save for shortages and high prices.
If the citizens are the owners of the company, then they must be given their shares of stock and their rights to buy, sell and participate in corporate governance must be implemented, just as it is for any stockholder in other publicly traded company listed on, say, the New York Stock Exchange.

Once the citizens become stockholders of a company that participates in an open and free market, and that all privileges and protections have been lifted, the majority of the political conflict will disappear, because stockholders vote primarily through their buying and selling, and thus dictate how the firm must be run. Managers and divisions that fail to operate profitably will lose their privileges and capital and investment will seek more competent ones. Stockholders will insist that management contract with partners that have the knowledge necessary to modernize the facilities and technology, and that they seek new capital. They understand that any company that fails in this will face bankruptcy. The company and the market as a whole will end up healthier and more efficient, and supplies, quality and variety of products will all increase while consumer prices fall.

AMLO wants to portray foreign companies as sharks preparing for the kill, but the economic reality is, thank goodness someone already has developed the technology and saved up the capital that can provide thousands of jobs at increasing wage rates and millions of ever-cheaper barrels of crude. All that’s required is to permit freedom of contract and to defend the property rights of owners ---- the citizens of Mexico.

‘Human Needs before Profits!’

The alleged superiority of socialism (or communism or interventionism or anything-but-capitalism-ism) is that it somehow addresses the more noble goal of meeting human needs than the base, greedy capitalist goal of reaping profits; hence the political slogan, ‘Human Needs Before Profits!’. Implicit in this slogan, which one can imagine an emotional crowd chanting at a demonstration, is the idea that capitalists are greedy pigs whose prosperity comes at the expense of the poor and that society should be organized (forced to behave) in such a way that true human needs (as defined by the slogan chanters) should have priority over the earnings of business owners.

This sentiment is the embodiment of multiple errors of reasoning, and I can demonstrate this by a very simple proposition.

I ask (defy) you, reader, to:

• design a business plan guaranteed to generate profits while ensuring that no human needs be met. Or, if human needs are met, they are met only after profits have been earned and collected.

You may not kill, rob, rape, persecute or conspire; you must respect the lives and property of all other people at least to the extent of doing no harm, commiting no offense. But you must not provide any service that anyone needs, nor produce any product that is useful, nor add anything to a customer or beneficiary’s well-being or happiness. Or if you do, you must make sure you have pocketed your profit first. You must turn a profit consistently over the long term (say, eight out of ten years), without commiting any crimes, and without subsidies, protective tarrifs, or other government-bestowed privileges.

How would you do it?

Maybe you’d try the classic industrial capitalist model: build a factory, hire workers, produce and sell products. You’re in trouble from end to end! First, you must accumulate the capital to build the factory. Let’s pass over the implications of that and go to the next: hire the workers. Unless you are going to enslave people against their will (which is not permitted), you have to offer them wages and working conditions that are better than their alternatives, i.e., working on a farm or in a competitor’s factory. You have to meet their needs at some level long before you can even dream of profit. In other words, under capitalism, human needs --- the needs of the hired workers --- already do naturally come before anything, and profit naturally comes dead last. Revenue generally can only be collected after the product has been delivered to the customer, which is after the product was manufactured, which was after the workers were hired (and paid, and paid, and paid many times over), which was after the factory was built, which in itself required the hiring and paying of workers and the purchase of building materials and equipment. Profits come dead last if they come at all. If the entrepreneur fails to meet the most urgent needs of his/her customers at a cost that is less than the prices customers are willing to pay, then the profits don’t come at all.

It doesn’t matter what business discipline or industry you chose. If you are operating within the laws of the free market, which require you to respect the lives and property of all other people and to only engage in voluntary cooperation, then there is no way to earn profit without meeting human needs, and no way to reap the profit before meeting just about all stakeholders’ needs but your own --- employees, managers, creditors, customers --- first. If you go into a service business rather than industrial manufacturing, you’ll have to serve the needs of customers in some way (hence the term ‘service’). Whether you are an accountant, lawyer, physician, fashion consultant, beautician, personal trainer, software developer or masseuse, before you reap any profits, you’re going to serve some customers.

But what about speculators? Now there are some parasitic leeches, you say! Surely their profits come from no redemable humanitarian activity!

Actually, speculators are no less virtuous than any other actors in the free market. They indeed do play a vital role in meeting human needs, through their research and assumption of risks, which they transmit to their ‘customers’ through the price system of the market via their investments and trades.

An original equity investor provides funds to a company to enable it to get started or to expand operations: build a factory, hire workers, pay wages and salaries (meet human needs). Since the stock confer upon the stockholder an ownership claim to a portion of the assets of the company and hence the profits (and losses) thereof, it has a value of its own which can be sold and bought in the stock market. The price is determined by the average estimations of any number of investors as to how well the company is doing and its future prospects. The speculator’s role is to put a reality check on all other speculators and investors and to correct errors before their magnitude becomes great. If investors bid a stock price up (or down) beyond reality, eventually fundamental business processes of profit and loss will inevitably bring it back down (or up). These price swings can be very painful, particularly for the investors who buy when the stock is overpriced and find the price sinking far below their original outlay. The speculator helps to smooth out these swings, mitigating the damage. If he is right, his short-sell puts the brakes on the excessive appreciation of the stock price; likewise, his buying the stock when it is undervalued influences the price in the right direction.

Speculators in the commodities markets provide a year-round, risk-mitigated market for agricultural products[1]. The farmer is not at the mercy of what the price of corn happens to be on the day he harvests his crop. Because of the commodity markets and the speculators who research market conditions around the world and express their forecasts by their own commitments, risking their own money, the farmer can be much more secure than he otherwise would be as to what price he will be able to sell for, and can make the decision any time of the year via futures contracts.

The speculator only wins (earns profits) if he is right. If he short-sells and under-priced stock, he loses. So you can’t beat the human-needs-before-profits law by becoming a speculator (sorry!). Only in a market distorted by government intervention (high tarrifs, taxes, corruption, regulations that have nothing to do with preventing murder, theft, fraud or conspiracy) can a speculator earn profits at the expense of the general population.

Profits are the reward --- after the fact --- of meeting human needs.

So the slogan is true after all, even if those chanting it are clueless.

Copyright©2007 by Howard Hyde. All rights reserved.

[1] see also: The Social Function of Call and Put Options, by Robert P. Murphy at http://www.mises.org/story/2417

Five Steps to Immigration Reform

By Howard Hyde

(ver en Español a: http://howardhyde-espanol.blogspot.com/2006/12/cinco-pasos-al-reforma-inmigratoria.html)

A realistic, politically feasible solution to the problems of illegal immigration which will actually work must be comprehensive, involving several interdependent aspects of security, politics, economics, citizens, immigrants, businesses and government agencies. It must be consistent with basic principles of how society actually functions, not on the ideology of narrowly-focused political factions or special-interest groups. And it will involve compromises with entrenched political interests; it will have something in it to offend everyone to some degree.

I see five pillars required of a comprehensive reform plan:

1. Legalize Capitalism. (Yes, you read that correctly.)

Abolish socialism. Stop paying able-bodied adults to breathe at the expense of fellow (taxpaying) citizens, many of whom are worse off than the beneficiaries but don’t meet the political requirements. Slash regulation of anything that doesn’t relate to murder, theft, rape, persecution or conspiracy (see the Ten Commandments). Allow businesses and individuals (including hospitals) to do as they see fit with what is theirs, including picking and choosing their customers, suppliers, employees, employers, investors and investments according to their own criteria and requirements. Allow medical savings accounts, deductibility of healthcare costs to individuals, marketing health insurance across state lines, and the right to refuse service to anyone. Abolish the abolition of unskilled labor (minimum wage laws). Cut red tape that keeps legitimate extra-legal and black market businesses out of the mainstream system. Understand that inclusion has been the number one challenge of capitalism for centuries; it is nothing new (see Hernando de Soto’s The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else).

2. Elevate Citizenship.

Require 8^th-grade English proficiency for US citizenship. Print ballots and other election materials only in English. Amend the US Constitution to repeal the loophole that grants automatic citizenship to children born (even of illegal aliens) in the US.

3. Liberalize the quotas.

WE NEED the workers, unskilled and skilled, blue collar and professional. We need the professionals because their productivity and services maintain our leadership in the world and generate more opportunities at home. We need the laborers to perform jobs we’d rather not do, lower the prices of all goods and services, and free us to do higher-order work.

The current legal quotas are out of touch with reality by orders of magnitude. It is a lose-lose proposition to discourage educated professionals and force desperate poor people into illegality and danger with no benefit to ourselves. We need to make it easier, not harder, for economic immigrants to come into the US to live and work, with few strings attached other than compliance with law. No restrictions should be put on immigrants as to where they shall live, who they shall work for, or what businesses they shall open, provided these are all legitimate, that is, do not involve crimes of murder, theft, rape, persecution or conspiracy.

4. Document the Undocumented --- without penalty.

Every immigrant should be photographed, fingerprinted, tested for infectious disease and documented in a national database. Non-citizens should periodically (once, twice or four times per year) provide a verifiable residence address, subject to random audit; guest workers may apply for a non-citizen’s driver’s license, NOT valid for obtaining public services reserved for citizens, and must pass the appropriate exam to receive it.

Do not require immigrants to have already been in the country for a specified period, or to return home after another. MAKE IT EASY to comply with the law, and people will comply. People want to live legitimately, out of the shadows.

5. Isolate the criminals.

If we accomplish the above four points, then this one will be much easier. We have made legal immigration easy, so there is a drastically reduced need for anyone to ‘sneak’ across the frontier zone. Citizenship is not automatic, welfare fraud has been shut down, and hospitals aren’t obliged (penalized for opening) to serve patients that don’t pay, so the draw of inappropriate benefits has been reduced. The only real magnet left is honest, hard work for willing employers and customers, leading to a better life for all.

Some criminal element will remain, of course. Drug traffickers, car thieves, pimping rings, and terrorists will always be attempting to penetrate our borders and society. Nevertheless, under the circumstances in which legitimate but ‘illegal’ economic immigrants no longer form a massive cover under which the criminal element may operate, the latter will be easier to target and interdict. With legitimate immigration easy, the waves of desperate and innocent families with children flooding across the desert will recede, revealing only the highly suspect. The immigrant database mentioned earlier makes us able to know who’s who and where.

As for terrorists, let us not forget that the 9/11 terrorists all entered the country legally and repeatedly. With limited resources, we would do better to scrutinize those few mosques and madrassas in the United States where radical Islamic imams are preaching ‘death to America and to the infidels!’, rather than flailing after millions of Mexicans as terrorist suspects.

A nation has the legitimate right to secure its borders, and a security fence can be a justified part of a plan to prevent illegal entry. That being said, a wall in and of itself is not a solution; if the above reforms are carried out, it may not be necessary. We have lived as neighbors with Mexico without a wall for almost 160 years, and we have the best friend America and George Bush could ask for in President Felipe Calderón, a pro-capitalist conservative.

The idea of criminalizing and/or deporting 12 million illegal immigrants en masse is logically ludicrous, socially destructive and politically suicidal (is the Republican Party listening?).

Spanish-speaking Puerto Ricans have few restrictions on their movement into and work in the continental United States, yet ‘immigration’ from Puerto Rico never makes the headlines; it’s balanced.

The solution is to allow the natural process to work.

What is Capitalism?

A proper discussion of any topic cannot begin without a definition of its most fundamental terms. Most of the controversy over Capitalism stems from disagreements and ignorance of just what Capitalism actually is. My definition will not settle the arguments, of course, as it will provoke again as much controversy as it resolves. Nevertheless, it is based upon this definition that I make the Shocking, Outrageous Assertions, and it will be shown that with this definition established (if not agreed upon), the common arguments against Capitalism lose their power and frequently turn on their wielders.

Liberty

At the heart of Capitalism is Liberty; the freedom of the individual to do as (s)he pleases with what is his/hers, unbounded by forcible coercion or fear of agression against his life; only constrained by the equal liberty of every other individual human being.

Liberty is freedom, with the responsibility to respect the freedom of others. It is the freedom of innocents from aggressive force, and the restraint from using aggressive force against innocents.

Liberty thus is not license to do anything you want and/or can get away with, including robbery, rape, murder and mayhem. To paraphrase Walter Williams, ‘the freedom of your fist ends at the tip of my nose’[i].

Without Liberty, there is no Capitalism and no civilization.

Already I can hear the anti-capitalist critics screaming. “Liberty! What Liberty? Capitalism is the expoitation of the powerless workers by the ruling class of owners of the means of production! It’s the Liberty of the Rich to enslave the Proletariat! Long Live the Comm---”

Patience, please. We’ll get to that…

Security of Life, Person and Property

In order to be free in the civilized sense, an individual must know that his right to live, and to live free of fear of physical threat or theft of what it his, is respected and defended. Since one individual is no match for the agression of multitudes, society must construct institutions which constrain, prevent, and as a last resort, punish violations of individual liberty. This conclusion is easily deductible from secular, dispassionate observation of human society. Remarkably enough, it is also freely available in the form of one of the oldest religious codes in the world, to wit, the Ten Commandments.

I am not a religious scholar. Nevetheless, permit me to go out on a limb for a moment to give my interpretation of this ancient text as it is relevant to our current discussion. The first 4 commandments instruct human beings in how they should relate to God; to believe (exclusively), to not profane the name or image of God, not to engage in idolatry, and to honor Him with the weekly Sabbath. The last 5, which I call the 5 Secular Commandments, or the ‘Secular 5’, deal with how human beings are to treat one another, specifically prohibiting fundamental forms of agression against innocents:

• Thou shalt not murder
• Thou shalt not commit adultery
• Thou shalt not steal
• Thou shalt not bear false witness against your neighbor
• Thou shalt not covet thy neighbor’s wife, …house, his field, or his manservant, or his maidservant, his ox, or his donkey, or anything that is your neighbor's.

The fifth commandment, ‘Honor thy Father and thy Mother’, seems to serve as a bridge between the spiritual commandments and the more worldly ones.

My next 2 sets of critics are screaming: the fundamentalist religious and the militant anti-religious atheists. The first are ready to fry me over my superficial and sophomoric analysis, which doesn’t agree perfectly with theirs, and the second are furious at my corrupting a ‘sacred’ secular topic with fairy tale mush. Hasn’t Howard heard of Separation of Church and…Separation of Church and…Economics? Uh,…

None shall murder, rape, rob, steal, defraud, or falsely prosecute.

I haven’t set out to write anything necessarily claiming that God endorses Capitalism. Nevertheless, I find it very interesting that I can find nothing in the most fundamental, religion-given law to contradict the most fundamental principles of Capitalism. For if all people followed the 10 Commandments (or at least the Secular 5), then Liberty, Capitalism and the most optimum prosperity possible on an imperfect earth would follow. This I deduct not from religious faith but independently from secular, logical deduction.

The commandment against murder validates the primacy of the individual human life. Capitalism takes this principle as its first axiom; by definition, capitalism cannot exist unless innocent individuals have an inviolable right to theif lives. About adultery there may be less of a connection with Capitalism (I cannot say that Capitalism per se requires abstinence from extramarital sexual relations), but both this commandment and Capitalism would be in agreement as proscribing rape. Religion teaches that rape is morally wrong; Capitalism is undermined by and therefore incompatible with violent coercion and violation of life, liberty, property and/or body of the individual.

‘Thou shalt not steal’ is a validation of private property rights, fundamental to Capitalism. For if there were no such thing as private property, there could be no such thing as theft. If what’s mine is yours is his is theirs is hers belongs to all and any, then if I take what is yours, it is the same as if they took what was hers or you took what was mine, or if you took what was your own. So what’s the problem?

The problem is that without security of possessions, there is no Liberty and no Capitalism. If none will defend my (or your or his or her or their) right to keep what I have acquired through my own labor and/or voluntary exchange with others, then Capitalism can not develop (we will deal with whether or not this is a good thing later). Capitalism requires defined boundaries of who may do what with what, and deduces that if a person owns himself, his life and his body, than anything which he acquires without violence upon others must also be his and his exclusively. In the case of possesions such as clothing, tools and foodstuffs, this is easily managed. With respect to land and other nature-given resources, the issues become more complex and subtle. As resources are defined with increasing subtlety, including side effects, externalities and aspects not thought of before (like water rights, pollution, airspace, mining, noise, aesthetic effects, property values etc.) the difficulty increases. Nevertheless, the most satisfactory solutions have been ingeniously devised by free people cooperating under the system of private property, validating this principle so fundamental to Capitalism.

False prosecution of innocent people is morally and socially destructive and is therefore proscribed by spiritual authority and incompatible with Capitalism. It is not enough to say, none shall murder, rob or rape; neither shall anyone acuse anyone else of the same, knowing the charge to be untrue.

The final commandment as enumerated in the Bible deals with ‘coveting’, or envy. Believers (and non-believers alike) are exhorted not to look upon the possessions of others as objects of provocation, inspiring feelings of inadequacy, jealousy, and the temptation to appropriate those thing from others by force or stealth. Envy is a poisonous emotion, causing destruction among the envious and the envied alike. In the political arena, some have elevated it to a high art, seeking to satisfy constituents through the punishment, plunder and restraint of other people for no better reason than that such others are perceived to be more prosperous than the supposed beneficiaries of the policy. ‘Soak the rich’ for the benefit of the poor, or the ‘Robin Hood’ political syndrome, are examples of this.

As it applies to Capitalism, for individuals to commit murder, robbery, rape etc. is just as much not permitted when done out of envy or jealousy as for any other reason. Moreover, the ambitions and plans which arise from envy --- conspiracy to commit murder, theft, fraud --- are worthy of the attention of the institutions which defend Capitalism. In order for Capitalism to exist, it is not sufficient only to punish violations after the fact; it must strive to prevent them (protect innocents) proactively. Thus Capitalism is consistent and in agreement with the tenth commandment, implementing it with prevention of violence and enforcement against criminal plots.

Again, I don’t expect to settle long religion-based and/or moral arguments. Nevertheless, I observe that Capitalism is a system of private property and voluntary cooperation holding individual human life and liberty to be sacrosanct, a position with which the religious commandments seem perfectly compatible.

The Ten Commandments are imperative, value-laden judgements. Capitalism takes most of the same statements as definitional, without passing moral judgement per se. Capitalism does not require or endorse government enforcement of the first four ‘spiritual’ commandments. It does require institutions of society to enforce the last five as they pertain to the limits of agression against other people.

Ownership of property is documented, standardized, and leverageable.

Under Capitalism, not only are individuals free to own possessions (foodstuffs, clothing, tools etc.) and property (homes, land, businesses and other long-term assets), but that ownership is documented, recognized and respected by the society as a whole. A title deed from Wyoming is as valid, comprehensible and enforceable in Florida (or France or Japan) as it is in Wyoming. No court in Florida would judge an owner in Wyoming as invalid and therefore worthy of forfeiting his land to a Floridian on the basis of the title deed not being written in Florida, on the Floridian forms[ii].

The first consequence of this documentation and standardization is that, unlike primitive tribes, third-world countries or citizens of states struggling to emerge from communism, capitalist owners are secure in the knowledge that their property cannot be capriciously taken away or otherwise violated. The second, and most powerful consequence, it that assets thus secured are able therefore to become living, leverageable Capital. A documented and recognized owner may take out a mortgage (incur debt in exchange for cash), sell all or part of a property, sell equity shares in an enterprise, or derive other financial instruments from his otherwise ‘merely’ physical assets. This is the truly powerful nature of capital, and the key element missing in so-called ‘third-world’ and post-communist countries. Hernando de Soto has written authoritatively about this in his seminal book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails everywhere else. The world’s so-called poor have collectively accumulated literally trillions of dollars worth of assets (many times the total foreign investment and charitable aid donated to the same people and countries); however, lacking a proper, universally recognized documentation and enforcement system, they are unable to leverage these assets. They are ‘dead’ capital. If ever there were a key to solving world poverty, this is it.

Rule of, and Equality before, the Law

Capitalism is defined as a social system in which all individuals are governed impartially, without privilege or prejudice, by laws consistent with the preservation of individual life, liberty and property. ‘Rule of Law’ differs from ‘Rule of Men’ in that the latter are capricious, favoring themselves and their cronies, unbounded by fundamental principles. A ruling dictator may makes laws or arrive at judgements binding on others because he feels like it or because they favor himself or his friends, without reference to any transcendent priniciple beside his own pleasure. This is the antithesis of the rule of law.

Rule of law differs from ‘Rule of Lawyers’ as a system in which well-connected power brokers jockey for advantage. Neither is it necessarily synonymous with democracy, which for all its merits is still corruptible, allowing for tyrannical majorities or caucusses to vote for themselves the expropriation of the property of others, competing caucusses.

Rule of Law means not just any law, but natural law which respects and defends the most fundamental rights of individuals and does not seek to engineer social outcomes per se. The founders of the United States of America and their precursors such as John Locke and Thomas Hobbes, considered that law was not something to be invented or made up for the caprice of the moment, but rather something innate in the nature of the world, God and human beings, to be discovered and understood. When we say that Capitalism requires rule of law, we mean law that is in harmony with transcendent, immutable principles.

Minimal, Democratic Government

Under Capitalism, government has only one job; the defense of Liberty. Government’s role is to interdict and punish murderers, rapists, theives, robbers, defrauders and all other violators of Liberty as outlined above, so that the Liberty-respecting citizens are free from fear and free to act in their own best interests.

In an imperfect world, governments formed on the principle of equal right of participation in the governing process by all adult citizens --- democratic governments --- have the best track record of respecting individual liberty and promoting Capitalism. Thomas Jefferson’s statement that ‘government is best which governs least’ is consistent with Capitalist definition and principle.

While still clinging to a fragile lead, the West in general and the United States which Jefferson contributed so much to found in particular, have strayed far from the original principles of minimalist, democratic government. The US since its founding has extended the franchise to the lower classes of society, to non-landowners, to black former slaves and to women. Yet the minimalist creed has been eroded beyond recognition via a series of significant expansions: the conduct of the Civil War under Abraham Lincoln, the 16^th Ammendment to the Constitution permitting the Income Tax, the New Deal policies of Franklin Delano Roosevelt, ostensibly instituted to save us from the Great Depression, and the Great Society programs of Lyndon Baines Johnson and their progeny[iii]. Today government in the United States of America consumes 40% of GDP while placing or permitting substantial burdens on individuals, families and businesses, and eroding private property rights and equality before the law.

America may yet be the most capitalist nation in the world, but it is a far cry from the definition of Capitalism.

Freedom of contract and of exchange

The next part of the definition of Capitalism flows freely from the prior. If individuals are free in relation to other adult human beings to own themselves, their bodies, their possessions and their property, then it follows irrefutably that they have the right to do with these things as they, not others, judge best, including exchanging them with others.

Under Capitalism, individuals are free from coercion or compulsion in deciding whether to hold onto something they own (including their own labor), or to exchange it for something else with another individual. Third parties do not interfere in the free exchange of goods or services by others unless (s)he can demonstrate that the exchange violates his/her own liberty in some way.

Individuals are free to trade with friends, family, neighbors, strangers, foreigners or aliens (intra- or extra-terrestrial). They may voluntarily form groups or organizations for purposes of mutual aid, spritual fellowship, commercial enterprise, charitable works, artistic patronage or any other desirable human activity. Individuals may choose to join such organizations as paid employees, unpaid volunteers, leaders, advisors and/or contingent stakeholders. And they may choose to leave. Individuals may contract their labor with other individuals freely willing to employ them. Individuals acting alone or in concert (i.e. as a corporation or labor union) may agree to perform services or provide goods to one another over short or long periods of time, with agreement on consequences should one party be unwilling or unable to fulfill the bargain. Capitalism requires that contracts freely entered into be enforced according to their original terms, not capriciously discarded at the whim of one party to the detriment of the other or to be reinterpreted and/or rejected by third parties; to permit otherwise is to permit and commit fraud and theft.

I can hear the yawning. So what, you say?

The critical element in all of this is that absent a demonstrable violation of the liberty of one or more individuals, no interference, compulsion or regulation by third parties is required or permissible under Capitalism.

Capitalism is, by definition, freedom of contract and of exchange.

Freedom of Competition

Under Capitalism, individuals are free to offer their goods and services on the market as they judge best, at prices and/or terms of their choosing. No individual or corporate party is prevented from entering into any business, industry or profession except by the limits of their own abilities, skills, knowledge, competence and experience. No privilege is reserved for parties already in a certain industry or market against newcomers. Anyone is free to compete with anyone else, to offer their own (presumably better, cheaper, higher-quality, better-tasting-less filling) product or service to consumers or clients, who are free to make new purchases and contracts which differ from the ones they had made in the past. ‘Stealing’ market share from competitors is not theft punishable under capitalist law (unless achieved through coercion or threat of force), but represents customers freely choosing to do business with different entities in the present and future than they had in the past.

Parties on the losing end of any market competition have five alternatives:

1. Improve their market offering; lower prices, higher quality products, better service etc.
2. Go to work for the leader; for the individual, this may mean seeking employment with the leading competitor in a subordinate position; for a company, this may mean being bought out by the leader (with mixed prospects as to what the buyer will actually do with the acquired assets).
3. Leave the market segment, industry, trade or profession and find one in which one’s abilities, products, services, etc. can be more competitive.
4. Appeal to his/her fellows for aid or charity to avert bankruptcy and starvation.
5. Fail in the business or occupation, consume remaining assets, and in the extreme case, starve to death.

It is this fifth, extreme condition that most critics of Capitalism latch onto to claim that Capitalism is a cruel and vicious system where compassion and caring for the less fortunate are absent and only the ‘law of the jungle’ prevails. We will defer the discussion of this criticism to a later chapter. For the moment note that without denying the reality of this case, we have with reason placed it at the end.

The sixth alternative, appealing to the government for aid, that is, having the government intervene by virtue of its ability to coerce and force appropriations in the marketplace, to take resources from one set of citizens (including the winning competitor) in order to subsidize or ‘bail out’ the failed individual or business, is not a capitalist concept. This is an interventionist action inconsistent with laissez-faire capitalism, practiced to some degree by all governments on Earth, from the most liberal to the most tyranical.

What Capitalism is NOT

I will defer discussion of the claim that Capitalism is the exploitation of the poor by the rich. For now I want to make clear some frequently misunderstood notions about Capitalism.

First, Capitalism by definition is NOT a system in which government is ‘pro-business’ in the sense of providing subsidies, protectionist tarrifs, special tax breaks and privileges for corporations. Capitalism is freedom from interference, and equality before the law. Under Capitalism, businesses are free to succeed without punishment, and to fail without privilege (we will talk about the very very VERY important role of failure in detail in a later chapter).

Capitalism does not sanction slavery, or the forcible coercion of workers to stay in jobs that pay ‘starvation wages’. It only permits anyone willing, to offer or deny employment, or to accept or forgo the same. It may happen under Capitalism that workers are not paid as much as they (or third parties) feel that they are worth (and this can and does happen at any level from non-skilled manual labor to high-level professional work). But this is not the same as ‘forcing’ people to accept inadequate compensation.

Finally, no activity of government qualifies as Capitalist. If a government runs a factory and sells the goods in a store ‘for profit’, this is still not Capitalism, because the government has the ability (which a private company does not) to tax and regulate the market, in other words to forcibly coerce individuals and groups to its own advantage. This is inconsistent with Liberty, private property, and freedom of contract and exchange, and therefor does not qualify under the defnition of Capitalism.

Government acting in defense of liberty in preventing and punishing murder, robbery, rape and fraud, acts in support of Capitalism. But Capitalism is the thing being defended, separate from the agency defending it.

With this definition of Capitalism in hand, then, let us elaborate upon how Capitalism solves so many of the challenges of human existence.

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[i] I heard this in the mid-1990’s when Walter Williams, professor of Economics at George Mason University, was subbing for Rush Limbaugh on his nationally syndicated radio talk show. Forgive me for not recalling the exact date.

[ii] We’ll deal with Eminent Domain and its abuse another time.

[iii] Some might argue that Jefferson himself was the first significant violator of his own principles, with the massive land purchases and the government financing of the Lewis and Clark expedition, which in its day was equivalent to our NASA Apollo program to go to the moon.

Copyright © 2006 by Howard Hyde. All rights reserved.

What is Economics and Praxeology?

This article is a summary and personal interpretation of the introduction to Human Action, by Ludwig von Mises.

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Economics is a science that has emerged in the last two hundred and fifty years, distinct from the sciences discovered by the ancient greeks: logic, mathematics, psychology, physics and biology, etc. It started with the recognition of regular, predictable patterns of marketplace phenomena --- prices, supply, demand, profit motive, material wealth, poverty, etc. The classical economists from before Adam Smith through Karl Marx struggled with the concept of value, attempting to explain it either as some measure of labor expended or some other objectively ascertainable phenomenon. Eventually the ‘objective’ theories of value were replaced with the concept that value is always subjective, the product of the choices and preferences of idiosyncratic individuals. Once that happened, market economics was seen to be just one narrow part of larger study of human choice and action, which Mises calls Praxeology.

So economics is a field of study within a larger context, and with a broader scope than it is popularly understood to have. It is not just about money. It is not just industrial products, services, markets, trade, regulation and taxes. It is not about materialism, ‘greed’ or ‘selfishness’, narrowly defined.

Rather, economics is the study of scarce resources with alternative uses, and how people choose to act in using, re-creating, saving, spending and utilizing them for whatever purpose suits them; survival, comfort, materialism, hedonism, spritual advancement, religious piety, charity, artistic patronnage, altruism, philanthropy, recreation, sado-masochism, intellectual enrichment, or just plain fun. Resources may be material, such as food, land, machinery, etc. or ideal/abstract, such as leisure time, spiritual fulfillment, or vocational satisfaction.

In addition to being a science of human action based on subjective appraisals of value, as opposed to a mechanical science like physics and its objective measures, there are other important distinctions to be made.

First, Economics is not history, not even ‘economic’ history. In the late nineteenth century, the German Historical School dominated the study of what was called economics in universities. But History is not economics proper. Rather, economics is a theoretical science that take ideas and scenarios through to their logical conclusions. Those theories, ideas and scenarios are what this book is about.

Finally, economics is not, according to Mises, a mathematical science capable of predicting precise magnitudes. It cannot tell what the price of milk will be on August 17 if the president’s tax plan is ratified, the union gets the wage increase it is stiking for, the rainfall is above average and there is a full moon. It can only predict general tendencies and directions which are likely to occur under specific circumstances.

Economics defined in this way is not universally embraced; not by all thinkers of past centuries, nor by present-day university economics departments. It has been condemned as the ‘Dismal Science’ by Thomas Carlyle. Karl Marx could not accept the validity of a science which claimed universal validity in the study of human action, since in his view people’s modes of thinking could only be determined by their class membership or affiliation (himself conveniently exempted); bourgeois, proletariat, serf, etc. Others base similar objections on the basis of race, ethnicity, culture, etc., claiming that what is true for one group is not valid for another (this is known as ‘polylogism’). No one could claim that there is a ‘Jewish Physics’ or a ‘Chinese Chemistry’ that would not be equally valid for Russians, Germans and Africans. But for economics, the polylogists have succeeded to a certain extent in marginalizing economists as the sycophant apologists of bourgeois capitalism, and dismissing them as partisan politicians.

This blog (www.howardhyde.blogspot.com) defends and promotes economics as a positive, practical and useful science; indeed, a science indispensible to the survival of civilization. In order to do this, we must define and clarify what economics is and isn’t, what its objects and method are and what they can’t be, what its limitations and opportunities are.

All science has its limits, even the natural or ‘pure’ sciences. Newton’s theories of physics are today still useful for simple scenarios, but they completely fall apart when it comes to advanced problems, for which it is necessary to substitute the theories of Einstein and his disciples. Science then, is a process of seeking out truth without ever finding the ultimate, final destination beyond which there is no going.

Economics has been criticized by some natural scientists for not using the methods and procedures of the laboratory. But the problems of human behavior within and without markets is not a laboratory problem. Different problems require different methods.

Economics has been further criticized for falling short of the manifest accomplishments of engineering; all the inventions, machines, capital equipment etc. which this discipline has produced which have greatly magnified the power of the human mind and muscle and increased material comfort and society’s standard of living. But if it weren’t for economics, none of these advances could have been permitted. In all times, even in our day, new inventions and improvements are a threat to entrenched interests and established orders. The building of capital equipment requires the accumulation of savings plus the vision of exceptional creative and entrpreneurial minds, belonging to individuals who are rarely initially part of the established political power structure. Extremely few kings, presidents, governors, union leaders, dictators, despots or socialist premiers have been prepared to tolerate the inequality (their own inferiority) implicit in the entrepreneurial proposition. Without entrepreneurship, engineering is vain. Without tolerance for inequality (the superiority of genius, the reward of profit for successfully anticipating the most urgent wants of the consumers, and losses associated with failing to meet these needs), entrepreneurship is impossible. Without economics, there is no explanation and justification of inequality and entrepreneurship. The accomplishments of the industrial revolution are the accomplishments of the classical economists, through the policy liberalizations that they advocated.

Economics proper cannot tell anyone what to products to value, what services to seek, or what ends to pursue. But it can tell what will and will not work, and can demonstrate the utility or disutility (or is it futility?) of different modes of social organization. It’s time to listen to what economics has to say; the survival of civilization depends on it.

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Copyright©2006 by Howard Hyde. All rights reserved.

[1] The term praxeology was first used in 1890 by Espina. If you can read French, look up his article “Les Origines de la technologie,” Revue Philosophique, XVth year, XXX, 114-115 and his book published in Paris in 1897 with the same title.

Another big, unfamiliar word that Mises uses is ‘Catallactics’, referring specifically to the dynamics of the exchange and markets.

The Role (and Benefits) of Failure in Human Endeavors

All human projects and actions are subject to the possibility of failure. It does not matter whether the objective is good or evil, related to business or charity, patronage of the arts or religious. The best-laid plans of men can fail. In the realm of business, it has been estimated that 80% of new startups go belly-up within 5 years.

For this reason, government must step in to ensure that good businesses do not fail.

If you’ve been paying attention to this site so far (or are you using it as a sleeping aid?) you’ll realize that the previous statement was given completely in jest.

Hold on! We haven’t even examined the nature of failure yet, let alone its role in the cycle of economic activity, so it’s premature to be throwing out conclusions as to what to do about it.

So, just to spice things up a bit, let me hit you over the head with another shocking, outrageous assertion:

• Failure is good!

Do you think I’m nuts yet? Let’s start with some acute examples to shake you out of your complacency. Imagine that a mugger is about to beat your face in with a motorcycle chain, but he slips on the ice and falls unconscious, allowing you to escape. He FAILED.

Are you getting my point yet? Failure is the flip side of success; without the one, the other has no meaning. Moreover, there are many things that you would hope to fail. Let us list just a few examples:

• A terrorist plot to explode a ‘dirty’ bomb in YOUR city (thank you Osama).
• A plan to eliminate your job and ship it to Outer Elbonia (thank you Scott Adams).
• A marketing campaign which includes the withdrawal of your favorite soft drink from the market and its replacement with something with more sugar in it (thank you New Coke!)
• A law abolishing the private practice of medicine (thank you Hillary Rodham Clinton).
• An athletic training regimen on the part of the scum-of-the-earth team intended to beat YOUR favorite team in the national championship (thank you Denver Broncos).

From these examples it is easy to see how there is a definite benefit to failure when it applies to something you personally don’t desire. What is a little more difficult to comprehend is the benefit of failure when encountered in the pursuit of worthy goals. Let’s imagine a story to illustrate the point:

Two entrepreneurs of modest means liquidate their life savings to open a restaurant each, in close proximity to one another. One of them thrives and begins opening additional restaurants, initiating a franchise chain. Ten years later, the first company is going strong. The other goes bankrupt after one year. Isn’t this a clear-cut case of failure being a bad thing, even an injustice?

Certainly, from the point of view of the failed entrepreneur, this situation is painful. But let us come back to him/her in a minute.

Consider the situation from the point of view of the restaurant patron. Assuming a very simple model, in which both restaurants open in a free market with similar menu items and target clientele, what could make one succeed and the other fail? Perhaps the quality of the food. Perhaps the friendliness of the servers. Perhaps the first entrepreneur just worked harder, putting in longer hours. Or perhaps the location chosen by the second entrepreneur was just not quite as advantageous, i.e. not near enough to other businesses, theatres etc. or in a neighborhood with a higher crime rate than the first. It could be for any one of a million things. But in the final analysis, it was the customers who decided to patronize the first restaurant and to avoid the second; to leave fat tips on repeat visits to the first and to leave for the first and last time at the second.

The first entrepreneur satisfied the customers. If government, the mafia or any other organization were to step in at this point and force customers to give equal patronnage to the second, or to subsidize the second to compensate for losses, it would be going against the choices made by the customers. Moreover, such an interference would necessarily involve raising taxes on the customers and the first restaurant in order to divert funds to the second restaurant. This would reduce the customer’s income and ability to patronize any restaurants, and impair the first entrepreneur’s ability to open new extablishments and pay salaries to more employees, without necessarily improving the quality of product or service at the second restaurant. Job creation would suffer.

So, clearly, from the point of view of the customers, the first restaurateur and society at large, it is a benefit that the second restaurant is allowed to fail and close its doors quietly.

Economics can only tread lightly on the question of whether the second entrepreneur ‘deserved’ to fail. It can only explain that in a society in which consumers have freedom of choice, they will necessarily make such choices as favor one set of products and services over others. Again, there cannot be success without failure. This does not mean that, given two businesses, one must succeed and the other fail. It simply means, axiomatically, that people make choices; the same family can’t eat dinner on the same night at two different establishments.

Economics also makes the following observation. Most successful entrepreneurs have multiple failures in their history. That is, their current success has come only at the price of trying and failing, trying and failing, getting up and trying yet again and learning from their failures what works and what doesn’t work, until finally they get it right. Read the biographies of great entrepreneurs from Thomas Edison, Henry Ford through Colonel Sanders (KFC) and Steve Jobs (Apple Computer), and you’ll see a history of repeated failures. In his day, Babe Ruth had the highest strikeout record in major league baseball.

But what of our failed entrepreneur in the moment? Isn’t (s)he entitled to some consideration for effort? Well, there are a few possibilities:

• He can appeal to his fellow citizens for assistance. This is the voluntary charity and assistance option, available from many secular and religious organizations, as well as informally through acquantance networks.
• The government could subsidize him personally or his business. This presupposes that a law and/or program to do such things is already in place; we don’t assume that at the point of failure, the entrepreneur has the time, resources and connections sufficient to lobby government for favors. We have already discussed the general dis-utility of this option.
• He could go to work for the competitor. This is not uncommon, however wounding it may be to the ego. If he wasn’t qualified to be the boss at one establishment, his knowledge, skills and experience might very well qualify him to work at one or two levels lower in the hierarchy at another firm in the same industry.
• He could get a job in another line of business.
• He could appeal to private investors to support him in his next venture, presumably convincing them that he’s learned from his mistakes and has a sure-fire, can’t-lose plan this time around.
• He can wallow in self-pity, consume remaining assets, starve and die.

In any event, the most important question of what to do about anyone’s failure is less what specifically to do, but whether the solution will be accomplished via voluntary cooperation, or by coercive force, against the will of participants. Ethics teaches that the use of coercive force is wrong in the majority of cases; economics demonstrates that the use of force is counter-productive in the same majority of cases.

One more example of the benefit of failure. Have you ever had a boss you didn’t like? (You’re lying!) I mean, not only someone you had a hard time getting along with, not just someone whose orders you resented, but someone who you were convinced was incompetent, actually hurting the business and compelling you to participate in counter-productive activities? Don’t you wish that boss could just, well, FAIL?

Of course you have! We all have. And the truth is, it would be better for all stakeholders (though in the short term, perhaps not for competitors) that such a person be removed from his/her position and given the opportunity to rethink his/her market offering.

It is desirable that if a plan or enterprise is destined to fail, that it should fail as early and quickly as possible, in order to limit the time and scope of suffering. Imagine that you are embarking on a hot-air balloon expedition. The balloon has a fault in a seam which will cause it inevitably to rip, causing the balloon to fall back to earth. Would you prefer the fault be exposed at two meters, twenty meters, or two thousand meters of altititude? You would prefer, the sooner/lower the better, unless you have a parachute.

Similarly, imagine that you are involved in a business enterprise or investment portfolio that is destined to crash because the fundamental assumptions underlying the projections of success are erroneous. The market isn’t really there, customers don’t really want the product or service, or government is printing money so fast that it only seems like there’s a dramatic increase in market demand. When would you prefer this enterprise fail? When the stock price is at $10 per share? $100? $1000? You would prefer it to fail as soon as possible, before you sink anymore of your hard-earned uninflated money into it --- unless you’ve got a parachute, but how you happened to have a parachute under these circumstances could attract the attention of the Justice department.

If you’re an employee of such a firm, you don’t want to lose your job, of course, but this is not an option. Given a choice between sooner or later, you are better off that your firm and firms like it fail before they grow to the point of dumping even larger numbers of employees out on the street, to fight it out for unemployment benefits and reduced real employment opportunities. The best preference would have been never to have been lured into a doomed enterprise in the first place. The least bad ‘failure’ might just mean staying in a job that doesn’t thrill you, but which is at least grounded in reality.

In conclusion, then, the phenomenon of failure, in business as in any human endeavor, is a fundamentally good and necessary part of the functioning of society. If it’s going to fail, let it fail fast. Failure artificially postponed is pain augmented.

Copyright©2006 by Howard Hyde. All rights reserved.