Tag: Capitalism

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Why Liberals Hate Capitalism

George Noga

Why Liberals Hate Capitalism

Capitalism is to each according to his accomplishments

America is engaged in a great culture war for the preservation of capitalism along with liberty – which is symbiotically linked to capitalism. As economist Joseph Schumpeter predicted a century ago, capitalism has sown the seeds of its own destruction.1 Schumpeter laid the blame at the feet of liberal professors who, freed from the need to work, would promote anti-capitalist dogma which eventually would result in people voting for a social welfare state, i.e. socialism.

College professors indoctrinating socialism

“Capitalism will not survive. Its demise will not be due to economic failure; instead its very success . . . creates conditions in which it cannot survive.” Schumpeter

Just how bad is the anti-capitalist mentality? In recent polls, a majority of Americans ages 18-29 believe socialism is the ideal economic system2 They embrace feel-good notions about some abstract socialist utopia3 that never has existed and never can exist. They simultaneously harbor a dark vision of capitalism as a dog-eat-dog system. Clearly, the vituperation of capitalism by professors has infected college students and wafted into the general population. It appears Schumpeter was prescient.

Why Liberals Favor Socialism Over Capitalism

There are many reasons progressives hate capitalism and embrace socialism.

  • Capitalism evolved organically. No intellectual wrote a capitalist manifesto. Adam Smith did not invent capitalism; he merely explained what people did naturally. Capitalism just happens; it doesn’t require academics to theorize.
  • No one is needed to control capitalism. Socialism however requires controllers, i.e. socialist intellectuals who deign to know what is best for everyone.
  • Capitalism is egalitarian. Some uneducated bloke can make a fortune stripping junked autos for parts because he provides a valuable service to consumers. In contrast, the intellectual feels unrecognized and unrewarded.
  • Professors are rewarded by bureaucrats, not markets. They succeed by pleasing statist employers, not by providing value to consumers.
  • Capitalism is to each according to his accomplishments, not his intentions.
  • Liberals believe their advanced degrees, pet theories and pristine intentions should be rewarded and override the free decisions of consumers, if necessary by using the police power of the state. Capitalists believe in laissez faire.
  • Collectivists prefer government regulation to the chaos of the marketplace.
  • Consumers are sovereign. Intellectuals enjoy no special status and the common man holds all the power via his decisions to buy or not to buy. The most powerful economic force on earth is a consumer armed with a free choice. Wealth can be achieved only by serving sovereign consumers – with every penny a vote.
  • Capitalism brooks no excuses for failure. Those who fail are found wanting by their fellow man. Both the carrot and stick are real. The economic landscape is littered with failed businesses and crushed dreams of wannabe entrepreneurs. Under socialism, there are no consequences for failure.
  • Socialists desire control over others because they know what is best for the poor ignorant rubes in flyover land. Capitalists just want to be left alone.
  • Intellectuals see themselves as heroic figures reining in greedy capitalists, saving helpless victims and basking in the approbation of mankind. Capitalists simply want to provide a product or service consumers value more than its cost.
  • Liberals focus on the perceived inequalities and social injustices of capitalism rather than on its astounding success in ending extreme poverty on our planet.
  • Progressives ignore the total failure of all collectivist systems ever imposed by man. They ignore Venezuela, Cuba, North Korea and the former USSR and believe they will get it right the next time. Capitalists know better.

Schumpeter’s Prediction: True or False?

Over 100 years ago Schumpeter predicted the success of capitalism would lead to its destruction. He feared the demise of capitalism, along with its corollaries of wealth and liberty, would usher in a new dark age resulting in a lengthy and unspeakable Orwellian torpor where men lead lives of quiet desperation. We are now in the end stage of a great cultural war to decide if our children and grandchildren inherit a world of free men and free markets or one of a never-ending socialist miasma.

I fear Americans have lost the critical connection between capitalism and the wealth and liberty it produces. By most objective metrics, it appears socialism is on the ascendancy. Even in America, that great bastion of capitalism and the richest country on earth, its youth favor socialism. Hopefully, this post will help explain why America’s liberal intelligentsia hate capitalism and love socialism.

Liberty is like a beautiful but fragile garden in the middle of the jungle; it requires constant vigilance to survive. It is not a natural state, but must be protected constantly against forces trying to destroy it. We Americans are not doing a good enough job tending the garden. Nowhere is it written that the garden will survive.

  1. Please see my posts of March 4, 2018 and March, 11, 2018 for a comprehensive analysis of Schumpeter’s prediction. All my posts are available on my website: www.mllg.us.

  2. See my post of May 26, 2024. It is available in the Substack archives and on my website.

  3. Most college students who favor socialism trot out Sweden as an example of a socialist nirvana. They are blissfully ignorant that Sweden is a capitalist state with sky-high taxes on its middle class. If Sweden were a US state, it would be 30% poorer than the USA’s poorest state, Mississippi.

    © 2024 George Noga
    More Liberty – Less Government, Post Office Box 916381
    Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

The Morality of Capitalism

George Noga

The Morality of Capitalism

Capitalism vs. Socialism: Results, Theory and Morality

George Noga
Oct 27, 2024

Socialists always compare an idealized version of socialism to the practice of capitalism. This is as convoluted as comparing ideal capitalism to real-world socialism. This post presents a comparison between socialism and capitalism: results to results, theory to theory and morality to morality.
Food Lines in Socialist Venezuela

Results of Socialism Compared to Results of Capitalism

This is no contest; no one seriously argues socialism produces better results. Socialism never has created sustained prosperity; it can only achieve a brief illusion of prosperity by plundering a nation’s wealth. See my post of May 26, 2024 for more details; it is available on my website www.mllg.us and in Substack archives.

Although socialism may achieve transient benefits, it always ends the same, i.e. starvation amidst plenty. Socialism’s failures are legion: the USSR, Venezuela, Cuba, North Korea, much of Latin and South America and Africa. There is not one example in history where socialism has worked. But they will get it right next time.

In sharp contrast, capitalism’s successes also are legion; they include, but are not limited to, the USA, Canada, Europe, Australia, New Zealand, Japan, Singapore and South Korea. In the past 30 years (per the World Bank) capitalism has cut extreme poverty by 90%. Each day 100,000 more people escape poverty thanks to capitalism, the greatest economic and humanitarian success since men lived in trees.

Theory of Socialism Compared to Theory of Capitalism

Under ideal socialism, the governing values are community and equality. Socialists view economic well-being as a common enterprise. People share work according to their abilities and no one demands extra benefits due to greater talent or work. All inequalities due to undeserved advantages or disadvantages are eliminated. In socialists’ utopia all people are economically equal, i.e. equality of outcome.

Ideal capitalism means self-interest and free markets. Some people are more talented, exert more effort or take greater risks; hence, some are wealthier than others. Just as in the socialist utopia however, people care about each other and value community. When someone is in need, neighbors help. All of the good parts of the socialist utopia are present in ideal capitalism, but so are additional benefits such as innovation, job creation and more and better goods and services.

Everyone is better off with capitalism and there is no envy because everyone is unselfish. If one assumes people under socialism are altruistic, then it is only fair to make the same assumption for capitalism. Moreover, markets are not dependent on altruism and function quite well even when comity is in short supply.

Morality of Socialism Compared to Morality of Capitalism

Capitalism is non-coercive cooperation in free markets. People succeed only by providing goods and services valued by their fellow man more than their cost. No transaction ever takes place unless both parties benefit. There is no more potent force on earth than a consumer armed with a free choice. The consumer is sovereign, and even the largest corporation cannot force anyone to buy its products. Capitalism is economic democracy and every penny is a vote.

Following are some of the moral underpinnings of capitalism – an economic system that respects individual rights, promotes liberty and lifts the world out of poverty.

  • Individual rights: Capitalism is predicated on the belief that it is a fundamental human right for everyone to be free to pursue their own economic interest. Under socialism, big brother decides everything.
  • Liberty: The freedom provided by capitalism is necessary for humans, both individually and as a society, to flourish. The political corollary of capitalism is liberty, while under socialism it is tyranny.
  • Meritocracy: Under capitalism, rewards are aligned with ability, work effort and risk. Capitalism is based on the correct understanding of human nature, while socialism is diametrically opposed to human nature.
  • Voluntary Exchange: All transactions in a capitalist system are based on mutual benefit. Socialism is based on central planning without regard to markets.
  • Innovation and Efficiency: The incentives of capitalism result in an economy that innovates, creates new jobs and responds to peoples’ needs and wants. This process benefits society as a whole. Compare the socialist (East Germany) Trabant to the capitalist (West Germany) Mercedes-Benz, BMW, VW or Audi.
  • Morality: Individuals under capitalism are responsible for their own success or failure; under socialism individuals are subordinate to the state.

Capitalism isn’t good because it works; it works because it’s good.

Capitalism is morally superior to socialism and is better in both theory and practice. Capitalism isn’t good because it works; it works because it is good. Socialism always fails because it is based on a deeply flawed understanding of human nature; hence, it never has succeeded and never will. The great mystery is why anyone in 2024 still believes in socialism. Maybe they will get it right the next time.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Happy Labor and Capital Day

George Noga

Happy Labor and Capital Day

Capitalism is economic democracy – every penny is a vote

Tomorrow is Labor Day when America honors labor, as work is a noble activity. However, as the greatest capitalist nation ever, we should also honor and celebrate capital. When capital alloys with labor, it puts labor on steroids making work more productive and remunerative and allows workers to escape poverty.

Child labor in England circa 1840

The natural condition of man always has been and remains poverty. Throughout history, labor alone resulted in grinding poverty. It is only when capital fueled the industrial revolution, beginning in England in the mid-nineteenth century, that the masses escaped poverty. Subsequently, extreme poverty has been reduced by over 90% and is on the verge of elimination – attributable entirely to capitalism.

The few remaining poverty-stricken places on our planet result from insufficient capital investment for a variety of reasons. Most are impoverished by obeisance to collectivist, anti-capitalist ideologies. Some remain destitute because they repel capital by not respecting property rights and the rule of law. Yet others impose confiscatory taxation, currency controls and mind-numbing regulation.

Beginning of the Industrial Revolution

Most Americans rightfully have a phantasmal view of the early industrial revolution. They conjure Dickensian images of child labor amidst poor working conditions, long hours and low pay. What is unseen however is the devastating rural poverty the people fled to seek work in the factories. Although their lives in the cities were bleak, by their own calculus they were better off than the conditions they escaped.

The start of the industrial revolution was fueled by capital and was a godsend to humanity. Although Dickens’ books paint a grim picture of life in the mid-nineteenth century, nascent capitalism unleashed powerful forces that soon would change the world. Beginning circa 1840, capitalism ushered in a new golden age for workers. Wages exploded; life expectancy and literacy soared; child nutrition and mortality improved; and child labor receded while school enrollment surged. There has never been a comparable period of prosperity – and it continues to this day.

It wasn’t that long ago that America was a developing country. Child labor was not uncommon even in early twentieth century America, particularly in mining and agriculture. My uncle began work in the Pennsylvania coal mines when he was nine years old because children with lithe bodies could crawl into small spaces. I worked 50 hours per week while in high school. The first child labor laws in the USA were not enacted until 1938; but by then they were moot largely because parents already had removed their children from the labor force as soon as humanly possible.

Capitalism Gets No Respect

Despite capitalism’s astounding success, it gets no respect from the media and academia; a majority of young Americans believe socialism is superior. There are many reasons for this, but the principal one is false comparisons. Ideal socialism is compared to actual capitalism. Ideal socialism has never existed and can never exist because it is contrary to human nature. When actual socialism (Venezuela, Cuba, North Korea) is compared to actual capitalism, it is no contest. Capitalism also beats socialism in theory and morality – see my post of 3/24/19 at www.mllg.us.

Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty is virtually eliminated. Every metric of human and environmental well being is favorable and improving. Inequality is shrinking as the poor are getting richer at a faster pace than the affluent. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Walmart. None of these miracles was created by government or socialism.

“The great achievement of capitalism is not to provide more silk stockings for princesses but to bring them within reach of the shop girl,” Economist Joseph Schumpeter

Capitalism benefits humanity just by focusing on its business. The best metric of a business’ value to society is its profit. Capitalism benefits humanity far better than if it set out to do good or if government taxed it in a misguided attempt to do good. The best metric to measure the progress of civilization is the rate at which it creates new wealth. The more new capital, the better society is innovating, creating jobs, efficiently allocating resources and responding to people’s needs and wants.

Labor Day should be expanded to include capital. Just as Labor Day honors and celebrates workers, Labor and Capital Day would also honor and celebrate those capitalists who had an impossible dream, took great risks and had the will to see it through to fruition. The horn-of-plenty that is America resulted from both labor and capital. Let’s honor and celebrate both. Happy Labor and Capital Day 2024!

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Is Government Evil?

George Noga

Is Government Evil?

Government horrors in my lifetime

GEORGE NOGA
March 24, 2024

Previously, I referred to government as a malevolent force; now I call it evil. It is however a necessary evil because it’s better than the alternative, which is anarchy. Since government is an evil force, we should have as little of it as possible, only enough to protect us from foreign and domestic violence and to preserve our liberty.

a field full of white crosses in the grassAmerican cemetery in Normandy

Some readers have questioned my use of the term evil. Following is my lifetime of experiences with government. You judge if they qualify as evil.

  • I was born while my father was fighting in WWII; he also fought in Korea. Both wars (as well as WWI) resulted from government ineptitude. American WWII casualties were 407,000 killed and 671,000 wounded. Worldwide 60 million died, all preventable. My father was away at war during half of my first 10 years.
  • For 12 years I was the victim of an execrable education in wretched government schools. Any learning that took place was purely incidental.
  • I have been subject to a mind-numbing array of taxes, including at one time an income tax with a 94% bracket. Government at all levels takes 40% in taxes.
  • Government mismanagement of the economy unleashed numerous economic cycles, bubbles, busts, panics and meltdowns. The Federal Reserve once jacked up interest rates to over 20% to fix the 15% inflation it caused.
  • It costs $20,000 to buy what cost $1,000 when I was born: inflation of 2,000%.
  • The government-promulgated disaster that was the Vietnam War discombobulated my life and required me to serve in the armed forces.
  • I owned a highly regulated business for 35 years and was subject to a Kafkaesque wasteland of arcane and conflicting government regulations that helped no one.
  • Out of control government spending, debt and deficits will result in the greatest economic and social disaster in US history. Incredibly, government has managed to bankrupt the most prosperous nation in the history of this planet.
  • I only narrowly escaped the Obamacare death panels, but am still at risk for rationing and denial of care under a future single payer system.

Government has bankrupted the most prosperous nation in the history of Earth.

Private Sector Advances

Let’s contrast the above government horrors with the progress made by the private sector over the same time horizon.

  • Medical and dental treatment has improved immeasurably. When I was young there was little doctors could do except palliative care. President Coolidge’s son got a blister playing tennis; it became infected and he died within a week. There was nothing doctors could do. Going to the dentist was to be feared.
  • The progress in pharmaceuticals has been breathtaking. Most diseases are curable and gene therapy is a reality.
  • Computers did not exist in 1943. Today’s smartphones contain thousands of times the computing power used on lunar missions – and at ridiculously low prices.
  • Consumer electronics have made amazing progress. When I was young, there were only 3 channels of TV on a 9-inch screen with fuzzy reception and broadcasting limited hours. Today many hundreds of channels are available in high definition with over 125,000 movies available on demand 24/7.
  • We have advanced from propeller planes to walking on the moon .
  • The quality of all goods – particularly cars – has improved. Food now is but a small part of most family budgets. The cost of most goods in real terms has plummeted.
  • Capitalism has eliminated poverty, hunger and homelessness except for those with untreated mental illness. See my 2/18/24 post on my website: www.mllg.us.

Government Versus Markets

During my lifetime, government has brought mostly grief and failure, whereas free market capitalism has produced miracles. Government is not based on markets; it is top-down, highly coercive and ignores consumer preferences. It is antithetical to human nature. Waste, fraud, abuse and corruption are endemic. Government failure is systemic, structural, ingrained and incapable of reform.

Free market capitalism succeeds because it properly aligns personal rewards, risks and incentives with the goals of the business; it is in sync with (not opposed to) human nature. There also are immediate and consequential personal costs of failure. Capitalism attracts those who are hard working and receptive to risk, whereas government attracts those who are risk averse and value security over opportunity.

Is Government Evil?

Dictionaries define evil as: (1) something that brings sorrow, distress or calamity; (2) suffering, misfortune and wrongdoing; (3) wicked or dishonorable; (4) capable of harm and (5) having undesirable or negative qualities.

Government comports squarely with the above definition. The drafters of our Constitution understood government was capable of great harm; that’s why they created a republic with separation of powers and numerous checks and balances. However, as I wrote at the beginning of this post, you may judge for yourself.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

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The “Root” Cause of Poverty

George Noga

The “Root” Cause of Poverty

America has spent $25 trillion in its war against poverty

GEORGE NOGA
FEB 25, 2024

This is a companion post to my offering of last week declaring victory in America’s war against poverty. If you missed that post, it is available on Substack and on my website: www.mllg.us. The above headline notwithstanding, poverty has no root cause; it is the natural condition of mankind. We begin in paleolithic times.
The Natural Condition of Mankind

The Natural Condition of Mankind

At the dawn of civilization our ancestors subsisted as hunters-fishers-gatherers. There was no economy per se. People were divided into small families or clans, each of which functioned as a putative economic unit. They coexisted with other such units, mostly peaceably, sometimes not. Their lives, short and brutish, were on a bare subsistence level – wholly dependent on the fickle bounty of the sea, the exigencies of the hunt and the caprice of nature.

What economic lessons can we sophists of the twenty-first century glean from such primitive people? What, if anything, can they teach us? Surprisingly, they teach us an ineffaceable economic truth applicable across all time and space, i.e. the natural and normal condition of mankind is poverty. There is no known instance where any aboriginal population existed in any state other than poverty.

Most people understand the natural condition of man is poverty, but fail to grasp its implications. Progressives prattle about the root causes of poverty and even have declared war against it. America has spent $25 trillion since it declared war on poverty in 1964. In 60 years of that war, poverty has not been reduced one whit.

Those who consternate about the causes of poverty are wasting their time. They are asking the wrong question. The question we should be asking is: what causes wealth and how can we bring it about. Wealth is not a natural condition of mankind and is rare throughout the sweep of human history. Wealth creation must be understood and fostered. It is only by understanding wealth that poverty can be alleviated.

Progressives assert that, for example, lack of education creates poverty. This is a posteriori reasoning. People are born uneducated. To create wealth they need to become educated. Education creates wealth; ignorance does not create poverty.

What Causes Wealth?

Harken back to our paleolithic fishermen ancestors. They struggled to spear enough fish to survive, until a nascent capitalist thought of a net. Since capital did not yet exist anywhere to finance the construction of this fisherman’s net, he had no choice but to create his own. He worked every waking hour for months accumulating enough extra fish (his capital) to allow him the time to construct his net.

The net worked as planned and our budding capitalist now generated a surplus of fish to trade for other goods – in the process giving birth to the division of labor. His capital investment made him wealthier than the others in his clan – but it also made everyone else better off. He now generated capital which could be used by other entrepreneurs in his clan to increase the prosperity and well being of everyone.

Capitalism Creates Prosperity and Eliminates Poverty

What worked for our capitalist paleolithic fisherman is the same thing that worked for the capitalists who founded Wal-Mart, Amazon, Tesla, Apple and Microsoft. They have become immensely wealthy, but in the process they have enriched all our lives and increased our productivity. Not one of these successes was created by government or socialism. Who has done more to benefit the common man – Henry Ford, Steve Jobs and Sam Walton – or any king, president or commissar?

Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty worldwide is nearly eliminated and every metric of human well being is improving. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Wal-Mart and Costco.

To continue to improve the lives of everyone and to end poverty, we must shed our shibboleths. Unlike our stone age ancestors, we do not blame poverty on deities, animal spirits or the position of stars. Today, progressives and the media blame poverty on bogeymen like greed, multi-national corporations, western civilization, capitalism, fossil fuels, racism, free trade and lack of diversity, equity and inclusion.

In the twenty-first century we understand how to create wealth and eliminate poverty, but we fail to do so because of obeisance to the false gods of progressivism.

© 2024 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Eighty Years and Counting – Lessons learned over a lifetime

George Noga

Eighty Years and Counting
Lessons learned over a lifetime
GEORGE NOGA JULY 23, 2023

 

As I begin my ninth decade on this orb, I am taking the liberty to share what I have learned about human nature and, more particularly, the relationship of man to the state. Following are the top ten lessons I have learned.

We The people text
Photo by Anthony Garand on Unsplash

  1. The US Constitution is the best document ever to define the relationship between man and the state and it may be the finest document ever crafted by the hand of man. It embodies a fundamentally correct understanding of human nature by imposing an ingenious system of checks, balances and separation of powers. Our Constitution is 236 years old; half of all constitutions fail within 20 years.
  2. Government is inherently evil as our founders well understood; however, limited government is necessary to prevent an even greater evil, i.e. anarchy. Because government is evil, we want as little as possible – mainly for security from foreign and domestic violence. Since the evil is inherent, government can’t be reformed. The only way to reduce the evil is to reduce the funding; nothing else works.
  3. Government fails because it is unalterably opposed to human nature. Its incentives are diametrically misaligned with the public interest. Government is top-down, highly coercive, ignores consumer preferences and artificially creates winners and losers; it does not attract talented, hard-working people. It is rife with waste, fraud, abuse and corruption. Business succeeds because it is the opposite of every one of the above described characteristics of government.
  4. The science of public sector economics explains why government is predestined to fail. The goals and incentives of public officials are horribly misaligned with the public good. That explains why taxes are opaque, borrowing is always preferable to taxes, spending is out of control and failed programs never end.
  5. All forms of collectivism are doomed to fail for all the reasons cited above; however, socialism deviates far more egregiously from human nature. It inevitably results in starvation amidst plenty. Colonists in Jamestown and Plymouth chose death over socialism. Once they had private property rights however, these very same people became inventive, industrious and prosperous.
  6. People are incapable of sacrifice absent a serious danger that directly and immediately affects their lives. We refuse to act even in face of a clear and inevitable disaster. The best example of this is the coming spending crisis.
  7. The success of capitalism sows the seeds of its own destruction. This was first posed as a question by economist Joseph Schumpeter; we have resoundingly answered his question in the affirmative. America has become so affluent its citizens have lost the connection with what created their prosperity in the first place. As Steinbeck wrote: “Americans can stand anything nature throws at us save only plenty. If I wanted to destroy a nation, I would give it too much.”
  8. Universal school choice – where the money always follows the child – is the only way to improve education. Absolutely nothing else will work due to government failure and public sector economics explained supra. Parents always have the best interest of their children at heart; teachers and education bureaucrats don’t.
  9. Most of our formerly trusted American institutions have become hopelessly woke and corrupted; they include: entertainment, media, corporations, military, sports, fact-checkers, education, government, science, criminal justice, immigration, universities, academia, social media and even religion.
  10. The Gods of the Copybook Headings¹, with terror and slaughter, will return. Americans have not only ignored the wisdom carefully learned and handed down throughout the ages, they have flaunted it. Instead, we worship the false gods of wokeness, debt and deficits, climate madness, political correctness and identity politics. Throughout human experience, whenever people worship false gods, the Gods of the Copybook Headings, always return – with terror and slaughter!
1

Taken from the poem of the same name by Rudyard Kipling. In Kipling’s time, children learned to write using a copybook. Each page of the copybook had a heading which embodied some proverb or kernel of wisdom such as “All that glitters is not gold” and “A stitch in time saves nine”. The children would then copy the headings into their copybook to perfect their handwriting.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Adam Smith Tricentennial

George Noga

Why there is no capitalist manifesto
GEORGE NOGA – JUN 25, 2023

This month is the 300th anniversary of Adam Smith, born June 1723 in Kirkaldy, Scotland. Adam Smith was not the father of capitalism, as he often is called, but the first to articulate its principles. He is known for his invisible hand metaphor explaining how self-interested individuals operate in a system of mutual interdependence and direct economic life more effectively and fairly than government intervention.

a statue of a man standing in front of a building

Adam Smith did not invent capitalism because it evolved organically. No intellectual ever wrote a capitalist manifesto. Capitalism doesn’t require pointy-headed professors to theorize; it just happens naturally. To the eternal pique of liberal elites, no one is capable of controlling capitalism, whereas socialism requires controllers, i.e. the same progressive savants who castigate capitalism. Capitalism is egalitarian and rewards those who best serve sovereign consumers; i.e. their fellow man.

Capitalism evolved in prehistoric times

Capitalism evolved organically. For example, Paleolithic fishermen worked incessantly, spearing just enough fish to survive. Then along came one nascent capitalist who thought of a net. Since neither he nor anyone else had any capital he could borrow, he worked longer hours for months to accumulate enough surplus fish (his capital) to give him time to make a net. With his net he generated a fish surplus to trade for other goods. He also financed others who, in turn, specialized in different skills, with the resultant benefits from the division of labor. Our first capitalist became wealthy, but his capital also made everyone else much better off.

“It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interests.”

In sharp contrast, socialism never has happened organically. All the failed attempts throughout history to achieve Utopia, Xanadu, Zion and Valhalla were spearheaded and financed by some ivory-tower dreamer. That explains, as well as anything, why capitalism always succeeds and why all forms of collectivism always fail.

More Wisdom from Adam Smith

Adam Smith wrote many other pithy statements about economics and capitalism, which continue to have relevance for those of us in the twenty-first century. His point in Wealth of Nations about comparative advantages of trade still resonates.

“By means of glasses and hotbeds, very good grapes can be grown in Scotland and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries.”

Smith’s statements about the role of government also are valid 300 years on.

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

“To hurt in any degree the interest of any one order of citizens, for no other purpose but to promote that of some other is evidently contrary to that justice and equality the (government) owes to all the different orders of citizens.”

“The statesman who attempts to direct private people in what manner they ought to employ their capital would not only load himself with unnecessary attention, but assume an authority which could be entrusted to no council, and which would nowhere be so dangerous as in the hands of a man who had the folly to fancy himself fit to exercise it.”

Perhaps my favorite Adam Smith quote applies (in spades) to today’s virtue-signaling progressives, private-jetting climate alarmists, greenwashing corporations, limousine liberals and their ilk. Adam Smith had their number 300 years ago when he wrote:

“The man who has performed no single action of importance, but whose whole conversation and deportment express the justest, the noblest and most generous sentiments, can be entitled to no very high reward. We ask him, what have you done.”

Adam Smith’s genius lie in being first to clearly explain an economic phenomenon that is as old as our Paleolithic fisherman who first generated an economic surplus. Remember, no one ever wrote a capitalist manifesto because it wasn’t necessary. Unlike all forms of collectivism, capitalism is organic and consistent with human nature. That explains why capitalism and free markets succeed and socialism fails.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Tale of Two Islands

George Noga

Both had revolutions in 1959
GEORGE NOGA – MAY 14, 2023

 

I continually search for new ways to highlight the blessings of liberty (both political and economic) and the evils of collectivism in all its many manifestations. Nothing puts this into as sharp relief as the Tale of Two Islands from 1959 to 2023.

Revolutions occurred on two islands in 1959. Both countries were mountainous, less than 25% arable and relied on sugar exports. Both faced large, powerful and hostile enemies, separated by less than 100 miles of ocean. In both cases, their enemies cut off diplomatic and economic relations and threatened military invasions. However, one of the island nations was way ahead of the other in terms of health, education, income and nearly all other metrics of national well-being.

The country you likely are familiar with is Cuba, which in 1959 had nominal GDP of $2.0 billion and a population of 7 million, resulting in per capita GDP of $286. In 1959 the communist revolution led by Castro took over and abolished both political and economic freedom. Prior to its revolution, Cuba was far more prosperous than the other island; its GDP per capita was double that of the other island.

The second island nation is Taiwan. In 1959 its nominal GDP was $1.6 billion and its population 11 million, equating to per capita GDP of $145. In 1959 Taiwan underwent an economic revolution, adopting capitalism and a market economy. In the early 1970s Taiwan also had a political revolution – becoming a liberal democracy.

Fast forward to 2023. Cuba has GDP of $110 billion, a population of 11.3 million and (nominal) per capita GDP of $9,700, ranking 75th in the world. Out of 176 countries ranked, Cuba’s index of economic freedom ranks 175th in the world; only North Korea is worse. Taiwan has GDP of $900 billion and a population of 24 million for per capita GDP of $37,500 placing it 30th highest in the world. Its freedom index is 4th best in the world, much higher even than the USA which ranks 25th.

This tale of two islands illustrates the differences between freedom and capitalism versus tyranny and collectivism. Moreover, the GDP data for Cuba are suspect and Cuba’s true rank is likely one of the lowest in the world. Take home pay, according to most sources, is less than $100 per month. Cuba remains a brutal dictatorship filled with political prisons that engage in torture. Even its vaunted health care system is a failure. Cuban doctors botched Fidel’s treatment and doctors from Spain had to be flown in. Infant mortality is the worst in Latin America and is based on forced abortion of risky pregnancies and on not counting underweight births.

In 1959 Cuba’s per capita GDP was twice Taiwan’s; now it is 4 times lower, a swing of 800% – and the real data are far worse. But numbers alone do not tell the full story. The juxtaposition of Cuba and Taiwan from 1959 to the present is one of freedom versus repression, prosperity versus stagnation and hope versus desperation. Cuba today is a nihilistic society where 35% of pregnancies are aborted. It reveals the depth and breadth of the human and economic disaster wrought by collectivism.

Che Guevara may continue to adorn the tee shirts of clueless youth. Useful idiots, in and out of the media, may continue to offer encomia; but the Cuban people, when the regime finally crumbles, will render final judgment. Castro statues will be felled, murals will be defaced and the truth about the incalculable poverty and suffering of the Cuban people will be outed.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Titanic Myths

George Noga

Setting the record straight

Titanic Myths

GEORGE NOGA – APR 16, 2023

Although Titanic sank 111 years ago yesterday, many Promethean myths (Prometheus was a Titan) reverberate even today. Most accounts (especially the DiCaprio film) are ignorant, dishonest and politically motivated. This post sets the record straight.

Myth: Capitalism (Greed) Caused the Loss of Life

The PC narrative is White Star Lines (WSL) did not have enough lifeboats due to greed (cost) or aesthetics. The real blame lies with inept government regulation by the British Board of Trade (BOT). The designer, builder and WSL all deferred to the BOT about the number of lifeboats, as it was the unchallenged authority. However, BOT regulations were 20 years old and enacted when 10,000 tons and 20 lifeboats was the norm; Titanic was 46,238 tons. Bureaucrats were rewarded for issuing new regulations, not updating old ones. No one challenged the BOT. Once government becomes involved, common sense and personal responsibility disappear.

Myth: First Class Passengers Got Preferential Treatment

Dissecting the data, 74% of women and 20% of men survived. However, 44% of first class passengers were women versus 23% third class. When adjusting for gender, the survival rates between first and third class were about the same. A third class female was 41% more likely to survive than a first class male. Third class passengers were more reluctant to leave the ship and part with baggage; also, their location aboard ship made survival more problematic. When third class passengers reached the boat deck, they were accorded the same treatment as all others. Survival was not about class; it was about women and children – nearly all of whom were saved.

Myth: Male aggression Hurt Survival of Women and Children

The number of men who survived is cited as evidence of male aggression. There was lifeboat capacity for all women and children and 550 men. There were many more men than women on board. If one man were loaded onto a lifeboat for each woman and child, all women and children would have been saved. Moreover, lifeboats would have been loaded quicker and with less fear, keeping families together and saving more lives. Male behavior, far from being aggressive, resulted in more than 200 fewer men surviving than should have been the case.

Myth: The Media – Then and Now – Fairly Report the Facts

Most contemporaneous media accounts were tainted by laziness, i.e. the failure to properly understand the data. Present day media stories hew to a politically correct narrative of blaming capitalism, greed, class warfare and male aggression for the calamity. The movie Titanic falsely depicted third class passengers forcibly barricaded to keep them from reaching lifeboats. Nor was anyone shot. The crew and passengers were stereotyped in the worst possible way, despite acting heroically and fearlessly in the fact of near-certain death. Note: Fox (which made the movie) has since apologized to families of those falsely portrayed in the movie.

Enduring Lessons of Titanic

First and Foremost, the Titanic disaster was a failure of government, not of capitalism. The media are feckless and lazy; it is far easier and more dramatic to blame the ship’s designer, builder and owner rather than an amorphous, faceless gaggle of bureaucrats. Nearly without exception, the media falsely portrays a politically correct narrative that blames capitalism, class warfare and toxic masculinity.

Source Note: Data for survival rates were taken from the formal investigation conducted by the British government as reported on several websites.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Was the Bethlehem Innkeeper Greedy? The Grinch Who Stole the First Christmas

George Noga

Higher prices result in more people getting more rooms than if prices were static.

Was the Bethlehem Innkeeper Greedy?

The Grinch Who Stole the First Christmas

By: George Noga – December 4, 2022

This year’s Christmas posting is about the innkeeper in whose manger Jesus was born. Last year (posting dated 12/5/21) was about Ebeneezer Scrooge; in 2020 (12/13/20) it was about Christmas Eve 1941 following Pearl Harbor. In 2019 (12/15/19) we featured America’s greatest Christmas story; in 2018 it was lessons from Christmas shopping (12/16/18). All these are on our website: www.mllg.us and worth a read. Note: The genesis for this post was an article forwarded by a reader, but the words are our own.

The story of the birth of Jesus lies at the heart of Christmas. One prevalent narrative is that Jesus was born in a manger because the innkeeper raised prices due to the surge of visitors for the census. The innkeeper often is portrayed as a greedy, and even evil, capitalist. But was the innkeeper truly greedy? The following is from Luke 2-7.

“Caesar Augustus decreed a census be taken and everyone go to their town

to register. . . So, Joseph and Mary, who was with child, went to Bethlehem.

While there, Mary gave birth in a manger as there was no room at the inn.”

The Grinch Who Stole the First Christmas

The Roman government forced people to travel long distances at their own expense and at great risk to register for the census – for the purpose of taxation. Caesar knew there would be great danger and hardship but was oblivious. Conducting a census, even 2,022 years ago, could have been accomplished with much less human misery.

Why was it necessary to require travel? Why couldn’t people register where they lived? The Romans had a vaunted postal system that could have facilitated the census without hardship. Clearly, this was an egregious abuse of power. The hubris of government was responsible for Jesus being born in a manger instead of in his own home. It is incandescently clear that the grinch who stole the first Christmas was government.

Was the Innkeeper Greedy or Benevolent?

If the innkeeper raised prices due to the surge of travelers registering for the census, would that have been greedy or even evil? This situation is no different than the price of hotel rooms during a hurricane or a big football game. Prices convey valuable economic information. By adjusting prices when demand surges, consumers benefit.

Higher prices incentivize travelers to stay with friends or relatives or to lodge farther away where prices are lower. Some families that otherwise might have taken two rooms may decide to make do with one room. Some people may decide to stay for fewer nights. Higher prices would sharply increase the supply of rooms as many local residents may decide to rent out rooms in their home, or even their entire home.

The price mechanism assures more people will get more rooms than if prices remained static. Scarce hotel (or inn) rooms are allocated in the most economically efficient manner. Those who value rooms the most get them. Far from being evil, higher prices enable the market to allocate scarce resources to the benefit of all consumers.

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The narrative of a greedy innkeeper is frequently the topic of Christmas sermons and school plays. It is economic ignorance and anti-capitalist drivel. The grinch who stole the first Christmas was government – and nothing has changed in 2,022 years.

BEST WISHES TO ALL OUR READERS FOR A MERRY CHRISTMAS AND FOR A NEW YEAR WITH MORE LIBERTY AND LESS GOVERNMENT!

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More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us

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