The Founders Were Not Libertarians or Ayn Randers!

To those who condemn government, I would ask you to read John Winthrop’s speeches and Scottish history.

Winthrop’s speeches to his colony created the nation’s first free schools; he exhorted them to take care of the poor, the helpless and sick, the weak and defenseless because Jesus required it of them; his ideals caused them to create income taxation based on the religious principle of “do no harm.” He said those who have more should contribute more to the commonweal than those who have less because it was the moral thing to do to meet the needs of the commonwealth.

The South, on the other hand, as a result of the Scots-Irish immigrants came from a rougher sort as anyone who has studied Scottish history knows. Self-reliance in Scotland was necessary as civil society – and the rule of the King and Parliament and development of the commonweal – were extremely limited. That failure of government to develop a commonweal was one of the reasons why England prospered as Scotland stagnated and continuously plunged into tribal (clan) civil wars.

Prior to the Constitutional Congress, Madison, Mason and many others exhorted Jefferson and Washington to throw their hats in the ring with them to create a new national government out of the ashes of a dysfunctional Confederation. Finally, when representatives met, outside of the Confederation Congress, the members spent months writing and arguing the Constitution – without the Bill of Rights. Newspapers and tavern discussions dominated conversations across the states: how should a federal government be limited; does a new constitution need to explicitly state individual and state rights; should rights devolve to the people first or to the states first; should a federal government take pre-eminence over states. Those arguments consumed Americans and filled the newspapers.

Madison joined with Hamilton in arguing in the Federalist Papers that the nation needed a strong central government to deal with the challenges facing the new nation. England still threatened her merchant marines and trade routes. France wanted to be repaid. Individual state coinage was a complete fiscal disaster. In short, the new nation was being torn apart. However, a new central, strong government could solve those problems, Madison and his friend thought.

Not everyone was satisfied with the idea of strong central government. States’ Righters in the South pushed to have states rights prevail over individual rights, believing that states held pre-eminence over individuals. Northerners demanded individuals take precedence over states.

Finally, a compromise was formed after the original Constitution was ratified in which citizen rights were confirmed as Northerner’s wanted and state’s rights were confirmed as Southerner’s wanted. The outcome was the Bill of Rights.

Later, Washington came down on the side of strong federal government, which after much discussion, allowing Hamilton to set up a national bank and pay off the nation’s debts over Jefferson’s objections.

When I read Libertarians demand devolution or elimination of federal powers, I harken back to the arguments of our founders. None of them were Libertarians as many Libertarians would described today. The main disagreement that had existed two centuries ago was between the pre-eminence of individual rights via a strong federal government or state rights which held to a weaker federal government. It was not whether a person could opt out of societal responsibility, previously known as the commonweal, for self-interest. Although the North held to a stronger belief in social responsibility, the South really did not dispute those notions entirely. Even clans built strong social networks.

A month or so ago, I read a speech – or book preface – in which Libertarian economist and author Fredrick Hayek wrote that he was not a conservative. He wrote that conservatives look backwards, while he, a self described classical liberal, looked forward into the future. In other writings, he stated that a federal government should do what a individual cannot do alone, including building infrastructure, care for the needy, and providing health care. He wrote that these things were not against individual responsibility but rather fostered the ability of people to make decisions for themselves without destroying the social fabric (the commonweal).

The Mises Institute may be the hero of many libertarians, but Mises appears to have perverted Hayek’s concerns at a time of rising communism (authoritarian state control of industries) in parts of Europe. Fighting communism is a dead argument. Communism, in its purist form, no longer exists. Even China can no longer be called Communist. In actuality, China and Russia most clearly resemble their monarchies of the 19th Century.

Nevertheless, what some call socialism, particularly in the USA today, is nothing more than a response to the market and the requirement to compete globally. For example, 17% of GDP going to health care nationally when other OECD countries spend ~11% puts US companies at a financial disadvantage competitively. Moreover, a system based employer provided health care reduces the ability, incentive and motivation to start a new business. Even if one were to eliminate insurance companies, the costs of the health care delivery system would be beyond the financial means of a middle income family. That is why England, for example, has more start ups than the US: individuals and families don’t have to worry about being financially destroyed should a family member get sick. Essentially, the people have more freedom.

Hayek understood that essential freedom prospect and supported it. Hayek also understood the need to balance the “free market” with the need to protect the citizenry from corrupting, non-competitive legislation and legislation that would harm the public (the commons) due to industry specific, purchased legislation. Businesses will always – as they have always done – seek to protect their profits, regardless of the affects on society. That is why Hayek sought, in later years when communism was no longer a threat, to advocate for industry in general, rather than for businesses, and to protect workers from circumstances beyond their individual control.

Modern day Libertarians, all too often, align themselves less with Hayek and more with Ayn Rand in their philosophy. Rand espoused a selfish, self-centered economic philosophy that is the antithesis of Winthrop’s commonwealth.

It is also why Romney must be defeated. While Ayn Randers and many so-called libertarians aligned with him, he does not portray the values of Winthrop that dominated the US rise to prominence throughout the last 200 years.

Ayn Rand’s Objectivism by Any Other Name is Adolescence.

Micheal Gerson’s column in the Washington Post yesterday was one of his best, at least to my way of thinking. On this Good Friday, a day in which we celebrate the life and philosophy of Jesus, this column is a particularly good read because it reminds us of what our grandparents, religious leaders, and favorite teachers taught us when we were going up.

Gerson takes aim at Ayn Rand and her self-centered, egoistic philosophy which has become so popular in the last few years. But let him explain in his own words why Rand needs to be discarded as any moral authority:

None of the characters expresses a hint of sympathetic human emotion — which is precisely the point. Rand’s novels are vehicles for a system of thought known as Objectivism. Rand developed this philosophy at the length of Tolstoy, with the intellectual pretensions of Hegel, but it can be summarized on a napkin. Reason is everything. Religion is a fraud. Selfishness is a virtue. Altruism is a crime against human excellence. Self-sacrifice is weakness. Weakness is contemptible. “The Objectivist ethics, in essence,” said Rand, “hold that man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself.”

If Objectivism seems familiar, it is because most people know it under another name: adolescence. Many of us experienced a few unfortunate years of invincible self-involvement, testing moral boundaries and prone to stormy egotism and hero worship. Usually one grows out of it, eventually discovering that the quality of our lives is tied to the benefit of others. Rand’s achievement was to turn a phase into a philosophy, as attractive as an outbreak of acne.

The appeal of Ayn Rand to conservatives is both considerable and inexplicable. Modern conservatism was largely defined by Ronald Reagan’s faith in the people instead of elites. Rand regarded the people as “looters” and “parasites.” She was a strenuous advocate for class warfare, except that she took the side of a mythical class of capitalist supermen. Rand, in fact, pronounced herself “profoundly opposed” to Reagan’s presidential candidacy, since he did not meet her exacting ideological standards.

Rand cherished a particular disdain for Christianity. The cross, she said, is “the symbol of the sacrifice of the ideal to the nonideal. . . . It is in the name of that symbol that men are asked to sacrifice themselves for their inferiors. That is precisely how the symbolism is used. That is torture.” Yet some conservatives marked Holy Week by attending and embracing “Atlas Shrugged.”

Reaction to Rand draws a line in political theory. Some believe with Rand that all government is coercion and theft — the tearing-down of the strong for the benefit of the undeserving. Others believe that government has a limited but noble role in helping the most vulnerable in society — not motivated by egalitarianism, which is destructive, but by compassion, which is human. And some root this duty in God’s particular concern for the vulnerable and undeserving, which eventually includes us all. This is the message of Easter, and it is inconsistent with the gospel of Rand.

Many libertarians trace their inspiration to Rand’s novels, while sometimes distancing themselves from Objectivism. But both libertarians and Objectivists are moved by the mania of a single idea — a freedom indistinguishable from selfishness. This unbalanced emphasis on one element of political theory — at the expense of other public goals such as justice and equal opportunity — is the evidence of a rigid ideology. Socialists take a similar path, embracing equality as an absolute value. Both ideologies have led good people into supporting policies with serious human costs.

Rep. Ryan’s tax plan reducing taxes on wealthy while pushing even more tax burden onto middle class

The Center on Budget and Policy Priorities scored Republican (and Ayn Rand acolyte) Representative Paul Ryan’s budget proposal.

According to the CB&PP, Representative Ryan’s budget proposal

calls for radical policy changes that would result in a massive transfer of resources from the broad majority of Americans to the nation’s wealthiest individuals.[1]

The Roadmap would give the most affluent households a new round of very large, costly tax cuts by reducing income tax rates on high-income households; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax. At the same time, the Ryan plan would raise taxes for most middle-income families, privatize a substantial portion of Social Security, eliminate the tax exclusion for employer-sponsored health insurance, end traditional Medicare and most of Medicaid, and terminate the Children’s Health Insurance Program. The plan would replace these health programs with a system of vouchers whose value would erode over time and thus would purchase health insurance that would cover fewer health care services as the years went by.

The tax cuts for those at the very top would be of historic proportions.[…]

Ryan Plan’s Claims of Fiscal Responsibility Are Unfounded, Tax Policy Center’s Howard Gleckman Explains

“Word is getting around that CBO has blessed a major budget reform plan proposed by Representative Paul Ryan (R-WI) as, in the words of National Review Online, ‘a roadmap to solvency.’ It isn’t true.

“…. All this confusion is due to a letter written on Jan. 27 from CBO director Doug Elmendorf to Ryan. In that 50-page document, CBO suggests the plan could eliminate the deficit in 50 years and, even more impressively, eliminate the debt by 2080.

“But, and this caveat is a whopper, CBO assumed this wonderful outcome would occur only if the revenue portion of Ryan’s plan generated 19 percent of GDP in taxes. And there is not the slightest evidence that would happen. …. Rather than estimate the true revenue effects of the Ryan plan, CBO simply assumed, as the lawmaker requested, that it would generate revenues of 19 percent of GDP (emphasis added).”

— Howard Gleckman, “Assume a Can Opener,” TaxVox, the Tax Policy Center Blog, February 4, 2010, http://taxvox.taxpolicycenter.org/blog/_archives/2010/2/4/4447284.html .

This analysis is not the first I’ve seen of Ryan’s budget proposal. I read Ryan’s plan (412046_ryan_taxplan) a couple of weeks ago. Independent analyses of the plan all agree that Ryan’s plan hurts the middle class by shifting most of the tax burden onto them while reducing the tax burden on the most wealthy in the country – those in the top 1% income bracket. In other words, Ryan’s plan makes the middle class responsible for paying off the deficit and national debt while giving the very wealthy a “get out of jail free card.”

What I don’t understand – maybe because I’m one of those middle class individuals who would pick up the tab for the extremely wealthy – is why this notion of “tickle down” economics continues to exist in tax policy when it so clearly has been discredited.

In reading up on the politics surrounding the Great Depression, I discovered that supply side economics (another term for trickle down economics) was a big factor in the market crash leading to the Great Depression. But public and political memory are short – which partially explains why Reagan’s economic advisers initially advocated a return of this policy.

However, as reality hit, Reagan’s leading advisers turned against “supply side” economics, realizing that giving tax credits and exemptions to the very wealthy did not accrue to higher economic benefits in the form of jobs and higher income to the middle class. Just the opposite occurred. Middle class income stagnated while the wealthy invested in bonds and other financial instruments that lent little to nothing to the real economy.

Clearly Ryan’s – and Rand’s – economic policies do not work. They are based in an ideology that posits the perfection of thinking of the wealthy. It says, in general, that self-interested business executives, because they are logical and rational, will never do anything to harm the overall economy because it would hurt themselves.

What this ideology misses – its fault line – is that people are not necessarily good or rational or logical. As reported during the last two years since the global economic collapse, numerous traders who actively traded the worthless credit default swaps and other risky derivatives said they knew the products they were selling were worthless and hoped to accumulate enough wealth to get out before the market collapsed. That kind of thinking is diametrically opposed to Ayn Rand’s…and Paul Ryan’s…business and economic philosophy of vested self-interest.

In the final analysis, Ryan’s budget proposal is just plain bad for American taxpayers.

[1] Paul D. Ryan, A Roadmap for America’s Future, Version 2.0, January 2010. Available at http://www.roadmap.republicans.budget.house.gov/UploadedFiles/Roadmap2Final2.pdf . The proposal has been introduced in the House as H.R. 4529. Where specifications are unclear, this analysis follows the language of the bill.