Friday, November 2, 2012

Book Review: The Financial Crisis and the Free Market Cure

The Financial Crisis and the Free Market Cure By John A. Allison
This is one of the most enjoyable new books I have read in some time.  You might find this hard to believe since it is about the financial crisis of 2007 – 2009.  Yet, it does more than dissect the financial crisis; it provides optimism and hope for the future.
John Allison knows what he is writing about.  As the former CEO of a successful bank (BB&T), he has the knowledge and experience that enable him to isolate the key causes of the financial crisis and explain them in simple, direct prose. 
As a business person who worked his way up the ranks at BB&T, Mr. Allison created a new American success story.  The result is over 40 years of active participation in the American economy and first-hand experience with the causes of the crisis.  Throughout those years, he participated in the decisions that helped BB&T survive and thrive.
Mr. Allison does an excellent job of identifying the various factors that created the financial crisis and he squarely places the blame on government regulations and policies.  This assessment provides some excellent principled observations based upon his unique vantage point as an actor in the American economy.  He clearly explains the roles of the Federal Reserve, the Clinton administration and Congress as well as Fannie Mae and Freddie Mac, not to mention crony capitalism, which he aptly calls “crony socialism”.  Mr. Allison goes into detail on the role of each of these parties and even discusses how these factors influenced decisions he had to make at BB&T.
Mr. Allison’s explanation of the crisis details the damage done by the government as it sought to increase home ownership.  He doesn’t put stated intentions ahead of results.  He doesn’t argue that the end justifies the means.  On the contrary, he lets no one off the hook, clearly identifying the coercive actions and policies that caused the recession.  He explains how the principles of the free market could have prevented the crisis – had we been in a free market.  He even points out the irony of having the two men most responsible for the crisis write the legislation (Dodd/Frank) that would ensure it did not happen again.  Not likely, according to John Allison.
After thoroughly explaining the causes of the crisis, Mr. Allison proceeds to offer free market solutions.  His explanation of the principle of supply and demand is excellent and more broadly explained than I’ve read before; and he clearly shows how the various actions of government violated this principle and caused serious harm to both rich and poor.  As he states:
“The reason the United States entered the recession was not a lack of demand; it was because our resources had been misallocated, so we could not continue to consume (demand) at the same level.  Trillions of dollars of capital had been misallocated to housing, and millions of workers had learned the wrong skills.  However, we did not have the resources (capital and labor) to meet the demand—that is the demand was illegitimate because of the lack of productivity of our economic system.”[1]
I found that this particular discussion coincided well with similar explanations made by classical economists such as Henry Hazlitt, Ludwig von Mises and others.  Henry Hazlitt tells us:
“If we try to run the economy for a single group or class, we shall injure or destroy all groups, including the members of the very class for whose benefit we have been trying to run it.”[2]
Mr. Allison is clear about his basic principles.  He understands that economic success can only come about in a nation of free people who benefit or suffer from their own decisions.  He understands that production engaged in by free individuals, not consumption, will improve economic conditions and he understands that re-distribution brings little in the way of economic stimulus. 
I recommend this book for anyone who wants to understand why our economy is in the doldrums.

[1] Page 185
[2] Economics in One Lesson, Henry Hazlitt, Paperback, Three Rivers Press, Page 158

Tuesday, October 9, 2012

Book Review: Free Market Revolution, How Ayn Rand's Ideas Can End Big Government

Free Market Revolution –  How Ayn Rand’s Ideas can End Big Government
By Yaron Brook and Don Watkins
Reviewed by Robert Villegas
If you were offered a book about how to live without guilt and be more successful, would you be interested?  If it taught you that success is good and more is better, would you be intrigued?  If it helped you understand the incessant attacks on capitalism by politicians, journalists and social planners, would you check it out?
The book is called “Free Market Revolution, How Ayn Rand’s ideas Can End Big Government”.  Its goal is to clarify some important philosophical and economic issues and convince you that Ayn Rand’s ideas have the solutions we need for a civilized society.  It challenges some of history’s falsehoods and provides a new way of looking at economics.  It can help voters, students, business people and even politicians understand the factors that move society.
The authors, Yaron Brook and Don Watkins point readers toward a new moral and political theory that challenges the corruption of today’s world.  Ayn Rand was an iconoclast who, even today, stirs both anger and respect among the millions who read her books.   Her philosophy is a full-fledged integrated system with all the characteristics of a complete, consistent frame of reference.  Objectivism, as it is called, is entirely original. 
Mr. Brook and Mr. Watkins are enthusiastic salesmen for Ayn Rand’s ideas.  Their presentation is flawless.  Yaron is already famous as the Executive Director of the Ayn Rand Institute.  His stirring speeches and commentary can be found on and PJTV, not to mention Fox News and other networks.  Don is a fellow of the institute and a perennial radio and television guest as well as an op-ed writer for Investor’s Business Daily and USA Today to name a few.
“Free Market Revolution” covers two key aspects of Ayn Rand’s philosophy: her morality of self-interest and her advocacy of laissez faire capitalism.  Rand’s philosophical approach creates an internally consistent and powerful argument for political freedom.  Find an energetic and innovative entrepreneur and you’re likely to find someone who has read Rand’s novel “Atlas Shrugged”.
Part 1 of the book is entitled “The Problem”.  It begins by setting the context for the book, discussing the recent resurgence of interest in Atlas Shrugged and explains the intellectual and economic malaise that needs Ayn Rand as antidote.  This section also analyzes the essential arguments of the left; especially the argument from need and the argument from greed.  It counters these arguments with the suggestion that liberating the un-free market will restore America’s once powerful place in the world.
Part 2 makes up the rest of the book and provides some of the most fascinating ideas ever put to print. It includes a re-evaluation of the concept of selfishness, the role that it plays in both life and the economy, and informs us of the discovery, made by Ayn Rand, that business success is not accomplished by predatory behavior but by innovation, production and win/win trades.  Brook and Watkins challenge the idea that economic transactions are “zero-sum” (which gets at the heart of the Marxist critique of capitalism).  The authors show that free markets are the engines necessary for improving human life.
In many respects, the book has the feel of a symphony.  It starts with a basic theme, allegro, stays there for a while as it develops; then boldly explores both harmony and rhythm; until finally, at the end, it finishes with a crescendo of energy and power.   By the time we arrive at the last chapter, entitled “Stopping the Growth of the State”, we have thoroughly examined the concept of selfishness and discovered its positive aspects and the role it plays in making society vibrant, innovative and life-enhancing; we've found a solid argument that declares capitalism to be moral; we’ve examined altruism and how it thwarts life and success; we’ve studied the division of labor, supply and demand, prices and their role in creating efficient markets; and we’ve studied how it happened that many people in society have moved from an entitlement morality to an entitlement mentality. 
The last chapter brings us full circle, exploring Rand’s philosophy further, identifying the major contradiction that has created our economic decline and provides a strategy that will end big government.
Both Yaron Brook and Don Watkins are competent writers, able to explain broad philosophical and economic concepts in a way that makes them real for the average reader.  This book is destined to become a manifesto for prosperity and peace in the world.  I highly recommend it.

Sunday, October 7, 2012

What Should Romney Do Now?

I find it positively admirable that Governor Romney selected Paul Ryan to be his running mate. Ryan’s intellectual abilities will provide the campaign, and hopefully the Romney administration, with new ideas and a fresh perspective. 

Truth, new ideas, and real solutions will help win this election for Romney, Ryan and the American people. If Romney doesn't win, then a collapse of the entitlement state will be the result. You cannot keep spending at these levels and expect things to get better. 

The President is offering an alternative policy.  It is a policy that we've seen in effect for four years.  Just look at the results.  But what is the policy?  What are the solutions? 

The first Presidential debate was clearly won by Governor Romney.   He offered a vision that looks at specific issues and offers specific solutions.  But he needs to keep the momentum going by expanding his criticisms of the President and his impractical policies.  There are many opportunities to do that.  Here are some suggestions:

1.      He should not agree with the contention that the President inherited a bad economy.  He must initiate a discussion of the causes of the subprime crisis of 2008.  Obama was a key player in setting up the regulatory scheme that caused it.  He, Bill Clinton and the Democrats were clearly involved.  Obama was part of the original lawsuit (against Citibank) in 1994 that laid the groundwork for strengthening of the Community Reinvestment Act (CRA).  This strengthening of the CRA mandated that banks should issue more loans to people who did not qualify under threat of prosecution.  It was Bill Clinton’s desire to spur home purchases that created the housing bubble and re-distributed millions of dollars into the housing industry.  Romney should hang the subprime fiasco around the necks of the Democrats especially Obama. 

To accept the premise that Obama inherited a bad economy assumes that the Republicans caused it.  There are plenty of articles on the Internet about the roles of Obama and Clinton in setting the foundation that caused our economy to collapse.  And there is plenty of video footage of Frank and Dodd blocking legislation designed to avert disaster.  Another villain was ACORN, an Obama organization that routinely accused banks of racism and pressured them to make more loans to the poor.  In fact, if you combine Motor Voter programs, ACORN, the CRA and the subprime crisis, you get a clear picture of how influential Obama has been in undermining our economy for many years.  Don’t buy the argument that Obama had nothing to do with the economic collapse.  An argument can be made that he engineered it.

2.      Obama claims that he kept the economy from sinking further.  But there is nothing he did that spurred new economic activity.  In fact, he delayed the recovery with his actions.  Had the government not interfered through further stimulus spending, the economy would have recovered quickly once housing prices hit bottom. By spreading out the damage through TARP and the bailouts, all American companies and citizens were forced to pay for the government-created problem. 

First, stimulus programs are nothing more than re-distribution of money already in the economy, even if newly printed dollars are used.  This means that any new economic activity they might have generated was done at the expense of economic activity already taking place. 

Secondly, Obama blamed capitalism for the economic decline and wrongly created regulations that harmed businesses.  These regulations (Dodd-Frank among others) added billions of dollars to the cost of doing business and severely impacted the profitability of many businesses.  They did nothing to avert another disaster, but, in fact, left largely intact the corrupt framework (Community Reinvestment Act, Fannie Mae and Freddie Mac) that was responsible for the decline. 

3.    Regarding the role of government, the President said, “Government has the capacity, the Federal Government, has the capacity to help open up opportunity and create ladders of opportunity and create frameworks where the American people can succeed.  Look, the genius of America is the free enterprise system and, freedom, and the fact that people can go out there and start a business, work on an idea, make their own decisions, but, as Abraham Lincoln understood, there are also some things we do better together, so in the middle of the Civil War, Abraham Lincoln said, let’s help to finance the transcontinental railroad, let’s start the National Academy of Sciences, let’s start land grant colleges because we want to give these gateways of opportunity for all Americans because if all Americans are getting opportunity, we’re all going to be better off.  That doesn’t restrict peoples’ freedom; that enhances it.  And so what I’ve tried to do as President is to apply those same principles.  When it comes to education, what I’ve said is we’ve got to reform schools that are not working.  We’ve used something called “Race to the top”; it wasn’t a top-down approach, Governor, what we’ve said to states, we’ll give you more money if you initiate reforms, and as a consequence, you have 46 states around the country who have made a real difference.  But what I’ve also said is let’s hire another hundred thousand math and science teachers to make sure we maintain our technological lead and our people are skilled and able to succeed and hard pressed states cannot always do that.  In fact, we’ve seen layoffs of hundreds of thousands of teachers over the last several years and Governor Romney doesn’t think we need more teachers.  I do because I think that is the kind of investment where the Federal Government can help.  It can’t do it all but it can make a difference and as a consequence we’ll have a better trained workforce and that will create jobs because companies want to locate in places where we’ve got a great workforce.“

This statement, I submit, lost the debate for the President.  People were looking for an answer here, not this garbled package of collectivist platitudes and deceptions.  This answer can’t be understood by most people; and some people, those who understand what the President is saying, know that this argument can be used for virtually any expenditure.  The statement is as corrupt as the President's administration.  It harkens to a totally unlimited government that can merely create an "emergency" and then offer itself up as the solution.  

Under this scheme, the government could pump millions of dollars into failing auto companies, failing banks and failing green energy companies.  It could enrich cronies and campaign contributors, cover for corrupt union pension programs, hire thousands of government employees to join those unions, cover the costs of unemployment benefits, food stamps, Social Security, Medicare, Medicaid and ObamaCare.  It could funnel millions of dollars to people who claim they tried to farm (Pigford Scandal), pay for voter registration programs that help elect the President, take over student loan programs, the Internet and send millions of dollars overseas to terrorist organizations.  It is “investments” like these that create trillion dollar deficits. 

What does this Abraham Lincoln-approved program consist of?  It is an integrated collectivist society, self-consciously organized by technocrats (czars) that includes political correctness, unlimited majority rule and coerced armies of unskilled people getting paid to do nothing.  In essense, the President is describing a benign fascist dictatorship that, once established, will cease to be benign.  Those who don't agree...well, they'll find a way to deal with "those people".

Governor Romney should expose this vision and explain what the President really meant.  This will communicate that the Governor understands the method in Obama's madness and that he has a sane and workable alternative; the pursuit of happiness and freedom.

4.      The “47 percent” quote has proven problematic for Romney.  According to the left, when he dismissed “the needy” he showed that he was insensitive and detached.  When Romney said that his statement was a mistake or in-artful, he ceded the premise to the left.  Instead, he should say that the statement was part of a bigger narrative for which Obama is responsible.  The President has increased dependency in the USA by putting more people on welfare.  The 47 percent include many people who want to be working and paying taxes but cannot.  What Romney was criticizing was the President’s effort to buy the votes of the 47 percent.  He should talk about how it pains him that so many Americans are being used as tools by the President.  

5.      Governor Romney should take apart the President’s closing statement as pure collectivism, not what America is about.  The President said, “Everything that I’ve tried to do and everything that I’m now proposing for the next four years in terms of improving our education system or developing American energy or making sure that we’re closing loopholes for companies that are shipping jobs overseas and focusing on small businesses and companies that are creating jobs here in the United States or closing our deficit in a responsible, balanced way that allows us to invest in our future; all those things are designed to make sure that the American people, their genius, their grit, their determination is channeled and they have an opportunity to succeed and everyone is getting a fair shot and everybody is doing a fair share and everybody is playing by same rules.”

Governor Romney should point out that spending is not investing.  You cannot have collective goals and help individuals; you wind up enslaving productive people and forcing them to work for goals that are not their own.

He should point out that the President's “channeling” of the American people implies that he knows better what people should do.  He should point out that funding the transcontinental railroad (which was a corrupt and failed endeavor) has now become forcing school children to starve for the sake of Michelle's version of a healthy diet.  No one has the authority or right or ability to decide how people with free will should act.  Re-distributing the money of productive citizens may seem like a good idea to those receiving the sums; but it is not fair to productive citizens.  Doing a “fair share” might seem fair to the person who is not working but it doesn’t seem fair to the person who is barely getting by on his own honest work.  Playing by the same rules might seem great to the person who cannot find a job but it doesn’t seem fair to the person who pays millions of dollars in taxes. When the President says he wants a balanced approach to deficit reduction, he means he wants to continue deficit spending and will not compromise with anyone about it. 

6.      Romney should consider buying television time for policy speeches and interviews in order to get around the media.  Ronald Reagan did this effectively and it could help the Governor have more time with the public without the media filter.

7.      Use humor.  The first debate burst the bubble on the President’s intelligence and competence.  He’s now on the defense.  Use your ads to find humor in some of his statements and gaffes.  People tend not to vote for a bumbling Chaplin-style politician.  Turn the tables on the President and get people laughing at him and you relieve their fears about his supposed invulnerability.

8.      Don’t forget to accentuate the positive and the possibilities of a brighter tomorrow.  Contrast this future with the present and show that you can make it happen.

These are the kinds of things Romney can do that will resonate with people.  Not only do they expose how wrong Obama’s ideas truly are, but they offer a shining vision of a prosperous future.  They offer an alternative opportunity for people to determine their own productive futures rather than have them determined by a faceless government of technocrats.

Tuesday, September 11, 2012

Protecting American Values – An Open Letter to our Troops

“The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." - Ayn Rand, Atlas Shrugged

This blog post is an open letter to America’s military troops, firefighters, emergency responders and police officers.  As a military veteran, I’ve had a strong interest in military matters since I left the Army in 1968.  Even though I considered the violation of my individual rights to be wrong (I was drafted into the Army), I still felt that I was involved in a struggle to protect Americans.  During this time, I saw the Soviet Union and Communist China as clear threats to our liberties and I was convinced that only the United States had the power and ability to stop the advance of totalitarianism. Because of this, I undertook my service with the same patriotic attitude as anyone who had voluntarily joined the military.  I believed that our country was still worth fighting for; that it represented freedom around the world against two encroaching tyrannical enemies.

Many service members distinguish themselves by their willingness to sacrifice for others.  They take seriously the idea that a moral life is one spent in service to others.  They agree with Einstein that

“Only a life lived for others is a life worthwhile.” [1]

But I dissent from this view.  Today, as a much older and experienced veteran, I challenge the concept of duty that is being taught to members of our protective services.  I’m convinced there is a better concept that enables them to express their benevolent natures.  I don’t think that the decision to protect Americans is a sacrifice.

Most young people today are unaware of the ideology surrounding the concept of duty and its negative aspects.  They see themselves as practical people who understand how to protect and they see sacrifice as an effective way to create good outcomes.  Yet, although they have spent their student years listening to teachers and theologians who support sacrifice, they have not been taught about the contradictions implicit in the act.  The first contradiction is that sacrifice is an obligation, not a freely chosen option; there is no choice about sacrificing.  The second contradiction is that sacrifice should be total; one must sacrifice all of one’s time and money for others.  As Dr. Tara Smith has observed, “If individuals owe one another their services, they can be licensed no freedom to shirk that obligation.”[2] 

These contradictions imply some important questions about altruism’s role in society.  Many take it to be benign and even beneficial.  Yet, Dr. Smith asks: “If the paramount altruist objective is to serve others, what is the need for freedom?  Its role is hardly obvious.  Why shouldn’t the altruist simply seek to install rulers who will dictate peoples’ activities, seize their output, and reroute the proceeds to those in need?”[3]

Indeed, history’s most brutal periods were those in which that premise dominated.  According to this view, government officials are authorized to decide men’s actions for them and people with guns will be responsible for making it happen.  This means that the instrument for implementing sacrifice on behalf of the government will be soldiers and police officers.  These professionals will be responsible for coercing citizens rather than protecting them.  Is that proper in the land of the free?

Few service-members are aware of the exploitive nature of the moral philosophy known as altruism, the philosophy behind the injunction to sacrifice.  Neither have they realized that our nation was the first to liberate people to pursue happiness not sacrifice.  So for service members, the questions are “If Americans should be free to live in freedom, why should you be the instrument of forcing them to sacrifice?” and “How can a protector of freedom and self-interest be required to sacrifice his life and/or limbs while doing his job?”

Let’s see if we can understand this contradiction more fully.

When the United States was created, a new idea, an anti-sacrifice idea, challenged centuries of moral thought.  When the Continental Army fought against the British, our soldiers did not see their American Revolution as a sacrifice; they saw it as a struggle for their own freedom.  They did not want to live under a tyrannical king and they knew that they had to put their lives on the line; they had to fight and possibly die so they could be free.  They knew that a tyrant demands nothing less than the lives of those who disagree with his policies.  The American Revolution was a matter of life or death for every revolutionary.

As our government was originally conceived, and because of the legacy of the Declaration of Independence, a professional soldier in the Armed Forces was different from any similar soldier of any other country.  This is because he was a protector of free people, not a protector of slaves.  It was not his job to coerce citizens and make them do things they would not otherwise do.  His job was to facilitate and protect the citizens’ freedoms.

The concept of duty, on the other hand, is centuries older than the concept of freedom.  It derives from prehistoric notions of human sacrifice where men were required to give their best children (or their own lives) to appease the gods of primitive religions. Eventually, human sacrifice became so onerous that men wanted to give up something of lesser value, their best cattle and/or agricultural products rather than their children.  Down to today, this idea of sacrificing for others has lost many of its bloody roots and has evolved into a more benign form of moral action ostensibly engaged merely to help others. 

Even as history moved forward, and as altruism evolved, men were sometimes required to give their lives for various social purposes such as war.  At other times, they may have been required to sacrifice their first crops of the year, or goats and other animals.  However, the distinguishing characteristic of all forms of sacrifice was the obligation that the individual give up a higher value for a lower.  Each sacrifice, whether it was a goat or money, meant additional work for the sacrificer so that he could make up for the loss. 

The best way to understand what a sacrifice consists of is to compare it with a mutual trade.  You do business with the grocer because he makes available products that provide nourishment to you.  The grocer charges you what it costs him to buy the product and he adds a markup which is his profit.  You are willing to pay the markup because otherwise, you’d have to spend your own time growing or making the product.  The benefit to you includes the benefits of consuming the product as well as the time saved in making the product yourself.  This is called a mutually beneficial and voluntary trade.  Both parties gain; you save time and effort and the grocer makes a profit that enables him to survive and keep providing products for sale.  If you take his profit away from him, you remove the incentive for him since he would not be able to feed his own family.  That profit is his paycheck.

If you persist in your demand that the grocer not make a profit, you have given him no choice but to use his produce to feed himself only.  He will no longer sell it to you; which means your demand that he sacrifice his profit has led to your starvation.  The next step is force and slavery.  You hold a spear to his throat and demand that he produce the products that will feed you.  You tell the grocer that it is his duty to serve you and that there is no choice about it.

Now, imagine a different situation in which government forces you to pay more than the average profit for this product.  Let’s assume that the grocer is given a monopoly by government and that you are forced by buy your groceries from him at double the price.  This would be a sacrifice on your part; in this case, you are required to give up more of your money than you would in a free trade and you are prohibited from making or growing the product yourself.  You’ll also have to work twice as many hours to earn the money to buy the product and you cannot spend that money on a less expensive alternative. 

Every sacrifice of this type is an immoral imposition on you.  It requires that you act in a certain way and that you lose a value that is more important to you than what you were gaining at the previous price.  It assumes that the tribe or state is the repository of morality and that it can decide what you can gain or lose.  It assumes that you are the property of the state and that your purpose in life is to do as you are told.  This is altruism in practice.  Who is getting the double price that you have paid? – The government, of course – a party that has not earned it.

As Harry Binswanger has pointed out:

“Average Americans naively take the morality of altruism to mean good will, generosity, and human decency. But stripped of that benign cover, the operative doctrine is that your life is not your own, that selfless service to the needs of others is the only justification for your existence.”[4]

According to this scheme, there is no such thing as a sovereign individual; the individual is a mere citizen whose purpose is to advance the will of the leaders.  These citizens will be fed a lie about a society where all citizens work together but this is mere propaganda designed to convince people that they are not being forced; that they are complying with the government willingly in order to create a better world. 

Throughout history, few have challenged the idea that sacrifice is moral.  They challenged only what made up a proper sacrifice and who should be made to sacrifice.  They never questioned altruism.  Yet, if we take a dispassionate look at the idea of sacrifice, we must ask, is the essential reason for sacrificing, to placate the gods, a valid reason for sacrificing today?  Was it even valid in the past? Haven’t we, as civilized people, moved past the ancient arguments for pre-defined and obligatory moral action?  Further, is the modern reason for sacrifice, the idea of helping others, a powerful enough reason to invalidate the choices and decisions of individuals?  Ayn Rand would tell us:

“It stands to reason that where there's sacrifice, there's someone collecting the sacrificial offerings. Where there's service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.”[5]

With the Declaration of Independence and the American Revolution, people fought, not to be sacrificial victims, but to be free.  They realized that they had the ability to decide for themselves without the interdiction of a king or ruler.  They could trade freely and build up their property while working free of expropriation by government.  This new idea was based upon the real life experiences of Americans living in the wilderness who knew that their lives could only be successful when they took freely chosen actions.  They were rugged, independent and they guarded their liberties diligently.  They saw any encroachment as morally reprehensible and they developed, without knowing the monumental import of it, a new morality for living on earth. 

Dr. Tara Smith has made an excellent argument for the fact that the call to sacrifice and the concept of individual rights are incompatible:

“…it is vital to respect freedom (including the freedom to do wrong) because a person can only do the right thing if she chooses right action.  Freedom is a necessary condition for morally right action.  Without freedom, individuals would have no chance to act morally...”[6]

“…my claim is rooted in a more basic conception of the nature of morally proper action.  An action does not become right until it is chosen and performed by a free person.  That choice is part of what makes an action right.”[7]

Surprisingly, none of the major advocates of sacrifice throughout history have offered a reasoned argument for why sacrifice is good.  Neither Jesus, Plato, Augustine, Aquinas, Hume, Kant, Comte, Marx; not even Stalin has offered an argument for WHY sacrifice is good.  They have merely relied upon an assumption that it is good.  Some have said that God says so, that you will go to heaven, that society demands it and that it is practical but there has never been a tangible argument for why altruism is anything other than the giving up of a higher value for a lower one. 

In fact, the strongest (and still false) argument for altruism is determinism, that the individual is imperfect, that he does not have the ability to decide for himself; that he is evil by nature and that he can only be made good by being forced to do what is right; forced to give up something he values for the sake of society.

Determinism is not the philosophy of the Enlightenment; it is the opposite of the idea that man has volition and can determine his own actions and achieve his own happiness.  Determinism invalidates the human mind and makes individual human choices into immoral acts, into revolts against God or society.  It is an ancient and hateful view of man that justifies enslavement and dictatorship.  If you believe that man is a determined creature bound to sacrifice then you have no problem if millions of men are slaughtered because they had the “impudence” to have been born.  If men are determined and doomed by fate, the death of one or a million men is irrelevant.

In fact, altruism has been disproven by the enormous success of the United States that was built on a different moral mandate.  Haven’t we seen the validity of freedom and capitalism in the very lives we live?  Isn’t our clean, paved, strongly built and infrastructure-reliant society better than the dirt and hovels of other countries dominated by determinism and altruism?  Isn’t the reason for our success that we enable self-interest and choice, that people can chose to live clean, happy and self-confident lives?

When we look to the period of the founding of our society, we see that the enlightened view of man held that it was wrong to force men to do anything against their wills, that men had wills of their own and that they were not determined by any historical or universal premise.  The United States effectively outlawed the various forms of sacrifice that had devastated societies of the past.  In fact, this new form of society protected men in their pursuit of values.  It did not expropriate their belongings or demand that men give up things for the sake of others. 

This new society even developed a new form of loyalty.  Men were no longer required to be the dutiful slaves of kings or dictators.  And because freedom made people more prosperous, they realized, as a matter of self-interest, that this society was worth defending from attack.  They created a new concept of patriotism based upon love for a country that valued and protected self-sufficiency and individual rights. 

The beginning of the end for freedom started during the USA’s first decades when Europe exported the ideas of Immanuel Kant.  Kant made an assault upon reason (in the name of reason) and free will (in the name of free will).  For Kant, because man had the ability to deny his own self-interest, duty was considered a “categorical imperative”; unquestionable and built into the very concept of morality itself.  I won’t go into all the arguments made by Kant except to say that his philosophy is a massive fraud based upon unproven assertions and deceptions whose result was the institution of irrationality and, once again, force against the individual.   America had barely begun to build its economic power before someone tried to kill it.

Of all the evil arguments made for sacrifice, the most evil was Kant’s.  He claimed that duty was to be done without reward, without a love for man, without even the happiness of heaven as a reward; but simply because it was, in his mind, a duty.

At base, Kant asserted that “pure reason” (an idea that he concocted with leads from Plato) had to be totally disconnected from reality; that it consisted only of tautologies.  This perpetuated and amplified many of Plato’s mistakes and left the human mind incapable of reason.  The ultimate expressions of Kant’s views resulted in men who could not resist the call to sacrifice and became the fodder for the killing fields, the concentration camps and the mass graves that punished those who refused to sacrifice for the collective.

Certainly, you are going to say that Kant’s idea of sacrifice and the murder of millions is not what you think of when you think of altruism.  But, whether you realize it or not, that is what you mean.  The idea of human sacrifice has always meant that the best were forced to give up their highest values, their minds and even their lives, for the sake of others.  The 147 million people killed in Soviet Russia, Communist China and Nazi Germany were the best people in those societies; capitalists, small business owners, intellectuals, college professors, college-educated citizens; people who disagreed (on one issue or another) with their government. They died because sacrifice was considered to be a moral imperative and those who did not agree with it had to be removed so history could move forward toward a world of sacrifice.

The idea that sacrifice is the justification for murder seems incongruous today considering the positive view most Americans have of the idea.  Today, many people mistakenly think that hard work for the sake of reaching an important goal is sacrifice.  Politicians will tell you, when they are giving their resumes, about all the sacrificing they have done, as if their willingness to sacrifice makes them worthy of votes.  Others will downplay or even hide their success because they are afraid they will be thought of as selfish and not worthy of votes.  These are all examples of the influence of the idea that it is moral to sacrifice.

Yet, the idea that sacrifice is good includes the idea that not sacrificing is evil.  This is the basic reason that people do so much to advertise their past sacrificial actions.  These actions are like tickets to humanity, verification that someone is a good citizen (according to altruism).  Were it not for the demand that people sacrifice, people would not feel uncomfortable about exerting their self-interest.  Even Plato insisted that society should force men to sacrifice for the good of the whole.

I say this is all wrong.  A willingness to sacrifice does not warrant deep respect and votes.  In fact, a desire to succeed and enjoy life requires much more in terms of hard work and dedication.  It requires individual effort, thought, education, reasoning ability and a desire to succeed.  The hard work you do today to accomplish a high value or goal is not a sacrifice.  Hard work is the price one must willingly pay in order to accomplish a supreme goal. Hard work can only be a sacrifice if it is demanded of men by moral or physical force.  If a value did not require hard work and supreme effort, it would not be a high value.

As Craig Biddle writes, “Altruism is not about moral obligation as such; it is about a specific kind of moral obligation. Altruism does not call for a person to serve others if he has made an agreement or a commitment to do so—as in the case of a doctor who contracts to provide a patient with medical care in exchange for payment, or an employer who contracts to pay an employee in exchange for his work. Such obligations are chosen obligations, obligations stemming from mutually beneficial agreements, agreements in which both parties gain a life-serving value. Altruism is not about chosen obligations. It is about “unchosen” obligations or “duties.”[8]

To return to our discussion of the military, if the individual is voluntarily fighting for freedom, it is because he values freedom so highly that he is willing to risk physical damage or death.  It is a chosen obligation that he takes on as a free individual.  Therefore, the protector of American lives is being highly moral and pursuing his highest values when he must go to war.  He is not sacrificing.  He is protecting the right of people to be free and moral.  And since he is a human being seeking to live a moral life, he is fighting for his own freedom above all.

Anyone who tells you that sacrifice should animate your life is doing a disservice to you and to the principles which guided the Founding Fathers in creating this country.  They ignore the basic reason why people live in a free society.  They ignore the requirements of human survival.

How do people survive in this world?  Certainly, they have to identify their true needs and find ways to meet them.  But before this, they have to do something much more profound; they have to conclude that life is worth living; that it presents the individual with an opportunity for enjoyment and good living.  In other words, people have to choose to pursue values.  Then they have to think about how to pursue those values.  They realize that they have to be productive, do good works and earn the money necessary to survive; they have to engage in a process of reason.

If life did not have the possibility of happiness, there would be little incentive to produce and trade with others.  Like the grocer forced to sacrifice his profits in our earlier example, there would be little incentive to develop technologies that lighten work and enable more production.  In fact, without the possibility of happiness, it is unlikely that people would want to pay other people to protect them and their property.  There would be little need for an army, a police force, firefighters or even society.

Since men must use reason in order to survive, this brings up the need for people to respect each other’s rights to engage in reason, to produce and keep the results of their work.  To steal or legally expropriate production would restrict and make impossible the thought and work necessary to survive.  Property rights are the first step in creating civilization.  By respecting the property of other citizens, we make it possible for people to thrive and flourish.  As Ayn Rand wrote,

“Civilization is the process of setting man free from men.”[9]

With all this said, I would like to propose an American approach to doing your job.  I think you should consider yourself a professional who honors your own life and that of others.  Your chosen profession to protect people is a means for accomplishing your values and goals; your love of life and your love of freedom.  Since freedom makes a good life possible for Americans, why not be a protector of freedom paid by those who have hired you to do it?  This makes your career a means for engaging in trade with other citizens rather than a mere sacrifice.  Further, it eliminates the performance of your job as a duty and turns it into the performance of your job as a life-serving career.  It also eliminates your acquiescence to the false idea that society has a right to demand your sacrifice or that your job is about forcing people against their wills.

To clarify this, ask “What value do I provide when I do my job?”  Certainly, the answer must be that you protect individuals, their freedom to live and their properties.  In an advanced society such as ours, someone should provide such services and be paid for it.  You save peoples’ lives, their properties, their freedoms; and your presence in society is needed.   You help people live profitable lives so you should also profit from the performance of our job.  It is honorable to earn a profit.

Now, let’s imagine that you have a great ambition to be successful.  If the level of service you provide is higher than that provided by others, then you should be able to demand a higher price for your services or attain to a leadership position and receive higher pay.  Certainly, you must keep your prices competitive, but if you want to earn more business, you will need to add value to your services.  You might undergo advanced training, or take additional classes in self-defense, or find the best new technologies, more advanced weapons or surveillance equipment.  You may even add new services to your capabilities that are difficult for your competitors to duplicate. 

You may also want to remove as much danger as possible from the performance of your job.  You may want to use bullet proof vests or other safety equipment.  These would make you safer and enable you to plan a long life, get married, have children and plan for their futures.  Because of your expertise, you may even be able to invent new tools or technologies to help protect you and your customers.  By making yourself more efficient, you increase your chances of survival.  You secure your long-term happiness; you honor your values, perform work you like, help people secure their lives and improve society.


As you can see, altruism is the opposite of self-interest.  Altruism leads to dictatorship while self-interest requires political freedom.  Altruism demands that men be forced to sacrifice.  Freedom enables independent thought, free will, capitalism and human survival.  Given these facts, what is the proper perspective on doing your job?    


The job of the military in the United States is to protect the country against attack by foreign invaders who would enslave the citizens.  It is not the job of the military to accomplish social goals such as building roads and bridges unless they are needed to help win wars and end conflicts.  It is also not the job of the military to force citizens to act against their wills.  As an agency of protection, the military should be called upon only when the nation or its interests and possessions have been attacked.  As a defensive agency, it is not responsible for the deaths and rights violations that are the collateral damage for the enemy in war.  A free nation places the blame for these deaths squarely on the party that engages in aggression.  The US military makes it a point to exact retribution from and punishment for all aggressors and their agents.

The solder is not a sacrificial tool for the social goals of his leaders.  Your time and training should be focused on making you into the best and most lethal fighter in the world so that no other country would dare attack us.  A good military strategy prepares the country so well for war that the cost of attacking America will be visited upon our enemies many times over.  Your job should be to kill the enemy and do it fast so the war is over quickly and the enemy is removed as a threat.

Further, your job is to protect the Constitution of the United States.  This document has given you a special mission unlike any mission of any soldier from any other country.  Our nation is the first and still one of the few that is based upon freedom.  In defending the Constitution, you are defending the freedom of Americans to live their lives as they decide. 

Even today, almost every American “service-person” loves his life; and he knows that only a free person can truly enjoy it.  By extension, he also understands the importance of freedom for every individual in society.  Perhaps, he even understands that freedom, as Dr. Smith states it, “…is necessary for reasoned action.”[10]  He or she may not agree with everything free people do in their lives, but he knows that freedom makes it possible for a rational person to live and enjoy his or her life.  As a lover of life, an American soldier is uniquely situated to be a defender of the highest values.

Finally, as an indication of the immorality that is created by altruism, many military people are required to sacrifice their lives by utterly irrational rules of engagement.  When a soldier must refuse to defend himself for the sake of “non-combatants”, he is not only needlessly putting his own life in danger, but he is also allowing the enemy to escape and fight another day.  These rules of engagement politicize the fighting of wars and destroy the military’s ability to fight and/or win wars.  Other issues, such as using the military to build civilian infrastructure and to create talking points for political elections, tarnish the military and its mission.

Police Officer

The same principles described above apply equally to police officers who fight crime.  Like members of the military, police officers are equally special because of their dedication to values and their willingness to put their lives on the line to protect people.  The difference for a police officer is that he must interact both with law-abiding citizens and law breakers.  This gives him a different relationship with the Constitution because he must know the difference between peaceful citizens and those who violate their rights.  He must also recognize his responsibility to maintain the Constitution by upholding the rights of all citizens and maintaining high standards of integrity in the performance of his duty.

For instance, a police officer cannot violate a citizen’s right to privacy.  He cannot insist that citizens keep silent about any issue, he cannot come into their homes without a warrant and he cannot arrest or detain someone without probable cause that a crime has been committed.  He can neither harass citizens nor defame them.  He must treat them with respect and maintain the principle that a citizen is innocent until proven guilty.  These rules place a special burden on police officers and ensure that they are protectors of rights and not violators of them.

Firefighter and other Emergency Services

Firefighters and emergency services providers save lives and property from fires and other emergencies and have a special connection to the community.  At any moment, they may be called upon to have a direct impact on the lives of family, friends and other citizens.  When the emergency services professional is not saving lives and homes, he is often training to stay in shape or improve skills.

Although the connection to the Constitution is further away for these individuals, they are equally committed to the values of America and her communities.  They value life and operate within the auspices of society in a way that seeks continuity, safety and security, all of which are values derived from freedom.  By preserving property and life, they contribute to the values of America.

Generally speaking, military personnel, police officers, firefighters and other emergency response professionals have a strong love of life and they feel a strong sense of satisfaction knowing that their careers help people live better, healthier and more secure lives.  It is not surprising that some of the best people choose these rewarding and fulfilling careers. 

I believe that having concern for others is not a bad thing and it need not involve the sacrifice of higher values for lower.  It is a natural extension of the idea that you love life, that you honor it and that you respect the freedoms and uniqueness of every human being.  Freedom, self-sufficiency, love of life and family are valid American values that are worth protecting not only because you want to enjoy them in your own life but because you see them as an extension of the greatest idea in history, the United States of America. 

Thank you

[1] Interview, 1932, The Journal of Young Israel – also New York Times
[2] Moral Rights and Political Freedom, Dr. Tara Smith, Paperback, Rowman & Littlefield Publishers, Inc. Page 78
[3] Ibid
[5] Ayn Rand, The Fountainhead
[6] Moral Rights and Political Freedom, Dr. Tara Smith, Paperback, Rowman & Littlefield Publishers, Inc. Page 78
[7] Ibid
[9] The Fountainhead by Ayn Rand
[10] Ibid