Reflections of a Neo-Liberal

by Steven Kates

http://www.quadrant.org.au/magazine/issue/2009/4/reflections-of-a-neo-liberal

Market-based economies are, after all, the only economic system that not only can provide us with the extraordinarily high standard of living we enjoy but is also the only economic system consistent with personal freedom. It is true that many people do get tired of having to look after themselves all the time. It is a great burden. But if they believe anyone else can and will look after them, they are in for a great and dismal surprise.

The Official Song of the G20 Protesters

http://www.youtube.com/watch?v=_SjBdVYG9ms

Rudd’s not so New Deal

http://www.quadrant.org.au/blogs/qed/2009/03/rudd-s-not-so-new-deal


http://blogs.theaustralian.news.com.au/letters/index.php/theaustralian/comments/beware_of_false_profits_and_the_pm_in_the_pulpit/

Re India and China: my answer to critics that didn’t get posted on The Australian blog:

The citizens of both countries languished in socialist poverty through the 20tth century – China under the brutal Marxist version, India under the highly regulated “license raj” version.

How do I account for their population increase? Nearly the whole world benefited from agricultural, industrial and technological advances. Nearly all of these were pioneered in semi capitalist countries, most especially in America. Those who scoff should try to name some advances (other than weapons and space travel which didn’t improve anyone’s life) which were made in communist countries.

What about the squalid poverty? It is always thus under socialism. Since India and China started deregulating and liberalizing things have improved dramatically, but they have a long way to go. The last thing they need at this juncture is Western leaders like Rudd telling them that we now see that we were worshiping a false god and that they got the fundamentals right last century after all.

Not that Rudd wants to take us to serfdom via the Marxist route, like Gandhi and Nehru he prefers the Fabian route, with some Christian moralizing thrown in.


http://mises.org/story/3128


http://www.aynrand.org/site/PageServer?pagename=reg_ls_financial_crisis


http://georgereisman.com/blog/

Socialism: A Reminder

Those who never accepted the verdict of the Cold War are interpreting the current financial crisis as a verdict against capitalism in favor of socialism. They should be careful what they wish for.

The verdicts of all the socialist experiments of the 20th century were decisive and unequivocal. But younger generations aren’t being taught the facts, and older generations don’t want to know them, or know them too well to want to talk about them. The following is a timely reminder of what socialism meant in practice.

Socialism is a political system based on the principle that society is sovereign, rather than the individuals who make it up. At the dawn of the 20th century it was the ideology whose time had come. Even the 19th century pro-capitalist philosopher John Stuart Mill had conceded in his later years that: "We are all socialists now." By the 1930s socialism was the “wave of the future”. In 1948 the economist Ludwig von Mises lamented that:

Socialism is the watchword and catchword of our day. The socialist ideal dominates the modern spirit. The masses approve of it. It expresses the thoughts and feelings of all; it has set its seal upon our time….As yet, it is true, socialism has not created a society which can be said to represent its ideal. But for more than a generation the policies of civilized nations have been directed towards nothing less than a gradual realization of socialism.

The purest form of socialism was communism - its architects, Karl Marx and Freidrich Engels, used the two terms interchangeably. The communist Utopia was a world without private property, or private enterprise, or private aspiration; all values were to be the product and property of the amorphous intangible collective called society. It was this purest and consequently most revered form of socialism that produced its most terrible failures everywhere it was tried.

Marxism was contradicted by reality from the start. Proletarians never did spontaneously erupt against capitalist masters, certainly not in Russia. By no stretch of any rationalization was Russia a capitalist country when Lenin’s Bolsheviks seized power in 1917. Despite the emancipation of the serfs in 1861, Russia was basically feudal. In an attempt to modernize the country foreign investment and private ownership of farms and industries was being encouraged, but the essential class divide was still between the peasantry and the aristocracy rather than between the proletariat and the bourgeoisie. Nevertheless, the Bolsheviks inherited the modernized industries and infrastructure, and a vast empire rich in minerals, forests, rivers, farmland, an enormous workforce, and the greatest potential of any European power.

The Russian aristocrats could by no stretch be considered enlightened champions of individual rights - but as repressive tyrants go, they were amateurs compared with the Bolsheviks. Between 1825 and 1917, Czarist Russia executed 3,932 political prisoners - in 1918 Communist Russia executed over 10,000 political prisoners in a single purge. It was the first of many slaughters to come. But "you can’t make an omlet without breaking eggs", explained Western intellectuals, if they acknowledged the carnage at all. The Soviets, they said, were conducting a “noble experiment”, and they would soon surpass the capitalist West, without its alleged exploitation of the workers.

With massive Western aid supplied during its famines and wars, and wholesale expropriation of the capitalists’ technologies, both overtly and covertly, the Union of Soviet Socialist Republics became electrified and industrialized, and for a while it seemed to be winning the space and arms races. But while it was being portrayed on the world stage as the morally superior and historically “progressive” superpower, what was happening back on the farm?

During the 1930s, while the USSR was being championed by Western intellectuals as the model society, the Soviets were systematically purging millions of aleged disidents and starving, enslaving and brutalizing many million of Ukrainians to death for the crime of owning means-of-production such as plots of land or cows. During the 1940s, while Joseph Stalin was cozying up to Adolf Hitler, British intellectuals, and Franklin D. Roosevelt, he was starving, enslaving and brutalizing millions of his subjects in the Siberian gulags for crimes such as absenteeism or anti-Soviet utterances, and herding millions more into cattle trains for “relocation”, due to their class, religion or ethnicity. During the 1950s, while all the Soviets’ atrocious failures were being blamed on Stalin in order to exonerate party doctrine, cycles of amnesty-uprising-purge-repression were entrenching a “psychology of fear” as the “stabilizing factor” of society. During the 1960s, while the Sputniks and Yuri Gagarin were being hailed as proof of Soviet superiority, the Soviet consumers were waiting in queues for scarce groceries, or for their name to come up on the list for their own family apartment, or for a privileged few: a motorcar. At a time when there were 100 million cars on American roads, the Soviets boasted they had doubled the number on their roads to 3 million. (They had caught up with America on one statistic, however: the road toll.) During the 1970s, while the Soviet Union sponsored communist terrorism and revolution on every continent and stockpiled nuclear missiles, hundreds of dissidents were show-trialed and sent to asylums or labour camps; free speech was equated with anarchy; and food shortages were, in Brezhnev’s words, “the central problem”. During the 1980s while the Soviets spied and armed and fought and bargained and propagandized their Cold War objectives, an average Soviet worker was earning as much buying power in a year as an average welfare mother in the United States received in a month.

In the 1990s, when the USSR imploded and the propaganda curtain was raised, Western analysts were astonished to discover how gullibly they had overestimated the potency of the communist economies. The productivity of East German workers was not 20% lower than the productivity of West German workers but 66% lower, and East Germany had been one of the more prosperous communist states. As for the respective productivity of the world’s two superpowers, Alan Greenspan notes an astounding statistic:

Throughout the late nineties the [US] economy grew at a better than 4 percent annual rate. That translated to $400 billion or so of prosperity – equal in size to the entire economy of the former Soviet Union – being added to the U.S.economy each year.

The American economy was the product of people free to choose their employment or business and consume or invest what they could earn in pursuit of their personal aspirations. Its power was derived from their free minds, fueling free enterprises, competing in free markets. The Soviet economy was the product of people subordinated to the needs of society, in which the accumulation of private property was tantamount to theft, and an instrument of exploitation. Its power was derived from their service and sacrifice for the good of society, as embodied by the communist party, pronounced by its leaders, and prosecuted by systematic surveillance, denunciation, intimidation, imprisonment, enslavement, torture and slaughter of its citizens. The American system produced the richest country in history. The Soviet system produced an economic basket case.

The results of the USSR experiment turned out to be repeatable. The same cause, communism, produced the same effect, brutality and failure, in: Lithuania, Latvia, Estonia, Albania, Bulgaria[1], Yugoslavia[2], Romania[3], Poland[4], Czechoslovakia[5], East Germany[6], Hungary[7], Vietnam[8], Laos[9], Cambodia[10], Afghanistan[11], Tanzania, Mozambique[12], Angola[13], Ethiopia[14], Benin, Guinea-Bissau, Madagascar, Cape Verde, Grenada and Nicaragua [15]. When Castro came to power in Cuba it was the second richest nation in Latin America, but depite assistance from the USSR and the West he turned it into the third poorest, and well over a million Cubans “voted with their oars” to escape his dictatorship - and still it is praised by America-haters for “standing up” to a superpower and for its universal health care system. In the same breath they will claim that the Cuban economy is superior, that its dismal failure is due to the exploitation of American capitalists, and that its destitution is due to sanctions that prevent American capitalists from trading in Cuba.

The largest experiment of all, conducted by Mao Zedong, whose helmsmanship included the exhortation that his “true communists” grow food in the morning and make steel in the afternoon, cost the largest deathtoll of all. .

The present plight of the North Koreans is no anomaly; their society is an archetypical result of communism – it may legitimately be compared with South Korea, which, for all its mixed-economy woes, is a paradise in comparison. http://www.theaustralian.news.com.au/story/0,,25217258-25837,00.html

The above is an overview of an epochal evil of staggering proportions; the following is one tiny detail. In 1949 the Romanian communists embarked on a “reeducation” program that, according to the philosopher Virgil Ierunca, involved “the most vile tortures imaginable”. Reeducation involved four phases. The aim of the first phase, “exterior unmasking", was to get the “student” to admit to anti-communist activities and links with anti-communist friends outside the prison. The aim of the second phase, "interior unmasking", was to get him to name people who had helped him inside the prison. The third phase, “public moral unmasking" was to get him to curse everything he had held sacred, his friends, family, lover and God if he had one. The fourth phase was to get him to join the torturers in the “reeducation” of his best friends. “Torture was the key to success. It implacably punctuated all confessions, between sentences. You couldn't escape the torture. You might perhaps be able to shorten it, if you admitted the worst horrors. Some students were tortured for two months; others, who were more cooperative, got away with a week."

The suffering in the gulags, which wern't confined to Siberia but were fixtures of most communist states, lasted much longer.

But there is a dimension to the communist atrocity that is missed by descriptions of torture regimes, maps of gulag archipelagos, chronicles of famines, statistics of mass murder, and analysis of dysfunctional economies. It is the billions of lives ground down and wasted in hopeless, cynical resignation and dependence on a system dictated by the omnipresent state. A typical attitude of middle-aged Russians during the 70s was: "give us food, a roof over our head, and work, and do whatever you want politically. Give us the material minimum. We won't ask for more."

Some communist experiments in non-communist countries escaped the brutality that characterized state communism, but not their economic frustrations and failures. Of these the most venerated were the kibbutzim, which cost Israeli taxpayers billions in subsidies, until they were privatized. In Australia taxpayers disregarded the billions they paid to support communally owned Aboriginal settlements, but the result, hidden for decades by vested interests, restricted access to the settlements, and politically-correct censorship, was: squalid degradation, drunken violence, child neglect, sexual brutalization, and hopeless despair.

Not every failure of the 20th century was the fault of communism, but every communist experiment was, by any human-life-based measure, a terrible failure. The communist world made some advances in weaponry and space travel, but of all the startling advances of that most inventive century that improved life on earth it is hard to think of one that was pioneered in any communist country, they were all pioneered in the more capitalistic countries, most of them in the most capitalistic country, the United States of America. The same goes for the more fundamental advances made during the 19th century. The vast sacrifices made in the name of communism were in vain - no human lives were sustained, no human values gained by communism, only despite communism.

But must we decide between a pure form of socialism and a pure form of capitalism? Doesn't “democratic socialism” offer a middle-of-the-road, mixed-economy “third way”? After all, none of the democratic states who won the Cold War and triumphed over communism were pure laissez faire capitalist states. They had all, to a greater or lesser extent, nationalized industries, regulated markets, redistributed wealth through taxation and welfare policies and generally intervened into the economy to further socialist agendas. So wasn't it one form of socialism that triumphed over another form - the evolving impure form, over the revolting pure form?

This much is true, less pure forms of socialism failed less. Or, to put it another way, the more socialism was contaminated with private enterprise, from Lenin’s “New Economic Policy” of 1921 to Tony Blair’s “New Labour” of 1995, to the “economic conservatism” of Australia’s post Whitlam Labor politicians, the more success was achieved in its name. Or, to put it another way, the triumph belonged to the ideology that dared not speak its name.

By the end of the century, reality checks had pushed everyone with eyes to see and minds not corrupted by their PhDs to overtly or covertly recognize that if human well-being was the goal, capitalism was the system that delivered. Anyone genuinely concerned with: the banishment of famine, the prevention and cure of disease, the relief of poverty, the maximization of pleasure and minimization of pain, the opportunities for and of affluence, the freedom to pursue happiness on earth, was pushed by experience to advocate capitalistic rather than socialistic means. It was not only conservatives like Thatcher and Reagan but liberals like Blair and Clinton who were pushed in that direction; not only John Howard and Peter Costello but also Bob Hawke and Paul Keating.

Last year Allan Greenspan summed up the verdict of the 20th century as follows:

While central planning may no longer be a credible form of economic organisation, it is clear that the intellectual battle for its rival - free market capitalism and globalisation - is far from won. For twelve generations, capitalism has achieved one advance after another as standards and quality of living have risen at an unprecedented rate over large parts of the globe. Poverty has been dramatically reduced and life expectancy has more than doubled. The rise in material well-being - a tenfold increase in real per capita income over two centuries - has enabled the earth to support a six-fold increase in population. Yet for many, capitalism still seems difficult to accept, much less fully embrace.

The economic crisis has brought the anti-capitalists out of their bunkers. But it is not capitalism's crisis, it is a crsis of the mixed economy, and its root cause is the interventions of the government. Nevertheless, to the extent that free-enterprise has been allowed to operate it produced a level of prosperity that surpassed the socialists' wildest Utopian dreams. The semi-capitalist economies have a long, long, long way to fall before they descend to the highest level of prosperity ever achieved by socialism.

But “we simply don't have to choose between Friedrich von Hayek and Leonid Brezhnev” declared Kevin Rudd last August, we can move beyond the “straitjacket” of such “paradigms”, our “reforming centre” government can impose just the right controls that will curtail CO2 emission but not productivity, and allow the capitalists just enough freedom to produce the wealth socialists need to redistribute to “working families”, and impose just the right controls on financial activity to solve the crisis. But Rudd is wrong. We simply do have to choose between centrally planned dictatorship and economic freedom. Because "decisive action" to solve problems can either decrease or increase dictatorial controls over economic activity; and while controls create dislocations in the economy that breed more controls, freedoms create opportunities and demands for more freedoms; and in any mix it is the freedom part that improves our ability to live on earth and the dictatorship part that diminishes it. It is the freedom part that is moral and the dictatorship part that is immoral.

[1] The first act of the "people's tribunals" set up when the communists seized power in Bulgaria in 1944 was to dispose of more than 40,000 community leaders such as judges, journalists, priests, teachers and employers.
[2] When Tito took over where the Nazi’s left off he dispatched 31,000 suspected opponents to Goli Otok, one of his many gulags, where they suffered unspeakable brutality.
[3] After a communist reign that would impress Count Dracula, Romania’s agony finally ended when Ceausescu was shot in 1989.
[4] Five variations of the intensity of the surveillance and brutality were tried in Poland between 1944 and 1989 in attempts to salve the economy.
[5] During 40 years of communist rule, 400,000 Czechs fled the country.
[6] The Berlin Wall had to be fortified with watchtowers, armed guards, barbed wire, guard dogs, vehicle trenches, and electric alarms to keep Germans from fleeing their workers state.

[7] After a 1956 uprising against communist rule in Hungary was crushed, 200,000 fled the country.
[8] After the Vietnam war more than half a million people were sent to "re-education camps" where many were starved or beaten to death.
[9] After the communists seized power in 1975, over 10% of the population fled Laos.
[10] At least a million Cambodians were executed or tortured to death between 1975 and 1979, a similar number were starved or worked to death.
[11] 1.5 million Afghanis, 90% of them civilians, were killed between 1979 and 1989, and a staggering 5 million refugees, nearly one third of the population, fled the country.
[12] Relocation and collectivization was brutally enforced by the Mozambique communists resulting in 600,000 deaths by starvation between 1975 and 1985.
[13] Communist rule in Angola from 1975 was ruinous, but the human cost was kept hidden until 1987 when UNICEF announced that tens of thousands of children had starved to death during the previous year.
[14] Ethiopia was belatedly recognized as a true communist state by the Soviets in 1984 despite their displeasure that the Ethiopians had accepted Western aid to feed their starving people.
[15] After wining a bloody civil war in 1979 the communists nationalized half the Nicaraguan economy, relocate Indian tribes, and brutally suppressed dissents, until resistance mounted into another civil war which lasted from 1983 to 1990.

The Treason of the (Australian) Intellectuals

Australia’s defense forces are being trained by an academic who argues that:

In the wake of 9/11, our critical task is not to help power seek out and destroy the “enemies of freedom” but to question how they were constructed AS enemies of freedom. It is to wonder if we, the free, might already be enemies of freedom in the very process of imagining and defending it.

This professor is not a lone eccentric; he represents a mainstream school of academic thought. If you find this hard to believe, you haven’t been paying attention to the “treason of the intellectuals” that has been the stock-in-trade of Australia’s humanities faculties for decades.

Australia’s tax-paid humanities professors are supposed to be the professional guardians of the country’s culture. But all too many of them are profound enemies of the enlightenment heritage that made Australia a country people are willing to pay any price to get into, rather than the sort of country people risk their lives to get out of. These professors do not spy for foreign powers or plot terrorist strikes. The professor quoted above protests that he considers terrorism: “immoral, unjustifiable and politically counter-productive”. The treason of the intellectuals is not political and violent, but philosophical and erudite. But it is no less serious a threat for that. Last century the academics tried to waltz us into communism - this century they do the postmodernist spin.

Trying to get a grip on the postmodernists in our universities is like trying to get a grip on eels in a pond. You know they’re there by their rippling effects but when you try to get a grip on one he slithers out of your grasp declaring he is not a postmodernist at all, but a poststructuralist or deconstructionist or constructivist or post-colonialist or simply a broad-minded fellow trying to see things from the “Others” perspective. But as he departs into a swirl of muddied waters you know by what is left on your hands that he represents something diabolical.

Postmodernism is not based on the recognition that different people observe the same fact from different perspectives, but on the assumption that those different perspectives are all there is – which means that there is no such thing as the truth, just different people’s or groups’ different “truths” as created by their texts. Due to the conga line of philosophical corruptions that led to it, this premise sounds reasonable to many students, and even those who sense that there is something wrong with it are inclined to go along for the ride, or to be fashionable, or for good grades, on the assumption that theoretical clap trap is of little importance to peoples practical lives. But the problem with theory is that it has practical consequences, and the consequences of postmodernist clap trap are nihilistic.

Of course different people do observe the same fact from different perspectives - but does that mean they are observing different facts, or different “truths”? Take the historical fact that in 1815 a battle was fought near the village of Waterloo. From the French perspective, it was a disastrous defeat, from the English perspective it was a triumphant victory. But does that mean there were two battles or two “truths”? There was obviously one battle, which was a disastrous defeat for the French and a triumphant victory for the English. This is not the English “truth” or the French “truth”, but the truth. But what if the English and French hold contrary views about who did what in the battle or about whose actions were strategically or morally justified? The point is that since views of what happened at Waterloo do not alter what actually happened there, when these views contradict each other, at least one of them must be wrong. It is legitimate to understand the other's point of view. It is not legitimate to confuse a point of view with the truth.

Postmodernists et al disagree. They believe that there is no truth, just “truths”: the French “truth”, the English “truth”, the male “truth”, the female “truth”, the Western “truth”, the Eastern “truth” etcetera; each of which may contradict the others, all of which are equally valid on their own terms. The contradictions that result do not faze postmodernists. They use empirically based logic when it serves a purpose, arbitrary assertion, contradictory supposition, unquestioned prejudice, indignant posturing or secular superstition when these do better. If there is no such thing as the truth, there is no such thing as an untruth, so provided its in an aproved cause, piostmodernists are liscenced to lie. They are not the first to be sucked into this relativist sink hole, but they are the ones currently spinning in the faucet.

In the real world, any truck driver, engineer or doctor who toyed with the theory that there is no one truth only different “truths” that can contradict each other would be quickly corrected by reality as their trucks crashed, their bridges collapsed or their patients died. But professors are far enough removed from the disastrous effects of their theories that they can get away with them for decades.

Last century the academics’ favorite theory was Marxism. From the Ivory Tower they envisioned Utopia shimmering on the horizon, and when they descended to the streets they mounted crusades in its name. When their vision turned out to be a mirage that dissolved to reveal a hellish reality, some of them backed themselves into a postmodernist bunker. They gave up on Utopian visions; when they venture out to sabotage the hated towers of power, they do so in the name of the “Other” - any “Other”.

In a letter protesting his outrage at being accused of being pro-terrorist, the professor at the centre of the current dispute stated that:

I argued that attempts by states to seek security by depriving others of it would be counterproductive and meaningless. In 2001 New York and Washington were struck, and in 2004 Osama Bin Laden stated that “we want to restore security to our Umma. Just as you violate our security, so we violate yours”. Who now is to tell me that my argument was not both prescient and policy relevant?

In other words, our defense policy should recognize that just as we view 9/11 as a violation of the security of a rights-protecting state, Islamic terrorists view our impediment to their establishment of a Caliphate of Islamic Theocracies as a violation of their security. It would, no doubt, strike this academic as meaningless or irrelevant, not to mention arrogant, for us to decide that our view is based on facts and is morally defensible, and Osama Bin Laden’s is not.

If there is no real world of immutable facts out there, only different texts created by different perceptions from different perspectives, all views are created equal, all cultures morally equivalent, all actions justifiable in the actors own terms – except of course the actions of the US and its allies, which, being “the power”, are self-evidently indictable.

If the spectacle of defense strategists claiming that the Western reaction to 9/11 was an “Islamophobic” construct; or of feminists fuming at the West in the name of an “Other” which entombs women in burkas; or of former champions of the hammer and sickle condemning industry in the name of the medieval “Other” and agriculture in the name of the Neolithic “Other” is bemusing, take a look at the philosophic premises being taught in our universities.

When Australia’s universities consign the country’s history, language, law, literature, politics, sociology, anthropology, education, even its medicine and defense to the tender mercies of postmodernist schooled academics they are surrendering its enlightenment culture. The only question is - to which “Other"?


PS: A full account of a dispute between the quoted professor and a whistle-blowing academic may be accessed here: http://www.quadrant.org.au/blogs/qed/2008/09/dissent-intolerable.

The un-free-enterprise crisis

The crisis is being blamed on "free-market ideology" and George Bush is being urged to "reverse course" and "seek expanded regulation." But, as Yaron Brook of the Ayn Rand Institute argued in Forbes on the 18th July: "All this overlooks a crucial fact. There has been no free market in housing or finance."

Read at: http://www.forbes.com/opinions/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html

"We certainly don't need a system based on the wholly implausible proposition that, in the end, government knows better than people" argued Gerard Baker in The Times on the 19th September.

Read at: http://www.timesonline.co.uk/tol/comment/columnists/gerard_baker/article4782481.ece
Government bailouts are "a complete disaster," said Yaron Brook to Time on the 19th September, "It's a form of national socialism of the financial markets."

Read at: http://www.time.com/time/politics/article/0,8599,1842879,00.html

It's the un-free aspect of the market that failed.

http://www.aynrand.org/site/News2?page=NewsArticle&id=21249&news_iv_ctrl=2482

The Clinton Responsibility

http://www.quadrant.org.au/blogs/qed/2008/09/clinton-s-responsibility-for-the-loans-crisis

A collecton of pertinent articles from the Ayn Rand Institute

http://www.aynrand.org/site/PageServer?pagename=arc_financial_crisis

Letter to congress from a rational banker

http://www.capmag.com/article.asp?ID=5293


John Montgomery argues that: Social engineering, specifically lending to people who can't repay, leads to financial ruin.

http://www.theaustralian.news.com.au/story/0,,24427661-30538,00.html

Crowing

Donning my Pollyanna bonnet, I see one good thing about the financial crisis: the Chicken Little Left will be crowing so much about it that they might give their Global Warming beatup a rest for a while.