An Objectivist Individualist: August 2014

Unlike Obama, I do not measure patriotism in terms of the amount of taxes paid to and the amount of paperwork prepared for an over-weaning government that uses its revenues and its ever mounting debt to suppress our individual rights. No, I look at the issue of American multinational companies moving their domicile to other nations with lower internal taxes and which do not tax earnings in the U.S. as a very real act of patriotism. This is fully consistent with the American Principle of limited government whose only purpose is the protection of our equal, sovereign individual rights. It is very patriotic to punish a malfeasant big government with a decrease in tax revenues. The lower its revenues, the less mischief it can perform. This includes a reduction in its anti-business agenda.

In most cases, changing a company's domicile does not actually mean it moves its headquarters. This is usually very like the case in which hundreds of thousands of U.S. companies are incorporated in the state of Delaware, but have their actual headquarters in a different state. The location of domicile is chosen for tax and legal reasons and does not imply that any or most of a company's activities will be at the location of domicile.

The federal tax rate on U.S. corporations is 35% and it applies that highest in the developed world rate to all profits made in the U.S. and to any profits a U.S. multinational corporation makes abroad. So a U.S. multinational corporation pays the nation in which its profit is made the lower tax they levy on corporate taxes. Then if the U.S. corporation decides to bring that profit back to the U.S. to invest it here in R&D, new facilities, new hires, or new manufacturing operations, the corporation has to pay the difference between the rate charged by the nation in which the profit was made and the higher U.S. tax rate of 35%. This drastically reduces the amount of profits earned abroad which are brought back to the U.S. This plays a big role in slowing down the growth of the U.S. economy, which means it slows down the growth in our standard of living.

U.S. multinational companies which do not bring back their profits from abroad also greatly reduce the burden of producing the tons of paperwork in the form of reports demanded by the IRS. This is a very great reduction of expenses and consequently a boost to profits earned abroad relative to those earned in the uphill battle at home.

To be sure, U.S. corporations do not generally pay the full 35% tax rate on profits earned in the U.S. There are many exemptions, tax credits, and deductions, though these come at the expense of the added paperwork to claim them. Nonetheless, the average percentage paid on profits by American companies is about 30%, while their rivals headquartered in other countries pay an average of about 23% on their profits. Consequently, American companies are paying about 30% more taxes on their profits than are foreign companies. This is a very sizable competitive disadvantage.

The Burger King acquisition of Tim Horton's, a Canadian company, is a case given much attention in the news lately. Moving the Burger King domicile to Canada, a nation with more economic freedom than the sorry present U.S., reduces its corporate income tax rate to 15%! Canada will only tax the profit made in Canada and will not tax Burger King on its profits made in the U.S. or in any of the other many nations it operates in around the world. This will actually allow Burger King to bring the profits it has made in those many nations back to the U.S. for investment here, because the U.S. government can no longer tax these profits made by a Canadian company.

It is essential that every American multinational company put as much pressure on the far too voracious American government to reduce its taxes on productive work and to reduce its power to coerce people in violation of their rights to earn a living and to generally pursue their happiness. A great and patriotic way to do this is to move their headquarters abroad. If that has the eventual effect of forcing the far too big and nasty federal government to lower its tax rates and to decrease its incredible paperwork burden, it will do much to allow Americans a future with a decent increase in our standard of living coupled with a much improved environment of economic freedoms.

As owner and president of a materials characterization and failure analysis laboratory, one of my customers has stated that I must sign the United Nations Global Compact if they are to continue doing business with us thanks to one of their biggest customers who is requiring this of them. The summary of that U.N. Global Compact is very vague but is intended to lock companies into a very extensive plan that will greatly change our way of life and limit our freedoms. It follows:

The Ten Principles
The UN Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus and are derived from:

The Universal Declaration of Human Rights

The International Labour Organization's Declaration on Fundamental Principles and Rights at Work

The Rio Declaration on Environment and Development

The United Nations Convention Against Corruption

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption:

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

I am refusing to sign this compact because of its moral, civic, and scientific errors. I expect to lose a customer, but one of the main reasons I founded my company was to be free of association with an organization as an employee whose moral behavior did not meet with my standards. Generally, when I take on work from a client company now, I can do so without subjecting myself to its moral imperfections and I can more easily refuse to work with any company whose standards are known by me to be too low. As a result, I sleep well and remain calm and happy.

I will explain my objections to each of the three categories: Human Rights, Labor, and Environment in this U.N. Global Compact.

Human Rights:

The problem here is that the The Universal Declaration of Human Rights does not understand what a human right is. It correctly names many human rights, but it also claims that there is a body of human rights which require that services and goods must be delivered to every individual at the expense of the labor of others who may not be willing participants. For instance, by right every child may demand that others throughout a nation may be forced to educate that child. This is a form of slavery, though of a limited nature. It is nonetheless a violation of the rights of individuals. One of the very reasons that education is critically important is so that the citizen understands his rights and learns how to assert and protect them. The process of becoming educated should not require trampling on the rights of others to life, liberty, and the pursuit of their own happiness.

Articles 1 - 13: I agree with them.

Article 14: I do not agree that asylum is a right, though I do agree that it is good practice for the USA to offer it.

Articles 15 - 21: I agree with them.

Article 22: This does not have a clear meaning, but I suspect it is a misunderstanding of rights, especially because rights pertain to an individual and arise from the nature of man, not from society and culture as implied here. It seems likely this is interpreted by most to imply that some people have the right to demand goods and services or income from others to maintain their own "social security."

Article 23:

"(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment." Well, no. Employment is like happiness and one is not able to claim it from others by right, but only to be free to be self-employed or to work out a free trade of one's work for employment with an employer. If one does not think the employment conditions are just or favorable, then one can leave the job. One should be free to purchase unemployment insurance from a willing provider should there be one, but one is not free to impose the costs of unemployment on others by the use of force.

"(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection." No again. How can a person who works for himself be guaranteed clients without violating the rights of the clients? A person who works for an employer may or may not add enough to the income of the employer for him to provide the worker with an income sufficient to ensure his and his family's existence worthy of human dignity. So, ultimately, this provision requires others in the society to provide this worker with goods and services or income that will allow his and his family's survival with human dignity. This can only be accomplished by violating the rights of others. In particular, it violates a large number of the rights this very document pretends to protect. Who even knows what that requirement for minimal human dignity is when phrased in such a context? I think human dignity is achieved when one is capable of sustaining one's own life through one's own efforts to think rationally and to apply that thought to securing and flourishing life. Others are not responsible for providing the human dignity that only one's own efforts can achieve. One has a right to pursue human dignity, not to be provided it.

Article 24: "Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay." Yes, everyone has a right to seek rest and leisure, but no one else is obliged to provide him with the means to rest and to take his leisure. Neither government nor society have any business limiting the right to contract or to earn a living by imposing limits on working hours or requiring an employer to provide pay for holidays. If an individual wants these things, he is obliged to provide them to himself as a self-employed person or to work out a mutually and voluntarily agreed upon contract with an employer.

Article 25:

"(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control." Like happiness, everyone has the right to pursue these objectives, but no one else is obliged to provide them. No one would have the right to life, liberty, and the pursuit of happiness if they are required to provide these values and services to everyone else who may need them, even if for reasons beyond their control. This is just a way of saying you are free, unless someone else needs you to serve them. Someone else is always needy and some of them for reasons which governments do not find it convenient to acknowledge to be due to their own lack of effort and foresight. Those who have planned their lives poorly and make little effort to secure their own lives have no right to enslave those who are better off than themselves simply by virtue of their need. Of course there are many good reasons why those who are well off may choose to act benevolently toward others in need, but they should not be responding to fulfilling the rights of others at the loss of their own rights. The benefactor should be free to decide for himself who he will provide charity to and how he will do so. He is also free to provide no charity to anyone. Once again, this provision is contradictory to many earlier valid rights in this document.

"(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection." This is a worthy viewpoint, but it confers no rights. Once again, it implies obligations of service contradictory to real and valid rights if it had the status of a right.

Article 26:

" (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit." Once again, everyone has the right to pursue an education, but no one else can be obliged to provide that education without depriving them of their rights. Education is important and it is worthy of great consideration for charitable giving, but there is no right to have it.

"(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace." Education should be devoted to the development of rational thinking skills and to an understanding of rights as a non-contradictory freedom of action and thought needed by every individual to sustain their life in security and to flourish in life. The U.N. has shown that its concept of rights is contradictory. While it is ultimately to be hoped that everyone will be able to at least live in peace with one another, this possibility is not independent of the actual beliefs prevalent in some nations or in some religious ideas. It is certainly not independent of peoples respect for real human rights either.

Article 27: I agree with this one.

Article 28: "Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized." This is wrong for the above reasons.

Article 29: "(1) Everyone has duties to the community in which alone the free and full development of his personality is possible. (2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society." To the degree that a community of people actually do protect the rights of the individual to life, liberty, and the pursuit of happiness, one does have a duty to that community, but it is unwise to make that duty enforceable by law. The exercise of duties should be voluntary, not forced. The general welfare of a society is only achieved by the thorough and non-contradictory protection of individual rights. This is only possible when rights are properly understood as endowing a freedom of action upon an individual and not an obligation of service to others. The U.N. clearly does not understand this.

Article 30: "Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein." In the name of securing my own real rights as an individual, I must object to the false U.N. declaration that I can be compelled to provide goods and services to others in the name of false and contradictory rights.

Labor:

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining This statement is internally self-contradictory, at least in the context of how it is meant. Every individual has a broad right to freedom of association. This applies to business owners, managers, and non-management employees. Employees have the right to organize to perform collective bargaining, but owners and managers cannot be obliged to give up their own freedom of association by being required to come to an agreement with such an employee bargaining unit. They are equally free not to employ those individuals who engaged in the collective bargaining, which is contrary to the intent of the U.N. and to unjust laws in the USA.

Principle 4: the elimination of all forms of forced and compulsory labour I agree with this.

Principle 5: the effective abolition of child labour I agree with this.

Principle 6: the elimination of discrimination in respect of employment and occupation Some types of discrimination are necessary in hiring, such as discriminating in favor of intelligent and hard-working employees who allow a company to add enough income that it can thrive. Because the U.N. proved such an unthinking instrument with respect to human rights, I cannot trust that its concept of proper and improper discrimination is correct. I do not believe either racial or gender discrimination makes sense in a business. There are however ideas that some individuals have which are highly corrosive to trust and confidence and they do justify discrimination.

Environment:

Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.

I would agree to these if

"precautionary approach" were "rational precautionary approach" and that rational precaution covered precautions against needlessly causing human beings misery, such as forcing them out of coal mining jobs, coal-fired power plant jobs, or to pay much higher electricity costs and to risk freezing in severe winters when wind and solar power would fail them.
"promote environmental responsibility" recognized that at some point one is doing enough
and if this were not taken to be an agenda determined by the U.N. rather than me.

My laboratory is constantly engaged in helping clients to use and process their materials to minimize environmental harm, while raising the standard of living of human beings. I am confident that the private sector can manage this process very well and that it will continue to turn to my laboratory for materials characterizations critical to this progress.

Key U.N. Documents Cited on the Environment:

The Rio Declaration - a statement of 27 principles upon which nations agreed to base their actions in dealing with environmental and development issues. The Rio Declaration built on the previous Declaration of the United Nations Conference on the Human Environment which was adopted in Stockholm in 1972. The Stockholm conference was the first global environmental meeting of governments, which stated that long-term economic progress needs to be linked with environmental protection.
Agenda 21 - a 40 chapter, action blueprint on specific issues relating to sustainable development that emerged from the Rio Summit. Agenda 21 explained that population, consumption and technology were the primary driving forces of environmental change and for the first time, at an international level, explicitly linked the need for development and poverty eradication with progress towards sustainable development
The 'Brundtland Report', 'Our Common Future' which was produced in 1987 by the World Commission on Environment and Development, also laid the foundations for the Environment Principles. This landmark document highlighted that people needed to change the way they lived and did business or face unacceptable levels of human suffering and environmental damage.

While the Rio Conference led to a great deal of discussion of restrictions on CO2 emissions, the statement of 27 principles in the Rio Declaration on Environment and Development do not mention any specific pollutant or threat to the environment. This surprised me. But knowing that the U.N. has a very different idea of what these threats are from my own still gives me great concern about signing on with the U.N. Indeed, the vagueness is useful to get people to sign on to the agenda and to allow planners and other government bureaucrats maximum flexibility in implementing their ever-tightening limitations on human activities and property use in the name of the environment.

Agenda 21 is a huge document that arose from the 1992 Rio Conference. It is also largely an effort to use government planning, often at the local level, to restrict land use and to force people to live in more dense communities with much more land further outside of towns left fallow or agricultural. As such, Agenda 21 limits property rights, economic development, drives up housing costs, and encourages government subsidies for lower income persons as a bribe to get them to move into more crowded developments. There is no good reason for governments to so limit individual choices and to inhibit the free use of land and capital resources.

While not much discussed explicitly in the summary portions of Agenda 21 or the Rio Declaration on Environment and Development, it is clear the U.N. is eager to lump its failed hypothesis of catastrophic man-made global warming into its precautionary protection scheme and its claims for the nature of sustainable development. I have written many posts on the bad physics behind the claims that CO2 emissions will cause warming at a catastrophic level or even a significant level. I have written many posts on the wrongful manipulation of the temperature record to make the temperature appear to rise at a more significant rate than it has. I have also written about how the actual predictions of the U.N. endorsed climate models have failed, most especially in predicting a continued rise in temperature over the last 17 years which has not occurred.

See for example my articles going back through 2013 on the fallacies of CAGW as pushed by the U.N., the U.S. government, and many other governments: