Celebrating the Declaration of Independence Day

The Second Continental Congress agreed upon the 13 colonies of America becoming independent on 2 July 1776.  We should celebrate Independence Day on 2 July, as Benjamin Franklin thought we would.

There was a still more important event on the 4th of July, 1776.  The Declaration of Independence was signed by the members of the Second Continental Congress on 4 July.  This document stated the fundamental principles that would define the United States of  America.  These ideas were uniquely revolutionary in 1776.  Revolutions as uprisings were not too unusual, but the principles of the Declaration of Independence were entirely innovative as a basis for a new nation.

On this great day, this Declaration of Independence Day, we should read these inspiring principles and renew our commitment to them.  Our beloved Declaration of Independence says:

We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness -- That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.  Prudence, indeed, will dictate that Governments long established should not be changed for light and transient Causes; and accordingly all Experience hath shown, that Mankind are more disposed to suffer, while Evils are sufferable, than to right themselves by abolishing the Forms to which they are accustomed.  But when a long Train of Abuses and Usurpations, pursuing invariably the same Object, evinces a Design to reduce them under absolute Despotism, it is their Right, it is their Duty, to throw off such Government, and to provide new Guards for their future Security.

No nation had ever committed itself to the principle that all men were created equal before.  No government had ever stated that its purpose was to secure the rights of all men to life, liberty, and the pursuit of happiness.  Before this vision of the United States of America, nations had been dedicated to a few among a given tribal group or ethnic group.  In rare cases, a foreigner found to be particularly useful to the ruling oligarchy might be accepted into consideration for the nation's benefits.  But in the new United States, whose people were primarily English, Scots, Germans, French, Dutch, Swedes, Portuguese, Africans, and American Indians by ethnic origin at the time, all men were created equal, with unalienable rights, which it was the proper purpose of the government they were forming to secure for them.

Yes, the government long did not properly and morally follow through on the implementation of this principle for those ethnically African or American Indian, but its actions could always now be held up against the yardstick it had clearly stated in its foundational principles.  This universal recognition of human rights had never, ever been done by any nation before and is very rarely done even now by any nation.  The Declaration of Independence made the Civil War almost inevitable.  It also made the end of Jim Crow laws virtually inevitable. 

The Declaration of Independence puts a principled duty upon each of us to throw off the attempts of Government to abuse our individual rights.  It states that when Government fails to earn its legitimacy by ruling with the consent of the governed for the purpose of securing their rights to life, liberty, and the pursuit of happiness, then we have both the right and the duty to provide new guards for the security of our universal and individual rights.

Our Constitution is a great document also.  The Constitution puts the means in place to organize the powers of government in such form as to achieve the goals and principles given to us in our sacred Declaration of Independence.  Our Constitution cannot be properly understood if this is not realized.  The context for interpreting our Constitution is the principles of the Declaration of Independence.  The widespread failure to understand the severe constitutional limits on the power of the federal government is a consequence of a refusal to recognize the fundamental principles of The Declaration of Independence.

Today, the 4th of July, is the greatest of all American holidays.  It is Declaration of Independence Day!  Love this day, love our Declaration of Independence, and celebrate its inspiring principles of universal individual rights to life, liberty, and the pursuit of happiness.  If we do not do this, we will surely lose our ability to exercise our many and broad individual rights.  It is the exercise of these rights that makes life worth living.  Live free or die!

Obama's Comrade Pants Act

I was recently commenting on the repeal of ObamaCare in response to an article on-line at the Foundation for Economic Education and said that ObamaCare was a sad case of one-size-fits all.  An anonymous pest named D G then called me stupid for not knowing that there are three plan levels in ObamaCare.  Of course, I did know that there are four plan levels, but one could say that I did somewhat exaggerate in the one-size-fits all.  But, really only a little bit as will be apparent in my discussion of how Obama, Reid, and Pelosi had planned to pass the Comrade Pants Act, but they lost control of the House and the Senate due to the reaction against ObamaCare before they could carry out their plans.

Recognizing that pants are very important to the welfare of Americans and that some people did not have pants of sufficient quality to meet the standards of Democrat politicians and bureaucrats, Obama and his party in Congress decided that something had to be done about this.  Of course they were quite busy with passing ObamaCare and Dodd-Frank so they were running badly behind schedule in pushing the Comrade Pants Act through Congress.  It was a race against time also, because they knew they were about to lose their legislative majorities, having sacrificed it to the principle that the government held ownership rights in everyone's mind and body, thus allowing them to dictate the means of maintaining everyone's mind and body.  Pants were important, but what could in principle be as important as that mind and body collective ownership principle?

So the Senate had had a thousand-page act thrown together by pants manufacturers, cloth makers, pants manufacturing equipment makers, haberdashers, egalitarian professional agitators, and their Senate staff members. None of the Senators had had time to read the act, but they knew there would be more time to do that after the act was passed.  Now there was a problem -- the act had tax penalties in it for anyone who wore pants that were not up to the standards set in the act.  Well, more precisely most of the standards were to be set up by federal government bureaucrats.  Those penalties would also have to be levied on anyone who did not purchase the required pants as well.  But constitutionally, all legislation levying taxes, tariffs, and other fees has to originate in the House of Representatives. So how could they satisfy this requirement without starting over, which time did not allow?  Simple.  They stripped out all but the bill number of a bill passed in the House to establish National Lollipop Day, changing the name of the bill to the Pant-wearer Protection and Affordable Pants Act, colloquially known as the Comrade Pants Act.  They poured the Senate act text into it and passed this act in the Senate after sufficient non-citizen votes were cast for Al Franken to allow the Senate to do so.  By then, the House did not have time to approve the act that resulted from reconciliation of the PPAPA and the National Lollipop Day texts.  Usually a reconciliation can be performed quickly, but the differences in the two texts were just a bit too much for the remaining time before recess.

While all of this legislative activity was carried out at a frenzied pace, Obama and Pelosi had been telling the American people over and over that if they liked their pants they could keep them.  It they liked their pants providers, they could keep them also.  They also said that because pant making equipment was to become standardized, as were the patterns and styles, the cost of pants would drop.  Everyone could efficiently examine them on on-line exchanges and purchase them there under competition among many pants suppliers, once they provided their social security numbers and credit card information to the government with its well-known regard for the security of their information.  People with qualifying incomes would receive subsidies for their critical pant purchases, while people with higher incomes would pay full price.  People who bought many pants with subsidies were thus supported by those who bought pants at full price, but of course those people who bought many pants must have needed them and it was recognized that need was an irrefutable claim on the labor and income of others.  Tax forms were to have a new line.  It was the shared pants responsibility line that one had to fill out proving that one had either purchased pants on-line from one of the pants exchanges or that pants from any other source met the specifications for what was deemed good pants by the Department of Health and Human Services.

The Democratic Party did not want to be criticized for forcing everyone to wear a single pant size, so they set up four levels of pants that one could purchase.  The Act itself was vague about what distinguished these pants levels, but the bureaucrats anticipated the House passing the legislation and rapidly filled out the requirements.

Platinum Level: 44-inch waist, 40-inch in-seam, wool cloth, gray, pockets both front and back, six pair a year.

Gold Level:  40-inch waist, 36-inch in-seam, linen cloth, cream-color, pockets in back only, four pair a year.

Silver Level:  36-inch waist, 32-inch in-seam, denim cloth, blue, pockets in front only, 2 pair a year.

Bronze Level:  32-inch waist, 28-inch in-seam, polyester cloth, pink, no pockets, 1 pair a year.

As you can see, this is not a one-size-fits-all law.  There is all the accommodation for different needs that any comrade might reasonably have.  All you have to do is sign onto the federal pants exchange in your state and choose your bronze, silver, gold, or platinum pant plan.  What could possibly be wrong with this?

To this day there are many Democrats who bemoan the failure to pass the Comrade Pants Act.  That act was so going to address everyone's pants needs and in the process make us all a little more equal.  Of course, this was just a second step in this quest for equality.  There were many more goods and services to which the Democratic Socialist Party planned to apply the same legislative methods.

20 Feb 2017 Update:  It has recently been suggested that the government having established the right to force individuals to buy a product or service should now force the People to buy Ivanka's clothing line.  As we know from ObamaCare, this requirement must be implemented without regard for the individual's sex, age, or personal needs.  So guys, line up and select your Ivanka clothing of choice!  The choices will only diminish with time.

A Nation of Sovereign Individuals with Unalienable Rights

Obama's 6 July radio address said that on 4 July 1776, a small band of men declared that we Americans were created equal and free to think and worship as we pleased.  He said we were now a land of liberty and opportunity.

Obama did not say in what very limited manner we were equal because his agenda requires that to be vague.  He did not note that while we are still free to think and worship as we please, we are very often not free to speak and write what we think or to act upon our beliefs, religious or not.  He did not note that our liberties are constantly becoming fewer and that he wants them to become fewer.  He did not say that he also wants to dictate the nature of our ever more limited opportunities and pick who will be given greater opportunity than others with manipulative government policies.  He habitually defends unequal status before government as an honest effort to create equality among the People.

To understand how insulting this man's ideas and policies are to the sovereign rights of the individual, we really need a much better understanding of what our individual rights are than most people have.  Indeed, even our founding fathers had an inadequate view of them, though I generally admire them for having understood the problem as well as they did in their time.

The Declaration of Independence, agreed upon on 2 July and published on 4 July 1776, wonderfully stated that "all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness -- That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness."

Yes, I do not agree that our rights come from our "Creator", but they do derive as Ayn Rand observed from our nature.  At that time, almost everyone assumed the nature of man had been determined by man's Creator and therefore the rights that derived from man's nature were endowed by man's Creator.  This reference to our Creator is a big deal with many who are religious today and because they attribute many of their beliefs to the will of a god they know nothing about, there are unfortunate consequences to this.  Despite this error, there are many really great insights in this quoted statement of the Declaration of Independence.

The statement firmly places sovereignty in the hands of the People, not with government.  It clearly takes individual rights to be of a very broad nature.  Note that it even implies rights beyond those of each individual to life, liberty, and the pursuit of their happiness with the word "among."  At the time, most Americans believed in the individual right to life, liberty, and property.  The substitution of pursuit of happiness for property was clearly a way of broadening the claim of individual rights.  Of course, the pursuit of happiness implied a freedom to acquire and keep property.  But, it also would imply such things as a freedom to choose one's own friends and domestic partners, to choose what books one would read, to choose a religion or not to choose one, to enter into trade with others of one's choosing for the purposes of one's choosing, to maintain the privacy one desires, and many more actions leading to any of the many means to and forms of happiness that individuals might choose.  This is a clear statement of a very broad concept of individual rights.

These rights are unalienable.  The existence of a government does not diminish these rights.  These rights are always sovereign in the individual.  These rights are not given to the individual by the government.  No, the government is only legitimate and able to claim a reason for its very existence to the extent that the government serves faithfully and well to protect these unalienable rights sovereign in the individual.  The government is the servant of individual rights and when it fails to protect them as a matter of principle, the sovereign individuals will reform and reorganize government by their right so that it does follow principles to protect their individual sovereign rights.

These are powerful, well-stated principles that are manifestly ignored and/or misunderstood by the Progressive Elitists who dominate most academic viewpoints on the role of government today.  This American principle of highly limited government with a legitimacy limited to its protection of individual rights held unalienably by sovereign individuals is unheard in academia, most media, and from most politicians.  The People, long educated in government-run and dominated schools, no longer have a clear concept of their sovereignty, of their broad rights, and of their equally unalienable claim to these rights.  Individuals are obviously unequal in most respects, but in the context of government, the most essential way in which they are equal is with respect to their equal and sovereign individual rights.  To give some people favored status by law is to abrogate this one critical respect in which we are equal before the law.  Those who most claim to believe in equality in the present political arena are most likely to destroy the most important sense in which we are equal.  For all of his talk promoting equality, the Progressive Elitist today believes in neither equal rights nor even one-man, one-vote.

The sovereignty of the individual is re-affirmed in the Preamble of the Constitution.  The statement of the highly limited powers of government issues from the sovereignty of the individuals who constitute that government.  The government is formed only to serve their needs by protecting their liberties and their general welfare.  This reference to general welfare is now often used in an out-of-context manner to support the welfare state and a massive redistribution of wealth.  This could not be further from the intention of the time.  No, then the general welfare implied government actions beneficial to everyone, not a bare majority or some special interest as it means today.  Securing individual rights would provide peace and tranquility, justice, and the general welfare for everyone.  No other government purpose can do this.  Other government actions will most likely be unjust to many, require threats of violence upon many, and will harm the interests of many.

The 9th Amendment of the Bill of Rights makes a clear statement that the rights of the individual are broad and are indeed unalienable.  They are not to be denied or disparaged by the government.  It is no small infraction of the principle of legitimate government that our government has long ignored this amendment and overtly claimed it to be meaningless.  Indeed, the Supreme Court has actually claimed that the government is sovereign, which it most manifestly is not.  Were this the case, then there would be no means by which a legitimate government could be formed and judged.  There would be no possible basis for overthrowing it when it became tyrannical and inimical to the rights of the individual.  Such a government would be inconsistent with both the Declaration of Independence and the Constitution.  Indeed, a sovereign government, rather than a government serving to protect the rights of sovereign individuals, is inconceivable in a human-centered morality in which individuals think and act as individuals for the purpose of preserving their lives, flourishing in liberty, and pursuing their own happiness.

This enlightenment and early American view of sovereign individual rights and very limited government legitimately protecting individual rights is very much at odds with the loose and hoary notions of government and rights held by Obama, the Progressive Elitists, and other advocates of big government today.  They assume that it is the purpose of government to grant individuals such rights as it may choose to give them.  They assume that government is supposed to hurt the interests of many for the purpose of helping some who are incompetent in living their lives.  They believe it is just and moral to propagate innumerable laws and regulations limiting our individual freedoms, even as each mandate is enforced by the threat of violence should anyone stand upon their individual rights.  No peace and tranquility are possible as faction upon faction, special interest upon special interest, and even race upon race, battle for control of the brutal power of government.  It is clear that by the criteria of our own Declaration of Independence, our government today is illegitimate.

The rational American does not celebrate the federal government on the 4th of July.  He celebrates the American Principle set forth by the Declaration of Independence and implemented in the Constitution by the mandate of American individuals.  The American Principle states that the individual is sovereign and each individual has equal and broad rights to life, liberty, and the pursuit of happiness.  It states that the only legitimate purpose of government is the protection of the unalienable rights of the individual.  Due to this very limited function, government has and can claim but few powers.  The sovereign individual retains his sovereignty with respect to the freedom to exercise his rights, while government is entirely his servant devoted to the sole task of protecting the rights of each and every individual American.  By adherence to this dedicated purpose, good government harms no one and never initiates the use of force against anyone.

The Falsely Framed Moral Evaluation of Capitalism

The Washington Post ran a long article on page 1 of its Outlook section on Sunday, 17 March 2013 entitled Is Capitalism Moral?  It was written by Steven Pearlstein, a Post columnist.  He claims that much of the reason for the stalemate in Washington is because the Republicans and Democrats have not really faced up to the question of whether Capitalism is moral or not.  He says that

The grand experiment with communism has been thoroughly discredited, a billion people have been lifted from poverty through free-market competition, and even European socialists have given up on state ownership and the nanny state.  Here at home, large swaths of the economy have been deregulated, and tax rates have been cut.  A good portion of what is left of government has been outsourced, while even education is moving toward school choice.  In embracing welfare reform, Americans have acknowledged that numerous programs meant to lift up the poor instead trapped them in permanent dependency and poverty.

This introduction to the Pearlstein article seems to bow to the power of Capitalism to do good, though it is always jarring to read that deregulation characterizes our government's efforts when about 80,000 pages of new regulations are added each year and the EPA is carrying out the Obama threat to kill the coal industry and coal-fired electric plants and to give us skyrocketing European gasoline prices.  The outsourced government continues to grow its many tentacles and keeps developing new tentacles such as those that sprout from the recent and still developing ObamaCare and Dodd-Frank "Too Big to Fail" acts.

Pearlstein notes that books by Arthur Brooks, of the American Enterprise Institute, and John Allison, of the Cato Institute, make a moral case for "even-freer-market capitalism than we have now."  The books he is referring obliquely to are:

Arthur C. Brooks, The Road to Freedom: How to Win the Fight for Free Enterprise, Basic Books, 2012.

John A. Allison, The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy's Only Hope, McGraw Hill, 2012.

Pearlstein characterizes their argument for capitalism as

As they see it, regulation is an infringement of individual liberty, while income redistribution, in the form of a progressive tax-and-transfer system, is nothing more than thievery committed against the most talented and productive by those who are not.  Regulation and redistribution, they contend, also undermine the vital incentives that drive capitalism, which throughout history has been the best system for freeing large masses of human beings from lives of misery and poverty.  What could be more moral, they ask, than that?

 Pearlstein even credits John Locke, Adam Smith, and Ludwig von Mises for their moral defenses of capitalism, before noting that the novels and writings of Ayn Rand really caused the idea of the morality of Capitalism to catch hold among "right-leaning intellectuals and politicians."

The remainder of this article mostly examines whether Capitalism is moral from Pearlstein's and frankly that of most people's perspective.  That perspective is implicit in the question he asks at the end of the article in his very last sentence:

If our moral obligation is to provide everyone with a reasonable shot at economic success, within a market system that, by its nature, thrives on unequal outcomes, then we ought to ask not just whether government is doing too much or too little, but whether it is doing the right things.

Basically, Pearlstein and most people believe that Capitalism is moral only if it is fair.  The bulk of the article is devoted to his belief that it is not really fair and loaded with implications that it must be controlled by government to see to it that it is as fair as possible.

One problem with judging the morality of Capitalism on the basis of whether it is fair or not is that even a toddler soon has a concept of fairness which need not have firm roots at all in a deep moral understanding.  It is extraordinarily common for the child to complain that it is not fair that her older brother always wins when they play Monopoly.  It is common that the younger sibling claims it is unfair that the older sibling can stay out to midnight on a Friday night with his friends or maybe even until 3 AM.  For many people, that concept of fairness evolves very little as they become adults.

The Founding Fathers and the Framers of the Constitution understood that what government should do was not governed by fairness.  They understood that the legitimate role of government was, as stated in the Declaration of Independence, the protection of our equal, inalienable individual rights to life, liberty, and the pursuit of happiness.  The role of government was simply to see that we were not forced by government or by others to give up making our own choices of values and prevented from taking action to try to acquire and keep our values, so long as we did not initiate the use of force against others.  Government had no role in deciding what values we should seek and no role in the distribution of those values among the people.

Those, who like Pearlstein, claim that the central government role is to ensure fairness in the distribution of values among the people must push government to decide what values really matter and how they will be distributed.  Commonly, they then think almost entirely in terms of income and worldly goods as the values of importance and those to be redistributed.  To concede that government has such a fairness role, is to concede that the Nanny State is proper.  It is to concede that the less developed person is right to constantly challenge the more developed person, or at least that those who have fewer worldly goods are right to challenge the government to redistribute those goods more in their favor or even totally unto equality in the distribution.

Of course a more developed concept of fairness might recognize that someone who chooses to watch NBC and CBS every evening for hours rather than working 12 or 14 hours in a day does not have a moral claim on the earnings or wealth of a person who did make the choice to work the longer hours.  After all, the TV watcher does not trade his relaxation and laughter in front of the TV in any meaningful way for the proceeds of the many additional hours worked by someone making a very different value choice.  Yet, most Americans exercise their limited sense of fairness to think that the TV watcher deserves to have a significant part, maybe even more than half, of what the hard worker made in his additional hours of work.

To a large degree, most people think fairness is about equality.  Yet, people are too complex and too highly differentiated for them to be equal.  They may have equal rights, but that is about the only way in which people are equal.  The Founding Fathers understood this, but they feared democracy largely because they understood that most people are governed too much by a desire for a simple-minded fairness, which drove them to desire equality and the redistribution of money and goods.  Yet, it cannot be fair to deprive the person who has acquired income and goods without the use of force of what he has acquired.  No system based on a forced redistribution can be fair.  Why set out in the name of fairness to redistribute income and goods when this necessarily means that one is unfairly doing harm to many and that fairness cannot be achieved?  Even Pearlstein allows that it is hard to know when to stop the process of redistribution.

The morality of Capitalism has the same basis as the morality of the entire private sector, only some of whose activities are devoted to the values of income and worldly goods.  There is no role for government in choosing who my friends will be and how many hours I am to spend with each of them for our mutual enjoyment.  The government that tried to redistribute my friendship time and effort would clearly be recognized as a tyranny.  There is no role for government in determining how fair it is that a woman of good character may or may not be loved by the man she wants to love her.  There is no role for government in deciding who we may choose for our domestic partner or partners, though that issue is still hotly debated with respect to same-sex marriage.  Many of the greatest values in each of our lives are properly seen by most of us as beyond the sphere of government rules for distribution.

Yet, for some childish and foolish reason, most adults do think that government has a role in re-distributing income and wealth.  I believe this is in large part because they ignore the fact that this is really a theft of the time an individual put into acquiring that income and wealth, including the time he may have spent preparing himself for earning it, as in his studies, his thinking about markets over many years, and his careful attention to details in his work.  Many seem to think that they have not subjected someone to slavery just because they are taking by force only half of every added dollar he earns rather than all of it.  In fact, a paper by Peter Diamond (MIT) and Emmanuel Saez (UC Berkeley) is making its rounds among the Progressive Elitists now that claims that the correct marginal tax on high income people is 73%.  I frankly cannot understand how they so deceive themselves that taking half or 73% of every additional hour worked from someone is not the moral equivalent of slavery.

Most slave owners in the Antebellum South allowed their slaves to spend a few hours working in their own gardens to grow some of their own food.  Did this mean that they were really not slaves because the slaveholder did not have them in his cotton or rice fields 100% of the time?  The Progressive Elitist might argue that they only make slaves of those who choose to be very productive in the marketplace, so if you participate in the market you are choosing to be a slave.  Of course they fear to be that honest, but they do say that if you make a lot of money you are choosing to pay the progressive taxes.

Yet, the person who spends time on other values, such as watching TV, going fishing, running, or spending time with friends or family is not taxed in any way.  That is not fair.  If it is right to progressively tax the person who chooses to spend time making money, then it is unfair to give the person who could have made money, but did not, a tax deduction for the money he failed to make.  Fairness demands that he be taxed for the value of his time that he spent in a different choice of values.  Yet, government knows that people will not stand for it to discourage other values such as time with family with a tax, so it acts in a manifestly unfair way on those who spend productive time making money through voluntary trades with others.  It does this even though it is generally recognized, even by Pearlstein, that such economic activity has done wonders in improving the standard of living for almost everyone, even the inveterate TV watcher.

Pearlstein's characterization of the market as much more free than it is provides him with some of his arguments that free markets do not work so well.  He also treats the arguments of people like Allison  unfairly.  For instance, he says

The conservative case against regulation, for example, is premised on the proposition that everything that has gone wrong with the markets is the government's fault.

 Well no, free market advocates realize that many businesses will fail in a perfectly free market and that there will be a business cycle in a free market with recessions from time to time.  They just object to the fact that government action in the market has the consequence of causing more business failures, more frequent and deeper recessions, and in the present case a recession that seems to have no foreseeable end.

Pearlstein claims that free market advocates say that

Because pursuit of self-interest is the essential ingredient in a market system, it somehow follows that individuals and firms are free to act as greedily and selfishly as they can within the law, absolved from any moral obligations.

I do not think there are many who believe they are "absolved from any moral obligations" in their actions.  Pearlstein in particular seems to imply that Allison holds this view.  I have not read his book, but the way Pearlstein describes Allison's viewpoint leaves quite a large leap to the conclusion that Pearlstein seems to impose on Allison's viewpoint.  I surely do not believe that a businessman is only morally obliged to obey the law and that he is morally allowed to otherwise act immorally.  Indeed, that is a clearly immoral viewpoint, which an advocate of Capitalism on moral grounds is most unlikely to make.  But Allison correctly notes that when government uses a heavy hand in making moral decisions in the marketplace, the many laws that claim to define moral actions and value choices in the marketplace will naturally become a substitute morality for many people.  If Pearlstein wants everyone in the market to act morally, then he should remove the government from the market as much as possible so that people will understand that they must act morally in the market, rather than just obeying the laws.  Government morality acts as bad money does to drive good money out of the market.

Pearlstein repeats the liberal argument that economic success often is due to dumb luck.  Some have the good fortune to be born with the right genes and the right parents, to grow up in a good community, to be better educated, to be better mentored, and to be at the right place at the right time.   They argue that the market should reward virtue, not dumb luck.

Well OK, we like to see virtue rewarded.  But, in a system in which market success means that everyone involved in a voluntary transaction has entered into it because he believes he is better off for having participated in it, how is anyone hurt if someone in the transaction was lucky?  Everyone still benefited.  We all want the freedom to be lucky, do we not?  We may be lucky in a business transaction one day also.  Or, maybe we were lucky enough to meet the love of our lives 40 years ago.  Apparently liberals believe that luck should be re-distributed also.  So, why is it only luck in financial terms to be redistributed?  Did I not realize a greater value in having the luck to meet Anna than someone else has had who is unhappily married for the third time?  As in the marketplace, virtues and luck both play roles in our love lives.  Luck is not something to be redistributed and rationed among us.  Our luck and misfortunes are generally properly beyond the reach of government.  Yes, we may well choose to recognize that some people have suffered more misfortune in life than others in our private charity work or contributions, but this is not a proper function of government.  Rightly, there is no grant of power for the purpose in the Constitution.

Pearlstein continues to argue against the perceived fairness of the marketplace.  He says that 20 years ago wage and salary earners reliably captured about 75% of the national income, with the rest going to capital providers.  More recently, labor has only received about 67%.  I expect there are reasons for such a shift that make sense.  One is that there is a decrease in union labor in the private sector.  Another is that there is an increase in the importance of knowledge and professionalism and both are more and more often tied to capital and the founders of businesses.  Still another is that complex law and regulation has insulated very large companies from upcoming competition.  Another is the huge influxes of taxpayer money to companies such as Goldman Sachs, CitiBank, Bank of America, GE, GM, Lockheed Martin, Solyndra, and A123 Systems in recent years.  Corporate welfare seems to be a staple of Progressive Elitist government even as it pretends it is not.

Pearlstein claims that 50 years ago, the typical corporate executive earned less than 50 times the pay of the average front-line worker.  He says the ratio is now 350 to 1.  He implicitly believes this is a statement that morality is defied here.  I expect he is comparing the few large corporations of 50 years ago in a much smaller US economy with today's corporations acting in a much larger US economy and in a much larger world economy.  If he chose to compare the mid-sized companies and large small businesses today with similar sized businesses by income of 50 years ago, the ratios would be much more similar.  That is, compare the ratio in a $100 million income company today with a $100 million income company of 50 years ago and the ratio will be much less dissimilar.  Neither 200 years ago, 100, 50, or last year did most companies even have a 50 to 1 ratio.  That ratio is a phenomena of size.

Pearlstein laments the fact that inequality of income in the market threatens to overwhelm the ability of a progressive tax-and-transfer system to keep up with it.  So yes, Pearlstein simply assumes that income equality is a requirement of a moral economic system, despite the fact that almost no one advocates equality in other aspects of our private lives.  His, and that of most Progressive Elitists, is a very childish moral code.  It is manifestly biased in the application of equality and it absolutely refuses to recognize that individuals are highly complex and differentiated.  It refuses to recognize that as a result, we make very different value choices and bring very different abilities to bear on acquiring the values we choose.  It just assumes that using force to redistribute income and wealth is good.  It just assumes that largely enslaving those who make good money in the voluntary and mutually beneficial marketplace is justified as for the greater good.  It also assumes that it is right and proper to redistribute luck, but only luck operating in the market.  What an absolutely weird, yet common, idea of morality this is!

A society with a very limited government whose only function is to protect our equal, sovereign individual rights to life, liberty, property, the ownership of one's own body, mind, and labor, and the pursuit of personal happiness is the only society in which people are free to be moral.  They are then free to be moral in the entire private sector of their activities, including that subset of economic activities in the market.  Capitalism is moral for the same reason that other human action dedicated to the free choice of values and the freedom to pursue them is moral.  Capitalism is moral because it allows these choices of value by each individual in the marketplace.  It is moral as an exercise in our individual right to freedom of association to cooperate with others as we choose for financial reward, just as in other aspects of our lives we are free to associate with others as friends and lovers and family.  Our labor belongs to each of us by right and we trade it with others in some cases for monetary gain and in other cases as part of a family to instruct a child or to do the dishes and laundry.  Government has no moral obligation to equalize any of the rewards that we get from exercising our freedom of association or the use of our time.  Indeed, if it tries to do so, it has violated our individual rights and done an evil deed.

The 1920s Whose Economic Policies Obama Dislikes

In the last debate with Mitt Romney, Obama said, "When it comes to our foreign policy, you seem to want to import the foreign policies of the 1980s, just like the social policies of the 1950s and the economic policies of the 1920s."  Let us review the economic policies of the 1920s a bit.  We will learn some very important lessons.

Amity Shlaes called Obama out on this.  She notes that real GDP grew by an average of 4% a year in the 1920s.  High unemployment in 1921 at 11.7% was brought down to 2.4% in 1923 while cutting federal spending.  In time, government spending as a percentage of real GDP was cut in half.  80,000 patents a year were being issued on average in the 1920s, which was not again matched until the 1960s.  The 1920s were a decade of growth in technology and for the economy generally.

Now, Obama can not abide by cuts in federal spending.  President Harding cut tax rates as advised by Andrew Mellon, and we know that Obama greatly dislikes that idea.  The income tax marginal rate under the bloated government of Woodrow Wilson for those with an income of $100,000 or more was 60% when Harding took office in 1921.  Under Wilson, those with an income of $1 million or more had paid a marginal tax rate of 77%.  The marginal tax rate for those with income over $100,000 was lowered in 1922, 1923, 1924, and then again in 1925 under President Coolidge, with a final marginal rate of 25%, until 1929 when it was dropped to 24%.  Not only did the economy grow well as noted, but the share of income taxes paid by those with incomes of $100,000 or more steadily and rapidly increased from 1923 to the end of the decade.  The total amount of income tax paid by these higher income taxpayers increased rapidly also.  In 1920, those making over $100,000 a year paid 29.9% of all income taxes.  In 1928, they paid 61.3% of all income tax collected.

Income tax revenues from those making $10,000 or less decreased greatly and stayed much lower throughout the decade.  For those making $25,000 to $100,000, very wealthy people then, the collected tax revenues went down considerably before rising later in the decade to about the level at the start of the decade.  See Tax Rates and Tax Revenue: The Mellon Income Tax Cuts of the 1920s by Veronique de Rugy of the Cato Institute.  The fact that total income taxes decreased somewhat for several years before growing back to levels exceeding that of the start of the decade was fine because the Republican Presidents Harding and Coolidge reduced the size of the government considerably.

Arthur Laffer and other supply side economists have often said that the Mellon tax cuts resulted in both economic growth and an increase in tax revenues. Actually, with such severe tax cuts for all income tax brackets, this is not a sufficiently accurate portrayal of what happened.  However, the income tax revenue collected from those with incomes over $100,000 more than doubled!  Large tax cuts for higher earners result in large tax revenue increases because these taxpayers are much more likely to devote great effort to avoiding paying high income tax rates, including exercising their greater ability to retire early or simply to work fewer hours.  They are also more likely to invest their money in businesses when taxed at lower rates, causing the economy to grow more rapidly, which also adds more to both income tax total revenues in time, but also to other types of taxes as people generally earn and spend more.

It is an interesting fact that if high earners were taxed at lower marginal tax rates than lower earners are, total revenues collected by the government by the income tax would increase and increase specifically from the higher earners.  There is even a very good moral argument that this is the way things should be.  Government legitimately serves only to protect our equal, sovereign individual rights from those who would initiate the use of force to deprive people of their rights.  If one man earns 10 times what another man earns, does it really cost government 10 times as much to protect the rights of the bigger earner?  I do not think so.  Some legitimate costs of government overall scale with the population, some with the area of the country, and some with its GDP.  The area of the U.S. is not changing and the population is growing at a rate of only about 1% a year.  Only a fraction of the legitimate costs of government are left as proportional to the GDP.  Total government spending should increase at a rate greater than that of population growth, but less than that of the GDP.  For both moral reasons and for the purpose of maximizing tax revenues, marginal tax rates should decrease with higher income rather than increase.  Such a tax scheme would guarantee that everyone's effective and marginal tax rates could be reduced with time.

Thus we see that the current highly progressive income tax scheme serves only an ideological purpose of egalitarianism.  It makes the primary purpose of the income tax code that of punishing higher income earners, rather than maximizing the income of the government with a minimum of harm to the People.  It sacrifices economic growth.  It sacrifices maximizing income tax revenues at minimal pain.  It means that those many tax revenues that grow with the economy will increase more slowly.  But this highly irrational progressive income tax system is much beloved by Obama.  Therefore, it should be no surprise that Obama hates the tax and economic policies of the 1920s.  Rational Americans should learn from that period of history and at the least greatly reduce the progressive marginal tax rates of the present insane system.  If we had the wisdom to go further and adopt an income tax code that is regressive, we would all benefit greatly in relatively short order.

If Only the Preamble of the Constitution Said --

While I think the American People who accepted the Constitution of the United States of America thought that the Constitution would be seen by everyone in the context that I have given it more explicitly in my own rewrite of the Preamble, our modern federal courts, legislature, and president do not.  Neither do most of our academics.  If only the Preamble said this explicitly, our individual rights would be much more secure:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.  This Constitution will provide the government a few explicitly enumerated and very limited powers.  The government of the United States of America shall not deny or disparage the equal, sovereign, and many rights of the individual citizens of the United States of America to life, liberty, property, and the pursuit of happiness.

If the Preamble did say this, it would have served as a strong protection against the present broad interpretation of federal government powers and the very narrow interpretation of the scope of individual rights.  This is not to say that an always power-voracious government would not commonly choose to ignore the limits of its power as ours now does.  It does not mean it would not often trample our individual rights and treat them as highly unequal rights as it now does either.  No, our government would likely still be tyrannical, but its road to exercising that tyranny would have been more difficult and it would not be so far down the path of tyranny as it now is.

On Fairness Claims that Social Force is Necessary

The principle argument for socialism is that life is not fair and society must try to make it more fair. To do this, society must have a government which forces people to act so that life becomes more fair. Usually, those ways in which life is not spiritually fair are too complicated for anyone to imagine that governments can do much to make life more spiritually fair, so they concentrate on what they consider the material measures of fairness. This is further simplified to become material equality.

It is true that life is not fair. Some have a genetic intelligence factor which is greater than that of others. Some are tall, while some are short. Some are beautiful and some are not. Some are genetically disposed to be too skinny and some to being too fat. Some are born to good parents and some to bad parents. Some are born to wealth and some to poverty. Some are genetically prone to early cancers and heart problems, while some are not. Some are caught up in a plague or some other epidemic, while others escape. Some are ruined or killed by vicious criminals, or by robber barons or migrating tribes, or by the local despot. Some may invest years in a company only to see it strangled by a labor union which takes it over. Life is not fair.

We all know this. There are different ways to respond to this fact of life. The socialist says we should use the force of government to make life more fair. Unfortunately, this does violence to the idea that we should not initiate the use of force against others. The socialist claims that initiating the use of violence against others is justified if some of the imbalances of genetic values and chance in life can be lessened. Of course, when selling this idea, he or she almost always pretends that the desired lessening of unfairness can be achieved at little cost and refuses to address the high cost of creating a society in which a philosopher ruler or a democratic plurality of voters imposes their will by force upon others in their quest for what they think is fairness for everyone. Of course, their idea of everyone is always oversimplified to become some groups of people who will be favored in the adjustments, while others will be disfavored due to some combination of having more of what is being adjusted or having less political power.

Because life is complicated and life is not fair, the effort to adjust it for fairness for all people or more practically, some people, is a never-ending and evolving quest. The sets of people being helped and the sets of people who are forced to help are ever-changing. There is no way to establish the rule of known law or of intelligible law. Today, one must adjust the social consequences of differing intelligence, tomorrow the differing activity levels, the day after the different eating habits, the day after that the different sexualities, the day after that the differing mental healths, the day after that the differing ideas of climate control or stasis, then the income due to investors must be lowered so it is not so great compared to a migrant farm worker's income, and on and on. What measure of well-being is to be adjusted and what group is to be helped at the expense of what other group is an ever-evolving matter of fashion. It is also inherently a brutal game of political power. It is a recipe for chaos.

Frankly, women are more impressed by the argument from fairness for socialism than are men. There are many more women in the Democrat or Socialist Party than there are men. As with women's clothing fashions, what they take to be the fashionable measure of fairness of the day requiring governmental adjustment is constantly changing and it changes with as little rational reason as their clothing fashions change.

Many believe it possible to somehow use social force to rationally adjust the many factors of life to make life more fair for at least the average person or for those who are sub-average. There are many problems with this idea. First, there is no such thing as the average person. Second, it is harmful to anyone to have government designating them as sub-average, or even for that matter as average. The minute some socialist points at you and says life has not been fair to you and you are in such need of their help as to justify their using force to rob someone else of something you need to give it to you, you should be very indignant. Even it they try to disguise the robbery of someone else so you can receive the stolen goods by claiming those goods are yours by right, you should see this as a medical gown exposing your rear side. This is a flimsy costume designed only to fool the most simple-minded. You may look at me and think I am average, but I do not think I am average. Indeed, no one should think they are average. We should all be thinking of how we are going to make the most of whatever it is that we have that gives us our best chance to achieve our values. Most people really do have some things that they are truly good at. If they can identify those things or in some cases even just have the dedication to the idea of having some such traits, they can often translate that into an enhanced ability to achieve their values and to become happy.

Because life is complicated and the forces of politics are not capable of reconciling themselves with complexity, the government will always fumble about and create some new unfairness even as it attempts to reduce some perceived unfairness. Fairness cannot be achieve in the politicians' culture of sound bites. Government cannot recognize individuals as such. It can only recognize fairly large groups or occasionally the small group with much political power. Government is always a bull in a china shop. It is always a fire in a hay barn. All the dreams of rationally managing government with a wide agenda and scope have proven that this cannot be done. Government cannot even get good and affordable toothpaste to the right people at the right time. How often does this need to be proven before socialists will acknowledge its truth? If it cannot deliver toothpaste, how can it deliver more complicated values such as equal substantial wealth, equal quality education, equal security against criminals, equal quality housing, and equally interesting work? Governments have tried to deliver all of these goods or services on an equal and "fair" basis, but have never succeeded in doing so.

It is highly irrational not to learn from history. History has many lessons about what governments can and cannot do. History is not devoid of governments which tried to produce equality among its people for some brief part of the history of this nation or that. But, that history was always short and always followed by an orgy of force against the people that made them most miserable. Oftentimes, the carrot of equality was only held out so those claiming to offer it could acquire power and then yank the carrot away and replace it with the whip or the gun to the head.

Can it not be argued that it is unfair for government to use more force against one person than another? If equality were a value which every person should be committed to pursuing, then surely we should be as adamant that there be equality in the actions that government takes in its dealings with each of us. If government takes a bauble from me, should it not also give me a bauble of equal value? If it does not, it is violating the principle of equality. This, by the fairness principle, should mean that we are all in a zero-sum game with government, so what is the point of playing this game? Especially given that it is a game involving deadly force. If I object that the bauble taken from me was worth more to me than the bauble given me, the government will require that I shut up and live with it, or else. But of course, I know that equality is not really a principle of broad applicability, so there is no intention that the actions of government will be fair to each and every individual. Yet, does this not show the unsuitability of even trying to make equality a goal of government action? It is not an achievable goal by its very nature.

Wisely, the American Founders and the Framers of the Constitution recognized that government was force and a crude instrument for managing society. They saw that it had always been necessary, but also a huge danger in its own right. The government powerful enough to give you what you want, was seen as powerful enough to take all that you want away from you. Historically, governments very commonly did just this. So, government was not to give us all we want and it was also not to be made strong enough to pretend to be pursuing equality for all of us except for our equal rights to life, liberty, and the pursuit of happiness. The Constitution made no pretense of giving us equal happiness. It only said government should not block our efforts to personally achieve our happiness. This formula proved incredibly successful. Individuals could truly manage their own lives, identify their own values, and act to acquire the values they had identified. Man prospered as never before and man became happier, healthier, and more secure than ever before in history.

As men pursued their happiness, they were aware that some among them had been dealt unfair hands by chance. These same Americans who had no governmentally imposed requirement to be charitable or to rob one another so some could receive the stolen goods and services to be elevated to a more "equal" status in some sense, became the most charitable people on earth. They still are today. We are not unaware that bad hands are dealt some people at some point in their lives, or even for their entire life. We help, but we do this on the moral basis of voluntary action, not on the immoral basis of forced action.

Socialist government does not like competition. When government becomes the agency of charity, if it can be called charity when it is carried out by theft by organized gangs of thugs, it acts to squelch competition. This is exactly what Obama tried to do when the charitable deductions of wealthy people were to be given lower levels of deductability than were those of people with less income.

There is nothing more unfair than to have the value you have poured the hours of your life into achieving taken from you by force. If you were a farmer in the Dark Ages and a gang of cutthroats poured over the hill on horses, armed with steel swords, covered with body armor and possessing shields, and carried away your wife, your child, your only pig, all the loaves of bread your wife had baked, and trampled your wheat field, you understood that the most important thing you could ask of others was that they not use force in dealing with you. If you were strong enough to oppose that gang of cutthroats you would surely do so. Now, multiply that gang of cutthroats by a hundred or a thousand and arm them with machine guns, scoped rifles, tanks, and helicopters and have them take 44% of whatever you have invested the many hours of your working life into making and you have the unfairness of today in America. They still swoop down on you, the individual, in massive force and demand what you have produced by your own effort and take what they want. You do not know when they will come and you do not know what they will steal from you tomorrow. You know only that you are their slave, at least 44% of the working hours of your life.

We no longer have the rule of law, we have instead the rule of the momentary fashion, as Obama showed by forcing banks to keep money they do not want, by forcing the GM CEO to give up his position, and by giving the assets of Chrysler not to the lawful highest priority investors, but to the labor union. This is a system which has pretended to be justified by seeking fairness for the average guy and the downtrodden, but makes its livelihood by preying on the rich and setting up the average guy with the carrot to be yanked away and replaced by the whip. The average guy will soon become aware of the huge indebtedness that he will have to help pay off with higher taxes and/or by suffering at the hands of inflation as we did in the 1970s. Of course many of Obama's followers do not remember the 1970s or know any history. Some of those who do are too power-hungry to be detered by such knowledge. Some wish to see equal poverty for everyone, no matter if this means that everyone will be made worse off in terms of their options to manage their own lives and their health, security, and prosperity. Others are drawn in with simple-minded ideas of fairness. Together, there could be no more effective a crew of cutthroats swooping over the hill and descending like locusts striping the land of all value in the act of ultimate unfairness, the act of taking what they want by force from those who produced it by pouring their own lives into the effort.