Thursday, November 14, 2019

Digging in: The Devil is in the details of dollars & sense - Economic Politics vs Political Economy pt2

Yes, I know. With all the news about the impeachment follies, and the gaphtastic Democrat POTUS race and stories of the life & mysterious(not so much) death of that 'pedophile to the politi-stars' Jeffery Epstein, I'm over here diving into the differences between 'Free Trade!' & a Free Market, because... why? Well, because they're related. You've heard the line about the Devil's greatest trick being getting people to think that he doesn't exist, right? Similarly, the Pro-Regressive's greatest trick has been getting us to treat national prosperity as a matter of Economics. How... exactly? Well it's a slight-of-mind trick that works like this: In the act of accepting that prosperity is a matter of Economics, your thoughts are diverted away from what actually does cause prosperity (those central ideas of our nation's moral, ethical, political philosophy & practices), and fixated onto those downstream distractions of percentage rate adjustments and trade issues, and before you know it, what truly does matter most has vanished from popular thinking as thoroughly as if the Devil himself had waved his magic wand and said 'Abracadabra... be gone!'. Conceptual vanishing tricks like this have led America's once signature regard for living a good & proper life, to slip quietly out of sight & out of mind, and sorry folks, but when calculating gain is allowed to push moral and ethical reasoning from the center of your thinking, you're going to find yourself confronted with just such bizarre follies as we face today. What happens when you allow yourself to be distracted from what matters: your ideology takes the wheel and speeds you on down the road of good intentions as your GPS locks onto that hot & sulphury destination where all such roads eventually lead. Like most good tricks, it's not all that complicated... neither is what happens when you mistake trickery for reality.

The absence of those central ideas are noticeable all around us today, such as in the recent survey where "Seventy percent of millennials are very open to voting for a socialist candidate..." People ask "What's driving this?", and then typically answer their own question as that post did, in economic terms, where a 'Democratic Socialist' is simply '...a political affiliation keen to spread wealth around through collectivist practices...', and expressing an oddly deterministic fear that such notions are due to "a faith of the cities" - all of which lacks that quality which might actually cause people to answer such surveys differently than they currently do. Do you see the mark that's being missed in this? Tucker Carlson sure doesn't, as he misses that mark even further, and more frustratingly. While he at least concedes that colleges have some connection to our 'current malaise', he says that it's not so much due to what is taught there - according to Tucker, what students are instructed to think (never mind those thoughts they're unlikely to ever encounter, as a result of that instruction) is only 'part of' the problem - but that for Tucker the real problem is an economic one in the form of the financial debt incurred under the influence of 'capitalism'. Both are fine examples of why so many are so open to a socialist candidate today: By treating Socialism/Communism/'Free Trade!'/Populism/[Insert other label here] as merely economic matters, they command about as much attention from people - and the very same type of attention - as they'd give to their credit card 'Rewards!' programs or to picking up a few extra bucks driving for Uber - such attentions invite exactly the distracted shallowness that they've typically received.

Do you see what's missing in them? Little things... like life or death, good and evil, true and false, justice or injustice, perhaps? Once upon a time before the Pro-Regressive era had taken root, the causers of prosperity were studied under the wider ranging heading of 'Political Economy' and was led by the likes of Jean Baptiste Say & Fredric Bastiat, whose desire to know had not yet been divorced from reality and their moral vision (though truthfully you can see signals of the coming turn
in that direction). Even as late as the 1820's, they were still primarily seeking to understand the principles which contributed to and detracted from the production of wealth, rather than how best to calculate how govt might best distribute what wealth that other's had produced. They had a passionate interest in how such principles contributed to living a good life and enjoying the blessings of liberty and justice for all, and it would take several corrupting decades for their understanding of 'Political Economy', to be reduced to the dismal state of modern Economics and its focus upon financial bean counting and how efficiently govt might calculate the societal management of human & material resources.

As modern Economics (succinctly defined by Thomas Sowell as: 'Economics is the study of the use of scarce resources which have alternative uses') has no overtly moral component, it's lessons don't teach that Socialism/Communism/'Free Trade!'/Populism are good, bad or even evil, but only how efficient such policies might or might not be, and of course it has no aversion to weighing the value of Liberty & Justice in a scale against just such golden efficiencies. As you should guess, being morally neutral doesn't mean that such Economic lessons have no moral impact, it only means that when such judgments must be made, its students will be trained to make them by calculating the utility of the matter, instead of having been equipped to soberly reason their way to understand the right and the wrong of the situation in question. Student's educated in such methods (especially business & professional majors) will lack the developed practice of considering what is right & wrong, but they'll be quite confident in their ability to determine what most serves the 'greater good', and the devil will be in those details where your desire to live your own life conflicts with those choices that their calculations will allow you to make.

Why are people surprised that students choose as they do? Few of us have learned to see 'Capitalism' vs 'Socialism' as a meaningful issue, because evaluating Right vs. Wrong was never presented as being a precondition to making that choice, but only what will result in the most gain for 'the greater good!' (which pre-determines the outcome). Sadly, it is those who would and should be the best students, who find themselves siding with the false face of 'Socialism' precisely because it's presented as being concerned with that utilitarian substitute for a moral component - the greater good, fairness to the disadvantaged - which is presented as being absent from 'Capitalism', and lacking that argument, they naturally choose just as they do. Where is the surprise in that?

The 'Right' utterly fails our youth and our culture, by tolerating the 'questions' to be phrased in such a way as they are, for in reducing the issues to being viewed as a useful, though not-too-interesting, means to an end of getting 'their share' of dollar$, perk$, and service$, what is NOT seriously being considered (and so is ignored), are the vitally important moral questions of dealing with what is Right & Wrong, which the 'Right' only tacks on, if at all, as an obligatory afterthought. Such questions, if wrongly considered as being of no more value than utilitarian issues of dollar$, perk$, and service$, are far worse than their wrong answers, as a people taught to ask them in that way are easily lead into inescapable programs of ever escalating brutality, servitude, misery and death, on historically massive scales - for 'the greater good'.

Is this instance of 'capitalism' vs 'socialism'an economic or a
political matter? Are the protesters more antifa or Tea Party?
It is with that image very much in mind, that I want to try to deal with clarifying the questions which this series of posts are focused upon, the significant differences inherent in what on first glance seem to be very similar 'economic policies', between those of 'Free Trade!', or a Free Market. The tendency towards mistaking utility as an acceptable equivalent of morality, is what needs to be taken notice of, before we can hope to retrace the many mistaken steps we've since taken over the last hundred plus years, so we can stop thinking of such important matters to our lives, in the crafty and calculative manner we would use in trying to get more dollar$, perk$, and service$ out of a financial transaction, rather than consciously considering the justice of our actions & place in the world, in a serious and reasonable manner that is intent on identifying what is truly of value and importance in life.

If you want to make America American again, it requires thinking about such matters in the exceptional manner that made Americans an exceptional people in the first place, and not in the way that has transformed us into ... whatever it is we are today. A simple starting point for that undertaking, is considering what is different, and what is lost, between 'Economic thinking', and thinking upon Political Economy, or more briefly put: 'Free Trade!' vs Free Market.

The Dollars and Sense of the Matter
If you pop 'Free Trade' into your favorite search engine, you'll get definitions ranging from
  • Webster's
    "trade based on the unrestricted international exchange of goods with tariffs used only as a source of revenue...."
  • or from "international trade left to its natural course without tariffs, quotas, or other restrictions",
  • to Investopedia's " a pact between two or more nations to reduce barriers to imports and exports among them"
  • , to "Free trade is the idea that things should be able to be traded between countries with as few restrictions or limitations as possible"
  • , to the bizarre's "A free trade area is a grouping of countries within which tariffs and non-tariff trade barriers between the members are generally abolished but with no common trade policy toward non-members. The North American Free Trade Area (NAFTA) and the European Free Trade Association (EFTA) are examples of free trade areas"
  • , and the businessdictionary's most artful and creative interpretation of words (AKA: Deceptive) with "The interchange of goods and services (but not of capital or labor) unhindered by high tariffs, nontariff barriers (such as quotas), and onerous or unilateral requirements or processes. Under a WTO treaty signed by 124 nations in "
, or to put it in other words, 'Free Trade!' has come to mean whatever the hell best helps your particular ideology to sound 'correct'.

Those who do care about definitions such as those are far more puzzling to me, than those who don't. Not one of those summaries mentions what not of them could even pretend to exist without - objective law, morality, trust, character - Adam Smith, who Marx slandered with the epithet 'Capitalist', was more concerned with what makes a people moral, ethical, interested in and capable of living in Liberty (see his 'The Theory of Moral Sentiments'), he didn't put mere 'economic matters' first, rather he believed that increased wealth is what resulted from greater 'Natural Liberty', not trade.

Rather than pick apart each of these attempted definitions, I think we'll get further by boiling them down to their key similarities, which leaves us with three main 'Sense of the matter' summations, of one for a Free Market, and two for the main variations of 'Free Trade!'. Of these, the least popular version is unfortunately - though not original with me - mine. And though its popularity has dropped precipitously over the last century and more, it best encapsulates what the other leading brands both aspire to and ignore:

  1. A Free Market is what results from a nation, or nations, whose principles of political philosophy are centered around upholding and defending its people's individual rights and property, through governments formed upon a Rule of Law, which limits their governments' powers to that purpose, enabling valid economic principles to operate within a nations growing prosperity.
  2. Then there are the two far more popular meanings that are promoted under what I believe to be the misleading term of 'Free Trade!' today:

  3. The more familiar meaning of 'Free Trade!' favored by academia, media, and establishment Republicans & Democrats alike - such as the likes of the late Sen. John McCain, the Bush's and Obama - presupposes the necessity of having robust Govt interventionism in the market, preferably by 'legitimate' national and international regulatory bodies, to impose rules that restrict and define each minute behavior in each and every particular market (one concerned with dairy, perhaps... another with pick-up trucks, and so on) so as to force it to be 'free!' and 'fair!'. The output of this variant of 'Free Trade!', are those monstrosities which they promote to us as 'Free Trade!' treaties (which I've posted on before), such as NAFTA, TPP, etc.,.

  4. Then there's the Libertarian variant of 'Free Trade!', which presupposes that "All Trade is about economic facts and principles which that govt be excluded from such matters, and that going against 'Economic Reality' shows that you are unprincipled, dishonest and unethical (and probably hopelessly stupid)", the more that such views lean away from the Political Economy of a Jean Baptiste Say & or a Fredrick Bastiat, and towards that of Murray Rothbard (an influential anarcho-capitalist Libertarian economist), the more they are inclined to think that some or all of those features which a just government provides, and which make a truly Free Market possible, are unnecessary, and in conflict with their "Principles!".
The 1st of these senses, that understanding of which America formed itself from, is in different ways repellent to the other two, who, though from very different perspectives and purposes, want Economics to be accepted as 'Science!' (though in both cases it's rather more a case of Scientism), and so be taken as the unquestioned starting point of 'human action'. Both are happy to reference our Founders ideas and the Constitution which was formed from them, but not so deeply as to seriously engage with and apply those moral & ethical ideas in ways that might (ought to) be troubling to their sensibilities, but rather more as a useful cloak for furthering their purposes for 'The Greater Good'.

Of course the 2nd understanding above is easy to see problems with, it's economically unsound, politically unsound, morally unsound, while at the same time it's a boon for those peddling political favoritism and corruption in 'legimimate' clothing, and many if not most on all sides of the issue typically do see the problems with that version of 'Free Trade!', and do dislike them. That dislike of course, doesn't stop those who prefer to promote it for the benefit of their own interests, under their go-to excuse of it being for 'The Greater Good'. And as having an honest argument in order to discover what is true, wasn't their goal to begin with, attempting to argue them out of it, is rather pointless, and I won't wast any more of our time on it here. Moving on....
Who said it better?

The 3rd of these meanings though, does appeal to those who are seeking the truest and best course of action, and it is very easy to mistake someone's presentation of it as being "Principled!", especially when not looking any deeper into a matter than the surface level of assertions being made. It seems sensible, it seems very American, and it seems oriented towards Liberty, but IMHO the approach to such issues by the typical Libertarian, effectively reduces the political and economic principles of a Free Market, to an ideological snake oil that's had its active ingredients removed. 'Free Trade!'rs peddle their ideology to the world as a miracle cure for all that ails society, which I find to be dangerously misleading, and very much worth taking a closer look at in these posts.

Unlike the 2nd example of 'Free Trade!' above, the shortcomings of this miracle cure are more difficult to spot, as it has less to do with what they say, than with what they don't say, and it's only when you pay closer attention to what isn't being dealt with, that the flaws in their system begin to jump out at you. For instance, when the 'Free Trade!'rs spout their favorite pithy economic principles, which they liberally invoke and apply well beyond and outside of strictly economic circumstances, it's the non-economic realities which they implicitly assume and rely upon (even while devaluing them), that are explicitly absent from their arguments, as is the case in their one-note reply to tariffs, as: "Tariffs are a tax upon your own people, the other nation doesn't pay them, you do". Note: the issue here isn't the economic value or status of tariffs (they have no such value), but that that is not their only purpose, which they ignore by telling less than the whole story. Of course if such issues of trade are taking place between nations who all have an established concern for their people's rights and property, then in such a case as that, if one of those nations sought to apply tariffs to the others for the economic purpose of boosting its economy, such tariffs as those, would be demonstrably counter-productive, and such statements as the 'Free Trade!'rs typically trot out would indeed be correct and very relevant points to make. But those implicit assumptions are not something that they'll explicitly state or examine, as they are typically more useful to them to be ignored - probably less because they're difficult to defend, than because they're easier to ignore.

The question to ask when these 'principles!' are trotted out though, is less one of is that true?, than one of 'Is it the whole truth' that it's pointing towards, and leads you to assume in both its conclusions and in its unstated premises...? and does it even contain enough of the truth to give you a full picture of what's really going on? Too often, especially in the context of Communist China which this thread grew from, the answer is "No".

However, most of those who rattle off dis-integrated economic principles as "Principles!" to guide national policy by, do so as if it is the truth, the whole truth and nothing but the truth, that they are presenting you with, assured that there are no further questions at the heart of the matter under discussion that require more careful consideration of, in making key policy choices for the nation. Some fairly obvious questions which typically go unasked, but shouldn't, are the likes of these:
Question: Are Economic considerations a valid starting point for making national political policies?
Hint: If you asked 'Which policies?', then congratulations, you've implicitly acknowledged that the answer is 'No', and you are correct (but have you considered why?)
Question: Are there some situations where principles other than Economics, should be considered first in some matters, and if so, which principles, in which situations, why, and how do you know to?
Bonus Points: Is there something more which precedes and orders those principles that you do, and don't, acknowledge?
Question: Does a Nation exist to produce an Economy, or is an economy what results from the type of nation that a Nation is, and the types of policies that such a nation has?
I take it as a self-evident truth that a nation's economy (note the possessive) is not, and cannot, and should not be, the primary purpose for why a nation exists, and therefore the economy should not be made out to be the primary driver of a nation's policies. And if there are, as it seems to me, more fundamental principles that should be considered first, then those are what should drive our govt's policy making, not the secondary ones - shouldn't they? On the question of questioning the economy as the purpose of a Nation, you can get a hint at the direction that 'Free Trade!' Libertarians come at their answer from, in this reply by my libertarian friend Duane on a related thread, where someone else pointed out that "We probably shouldn’t be doing business with them [Communist China] anyway.", and he replied that "Yeah, we should, for several reasons.". When asked what those reasons might be, he replied that
"History shows that if you want to help an oppressed people overcome that oppression, one of the most effective ways is to trade with them. As the people of China become more affluent, they will demand a higher standard of living, including more freedoms. At least, that's been the lesson of history. If you want to help them, you don't make them poorer."
That too is a very economic, utilitarian, reply, a very cost/benefit transactional reply, to a moral, ethical & political concern, which dutifully puts little stock in or care for issues of morality and ethics and other concerns of Political Philosophy, so as to tip the scales towards the 'greater good' of the Economy (... a polite way of sacrificing the individual, for the Collective...GDP?). Color me surprised. It's worth pointing out at this point that even Libertarian Economist Milton Friedman himself (who I do respect but follow only at a safe distance), thought the expectations that markets could reform tyrannies, was highly unlikely and foolishly optimistic, as noted on page 57 (pg. 49 in the original paperback) of his book "Free to choose":
"...However, the gains will be severely limited so long as political control over economic activity remains tight and private property is narrowly limited. Moreover, letting the genie of private initiative out of the bottle even to this limited extent will give rise to political problems that, sooner or later, are likely to produce a reaction toward greater authoritarianism. The opposite outcome, the collapse of communism and its replacement by a market system, seems far less likely..."
When I asked Duane which lessons of history it is it that he thought had taught us the lesson that rising affluence alone, had turned "a murderous totalitarian dictatorship, from oppressive, to open?", and if whether making the oppressor more affluent, might be less than helpful to those being oppressed by them, I got no reply.

History, however, does have a reply to that, lots of them in fact - and it isn't necessary to go too far back in time to begin finding them, especially in the region we're primarily dealing with here, of Communist China. There are several such lessons from recent history, as Tienanmen Square, or those of current events in Hong Kong, seem to show that although Communist China, and the 'One country, two systems' which it promised to follow in repossessing Hong Kong from Britain (returning Hong Kong to China was a shameful blot upon, and dismal end to, the British empire), has been an empty promise that's gradually been replaced with threats to their remaining liberties, and as Communist China has benefited greatly from its increasing economic wealth, and Hong Kong has been fighting a losing battle over being swallowed into the 'mother country's tender embrace, and 'Free Trade!' policies towards Communist China, have done much to finance it's ever more threatening behavior both at home, and abroad - does that not matter? To a people concerned with Liberty?

Willfully and vigorously Ignored by 'Free Trade!' rs, is the fact that because Communist China's system is founded upon the elimination of property rights (Karl Marx: " the theory of the Communists may be summed up in the single sentence: Abolition of private property."), and worse, they seem ignorant of the roots of their own movement in political economy, in what Jean Baptiste Say had to say in his essay “Of the Right to Own Property” (1819)
"...Political economy recognises the right of property solely as the most powerful of all encouragements to the multiplication of wealth, and is satisfied with its actual stability, without inquiring about its origin or its safeguards. In fact, the legal inviolability of property is obviously a mere mockery, where the sovereign power is unable to make the laws respected, where it either practises robbery itself, [26] or is impotent to repress it in others; or where possession is rendered perpetually insecure, by the intricacy of legislative enactments, and the subtleties of technical nicety.

Nor can property be said to exist, where it is not matter of reality as well as of right. Then, and then only, can the sources of production, namely, land, capital, and industry, attain their utmost degree of fecundity. [27] There are some truths so completely self-evident, that demonstration is quite superfluous. This is one of that number. For who will attempt to deny, that the certainty of enjoying the fruits of one's land, capital and labour, is the most powerful inducement to render them productive? ..."
The self evident fact, to those who've given careful attention to, and who care about reality and facts, is that without which individual rights cannot be upheld or defended under law, liberty is an impossibility in Communist China, and because the only transactions that occur in Communist China, are those which the state permits and is enriched by, to trade with any person or business in Communist China, is to support the tyrannical government of Communist China.

Ignoring and disregarding the philosophical first principles of moral & ethical human reality, is how we transitioned away from thinking about the fundamental prerequisites of a Free Market, to policy positions of 'Free Trade!', and so we entirely miss the fact that there is and can be no 'Free' in 'Free Trade!' with Communist China, whose system violently repudiates the fundamental first principles which were the self-evident starting points of Political Economy advanced by Jean Baptiste Say, yet these same people virtually bathe in talk of 'Principles!', while demanding we unilaterally establish 'Free Trade!' with Communist China.

Far from the fantasized 'Lessons of History!' that many Libertarian's presume to be informed by, an actual regard for history, and attending to the real experiences which a worthwhile understanding of history has to be developed from, those experiences show us that Hong Kong, once the epitome of Free Market principles in action which were the model used by Milton Friedman in his 'Free to Choose' (Friedman expressed his disappointment and fears for at the imposition of 'one two policies' on Hong Kong), is the one that is being transformed by the immoral, unethical and brutal political realities of a communist state. It is a tragic testimony to the inadequacy of holding economic principles, and economic power, as being a nation's primary concern, while allowing political philosophy and ethics to take a back seat to what a nation is, and has to rely upon. Whether you take that experience into account in the 'Lessons of History!' you choose to learn from... varies, depending upon whether you'd rather further your understanding of man through history, or to further your ideology in order to 'make' history.

Next post, the greater harm in using political power for 'the greater good'.

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