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Tuesday, November 11, 2008

Why Republicans Keep Failing

After being handed the Congress in 1994 and the presidency for eight years, the Republicans have been soundly defeated. Of course, Republican futility is not a recent phenomena. The Republicans have been unable to retain a majority in Congress for more than a few years at a time for a hundred years. As I said in my last post, if there is any good to come out of this it is that it will force yet another rethink of their "philosophy" although it is unlikely they will fundamentally change for the same reasons that make them futile in the first place.

So why do the Republicans keep losing? Many reasons will likely be offered in the wake of this defeat. Some might argue that even when Republicans gain power, they do not implement policies consistent with their allegedly free market rhetoric, and, in fact, they act more like Democrats than Democrats. Some might say that they are unable to inspire the public to follow them and unable to articulately defend their ideas from opponents who, for example, charge them with supporting the "wealthy" at the expense of the poor and middle class. Some say the party is split between religious conservatives, who focus on less immediate social issues like abortion, gay marriage, or "family values", and the "economic conservatives", who support limited government intervention in the market. Some say they are unprincipled Washington whores corrupted by the "process". Of course, all of these charges are true but, in my view, they are symptoms of a more fundamental cause - not the primary cause. If you want a clue as to why the Republicans not only continually lose elections but seem unable to implement their supposed ideology when they do have power consider the answers to the following questions related to observed facts in our culture:

Why do popular "super heroes" need "super powers"?

On "The Simpsons", why do the writers portray the Republican Party of Springfield as surreptitiously meeting in an underground cave?

Why are Republicans like Cheney, Rove, and Rumsfeld popularly portrayed as nefarious ogres scheming in dark smoky rooms while a liberal like Bill Clinton, who raped his subordinates and sold military secrets to the Chinese, is celebrated as a suave ladies' man and Obama, who cavorts with communists and terrorists, is portrayed as an affable idealist?

Why are businessmen vilified as miserly scrooges who refuse to dole out money to the poor (see, uh, "Scrooge" in A Christmas Carol or "Mr. Potter" in "It's A Wonderful Life") yet now are vilified for doling out money to the poor (i.e., lending to uncreditworthy customers)?

Why are the laws, rules of evidence, and the presumption of innocence strictly enforced when it comes to murders and rapists but businessmen are subjected to undefined, arbitrary laws and regulations and saddled with mountains of compliance related filings and wanton regulatory investigations under the presumption that they are guilty until proven innocent?

How come quacks like Al Gore and a terrorists like Yasser Arafat receive Nobel Peace Prize's while great business heroes like Carnegie and Rockefeller are smeared as "Robber Barons"?

How can someone like Mother Teresa be sainted for keeping poor people poor while brilliant businessmen who create untold wealth like Bill Gates, Michael Milken, and Martha Stewart are put on trial?

Why is it that despite the massive body of empirical and theoretical evidence demonstrating that free markets lead to untold prosperity, whenever a crisis occurs as a result of departures from capitalism, i.e. from government intervention in the economy, everyone in the world (including the conservatives) declares that capitalism has failed and more controls need to be implemented?

Is there an underlying theme that explains all of the above?

First, the question related to capitalism taking the blame for socialism has been of particular interest lately. Dr. George Reisman wrote a brilliant post entitled The Myth that Laissez Faire Is Responsible for Our Financial Crisis refuting from an economics perspective the absurd claim that "laissez faire" is to blame for the recent crisis. As Dr. Reisman states:

Today, they continue to play the same game. Always it is laissez faire that they denounce, and whose alleged failures they claim need to be overcome with yet more government regulations and controls. Today, the massive interventions not only of the New Deal, but also of the Fair Deal, the New Frontier, the Great Society, and of all the administrations since, have been added to the very major interventions that existed even in the 1920s and to which Hoover very substantially added. And yet we still allegedly have laissez faire. It seems that so long as anyone manages to move or even breathe without being under the control of the government, laissez faire allegedly continues to exist, which serves to make necessary yet still more government controls.

The logical stopping point of this process is that one day everyone will end up being shackled to a wall, or at the very least being compelled to do something comparable to living in a zip code that matches his social security number. Then the government will know who everyone is, where he is, and that he can do nothing whatever without its approval and permission. And then the world will be safe from anyone attempting to do anything that benefits him and thereby allegedly harms others. At that point, the world will enjoy all the prosperity that comes from total paralysis.

Also, recently Alan Greenspan made headlines by claiming that much to his surprise his "free market ideology" contains a "flaw". Naturally, despite the fact that for over 20 years Greenspan presided over the nationalized banking system which literally controls the MONEY supply, he is considered an advocate of "laissez faire". Alex Epstein and Yaron Brook wrote an excellent op-ed entitled The Maestro and the Market which refutes the claim that Greenspan is an advocate of capitalism.

Greenspan is entitled to change his mind, of course; but it is intellectually dishonest to pretend that the market he manipulated for 20 years was genuinely free. And those questioning Greenspan’s actions as Fed chief should not be asking him what he didn’t do to prevent the financial crisis; they should be asking what he did do to cause the crisis by using his enormous power to reward irrational behavior. They should ask him how he can deny that his inflationary printing press, along with the housing welfare state, created the false promise of ever-increasing home values that was at the root of all the market irrationality--from “flipping” houses endlessly for fun and profit to interest-only “liar loans” for poor people to Wall Street’s slicing, dicing, and gambling on dubious mortgage contracts.

Nothing good can come, intellectually or politically, from blaming our problems on something that didn’t exist--whether the mythical free market of the housing boom or Greenspan’s mythical free-market ideology. Americans need to understand Greenspan’s true nature as the bureaucrat manipulating the market so that we can investigate the government controls that are the real cause of the present mess, and save ourselves from disasters caused by an even less free market in the future.

So, despite the obvious absurdity of the argument that capitalism is to blame for the current crisis (or any of hundreds of past crises caused by government intervention in the economy), the fact is that people readily accept the claim that capitalism has failed and that more government is the solution. Again, what explains this? In other words, despite the fact that capitalism leads to prosperity and happiness, despite the fact that reality and reason are on the side of freedom, limited government, property rights, justice and capitalism it is a fact that virtually everyone seems to agree that more government control is needed, that businessmen are somehow to blame and must be throttled by more regulation, and that the only way out of this latest financial crisis is through some magical elixir of Fed "injections", "stimulus" and bailouts. Republicans, far from pointing to government intervention in the economy as the cause of the present crisis, have been at the front of the charge for more regulation.

The answer to this fundamental question was the topic of Yaron Brook's recent talk at the National Press Club, Capitalism Without Guilt: The Case for Moral Freedom. See also Ayn Rand's discussing the failure of conservatism in 1961.

The cause of capitalism's demise both now and historically is philosophical not practical. Capitalism is rightly associated with profit making and self-interest. Since self-interest is regarded as morally evil, it is accepted as almost uncontroversial that the state needs to intervene to protect "society" from rapacious businessmen that left to their own devices would maim, slaughter and kill in the quest for profits. The issue of the morality of capitalism and therefore the morality of self-interest is the fundamental theme which provide the answers to all of the above questions and which explains why conservatives can not properly defend capitalism. In her essay, "The Inverted Moral Priorities" (1974), Ayn Rand describes a "televised summit on inflation" that had been attended by the nation's leaders to deal with the then national crisis:

Acting as if need conferred on their clients a special privilege superseding reality - as if the needy had rights denied to the rest of mankind - they flaunted the consumption oriented, range-of-the-moment , hand-to-mouth mentality that sees economics in terms of hunger, not of production, seeks "fairness" in terms of equalizing the hunger, and stands ready to devour the rest of the country (this country, where - according to their own leaders - poverty is not absolute, but "relative").

Why did the reputable politicians, the economists, the businessmen keep silent in the face of outrageous abuse? Why did they allow the deadly, illiterate nonsense to proliferate without opposition? Why did they listen respectfully, apologetically, "compassionately", and promise more help to egalitarian savages? There is only one power that could paralyze the country's leaders, a power more potent than the power of money, of professional knowledge, even of political force: the power of morality. This is was what the inverted morality of altruism accomplished. This was the kind of moral cowardice, intellectual disintegration, professional dishonesty, and patriotic default it led to in practice, at a time of national emergency.

There is a group of economists who deserved it : the so-called "conservatives" who claim that economics has nothing to do with morality.

In other words, as long as capitalism is regarded as "practical but immoral" or a "necessary evil" then we will continue to lose freedom. Man's nature as an individual reasoning being necessitates individual rights if he is to live properly. This is a fact of human existence and why rights are "inalienable" not a gift bestowed upon us by a benevolent state. Properly, capitalism is simply the economic system that results from consistently upholding rights, i.e., the right to think and own property. Logically, if living successfully is the goal then capitalism is morally good.

Attempts to justify capitalism in any other way is not only futile but antithetical to the fight for capitalism. It is only under the "inverted" and twisted morality of altruism that a system consistent with man's nature which leads to large scale happiness and prosperity could be regarded as morally evil. For example, as Ayn Rand points out in the clip, the attempt to justify capitalism by reference to religion or "faith" concedes that capitalism can not be justified logically. It concedes that individual rights, property, free trade, and justice can not be defended rationally but only by reference to mysticism.

This is why the Republicans fail.

The Republicans overtly promote "free markets" and pro American foreign policy without understanding why this is morally right. Capitalism is rightly associated with profit making and self-interest. If you attempt to justify self-interest on the grounds of altruism (uh, self-sacrifice) you will be perceived as unconvincing and hypocritical. In the mind of the public, how can people who pompously uphold "family values" or religious altruism, on the one hand, support selfishness, greed, and profit making on the other? They can not uphold both consistently. The perception of hypocrisy explains why the Republicans are perceived as shadow lurking accomplices for their Big Business buddies. Their acceptance of the morality of altruism also explains why, in reality, when it comes to policy, the Republicans can not actually implement free market programs or execute all out war on our military enemies. It explains why the are unprincipled, because, under altruism, they can not act on principle without acting like Democrats. The Democrats do not suffer from this contradiction. The Democrats support government intervention in the economy which is consistent with the popular notion that business is selfish and evil. They overtly oppose self-interested military action on the grounds that it is self-interested. They are viewed as "idealistic" and "well-intentioned" albeit "impractical" (or simply "flawed" to the extent that they are personally despicable).

America has been drifting towards statism since its founding. The only way to stop the procession is to understand why freedom and capitalism is the moral system and to proudly and unapologetically defend it.

(Incidentally, if you want my specific answer about the super hero question see my post http://dougreich.blogspot.com/2007/01/why-super-heroes-need-super-powers.html)


Anonymous said...

The Republicans have done a terrible job explaining that our poor are actaully rich by world standards, becuase of capitilsm and that capiilism is the best form of allocating capital. One of the other problems that Republicans have is that our A team goes into business while the Democrats A team goes into goverment.

The Rat Cap said...

I take exception to the idea that we should justify capitalism by reference to the idea that it is the "best form of allocating capital." I believe that characterization is a consequence of Marxism's implicit theory that wealth simply "exists" and that the government must seize it and "allocate" it proportionally.

Due to this premise, proponents of capitalism are reduced to arguing not that capitalism is moral and therefore practical but simply that it is best at "allocating capital". In other words, proponents of capitalism concede the Marxist premise that wealth just exists and that capitalism is evil but argue that capitalism is just a more efficient allocation scheme. In this way, they are granting to their enemy the more important premise that capitalism is immoral. The typical response of socialists is essentially "so what" if socialism is not "optimal" it is morally just to redistribute wealth.

This type of thinking is exactly what I'm arguing against and why Republicans keep losing!

Capitalism frees individuals to think, produce, and trade and therefore to reap the rewards of their efforts. Capitalism is the system of producers not redistributers or allocators. Yes, it is true that capitalism does benefit the most people in the sense of creating enormous wealth and productivity but that is not its justification. Individual freedom or capitalism is consistent with man's nature and is morally ideal. It is a system of justice, fairness, and morality.

Patrick said...

I don't think that concern for the welfare of others necessarily has to involve self-sacrifice.

If it is true that,

"capitalism does benefit the most people," and that


Why not use that as justification to a public mind that is so concerned about the welfare of others.

It is no more hypocritical than supporting the moral cowardice, intellectual disintegration, and professional dishonesty that accompanies altruism.

The Rat Cap said...

I'm not sure I understand your comment "I don't think that concern for the welfare of others necessarily has to involve self-sacrifice" but you seem to be equating the two which is a profound error. Let me quote Ayn Rand from her essay "Faith and Force: The Destroyers of the Modern World":

Begin quote*****


end quote*******

The idea that one should justify capitalism to the "public mind" by asserting its benefits with respect to the "welfare of others" is the "greatest good for the greatest number" philosophy of utilitarianism and is very popular and very wrong.

Let me quote Ayn Rand again from "Textbook of Americanism" in The Ayn Rand Column

Begin quote************



If you consider this moral, you would have to approve of the following examples, which are exact applications of this slogan in practice: fifty-one percent of humanity enslaving the other forty-nine; nine hungry cannibals eating the tenth one; a lynching mob murdering a man whom they consider dangerous to the community.


End quote*************

My position is consistent not hypocritical. I do not justify capitalism by reference to the "public mind" since there is no public mind. The public is a sum of individual minds. Individual rights are necessitated by our individual nature not by opinion polls of what constitutes the "welfare of others" which an arbitrary and undefinable concept.

Anonymous said...

WAKE UP! Amerika has Republicans are losing becuase Democrats have the best plan for growth. Goverment is the best source for providing growth and security

Patrick said...

I was not trying to imply that your position is hypocritical. I know it is consistent.

I would say that the majority of people do believe altruism to be moral despite the fact that it is responsible for moral cowardice, intellectual disintegration, and professional dishonesty.

A majority of people also think that self-interest and profit making is bad when really it is morally good.

What is the best way for those myths to be dispelled?

It seems like now would be like a great opportunity to point out the negative consequences of altruism but you don't see that in the media.

Why is capitalisms defense not mainstream?

The Rat Cap said...

A philosophy upholding rational self-interest and opposing the idea that sacrifice is the highest virtue is revolutionary. This philosophy goes against both conservatives (who are steeped in religious altruism and regard sacrifice to God as moral) and the liberals (who are steeped in secular altruism and regard sacrifice to the poor or recently, the "environment" as the height of moral virtue).

For that reason, Objectivism tends to be hated equally by both mainstream ideologies and political parties. It is why both parties remain a false alternative and why good ideas are not even on the radar screen in mainstream political circles.

I believe the Ayn Rand Institute's approach is the correct one. They are promoting Rand's ideas in high schools and universities. This is where intellectual revolutions take place and where we must start. Politics always reflects ideas coming out of the universities. Historically, it takes 50 to 100 years for intellectual revolutions to take place but they didn't have the internet so maybe we can do it before it's too late.