12 October 2008

14. Self-Interests Under Capitalism vs. Statism

In this discussion, I present the points of how Capitalism encourages and promotes Individual Rational Self-Interests and its effects on individuals and businesses, versus how Statism encourages and promotes Irrational Self-Interests, along with what I call destructive, collective societal-public-political interests, and its effects on individuals and businesses.

Individual rational self-interests under Capitalism.

Capitalism encourages and promotes those individual rational self-interests, decisions, and actions, including all economic and commerce applications, practices, and activities, that do not violate or infringe upon individual and economic freedom, individuals rights, property rights, and derivative freedoms.

Also, Capitalism encourages and promotes those individual rational self-interests, decisions, practices, and actions that help build and establish a self-reliant, self-responsible, productive life, for both individuals and businesses alike. In the world of unrestricted, unregulated free-market competition, I think that rational self-interests WIN OUT OVER irrational self-interests, because the rational ideas, decisions, and actions by both individuals and businesses lead to the positive, beneficial, and productive results that we all witness in life, society, and business (economics) every day – as opposed to the result of irrational ideas, decisions, and actions.

Simply witness the amazing economic progress and improvement of peoples’ lives that occurred throughout the United States during both the 18th and 19th centuries, and even through the 20th century up to present day despite the constant and relentless interference and intervention by statist-oriented elements from our own government (see Item No. 30 below). All this wonderful and amazing economic progress and prosperity that we enjoy so much in our lives and take for granted, without a second thought, did not materialized out of thin air or in a magic puff of smoke! Nor did it occur do to the government!

It occurred because millions of independent, individuals and businesses were, and still are, all each pursuing their own self-interests, under individual and economic freedom, dealing with each other in a peaceful, voluntary, cooperative manner, within a “division of labor” society – all unhampered at first by an intrusive, interfering, interventionist government (Statism), and despite the growing government interference. It would be even more so if our lives and businesses, along with our individual and economic freedom, were untouched, unregulated, and unshackled by our current growing statist-oriented government.

It is the effects of Statism that forces the irrational into our lives, society, and the economy, where the rational is not allowed to compete due to government force, regulation, and control. For example, simply observe our current (2008) national financial crisis due to statist-oriented government meddling, mandating, control, and manipulation of our banking and financing private sector, creating a situation that allowed – even mandated (forced) - the practice of irrational (and therefore, irresponsible) economic decisions and actions by both individual citizens and businesses. Rational (responsible) economic decisions and actions were pushed aside because of statist-oriented government forced policies and practices.

In short, the desire and practice of rational self-interests, for both individuals and businesses, in the pursuit of personal and economic improvement, progress, and prosperity are extremely curtailed – and even eliminated – under Statism and its influence on the individual’s life, on society, and on economics. It is only Capitalism that can provide a system were the rational self-interests of all individuals and businesses can exist and flourish without any government interference, control, or force.

As a side issue, special-interest groups and/or lobbyist-type groups would not – and could not - exist under true, laissez-faire Capitalism. There would be no need for such groups, as such groups could not use the government to implement and expand their social-engineering ideas, agendas, and desires. The functions of a proper capitalistic, constitutionally-limited government do not include any type of welfare programs or projects, and therefore, any type of subsidy programs for individuals, groups, and/or businesses.

Also, under true laissez-faire Capitalism there is no compulsory taxation, and what money and funds that are raised for the financing of essential government functions would strictly be applied towards such essential functions, meaning the protection of individual and economic freedom and rights – as the government would be prohibited from interfering, regulating, or controlling individual and economic freedom - so there is no corrupt competition for governmental monies or funds for such special-interest groups and/or lobbyist groups, or for any welfare or social programs and/or projects, including all government business subsidies, favors, and market manipulations.

As per the discussion above, and per Item No. 11 above, in regards to the relationship between the pursuits of individual self-interests and that of a peaceful, free-associating, voluntarily cooperative division of labor among all men, Adam Smith had this to say in his book The Wealth of Nations (published March 8, 1776):

”…But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interests. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chuses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, by purchase. …As it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour.” [All spellings from original text.]

-- Visit the on-line Library of Economics and Liberty for the full text of The Wealth of Nations.

-- For a insightful introduction about the relationship between rational self-interests and economics, I refer you to Dr. George Reisman’s book Capitalism, Part One, “The Foundations of Economics,” Chapter 1, “Economics and Capitalism,” Part B, “Capitalism,” both Section 3, “Capitalism and the Origin of Economic Institutions,” and Section 4, “Capitalism and the Economic History of the United States,” pp. 27-31 (Jameson Books, 1998).-- Also, for an extended discussion about the essential role of rational self-interest in man’s life, see Ayn Rand’s book The Virtue of Selfishness, (Signet).

-- Also, for an extended discussion about the essential role of rational self-interest in man’s life, see Ayn Rand’s book The Virtue of Selfishness, (Signet).

Also, see an edited introduction to Ayn Rand’s writings regarding self-interests at -
Self-Interest at http://www.aynrandlexicon.com/
Selfishness at http://www.aynrandlexicon.com/
Self-Esteem at http://www.aynrandlexicon.com/
Self at http://www.aynrandlexicon.com/

Irrational self-interests, along with destructive, collective societal-public-political interests, under Statism.

Statism encourages and promotes those irrational self-interests, decisions, and actions – in conjunction with destructive, collective societal-public-political interests forced by the government – that do violate and infringe upon the individual and economic freedom of any and all individuals and businesses. Statism encourages and promotes those irrational self-interests that show no recognition of, no regard for, no respect for, and no protection of the freedom and rights of individuals and businesses.

Statism also encourages, promotes, and forces: DUTY (see Emmanuel Kant), meaning that the individual must sacrifice and give himself/herself – meaning their life, their work, and their freedom – totally and completely to the preservation and maintenance of the state, meaning the nation, the government, the society, the community, the ruling group, the religion, the national culture, the environment, “mother” earth or nature, the mob, etc. In this vain, Statism also encourages one to “feel” guilty (Statism encourages guilt) for pursuing one’s own rational self-interests, in both individual and business matters. Self-sacrifice by and of the individual (altruism) is the necessary and required practice to ensure the preservation and survival of Statism.

In order for Statism to function and exist, a statist government (or ruling group) must deceptively persuade and then ultimately force the citizenry, including business, to accept the idea that an individual’s life and work belongs to the state, and that the citizen’s (the individual’s) and the business’ duty is solely to the state (government or ruling group) and its benefit - to sacrifice themselves, their lives, their work, and their freedom to the function, preservation, and survival of that statist system and its government, meaning the statist government’s total political structure - its politicians, its officials, its directors, its employees, its policies, programs, projects, departments, agencies, divisions, etc. (whether they are needed or not), including all the crony capitalists, their businesses, and associated practices that come into existence due to the interference, manipulation, restriction, regulation, mandating, and control of the economy by the statist-oriented government.

Statism encourages and promotes those irrational, self-serving social-political ideas, agenda, policies, programs, projects, and interests - both of individual and/or of group orientation - that violate, control, and destroy individual and economic freedom and choice, and that also violate, control, and destroy individual rights, property rights, and derivative freedoms, and do so because such irrational, self-serving social-political ideas, agenda, policies, programs, projects, and interests usually end up having to be implemented through government force and control over the citizenry and economy.

Statism encourages and promotes irrational, destructive, collective, and forceful societal-public-political interests that are both dependent and parasitic upon all individuals and businesses of a society, either through some form of taxation, regulation, and control.

For Example: all governmental schools and educational programs, and any flavor of other welfare programs, including all types of socialized medicine or national health care programs, or business and farm subsidies, are – by their very fundamental natures – those type of special “interests” for certain groups that are implemented by force (through regulation, mandate, legislation, and law) at the expense (control of choice and free action) and enslavement (taxation) of a country’s citizenry. Such government programs are not productive but consumptive, and they encourage rapid growth and expansion of the “status-quo” government policies, programs, projects, and institutions to continue to support, justify, and preserve themselves and their existence, and therefore, are completely dependent upon taxation, therefore requiring a continually increasing taxation system – which in turn requires government force (tyranny) to keep them implemented. But this is standard operating procedure under Statism and for Statists, as such actions and practices are rationalized as necessary for the “public good,” since the individual’s life is viewed as belonging to the state (government or ruling group) in the first place.

The very survival and self-preservation of statist governmental institutions, policies, agendas, projects, and programs, including all government welfare and subsidies, requires the enslavement and control of a nation’s citizenry and its economy. There is no other way to implement and achieve a statist (socialist) system.

To continue, statist-oriented government programs and projects are consumptive, dependent, and parasitic and feed off the productiveness of all individual citizens and businesses, throughout a society and economy. They are parasitic because with such government programs and projects, their very self-preservation and survival becomes the final sole purpose and focus for their continued existence, with most of the energy and funds of such a program or project going towards that very self-preservation and survival – at the expense of the program’s original purpose and goals, and broadening to the expense of the taxed slave-citizen and demise of the economy.

Two Examples:

(1) One can witness such a scenario occurring today within the U.S. Government Public School System: the continued existence, self-preservation, and survival of the Teachers Union has become the sole purpose and focus of continuing and expanding government “public” education and schools at the expense of the students, actual teachers, and quality of education (as they become unimportant), including the expense and destruction of citizenry and business productiveness, wealth, profits, prosperity, and property in the form of ever increasing and all consuming taxation and fees, just to justify the survival of the Teachers Union. This is a perfect example of irrational, destructive, collective societal-public-political interests taking over.

(2) The same can also be said of certain parts of the U.S. Agricultural Industry, as many important farming businesses have become so completely dependent on government business welfare in the form of subsidies, and/or on government regulations, mandates, programs, and intervention, that the existence, preservation, and survival of such government subsidies and interference becomes the sole purpose and focus – at all costs - for these farming businesses just to simply function, stay competitive, and survive, all at the expense of customer service, production, and product quality (as they become unimportant). A good example of this is the current government subsidizing, mandating, and forcing of the ethanol and bio-fuel industry into existence – despite the fact that there was no real market for bio-fuels - thus creating unrealistic economic expectations and demands for certain farm crops just to provide base material for this new government subsidized and forced industry, to the point where certain farmers are now so dependent on both government subsidies and this government forced industry, that even if there is no market for such bio-fuel products, the continued existence, preservation, and survival of such a government forced industry becomes the sole purpose and focus – at all costs - for these farmers, at the expense of production and quality of product (as they become secondary) – let alone the fact that billions of dollars and resources are recklessly diverted away from the true productive demands in the economy).

Under Statism, so-called “group rights” (such as gay rights, teacher’s rights, women’s rights, unions’ rights, etc.) and so-called “human rights” (which are not really rights at all, but are pursuits of values, such as food, shelter, jobs, education) take precedence and importance over individual freedom and individual rights. Therefore, under Statism, “group interests” and “pursuits of values” are encouraged over individual self-interests, with groups turning to use government force to regulate, control, and violate individuals and businesses at the expense of destroying individual freedom, individual rights, property rights, and derivative freedoms – to satisfy the desires, needs, and demands of groups and personal pursuits of values.

But, as Ayn Rand has pointed out, there is no such thing as “group rights;” there can only exist the rights of the individual. Statism, by its very fundamentals, destroys the concepts of individual and economic freedom, individual rights, and property rights. If a man has no freedom or right to his own life, work, and production - if he is nothing more than a slave to the state - then he has no other rights, no property rights, and certainly no derivative freedoms. And his pursuits of rational self-interests are certainly discouraged under Statism.