Saturday, November 8, 2014

This Blog is Moving to russellhasan.com in 2015, But Here is One Final Post for your Enjoyment... An Introduction to Hasanian Economics



Making Money vs. Theft, Fraud, and Force: A GOLD Analysis

“He didn’t want to make money, only to get it.” --Ayn Rand, “Atlas Shrugged,” Part One, Chapter X, page 273 (Signet Edition).

In my opus of libertarian politics and economics, the nonfiction treatise “Golden Rule Libertarianism” by me (Russell Hasan), I present a bold new theory of economics, which I call GOLD. In the book, I explain the GOLD economics theories of how trade and the money price system are used to coordinate production and consumption in a division of labor economy, and why supply and demand interact with the price system to fine-tune economic efficiency in a capitalist economy. However, after I published the book, I realized that, while I had explained how things work in a good economy, I had not presented extensive detail on what goes wrong in a bad economy. This article will fill that gap.
To begin, I will summarize the GOLD theories of the triangle of trade and the pool of value, which is the core of the GOLD theory. Then I will discuss the difference between making money, which comes from producing a value and trading that value to someone else in return for a value to consume, vs. getting money, which happens when money enters your control without you having produced or traded values, and which is accomplished by theft, fraud, and force. I will proceed by analyzing, one by one, first theft, then fraud, then force. At the conclusion, as an added bonus for you, I will explain what the GOLD analysis tells us about how to make money and get rich.
1. The Triangle of Trade and the Pool of Value. Let us first assume two people, Mr. X and Mr. A. X creates Y, and A creates B. The details don’t matter and this is intended to be a broad theory which accordingly would be true if one plugs any set of details into the variables. X’s job is to make Y, and A’s job is to make B. In a primitive economy 5000 years ago, X and A would live in the same little village, and if X wants to consume B and A wants to consume Y, then they would trade in kind. For example, if X is a blacksmith who makes horseshoes, and A is a farmer who raises cattle, they might trade one cow for a set of horseshoes.
Now jump ahead 5000 years. A modern economy is a division of labor economy, where every person is tightly focused on one particular trade, i.e. his or her career. Assume that X and A live again, and, once again, X makes Y, and A makes B. In a modern economy, Y and B are any value that can be consumed, including a consumable good or service or something that can be used as a tool to make such, and they may or may not be entire products, e.g. they could be tiny parts of a product built by a company, such as a pencil eraser or a car tailpipe. For this example, let us say that X is an auto mechanic in Los Angeles who fixes cars, so Y is auto parts, and A is a baker in New York who bakes cupcakes, so B is baked goods. Let us assume that X wants to order a batch of A’s cupcakes over the internet in order to eat them and give some of them to his children. X wants B, and would trade Y for B. However, A does not want Y. Mr. A’s care works fine and does not need new parts. The money system is what solves this problem, because money is a common medium of exchange that represents all tradable consumable value. X repairs a car and is paid $40, and X then pays $40 over the internet to A in return for A shipping a batch of chocolate cupcakes to X. A is willing to trade cupcakes for money instead of for a car repair because X’s money can be spent by A to buy literally anything else for sale in the economy.
Why is A willing to accept X’s money? Here is where the triangle in the “triangle of trade” comes into play. Normally economists look only at the transaction whereby X buys B from A for $40. What they miss, and what nobody pays attention to, is that the trade is a circuit, and the circuit is completed by a tertiary trade, such that the true cycle of trade is a triangle, which includes X, A, and a previously invisible third party, whom I call Dr. C. Generally, X buys B from A for money, A buys D from C for money, and C buys Y from X for money. The money flows in one direction along the triangle and in kind goods and services flow in the other direction. This must be true, because the money has no intrinsic value, but the goods and services are what gets consumed, so ultimately goods and services are what must be traded. In this example, there is a doctor in San Francisco named Dr. C. The engine in his car dies and he buys some car parts for a new motor from X for $40. C also has invented a new medicine for facial acne, called D, and A in New York has purchased a bottle of medicine D from C (i.e. from C’s business than sells his medicine) for $40.
The only things that really happened are that X produced Y and consumed B, A produced B and consumed D, and C produced D and consumed Y. In other words, the real economy is a series of in kind trades of goods and services for goods and services, not trades of money, although the money facilitates the trades. The money hides the fact that the only real things in an economy are production, trade, and consumption, and the money merely makes trades possible as a common medium of exchange to represent good and services, without adding anything fundamental to the picture. Of course, in a division of labor economy with millions of economic actors, like the USA, the triangle of trade is more like a big circle of trade, with hundreds or thousands of people all trading value in one direction with money flowing back in the other direction.
I say that X’s Y “justifies” or “backs” the $40 that X pays to A because the real reason that A gives B to X is not X’s $40 that X pays to A. Instead, the real reason that A sells B to X is the D that C gives to A when A pays X’s $40 to C. And C gives D to A because X gave Y to C. So, when X makes Y, when X produces Y or does whatever work his job entails that creates Y, when Mr. X creates the consumable tradable value that is Y, X is literally “making” the $40 that he pays to A for B, because he is justifying and backing that money with the value that he produced. This is how the triangle of trade explains the phrase “making money.”
When an economy includes, not hundreds of people, nor thousands of people, but literally hundreds of millions of people and billions of trades, then it stops looking like a neat simple triangle or a circle, because there are more than three trades or 100 trades, and instead it looks like a big blob with a billion interconnected trades, which I call a “pool.” GOLD economics can be characterized using the pool of value theory, which analyzes this blob using the an extension of the triangle of trade theory. This theory states that when a person works a job, he creates value and puts it into the economy’s pool of value and gets money back, and when he buys something he takes value out of the pool and puts money back in. Under this theory, the total money supply must equal the total pool of value in the economy, because money represents value, so all the money must represent all the value. The pool contains all the goods and services in the economy, and people get money by adding to it, and then spend their money to subtract from it. Thus, to make the money that you get, you must place into the pool of value an amount of value to “back” the money you are taking, i.e. to make the money.
The pool of value theory explains why printing money causes inflation, because, for example, if there are only 200 dollars in the money supply and only 200 apples in the economy, and the money represents the pool of value, then the value of one apple will be 200/200, i.e. one apple will cost $1. But if 200 new dollars are printed and now 400 dollars corresponds to 200 apples, the value of one apple will be 400/200, so inflation will drive the price of apples from $1 up to $2. Observe that in this scenario, the government has stolen 100 apples, because it can use the newly printed $200 to buy 100 apples out of the economy without having created any value to “back” that newly minted 100 dollars, so the dollar-owning private economy loses 100 apples and those 100 apples are “redistributed”. Observe also the logical conclusion of this reasoning that inflation does not help the economy, contrary to Keynesian dogma, because printing money creates more money for people to “get” money, but it does not “make” any money because it adds nothing to the pool of value. By further extension, good economic policy focuses on growing the pool of value, not on growing the money supply, and free trade is the policy that accomplishes this real growth.
I also call the pool of value theory the “correspondence theory of money,” because it posits that money corresponds to the pool of value, in much the same way that words correspond to the objects in reality according to the correspondence theory of language. The word “apple” represents any real apple, and a dollar represents any real value that you can buy with it.
Most people do not make something and sell it themselves. Instead, they work as employees and do work for an employer. But, even in this situation, each employee creates a value, which the employer collects, aggregates, and sells to other buyers. The employee sells the value he creates, i.e. his work, to the employer, and the employer trades money, i.e. salary, to the employee in return for that value. The big picture is that the employees all add value to the finished product, and the employer then sells the finished product for money and takes the money and pays each employee a salary for what he contributed to the finished product. So, in reality, each person is trading produced value for money which he will then spend to buy value to consume. Even in the employee-employer model, each employee “justifies” his salary by the work that he does. To frame this using the pool of value theory, when you do work for your employer, you put the value that you create into the pool and get back your money salary, and when you buy things you give your money back and pull value out of the pool.
2. Making money vs. getting money. In her novel “Atlas Shrugged,” in Part One Chapter X, there is a sequence of scenes wherein the heroes discover an abandoned factory. For a complicated reason, they seek to learn as much about the factory as possible. They learn that once, the factory was productive and made motors that were sold, but the factory collapsed under owners who did not care about profit. The factory went bankrupt and was sold to a series of crooks who stripped it of its equipment, furniture, etc. The factory was sold to two different people, so its legal status collapsed, and nobody could claim that they owned it, at which point looters broke in and stole everything that was left. During this investigation, over and over again, the heroes talk to idiots who seem to believe that the only way to get money from the factory was to take the objects out of it, like the equipment and furniture, and sell them, or to sell the factory to a sucker. The idea of actually running the factory and making motors to sell, and making money from the factory by creating value and trading it in the economy, does not occur to any of them, although, by implication, it does occur to the heroes.
Rand uses this sequence to point out the difference between making money and getting money. My GOLD theory completes the analysis begun by Rand, by explaining exactly wherein lies the difference. If you seek to make money, then you seek to create a value to trade with others in order to add meaning to the money that you handle. For example, in the triangle of trade example, when X gives $40 to A for B, the value to back up that $40 is the Y that X created and traded to C. Under the pool of value theory, you make money by creating value and placing it into the pool of value to justify the money that you take out. In contrast, getting money without making money consists of pulling value out of the economy without adding any value into the pool of value. In the triangle of trade, getting money breaks the circuit by getting a consumable good or service from someone without having to create value and add it into the triangle through trade with others.
This is almost always accomplished by getting physical money without creating the value to back the money and add meaning to the money. No one is going to feel forced to just give value to someone in return for nothing, but if a thief gets his hands on money, then he can use that money to get value by trading it to other people who see only the money and don’t see whether it was made or stolen. The person who created the value consumed by the thief, i.e. the person who takes the thief’s money and gives value to the thief, will not know that the money was stolen, and will not be able to see through the complicated web of trades to know that the thief never created any value to deserve to consume what the producer created. The victim of theft, who was robbed, will have been entitled to consume the value that the thief consumes, but this person could be miles away from wherever the thief goes to spend the stolen money.
3. Theft, fraud, and force. Now, having laid our theoretical framework, we can see how theft, fraud, and force work. Theft, fraud and force all consist of getting money and then spending that money without having created anything.
In theft, a thief uses force, e.g. a bank robber with a gun, or deception, e.g. picking someone’s pocket, to take money from a person who rightfully owned that money. The thief then spends the money to consume the value that rightfully should have gone to the money’s true owner. One of the core teachings of GOLD economics is that the total amount of value that is consumed cannot exceed the total amount of value that is produced, so when someone consumes a value without producing anything, there is necessarily one or more other people who are forced to produce value without consuming the corresponding value they could have traded for. It is in this sense that theft makes the producers into the slaves of the thieves.
Consider again my example of X, A, and C. Now suppose that, after X repairs C’s car and gets $40 of payment from C, and thief named Z breaks into X’s home and steals $40. Z then buys $40 worth of baked goods from A, and eats them. The production is still the same. Y, B and D get produced. But the consumption is different, because X must now go hungry despite deserving cupcakes, and Z gets to eat when he did not do any productive work. If we could see the network of trades of in kind goods for in kind goods, then A would ship his baked goods to X instead of Z, because he would see the trade of Y to C, which justifies A’s sending the cupcakes due to the D that C traded to A. But, because the system of trades is so complex, we only see the money that gets traded. A sees Z’s money and A must assume that it is legitimate because he can’t see where Z’s money came from, so A sends the baked goods to Z, when they should have gone to C. In essence, Z forces X to be Z’s slave and work for Z by creating the value for C that makes A give value to Z.
Under the pool of value theory, a thief puts money into the pool and takes out value, but he never put value into the pool to get that money, instead getting the money through evil acts. If replicated on a large scale, this would result in massive consumptions of value with no corresponding productivity or creation of value. Under this scenario, either producers will become slaves, and produce value for the thieves without getting anything in return, or else the producers will stop producing, and the pool of value will shrink.
Now let us consider fraud. Fraud could mean that a person who makes a trade is deceived about what he received on his end of the trade, but I define it more broadly to mean that a person did not get what he wanted. The analysis is similar to the analysis of theft. A sends B to X in return for X’s $40, but in reality, it is really in return for C’s D that A buys for $40. Now assume that the medicine D does not work, or is not what A wanted, or C lied to A about what D does. Perhaps D makes A’s hair turn blue, and does nothing to cure his acne. A created a value worth $40, but A has not gotten to consume the value corresponding to what he produced and traded away. This, again, makes A into a slave, producing value for others to consume while getting nothing in return. C, who defrauded A, gets his $40, and uses it to buy car parts from X. The villain gets money without creating value to justify that money, but in this case, he gets money by fraud instead of by violence as with a thief. According to my theory, if A created $40 worth of value and A does not receive exactly what he chose to buy for $40 in return then A was defrauded by C. In normal situations, this will be identical to A failing to receive the $40 worth of happiness that he paid for (normal meaning that a person chooses to buy the things that will make them happy). This is why, in “Golden Rule Libertarianism,” I include a section in the discussion of contract law which focuses on returns policies, because a person should generally be able to void a trade if they did not get what they wanted or did not get what they thought they were getting.
Here let’s consider force. As distinct from theft or fraud, which can be done by private individuals, I define force as the systematic distortion of trades in an economy executed by a government using the power of the guns of the police and army to enforce its economic distortions, i.e. the government acts by force. There are two types of force: taxation and regulation. In taxation, the government takes money from private individuals who have earned it, and gives to other people or, as more frequently happens in reality, wastes it on government spending programs that destroy the money without giving anyone what they actually want. As I explain in my book, in a free market economy a trade only happens if two people freely choose it, so the free market economy is what people have chosen. By definition, the economy created by force is different from the free market economy, therefore it follows as a logical necessity that the economy created by force is not what people would have freely chosen, and therefore it is not what people want. By definition, the difference between the economy of force and the free market economy is what the people would not have chosen but which the government chooses for them. This touches upon the basic GOLD theory, which is that, according to the Golden Rule (“treat other people the way you want them to treat you”) you should give freedom of choice to everyone else so that everyone else will let you be free to make your own choices. When GOLD is violated, the result is force, because force was used to override the result that would have resulted from freedom.
We can see that taxation is basically the same as theft, in practice. The government takes money from the productive and then spends it. When X creates $40 worth of Y and trades it and (to simplify the example) on that trade $40 is taxes away as income tax and sales tax, then this makes X into a slave, and steals the value that X created. Using the pool of value theory, X puts value into the pool but gets nothing out of it, while the government takes value out of the pool and places nothing into it. In fact, the government is actually taking Y from X and giving nothing to X in return. This fact is obscured by the role that money plays in what happens. The voters see the government taking tax money from X, and this looks less evil and scary than what is really happening, which is that X is a slave of the government, and X works for the government, to the extent that X makes the value that backs the money taken from him as taxes. True communism, where the people work openly for the government as economic slaves, scares mainstream American voters, but the liberal tax and spend politicians use money to hide what is really happening in a tax-based system, which is a degree of communism to the extent that the worker’s created value is taken by the government by means of taking as taxes the money backed by that worker’s created value.
We can also see that regulation is fundamentally akin to fraud because people don’t get what they want and what they paid for. In a free market economy, the trade of Y for B, or of Y for B for D, would naturally happen. A regulation by definition blocks a trade that would have freely happened or directs that one value be traded for something else other than what the traders would have freely chosen. It must be true that regulation by definition distorts the trades that would have been freely chosen because if all freely chosen trades were to happen then the regulations would have no need to exist. Returning to our triangle of trade example, let us say that, in the interests of food safety, a regulator enacts a regulation that bakers in the eastern USA may not ship boxes of cupcakes to buyers in the western USA, lest they go stale while being shipped over a long distance. We have already seen that, in a free market economy, X would buy cupcakes from A. This is the free trade that would complete the circuit of triangle trade, if it were allowed to happen. A has baked the cupcakes, and X would choose to buy them.
But because of this regulation the trade is forbidden to happen. Now, instead, X must keep his $40, and the cupcakes sit idly on the shelf in A’s bakery, unsold, until they go stale. In one sense, A’s cupcakes have been stolen from X and $40 has been stolen from A, but in another sense, B has been taken from A, to be disposed of as the regulators see fit. The trade is exploded and X and A do not trade value for value, similarly to a fraud, except that with fraud, a sham trade happens, and with regulation, no trade happens at all.
In a trade-based capitalist economy, trade is what connects producers to consumers in a circuit, and it is the prospect of trading to get what you want to consume which motivates the producers to produce. The more regulations and taxes, the fewer the trades that would otherwise have been freely chosen. Thus, regulation and taxation will directly correlate to a decrease in wealth in a free market economy. For example, if $40 of tax money is taken from X, then he is not allowed to take the value out of the pool that he put in, which will kill his motivation to work. Specific to the example of regulation, the trade of B to X for $40 was a key part of the triangle of trades between X, A, and C. Because of the regulation, A doesn’t have the $40 to buy medicine from C, so C won’t have the $40 to buy car parts from X. The regulation breaks the circuit in the circle of trade and wreaks havoc on the delicate money mechanism that coordinates purchases and sales in a capitalist economy.
Three important differences exist between government force on the one hand and theft and fraud by private criminals on the other hand. First, a person can legally protect himself from criminals, but there is no legal protection from taxation and regulation. Second, when a private thief steals money, he spends it on what he wants to make himself happy. In contrast, when the government spends taxpayer money to help the poor, or for whatever other bizarre reasons are politically in vogue, the money buys things that were not freely chosen by the poor people or other interested parties for whose benefit the money want spent, nor were the purchases chosen by the taxpayers. Instead, the money funds projects chosen by the broken, failing system of bureaucracy and crony politics. So, more often than not, nobody gets anything they wanted while billions of dollars are wasted and everyone ends up poorer.
Third, in a normal capitalist society, theft and fraud will be the exception. On the other hand, in a liberal/socialist society, force will be the norm and free productive trade will be exception. Because force, like theft and fraud, essentially transforms the productive into the slaves of the looters, either productive people will produce as slaves with nothing in return and the value that is produced will be consumed by people who trade nothing to the producers who made it, or, as will more likely happen, the productive people will lose their motive to produce, they will stop producing, and the pool of value will get smaller. Then, with a smaller pool of value, everyone will be poorer, which will prompt the government to stage further inventions (such as printing more money, which will lack any new value to back it), making things worse (e.g. massive inflation), and the economy will collapse into a downward spiral. This is precisely the nightmare scenario fully explored in Rand’s economic novel “Atlas Shrugged,” and, especially in dark times like the Great Recession, we have the possibility that our fact will mirror her fiction.
Also note that, as the dark times come, people will lose the understanding of the meaning of money, that money represents value and money is made by creating value to trade, because the government will have severed the connection between money and value. Lacking such understanding, more and more people will seek only getting money instead of making money, and the entire populace will fall into a mindset of force, theft, and fraud.
4. How to get rich. It stands to reason, based on the above, that there are two ways to try to get rich: either try to get a lot of money, as by massive Ponzi scheme frauds, or try to make a lot of money, as by being extremely productive and doing a ton of work to create value that other people will really want to buy. The government has a monopoly on legalized “getting” of money, so, unless you have political connections, it is pointless to seek that path to easy money. Some people use quasi-legal ways to “get” money, like cutting corners on quality to save money, charging an expensive price for a low-quality product, giving bad service to the poor while giving better service to the rich, saving money by doing unsafe dangerous things or selling unsafe products that were cheap to make, high pressure sales tactics or deceptive advertising that gets people to buy into deals that they don’t want or don’t understand, etc. Plenty of people try to get rich by getting money instead of making money, and some of them succeed. But, under the GOLD theory of economics, such a strategy of “getting” money is contrary to the teachings of economics. Instead, the path to riches that is most practical, and also the most noble and ethical, is to try to get rich by making a huge amount of value, and then trading this abundance of value for a lot of money. “Making” money requires making your customers happy, which comes from selling a great product at a reasonable price and giving good customer service. Happy customers mean that you earned your profit, i.e. you made your money.
So, the practical wisdom that flows from this is, if you want to get rich, don’t look at the money or think about the money. Instead, think about the work you are doing and the value you are creating. Work as hard as possible, and, even more importantly, maximize the value you create that other people will want to buy. When you create as much value as you can, and then trade as much as possible, then the end result will be the maximum possible amount of money ending up in your hands from selling what you created to other people. This results in having a lot of money, which means that you can buy a lot of consumable goods and enjoy life.
The Randian approach taken by the heroes of “Atlas Shrugged” makes sense here also: come up with a brilliant idea for a product that people will want to buy, like Rearden Metal, or develop a great skill that people will need to pay you for, like managing a railroad track with hundreds of moving parts and dozens of trains every hour without any train crashes. Do this, and you will put yourself in a position to create a vast amount of value, which you can then trade to others for great wealth to get rich.
But, to make money, it’s never about the money. It is always only about the value you create and produce, which you profit from when you trade that value to others for them to consume. In other words, you make money by making other people happy. You create value and trade it to others, those other people consume the value you created and it makes them happy, and this “justifies” and “backs” the money your customers pay you, which makes you happy. Making money is a win-win situation, whereas theft, fraud, and force are deadly for their ability to destroy an economy so that everyone loses.
One final note: There is some debate among economists (and humans at large) about whether greed is good or evil. Greed, in the evil sense, is the desire to get money and spend money without having made anything, as I described above. Greed, in the good, noble, Randian sense, is the desire to make money. I believe that the text of Atlas Shrugged shows that Rand herself understood this distinction, and she would not have thought of getting money as a good ethical action unless the money was made by production and trade. James Taggart is rich and gets plenty of money, but he is not a hero. Rand’s followers, sadly, take a less intelligent, less subtle and nuanced understanding than what Rand herself exhibited. Plenty of stupid Objectivists espouse the dogmatic belief that the rich, in general, are noble heroes and the poor, in general, are looters, without any grasp that some rich people make money and other rich people get money, and many rich aristocrats are looters of a different sort. We can debate whether the correct term for a person who desires to make money is “greed,” which Rand used for shock value as much as for accuracy, or “rational self-interest,” which is the more accurate but less polarizing or radical name. I personally prefer the name “rational self-interest,” although I am not opposed to the term “greed” provided that it is properly explained so as not to be misunderstood.

Tuesday, October 14, 2014

Freedom isn't free. But it only costs 99 cents.

That's right! I have lowered the prices of the e-book editions of my three books, the nonfiction "The Apple of Knowledge" and "Golden Rule Libertarianism", and the novel "Rob Seablue and the Eye of Tantalus." They are all now just 99 cents each! Some say that knowledge is liberating, and some say that knowledge is power, but did you also know that knowledge is cheap? All my e-books are available at Amazon for Kindle, at Barnes & Noble for Nook, and at iBookstore for iPad! They are also available at the Smashwords store in file formats that work on every e-reader and in a PDF that you can print out.

At 99 cents, you can't afford NOT to buy them! Support writers who take the time to write good books (i.e. me) and hop on over and buy a copy of whichever book interests you, for your preferred e-reader. Each of my books is about 300 pages long, perfect to read when you have some spare time later this year during the holiday season. And, if the commitment of one dollar is too extreme to invest blindly, you should know that on Amazon and Barnes & Noble and Smashwords it is possible to preview the first 20% of the book before you buy it, so you can feel comfortable in the knowledge that you will like my books before placing that big 99 cent layout. Please buy my books! Thank you!

Monday, February 17, 2014

GOLD vs. Nudge

I see the theory of GOLD articulated in my new book "Golden Rule Libertarianism" as the equal but opposite of the "Nudge" theory of law professor and Obama crony Cass Sunstein. He argued in his book of the same name that government policy should let people be as free as possible, which he calls the "Golden Rule of Libertarian Paternalism" (not to be confused with MY Golden Rule Libertarianism). But--and this is an important "but"! But Sunstein believes that, even if we let people be free, the government can "nudge" them into making better decisions and choices than they would do in a system of unrestrained freedom. He speaks of "choice architecture" as the set of policies which shape our choices, and he says that if he nudges people then they will make better choices and have fewer regrets from having made bad choices. All with freedom preserved, by magic.

When Obama talked about going to war against Syria last year, he said he wanted "pinprick strikes," to which one Pentagon official replied "the US military uses sledgehammers, not pinpricks." Similarly, the government, with the army, and the police, and the regulators, and criminal prosecutors, and laws, enforced by jails and fines, does not "nudge" people, it SHOVES people into the path that it desires for them. When you break the law then you go to jail. You are either free or else you are a slave. There is no in-between.

As you would know if you had read Golden Rule Libertarianism, one of the basic ideas of GOLD is that human minds are fallible and can always make mistakes, so it isn't fair for one person to force another person to obey his decisions about what the other person should do or which behavior is best for him, because the other person could be mistaken. GOLD goes on to posit the "government as God complex" idea, which states that individuals within and outside the government are basically the same, so the same rules of private people apply to government politicians. In other words, politicians and regulators are not gods who magically know the perfect choices for everyone to make, despite their claim to be experts and brilliant legal scholars. If Cass Sunstein wants to "nudge" me into drinking carrot juice and eating tofu, he doesn't have the right to do so, because he is not God, and I can make decisions for myself just as well as he can make them for me (despite his "impressive" pedigree of Yale Law professorship and degrees from top Ivy League universities). If I want coffee and he thinks I should drink carrot juice, I might be wrong and he might be right, or he might be wrong and I might be right. But the person who will prosper and be healthy and alert or else get food poisoning and get sick and die is me, not him, so the fair and just thing is for me to decide for myself, and let Cass decide for Cass.

Contrary to GOLD, Nudge is simply a sophisticated, complicated justification for liberal leftist dictatorship, couched in soft mushy language designed to soften the public's fear of going to jail or being shot when a person refuses to be "nudged" into the decision by the Big Government which "knows what's best for us." Cass Sunstein doesn't know what's best for us, but he does want the government to rule us.

Saturday, January 25, 2014

My E-Books are Now Up for Sale on Amazon and Barnes & Noble. Please Buy Them!

My philosophical treatise The Apple of Knowledge and my political essay Golden Rule Libertarianism are now both live on Amazon and B&N. If you enjoy my blog, please consider buying them. Each one is available for Kindle and Nook. The links for Apple are:

The Apple of Knowledge: Amazon Kindle

The Apple of Knowledge: Barnes & Noble Nook Book

The links for GOLD are:

Golden Rule Libertarianism: Amazon Kindle

Golden Rule Libertarianism: Barnes & Noble Nook Book

The books are just $4.99 each. If you read them and have any thoughts, please post a comment to this blog to let me know how you liked them. I am confident that each of these books is full of useful ideas that will improve your life and sharpen your grasp of philosophy and epistemology (Apple) and also your understanding of politics and economics (GOLD). Enjoy!

Friday, January 10, 2014

Cover Reveal!

I am presenting the ebook covers for my two new books, both of which should be available soon at Amazon, Barnes & Noble, and the iBookstore (and I am also changing the cover for my novel Rob Seablue). These covers were designed by Graphicz X Designs, and they did a great job.  Take a look!




Friday, December 13, 2013

December 2013 Update: Staying Power, "Friends," The Hobbit, Upcoming Titles

Staying Power: In one week, on December 20th, I celebrate the four year anniversary of quitting smoking cigarettes. How did I stay quit? In all honestly, I drink 2 to 3 cups of coffee everyday, so I get my upper fix from caffeine instead of tobacco. That, combined with iron determination and willpower, is the reason why I haven't had a smoke in the last 4 years.

"Friends": My most recent legal document review project ended. The thought I want to post about in this blog, in regards to my job, is that working is a lot of stress, and to be a good worker you need a way to relax while at work in high pressure situations (e.g. deadlines, quotas, etc.). My coworkers would relax by talking a lot, e.g. about their girlfriends and sneakers, but I developed a very useful trick for how to relax at work. I own all 10 seasons of the TV show "Friends" starring Jennifer Aniston on DVD, and I have seen all 200 episodes at least 20 or 30 times. So while I am at work I will literally play jokes or scenes from "Friends" in my mind while I am working, over and over again, because I have probably 1000 jokes and scenes memorized. This puts me in a constant good mood at work, which I think makes me a better worker and breaks up the monotony.

The Hobbit: I saw the second installment of The Hobbit trilogy today. It was escapism at its best. A rich, vividly imagined world, with great acting and an awesome dragon (and I love dragons!). The only problem was that it cut out in the middle of the story when I was looking forward to the ending with great anticipation, and it will be a pain to wait, and wait, and wait for the third movie to come out. Here let me note a story common among fantasy fans, that the two founders of the fantasy genre, J.R.R. Tolkien and C.S. Lewis had a conversation, in which Lewis asked "they say our novels are escapism? What sort of person hates escapism?" to which Tolkien replied, "Jailors."

Upcoming Titles: I am putting the finishing touches on my two new nonfiction books, tentatively titled "The Apple of Knowledge" and "Golden Rule Libertarianism." You will be the first to know because I will post it here as soon as they are released, probably for Kindle, Nook and iPad via Amazon, BN and the iBookstore.

Saturday, December 7, 2013

Just Checking In

I have been "working like a dog" recently, billing 55 to 60 hours a week at my job in Manhattan doing legal document review. My project ends soon, so expect a longer blog post around Christmas. I continue to plan to release my two independently published nonfiction books soon, so anyone reading this should have something to look forward to. Happy Thanksgiving and Hanukkah, belatedly!

Tuesday, October 22, 2013

Work Portrayed on Television

The essay Thoughts on Work and Working in the October 2013 issue of The Freeman is the inspiration for this blog post, which will discuss the portrayal of working and jobs on television. In the essay, author Sarah Skwire reviews the book "Working" by Studs Terkel, which contained oral narratives of different types of workers talking about their jobs. The author uses her analysis of the book to argue that the public's view of free market capitalism is influenced by how we view and talk about work. Specifically, if we hate our job and view working for a salary as slavery to the rich then we will hate capitalism, and if we enjoy our job and take pride in doing good work then we are more likely to favor capitalism.

Ms. Skwire cites cases in Mr. Terkel's book which show that this hate-my-job vs. love-my-job dynamic does not line up neatly with poor vs. rich or working class job vs. upper class job. She describes blue collar workers, like cashiers and assembly line workers, who love their work. Here I will elaborate on this point that working class jobs are not exploitation with reference to the portrayal of jobs and working in two TV shows: Shark Tank and Project Runway. Up front I must confess that I watch and enjoy both of these shows, for reasons that should become clear below.

(1) Shark Tank is a show about a group of wealthy venture capitalists called "sharks," including famed Dallas Mavericks owner Mark Cuban, who hear presentations by small business owners and then decide whether to invest in the business. This show is interesting to a libertarian because the rich investors are not portrayed as exploiting the small businessmen. Although the sharks do often make predatory initial offers, like buying 75% of a business for $10,000, the five sharks compete with each other and if the investment opportunity has merit then they frequently undercut each others' offers in ways that favor the entrepreneur, e.g. the initial offer could become a final offer of $20,000 for 20% of the equity.

The entrepreneurs who pitch ideas to the Sharks are frequently people who started off in a working class job and loved what they did and wanted to start or expand a business where they take their expertise and passion of an area and develop that passion into a brand or product, for which they need capital. Indeed, many of the Sharks themselves, including Mark Cuban, began as small businessmen and then got rich due to hard work and success. Shark Tank depicts in reality what it looks like for capitalism and Wall Street to help small business and create jobs, rather than describing that in disembodied abstract theory as so many libertarian economists have done.

For example, in the last season of Shark Tank a boy in middle school, who happened to be from a town close to where I live in Connecticut, dreamed of making gourmet dog food, and cooked up batches of dog treats in the early morning before school and sold dog treats to his friends and teammates' families at his sports teams' practices. Despite what some Marxists would assert as child labor, his story felt like an ambitious passionate young person wanting to work and make an honest living for himself. He pitched his dog treat business to the sharks and, although four of the sharks did not really take him seriously due to his age, one of the sharks liked his product and gave him a reasonable offer. He decided to take her offer and he did the deal to get her investment capital.

(2) Project Runway is a show, hosted by supermodel Heidi Klum, where a group of fashion designers compete in a series of challenges to win a $500,000 prize. Most of the contestants in this reality shows are poor and/or gay, and many of them have fascinating and eccentric personalities. Although the challenges are grueling and difficult, like sewing and working all day and all night to design a runway-ready evening gown from idea to finished clothing in 24 hours, the show does not depict the contestants as slaves in a sweatshop who are exploited by the $500,000 prize's control over them. The opposite is true: the show depicts the money as a prize for the worthy, not as an evil system of oppression. The contestants are young and ambitious and have a deep love of clothes and they enjoy the work they do despite it being very difficult. Most of them view Project Runway as an opportunity to show the world their talent and be rewarded for all their hard work and skill.

In the most recent season, the show ended in a competition between two designers, Alexandria and Dom, with everyone else having been eliminated by the end. Alexandria ended up losing and was very upset and bitter (despite winning $25,000 as runner up), but Dom, a poor young black woman from Philadelphia, had done what was in my opinion the best collection to show on the runway in the finale, with clothes that were exotic and attention-grabbing, and she worked hard and deserved her prize. Project Runway depicts work as good and something that earns its just reward, not as a necessary evil that we should all complain about and try to abolish.

Television, like Hollywood and the news media, has its fair share of Marxists. But these two shows, and others like them, are getting people to talk about work in ways that are accurate in assessing the values of freedom and capitalism.

Wednesday, October 16, 2013

Deconstructing the Motives of Marxist Professors



Deconstructing the Motives of Marxist Professors

By Russell Hasan

Most ideas which are too smart for their own good eventually end up in a Woody Allen movie. Continental philosopher Jacques Derrida’s theory of deconstruction was no different, showing up in the movie Deconstructing Harry. Deconstruction looks at something, typically a text, and peels away the layers of explicit meaning and logical order in order to see the bloody reality that lurks beneath. It is interesting to attempt to apply the theory of deconstruction for a libertarian analysis, specifically by deconstructing the motives of Marxist professors on college campuses and examining why so many academics are Marxists.

Marxist professors appear to preach the political philosophy of Marx because they believe in it. Or, perhaps, they are Marxists because that is what they were taught by their professors way back when they were themselves students in college. But a deeper motive can be discerned by looking underneath the surface. In Ayn Rand’s opus Atlas Shrugged, the physicist Dr. Robert Stadler justifies his betrayal of John Galt and his support for the State Science Institute by telling Galt that he wanted to set the mind free from money by getting government funding for scientific research. The deconstruction of this statement shows that the free market either does not, or might not, place a high value on the work that professors do, such that some scholars could go unfunded if left without state assistance. Generally, in a free market traders trade value for value, so that in order to buy something you must first be productive and actually make some money. What is it precisely that a Marxist professor of sociology, history, or political science really produces? Unless their scholarship and ideas have some sort of concrete financial value, the free market would not pay them very much in return for their work. On the other hand, government funding for universities, especially in the form of Department of Education-backed student loans but also from government grants for research, results in a situation where the salary of the typical college professor bears no relation whatsoever to his or her productive value.

The situation in the economics behind university education might accurately be called a higher education bubble. Spending on education, motivated by the Department of Education’s policies, goes ever higher and higher, as seen in data presented in the Wikipedia article Higher Education in the United States, while the actual productive value that results from a college education bears no real relation to rising spending. The university administrators and professors in general don’t seem to care. Indeed, the theory of a “liberal arts” education, as articulated by Progressive education pioneer John Dewey, believed that the purpose of an education was to free the mind, not to help the student make money. Dewey also asserted a belief that part of the purpose of education is to convert youth to Marxism, as seen in the Wikipedia article John Dewey, and Dewey’s influence upon modern education cannot be understated. Today’s students should thank Mr. Dewey for the fact that their minds have been set free while their bodies need to eat in a job market that has been mercilessly crushed by the Great Recession, which resulted from the statist policies of Bush and Obama.

Perhaps the situation will be rectified when the higher education bubble bursts and the forces of supply and demand wreak havoc on college funding and drag spending back down to what is fiscally justified by the return on investment for a college education. Bubbles usually burst when state-controlled systems run out of other people’s money, in this case, the taxpayer’s money which funds student loans and grants. If the economics of supply and demand are allowed to correct the higher education bubble, then many Marxist professors might be fired unless they can provide something to students which furthers the students’ careers or future earning capacity, which would mean that the professors are actually productive. A plausible deconstruction of the motives of Marxist professors is that the professors just want to maximize the amount of money in their salaries, because the state’s influence over education accomplishes a vast disconnect between the professors’ salary received and the value that they produce. Note that the state also receives a quid pro quo from the professors in the form of the Marxist propaganda which they teach to their students in order to persuade impressionable young minds to believe in statist economic policy, so that the achievements of Marxist professors would have no value in a free market economy but have a high importance in a centrally planned economy.

Sunday, September 22, 2013

Author Update

My two new nonfiction books, the first about the politics of libertarianism and the second about the philosophy of science, have now both been completed! The first drafts are written and I am editing, and I hope to release them within the next 6 months. Of course, the indie ebook self-publishing phenomenon has been driven by fiction, so indie nonfiction is something of a charting a new path, but hopefully it will go well! Although fiction is fun and entertaining, with nonfiction it is possible to sell ideas or information which are unique, so a nonfiction book can be truly one of a kind, whereas with most novels it is possible to find similar novels or substitutes. And both of my books offer content that is original and can't be found elsewhere.

In other news, I have been working a new job recently, a legal job in Manhattan. I have done legal internships and pro bono work in the past, for example I used to be an intern at the Connecticut Attorney General, but this is my first full time law job. For a lawyer to have a job that requires a law degree and bar admission, which my job does, is a great blessing, especially given the oft-chronicled collapse of the legal job market in the Great Recession era. The job is a temporary position which ends soon, but it is a nice step forward for my career. I am very grateful for the opportunity.

Monday, August 19, 2013

The Lamestream Media: Democratization vs. Nationalization as Solutions

This blog post is my reaction to the article Did Capitalism Give Us The Laugh Track? in The Freeman July/August 2013 issue. The article's main point is that the laugh track in television comedies, e.g. sitcoms, is ugly and stupid, and its widespread use was a flaw due to homogeneity caused by the fact that FCC regulations gave an oligopoly to the broadcast radio stations (ABC, CBS and NBC), and the laugh track was done in by evolution and innovation caused by the rise of free market competition in television, first with Fox and then with cable TV like HBO.

This article highlights a point that is hotly debates among the general public: what is the solution to the horrible, atrocious quality problem in the media? Most people agree that the most of the news shows on the media are stupid and offer cliched, hackneyed tripe, not deep, biting insight. Not surprisingly, the Left and the Right differ in their characterization of the problem, and in their proposed solution. The Left says that the profit motive drives news stations like CNN (and Fox News) to dumb down their news and turn the news into entertainment in order to get higher ratings. To the Left, the media can only improve if the profit motive is removed and the news is made into a public good, like PBS or the BBC. The Left in particular criticizes Fox News for being biased and stupid. The Right makes an argument not unlike Freeman author B.K. Marcus, that the government-sponsored FCC-administered monopolization of the media has stifled innovation, and the solution is deregulation and competition to improve quality. The Right complains that networks like CNN and MSNBC have a liberal agenda and view all policy debates through a Leftist lens.

In any political analysis which pits libertarian policy vs. statist policy, it is interesting to speculate about whether the findings lead to the conclusions as the result of empirical research, or whether the analysis uses a priori assumptions which conform the data to fit the desired result. The former is a neutral unbiased analysis, whereas the latter is bias contaminating the research. Can we say that the FCC helped the laugh track, or was it the low taste of the public that contributed to the laugh track? In the absence of empirical data capable of distinguishing these two possibilities with precision, we cannot achieve an answer to this question that possesses scientific certainty.

But in the case of freedom vs. tyranny in explaining the "Lamestream Media", reality is handing us something that approximates a neutral scientific experiment. This is, obviously, the internet, and podcasts and Youtube channels as independent media. The government has not yet shackled the internet media with regulatory controls, so independent internet media has the chance to break free from conformity and be innovative. If the Right interpretation is correct, then internet-based competition will produce lean, hungry new media stations which will abandon stupid shallow news shows and two-dimensional biases in favor of deep, honest, insightful analysis, and the free market will reward the new media, and the good media feeds will prosper and evolve and improve. But if the Left interpretation is correct then the profit motive will afflict new media just as it did old media, with the need for ads and ratings driving down the intelligence of the analysis. As a libertarian I predict that the evolution of media to an internet-based mode will lead to competition among thousands of news feeds, which will destroy the "lamestream" mainstream media and break the news free from the orthodox conformist paradigm through which the news is filtered in the process of being taught to the news-consuming public. Indeed, the internet is bringing new libertarian media like The Freeman of FEE, as well as other libertarian media like Reason Magazine and Liberty Magazine, to the attention of people who would never have had access to it in the absence of the internet. Internet media will enable libertarian news feeds to compete with the mainstream statist news feeds, and let the public, not the experts, decide whose accounts of the facts are most trustworthy. The eventual result of whether or not media enrichment happens once we fully transition to an internet-based media model will be a scientific proof supporting either the Right (if media gets better) or Left (if it does not) interpretation of what is wrong with the media.

Friday, July 19, 2013

New Updates to my Libertarian Activism Page

Today I have added links for Congressional scorecards, legislative tracking sites, and activism sites to my Libertarian Activism Page on this blog. The link to the Page is on the upper right side of the blog. Please take a look! If nothing else, have the curiosity to learn who your Congressman is and how he or she votes on the issues you care about.