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Economic Education Not Enough to Promote Freedom, Capitalism

May 3, 2012
What actually motivates these people to support socialistic policies?

What actually motivates these people to support socialistic policies?

Today we see the gradual rise of advocacy groups, think tanks, bloggers, and ‘free-marketers’ who promote economic liberalization and free market reforms. This is a good sign since our society has long been trapped in a collectivist period that calls for drastic, radical political changes in order to avert the country’s inevitable economic and political collapse. Even politicians now see the need to amend the protectionist Philippine constitution in order to pave the way for substantial changes in the country’s economic policies.

For instance, two veteran lawmakers, one in Congress and the other in the Senate, believe the government needs to amend “the restrictive economic provisions” in the charter. A lot of people who support economic liberalization and constitutional change praised this political initiative to remove the charter’s restrictive provisions and to institute free market reforms. The existence of advocacy groups and individuals who support economic liberalization and free market reforms is simply a reaction to the current political and economic climate. Some of them understand that ideas have consequences, and that the country’s current economic predicament is the logical result of the policies or ideas adopted by the government. But is the presence of these groups and individuals who believe in economic reforms enough to promote freedom and capitalism? The answer is: NO!

Consider the curious case of an absurd political advocacy group that promotes parliamentarism in the Philippines. This group called CoRRECT Movement advocates its three-point agenda, namely, economic liberalization, evolving federalism, and shift to parliamentary system. The creator of that statist movement named Orion P. Dumdum dogmatically believes that the only way for this country to survive and to achieve economic prosperity is to embrace his three-point agenda, particularly parliamentarism, which is non-negotiable.

In his online attack on my and my friend Nonoy Oplas’s uncompromising stand against his parliamentary fanaticism, Mr. Dumdum posted the following statement:

Both Froilan Bersamina and Nonoy Oplas contend that a country needs ONLY ONE SILVER BULLET: A Free Market – Minimal Government paradigm. That’s all you need, according to them. For them, everything is about individual rights ONLY. No group rights. No such thing as the need for considering the “majority” or people as groups.

We at CoRRECT, on the other hand, maintain that while we need to have a FREE MARKET economic system along with the principles of private enterprise and letting government do only those things that private enterprise cannot and will not do, we also realize that we need to fix the errors of this country.

As such, we have an overly centralized-around-Manila system which can only be fixed through an evolving Federalism…

We also realize that having an efficient, accountable, stable, and faster-moving system of government is important, and our current Presidential System has only continued to create MINORITY PRESIDENTS with a weak mandate, and elections conducted through popularity contests, causing only popular celebrities with name recall to win and emerge as leaders of almost 100 million poor Filipinos needing visionary leadership. As such, shifting to the proven and superior PARLIAMENTARY SYSTEM is also necessary. (NOTE: please view my response to this statement HERE.)

It appears that his dishonest charges and assumptions only exist in his imaginative mind. That baseless, malicious tirade actually exposes the intellectual and moral bankruptcy of some people and advocacy collectives that call themselves pro-capitalists. The problem with their advocacy is that it is fundamentally focused on absurd political and economic principles with no strong moral and philosophical foundation. This error actually exposes their nihilism, political naivety, and political and moral relativism. Also, the main problem with this movement is its fanatical belief that adopting a parliamentary form of government, instituting economic reforms, and making few political changes are enough to solve the many economic ills faced by this country. This strategy reminds me of the Keynesians’ purely statistical and academic yet practically unworkable/unfeasible economic methods and strategies.

Like the Keynesians who deceptively made free market claims, these clueless fanatics of parliamentarism also claim they’re pro-capitalism and in favor of free market reforms. Also, its leader- Mr. Dumdum- naively believes that focusing on individual rights is not enough. Dumdum dogmatically believes that the government must support and finance public education, birth control or reproductive health services, and other public services and programs. In regard to the issue of regulation, he made the following statement: “Competition is good, but there needs to be some regulation in certain cases, since some of the things that people do when competing against each other can be wrong — like cheating. Cheating is in an individual’s self-interest, but cheating is NOT in the collective group’s interest once everybody cheats or engages in unscrupulous behavior just to get ahead, hence the need for rules, regulations and the implementation of the same.” (I responded to that statement HERE.)

What these clueless advocates of economic liberalization do not understand is that economic education, or even reform for that matter, is NOT enough. I stated many times before that we need to focus on moral and philosophical issues, because it is these issues that motivate people to embrace certain ideas or ideologies. In the long struggle for individualism and freedom, we ought to focus on moral fundamentals and principles.

What do people actually embrace as their moral ideal? Do they believe that a person’s life belongs to him, not to the state, society, or his fellowmen? Do they embrace the idea that their fellowmen are their brothers’ keepers? Do they believe that it is the duty of every man to selflessly serve others above his own? Do they buy the primitive idea that we must selflessly serve others above our own welfare?

It is these collectivist moral ideals that motivate people to embrace collectivist economic systems and theories. Their goals, beliefs, dogmas, and advocacy are the very result of their view of morality. If you believe that you own your life, then, you understand that you ought to support an individualist system that supports and promotes individual freedom, choice, and rights.

I stated before the following:

The symptoms of this intellectual bankruptcy can be seen everywhere today. We see young people, professors and intellectuals who proclaim that everybody has a right to education, health care, housing, pension, or almost every kind of public welfare. We see intellectuals who preach anti-capitalistic, collectivist and anti-reason ideas. They preach that we are our brothers’ keepers and that we must sacrifice our lives for the sake of the greater good. We see career politicians who shamelessly proclaim that it is their duty to serve the needs of the people. We see and hear professors and media personalities who urge the government to be our “nanny state.” We see protesters calling for more government services and goods. In short, we see more and more people calling on the government to inflate its scope of powers in order to serve people’s immediate needs. Yes, these are just a few symptoms of the nation’s intellectual bankruptcy that we continue to ignore.

Man’s view of morality creates his own culture. Thus, a society’s dominant morality determines the kind of culture that people embrace, absorb, or even practice. A culture is the barometer of a society’s degree of morality, freedom, and intellectual state.

I also wrote the following in a previous blog:

For those who advocate the free market system, capitalism has a parallel culture. Capitalism cannot survive in a society, the culture of which is anti-man, anti-mind, and anti-freedom and anti-reason. To survive, a capitalist society must sustain, preserve and transmit its individualist culture, not through the use of people’s money, but through the intellectual efforts of men and women who value freedom and individual rights. Government interference is the main difference between a capitalist society and a socialist slave pen. A capitalist society does not use government force to impose or promote its own agenda; a socialist society does the exact opposite. The first- its survival and continuity- relies on the voluntary efforts and intellectual pursuit of independent men who understand the value of a free society. The second- its survival and continuity- largely depends on the use of state force and intervention in order to preserve its totalitarian, evil system and to destroy dissents and potential resistance.

It is futile to focus on economic education without fighting for the right, moral ideal. The very reason why many Filipinos embrace certain aspects of socialism or collectivism is because they naively believe that we are our brothers’ keepers. Some of them believe that capitalism or the desire to acquire or gain material wealth is immoral.

A lot Filipinos believe that it is OK for the government to tax them as long as their tax money is used to support public education, public housing, health care, and other social services. Many Filipinos also believe that they are entitled to certain public services because it is the duty of the government to redistribute wealth and to serve those with less in life.

The issues of freedom, capitalism, and rights are primarily a moral issue. In dealing with these issues, you need to confront the following questions:

  • Do you own your life?
  • It is your duty or obligation to serve others above your own interest or welfare?
  • Are you your brother’s keeper?
  • Do you believe that the state has the right or power to regulate your right?
  • Can you live properly without rights?
  • Are you a human being?

In 1946, Ayn Rand wrote a letter to Leonard Read, the founder of the Foundation for Economic Education, wherein she explains why it’s NOT true that economic education is the answer to human, global crisis. In this letter she wrote:

You state that economic education is to be your sole purpose.

You imply that the cause of the world’s troubles lies solely in the people’s ignorance of economics and that the way to cure the world is to teach it the proper economic knowledge. This is not true – therefore your program will not work. You cannot hope to effect a cure by starting with a wrong diagnosis.

The root of the whole modern disaster is philosophical and moral. People are not embracing collectivism because they have accepted bad economics. They are accepting bad economics because they have embraced collectivism. You cannot reverse cause and effect. And you cannot destroy the cause by fighting the effect. That is as futile as trying to eliminate the symptoms of a disease without attacking its germs.

Marxist (collectivist) economics have been blasted, refuted and discredited quite thoroughly. Capitalist (or individualist) economics have never been refuted. Yet people go right on accepting Marxism. If you look into the matter closely, you will see that most people know in a vague, uneasy way, that Marxist economics are screwy. Yet this does not stop them from advocating the same Marxist economics. Why?

The reason is that economics have the same place in relation to the whole of a society’s life as economics problems have in the life of a single individual. A man does not exist merely in order to earn a living; he earns a living in order to exist. His economic activities are the means to an end; the kind of the life he wants to lead, the kind of purpose he wants to achieve with the money he earns determines what work he chooses to do and whether he chooses to work at all. A man completely devoid of purpose (whether it be ambition, career, family or anything) stops functioning in the economic sense. That is when he turns into a bum in the gutter. Economic activity per se has never been anybody’s end or motive power. And don’t think any kind of law of self-preservation would work here – that a man would want to produce merely in order to eat. He won’t. For self-preservation to assert itself, there must be some reason for the self to wish to be preserved. Whatever a man has accepted, consciously or unconsciously, through routine or through choice as the purpose of his life – that will determine his economic activity.

And the same holds true of society and of men’s convictions about a proper economics of society. That which society accepts as its purpose and ideal (or to be exact, that which men think society should accept as its purpose and ideal) determines the kind of economics men will advocate and attempt to practice; since economics are only the means to an end.

When the social goal chosen is by its very nature impossible and unworkable (such as collectivism), it is useless to point out to people that the means they’ve chosen to achieve it are unworkable. Such means go with such a goal; there are no others. You cannot make men abandon the means until you have persuaded them to abandon the goal.

Now the choice of a personal purpose or of a social ideal is a matter of philosophy and moral theory. That is why, if one wishes to cure a dying world, one has to start with moral and philosophical principles. Nothing less will do.

The moral and social ideal preached by everybody today (and by the conservatives louder than all) is the ideal of collectivism. Men are told that man exists only in order to serve others; that the “common good” is man’s only proper aim in life and his sole justification for existence; that man is his brother’s keeper; that everybody owes everybody a living; that everybody is responsible for everybody’s welfare; and that the poor are the primary concern of society, its holy shrine, the god whom all must serve.

This is the moral premise accepted by most people today, of all classes, all stages of education and all political parties.

How are you going to sell capitalist economics to go with that? How are you going to get them to accept as moral, proper and desirable such conceptions as personal ambition, economic competition, the profit motive and private property?

It can’t be done. Their moral ideal has defined these conceptions as evil and immoral. So modern men are consistent about it. Our “common gooder conservatives” are not. It’s one or the other.

Ayn Rand further wrote the following:

Here is the dilemma in which the public finds itself when listening to our conservatives: the public is told, in net effect that, collectivism is a noble, desirable ideal, but collectivist economics are impractical. In order to have a practical economy, that of capitalism, we must resign ourselves to an immoral society, that of individualism. This amounts to saying: you have a choice, you can be moral or can be practical, but you can’t be both. Given such a choice, men will always choose the moral, because it is preposterous to expect them to choose that which, by the speaker’s own assertion, is evil. Men may be mistaken about what they think is good (and how mistaken they’ve been! And what lying they indulge in to deceive themselves about it!), but they will not accept evil with full, conscious intent and by definition.

Nor will men accept the idea that a moral ideal is impossible, that it cannot be achieved in practice. (And they are right about that, too – it’s a thoroughly unnatural proposition.) Therefore it is absolutely useless to tell them that Marxist economics are impractical, so long as you’re also telling them in the same breath that Marxism is noble. They will merely say: “Well, if that’s the ideal, and it cannot be achieved through the economics of capitalism, to hell with the economics of capitalism! If Marxist economics do not work, we’ll find something that works. We must find it. So we’ll go on experimenting. At least Marxism tries in the right direction, while capitalism doesn’t even try achieve the collectivist ideal. Capitalist economics do not even try to offer us a solution”. How often have you heard this last one?

Now the most futile and ludicrous of all stands to take on this question is the one attempted at present by most of our conservatives. It may be called the “mixed philosophy.” It’s a parallel to the theory of a “mixed economy,” just as untenable, silly and disastrous. It’s the idea that capitalism can be morally justified on a collectivist premise and defended on the grounds of the “common good.” It goes like this: “Dear pinks, our objective, like yours, is the welfare of the poor, more general wealth, and a higher standard of living for everybody – so please let us capitalists function, because the capitalist system will achieve all these objectives for you. It is in fact the only system that can achieve them.”

This last statement is true and has been proved and demonstrated in history, and yet it has not and will not win converts to the capitalist system. Because the above argument is self-contradictory. It is not the purpose of the capitalist system to cater to the welfare of the poor; it is not the purpose of a capitalist enterpriser to spread social benefits; an industrialist does not operate a factory for the purpose of providing jobs for his workers. A capitalist system could not function on such a premise.

The economic benefits which the whole society, including the poor, does receive from capitalism come about strictly as secondary consequences, (which is the only way any social result can come about), not as primary goals. The primary goal which makes the system work is the personal, private, individual profit motive. When that motive is declared to be immoral, the whole system becomes immoral, and the motor of the system stops dead.

It’s useless to lie about the capitalist’s real and proper motive. The awful smell of hypocrisy that accompanies such a “mixed philosophy” is so obvious and so strong that it has done more to destroy capitalism than any Marxist theory ever could. It has killed all respect for capitalism. It has, without any further analysis, simply at first glance and first whiff, made capitalism appear thoroughly and totally phony.

The effect is precisely the same as that produced by Willkie, Dewey and all the rest of the “me too,” “I’ll-get-it-for-you-wholesale” Republicans. Do not underestimate the common sense of the “common man” and do not blame him for ignorance. He could not, perhaps, analyze what was wrong with Willkie or Dewey – but he knew they were phonies. He cannot untangle the philosophical contradiction of defending capitalism through the “common good” – but he knows it’s a phony.

Is there anything more offensive and preposterous than to tell an unemployed worker that the millionaire who is throwing a champagne party on his yacht is doing so only for his, the worker’s benefit, and for the common good of society? Can you really blame the worker if he then goes out and demands that the yacht be confiscated? Is it economic ignorance that makes him do so?

The more propaganda our conservatives spread for capitalist economics while at the same time preaching collectivism morally and philosophically, the more nails they’ll drive into capitalism’s coffin.

That is why I do not believe that an economic education alone is of any value. That is also why you will find it difficult to arouse people’s interest in the subject. I believe you are conscious of this difficulty; your prospectus shows anxiety on the scope of “creating a greater desire for economic understanding.” You will not be able to create it.

The great mistake here is in assuming that economics is a science which can be isolated from moral, philosophical and political principles, and considered as a subject in itself, without relation to them. It can’t be done.

The best example of that is Von Mises’ Omnipotent Government. That is precisely what he attempted to do, in a very objective, conscientious, scholarly way. And he failed dismally, even though his economic facts and conclusions were for the most part unimpeachable. He failed to present a convincing case because at the crucial points, where his economics came to touch upon moral issues (as all economics must), he went into thin air, into contradictions, into nonsense. He did prove, all right, that collectivist economics don’t work. And he failed to convert a single collectivist.

  • Reprinted from “Letters of Ayn Rand” by Ayn Rand and Michael S. Berliner, 1997.
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