Wednesday, February 4, 2009

Naturalist Economics: Bernanke vs. Ayn Rand

Natural economics do not require the coercion and the gun-in-hand tactics of collectivism, nor is it up to the government to "allow" naturalism, but only to prevent unnatural economic acts.

Many times over the course of the lifespan of this blog, I have written about capitalism as the rational economics of metaphysical naturalism.

Ben Bernanke, former Chairman of the Fed, co-authored a syllabus called Principles of Economics, while teaching at Princeton. The authors do not describe "economic naturalism" as that which would apply to the nature of man if man was uncoerced by any policy other than the free, natural market.

They describe it, instead as "the ability to see economic principles in the everyday details of life as well as national and international events." Why does the small business woman in Minnesota who operates as though she were in a truly free marketplace need to see international "events" as part of her naturalistic view of business?

It was my understanding that all economists who are not concerned merely with the "big macro-economic picture" will understand that that "big picture" is made up of "principles in the everyday details of life." Any economist who only looks at the macro-economics of "international events" is a fool.

But what details of what life? As it has been said that we are already a socialist nation, the "details of life" are going to be those of a civilization living under the rules of socialism.

That, in short, has nothing to do with "naturalism" in economics. Natural economics do not require the coercion and the gun-in-hand tactics of collectivism. This may be the reason that former Treasury Secretarys Henry Paulson and Bernanke, and President Bush, put forward on September 18, 2008, a brief, three-page proposal without details about how the program would be overseen.

Bernanke, and obviously Paulson, are of that school of economics that does not recognize a natural market, not even after Bernanke defined what it means to him; in that three page proposal there were no "details of life." There were no details at all.

He and Paulson spent days in front of Congress conceding problems with the plan while at the same championing it as the solution to the nation's current financial problems. It has not been the solution. We are now looking at a boondogle spending bill of well over $800 billion.

"Try acting as a laissez-faire capitalist," I wrote here. "It will get you a prison sentence for ignoring all the laws that prevent it."

Acting as though the laws did not exist is not coercive. It twists no one's arm to keep your prices low.

It is, however, proper to make laws about capitalism that prevent such things as lowering prices below costs to put competitors out of business, or about the taking of public bail-out money then spending it on bonuses for the very people who took the bail-out. Legislating what are improper ethics is not the reverse position of allowing sound business practices that some people with certaain ideologies don't like. The government has no business and no right to allow that which is non-coercive because it is, instead, the right of the people to do anything they please that is not coercive, i.e., that does not require a gun, whether it be a literal or a virtual gun.

It is not up to the the government to allow anything. It is up to the government only to prevent that which is unlawful, and it is not up to the government to make unlawful those things which are not coercive. Naturalistic economics as would exist without any government interference is naturalistic economics and is therefore non-coercive.

Economic naturalism is the state of any economy that is not controlled by the governement, nor by any means of coercion--or worse--used by businesses or individuals in that economy.

Today, Americans are walking with eyes wide open into the kinds of scenarios that could have come right out of "Atlas Shrugged". As I speak, a pay cap is being legislated for businesses who take government bail-outs that never should have been paid in the first place but which will continue to be standard practice for many years to come. This will cause the best of our business leaders to get out.

The Governor of my state, Michigan, has vowed to cap the prices of health care costs. This will only drive doctors out of the state. Then the only way to prevent that is to make it illegal for doctors to leave the state because they have taken government money in the form of Medicaid or Medicare or some other plan.

Take WalMart as the biggest literal example of a business that every local government tries to control in some way, in the belief that WalMart is the big bad economic wolf who sets out to destroy local small businesses, that will cause traffic problems, and look like an eyesore. Sam Walton could have written these words, and if he had, and if he was alive today, he might become one of the "deserters" of the world of "Atlas Shrugged":

"I do not want my attitude to be misunderstood. I shall be glad to state it for the record...I work for nothing but my own profit--which I make by selling a product they need to men who are willing and able to buy it. It do not produce it for their benefit at the expense of mine, and they do not buy it for my benefit at the expense of theirs; --and I am proud of every penny that I have earned in this manner. Do I wish to pay my workers more than their services are worth to me? I do not. Do I wish to sell my product for less than my customers are willing to pay me? I do not. Do I wish to sellit at a loss or give it away? I do not. If this is evil, do whatever you please about me, according to whatever stnadards you hold. These are mine." Hank Reardon, industrialist in Atlas Shrugged" by Ayn Rand, at his trial for ignoring laws that prevented doing business as his standard told him he ought to. [condensed]

That is "naturalist economics."

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