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Financial Freedom Is Merely Organized Common Sense
A Little More Political Philosophy
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Imprimis is a newsletter from Hillsdale college. They are conservative in the sense of believing people should be free to make their own decisions. Governments must be small if that is to be the dominant form of social leadership and so they are quite distinct from the current form of thinking. You can find them here and a subscription is valuable.
The current publication is America’s Cold Civil War and I think you will find it worth the trouble.
The point within for me is this
“Political scientists sometimes distinguish between normal politics and regime politics. Normal politics takes place within a political and constitutional order and concerns means, not ends. In other words, the ends or principles are agreed upon; debate is simply over means. By contrast, regime politics is about who rules and for what ends or principles.”
One system builds a system within which people do what they want within simple limits and society evolves. The other decides the end goal and imposes methods to reach it.
While I think goals are a wise part of planning, I am reluctant to assume I always know the right goal and the costs to achieve it. I seriously doubt the political elite are dramatically better at it than I am. The flaw in goal oriented systems is the so far proven inability to select goals that satisfy a cost/benefit test.
People generally are willing to give up on goals or methods to achieve them that have been proven to fail. Governments are more reluctant to do so.
Factors aside from goals versus process
The left and the right differ in several ways and it helps to understand each other.
- The left favours “fairness” while the right selects abundance as their theme. The underlying question involves a choice: less more evenly distributed, or more less evenly allocated. How you answer that question puts you on to the discussion of capitalism versus socialism.
- The left is about kindness, while the right is more interested in incentivising productive behaviour. Capitalism is more suited to incentives than socialism so the question’s underlying philosophical difference colours the choice of method. The incentives we see governments providing these days are primarily mitigation of previously imposed disincentives. The best incentive for economic growth is removal of the disincentives.
- Equality is a theme for both. The difference lies in what equality means. The right favours equal opportunity, while the left chooses equal outcomes. To assume equal outcome is possible is to deny reality. Wishes do not overcome experience. Choosing equal outcome is a specific in the fairness discussion.
Capitalism versus socialism
Pure socialism, as in the old USSR and currently in Venezuela, fails. Universally. There are no exceptions. So it is a delusion to assume it will work in its full blown form. On the same page, we know capitalism won’t work if it is allowed to run unchecked.
The question of where the limits lie for each is difficult. If we thought of the right/left conflict as being the search for that answer, life would be easier. Essentially, what gives us the most fairness for the last impairment of abundance. Framed that way, cost/benefit becomes a meaningful question.
The current structure addresses a different question
In its simplest form, our system is about who decides. You or some stranger? It is about who has power. Deciding the agenda is power. Deciding how to implement is power.
Socialism is very attractive for those who enjoy the exercise of power. The idea of building an infrastructure where people make their own decisions and work hard to advance their own future, is not one where the power seekers flourish. It is one where the people flourish and so you would think it has some merit.
At the same time, those not willing to participate in an incentive based system prefer fairness without accountability for their own actions. Entitlement then rules contribution. People are elected based on the entitlements they will provide, not on the accountability they will require.
At some point we all must ask ourselves, “Who should make the decisions in my life?” Should it be you, or an uninterested stranger. Look at regulation.
I like dark toast. In the EU, a restaurant is prohibited from providing it because a bureaucrat decided acrylamide might cause cancer. More here. When governments feel the need to involve themselves in unproven trivia, we have an attitude problem on their side and we must ask how far it will expand.
Some thoughts from Thomas Sowell
- We seem to be moving steadily in the direction of a society where no one is responsible for what he himself did, but we are all responsible for what somebody else did, either in the present or in the past
- The vision of the anointed is one in which ills as poverty, irresponsible sex, and crime derive primarily from ‘society,’ rather than from individual choices and behavior. To believe in personal responsibility would be to destroy the whole special role of the anointed, whose vision casts them in the role of rescuers of people treated unfairly by ‘society’
- People who pride themselves on having ideas often fail to understand that only after ideas have been filtered through real-world world experience do we know whether they are right or wrong. Most turn out to be wrong.
- Life has many good things. The problem is that most of these good things can be gotten only by sacrificing other good things. We all recognize this in our daily lives. It is only in politics that this simple, common sense fact is routinely ignored
And the one you must always note when the politicians and bureaucrats are busy.
“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong”
Somewhere in the middle of it all lies a perfect system. A little less capitalism traded for a little more fairness. Fewer rules for more choice for the people. Cost/benefit as the deciding factor in every decisions. And the final Sowell thought for today.
“Much of the social history of the Western world, over the past three decades, has been a history of replacing what worked with what sounded good.”
Post script.
Art Powell published this on the 24th of November. He is worth reading too. Compassionate Economics
I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.
In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. don@moneyfyi.com 705-927-4770
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