Thursday, March 25, 2010

When Commodities Are FREE, People AREN’T....

If you believe in “free things,” like free/government provided medical care, free/government provided education, free food, clothing, shelter, etc. than YOU believe in chattel SLVERY!

Commodities are produced by human labor.

In the private sector, a medical practitioner or an educator can sell their commodities (specified knowledge and skills developed at cost to themselves) to the highest bidder, PROVIDING that they are able to consistently deliver good quality service for the fees/prices they charge, so long as those fees are in-line with what the market will bear, or, they can work for the “prevailing wage” paid to those professions.

Whether you like the private enterprise system or not, it is the ONLY economic system that encourages, even allows HUMAN FREEDOM.

When all goods and services are run by/controlled by the government, the worker/commodity provider is, by definition, NOT free. When a government goes rogue and seeks to stamp out human freedom and initiative by exerting control over the economy, that government becomes a de facto “slave owner.”

Government is the ONLY means by which a monopoly can exist. In an open or free market, a given enterprise can only garner 90% or more of the market by offering goods and services at prices and of a quality that the consumer prefers over all others. Once that enterprise stops doing that, it will lose market share and lose it quickly.

ONLY government can maintain a monopoly because only a government can exert the force needed to circumvent and suppress the market. The Post Office only exists because the government bars competition in letter carrying. It has already lost huge swaths of the package shipping industry to more competitive rivals. AT&T was able to maintain its monopoly status only through government coercion and control.

The failure of government sponsorship is on display in two areas today; Right now, the USA has TWO failing “public options” for health care – Medicare and Medicaid. Medicare recipients paid into that system all of their lives, Medicaid is for the chronically poor. Those Medicare recipients who divested themselves of their assets before shifting to Medicaid, have NOT paid into that system. They paid their FICA taxes for their Medicare benefits, when they moved to Medicaid they willingly merged themselves with the chronically poor. Regardless, BOTH of those public options are now virtually insolvent – they owe more than they can possibly take in.

Moreover, many doctors (and the numbers increase annually) refuse to take on any new Medicare or Medicaid patients.

With less than 4% of all physicians going into primary care the newly signed health care bill will allegedly add 31 million new patients to the system. Not only is there a “doctor shortage” right NOW in the field of Primary Care, many doctors have looked at the reimbursement rates and found they could no longer continue in Primary Care medicine at those rates and under the new conditions/restrictions.

We appear to be heading for a “health bubble” burst that could be even worse than the ongoing subprime mortgage/global credit crisis.

And speaking of bursts, the second existing failing government sponsorship is currently on display with the Housing GSE’s (Fannie Mae and Freddie Mac, as well as the “third GSE, the Federal Home Loan Bank System), ALL of which are deeply in debt because of their foolishly embracing inane utopianist schemes to equalize Americans and create yet another “commodity (housing) as a human right.” This was the result of a rogue government’s adhering to a blatantly unconstitutional concept (“disparate impact”) rooted in an equally unconstitutional concept of EQUALIZING people. Liberty REQUIRES IEQUALITY and the greater the inequities and disparities in wealth, the MORE FREE a nation is.

And yet, today there is neither any doubt, nor debate about whether these inept government policies (ie. looking to make sure that traditional lending criteria don’t “discriminate” against low income and poorer Americans) were completely responsible for the subprime mortgage meltdown and the subsequent global credit crisis.

So now, that same inept rogue government wants to equalize health care between wealthier and poorer Americans? The result would be even more horrific than the subprime mortgage disaster!

The ONLY right way to cut America’s health care costs is to offer a universal bare-bones “public option” that would take the onus of providing health care off the backs of American business and its Municipalities and put it back on the taxpayer and further upon the individual – as individuals would be responsible for paying for the privately available gap insurance needed to avoid the strict rationing and tight restrictions of that bare-bones public option on their own. That way, those least able, as well as the most reckless and irresponsible among us would be rationed and the health care system would be far less abused.

Commodities can’t be free unless the people are not free.

When home ownership is given to the poor via 0% down, subprime mortgages, the productive, working Americans pay the ultimate price. It’s the same thing when high tech, high-cost health care is given to those unable/unwilling to pay the premiums for it, that guarantees the abuse and overuse of that healthcare system and the same kind of crushing “bubble burst” we just saw with the collapse of the housing market due to a number of ill-conceived, government-inspired policies designed to make home ownership available to “Americans it hadn’t been available before.”

We DON’T need any more hair-brained schemes designed by hair-brained political hacks set up to equalize people in violation of a Constitution that enshrines inequality (freedom is inequality) and “disparate impact” (individualism mandates disparate impact between BOTH individuals and groups), we NEED to accept the inequities that individualism, private property rights and economic Liberty inevitably result in, for those inequities are, in fact, the mainspring of human progress!


Early Light said...

An interesting essay. I don't agree with everything here, but I certainly called attention to this in my most recent post. (Meanwhile, I can't help but wonder if I don't agree with you on every point only because I need to research the topic more.)

Keep up the great work!

Early Light said...

One point I would like to make, is that there are occasions when organized crime enforces a monopoly. It sometimes goes so far that organized crime becomes a de facto government. In cases where we see this occur recently, this is known as State Capture. I saw some posts about this at another blog. Under those circumstances, since organized crime is the de facto government, your premise that only government can enforce a monopoly holds. However, when organized crime is less established, it can still enforce a monopoly, though it does not exert the control a government exerts.

I think your comments comparing excessive government to slavery are right on the mark, but perhaps don't go far enough. I'm not sure if we can go far enough in warning people of the danger excessive government poses.

To my way of thinking, if the tax rate is 100% - all that I produce goes to the government - and I have no say in the matter, I am a slave. If the tax rate is less than that, and I am satisfied both with it and with my voice in government, then I could argue I am a citizen. Somewhere in between, we cross some lines, becoming - what? subject? serfs? - until we finally are merely property.

I would be interested to read your thoughts on this.

JMK said...

You're right that under certain specific circumstances, organized crime can act as a "protection rackett," similar to the one that government runs. Government advocates inanely claim that without government "protection" the market couldn't operate.

That is untrue as private enterprises would, absent government's police protections, pay for private security forces, which would arise to fill that need.

"To my way of thinking, if the tax rate is 100% - all that I produce goes to the government - and I have no say in the matter, I am a slave." (EL).....Actually, it's more stark than that. If the government takes any portion of your property (and earned income IS property) against your will, you're a slave, it's only a matter of degree.

Of course, the government does NEED to be funded and so we've all come to accept income taxes, but there are many other less abusive forms of taxation that don't violate our private property rights.

One example would be the Fair Tax which taxes consumption, via a fixed national sales tax of between 17% and 21% which would replace the income tax, FICA taxes, Corporate taxes (which we pay as they're all passed along to us as consumers), the inheritance tax etc.

Still getting back to your point about the 100% tax Arthur Laffer (of the "Laffer Curve" fame) said, "There are 2 income tax rates that would yield 0% revenues - 0% and 100%."

Did you know that the Reagan tax CUTS increased tax revenues greatly?

Did you know that when the Gingrich Congress slashed Capital Gains rates by 1/3 from 30% to 20%, Cap gains revenues soared?

So did income tax revenues after the G W Bush across the board income tax rate cuts.

Dumb Leftists insist that "Revenues would've been higher IF people had paid the older rate on all that newly declared income and invested as heavily at the 30% Cap Gains rate."

The reason income tax revenues go up when income tax rates are relatively low is because "people respond to incentives." When rates are low, the top 10% of income earners (who pay over 70% of all income taxes) take more of their income upfront, and when income tax rates rise, defer more of their hard-earned money in various tax-deferred vehicles.

Same with investors, when Cap gains rates are lower, people are willing to take more risks (invest and speculate) because there is more in it for them.

As to people becoming property, YES< there are at least two ways people become property (slaves/serfs), one is via the eradication of private property. If you can't own property you are property and the other is via confiscatory taxation.

What level does "confiscatory taxation" start at?

I'd say when you pay anything above 50% of your income directly to the state - including the federal, state and local income taxes, then that's probably confiscatory, in my book.

Of course that's a definition open to conjecture and opinion. Some might say anything above a third is confiscatory (and I wouldn't necessarily disagree), others might say the "confiscatory rate" is above 65% (I'd strongly disagree, seeing that as far too high).

Of course, there is a HUGE price for confiscatory taxation - economic lethargy. No one works hard, when the government takes more than half. Free time becomes more valuable as government artificially decreases the value of labor via high tax rates.

JMK said...

"Somewhere in between, we cross some lines, becoming - what? subject? serfs? - until we finally are merely property." (EL)

A great book by a man far smarter than I (Friedrich Hayek) is The Road to Serfdom (, another is by the great Henry Hazlitt entitled Economics in One Lesson ( course Milton Friedman's 10-Hour series Free to Choose (available online at is also incredible.

What's incredible is that there is no evidence that bolsters the Command or government-run economy and virtually unlimited amounts of evidence that shows that more economic Liberty (free markets) equals MORE prosperity, but none of that means anything to far-Left ideologues intent on gaining power and ruling/lording over others.

Early Light said...

A lower tax rate generally has resulted in more tax dollars being paid.

Of course, for income tax, there is a rate where, if you go this low, the government doesn't get enough to function. I have no idea what it is, and the way these guys work in Washington, it doesn't look like we're in any danger of finding out soon.

One of the main reasons I would never support a national sales tax is that, despite whatever those snakeoilsalesmen in Washington said, they would establish the national sales tax, but they would neither repeal nor significantly diminish the income tax, and so we would be getting it in two directions.

It is important to remember that they vote themselves a pay rate adequate to be able to afford ways around excessive taxation and, in any case, the lobbyists would step up to the plate to take care of them.

These guys in Washington keep giving us the same things that made the Soviet Union collapse, that make Cuba suck, and so on.

I don't encounter many people who understand this, and you seem to have a very good handle on it.

"If you can't own property you are property"

A great many people do not understand this connection, and I will admit I do not understand it as well as I should.

What use is Freedom of the Press if you do not own a computer, a photocopier, an Internet server, and other means of publishing your ideas? Without property rights, it exists in name only.

Similarly, what use is Freedom of Religion if you do not own your holy scriptures and a place to meet and worship?

I would love to see you explain that, though, as you seem to have such a good understanding of these concepts, and you explain them so well.

JMK said...

"Of course, for income tax, there is a rate where, if you go this low, the government doesn't get enough to function." (EL)

Arthur Laffer pegged that rate at somewhere around 20%. He's another great economist and writer.

Although, I've long said that we NEED to set the tax rates low enough that government is FORCED to cut already does far too much and the more it spends, the more it wants to spend!

You could almost certainly cut the federal budget by 15 - 20% and cut nothing but waste, excess and duplication of services.

I'd cut deeper....we MUST confront our ridiculous level of "entitlement spending."

JMK said...

"What use is Freedom of the Press if you do not own a computer, a photocopier, an Internet server, and other means of publishing your ideas?" (EL)

I definitely understand your point, although it isn't merely you, nor I, nor any specific "person-x," who as an individual needs to publish, so long as there is no government barring any of us from doing so.

If I either choose not to own a computer nor have internet access in my home, OR, if I do so poorly financially that I can't afford those, then those are "personal issues," or choices.

But if government bars any of us from publishing freely THAT is censorship and that is tyranny.

You can see how so many confuse the issue when private sector companies fire controversial spokesmen or members, as the Atlanta Braves did with John Rocker over his disparaging NYC, and WABC Radio did with Bob Grant for his callousness over Ron Brown's death in the Balkans.

IF the government had demanded their firings and those companies submitted to government pressure, THAT would be "censorship" and an abridgment of those folk's 1st Amendment rights, BUT private concerns (in the aforementioned cases, the Atlanta Braves & WABC Radio, a subsidiary of Disney at the time) have a right to protect themselves from controversies they want no part in, controversies that could alienate customers and impact their ability to do business. So Disney firing Grant and the Braves (through Turner Enterprises) releasing Rocker did not violate their 1st Amendment rights.

It's amazing how many people rail about "censorship" when those they agree with are fired by a private entity and applaud when those they disagree with are treated the same way.

In my own personal view, Rocker's tirade about NYC wasn't all that "over-the-top" and was in many respects true (and I grew up in NYC) and Bob Grant's tongue-in-cheek lament, "My luck, the only survivor will be Ron Brown," (Brown didn't, no one survived that helicopter crash) was merely a joke done in poor taste, BUT both those entities had a right to do what the government has NO right to - remove them from their organizations.

JMK said...

"Similarly, what use is Freedom of Religion if you do not own your holy scriptures and a place to meet and worship?" (EL)

Again, a fine point, although I'd note that it isn't our own individual access to scripture and a place to worship, but government's barring or actively discouraging such actions (ownership of scripture, public worship, and freedom of religion) that would violate the 1st Amendment.

If you and I lived in a small town where no Church existed and no book store sold the Bible, we could (absent governmental abuse/tyranny) set up a meeting place, if only for us at the start) and order a Bible online and solve our personal access issue.

It's only when government bars certain established religions or sanctions a "State Religion" (ie. as the Anglican Church or "Church of England" was in Great Britain) that it violates our freedoms/LIBERTY and violates the 1st Amendment.

The irony is that the Bill of Rights(the 1st TEN Amendments to the U.S. Constitution) RESTRICTS government action.

The Founders never enumerated our INDIVIDUAL Rights, because, (1) they were too many to list and (2) they felt it more vital to enshrine the LIMITS of government, thereby ceding ALL other responsibilities to the individual.

That's why the 9th and 10th Amendments are the two most forgotten and overlooked Amendments of all....and perhaps, the MOST important.

They make clear that aside from the very few and specific powers granted to the federal government (military, minting and coining currency and regulating interstate commerce - which originally ONLY meant making sure that PA, for instance, didn't bar NJ businesses from conducting business in that State) ALL Other powers were assigned to the individual states (9th Amendment) and ALL powers NOT expressly assigned to the government belonged directly to the people themselves (10th Amendment).

Since the early part of the last Century, we've ignored those two vital protections/Amendments.

First, via the 16th Amendment that instituted an Unconstitutional excise tax on income, which was not, as the Constitution demanded all excise taxes be equally apportioned, and with the Federal Reserve Act, which took the responsibility of minting/coining our currency FROM Congress and handed it over to a consortium of privately owned Banks (the "Federal Reserve System" comprised of its 13 member Federal Reserve Banks), continuing on through the "New Deal, with Social Security, through LBJ's Great Society, with Medicare & Medicaid and onward to this day, where government seeks control and dominion over all facets of life and commerce in America.

How did all this happen?

It happened because the LIBERTY (enshrined by America's Founders), which is the FULL WEIGHT of self-ownership and the ponderous self-responsibility that goes with that is HARD, and the "freedom" of "free stuff" and government taking care of all, is EASY.

Problem is, ONLY Liberty (self-ownership/responsibility) is true "freedom," and what many today call "freedom" is merely LICENSE. A License that leads to dependency and a universal slavery to the State.

JMK said...

To give you an idea of how long this usurpation of powers has been going on, EL, here's a GREAT quote from the late, GREAT Lysander Spooner (circa 1863);

"The question of treason is distinct from that of slavery; and is the same that it would have been, if free States, instead of slave States, had seceded.

"On the part of the North, the war was carried on, not to liberate slaves, but by a government that had always perverted and violated the Constitution, to keep the slaves in bondage; and was still willing to do so, if the slaveholders could be thereby induced to stay in the Union.

"The principle, on which the war was waged by the North, was simply this: That men may rightfully be compelled to submit to, and support, a government that they do not want; and that resistance, on their part, makes them traitors and criminals.

"No principle, that is possible to be named, can be more self-evidently false than this; or more self-evidently fatal to all political freedom. Yet it triumphed in the field, and is now assumed to be established. If it really be established, the number of slaves, instead of having been diminished by the war, has been greatly increased; for a man, thus subjected to a government that he does not want, is a slave. And there is no difference, in principle - but only in degree - between political and chattel slavery. The former, no less than the latter, denies a man's ownership of himself and the products of his labor; and asserts that other men may own him, and dispose of him and his property, for their uses, and at their pleasure.

"Previous to the war, there were some grounds for saying that - in theory, at least, if not in practice - our government was a free one; that it rested on consent. But nothing of that kind can be said now, if the principle on which the war was carried on by the North, is irrevocably established.

"If that principle be not the principle of the Constitution, the fact should be known. If it be the principle of the Constitution, the Constitution itself should be at once overthrown."


JMK said...

""If you can't own property you are property" (JMK)

"A great many people do not understand this connection, and I will admit I do not understand it as well as I should." (EL)

The fact that it resonates with you shows that you understand it better than most, certainly far better than those who don’t.

A free, self-owning person can own property and take the responsibility for the care and upkeep of that property (either residential or commercial), just as they take full responsibility for themselves.

A non-free/non-self owning individual can’t “own” property because property can’t possess other property. How can an individual not free to maintain him/herself and take on the responsibilities of self-ownership, be able to take on the responsibilities of ownership of other property?

How can a slave own another slave?

The short answer is, "A slave cannot own anything, since he doesn't even own himself."

Fundamentally, anything or any ENTITY that can control you - limit your actions or tell you how your commerce is to be conducted, in effect, “owns” you, as “ownership” is most evidenced by such control.

Before America’s Founders (Jefferson, Franklin, Adams, Madison, Jay, et al) incredible experiment in individual Liberty, ALL humans were “subjects”/property of one Monarch or another. America’s Founders set up the FIRST government in recorded human history that was, in effect, a “subject”/property of the people of that nation!

Compare that, to the incredible juxtaposition we have today, where our “servant government” has dictated to privately owned banks, condemning traditional lending criteria as having a “disparate impact” on low-income people.

Skunkfeathers said...

A superb analysis. One that a generation of "welfare entitlees" will never, EVER understand, and the politicians that wish to keep them thus to feed off their votes, will never accept or allow, as long as enough of their philosophy can block, stymie, and demonize any attempt at legitimate reform.

JMK said...

"A superb analysis. One that a generation of "welfare entitlees" will never, EVER understand..." (SF)

One thing is in our favor and it's a BIG the great Maggie Thatcher was so fond of saying, "Reality is Conservative," meaning that failed collectivist policies ALWAYS deliver failed results and ultimately such implode (as our economy did in the late 1970s after nearly a decade and a half of escalating Keynesian policies).

Maggie Thatcher was and remains right and we'll see the implosion of these Keynesian policies soon enough.

The cure, especially for those handicapped by hand-outs, is going to be difficult.

JMK said...

N.B. "The cure, especially for those handicapped by hand-outs, is going to be difficult." (JMK)

Just to be clear, by "DIFFICULT," I mean, of course, somewhere between seriously and hideously PAINFUL.

Some will adjust to the ensuing contractions better than others.

Generally, the more marketable skills you have and the more diverse your skill-set, the better off you are....which is only common sense, BUT we're just leaving a period when the quality and range of one's skill-set was NOT always paramount.

In fact, Obama-care still has anachronistic "racial preferences for various medical professions built into it. And YES< the bulk of those will (as usual) go to foreign-born "non-whites" as opposed to "American-born minorities." A fact that underscores the abject futility of such preference programs.

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