The Role of Profits in Free-Market Capitalism, and Why High Profits are Good for a Company’s Workers

Underpants Gnomes Meme - Phase 1: Physical Labor Phase 2: ? Phase 3: ProfitWhether people like it or not, it is a fact that the production of valuable things requires more than physical labor. (I’m looking at you, Karl Marx, with your Labor Theory of Value and “profit as exploitation.”) This is especially true when it comes to industrial-scale mass production. To successfully deliver products at a reasonable price and quality, a company must be organized in certain ways that are effective; there must be communication and coordination between the various departments; there must be management to make sure things keep running smoothly together and that timetables are kept; there must be wealth invested for buildings, machinery and raw materials in the right amounts; any machinery and facilities must be continually maintained; there must be management of sales and distribution of the product; etc.

A collection of factory workers without power tools, without specific roles and without management direction will produce very little and very inefficiently. In any line of business, there is a tremendous amount of strategy, business planning, technical planning, management, and industry knowledge that goes into making a company productive and successful.

As I discussed in my essay, “How Business Executives and Investors Create Wealth and Earn Large Incomes,” a company’s chief executive officer (CEO) carries tremendous responsibility: he is crucial in making large-scale decisions for the company, implementing and coordinating major changes, planning long-term for the future market and technology the company will face, formulating and holding onto a large-scale vision of where the company should go, etc.

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The Ayn Rand Institute’s 2015 Summer Conference (OCON) Just Wrapped Up

The Ayn Rand Institute (ARI) holds a conference every summer in a different city. Objectivists, students of Objectivism, and other people interested in Ayn Rand‘s philosophy travel from around the country to meet each other and hear talks by experts in various fields. The speakers discuss the ideas of Objectivism and their applications in life, science, and the arts, and answer questions from the audience. It is a very educational event, and a way to meet new people interested in ideas. (For the veterans of OCONs past, it’s also a chance to see old friends.) I definitely recommend it.

I went to OCON 2014 in Las Vegas, but was unable to go this year. But I look forward to videos of some of the major talks being released on ARI’s YouTube channel, as they were for OCON 2014.

There’s a fee to attend OCON, but that fee is reduced quite dramatically for current students and young adults. (Students can even apply for scholarships to cover the costs of travel and lodging.) If you are a student or young adult, I especially recommend taking the opportunity to attend at least one OCON. It’s a great opportunity to take a break from mundane things, meet great people, and learn more about Ayn Rand’s deep philosophy in a benevolent, congenial and exciting atmosphere.

You can subscribe to the Ayn Rand Institute’s Facebook and Twitter pages to see announcements when registration for next year’s OCON is open.

Here is the cvent page for OCON 2015, and here’s a list of upcoming ARI events.

Here are a couple of talks from last year’s OCON:

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Related Posts:

Introduction to Objectivism

Why the Philosophy of Objectivism is Still Relevant and Needed in the Age of Modern Science

Ayn Rand’s Philosophy vs. Abortion Bans: Why a Fetus Doesn’t Have Rights

The Wages of Altruism: Domestic Abuse

What Caused the Financial Crisis: It Wasn’t Capitalism or Deregulation

Why “Selfishness” Doesn’t Properly Mean Being Shortsighted and Harmful to Others

Carpenter Working with Pencil and HammerThe definitions of the terms we use have consequences for our ability to think and communicate clearly.

Imagine for a moment that your friend told you that he defines “carpenter” as “one who shapes wood by shooting it with a gun.” You’re baffled and you ask him what word he uses for someone who shapes wood by other means, such as a saw, lathe and sander. He says that he really has no word for this. He has a couple of synonyms for “carpenter,” but they also carry the implication that the person shaping the wood used a gun.

Hopefully, you can see that the problem with this hypothetical situation is not merely that you and your friend are using terms differently: shooting wood with a gun is a terribly impractical way of shaping it into useful forms. If the only concepts you have of wood shaping mean using a gun to do it, then you can’t really talk about those who shape wood using the practical methods in their profession.

Ayn Rand held that the common concept of “selfishness” is in an exactly analogous position to your hypothetical friend’s use of “carpenter.” At root, “selfishness” means pursuing one’s own interests and well-being. But the common use today adds in a second element: “pursuing your interests/well-being by means that are shortsighted and hurtful to others.” In today’s culture, the approximate synonyms of “selfishness,” such as “egoism” and “self-interest,” tend to be regarded with the same connotations of shortsightedness and harmfulness, so they are not much different.

Yet Ayn Rand rejected the idea that being shortsighted and hurtful to others is inherent in pursuing one’s interests and well-being. In fact, she recognized that the pursuit of one’s genuine interests in everyday life is specifically the opposite of “shortsighted and hurtful to others.” An individual’s genuine interests require long-term planning to fulfill, and his well-being is not served by doing harm to others. Attempting to pursue one’s self-interest by shortsighted and hurtful means is like trying to shape wood into a beautiful chair by shooting it with a pistol: utterly doomed to failure.

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Earth Day Video: Why You Should Love Fossil Fuels

On Earth Day, let’s pause and reflect on how much better fossil fuels have made our lives and our environments:

The burning of fossil fuels to generate plentiful energy has given us the opportunity to live in a prosperous, industrial civilization. Burning fossil fuels gave us the opportunity to invent nuclear and hydroelectric. And if people are left free (by the government) to innovate, it will likely also give us the opportunity to invent other energy sources that can fully replace fossil fuels, before they run out. (Solar and wind, in their current states, don’t even come close.)

Read Alex Epstein’s book: The Moral Case for Fossil Fuels

Visit the website of the Center for Industrial Progress

Twitter:

@AlexEpstein (Click here)

#ILoveFossilFuels (Click here)

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Related Posts:

Fossil Fuels and Environment: McKibben vs. Epstein, Full Debate

Book Review — RooseveltCare: How Social Security is Sabotaging the Land of Self-Reliance

RooseveltCare: How Social Security is Sabotaging the Land of Self Reliance, by Don Watkins book coverMost American conservatives, today–however “radical” or “extremist” the political Left calls them–do not openly challenge “big government” in the form of Social Security and Medicare. While some seek a complete repeal of the recent ObamaCare legislation, at most, they want to “reform” these other two programs by a scheme of partial privatization.

Yet, in his recent book, RooseveltCare, Don Watkins demonstrates that the United States grew, prospered, and did quite well at providing for old age for 158 years, before FDR and his fellow “Progressives” pushed Americans into accepting the Social Security program. Watkins also shows that, ultimately, a complete repeal of Social Security is the only moral course of action; any lesser measure, as the ultimate goal, is morally wrong. Social Security is basically an inter-generational Ponzi scheme that is morally bankrupt and does nothing but harm.

RooseveltCare is divided into 2 parts: “The Story of Social Security” and “Social Security: A Verdict.”

The first part is a thorough survey of the history of the United States as it relates to Social Security. The account of the culture of American self-reliance prior to Social Security is inspiring and enjoyable. It includes the plethora of options ordinary people had in dealing with old age and life’s unexpected challenges, both in preparation and response. The account of the rise of Social Security and the welfare state makes clear that these government programs were not something that most Americans considered an obvious necessity, even during the government-created Great Depression. Social Security was pushed by “Progressive” intellectuals, on Americans who had no intellectual defense, (and some operative elements of the un-American morality of self-sacrifice, making them susceptible.)

The second part of RooseveltCare is an exploration of the moral status of Social Security. It takes the arguments of Social Security’s proponents seriously and persuasively shows why they are wrong, (such as that Social Security is an “earned benefit.”) It discusses how and why Social Security is destructive to Americans’ economic and moral well-being. It discusses why “reforms” of the Social Security system are not a morally acceptable endpoint: ultimately, only a complete phase out of the system over a finite number of years will do.

I highly recommend RooseveltCare: How Social Security is Sabotaging the Land of Self-Reliance, by Don Watkins. It contains fascinating history, and will help give most people a stronger appreciation for the benefits of liberty and the culture of self-reliance. Workers in 19th-Century America were not downtrodden and were not starving in the streets. Starting out poor was not considered an indignity, to be “corrected” by handouts, but an honorable condition to be improved by diligent work on one’s own behalf. (A huge number of Americans in fact did improve their lot quite significantly this way.) It was, rather, accepting unearned charity and handouts that were often considered beneath one’s stature as a self-reliant adult.

The “Progressive” movement changed these attitudes and made unnecessary dependency morally acceptable in most American’s eyes. This opened the way for government redistribution, and has led to a host of destructive effects, including the destruction of wealth and the elimination of opportunities for investment in new technologies.

If we Americans want a bright future of prosperity, technology, opportunity and self-esteem for ourselves and our children, we need the majority of the population to understand the moral and economic need to completely phase out government entitlement programs. As a first step, we need as many thoughtful people as possible to read Don Watkins’ book:

RooseveltCare: How Social Security is Sabotaging the Land of Self-Reliance

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Related Posts:

19th-Century Capitalism Didn’t Create Poverty, But Reduced It

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Socialism and Welfare vs. Justice: Why Inalienable Private Property Rights are Required for Justice

America Before The Entitlement State

Socialism and Welfare vs. Justice: Why Inalienable Private Property Rights are Required for Justice

A farm and a factory: examples of property that requires effort to build.In 1816, Thomas Jefferson wrote:

“To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “the guarantee to every one of a free exercise of his industry, and the fruits acquired by it.””

Here, Jefferson is affirming the principle of individual rights, especially property rights. But don’t property rights sometimes stand in the way of justice? In any such cases, wouldn’t it be a moral imperative for government to violate property rights?

The purpose of this essay is to show that inalienable private property rights are a necessary condition of justice. That is, any violation of property rights implies injustice, to the extent of the violation. Please note that it is not the purpose of this essay to argue that property rights guarantee justice. Objectivism does not hold that property rights are a sufficient condition for justice, only a necessary condition. There is much injustice that can occur without violations of property rights. But no one, including the government, can rectify such injustices by violating property rights. Anyone attempting to do this is in the wrong, morally.

So, what is an inalienable property right? It is a principle specifying that no one else may take or otherwise use the thing a person has a right to, without that person’s permission. (All things properly called “rights” are inalienable–that is, they cannot morally be taken away; otherwise they are not “rights,” but grants of permission by someone else. Note also that one person’s rights can be waived by him, by the act of violating another person’s rights.)

A property right to a certain, distinct thing–call it “X”–is properly acquired by either 1) engaging in a productive process directly involving X, when it is not already owned by someone else, or 2) consensually trading things or services with another person for X, when that person owns X, or 3) receiving X as a gift from another person, when that person owns X. A “productive process” might be farming to produce food, building a home, building a factory, making shoes, writing software, providing services, like air conditioning repair, radio, television, movies, etc.

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What Squeegee Bandits Can Teach Us About the Welfare State (Voices for Reason)

Don Watkins makes an excellent and concise point about consent and moral responsibility in this blog post at Voices for Reason:

What Squeegee Bandits Can Teach Us About the Welfare State

Here’s a bonus video: “Is Inequality Fair?” by Yaron Brook of the Ayn Rand Institute:

 

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Related Posts:

America Before The Entitlement State

19th-Century Capitalism Didn’t Create Poverty, But Reduced It

How to Show That Taxation is Robbery

On Fairness and Justice: Their Meanings, Scopes, and How They Are Not the Same

The Nature of the Morality of Rational Egoism: Short Notes

Student suspended for questioning CT Governor on Gun Legislation

First, government officials come after your Second Amendment rights. Then, when you peacefully question them about it and tell them that they’re destroying your business, government officials violate your First Amendment rights to shut you up! (Note that Asnuntuck Community College is a public/government institution.) All hail the coming police state!

Two Heads are Better Than One


Shut up

If you’re one of the many folks upset about Connecticut’s new gun laws, that state’s governor has a message for you: Shut Up.

Courtesy of the Daily Caller:

“…student Nicholas Saucier tried to get (Democratic Governor Dannel ) Malloy to answer questions about his support for gun control legislation, which has put Saucier’s ammunition manufacturing business in jeopardy. Saucier followed Malloy to his car after the governor finished speaking at a public forum at Asnuntuck Community College.

The exchange took place in October of last year, and was captured on video…” 

Sounds relatively harmless so far, right?

Now here’s the video:

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An Objectivist Refutation of Anarcho-Capitalism (Market Anarchy)

Free Market Revolution

A work discussing Ayn Rand’s morality in relation to the fight for freedom. This book is not the source of this essay.

Many people who consider themselves libertarians also consider themselves “anarcho-capitalists.” (AnCaps) They don’t believe there should be a government with a monopoly over the use of retaliatory force in a given geographic area. Yet Ayn Rand’s philosophy of Objectivism advocates for such a monopoly government. AnCaps believe that Objectivism is misguided, because they hold there is a contradiction between advocating for the Non-Aggression Principle (NAP) and advocating for a governmental monopoly that is prepared to use force to exclude competitors.

This essay will show how Objectivism is right, and there is no contradiction between upholding the Non-Initiation of Force Principle (NIFP) and advocating for a monopoly government. It will show that a certain kind of governmental monopoly is necessary for the protection of people’s individual rights; that is, the protection of people from initiatory and unjust coercion. I think you’ll find that an Objectivist critique of anarcho-capitalism is rather different from other criticisms of anarcho-capitalism and anarchism.

[Note: A summary of this essay appears at the end. But please read the whole essay before criticizing.]

We Currently Live Under Market Anarchy and the “Market in Force” Has Failed: Now What?  [Permalink]

So what is “market anarchy?” At the most basic level, what market anarchists think they are advocating for is to “let the market decide” what sorts of measures are taken for the retaliatory use of force against aggressors. In other words, they think they are advocating for unrestrained individual choice in the use of force. They think that, if only individual choice were “freed from a state,” the result would be smaller, Private Defense Agencies (PDAs) and/or private Dispute Resolution Organizations (DROs).

But if “market anarchy” means “unrestrained individual choice in the use of force,” then there is literally nothing that any individual–or any private defense agency–could do that would stop a condition of market anarchy from prevailing. The unlimited discretion in the use of force that AnCaps assign to each individual client of a defense agency, also applies to the individuals that compose the defense agency. So people can choose to have a defense agency that permits the mutilation of babies’ genitals, the killing of children for “dishonoring” their families, that punishes theft by dismemberment or death, that preemptively kills suspicious neighbors, and this is all covered under the label “market anarchy.” Similarly, any defense agency can collect taxes, coercively regulate business, arbitrarily abduct its clients to walled compounds, restrict sales of guns, conduct wars of aggression and crush other defense agencies, all under the label of “market anarchy.”

So, actually, the entire world is in a state of market anarchy, by the above definition. Those AnCaps in the territory of the USA are entirely free to form their own defense agencies and compete for clients with the giant, bloated defense agency that is the US Federal Government. The “market in force,” which is “unrestrained individual choice in the use of force,” has produced this behemoth. Defined this way, the AnCap “free market” has chosen a coercive state as its defense agency. And it should be plainly obvious to any reasonable AnCap that, in this current market, start-up defense agencies cannot hope to compete with the US Government. Humans started stateless, then got into tribal wars with each other, and later formed states as their DROs that startups can’t possibly compete with. Where were the anarchic “market forces” that were supposed to prevent this from happening the first time? This is a “market failure” at its most spectacular.

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A Reddit Discussion of Anarcho-Capitalism (Market Anarchy)

Capitalism-The Unknown IdealThis post is an adjunct to an essay refuting the theoretical basis and practicality of “anarcho-capitalism” or “market anarchy.” It is a reproduction of a discussion on a public area of reddit. I am Sword_of_Apollo and I am debating Liber-TEA, a proponent of anarcho-capitalism.

RobO2112: A truly Objectivist government wouldn’t be in the business of telling people what to do and how to do it; government, as understood by Objectivists, has one purpose and that is to protect the rights of individuals from coercion and fraud, and nothing else. So it’s kind of an odd question. To an Objectivist it would read like, “What would an Objectivist government do with people who do not consent to having their rights protected from force and fraud?” And I have to venture that the answer would be, “nothing, so long as they do not violate anyone else’s rights.”

Liber-TEA: But what if I disagree with the application of that, or I disagree with a particular law ideologically?

Sword_of_Apollo: Then you have to speak, reason, persuade. If the government allows people to opt out every time they disagree, then any criminal can get away with murder by invoking the fact that he disagrees with the idea that what he did should be punished. If the government allows people to opt out at all from its ultimate authority, (even if they have not yet committed a crime) then it has nullified its own ability to protect rights.

If the person sets up laws that are coercive, and the government says, “Oh, we’ll just make a compromise between your laws and ours,” then imagine what kind of destruction would be wreaked on justice.

What would a “compromise” look like between one law system that protects children from honor killings, and another that allows them? The parents get to cut off the child’s right arm and completely destroy her genitals?

Liber-TEA: And what if you can’t persuade me?

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