“The whole of economics can be reduced to a single lesson, and that lesson can be
reduced to a single sentence. The art of economics consists in looking not merely
at the immediate but the longer effects of any act or policy; it consists in tracing
the consequences of that policy not merely for one group but for all groups.”"Economics is haunted by more fallacies than any other science known to man.”
– Henry Hazlitt in Economics in One Lesson

For instance, I may choose not to drive a car, or purchase gasoline – but I may not choose not to pay my taxes, which are used to build and maintain our roads. (This is not an argument for privatizing roads, just an example of choice vs. force.). The principal is simple: If I am unable to simply say one word, “No” – then I am being forced to act, forced to work, forced to serve someone else with my mind.

A common criticism of this discussion is that it is too abstract or, for instance “doesn’t feature a single word about policy.” I would simply argue that a philosophical understanding of why government exists, how it functions, and what its role should be is far more essential than any policy discussion. In fact – it must pre-empt policy discussions. Policy is decided long after people have already made assumptions about what government can and should do.

Many people have written about the proper role of government in the past, but sadly, their ideas are substituted in favor of chatter about this or that policy. For the person who perhaps hasn’t taken a moment to think about the core issue, “What is the role of Government,” allow me to present two arguments about the proper, and improper use of force (Government being an institution of force).

The following is an excerpt from John Galt’s speech toward the end of Atlas Shrugged. It highlights some important points about the use of force that must be considered when talking about government functions, since (in America at least), Government is the only institution granted the monopoly use of force. This is a bit of a mild spoiler if you have not read the book – so if that is the case, you may wish to come back to this after reading the book. The video clip is just an excerpt, so be certain to skip to the text below. I have added emphasis.

“Whatever may be open to disagreement, there is one act of evil that may not, the act that no man may commit against others and no man may sanction or forgive. So long as men desire to live together, no man may initiate-do you hear me? no man may start-the use of physical force against others.

“To interpose the threat of physical destruction between a man and his perception of reality, is to negate and paralyze his means of survival; to force-him to act against his own judgment, is like forcing him to act against his own sight. Whoever, to whatever purpose or extent, initiates the use of force, is a killer acting on the premise of death in a manner wider than murder: the premise of destroying man’s capacity to live.

“Do not open your mouth to tell me that your mind has convinced you of your right to force my mind. Force and mind are opposites; morality ends where a gun begins. When you declare that men are irrational animals and propose to treat them as such, you define thereby your own character and can no longer claim the sanction of reason-as no advocate of contradictions can claim it. There can be no ‘right’ to destroy the source of rights, the only means of judging right and wrong: the mind.

“To force a man to drop his own mind and to accept your will as a substitute, with a gun in place of a syllogism, with terror in place of proof, and death as the final argument-is to attempt to exist in defiance of reality. Reality demands of man that he act for his own rational interest; your gun demands of him that he act against it. Reality threatens man with death if he does not act on his rational judgment: you threaten him with death if he does. You place him into a world where the price of his life is the surrender of all the virtues required by life-and death by a process of gradual destruction is all that you and your system will achieve, when death is made to be the ruling power, the winning argument in a society of men.

“Be it a highwayman who confronts a traveler with the ultimatum: ‘Your money or your life,’ or a politician who confronts a country with the ultimatum: ‘Your children’s education or your life,’ the meaning of that ultimatum is: ‘Your mind or your life’-and neither is possible to man without the other.

“If there are degrees of evil, it is hard to say who is the more contemptible: the brute who assumes the right to force the mind of others or the moral degenerate who grants to others the right to force his mind. That is the moral absolute one does not leave open to debate. I do not grant the terms of reason to men who propose to deprive me of reason. I do not enter discussions with neighbors who think they can forbid me to think. I do not place my moral sanction upon a murderer’s wish to kill me. When a man attempts to deal with me by force, I answer him-by force.

“It is only as retaliation that force may be used and only against the man who starts its use. No, I do not share his evil or sink to his concept of morality: I merely grant him his choice, destruction, the only destruction he had the right to choose: his own. He uses force to seize a value; I use it only to destroy destruction. A holdup man seeks to gain wealth by killing me; I do not grow richer by killing a holdup man. I seek no values by means of evil, nor do I surrender my values to evil.

“In the name of all the producers who had kept you alive and received your death ultimatums in payment, I now answer you with a single ultimatum of our own: Our work or your guns. You can choose either; you can’t have both. We do not initiate the use of force against others or submit to force at their hands. If you desire ever again to live in an industrial society, it Will be on our moral terms. Our terms and our motive power are the antithesis of yours. You have been using fear as your weapon and have been bringing death to man as his punishment for rejecting your morality. We offer him life as his reward for accepting ours.”

“This is John Galt speaking.” – Atlus Shrugged

Frederick Bastiat also illuminated this idea much earlier in The Law:

What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right — from God — to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend even by force — his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right — its reason for existing, its lawfulness — is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.

Such a perversion of force would be, in both cases, contrary to our premise. Force has been given to us to defend our own individual rights. Who will dare to say that force has been given to us to destroy the equal rights of our brothers? Since no individual acting separately can lawfully use force to destroy the rights of others, does it not logically follow that the same principle also applies to the common force that is nothing more than the organized combination of the individual forces?

If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

Clearly, Force in itself, is not an evil thing, just as guns in themselves, are not evil. However – applying force against an individual’s will is a violation of that individual’s basic human right to liberty. As Rand’s fictional character John Galt put it, to force someone to substitute their own will for yours or another’s, is to deprive that person of choice, or the proper use of their mind.

This brings us back to the core question: What is the proper role of Government? Or in other words – how can the collective force be used, in a manner than does not violate the rights of individuals? This question can be applied to all manner of topics: From National Defense, to Education, to Universal Health-care – the first question, the question that is more fundamental to every situation is – does this policy fall within the bounds of the proper application of force. How are we to determine this? Bastiat again helps with this quandary:

See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

As soon as government breaks out of its proper boundaries (its limits, which I believe were the very purpose of our Constitution), each individual’s mind is in grave danger. No – this isn’t some “black helicopters and tin-foil hats” nonsense, but you simply have to apply what you know about human nature, and add in the power of coercive force without proper function or limit. The bigger and more centralized a government program becomes, the greater number of individual wills are overrun by the relatively tiny will of the elected body. This is exactly the reason that conservatives favor smaller, more local initiatives (if they favor them at all). Programs and policies that claim to represent everyone, more accurately represent no-one. The closer a representative is to the people whom they represent (and the fewer people they represent), the more likely that their choices will align with the wills of the represented.

This is also the reason conservatives reject socialism and other collectivist philosophies. Not only do these philosophies have a history of mass atrocity, at their very core, they fundamentally act against the individual. Given human nature’s fatal tendency to dominate (by force) other human beings – it is easy to see the dangers of setting up systems which encourage and enable this ability.

Self-preservation and self-development are common aspirations among all people. And if everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing.

But there is also another tendency that is common among people. When they can, they wish to live and prosper at the expense of others. This is no rash accusation. Nor does it come from a gloomy and uncharitable spirit. The annals of history bear witness to the truth of it: the incessant wars, mass migrations, religious persecutions, universal slavery, dishonesty in commerce, and monopolies. This fatal desire has its origin in the very nature of man — in that primitive, universal, and insuppressible instinct that impels him to satisfy his desires with the least possible pain.

-Frederick Bastiat, The Fatal Tendency of Mankind -The Law

Back to the concept that conservatives being “short on policy.” There are people who believe that if only the “right policy” (the right application of force) were implemented, then everyone would benefit. This sounds like a nobel idea (and is classic among collectivists), but the ends do not justify the means. You cannot confiscate work, to encourage work. You cannot enslave, to set free. This is contradictory. Historian and Communist Howard Zinn penned the popular “A people’s History of the United States” (though I take huge issue with his use of Presentism) which catalogs the suffering and horrors of underdogs and people trampled by force throughout history. And yet – all the while, he supported the idea that “the right government” could wield force, or if “the right people” controlled the levers of power, it would benefit “the people.” Zinn spent his life demonstrating the destruction that the use of force wreaked on people, and yet never arrived at the idea that force cannot be initiated against the unwilling, even if done with noble intentions.

And this truth is the core of my argument. Firstly, I reject the group classification of “the people.” There is no such thing. There exist only totally unique individual human persons. Therefore, there is no way for any policy to be “right” for each individual person. Economist Thomas Sowell put it this way: “The most basic question is not what is best, but who shall decide what is best.” To take this question away from a person, and hand it a third party, is to remove the choice from the person with the best knowledge to make it. I think each person needs to decide what is best for themselves, their family, their children, etc. Not some elected group of “experts” claiming to act in the individual’s best interest.

This is why true conservatives advocate ideas that increase liberty. We don’t believe that if we only had “the right government,” or the “right policy” every societal ill could be corrected. We believe that each human being is an individual person, and thus do not address nameless, faceless groups, and classes of people. We do not create political mascots out of groups, such as “the rich,” “the middle class,” or “the poor” so that we can pit them against one another. Nor do we have the audacity to proclaim ourselves so above society that we can fix their problems with our magical policies, if they would only surrender us the power.

By advocating more liberty, given the dismal history of the human condition, conservatives are the true progressives. Liberty is the only situation where each individual is truly a person, capable of making the maximum amount of choice about their own life. With Liberty, the individual has rights and is not demanded by threat of imprisonment or death to surrender his mind, his choices, or his work to the will of another. A free man offers the product of his choices (or his mind) in exchange for something else of value. He determines what he judges to be a fair trade – not a third party. He offers true charity out of his own desire to help another person, not by edict imposed from the desires of a politician. He is not forced to work for someone else, neither does he force another to work for his benefit. In doing so – his rights do not necessitate the destruction or sacrifice of anyone else’s. The choices in his mind, do not command the minds of others.

Thus, the proper and only role of government is to protect human rights, or men’s minds from being violated by force.

“…That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”

Let us stop proposing policies which are destructive to this end. Let us not regress into soft-despotism and servitude. Let us progress, as a nation, with ideas that free individual’s minds.

Whenever you read Paul Krugman, it is always helpful to remember that this man won a Nobel Peace Prize in Economics. It might as well have been for Pushing Water Uphill. Here are a couple remarkable statements from his latest New York times column. That’s right…THE New York Times – where The Vision of the Anointed is valued above any rational thought:

Beyond that, this is a story that could happen only in America. In every other advanced nation, insurance coverage is available to everyone regardless of medical history. Our system is unique in its cruelty.

[...]

So you end up with a tripartite policy: elimination of medical discrimination, mandated coverage, and premium subsidies.

Above, Krugman is referencing the much lauded “pre-existing conditions” angle. Now, in a tiny way, I actually agree that often insurance companies can be extremely harsh in their restrictions regarding people who have pre-existing conditions. However, the problem here is the screwy way some companies define “pre-existing.” That should draw Krugman’s ire – not the fact that any pre-existing condition must be ignored. The latter concept is lunacy. What would be the incentive to purchase insurance, if you were guaranteed coverage regardless of any pre-existing conditions? The whole point of insurance being that you are paying someone else to pool the risk that you may or may not require healthcare. It is not “discrimination” to willfully take on exorbitant risk.

So what of Krugman’s solution: 1) Force insurance providers not to “discriminate.” Coercing and removing the risk for mortgage lenders to make less “discriminatory” loans sure worked out really well for the mortgage industry. 2) Mandate everyone purchase insurance to increase the risk pool. Good idea…except that the poor are immediately and totally screwed. His solution for that – subsidize the poor. His solution to pay for that subsidy – you guessed it – taxing other groups of people. This is a fine strategy, if you endorse using the law to plunder various arbitrary groups of individuals. Since the law’s sole purpose is to provide justice by defending a man’s life, liberty, and property, you should be able to see the obvious contradiction. In short – Krugman solution is practicing injustice to promote justice.

Also, with regard to his, “every other advanced nation…,” statement; massive entitlement programs are exactly why most of these nations are going broke. Apparently, in Krugman’s mind, it is considered “advanced” to not only be fiscally irresponsible, but also to proclaim that A is not A.

Next quote:

Can you imagine a better reform? Sure. If Harry Truman had managed to add health care to Social Security back in 1947, we’d have a better, cheaper system than the one whose fate now hangs in the balance.

The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

Posted via web from Andrew Colclough

First of all – to whoever reads this, I could care less which way you decide to vote on these measures. I think that assumptions of ill intent by anyone on either side of Measures 66 and 67 are foolish, and distract people from carefully weighing the issues logically. 

As anyone who knows me might have guessed – I’m not exactly enthralled with the two ballot measures, 66 and 67, which are currently facing Oregon’s voters. I have been trying to think them over for a while now, but I tend to think most clearly when I force myself to write my thoughts. Of course – before you read any further – you should read the actual bills yourself. Here is Measure 66, and here is Measure 67.

At this point, you have probably heard the talking point arguments from either side of the issue. Namely, that your choice is between hurting schools, teachers, and students (by voting against 66 and 67) or hurting corporations, jobs, and the rich (passing 66 and 67). Both arguments may be true, but I think there are some deeper concepts to consider.

“The most basic question is not what is best, but who shall decide what is best.”

 -Thomas Sowell

In my opinion, all political and legislative ideas should be judged by two key factors.

1. The vision they are built on
2. Their practical seen and unseen results

In this post – I am going to discuss the vision behind Measure 66. It is important to understand that by ‘vision,’ I do not mean the stated goals or intent of the policies. In fact – whatever the stated goal of policy happens to be, is almost entirely irrelevant to whether or not it is a good policy which would achieve that goal. When I say ‘vision,’ I am referring to the actual fundamental assumptions about society, law, and justice that the policy is built on.

Measure 66

Measure 66 raises taxes on a certain group of people who earn above a specified amount of income. In my view, there are several problems with the vision behind this bill, primarily, the vision of Law. Firstly, this tax is progressive in nature, as it singles out a specific group of people to be taxed at a higher rate than another group. From the way I view law, I believe progressive taxes are unjust.

The Law (including tax law) is meant to be an instrument of justice. Here the definition of “just” is especially helpful: 

“Equitable: fair to all parties as dictated by reason and conscience; “equitable treatment of all citizens.”  

A just Law then is the application of force against the inequitable treatment of citizens, or the violation of individual natural rights, such as life, liberty, or in this case, property. Friederic Bastiat wrote far more eloquently about this concept in the 1800s (Please excuse the long quote):

What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right — from God — to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend even by force — his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right — its reason for existing, its lawfulness — is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.

Such a perversion of force would be, in both cases, contrary to our premise. Force has been given to us to defend our own individual rights. Who will dare to say that force has been given to us to destroy the equal rights of our brothers? Since no individual acting separately can lawfully use force to destroy the rights of others, does it not logically follow that the same principle also applies to the common force that is nothing more than the organized combination of the individual forces?

If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

- Frederick Bastiat, The Law

I can think of many rationalizations for a certain group of people to be forced to turn over a greater percentage of their earnings to the State, but not one which is just. Some people argue that the wealthy actually live on a different percentage of their income, than say, a poorer middle-class person, and are less affected by higher taxes. Whether or not this is factually accurate, it hardly justifies the majority deciding what percentage they actually need to live on, or what shall be taken.

“The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities.”  

-Ayn Rand

Essentially, Measure 66 and all progressive taxes, agree that it is right for third parties (lawmakers or the majority of voters) to determine for other individuals (first parties) what constitutes ‘enough’ income to be taxed at a higher rate. Of course I believe in representative government, but only one which represents the whole equally as individuals, and not one group of citizens vs. another based on class criteria.

Furthermore, I cannot think of a real justification for choosing $250,000, other than the assumption that this amount of money is high enough that a) the taxed party doesn’t need the money, or can ‘afford it’, and b) it won’t effect the majority of people voting to pass the Measure. The first reason subtly agrees that a progressive tax is unjust – but then attempts to rationalize it. And the second is nothing more than shrewd politicking.

The unfortunate consequences of Measure 66 passing or failing are real, and shouldn’t be minimized. If it passes – I believe that it will have an unseen negative effect on jobs (which are already in terrible shape) throughout the state. But there is no doubt – if it fails, it will certainly have a seen negative effect on teachers and schools. As with most government policy – we are left to vote on a loose-loose measure. If anything – this illustrates another simple truth about life:

“There are no solutions; there are only trade-offs.”

-Thomas Sowell

As I mentioned in the beginning – in no way could I judge anyone for voting one way or the other on this measure.  The trade-offs of Measure 66 (as well as 67) are difficult to judge, but neither are without negative consequences. I can only state my own judgment and reasoning. Personally, I think 66 represents a deeply flawed vision of society and law. I am not arguing that people who vote for 66 are necessarily approving this vision. However, I believe that American society should be ‘progressing,’ or moving away from laws which divide citizens by class and set up one group against another. I think Bastiat again rightly illuminates this issue:

“But, unfortunately, law by no means confines itself to its proper functions. And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense.”

- Frederick Bastiat, The Law

I realize that this opinion may seem grandiose and/or ideological. But I simply believe that the greater trade-off in the long-run is not just “education vs. jobs”, but a free people, and a system of just laws. And I think it is a serious problem that we have lawmakers who write policy of this nature. 

Part of me laughs, and part of me cringes whenever I see these signs….because they are absolute rubbish. This sign is based on the assumption that we the public are either too lazy, or just too ignorant to think beyond what we immediatly see.

Whenever we are presented with this concept: that the government can “put people to work,” the question must be asked, “How?” 

When a non-state entity creates a job, it does so either by taking out a loan on the investment bet that the job created will produce enough value to repay or exceed the loan taken, or by reinvesting its own existing capital with a similar goal.

The State “creates jobs” or “puts people back to work” either with existing tax revenues, or by taking on debt to be funded through future tax revenues. I used quotes above because anyone with a grasp of elementary mathematics would realize that this is neither “creating jobs” nor “putting people back to work.” It is nothing more than shifting work around.

Ask yourself, what would the tax revenues taken by the state to ‘put Oregon back to work’ have been used for otherwise? What of the things the tax-payers would have invested their money in, had it not been taxed away?

The answer is: jobs.

Perhaps the tax-payer was planning on buying some new shoes (a shoe salesman’s paycheck), going out for an extra nice dinner (a restaurant worker’s wages and tip), a kitchen remodel project (construction material producers, contractors, cabinet makers, plumbers, etc) planning to add to their payroll at work to hire a new employee, or even donating money to their favorite charity. But these things will never be seen because some politician had the nice, though deceptive and false idea that they had the ability to “put Oregonians back to work.”

It is important at this point to understand that money is nothing more than a representation of labor, or work. We choose to work and earn money because money allows us to trade the value of something we are good at (in my case, web developement), for something we value that we aren’t good at, or couldn’t possibly create on our own (e.g. a ticket to football game. I neither play football, nor do I have the knowlege or ability to coach a team, let alone build a football stadium. Heck, I even suck at Madden…).

The point is that the sign above is clearly hogwash. It is based on the flawed notion that governments create things. To accept this idea, is to throw out the economic concept of opportunity cost. Government is force. The government is the only entity that we allow the power to involuntarily take our money and re-appropriate it. In this case – it is the opportunity for the tax dollars to have been spent elsewhere – that the government is forgoing so they can be assigned to this road project. If the sign was actually honest it would read: Taking a portion of your work, and directing it to someone or something else. Or perhaps simply, Making Oregonians pay for this road project.  

But telling the truth doesn’t matter to politicians because when there is a problem (such as a down economy) they must be seen as doing something to fix the problem. The perception that they are doing something to ‘put Oregon back to work’ is far more important politically than the actual truth, that they just moved work to a project that the voters will see. What the voters won’t see is all of the jobs that were sacrificed to make that particular road project possible.

It is important for me to mention that here, I am not necessarily arguing against road or other government projects. I am however calling out the hack politicians who think that tax-payers are dumb enough to fall for the ludicrous idea that government can create jobs by simply spending them into existence. From here, you can draw your own conclusion on whether the ‘stimulus’ bill will actually stimulate anything, other than some politician’s delusion of grandure.

Oh, and here’s the real irony of ironies: This sign is on a road leading up to the city Amtrak station. Amtrak is in business today, and its employees have jobs, only because they are subsidized with money taken from tax-payers. I suppose a sign for that could have read: Putting Amtrak back to work – which of course actually means, Forcing you to pay for Amtrak, rather than whatever else you valued more. 

“In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.”

-That Which is Seen, and That Which is Not Seen -Frédéric Bastiat, 1850

Posted via email from Andrew Colclough

The president is making sense
Ezra Klein and Matthew Yglesias both catch President Obama making sense on the public option:

QUESTION: Wouldn’t that drive private insurance out of business?

OBAMA: Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.

Making Sense? I respectfully disagree. Obama’s answer conveniently leaves out some important economic factors.

President Obama asks, “Why would it drive private insurance out of business?”

The answer is simple:

1. Because the government operates outside the market and price system and therefore has the unique ability to artificially set their price below the competitive market (something private insurers do not have the power to do, because their price is determined by supply and demand). Contrary to popular belief, Prices in the free market are not set arbitrarily. This is easily demonstrated by Craigslist. I recently tried to sell a rather ugly southwestern style kitchen table for $200. I actually figured that it probably wasn’t worth that, but I thought I would try it and see if I got any bites. No Response.
   Soon – I lowered the price to $150. Nothing.
   Finally, I lowered it to $100 and I sold it fairly quickly. You can see that I could not sell the table for more than it’s actual real-world perceived value. I didn’t really set the price at $100, rather, low demand for the ugly table did.
2. Also – the government is funded through non-voluntary trading – by taxation, thus has no competition, no bottom line, no incentive, nor any reason whatsoever to function efficiently. Nor do they have any real incentive to provide ‘better health care’ (In a public system – someone in an office, who knows nothing about you, will determine the policy of what is considered ‘adequate’ healthcare based on what – Statistical data?) since you don’t get to choose to pay (essentially, vote with your dollars) for their service. Only the government has the power to force you to pay for their service, whether you want it or not. Private industry has to offer you something you value more than your own money, to earn your business.
3. Finally, the fact that most people falsely perceive government options as “free,” basically guarantees overwhelming popular and political capital for an idea that you cannot choose not to pay for. Even if the actual outcome of such a program is poor, the majority of voters will subscribe to the nice sounding idea that everyone should receive health care. It is, after all, a noble sounding ideal – but unfortunately, when measured against history, or any kind of actual economic cost/benefit results – it fails.

I would expect Paul Krugman, Ezra Klien, Matthew Yglesis, and President Obama to know better, but political capital is so much easier to get excited about, than the, rather, wet blanket that is economic reality. It’s time (yet again) for one of my favorite quotes:

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
-Thomas Sowell

You cannot buck economic forces. In my view – they are as consistent and absolute as the laws of Mathematics. Yet they seem to be the first to be disregarded in the face of an idea that sounds really satisfying.

I have written much more extensively on this here: Healthcare: Economic Reality vs. Political Capital

People who like the tax-free status of their company health benefits could be asked to ante up. Money in the pot: more than $700 billion over 10 years.

Treasure the tax benefits from your health savings account? Some experts say the accounts encourage “excess consumption” of health services…

…

“I know that there is some controversy around doing so,” Baucus said. “But the current tax exclusion is not perfect. It is regressive. It often leads people to buy more health coverage than they need.”

Hang on a minute! Did Senate Finance Committee Chairman Max Baucus just admit to an economic reality? Namely, that demand for health care services goes up when the cost is low? It will be interesting to see if this economic truth finds its way further into political rhetoric.

Low perceived cost, and who really pays for employee benefits

Whether he intended to or not, Baucus is making a very valid point. Because health insurance is often provided by employers, individuals (employees) are far less likely to consider actual medical care costs. Just ask how many people with employee provided benefits run a price comparison around town before seeking out medical care? I certainly don’t.

Also, since the employer usually chooses the insurance package – it is likely that some employees may be getting more insurance than they actually would choose to receive otherwise. The problem is that employees don’t realize they are paying for their own insurance coverage, even though it appears their employer is.

This is again, a simple economic reality. Hiring an employee is a cost to the employer. That cost includes the employee salary, PTO, and any benefits package offered, among other things. Thus, employee salary is likely reduced as a factor of the total employee cost, including the employer provided benefit package. Therefore, employees essentially agree to lower pay – and receive greater benefits, even though they may not perceive it this way.

The false perception that employee benefits are, “free,” has economic ramifications. Back to Baucus’ point: Employees with employer provided health insurance are less likely to consider the actual cost of the health insurance and medical expenses received, which results in higher demand for health care services. Higher demand drives up health care prices, as well as driving up the price of health care insurance. ”Excess consumption,” is just a symptom of the perception of low cost. We would see the same phenomenon if health care prices were artificially driven down through government action.

Which brings us to the next logical conclusion:

Universal Health Care will create much higher demand for health care

Take the current, ”Excess consumption,” and multiply it by some arbitrary huge number, like, say…oh…let’s be conservative with $1.85 trillion. Since everyone will be covered under a government program - no-one will think about the cost of medical expenses, because it will be perceived as, “free”. This will obviously create a huge increase in, “Excessive consumption,” which will further drive up the real cost of medical care. The rising costs will then be paid by the government, who is really you – the taxpayer.

So in a universal coverage program, how will the government combat the increase in demand and cost?

Rationing, and much higher taxes.

The government will have no other option but to place limits on health care usage through bureaucracy. This isn’t because the government has bad intentions, but simply because, regardless of the public’s perception of cost, the real economics of medical service will still be in effect. The government will be paying the bill the public doesn’t see. As price goes down, demand goes up. Government will have no choice but to ration medical care and radically hike taxes, or the nation will face shortages and/or bankruptcy as real medical costs skyrocket.

This probably seems too simplistic, but this isn’t just some crazy theory. We already see this happening in Canada and the U.K. In a way – we even see it here in the U.S. with employee provided health insurance, as Baucus pointed out.

Of course, none of the economic factors really matter here because the notion that “everyone should have health care” is excellent political capital. How can you possibly run against “health care for everyone”, without appearing like an uncaring jerk? Thus, I doubt Baucus will make this logical progression when he talks about universal medical care.

Similar to demographic facts, economic realities are always depressing wet blankets thrown on any nice sounding, “fix all,” political vision. As economist, and former Marxist, Thomas Sowell said:

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.“

Will the economic reality Chairman Max Baucus stumbled into find it’s way into discussions of universal health care?

One can only hope.

Firstly, it is important to understand that conservatives are not anti-taxation. Obviously, government does have a function – and must be funded to carry out it’s function. Therefore, the rift in thinking on this issue consists of two basic underlying principals: Private Property Rights, and The Functions of Government.

Private Property Rights

I have discussed Private Property Rights at greater length in the second part of my series titled: Why Reject Socialism: Economic Freedom vs. Economic Equality. Rather than repeat myself here – I encourage you to read that section first, if you wish to get a fuller discussion. The conservative philosophy on Private Property Rights breaks down to these summarized points (note – this list isn’t meant to be a strict logical progression):

• Private Property is the result of a man’s labor
• A man’s labor is the result of a man’s rational mind, acting on free choices (in this case, to be productive)
• Thus – The Right to Private Property is really the unalienable right of an individual to the product of that individual’s own mind
• Therefore – the government, being the only institution with the power to take by force, must only be allowed the absolute minimum amount control of an individual’s mind.

That’s just a summary of the viewpoint – but hopefully, you can see how a conservative would view Private Property Rights, and Human Rights as totally inseparable.

The Functions of Government

Though people may differ in some aspect on the conservative view of private property – the functions, or role of government, is where the real disputes appear to be. One of the reasons that conservatives oppose higher taxation, is that the tax money goes from individuals to fund programs that should not lie within the function of government.

Most often – these programs are created out of a desire to ‘fix‘ what some view as a social or societal ill. When these programs are discussed – they are done so in a manner that implies a higher moral necessity, (such as – social justice) thus justifying the program’s existence. Government programs for social problems like: poverty, drugs, health-care, and the environment, are all justified by this moral imperative. However, by far the most common morally justified government crusade is said to combat ‘greed’.

Obviously, thousands of words have been written over this subject, but I think Thomas Sowell accurately relates the conservative’s concern (emphasis mine):

One of the last refuges of someone whose pet project or theory has been exposed as economic nonsense is to say: “Economics is all very well, but there are also non-economic values to consider.” Presumably, these are supposed to be higher and nobler concerns that soar above the level of crass materialism. Of course there are non-economic values. In fact, there are only non-economic values…. Economics does not say you should make the most money possible…. What lofty talk about “non-economic values” usually boils down to is that some people do not want their own particular values weighed against anything.

[...]

“Lofty talk about “non-economic values” too often amounts to very selfish attempts to impose one’s own values, without having to weigh them against other people’s values. Taxing away what other people have earned, in order to finance one’s own fantasy ventures, is often depicted as a humanitarian endeavor, while allowing others the same freedom and dignity as oneself, so they can make their own choices with their own earnings, is considered to be pandering to “greed.” Greed for power is more dangerous than greed for money and has shed far more blood in the process. Political authorities have often had “revolutionary values” that were devastating to the general population.”

-Thomas Sowell

For some reason, people seem to view private parties as the only entity capable of greed. Likewise, many people view the government as somehow above and exempt from any form of ‘greed’. Of course, this assumption is utter rubbish to anyone who has even the faintest grasp of governments throughout history. J. R. R. Tolkien hit the nail on the head in the opening of The Fellowship of The Ring:

“Nine rings were gifted to the race of men, who above all else desire power.”

Even in America, where our founders were wise enough to create a system of checks and balances, a constitution, and bill of rights designed to limit the power of government – the government still remains the single most powerful entity. Conservatives view, as Sowell correctly states, the greed for power, as far more dangerous than the greed for money and property.

T.S. Elliot said:

Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm– but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.

While private corporations can be greedy for money, they do not have the power of force to take money from your pocket, as the government does. Thus – the functions and role of government, from the conservative perspective, ought to be limited only to those things that are absolutely necessary to protecting the existence of a civil and free society.

Historian, Paul Johnson wrote:

“The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false.”

At this point – most people will begin to argue that, since “money is power,” certain social programs actually help equalize the playing field and protect the individual. I will concede that this could be possible. However, these programs must be judged by their end results, and not by the nobility of their intentions. While I don’t have the time here to present the data –  in most cases, it can be shown that the end results are not worth the tax money invested.

Milton Friedman also talkes about this idea extensively in this video that I discussed previously:

Thus, for the most part, conservatives believe that increasing taxes does two things.

1. It takes away property – and thus the rights of the individual to the product of their mind.
2. It increases the power of the government through massive programs, which do not provide results justifying their existence.

In my view – this is really a bi-partison idea. I personally think that you and I, are far better judges of what to spend our money on, than the federal government. The problem with federal programs is that they cannot possibly account for the vast diversity of the people under them. (Take for instance, No Child Left Behind. How in the world can the federal government possibly account for the needs of each individual school – let alone each student?) The more localized and individual a solution can be, the better.

So when I hear about how a new government solution (requiring more taxes) is coming that will ‘fix’ things – I believe the response, “Thanks, but no thanks!” is justified by history, as well as a sober view of society and reality.

Consider this my Tea Party sign. I would hope that these ideas are discussed at the protests today.

Again – the goal here is to understand the ideas, not necessarily agree with them or with the person presenting them. After all – no one person embodies conservative thought. So put aside whatever feelings you may have for Reagan’s presidency, and consider these thoughts:

I’ve added emphasis to some important bits:
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Program Announcer: Ladies and gentlemen, we take pride in presenting a thoughtful address by Ronald Reagan. Mr. Reagan:

Reagan: Thank you. Thank you very much. Thank you and good evening. The sponsor has been identified, but unlike most television programs, the performer hasn’t been provided with a script. As a matter of fact, I have been permitted to choose my own words and discuss my own ideas regarding the choice that we face in the next few weeks.

I have spent most of my life as a Democrat. I recently have seen fit to follow another course. I believe that the issues confronting us cross party lines. Now, one side in this campaign has been telling us that the issues of this election are the maintenance of peace and prosperity. The line has been used, “We’ve never had it so good.”

But I have an uncomfortable feeling that this prosperity isn’t something on which we can base our hopes for the future. No nation in history has ever survived a tax burden that reached a third of its national income. Today, 37 cents out of every dollar earned in this country is the tax collector’s share, and yet our government continues to spend 17 million dollars a day more than the government takes in. We haven’t balanced our budget 28 out of the last 34 years. We’ve raised our debt limit three times in the last twelve months, and now our national debt is one and a half times bigger than all the combined debts of all the nations of the world. We have 15 billion dollars in gold in our treasury; we don’t own an ounce. Foreign dollar claims are 27.3 billion dollars. And we’ve just had announced that the dollar of 1939 will now purchase 45 cents in its total value.

As for the peace that we would preserve, I wonder who among us would like to approach the wife or mother whose husband or son has died in South Vietnam and ask them if they think this is a peace that should be maintained indefinitely. Do they mean peace, or do they mean we just want to be left in peace? There can be no real peace while one American is dying some place in the world for the rest of us. We’re at war with the most dangerous enemy that has ever faced mankind in his long climb from the swamp to the stars, and it’s been said if we lose that war, and in so doing lose this way of freedom of ours, history will record with the greatest astonishment that those who had the most to lose did the least to prevent its happening. Well I think it’s time we ask ourselves if we still know the freedoms that were intended for us by the Founding Fathers.

Not too long ago, two friends of mine were talking to a Cuban refugee, a businessman who had escaped from Castro, and in the midst of his story one of my friends turned to the other and said, “We don’t know how lucky we are.” And the Cuban stopped and said, “How lucky you are? I had someplace to escape to.” And in that sentence he told us the entire story. If we lose freedom here, there’s no place to escape to. This is the last stand on earth.

And this idea that government is beholden to the people, that it has no other source of power except the sovereign people, is still the newest and the most unique idea in all the long history of man’s relation to man.

This is the issue of this election: whether we believe in our capacity for self-government or whether we abandon the American revolution and confess that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves.

You and I are told increasingly we have to choose between a left or right. Well I’d like to suggest there is no such thing as a left or right. There’s only an up or down: [up] man’s old — old-aged dream, the ultimate in individual freedom consistent with law and order, or down to the ant heap of totalitarianism. And regardless of their sincerity, their humanitarian motives, those who would trade our freedom for security have embarked on this downward course.

In this vote-harvesting time, they use terms like the “Great Society,” or as we were told a few days ago by the President, we must accept a greater government activity in the affairs of the people. But they’ve been a little more explicit in the past and among themselves; and all of the things I now will quote have appeared in print. These are not Republican accusations. For example, they have voices that say, “The cold war will end through our acceptance of a not undemocratic socialism.” Another voice says, “The profit motive has become outmoded. It must be replaced by the incentives of the welfare state.” Or, “Our traditional system of individual freedom is incapable of solving the complex problems of the 20th century.” Senator Fulbright has said at Stanford University that the Constitution is outmoded. He referred to the President as “our moral teacher and our leader,” and he says he is “hobbled in his task by the restrictions of power imposed on him by this antiquated document.” He must “be freed,” so that he “can do for us” what he knows “is best.” And Senator Clark of Pennsylvania, another articulate spokesman, defines liberalism as “meeting the material needs of the masses through the full power of centralized government.”

Well, I, for one, resent it when a representative of the people refers to you and me, the free men and women of this country, as “the masses.” This is a term we haven’t applied to ourselves in America. But beyond that, “the full power of centralized government” — this was the very thing the Founding Fathers sought to minimize. They knew that governments don’t control things. A government can’t control the economy without controlling people. And they know when a government sets out to do that, it must use force and coercion to achieve its purpose. They also knew, those Founding Fathers, that outside of its legitimate functions, government does nothing as well or as economically as the private sector of the economy.

Now, we have no better example of this than government’s involvement in the farm economy over the last 30 years. Since 1955, the cost of this program has nearly doubled. One-fourth of farming in America is responsible for 85% of the farm surplus. Three-fourths of farming is out on the free market and has known a 21% increase in the per capita consumption of all its produce. You see, that one-fourth of farming — that’s regulated and controlled by the federal government. In the last three years we’ve spent 43 dollars in the feed grain program for every dollar bushel of corn we don’t grow.

Senator Humphrey last week charged that Barry Goldwater, as President, would seek to eliminate farmers. He should do his homework a little better, because he’ll find out that we’ve had a decline of 5 million in the farm population under these government programs. He’ll also find that the Democratic administration has sought to get from Congress [an] extension of the farm program to include that three-fourths that is now free. He’ll find that they’ve also asked for the right to imprison farmers who wouldn’t keep books as prescribed by the federal government. The Secretary of Agriculture asked for the right to seize farms through condemnation and resell them to other individuals. And contained in that same program was a provision that would have allowed the federal government to remove 2 million farmers from the soil.

At the same time, there’s been an increase in the Department of Agriculture employees. There’s now one for every 30 farms in the United States, and still they can’t tell us how 66 shiploads of grain headed for Austria disappeared without a trace and Billie Sol Estes never left shore.

Every responsible farmer and farm organization has repeatedly asked the government to free the farm economy, but how — who are farmers to know what’s best for them? The wheat farmers voted against a wheat program. The government passed it anyway. Now the price of bread goes up; the price of wheat to the farmer goes down.

Meanwhile, back in the city, under urban renewal the assault on freedom carries on. Private property rights [are] so diluted that public interest is almost anything a few government planners decide it should be. In a program that takes from the needy and gives to the greedy, we see such spectacles as in Cleveland, Ohio, a million-and-a-half-dollar building completed only three years ago must be destroyed to make way for what government officials call a “more compatible use of the land.” The President tells us he’s now going to start building public housing units in the thousands, where heretofore we’ve only built them in the hundreds. But FHA [Federal Housing Authority] and the Veterans Administration tell us they have 120,000 housing units they’ve taken back through mortgage foreclosure. For three decades, we’ve sought to solve the problems of unemployment through government planning, and the more the plans fail, the more the planners plan. The latest is the Area Redevelopment Agency.

They’ve just declared Rice County, Kansas, a depressed area. Rice County, Kansas, has two hundred oil wells, and the 14,000 people there have over 30 million dollars on deposit in personal savings in their banks. And when the government tells you you’re depressed, lie down and be depressed.

We have so many people who can’t see a fat man standing beside a thin one without coming to the conclusion the fat man got that way by taking advantage of the thin one. So they’re going to solve all the problems of human misery through government and government planning. Well, now, if government planning and welfare had the answer — and they’ve had almost 30 years of it — shouldn’t we expect government to read the score to us once in a while? Shouldn’t they be telling us about the decline each year in the number of people needing help? The reduction in the need for public housing?

But the reverse is true. Each year the need grows greater; the program grows greater. We were told four years ago that 17 million people went to bed hungry each night. Well that was probably true. They were all on a diet. But now we’re told that 9.3 million families in this country are poverty-stricken on the basis of earning less than 3,000 dollars a year. Welfare spending [is] 10 times greater than in the dark depths of the Depression. We’re spending 45 billion dollars on welfare. Now do a little arithmetic, and you’ll find that if we divided the 45 billion dollars up equally among those 9 million poor families, we’d be able to give each family 4,600 dollars a year. And this added to their present income should eliminate poverty. Direct aid to the poor, however, is only running only about 600 dollars per family. It would seem that someplace there must be some overhead.

Now — so now we declare “war on poverty,” or “You, too, can be a Bobby Baker.” Now do they honestly expect us to believe that if we add 1 billion dollars to the 45 billion we’re spending, one more program to the 30-odd we have — and remember, this new program doesn’t replace any, it just duplicates existing programs — do they believe that poverty is suddenly going to disappear by magic? Well, in all fairness I should explain there is one part of the new program that isn’t duplicated. This is the youth feature. We’re now going to solve the dropout problem, juvenile delinquency, by reinstituting something like the old CCC camps [Civilian Conservation Corps], and we’re going to put our young people in these camps. But again we do some arithmetic, and we find that we’re going to spend each year just on room and board for each young person we help 4,700 dollars a year. We can send them to Harvard for 2,700! Course, don’t get me wrong. I’m not suggesting Harvard is the answer to juvenile delinquency.

But seriously, what are we doing to those we seek to help? Not too long ago, a judge called me here in Los Angeles. He told me of a young woman who’d come before him for a divorce. She had six children, was pregnant with her seventh. Under his questioning, she revealed her husband was a laborer earning 250 dollars a month. She wanted a divorce to get an 80 dollar raise. She’s eligible for 330 dollars a month in the Aid to Dependent Children Program. She got the idea from two women in her neighborhood who’d already done that very thing.

Yet anytime you and I question the schemes of the do-gooders, we’re denounced as being against their humanitarian goals. They say we’re always “against” things — we’re never “for” anything.

Well, the trouble with our liberal friends is not that they’re ignorant; it’s just that they know so much that isn’t so.

Now — we’re for a provision that destitution should not follow unemployment by reason of old age, and to that end we’ve accepted Social Security as a step toward meeting the problem.

But we’re against those entrusted with this program when they practice deception regarding its fiscal shortcomings, when they charge that any criticism of the program means that we want to end payments to those people who depend on them for a livelihood. They’ve called it “insurance” to us in a hundred million pieces of literature. But then they appeared before the Supreme Court and they testified it was a welfare program. They only use the term “insurance” to sell it to the people. And they said Social Security dues are a tax for the general use of the government, and the government has used that tax. There is no fund, because Robert Byers, the actuarial head, appeared before a congressional committee and admitted that Social Security as of this moment is 298 billion dollars in the hole. But he said there should be no cause for worry because as long as they have the power to tax, they could always take away from the people whatever they needed to bail them out of trouble. And they’re doing just that.

A young man, 21 years of age, working at an average salary — his Social Security contribution would, in the open market, buy him an insurance policy that would guarantee 220 dollars a month at age 65. The government promises 127. He could live it up until he’s 31 and then take out a policy that would pay more than Social Security. Now are we so lacking in business sense that we can’t put this program on a sound basis, so that people who do require those payments will find they can get them when they’re due — that the cupboard isn’t bare?

Barry Goldwater thinks we can.

At the same time, can’t we introduce voluntary features that would permit a citizen who can do better on his own to be excused upon presentation of evidence that he had made provision for the non-earning years? Should we not allow a widow with children to work, and not lose the benefits supposedly paid for by her deceased husband? Shouldn’t you and I be allowed to declare who our beneficiaries will be under this program, which we cannot do? I think we’re for telling our senior citizens that no one in this country should be denied medical care because of a lack of funds. But I think we’re against forcing all citizens, regardless of need, into a compulsory government program, especially when we have such examples, as was announced last week, when France admitted that their Medicare program is now bankrupt. They’ve come to the end of the road.

In addition, was Barry Goldwater so irresponsible when he suggested that our government give up its program of deliberate, planned inflation, so that when you do get your Social Security pension, a dollar will buy a dollar’s worth, and not 45 cents worth?

I think we’re for an international organization, where the nations of the world can seek peace. But I think we’re against subordinating American interests to an organization that has become so structurally unsound that today you can muster a two-thirds vote on the floor of the General Assembly among nations that represent less than 10 percent of the world’s population. I think we’re against the hypocrisy of assailing our allies because here and there they cling to a colony, while we engage in a conspiracy of silence and never open our mouths about the millions of people enslaved in the Soviet colonies in the satellite nations.

I think we’re for aiding our allies by sharing of our material blessings with those nations which share in our fundamental beliefs, but we’re against doling out money government to government, creating bureaucracy, if not socialism, all over the world. We set out to help 19 countries. We’re helping 107. We’ve spent 146 billion dollars. With that money, we bought a 2 million dollar yacht for Haile Selassie. We bought dress suits for Greek undertakers, extra wives for Kenya[n] government officials. We bought a thousand TV sets for a place where they have no electricity. In the last six years, 52 nations have bought 7 billion dollars worth of our gold, and all 52 are receiving foreign aid from this country.

No government ever voluntarily reduces itself in size. So, governments’ programs, once launched, never disappear.

Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.

Federal employees — federal employees number two and a half million; and federal, state, and local, one out of six of the nation’s work force employed by government. These proliferating bureaus with their thousands of regulations have cost us many of our constitutional safeguards. How many of us realize that today federal agents can invade a man’s property without a warrant? They can impose a fine without a formal hearing, let alone a trial by jury? And they can seize and sell his property at auction to enforce the payment of that fine. In Chico County, Arkansas, James Wier over-planted his rice allotment. The government obtained a 17,000 dollar judgment. And a U.S. marshal sold his 960-acre farm at auction. The government said it was necessary as a warning to others to make the system work.

Last February 19th at the University of Minnesota, Norman Thomas, six-times candidate for President on the Socialist Party ticket, said, “If Barry Goldwater became President, he would stop the advance of socialism in the United States.” I think that’s exactly what he will do.

But as a former Democrat, I can tell you Norman Thomas isn’t the only man who has drawn this parallel to socialism with the present administration, because back in 1936, Mr. Democrat himself, Al Smith, the great American, came before the American people and charged that the leadership of his Party was taking the Party of Jefferson, Jackson, and Cleveland down the road under the banners of Marx, Lenin, and Stalin. And he walked away from his Party, and he never returned til the day he died — because to this day, the leadership of that Party has been taking that Party, that honorable Party, down the road in the image of the labor Socialist Party of England.

Now it doesn’t require expropriation or confiscation of private property or business to impose socialism on a people. What does it mean whether you hold the deed to the — or the title to your business or property if the government holds the power of life and death over that business or property? And such machinery already exists. The government can find some charge to bring against any concern it chooses to prosecute. Every businessman has his own tale of harassment. Somewhere a perversion has taken place. Our natural, unalienable rights are now considered to be a dispensation of government, and freedom has never been so fragile, so close to slipping from our grasp as it is at this moment.

Our Democratic opponents seem unwilling to debate these issues. They want to make you and I believe that this is a contest between two men — that we’re to choose just between two personalities.

Well what of this man that they would destroy — and in destroying, they would destroy that which he represents, the ideas that you and I hold dear? Is he the brash and shallow and trigger-happy man they say he is? Well I’ve been privileged to know him “when.” I knew him long before he ever dreamed of trying for high office, and I can tell you personally I’ve never known a man in my life I believed so incapable of doing a dishonest or dishonorable thing.

This is a man who, in his own business before he entered politics, instituted a profit-sharing plan before unions had ever thought of it. He put in health and medical insurance for all his employees. He took 50 percent of the profits before taxes and set up a retirement program, a pension plan for all his employees. He sent monthly checks for life to an employee who was ill and couldn’t work. He provides nursing care for the children of mothers who work in the stores. When Mexico was ravaged by the floods in the Rio Grande, he climbed in his airplane and flew medicine and supplies down there.

An ex-GI told me how he met him. It was the week before Christmas during the Korean War, and he was at the Los Angeles airport trying to get a ride home to Arizona for Christmas. And he said that [there were] a lot of servicemen there and no seats available on the planes. And then a voice came over the loudspeaker and said, “Any men in uniform wanting a ride to Arizona, go to runway such-and-such,” and they went down there, and there was a fellow named Barry Goldwater sitting in his plane. Every day in those weeks before Christmas, all day long, he’d load up the plane, fly it to Arizona, fly them to their homes, fly back over to get another load.

During the hectic split-second timing of a campaign, this is a man who took time out to sit beside an old friend who was dying of cancer. His campaign managers were understandably impatient, but he said, “There aren’t many left who care what happens to her. I’d like her to know I care.” This is a man who said to his 19-year-old son, “There is no foundation like the rock of honesty and fairness, and when you begin to build your life on that rock, with the cement of the faith in God that you have, then you have a real start.” This is not a man who could carelessly send other people’s sons to war. And that is the issue of this campaign that makes all the other problems I’ve discussed academic, unless we realize we’re in a war that must be won.

Those who would trade our freedom for the soup kitchen of the welfare state have told us they have a utopian solution of peace without victory. They call their policy “accommodation.” And they say if we’ll only avoid any direct confrontation with the enemy, he’ll forget his evil ways and learn to love us. All who oppose them are indicted as warmongers. They say we offer simple answers to complex problems. Well, perhaps there is a simple answer — not an easy answer — but simple: If you and I have the courage to tell our elected officials that we want our national policy based on what we know in our hearts is morally right.

We cannot buy our security, our freedom from the threat of the bomb by committing an immorality so great as saying to a billion human beings now enslaved behind the Iron Curtain, “Give up your dreams of freedom because to save our own skins, we’re willing to make a deal with your slave masters.” Alexander Hamilton said, “A nation which can prefer disgrace to danger is prepared for a master, and deserves one.” Now let’s set the record straight. There’s no argument over the choice between peace and war, but there’s only one guaranteed way you can have peace — and you can have it in the next second — surrender.

Admittedly, there’s a risk in any course we follow other than this, but every lesson of history tells us that the greater risk lies in appeasement, and this is the specter our well-meaning liberal friends refuse to face — that their policy of accommodation is appeasement, and it gives no choice between peace and war, only between fight or surrender. If we continue to accommodate, continue to back and retreat, eventually we have to face the final demand — the ultimatum. And what then — when Nikita Khrushchev has told his people he knows what our answer will be? He has told them that we’re retreating under the pressure of the Cold War, and someday when the time comes to deliver the final ultimatum, our surrender will be voluntary, because by that time we will have been weakened from within spiritually, morally, and economically. He believes this because from our side he’s heard voices pleading for “peace at any price” or “better Red than dead,” or as one commentator put it, he’d rather “live on his knees than die on his feet.” And therein lies the road to war, because those voices don’t speak for the rest of us.

You and I know and do not believe that life is so dear and peace so sweet as to be purchased at the price of chains and slavery. If nothing in life is worth dying for, when did this begin — just in the face of this enemy? Or should Moses have told the children of Israel to live in slavery under the pharaohs? Should Christ have refused the cross? Should the patriots at Concord Bridge have thrown down their guns and refused to fire the shot heard ’round the world? The martyrs of history were not fools, and our honored dead who gave their lives to stop the advance of the Nazis didn’t die in vain. Where, then, is the road to peace? Well it’s a simple answer after all.

You and I have the courage to say to our enemies, “There is a price we will not pay.” “There is a point beyond which they must not advance.” And this — this is the meaning in the phrase of Barry Goldwater’s “peace through strength.” Winston Churchill said, “The destiny of man is not measured by material computations. When great forces are on the move in the world, we learn we’re spirits — not animals.” And he said, “There’s something going on in time and space, and beyond time and space, which, whether we like it or not, spells duty.”

You and I have a rendezvous with destiny.

We’ll preserve for our children this, the last best hope of man on earth, or we’ll sentence them to take the last step into a thousand years of darkness.

We will keep in mind and remember that Barry Goldwater has faith in us. He has faith that you and I have the ability and the dignity and the right to make our own decisions and determine our own destiny.

Thank you very much.