September 29, 2013

On Decadence - Charles Hill, The American Interest

I know I'm crossing a line in posting this article because the story at the link is behind a subscription pay wall; consequently, you should be a subscriber to view it. But I think this is such a superb item that I really do hope that by sharing it you, dear reader, will find the same wonderful insight I found, enjoy the same sublime gift in Hill's writing style and clarity of thought, and (I hope) find it of sufficient value to actually subscribe the The American Interest. I've had the great pleasure of working with Adam Garfinkle, the Editor at TAI, on a couple of articles and he was always the epitome of what you would expect an editor to be: supportive, encouraging, prodding for completion, sound advice. His blog is here. He does a marvelous job at assembling an array of quality essays for each bi-monthly issue. Please check it out.

As for Hill's article, when you've finished reading it -- and you'll need to set aside some time to do so -- you'll find yourself thinking, "But of course! It all makes so much sense." Hill addresses, and echoes, the concern of George Washington regarding the necessity and challenge of "maintaining the character of the nation amid the temptations of freedom." He walks the reader through the evolution of how society's appreciation of virtuous living is constantly challenged by the opportunities for mischief presented by increasing liberty for the individual and freedom for our society as a whole. He discusses the corrosive aspects of our "Age of Entertainment," the "Great Virtue Shift" of the last few decades where vices have become virtues, and how our government itself has shifted as officials respond "to the changing psychology and national character of the country." 

Per Hill, "Throughout most of American history people were preoccupied with how to prevent government from becoming corrupt. In our time, governments have discovered how to corrupt the people. It then follows that the more corrupted the people become, the more numerous the laws must be, thus further aggrandizing government’s indispensability." Hill brings it all together in his concluding paragraphs where he emphasizes and ties together freedom, liberty, and the essential, enabling virtue of self discipline...all rooted in a strong foundation of religious belief. 
"It comes down, finally, to the individual and to George Washington’s recognition that a free society must be made up of virtuous, self-disciplined citizens. [...] Americans possess liberty as do no others and so have sought to understand its uses and responsibilities as well as the myriad of ways, direct or insidious, through which it can be taken away. Freedom is for a people; liberty is for the individual. So if liberty must be limited in order to be possessed, it must be self-imposed in the recognition that certain limits are essential to making one’s actions effective, intellectually coherent and even possessed of a certain beauty. [...] To the main point of Washington’s Farewell Address...Tocqueville added that in America, uniquely, religion and liberty are compatible: Freedom sees religion as the cradle of its infancy and the divine source of its rights, while religion is the guardian and guarantee of the laws that preserve liberty. But at the same time...American liberty has been endangered by the American “passion for regulation.” This, Tocqueville predicted, eventually would enable government to extend its arms over society as a whole, to cover its surface “with a network of small, complicated, painstaking, uniform rules through which the most original minds and the most vigorous souls cannot clear a way.” [...] ...a lack of self-limitation on individual liberty will produce excess and coarseness; virtue will retreat and, as it does, hypocritical moralizing about society’s deficiencies will increase. Widening irresponsibility coupled with public pressure for behavior modification will mount and be acted upon by government. The consequential loss of liberty scarcely will be noticed by the mass of people now indulging themselves, as Tocqueville predicted, in the “small and vulgar pleasures with which they fill their souls.” We will not as a result be ruled by tyrants but by schoolmasters in suits with law degrees, and be consoled in the knowledge that we ourselves elected them. [...] To retain liberty, or by now to repossess it, Americans must re-educate themselves in what has been made of Burke’s precept: “Liberty must be limited in order to be possessed.” Walt Whitman re-formulated this as, “The shallow consider liberty a release from all law, from every constraint. The wise man sees in it, on the contrary, the potent Law of Laws.” Learning what liberty is and what it requires of us is the only bulwark, ultimately, against American decadence."
In short, if we as a people and as individuals cannot exercise self-discipline derived from the virtues provided by our religious convictions, then our "coarseness" as a society will increasingly result in additional layers of government intrusion and regulation upon which we will continue to be increasingly dependent until we finally arrive at a state where all liberty is lost and government power is absolute. A free society is a virtuous society, one that is serious about what it takes to maintain such and is always on guard against those influences that constantly seek to erode its character. It is time for us to once again be a serious people. 

From the September/October 2013 issue:

On Decadence

ecline” we Americans and Westerners mope about daily; “fall” most of us still hope to postpone. Decadence, it would seem, is the mean between the two.
The much-overused decline and fall trope, fixed permanently into our abstract vocabulary ever since Edward Gibbon’s Decline and Fall of the Roman Empire took a then-experimentally post-Christian Western Europe by storm, was meant to demonstrate the mortality of all human constructions. Oddly enough, however, Gibbon did it in spite of the Enlightenment’s discovery of progress by retreating to the oldest trope of all—the cyclical, organic metaphor of birth, growth, decay, death. Much of the 19th century was spent trying to reconcile progress with the cyclical via the uses and abuses of Darwin. In the 20th century, Oswald Spengler, Arnold Toynbee and Paul Kennedy rejoined that intellectual dispute, traceable to remote antiquity: Either the human condition is cyclical, like the seasons and the life cycle, or it is linear, starting someplace, going someplace, with a positive goal ahead. 

September 12, 2013

American Exceptionalism

My go-to source for news of "the world's major wars, conflicts...military, political, and intelligence" issues is War News Updates, a blog edited by a fellow of Russian ancestry who currently lives in Canada. He does a remarkable job of posting articles throughout the day, occasionally adding his own comment. I mention this because of all the hubbub created by the Putin Op-Ed piece in yesterday's New York Times.  Pundits from across the political spectrum have weighed in on various aspects of it with perhaps the most attention paid to Putin's dismissive comment about "American exceptionalism." There are so many items about America, what it stands for, what it has contributed to the world, the hope it has brought to millions, the burden it has borne on behalf of so many who were unable, or unwilling, to do so on their own that I would scarcely know where to start...but then there's this...the comment posted today from the Russian-Canadian editor of WNU:
"As to what is my take on American exceptionalism .... read the following.
Being one who grew up in the former Soviet Union .... and who now lives in Canada but travels to the U.S. all the time .... I think I have a certain perspective on American exceptionalism that I know that Russian President Putin does not have ... and .... I sometimes wonder .... if President Obama and most Americans still believe in.
American exceptionalism is not because America was and is made up of special people. Or (as some believe) that God has chosen the American people. It is certainly not because of it's national and international policies ... nor of the good deeds that Americans are always trying to do.
American exceptionalism is the following ..... throughout history mankind has always lived under (and been subjected to) despots and tyranny that made survival the primary goal of everyone .... with the exception of the rulers. But the founding of America broke .... for the first time .... this state of affairs. In short .... the U.S. was founded by men who believed that leaders must serve the people .... and not the other way around .... and to insure that this will not change a constitution was then set up and enshrined in law on how this government was to function .... and more importantly .... enshrining in law the freedom and liberty that individuals will have in such a nation..
Yup .... liberty and freedom codified by law is what made America exceptional .... not the power and might of it's government.
As to Putin's comments that God created us equal .... the framers of the constitution understood this .... hence enshrining in the constitution a political framework that was codified by law that acknowledges God's creation.
President Putin as a former communist does not understand this. President Obama .... when I listen to his comments on negative liberties .... certainly does not. And sadly .... most of the world certainly does not.
But people worldwide have always found this topic to be a fascinating one to talk about .... and in my travels to places in Asia and Europe I have always found myself getting into these discussions. Interestingly .... these debates always ended when I made the following observation. Culturally .... Europe and Asia are centuries ahead of the U.S. .... if not more. Their history is rich with thousands of years of life experiences .... something that a young nation like America cannot even hope to compare to. But .... when looked at politically .... America is the giant and the old wise man while all of these old nations are just juvenuiles struggling only now to attain those concepts of freedom and liberty that we in North America have take for granted for the past two centuries."
Why is it that some of the best commentary on the exceptionalism of America comes from people who aren't Americans, or at least weren't so originally? I think it's because people who have grown up outside of America have experienced first-hand a vastly different reality than most Americans can even begin to understand. For many (most?) of those living somewhere other than America, daily reality includes oppressive governments, few personal freedoms, limited opportunities, and subsistence living. It includes an enduring concern for personal safety and, for many, resignation to whatever socio-economic status they were born into. Here in America, the vast majority of us have known nothing but personal liberty, the opportunity to pursue whatever we desired (whether we take advantage of those opportunities is an entirely different matter), a complete absence of true fear of authorities, the ability to come and go as we please, and to say pretty much whatever we want to, whenever we want to, with no fear of consequence. Long stretches of national peace, ease, relative comfort, comparative wealth--the list goes on--tend to lull people into a false sense that things have always been and will always be this way at little personal cost. Like subsisting on charity for a long stretch of time with no obligation to repay it in any way, even through community service, the recipient grows to feel entitled to such, gets resentful when called upon to 'pay up,' and seeks the cover of sympathetic patrons when the 'easy times' are threatened. Nationally, we are teetering on the edge of such a condition. For almost a quarter century now, since the dissolution of our global opponent, the Soviet Union, we have extended benefit upon benefit to our citizenry and have asked for almost nothing in return. Our living has been good, perhaps too good. But now competitors challenge us at every turn. The 'daily reality' of much of the world begins to affect us here at home. At a moment when strength is needed, we find ourselves riddled with debt, unmoored from our founding principles, and cynically suspicious of our own government.

Make no mistake - our system is still the best there is. It possesses the greatest inherent resilience, provides for the greatest opportunity for the greatest number of people, facilitates the transfer of power from one group to the next without bloodshed, enables the greatest participation in the process limited only by the interest of our citizenry to participate in the first place. Our system is able to easily trounce any other in the world because of the inherent failings of the others. In fact, the only real threat to America comes from inside America and that threat stems from the apathy of its citizens. If you don't care enough to take an interest and get involved, don't be surprised if you wake up one day to find the world you remembered has been replaced by another that's hungrier, more ambitious, and more confident in itself. In the end, it really is up to us.

September 11, 2013

Neil Cavuto looks back on the anniversary of 9/11

While driving home from work this evening, I heard a wonderful item from Neil Cavuto who was sharing his thoughts on this 12th anniversary of 9/11. I don't know why but it really stuck with me, perhaps because I only heard the audio while driving alone and the effect wasn't lessened, in a sense, by the video setting. When you just have to listen, you can picture different things in your mind's eye. Maybe it's best to just close your eyes and listen while it plays. Either way, I liked his perspective and the points he was making -- we just never know when life will take it's dramatic turns and only after such moments do we truly realize what we habitually take for granted.

Here's a link to the video.

September 8, 2013

Information Theory and Capitalism

Hard to believe it's been almost two months since my last post. "Life" does have a way of imposing itself  such that we all need to prioritize our allocation of time, attention and effort. Clearly this blog has taken a lesser place when balanced against family time and even work, though I try to limit the amount of work that comes home with me. Another contributing factor has to do with my desire to share things that I hope are value-added or to spend time here at the keyboard on material of sufficient interest (even if only to me) that warrants not spending the time doing something spending it with family. We are awash with news reports, commentaries, the hyperactivity of the blogosphere, an unending stream of televised and broadcasted punditry and, thank goodness, the occasional really good article in print media all hard at work dissecting, analyzing, and critiquing the issues of our day. Why just add to the noise? Snowdengate, Obamacare, the Benghazi debacle, an out-of-control IRS, a dysfunctional Congress, continued turmoil in the Middle East (shock), amateur-hour-theatrics over whether to strike Syria, the latest starlet going into or coming out of rehab...these are covered ad nauseum.  If you are taking the time to read this blog, you are highly likely to be the type of person who already tracks current events and takes more than a moment to reflect on their implications and the various factors that converge to create such situations in the first which case I'd like to provide material you might not otherwise have read during the week. After all, it's not as if I'm trying to entice readership with fantasy league stats, photos of the new royal baby, or commentary on the dating techniques of the newly-graduated-but-not-yet-employed-who-still-live-with-parents-cohort.

With this in mind, I'd like to direct your attention to a superb article published in a recent issue of The Weekly Standard. The item, a four page article entitled "Surprise and Creativity," by George Gilder, is a fascinating overview of Information Theory as the basis for a new economics theory for Capitalism. Yes, yes, I know..."fascinating" in the same sentence as "theory," "economics," and "capitalism"? It doesn't carry quite the emotional high that you get when you see your favorite team beat its arch-rival in overtime but stick with me on this. I think what Gilders is saying is profoundly important for this reason: at the root of any substantive policy lies some sort of strongly-held belief by the person(s) who crafted and implemented the policy...some conviction that a given approach to an issue is most likely to achieve a desired objective or outcome. 

For socialists, the conviction is that production should directly and immediately satisfy needs (of the market or the individual person) rather than the private accumulation of wealth. Therefore, Socialists seek to centrally control resources and dictate production and distribution instead of allowing individuals to do so and for the market, writ large, to determine prices, availability, market penetration, etc. Different religions have different central imperatives that drive implementation of their doctrines. Some belief systems compel adherents to impose their system on others while other systems are quite "hands off." The stewardship of natural resources even finds wildly different expression based on the underlying beliefs of different people--some believing that the "natural condition" of the environment takes priority over the material progress of humans while others are just as firmly convinced that Man has every right to use what nature has to offer in pursuit of material advances. In all these cases, such beliefs can shape the policies that governments adopt and impose on their citizens. We have seen the relentless march of Socialism in Europe whereby governmental (local, state, national), super-governmental (European Union), and extra-governmental (e.g. the European Commission) regulatory bodies dictate that how, when, where, and why of economic policies for all member states and their citizens. Islam, as it is being practiced throughout much of the Middle East, seeks to impose its view of "right conduct" by force, necessarily at the expense of the beliefs of other populations such as Christians or even competing sects within Islam (Sunni vs. Shia). Those who believe the industrial-age activities of mankind are responsibility for changes in our climate seek to change policies effecting energy production and use. My long-winded point here is that theories actually mean something since they serve as the basis for the policies, laws, and regulations that effect our daily lives. 

What Gilder is proposing is a different way to understand economics, in general, and capitalism in particular. An early and devoted disciple of Irving Kristol, Gilder begins his article with an overview of Kristol's thoughts about economic models, specifically highlighting Kristol's criticism of the prevailing theory of capitalism as "a calculus of simple self-interest and apparently governed by no moral code," that "[in] a democratic such system can ultimately survive." By this, Kristol meant that free-market capitalism and, indeed, a free democratic society should be governed by some sort of morality to reflected the conservative values he did so much to champion. According to Gilder, Kristol posed two key questions for any economic theory: "Can the theory provide a moral or 'transdendental' justification for its results, so that it is politically acceptable" and "can it explain growth and creativity?" Gilder says that the Information Theory of economics does so and therefore should serve as the basis for better understanding, and by extension informing policies for, our government's approach to economic policy. 

Here are some highlights (extracts or paraphrased items) from the article:
- Most economists believe that order and information are kindred concepts...that a successful economy seeks balance or equilibrium between the two.
- "Order," however, is the opposite of information since "information" is essentially news or surprise; information is something new, something unexpected. If you hear something you already know, you haven't learned anything, nothing new has been created. Order, then, is in opposition to this because it seeks to minimize disruptions to the system.
- Gilder's "information theory for economics" should be thought of as human creations viewed as 'transmissions down a channel' in the presence of 'noise' or 'impediments to transmission' with the outcome measured by its 'news' or surprise.
- Businesses conducting entrepreneurial experiments must be allowed to fail; otherwise, nothing is learned from the attempt, no new knowledge is generated and therefore no new wealth is produced. [In other words, you can't really learn any true lessons if outcomes are predetermined.]
- Information Theory places the surprising creation of entrepreneurs and innovators at the very center of the system.
- Information is ultimately a measure of human freedom and thus places such freedom at the heart of the economic model.

So what does all this really mean? I believe it means that wealth comes from creativity (something that is new and unexpected); creativity comes from experimentation; and experimentation is defined by an infinite variety of attempts to find new things and new ways. When "the system" -- i.e. the government -- seeks to dictate preferred outcomes, shape efforts toward desired solutions, or impose burdensome restrictions and impediments on capitalism then entrepreneurialism is stunted, the flow of "information" is reduced ("information" in this sense can be thought of as anything, really -- individual effort, the exchange of ideas, the flow of capital, etc.), working capital is bled-off (in taxes, regulatory compliance, and bureaucratic overhead), and true innovation is quashed. 

Consider some of Gilder's closing thoughts:
No business guaranteed by the government is capitalist.Guarantees destroy knowledge and wealth by eliminating falsifiability [the potential to fail].  Unless entrepreneurial ideas can fail and business go bankrupt, they cannot succeed in creating new knowledge and wealth.
The message of a knowledge economy is optimistic. As Wanniski wrote, "Growth comes not from dollars in people's pockets but from ideas in their heads."...A capitalist economy can be transformed as rapidly as human minds and knowledge can change.
Deeper than economics or social theory, these ideas reflect the most powerful scientific ideas of the era. Information Theory recognizes that information is not order but disorder and that the universe is not a great machine that is inexorably grinding down all human pretense of uniqueness and free will. The uniqueness and free will of humans is indispensable to civilization.
In capitalism, the predictable carriers are the rule of law, the maintenance of order, the defense of property rights, the reliability and restraint of regulation, the transparency of accounts, the stability of money, the discipline and futurity of family life, and a level of taxation commensurate with a modest and predictable role of government.
As Kristol observed, progress in law and order does not spring from a Darwinian process of natural selection among random mutations. Progress stems from political leadership and sacrifice, prudence and forebearance, wisdom and courage. Sometimes these must be defended by military force. They originated historically in a religious faith in the transcendent order of the universe. They embody a hierarchic principle. It is these low-entropy carriers that enable the high-entropy creations of successful capitalism.
What Gilder is getting at is this: when our government uses its regulatory powers to choose winners and losers, when it bleeds capital from the private sector via high taxes and extraordinary levels of public debt, when it imposes layer upon layer of regulation on private business and individuals, and when it takes control of sectors of our economy (health care, for example) it distorts our economy, undermines our entrepreneurs, constrains innovation and creativity, and blunts generation of wealth. And most importantly, an overly active government saps "the uniqueness and free will of humans [that] is indispensable to civilization."

Our government helps most when it does the least necessary to maintain a stable framework within which the creative energies of capitalism are unleashed and the root values of our culture find their full flower. I hope Gilder's new economic theory gains traction and I hope you take a few minutes to read the article for yourself.