Saturday, May 31, 2014

Why Readington’s Eminent Domain Action Against Solberg Land is Un-American

In 2006, the future of Solberg Airport was a hot item in Readington Township, New Jersey. On May 16 of that year, by a 56-44% margin, voters approved a bond referendum for $22 million toward purchase of land and development rights to Solberg Airport and surrounding lands. On September 16, 2006, Readington initiated its eminent domain action against Solberg on the pretext that preserving the existing airport and surrounding lands is in the “public interest,” because it would preclude airport expansion to accommodate small corporate jets or sale of the land to housing developers. The Solbergs fought back, and the battle has been tied up in the courts ever since.

The referendum itself did not specifically authorize, nor rule out, eminent domain. Most people understood, however, that approval of the referendum would likely lead to the eminent domain taking of Solberg land. Signs sprouted all over Readington; some saying “NO JETS”, and others saying “STOP EMINENT DOMAIN—IT IS UN-AMERICAN”.

Yes, eminent domain is un-American. To understand why, one need only examine the issue in the context of America’s founding ideals.

The referendum “does not change the Township's right of eminent domain one way or the other,” according to an FAQ document. A court brief on behalf of Readington spoke of the township’s “sovereign power of eminent domain.” In a recent campaign mailing, Julia Allen and Frank Gatti, the Readington Township Committee incumbents in the June 3 GOP primary election, cited the “will of the voters” as justification for the Solberg taking. [all emphasis added]

These statements beg certain questions: What are rights? Who is sovereign in the American system? What is the proper role of government?

The Declaration of Independence is the philosophic “blueprint” for this nation’s constitution and law. That blueprint states that every individual has “unalienable rights to life, liberty, and the pursuit of happiness.” The government is established “to secure these rights.” The government, said Abe Lincoln, is “of, for, and by the people.” Government is the people's servant, not their master. The government has no rights, apart from the limited powers granted to it by the vote of the people.

But, the people’s power is also limited. Since rights are unalienable, the people cannot grant government the power to violate individual rights. The voting power of the people is limited to granting government only those powers related to fulfilling its only fundamental task of protecting individual rights. The people can not vote to kill, or enslave, or take the property of, or otherwise violate the rights of, any individual or minority group of individuals. In a democracy, where the group or collective is sovereign and individuals are rightless, the “will of the voters”—i.e., any electoral majority—would have absolute power. But America is not a democracy. America is a constitutionally limited republic based on unalienable individual rights.

Given these principles, it follows that the government is not “sovereign”—i.e., supreme over the people. The government is subordinate to the people in all of its functions. It is the people, qua individual, that is sovereign. This is crucial. The individual, and only the individual, is sovereign; over his life, liberty, and, by logical extension, his property. This means that the government can not violate the individual’s sovereignty—meaning, his rights—under any pretext, including majority vote. Rights, properly understood, are moral principles sanctioning the individual’s freedoms in a social context; i.e., to act on his own judgement, in pursuit of his own goals, values, and happiness, so long as his actions do not violate the same rights of others and he deals with others only by voluntary mutual agreement.

It’s true that America’s Founders were not fully consistent to the principles stated in the Declaration of Independence. The biggest inconsistency was, of course, the failure to eradicate slavery. But another is the acceptance of eminent domain into the constitution (although, to my knowledge, the term “eminent domain” does not actually appear in the constitution). Thankfully, slavery was abolished. But eminent domain survived and grew, trampling our rights with increasing frequency and ferocity.

That inconsistency aside, it’s clear that the Founders overarching purpose was to ensure individual rights by means of rights-protecting government. The sovereignty and liberty of the individual, not the state or the majority, is what they intended to ensure. The fact that governments have the power of eminent domain does not make it right, or a sovereign power, or consistent with American ideals. Only individuals have rights and sovereignty, and any rights-violating government actions—including those initially sanctioned by the Founders—are inherently un-American.

John Broten and Sam Tropello, who are challenging incumbents Julia Allen and Frank Gatti for Readington Township Committee seats in the June 3 Republican primary, oppose the eminent domain action against Solberg land on practical grounds—mainly on financial and tax grounds. The Solberg action may not make “fiscal sense,” as Tropello puts it. But that is not the essential issue. Nor is it a convincing argument. Those who support eminent domain will simply say that higher taxes are a worthwhile price to pay for keeping out corporate jets or a large housing development.

The main issue is that eminent domain, both in regard to Solberg land and on general principle, is immoral and un-American. Eminent domain should be abolished. Government should not have that power. But that is a long-term fight. The fact that Readington Township has the power does not make it government right. Nor does the township have to use it. Nor should it; against the Solbergs or any other township resident. Readington officials should end the township’s eminent domain assault on Solberg lands—not because it’s expensive, or because jets might start landing in Readington, or because houses might sprout on Solberg land. Eminent domain against Solberg should be ended because it’s the right thing to do.

Related Reading:

Man's Rights and The Nature of Government—Ayn Rand

Friday, May 30, 2014

Solberg Airport: Who Shapes "Community Character"?

With the Solberg issue once again heating up, Mayor Julia Allen published a letter in the Hunterdon County Democrat addressing the issue.  She wrote:

Since 2006, Readington Township has been moving forward with efforts to purchase an interest in Solberg Airport. In a special referendum, the electorate had supported a proposal to purchase the development rights on the 100 acre Airport Facilities Area and to purchase the 625 acres of open space surrounding the airport. Sixty one percent of registered voters participated in the 2006 referendum and the measure passed with 56 percent of voters approving the $22 million purchase.

Allen justified the coercive seizure of Solberg as follows:

A recent study commissioned by the FAA noted that the income generated from small airports is not sufficient to justify the huge capital investment in the land they occupy. This means that the open land and the small general aviation airport may succumb either to suburban sprawl as it advances across central New Jersey, or it may be transformed into a much larger airport. Either scenario would negatively impacting the township’s community character.

In a more comprehensive Mayor’s Corner letter to township residents, Mayor Allen recounted the history of the Solberg issue dating back to the 1960s. In that letter, she stated:

The stated purpose of [the eminent domain] action is the permanent preservation of the Township’s largest remaining tract of open space, and the preservation and control of the airport in order to protect Readington’s community character.

The crux of the matter, from the eminent domain proponents' perspective, is clearly preserving the township as is. But what is community character, and who shapes it? Do some residents have to right to impose their "community character" values on everyone else? Mayor Allen asked Readington residents for their input:

The Township Committee is now assessing its options in light of the serious questions raised by testimony at the public hearing on November 6th [2013]. Many speakers at this meeting called into question the continued public support for this acquisition, pointing out the failure of negotiations with the owners of the airport, and public opinion that is clearly shifting against the use of eminent domain. . . .
So, how does this story end? Clearly, the final chapter has yet to be written. The issue of Solberg Airport in Readington Township is predictable in that it “sleeps” for a while, sometimes a long while, then erupts into a dramatic crisis. What is going to happen to the airport in the future, and what will the impact be on the Township’s quality of life? As long as this question remains unanswered and the issue remains unresolved, this is going to continue to be a matter of debate.
The Township Committee would be interested in hearing where citizens stand today on the issue of Solberg Airport. If you would like to share your views with the Township Committee, please contact the Mayor at

I sent the following letter to the committee, reflecting essentially the same comments I left with Allen's Hunterdon County Democrat letter-to-the-editor.

Dear Mayor Allen and the Readington Twp Committee,

My wife and I have lived in Readington for 35 years. We would prefer not to have a larger airport nearby, or the added congestion a major development would bring. But our personal desires are not the issue. The issue is the rights of individuals to use their property as they see fit, so long as that use violates no one else’s rights—“rights” meaning the individual freedom to pursue one’s values without coercive interference from others. It’s hard to see where an expanded airport or housing development violates anyone’s rights. If someone thinks either use violates their rights, they can prove it in the approval process. Government’s job is to objectively resolve disputes from the standpoint of strict neutrality. It should not coercively interfere on behalf of any side.

But what about Readington’s “community character?” A community is made up of individuals, and the character of a town is properly the commulative result of how those individuals live their independent lives and voluntarily interact. No one has a right to maintain a particular “community character” to his liking by stopping others from pursuing their values, no matter how large a majority or how much political power he can muster. Neither does a community’s government acting on behalf of any electoral faction, majority or otherwise, have that right. (The fact that, contrary to basic principles of Americanism, governments have this power does not make it right.) The basic principle of America is to protect the minority from the power of government or any electoral majority, and the smallest and only morally relevant minority is the individual.

The character of the township may indeed change if Solberg Airport expanded or developed in some other fashion. But the Solbergs are as much a part of Readington as all others, and they have the same right to “shape” their town’s character through the peaceful use of their land as anyone else. We oppose the Readington government’s eminent domain designs on Solberg Airport and surrounding lands as immoral and un-American.

Thank you for the opportunity to register my viewpoints.

Respectfully submitted,
Mike and Kathy LaFerrara

Is "public opinion . . . clearly shifting against the use of eminent domain?" We'll find out on November 3.

Related Reading:

Readington's Eminent Domain Assault on Solberg Airport--1, 2, and 3

Thursday, May 29, 2014

Readington's Eminent Domain Assault on Solberg Airport--3

Readington Township, Hunterdon County, New Jersey has been the scene of a long-running battle between those who want the municipal government to seize 600+ acres of land surrounding Solberg Airport through eminent domain to preserve as "open space." The battle pits the majority of voters (based on a $22 million referendum) against a vocal minority who opposes it. The upcoming June 3 Republican primary will determine whether the balance of power has shifted. This is the fourth in a series of posts on the subject. The first three are linked in "Related Reading".

The subject of this next letter is Solbergs and Special Interests by Abraham Farsiou. The opening sentence:

As a resident of Readington Township for the last 37 years, I do not remember a time that we did not have to challenge the Solbergs and special interest groups to keep the airport from becoming a busy jetport and fundamentally changing our township.

Farsiou goes on to talk about "the landscape of the township" and how this wonderful township is full of "People who are dedicated and care about the well-being of others"—as against "venom of special interest groups."

I left these comments:

What does one call the group that supports the eminent domain seizure of Solberg land, if not a "special interest"? Abraham Farsiou's entire letter is a demand to forcibly mold "the landscape of the township" to his liking—and those who have plans for their property that doesn't fit that mold be damned.

The Solbergs are confronted with the prospect of their own municipal government, at the behest of a cabal of their own neighbors, seizing their property against their will. I guess to "care about the well-being of others" doesn't extend to the Solbergs. People who are morally opposed to the action against the Solbergs are being forced to pay for it, against their will, through their taxes. But I guess to "care about the well-being of others" doesn't extent to those of us who disagree.

The fundamental principle of America is individual rights. The point of individual rights is to keep the individual secure in his life, liberty, and property. The fundamental principle of proper government is to protect individual rights—including from any voting majority. Eminent domain violates those rights and inverts the proper purpose of government, and is therefore un-American and immoral.

Allen and Gatti "protect the interests of families in Readington?" Wrong. They are imposing the wishes of those who see it in their interest to violate the rights of the minority—and the smallest minority is the individual. Not knowing them personally, I have no animosity toward Allen and Gatti. But there is nothing "gentle" about using the government's misbegotten, quasi-criminal powers of eminent domain against any township resident or landowner.

My wife and I have also lived in Readington for a long time—36 years. We too have raised children who attended Readington schools, played sports, gone on to college and built successful careers (and families, too). I too coached kids sports (soccer and softball). And we intend to stay. We, too, would prefer that Solberg not be expanded. But the difference is, we really do "care about the well-being of others," and caring begins with respecting the rights of others—ALL others, including the Solbergs to operate their airport as they see fit. There's no "quality of life" if your property is not even safe from your own neighbors.  

Related Reading:

Readington's Eminent Domain Assault on Solberg Airport--1 and 2

Wednesday, May 28, 2014

Readington's Eminent Domain Assault on Solberg Airport--2

Readington Township, Hunterdon County, New Jersey has been the scene of a long-running battle between those who want the municipal government to seize 600+ acres of land surrounding Solberg Airport through eminent domain to preserve as "open space." The battle pits the majority of voters (based on a $22 million referendum) against a vocal minority who opposes it. The upcoming June 3 Republican primary will determine whether the balance of power has shifted. This is the third in a series of posts on the subject. The first two are linked in "Related Reading".

A recent letter to the Hunterdon County Democrat (The threat of a jetport worst thing for Readington) opened with:

I’m sorry, but I don’t think that Thor Solberg has negotiated in good faith with Readington Township. The threat of a jetport has hung over this town for more than 30 years, and voters have made it quite clear that we do not want jets, more noise, pollution, and congestion to spoil the township that we have so carefully tended all these years.

I left these comments:

What do you call negotiating in "good faith"? The township officials are holding a gun to the Solberg's head while "making an offer you can't refuse." Is that what you call "good faith"?

Negotiation implies a search for common ground in pursuit of a mutually beneficial voluntary agreement. For the Solbergs, "negotiation" is a cruel fraud. The Solbergs are confronted with an extortion attempt by their own municipal government, authorized by their own neighbors, to immorally—but, sadly for America, legally—force a "negotiated" settlement under a threat to seize their property by force and against their will. There is nothing "reasonable" about an "offer" backed by a gun.

The fundamental issue is not "jets, more noise, pollution, and congestion," all of which are routine occurrences in an industrial society. And the issue certainly is not anyone's subjective feelings of what an un-"spoiled" township looks like. The fundamental issue is individual rights, which—contrary to what Christina Albrecht and others seem to think—are held equally and at all times by each and every individual. Among these fundamental rights are the right to be secure in the ownership and use of one's own property, so long as that use violates no one else's rights.

For more of my thoughts on this issue, see my letter of last June, The government is abusing its legal powers in Readington. As to Christina Albrecht, it takes a monumental amount of nerve to accuse the Solbergs of bad faith.

Related Reading:

The Eminent Domain Assault by Readington Against Solberg Land is Democracy in Action—and Un-American

Tuesday, May 27, 2014

Readington's Eminent Domain Assault on Solberg Airport--1

Readington Township, Hunterdon County, New Jersey has been the scene of a long-running battle between those who want the municipal government to seize 600+ acres of land surrounding Solberg Airport through eminent domain to preserve as "open space." The battle pits the majority of voters—based on a $22 million referendum allocating money for purchase—against a vocal minority who opposes it. The upcoming June 3 Republican primary will determine whether the balance of power has shifted. This is the second in a series of posts on the subject. The first is linked in "Related Reading".

Solberg Airport is situated smack in the center of my long-time home Readington Township, in the rural New Jersey county of Hunterdon. The airport was established by aviation pioneer Thor Solberg in 1941, and has operated without interruption by the Solberg family ever since.

In recent years, a large portion of the land surrounding Solberg—some 600+ acres—has been threatened with an eminent domain seizure by the township government, allegedly to head off airport expansion or sale to developers. The purpose; to preserve "open space"—with taxpayer dollars. As anyone familiar with liberty can readily detect, there are multiple violations of individual rights and abuse of government power evident in Readington.

Public attention to the "Solberg issue" has been contentious, but with ebbs and flows. The issue has been tied up in the courts for years, as the Solbergs have been forced to spend enormous amounts of their own money to battle the hefty tax-funded township assault. Lately, the public controversy has once again erupted from its slumber with a vengeance, as the upcoming June 3 Republican primary pits the spearheads of the drive against Solberg Airport, incumbent township committee members Mayor Julia Allen and Frank Gatti, against challengers John Broten and Sam Tropello, who seem to oppose the Solberg action (for wrong or futile reasons, but that's another post).

(Note: There are no Democrat challengers registered for the November election to run against the winners of the primary. So, the winners on June 3 are virtually assured of gaining the committee posts come November. In regard to the Readington Township committee, this is it.)

I've had plenty to say on the subject, and this will be the subject of my next several posts.

To start, let me reprint my letter-to-the-editor published in the Hunterdon County Democrat June 13, 2013. It is titled The government is abusing its legal powers in Readington:

In a May 21 article on about Readington continuing it legal battles to keep land around Solberg Airport green, Renee Kiriluk-Hill reported that this year Readington has budgeted thousands of dollars for “legal expenses” related to this “battle,” as has been the case over the past eight years. She notes that, “The process is driven, in part, by a $22 million bond ordinance that voters approved in 2006.”

But not all voters approved of this bond issue, which underpins the efforts to seize the Solberg’s land through eminent domain. That there are voters who didn’t vote for the bond issue might seem obvious, but this fact deserves serious consideration.

I oppose eminent domain on moral grounds. Whether the purpose is to keep land “green” or to head off airport expansion, it is simply unjust to use government’s legal powers — essentially the power of the gun — to confiscate private land against the owner’s wishes. It is likewise unjust to force those who disagree to finance this outrage through their taxes.

Some would say to me, “That’s democracy, majority rules.” Yes, it is, and that is the most damning indictment of democracy: that it grants the majority the power to trample the rights and violate the consciences of the minority. The government should not have the power to impose any voting bloc’s desire to violate others’ rights.

Government’s proper purpose is to protect individual rights, including rights to property and freedom of conscience, from criminals who violate rights by initiating force or fraud. The legal assault against the Solbergs, being pursued under the veneer of false legitimacy accorded by democracy, turns the government’s very reason for being on its head.


Related Reading:

The Eminent Domain Assault by Readington Against Solberg Land is Democracy in Action—and Un-American

NJ Assemblyman Joseph Cryan's Bill to Control College Costs is the Wrong Solution

RE: Our obligation to NJ's young minds by NJ Assemblyman Joseph Cryan

Skyrocketing college costs has prompted two NJ Assembly-persons to introduce legislation to reign in these costs. Enrollment is rising, but graduation rates are falling, often below 50%. In a NJ Star-Ledger op-ed, Assemblyman Joseph Cryan writes:

Teaming up with Assemblywoman Celeste Riley, I am trying to change that with a new package of bills that attempts to cut costs for our middle-class students and families, while increasing the number of young adults who are ready for college and boosting graduation numbers.

How to accomplish this? Through massive state interference in school governance. E.G.:

By putting limits on the amount of credits required for a bachelor’s degree, increasing the ability to transfer between universities and standardizing college courses, we project a quicker path for degree-seeking students.

I left these comments:

The big picture, which Cryan evades, is a textbook example of government funding. When government funding begins, costs inevitably spiral out of control. To counter the inevitable exploding costs, the government must eventually step in to control those costs. The result; government control over the subsidized industry. It is in this way that government spending eventually leads to tyranny.

Beginning in the 1960s, government began getting deeply involved in college financing, through various grants, subsidies, and loan guarantees. The result was predictable by any decent economics textbook; an explosion of college costs, as typically happens when government showers "free money" on an industry. In the last 35 years, higher education costs have risen at 4 times the rate of inflation.

True to form, the Cryan/Riley bill authorizes the government to intrude on higher education school governance, under the guise of controlling college costs. Once these controls start, there is no stopping their expansion over time. As Cryan readily acknowledges, "To accomplish our goals, no aspect of college and university life can go unchecked." Considering the leading role that higher education plays in the intellectual life of a nation, this statement should send a shutter down the spines of anyone who values intellectual freedom.

Furthermore, top-down central planning never works, because it leaves out the vast expanse of private initiative that exists in society. When central planning commences, to that extent the handful of planners usurps everyone else's liberty to think and act on their own judgement: It is a veritable "moratorium on brains" other than the government planners, as everyone else must follow their dictates. Only a free market leaves people free to act on their own judgment, thus bringing maximum intelligence to bear on the solving of problems. 

The only fair and rational solution is to end government funding, in whatever manifestation, of higher education. The result will be a collapse of cost, as colleges and universities compete for students based on quality, cost, and ability to pay, and both institutions and families search for more cost-effective ways to prepare young people for a productive life; scholarships and student loans will be privately funded and thus tied to future earning ability; bloated colleges will shed useless courses and requirements as they cut costs to attract students; and government spending will fall, leaving more money in the hands of those who earned it. 

More fundamentally, government subsidization of higher education is immoral, because it is funded by forcibly seizing money from productive citizens. So, let's forget about this horrendously damaging bill. Instead, let's get at the root of the problem—government funding.

The abysmally low college graduation rates that Cryan laments—less than 50% in many cases, he notes—should also be no surprise. Why wouldn't so many unprepared kids dive into college, given the flood of easy money available through government programs? How many of these kids could have gained occupational skills more consistent with their potential and/or interests if they (or their parents) had to foot the bill the old fashioned way—without any artificially easy path to tuition money?

Related Reading:

End, Don't Reduce, Federal Student Higher Education Funding

Saturday, May 24, 2014

A Memorial Day Tribute

Throughout history, armies have fought for territorial boundaries, kings, monarchs, dictators, imperialistic ambitions, the “honor” of some sundry rulers, the tribe, some theocrat's assertion of God’s will, and so on.

America’s military is unique. It fights for a set of ideas…the most radical set of ideas in man’s history. America is the first and only country founded explicitly and philosophically on the principle that an individual’s life is his to live, by unalienable right. America is the first and only country founded on the explicit principle that the government exists as servant for and by permission of the people, with the solemn duty to protect those rights; or, as Ronald Reagan put it in his first inaugural address:

We are a nation that has a government—not the other way around!

Sadly, the knowledge of what this country stands for is steadily slipping away…and along with it, our rights. Fortunately, we’re still free to speak out. So the best way to honor our military personnel, for those of us who still retain that knowledge, is to remind our fellow Americans in any small way that we can about America’s unique, noble, and radical Founding ideals.

We can still prevent “the other way around”. But we must rediscover the knowledge of, and think about, what it means to be an American. So, let us reflect on what really made this country possible.

This Memorial Day weekend, we will hear a lot about the “sacrifices” made by those who died defending America.

It is said that this nation, our freedom, and our way of life are a gift bestowed upon us by the grace of the “sacrifices” of the Founding Fathers and the fighters of the Revolutionary War. But, was it? Is it even possible that so magnificent an achievement – the United States of America – could be the product of sacrifice? As the closing words of this country’s Founding philosophical document – the Declaration of Independence – attest, the Founding Fathers risked everything to make their ideals a reality:

“And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.”

Some point to those words, and bestow on the signatories of that document the “honor” of having sacrificed for us, the "future generations." Nothing can be further from the truth. Sacrifice--properly understood--is the giving up, rather than the achievement, of values. America was achieved.

What is any human being’s highest attribute and value? It is his mind and his independent judgement. To use one’s mind – to think – is an exclusively personal, individualistic, self-motivated, self-chosen, selfish effort. All else in a person's life is a consequence of the use, or lack of use, of his mind – for better or for worse. One’s convictions about what one believes is right, one’s passionate concern for ideas, is the product of the independent use of one’s mind. The man who places nothing above the judgement of his own mind, even at the risk of his own physical well-being, is not engaging in self-sacrifice. To fight for one’s own fundamental beliefs is the noblest, most egoistic endeavor one can strive for.

The Founders were thinkers and fighters. They were egoists, in the noblest sense, which is the only valid sense. They believed in a world, not as it was, but as it could be and should be. They took action – pledging their “sacred honor” at great risk to their personal wealth and physical well-being – to that end. They would accept no substitute. They would take no middle road. They would not compromise. They would succeed or perish.

Such was the extraordinary character of the Founders of this nation.

To call the achievement of the Founders a sacrifice is to say that they did not deem the ideals set forth in the Declaration as worthy of their fighting for; that the idea that the individual’s life belongs to him and not to any collective and not to any ruler was less of a value to them than what they pledged in defense of it; that they did what they did anyway without personal conviction or passion; that the Declaration of Independence is a fraud. To say that America was born out of sacrifice is a grave injustice and, in fact, a logical impossibility.

World history produced a steady parade of human sacrifices, and the overwhelming result was a steady stream of bloody tyrannies. The Founders stood up not merely to the British Crown, but to the whole brutal sacrificial history of mankind to turn the most radical set of political ideas ever conceived into history’s greatest nation. It is no accident that the United States of America was born at the apex of the philosophical movement that introduced the concept of the Rights of Man to his own life, liberty, and pursuit of happiness, the Enlightenment.

Only the most extraordinary men of the most ferocious personal strength and courage could have so uncompromisingly upheld, against overwhelming odds and hostility and personal risk, so passionate a belief in their own independently held convictions so as to have established the American Founding. The American Revolution was history’s brightest demonstration of the rationally selfish pursuit of a noble goal by any group of people, ever. It was a monumental human testament to the dedication these men had to their cause – the refusal to live any longer under any social condition except freedom, and to "pledge eternal hostility against every form of tyranny."

The highest tribute I can pay to those Americans who died in the line of military duty, on this Memorial Day, is not that they selflessly sacrificed for their country. Self-sacrifice is not a virtue in my value system. It is an insult, because that would mean that their country and what it stands for was irrelevant to them; that they had no personal, selfish interest in it; that they were not passionate about their service; that they were indifferent toward America's enemies; that it made no difference to them whether they returned to live in freedom or to live in slavery.

This, of course, is not the case.

Freedom is thoroughly egoistic, because it leaves individuals alone to pursue their own goals, values, and happiness. It follows that to fight for freedom is thoroughly egoistic. If American soldiers fight for freedom, then the highest tribute I can pay to those who perished in that cause is to say that they were cut from the mold of the Founding Fathers; that they did not set out to die for their country but rather that they set out to fight for the only values under which they desired to live—that radical set of ideals that is the United States of America.

In honor of those who perished fighting for the American cause, and to all of America’s service men and women past and present:

Thank you for your service in defense of American ideals, for your desire to live in freedom, and for your fierce determination to accept no substitute.

Happy Memorial Day!

Thursday, May 22, 2014

Money vs. Wealth: Which is the Cart, and Which is the Horse? Ask Gilligan

If you want to see the mental corruption that is the legacy of Keynesian economics, read the letter Trickle-down economics is a ruse by Charlie Hagel. Hagel sees money exchanged for a car, computer, or hot dog, and concludes that money is the economy's driver. Put enough money in consumers' hands, and material goods, services, and jobs will miraculously materialize. Like an animal or infant, Hagel's (and many, many highly influential people's) mental activity stops at this perception.

Hence, this astounding statement:

"Businesses have never created a job — consumer demand for goods and services creates jobs."

This statement wouldn't be worth a second of my time, except that the premise is the basis for the destructive economic policies of most governments.

I left these comments:

This is one of the most bizarre statements ever uttered. Try tying that premise to reality. How do you consume before producing? Try eating a loaf of bread before you bake it.

As any rational person knows, you (or somebody) have to earn money by productive work before you go to the store to spend it. For that, you need a job. Businesses create jobs. Jobs create consumer demand. Production precedes consumer demand. No production, no consumer demand. And if there are no entrepreneurs to organize the factors of production toward the creation of goods and services—create businesses—there is no consumer demand because there are no products and services for your money to buy and no jobs for which to earn the money that stands for your productive contribution.

Henry Ford didn't pay higher wages so his workers could afford to buy cars. He paid higher wages to attract the best qualified people, and he was able to pay higher wages because he increased the productivity of his workers through his productive genius. And why did he increase his workers' productivity? So he could lower the price of his cars and thus expand consumer demand for cars to the average person. Only increased productivity can increase wages, lower prices, and create demand. That is the province of the businessman, not the consumer. Henry Ford, not consumers, was the ultimate source of the consumer demand for his cars (and a lot of other products by other businesses).

And the source of productivity is human brain-power. If that weren't so, then stronger animals like gorillas and mules would be far more prosperous than humans. They aren't, because they don't have the brainpower—reason—to guide their muscle power. Only humans do. Business is the application of human brainpower to human labor, and thus the driving force of our prosperity. Trickle down? The benefits of successful businesses—the "one-percenters"—is a flood, not a trickle, that lifts the boats that carry the rest of us.

How does taxing (i.e., stealing) money from those who earned it and handing it over to a non-worker add to consumer demand? It doesn't. It just redistributes consumer demand. Only working creates consumer demand. How does forcing higher wages by legal fiat increase productivity? It doesn't. It just throws people out of work and kills entry-level jobs.

The businessman is the unsung hero of the advanced, middle class industrial economy. Meddling government is the enemy.

By the correspondent's own premises, his statement is self-refuting and proves my point. If consumption creates jobs, then the products that the consumers consume could not even exist for consumers to consume, because the jobs (and businesses) that produce the consumer goods haven't come into existence yet, being dependent for their creation on the consumer to begin with. A "consumer" with noting to consume is a logical absurdity. But that is precisely what the correspondent say creates jobs—consumers with nothing to consume. Got it?

But, let's go back to basics.

In a primitive, barter economy, the process is obvious. You exchange a good for a good—e.g., a loaf of bread for a dozen eggs. If you do not have that loaf, your barter partner doesn't hand you the eggs; the trade doesn't take place. Money facilitates trade and makes possible the division of labor economy. Money enables you to produce a good for one productive person, and, in exchange, receive a good from another, different productive person in a completely different transaction. How? Money is the medium of exchange that makes this possible. You hand your work product to the first person in exchange for money, which you then exchange for the work product of the second person. Multiply this type of trade by millions and billions, and you've replaced the primitive barter economy with an advanced industrial economy. 

But beneath it all, every single one of those untold numbers of transactions is just as much a trade of actual goods for actual goods as the bread-for-eggs barter transaction. The whole process begins with production. It has to. Otherwise, there is no need for money because, like the barter example, there is no trade.

If the egg producer accepts money in exchange for his eggs, it is only with the assurance that the bread (or someone else's work product) will be there for him to exchange his money for. Money not backed by work product is worthless, and the egg producer would have no reason to exchange his eggs for money. Without production, there's no money, because production, not money, is consumer demand. In my barter example, the baker's bread is his demand for the eggs, and the farmer's eggs are his demand for the bread. When you talk about "consumer demand", you're talking about a producer's work product, whether money is involved or not. Money represents your unconsumed wealth production (consumer demand). It is not, in and of itself, consumer demand.

But, according to the Keynesians, money comes before wealth, as if you could exchange nothing for something—a something that doesn't yet exist. Another correspondent asks me"what is production of goods and services if no one can pay for goods and services? You have the cart in front of the horse." Production of goods and services is the only thing that can pay for goods and services.

The Keynesians can learn a thing or two from the rag-tag gang living on Gilligan's Island.

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