Selfishness, Not (Just) Competence

Like sharks sniffing the blood of an injured swimmer, pundits of all stripes are encircling President Obama and crying, "Incompetent!"

It may or may not be that Obama is incompetent, but what many of these analyses miss or sweep under the rug is the importance of philosophical ideas in causing (and ultimately ending) the terrible crisis our nation faces today. As I have put it here before, "What difference does it make if the trains are running on time, if they're all headed to the gulag?" Blasting Obama for incompetence when the successful implementation of his statist policies would be disastrous is counterproductive at best.

If our basis for judging the Obama Administration is protection from all foreign and domestic threats, we had better hope he is incompetent, because to the extent that he isn't, his policies will become a huge domestic threat and embolden many foreign ones. When his administration fails, "Try this again, but execute it better," would be exactly the wrong lesson to learn. But unless more commentators accept the individual's right to freedom and prosperity as their standard of value, this is precisely the lesson they will teach most Americans. This is a serious danger.

More to the point, our economic crisis did not magically begin with the Obama -- or the Bush -- Administrations. And it will not end when Obama finally leaves office. The crisis has long and deep roots in a general approach to government and the specific policies that grew from that approach. This approach to government and the resulting policies are justified by a generally-accepted moral ideal of the populace. The American people ultimately demanded the welfare state in lieu of a government properly delimited to the protection of individual rights. They did so because too many accept the premise that they are their brothers' keepers.

The latest issue of The Objective Standard focuses on how this moral ideal, altruism, brought about today's train wreck and what we must do to recover. Specifically, it makes available free of charge two full-length features that discuss this crucial issue.

In "Altruism: The Moral Root of the Financial Crisis," Richard M. Salsman examines the evolution of the financial crisis in detail, and explains how altruism effected it at every step. For example, he considers what Americans' acceptance of fiat currency really means.

The Fed was granted a monopoly on the issuance of currency; all other bank currencies were deemed illegal. Within twenty years (in 1933), the Fed reneged on the gold standard and began issuing fiat paper money -- money unmoored to any objective standard of value -- as it does to this day. With this privileged, pet bank at their side in the decades since, Washington's politicians were better able to finance the burgeoning American welfare state. Had Americans objected to this monopoly and its nonobjective money at the outset, we would be thriving in a very different America today. But Americans did not object. Why?

Few people have ever objected to the Fed's role as financier of the welfare state because so few object to the welfare state itself. The welfare state is the political ideal of altruism; it facilitates the sacrifice of the successful to the needy. Indeed, defenders of the welfare state defend the Fed no matter how irresponsible its policies or actions, precisely because it is so integral to the welfare state. And Fed officials excuse their own irrational behavior in the ether of moral superiority, seeing themselves as duty-bound to help the needy, even if indirectly, through the funding of mathematically and economically ridiculous Congressional schemes. They willingly finance (by printing fiat money) the welfare schemes that Congress cannot finance via direct taxation. Paul Volcker, head of the Fed from 1979 to 1986 and now an economic advisor to Mr. Obama, admitted that "central banks are not exactly harbingers of free market economies," primarily because they have always been "looked upon and created as a means of financing government [projects]." [bold added]

Paired with this penetrating analysis is an interview with Yaron Brook, Executive Director of the Ayn Rand Institute, about what can be done about this deeper problem, which has caused the current crisis, and will deepen it or cause similar one later, unless it is solved.

How can we turn an overwhelming culutral tide? By getting the right ideas out into the intellectual marketplace. As Brook puts it:

[M]ore than anything else, Americans need to understand the philosophical roots of this crisis. They need to know that freedom cannot coexist with altruism. And they need to know that there is a rational alternative to the destructive ideas that dominate America today: Ayn Rand's philosophy of Objectivism.

Ayn Rand saw today's crisis coming half a century ago for a reason: She understood that philosophical principles drive history, and she saw that the ones dominant in her time and today would necessarily drive it in the wrong direction.

-- CAV