Union Thugs and Warren Buffett

— "According to government legislation, people aren't responsible enough to survive doing anything," says Frank H. Steensnaes. "What if footwear was determined to be a crucially important element of human survival and the government decided to regulate and fund it? The result would be shoes that did not serve us as well as the shoes we have today. According to the text, that's exactly what happens with education, because the government steps in [having decided] it's so crucial." The text to which Steensnaes refers is Nathaniel Branden's essay "Common Fallacies about Capitalism," chapter five of Ayn Rand's book, Capitalism: The Unknown Ideal.

On Sunday, November 25, the San Diego Objectivist Discussion Group will meet to discuss Branden's essay. "The purpose of our club is to go through Ayn Rand's writings and to learn about objectivism," explains Steensnaes. At the previous meeting, the group discussed Alan Greenspan's essay "Antitrust," which precedes Branden's essay in Rand's book. According to Steensnaes, the only social system that "systematizes" the political philosophy of objectivism is laissez-faire capitalism.

"When you have redundancy in a system, when you have competition, it forces quality up and prices down." If power grids were privately owned, Steensnaes argues, "You would have smaller producers finding the most efficient ways" to produce alternative, perhaps more reliable, sources of power. "If you only have a hammer, every problem looks like a nail. What you can do, if you're a politician, is make laws -- laws that typically restrict, or so-called 'guide,' people's behavior for the betterment of themselves, whether or not they want to be bettered."

In his essay Branden contends that a recession or a depression in the marketplace is caused by government intervention. "In 1913 the Federal Reserve System was established, and their mission was stated as being to free the individual banks from limitation in lending," says Steensnaes, who adds that the depression in the 1930s was the direct result of the Federal Reserve System. Steensnaes cites the recent financial crisis resulting from widespread mortgage loan defaults as a current example of government-induced recession. "Two government entities underwrite loans, package them up, and sell them to securities markets on Wall Street. I think that if all the banks individually had to assess all these loans, they probably wouldn't have approved them all."

Another issue raised in Branden's essay is that of labor unions. "Unions have not created a better standard of living for American workers," says Steensnaes. "According to Branden, there is another reason for our high standard of living, and that is productivity. What the unionists are doing is creating artificially high wages for their members for a relatively short period of time. Unions are nothing but thuggery: 'You can't individually negotiate, you have to go through us, and we'll look after your well being.' [The text] does say in a different section that statism is nothing but gang rule -- the opposite of objectivism and capitalism is a statist economy, in which all production resources are owned by the state."

Warren Buffett, a self-made billionaire, has been in the news recently, voicing his support for an estate tax. According to Rand's philosophy, as interpreted by Branden, taxing inherited wealth -- to preserve the morals of the inheritor -- is misguided. "What a producer does with his or her money is not relevant," says Steensnaes. "I've read about these trust-fund babies too, and they are morally reprehensible; they don't do anything productive. But there is a quote in the text that describes that the marketplace will always take care of these kinds of issues if the recipients don't guard their wealth or produce anything."

The nature of objectivism, Steensnaes explains, is that race and ancestry do not matter -- a person's character should be judged only by a person's actions. "Warren Buffet has the right to do with his money what he wants, just like anyone else. If inheritors don't take care of the wealth, they will lose it eventually. They should not be taxed. Here's the crazy thing: Who is Warren Buffett to tell some other person what to do with his or her money?"

Objectivists following the word of Ayn Rand contend that capitalism is the most practical economy, both for underdeveloped and complex societies. "I heard on the news not too long ago that people in the Middle East were not developed and therefore couldn't handle democracy," says Steensnaes. "I've heard that repeatedly, that one developing country or another is not ready for economic freedom. This is a fallacy, according to objectivists, because the only reason why they are developing countries instead of developed countries is because they have a restrictive, highly regulated society." On the other hand, he says, "The more complex an economy, the greater number of choices and decisions that have to be made. The more choices we have, the more difficult it would be for a central authority to control all the choices and products, and we would have an astronomical bureaucracy." -- Barbarella

San Diego Objectivist Discussion Group: "Common Fallacies about Capitalism"

Sunday, November 25

6 p.m.

Claire de Lune Coffee Lounge

2906 University Avenue

North Park

Cost: Free

Info: 619-277-5840 or http://www.aynrandcenter.org

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