It’s Good to Make a Profit

I attended a recent gathering where someone made the unchallenged remark that corporations were profiting at our expense. That got me to thinking – if Microsoft makes big profit, is there some group of exploited people who are poorer by that same amount? I suspect many people think so. People in Congress may think so too, because they are considering legalizing something called a “B” Corporation, which could legally pursue so-called “social responsibility” in place of profit.

Apparently this cultural bias against profit has been around for a long time, going back even to the Ancient Greeks and Romans, and is related to a similar bias against productive work. (See article by Richard W. Fulmer in “The Freeman”, July/August 2010.) According to this view, productive work is fitting only for serfs and slaves; honorable men gain wealth through battle and conquest (Wow!).

In spite of popular beliefs, profit is created wealth, not transferred wealth. To understand why, observe that profit is the difference of sales minus expenses. Sales are a measure of the value to the economy that has been created. Expenses are a measure of the resources of the economy that have been consumed. Thus, profit is the excess of value created over resources consumed and represents wealth that did not previously exist.

So, to answer my own question, - no one is exploited because Microsoft has a profit. That profit is wealth that would not exist, had Microsoft not been so successful. Of course, Microsoft’s competitors got hurt, but it was the competition from Microsoft that hurt them, not the profit.

I can hear the profit bashers now, claiming that Microsoft should have reduced its profits by lowering prices even more. But lowering prices doesn’t always reduce profits any more than raising prices can erase losses. And lowering prices too much could (or did) get Microsoft accused of unfair competition.

Another important benefit from the pursuit of profit is that resources of society are allocated most efficiently when profit is maximized, which is beneficial to everyone in the long run. That’s why economist Milton Freeman so famously said that corporations have only one social responsibility, which is to increase their profits.

We should also inform the profit basher that he himself makes a profit in his job, assuming his pay exceeds his job-related expenses. Who has he exploited? That should make it very clear that it is good to make a profit.

Gay Marriage

I am dismayed that so many Republican candidates believe it is the duty of government to deny gays the right to marry. They call it “defending” marriage, as if gay marriage were somehow a threat to anyone. Are they afraid we are all going to turn gay? Or maybe it is just mean-spirited; they wish to make gays as miserable as possible.

The fact is that gays are going to continue to marry each other and live together, with or without state approval. Laws like California Proposition 8, to “define” marriage as between a man and a woman, do not affect the actual practice of gay marriage, but they do allow the state to discriminate against gays in the area of marital privilege, through laws governing such things as inheritance, divorce, community property, child custody, visitation rights, taxes, and benefits.

It is interesting that currently over sixty percent of major corporations provide employee benefits to same-sex partners, yet only five states plus D.C. recognize gay marriage. This is a disgrace, but it is not surprising. Government has a long history of discriminating against its own people. There was a time, for example, when 38 states banned inter-racial marriage.

Government has the obligation to treat all people equally. That comes from the 14th Amendment of the federal constitution, which says states may not deny any person the equal protection of the law. Perhaps a future Supreme Court ruling will strike down state laws which currently discriminate against gays.

Gay couples are entitled to the same legal rights as everyone else, including the right to form a legal contract commonly known as marriage. Moralists who believe they must defend the institution of marriage by discriminating against gays have their morals on backwards.

Legalize Marijuana

I have never used marijuana and don’t even know anyone who does. So how can I be so sure it is safe to make marijuana legal? The answer is simple. Legalizing marijuana has nothing to do with how safe or how harmful it may be. Lots of substances are harmful (like cyanide, and arsenic), yet BATF and DEA SWAT teams are not breaking down doors in the night looking for them.

If we are concerned that people may harm themselves with marijuana, why are we harming them even more with prison. We have over half a million people in prison for violating non-violent drug laws. Prison is more harmful than marijuana.

Is the threat of prison supposed to prevent drug use? If so, it is not working. We have about 40 million people in the U. S. who are occasional users of illegal drugs. That is more people than when President Nixon launched the federal war on drugs in 1972. Our last two presidents admit to trying marijuana. Do we really want all these people in prison? The U. S. already leads the world in incarceration rate.

If marijuana were legal, would it be more of a problem? Well, alcohol was more of a problem during prohibition than it ever has been since, so it seems logical that drugs would be less of a problem if they were legal. For one thing, we would not have pushers on campus like we do now. For another, terrorists would not be funding their activities with illegal drug money like they do now. For another, we would not have so much crime and gang violence like we do now.

Do we need drug laws to protect our children? Actually, teens report that marijuana is more accessible than alcohol and cigarettes. The reason is simple: pushers don’t ask for ID. It seems reasonable that if we treat marijuana like alcohol and cigarettes, marijuana will be less accessible to teens.

Do we need drug laws because marijuana is immoral? It seems dangerous to me to let the government decide morality, because there is no end to it. Gambling, pornography, homosexuality, being absent from church on Sunday – all these things have been illegal in the past because of government’s moral judgment. Here is my moral judgment: leave your neighbor alone as long as he is not hurting anybody but himself.

So why do we have drug laws anyway? One reason comes to mind: the ever-expanding power and authority of the federal government. It is seen in the merciless pursuit of sick and dieing medical marijuana patients in California by the federal DEA, even after our state legalized medical marijuana. It is seen in the asset forfeiture laws which allow the government to confiscate your property without due process of law. It is seen in the ban on growing hemp. The war on drugs has become an excuse to expand government power.

Most of the points I have made here would apply not just to marijuana but to all illegal drugs. However, the voting public is not ready to consider legalizing all drugs. So let’s take them one at a time. Marijuana, being the least harmful and the most medically useful, is the logical place to start.

Recommended reading: “Why our Drug Laws Have Failed and what we can do about it”, book by Judge James P. Gray.

What Part of “Infringe” Don’t You Understand?

The recent decision by the U.S. Supreme Court, in striking down the Washington D.C. total gun ban, unfortunately left the window open for President Obama to declare that he supports what he calls “common sense” gun laws. My question is – Will common sense be applied to determine if any of the proposed gun laws are actually constitutional?

The second amendment to the U.S. Constitution declares that the right of the people to keep and bare arms shall not be infringed. The dictionary defines “to infringe” as “to act in violation of, or to transgress”. Assuming that “arms” mean fire arms, that is, guns not too large for one man to carry, I arrive at the common sense conclusion that most (maybe all) of the current gun laws are unconstitutional, let alone the ones being proposed.

And what is being proposed? The proposal that frightens me the most is called “national gun registration”. This may seem harmless at first, but in fact is very dangerous, because registration is a logical precondition to confiscation. (And confiscation is a logical precondition to genocide, but let’s not get ahead of ourselves.)

Gun registration is unconstitutional for the same reason that concealed carry permits are unconstitutional. These laws convert a right into a privilege, to be granted or denied at the whim of the state.

The constitution does not say that the privilege of the people to keep and bare arms shall be regulated for the purpose of public safety. Gun control advocates and Supreme Court justices should stop pretending that it does.

And what kind of society would we have if we declared all of our gun laws unconstitutional. I think we would have a safer society, from criminals as well as from government tyranny. It works for Switzerland.

What to Say to a Global Warming Alarmist

Global warming true believers claim that humans, by using carbon-based fuels such as coal and oil, are degrading the earth’s climate. Their solution is to have a government policy which will restrict the use of these fuels, world-wide. They favor international multi-lateral agreements to accomplish their goal, coupled with economic sanctions to force compliance. They see the United Nations playing a key roll, perhaps evolving into a form of world government. They claim to have a scientific consensus on their side, and they are willing to marginalize anyone who disagrees with them, with charges of being anti-science and anti-environment.

What do you say to such people? Here are a few of their most frequent claims, followed by my thoughtful response.

“Humans have been polluting the atmosphere with carbon dioxide by burning coal since the industrial revolution, and that has raised the earth’s temperature, because carbon dioxide is a greenhouse gas.”

First, it is wrong to label carbon dioxide as a pollutant. Carbon dioxide is a vital component of the atmosphere and is absolutely necessary for all life on earth. Second, the total accumulated amount of atmospheric carbon dioxide contributed by humans is estimated to be only 100 parts per million, or one hundredth of one percent! This is about 150 times smaller than the average concentration of the main greenhouse gas, which is water vapor. The carbon is theoretically warming, but you will never see it in real world measurements.

“But the earth has warmed in the last 100 years!” That’s right, and the observed warming, decade by decade, correlates quite well with measured solar activity, and not with carbon dioxide content.

“You will be sorry when Greenland melts and floods the everglades, and when polar bears and penguins go extinct.” Greenland was green when first discovered one thousand years ago, yet the everglades have been around for at least ten times that long. Polar bear populations have more than doubled in the last 30 years. Penguins suffer from over-fishing of their feeding areas, not from an un-noticeable amount of extra carbon dioxide.

“The debate is over, the science is settled, and a consensus has been reached.” Yes, a consensus exists among climatologists corrupted by an obscene amount of government funding. The rest of the scientific community disagrees.

“We have a moral imperative to save the earth.” No, we have a moral imperative to preserve human liberty; it is never moral to expand government.

“You global warming deniers are no better than holocaust deniers.” The similarity between global warming alarmism and the holocaust is that both are the result of too many people accepting uncritically what their government is saying. In the case of the holocaust, it was the idea that the Jews were responsible for all of Germany’s misfortunes. In the case of global warming, it is the belief that carbon fuel is responsible for everything that can go wrong with weather and climate. Both belief systems are false.

Stop Bashing Immigrants

Conservative talk radio and political campaign ads are full of concern these days about how immigrants are taking our jobs, burdening our welfare state, and increasing crime. Employers of illegal workers are vilified. There are even plans for building a fence at the Mexican border.

Fortunately, none of the complaints against immigrants are valid. Here are some arguments to counter the immigrant bashers.

Immigrants cause unemployment? No, because workers are also consumers, so population expansion can never create unemployment. Furthermore, Cato has shown that cities with the most immigrants have the lowest unemployment.

Immigrants send money out of country? Yes, but all that money eventually comes back. A dollar is a claim against the U.S. economy, and it would be foolish to forfeit that claim.

Immigrants are over-represented in the prison population? Not when you adjust for age, and subtract those detained for simply being illegal.

Immigrants burden the welfare state? Well, everyone does, but immigrants less so because they tend to be younger and require less healthcare. And don’t forget, immigrants pay taxes too.

“My ancestors came here legally!” Yes, that’s because there were no quota limits before 1924.

“Immigrants don’t assimilate!” I’ll bet they were saying that about your ancestors one hundred or more years ago.

Having countered some of the negative claims about immigration, what about the benefits? The primary benefit is that immigration creates wealth in the same way that free trade creates wealth. Immigration is a form of international trade in labor. The single best thing America can do for other countries is not foreign aid; it is to allow free trade in goods and services, labor and capital.

In addition to economic arguments, there are human arguments as well. People have a right to migrate; it is called freedom of movement. Think of the Berlin Wall and the people in the captive countries of Eastern Europe. Migration is an important check on tyranny. Why is keeping people out any different from keeping people in?

Our immigration laws are a bungling attempt at economic and cultural central planning. Current law, existing since 1968, places an annual ceiling on legal immigrant visas of 20,000 per country of origin. What arrogance that our lawmakers would think they know how many immigrants our country would need, even into the future!

What to do about illegal immigration? I suggest we simply repeal the visa limits. That is the situation we had before 1924, when America stood for freedom. Illegal immigration will dry up as legal immigration expands. Total immigration might increase, but that might be a good thing. Bad law has been the problem all along, and once again, freedom is the answer.

Dumping On the Tea Party Movement

The tea party movement seems to be a spontaneous and leaderless grass roots response to the outrageous way our federal government has been behaving lately. Thousands of people showed up in public photo-op demonstrations around the country, and in D.C., to protest the economic stimulus package, the bank bailouts, the auto company bailouts, socialized healthcare, the Federal Reserve, unfunded entitlements, and the explosion in federal debt. They thump the constitution and claim to value liberty. But do they really?

Who are these people? Apparently they are a coalition of disgruntled Republicans and independents, perhaps boosted by some spin-off from the so-called “Ron Paul Revolution”. There was even a Nashville convention, with Sarah Palin as a speaker. Will there soon be a “Tea Party Party”?

I certainly agree with the alarm that the tea party goers have over the current state of affairs, but my question to them is – Where have you people been!? Why weren’t you protesting when George W Bush was trampling civil liberties, inventing foreign wars, and expanding the national debt? Where were you when George W Bush, in his final year, signed off on the initial stimulus package and bank bailouts?

Here are some more questions for the tea party people:

You say healthcare should be provided by the market, not by government? Fine. Does that mean you are now ready to repeal Medicare? And why is government-run healthcare so different from government-run education. Under the ethical principles of socialism, you should accept both; under the ethical principles of liberty, you should accept neither.

You say you don’t want cap-and-trade, and you don’t want the EPA to restrict emissions of carbon dioxide. Fine. Does that mean you are now ready to abolish the EPA? The EPA has been trampling private property rights from it’s very inception, with such weapons as the Endangered Species Act and the Wetlands Preservation Act. The EPA is not compatible with liberty, nor is it even constitutional.

The questions could go on, but my point is - I suspect the tea party goers approve of big government, just not “bigger” government. If the tea party goers truly loved liberty as they claim, they would be supporting the Libertarian Party, not spawning a new movement.