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221. How an Economy Grows and Why It Crashes

Author:
Daniel Wahl
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes. . . .
Topic:
Economics and Government
Political Geography:
United States

222. The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

Author:
David H. Mirman
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Consider a drunk staggering down the middle of a busy highway and assume that his average position is the centerline. The state of the drunk at his average position is alive, but on average, he's dead. (p. 83) This is an example of the danger of the “Flaw of Averages,” Sam Savage's term for the common mistake of “representing an uncertain number by its average” (p. 59). “Plans based on average assumptions are wrong on average,” he explains. “In everyday life, the Flaw of Averages ensures that plans based on the average customer demand, average completion time . . . and other uncertainties are . . . behind schedule, and beyond budget” (p. 11, emphasis original). In The Flaw of Averages, Savage demonstrates the harm caused by the error and arms his readers with skills to avoid it. . . .

223. From the Editor

Author:
Craig Biddle
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Welcome to the Fall 2010 issue of TOS—and a special welcome to our new Canadian readers who, with this issue, are discovering the Standard via newsstands in Canada's largest bookstore chain, Chapters/Indigo. We are excited to add our northern neighbors to the list of countries we infiltrate with principled discussion of the moral and philosophical foundations of freedom.
Topic:
Economics and Islam
Political Geography:
America and Canada

224. Ground Zero Mosque, the Spread of Islam, and How America Should Deal with Such Efforts

Author:
Craig Biddle
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Considers the Ground Zero mosque, the spread of Islam in America, and how Americans and Westerners in general should deal with such efforts.
Topic:
Islam and Terrorism
Political Geography:
America

225. A Prescription for America's Health Care Ills

Author:
Stella Daily Zawistowski
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
In their desire for less expensive, higher quality, more accessible health care, Americans have accepted a false alternative: fully regulated, socialized medicine, as advocated by Democrats, or semi-regulated, semi-socialized medicine, as advocated by most Republicans. But if Americans want better health care, they must come to recognize that government intervention, great and small, is precisely to blame for America's health care ills. And they must begin to advocate a third alternative: a steady and uncompromising transition toward a rights-respecting, fully free market in health care. In order to see why this is so, let us first consider the unfree, rights-violating nature of American health care today. Under our current semi-socialized health care system (which both Democrats and Republicans created), the government violates the rights of everyone who provides, purchases, insures, or needs health care. It violates the rights of doctors by forcibly subverting their medical judgment to the whims of government bureaucrats or to the heavily regulated insurance companies; it violates the rights of citizens in general by forcing them to buy insurance with a mandated set of benefits; it violates the rights of insurers by prohibiting them from selling plans of their design to customers of their choice at prices they deem economically appropriate; it violates the rights of pharmaceutical companies by forcing them to conduct trials that, in their professional judgment, are unnecessary; and it violates the rights of suffering and dying patients who wish to take trial medications but are forbidden to by law. These instances merely indicate the numerous ways in which the government violates the rights of health care participants, but they are enough to draw the conclusion that Americans are substantially unfree to act in accordance with their own judgment—a fact that alone is sufficient reason to condemn our current system as immoral. But, as we shall see, the immoral nature of the current system is also precisely what makes it impractical. The system is in shambles because of these rights violations, a fact that will bear out on examination of the three aspects of health care of most concern to Americans: its cost, its quality, and its accessibility.
Topic:
Health
Political Geography:
America

226. An Interview with John Allison about Pro-Capitalism Programs in American Universities

Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
I recently spoke with Professor John Allison about his efforts and successes in creating pro-capitalist programs in American universities. Professor Allison was the CEO of BB for twenty years, during which time the company's assets grew from $4.5 billion to $152 billion. He now teaches at Wake Forest University. —Craig Biddle Craig Biddle: Hello, John, and thank you for joining me. John Allison: It is a pleasure to be with you. Photo courtesy Wake Forest University CB: Let me begin with a couple of questions about your work at Wake Forest. I understand that you joined the faculty in March 2009 as a Distinguished Professor of Practice—a fitting title given your decades of applying philosophy to business. What has your work at the university entailed so far? And how have your ideas been received? JA: I've primarily been involved in teaching leadership both to students and to some of the administrators in the university. I taught a course on leadership last fall, and I've been participating in various courses taught by other professors on finance, mergers and acquisitions, and organizational development. But my focus is on leadership. My ideas have been well received. The students take great interest in talking to someone who has been in the real world and been successful in business. I think they appreciate that perspective. CB: Through the BB Charitable Foundation, you've established programs for the study of capitalism at a number of American universities. How many of these programs are there now? What unifies them? And what generally do they entail? JA: BB has sponsored sixty-five programs to date, and they're all focused on the moral foundations of capitalism. While many people recognize that capitalism produces a higher standard of living, most people also believe that capitalism is either amoral or immoral. Our academic question is: How can an immoral system produce a better outcome? We believe that capitalism is moral and that this is why it is so successful. We think it is critically important that we not only win the battle over economic efficiency, but that we engage in and win the debate over ethics as well.
Topic:
Economics
Political Geography:
America

227. The British Industrial Revolution: A Tribute to Freedom and Human Potential

Author:
Michael Dahlen
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
For most of human history, the vast majority of people lived in squalor and bitter poverty. People labored hard in grueling conditions but produced little wealth for their efforts; food was scarce; disease was rampant; child mortality was about 50 percent; and life expectancy was twenty to thirty years. To borrow from Thomas Hobbes, life was “nasty, brutish, and short.” ©2008 Frankie Roberto http://commons.wikimedia.org/wiki/ File:James_Watt%27s_Workshop.jpg Today, by contrast, in developed countries such as Britain and the United States, the relatively few people who are considered “poor” typically work in comfortable jobs (if they work at all); have refrigerators, electric light, indoor plumbing, televisions, telephones, and the like; and can expect to live into their seventies. Their “poverty” appears rather fortunate compared to the wealth of kings past. The average person today works in even greater comfort; has a car, a computer, a cell phone, countless other devices of luxury, and a lifestyle that would make any king living in the pre-industrial era look like a peasant. The dramatic transformation from universal poverty to widespread wealth began in the late 18th century with the Industrial Revolution, which originated in Britain. The Industrial Revolution was just that: a revolution of industry—a revolution in which an enormous increase in the commercial production and sale of goods changed the world and improved man's standard of living by orders of magnitude. As historian Eric Hobsbawm remarks, “No change in human life since the invention of agriculture, metallurgy and towns in the New Stone Age has been so profound as the coming of industrialization.”1 To see what caused this dramatic transformation, let us look first at the political climate and living conditions of the medieval era that preceded the British Industrial Revolution; then we will consider the politico-economic system in which the Revolution occurred, several related developments that illustrate the nature of the era, and the economic growth that these developments brought about.
Topic:
Political Economy
Political Geography:
Britain, United States, and United Kingdom

228. The Curious Life of Richard Feynman

Author:
Daniel Wahl
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Twelve-year-old Richard Feynman's room was a mess. Old, broken radios were scattered across the floor; spark plugs and electronic gizmos overflowed from a big wooden box; a well-worn microscope protruded from a tabletop covered with specimens and slides; and a book titled Trigonometry for the Practical Man lay open on the bed. Richard navigated through the chaos of his room, walked out the door, down the hall, and into his three-year-old sister Joan's room. He woke her, saying he wanted to show her something wonderful. They left the house and walked through the streets of Far Rockaway holding hands. When they reached a golf course, far away from the city lights, Richard stopped and said, “Look up.”1 There, in the sky above them, shone the aurora borealis, a beautiful green curtain of light caused, as Richard explained, by excited nitrogen atoms colliding with one another and emitting photons.2 Few twelve year olds knew this phenomenon was taking place; far fewer knew how. But Richard was not an average boy. Richard was the kid who presented a book report about a tale of mystery and adventure while delaying the revelation that he was talking about a math text.3 He was the kid who earned the curious title “the boy who fixes radios by thinking.”4 He was the boy who, in high school, won math competitions by circling his answers mere moments after the questions were asked.5 Richard read voraciously on any subject that interested him, amassing, integrating, and applying an ever-expanding wealth of knowledge. When his friend Arline told him that she was studying the works of Descartes in her philosophy class and that Descartes had proved the existence of God, Richard replied, “Impossible!” After examining Descartes' argument, Richard confirmed his initial conclusion: “It's a bunch of baloney.” When Arline said, “Well, I guess it's okay to take the other side. My teacher keeps telling us, 'There are two sides to every question, just like there are two sides to every piece of paper'”—Richard excitedly shot back: “There are two sides to that, too.” He grabbed a strip of paper, gave it a half-twist, connected the two ends, and handed her a one-sided piece of paper known as a Möbius strip (named after its discoverer, August Ferdinand Möbius). The next time her teacher repeated the cliché, Arline held up her own Möbius strip and said, “Sir, there are even two sides to that question: There's paper with only one side!

229. Herman Boerhaave: The Nearly Forgotten Father of Modern Medicine

Author:
Richard G. Parker
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Isaac Newton developed calculus, demonstrated the immense practicality of the scientific method, and discovered the laws of motion that govern the physical world. Charles Darwin developed the theory of evolution, discovered the mechanism of natural selection, and established the fundamental principles of biology. Michelangelo perfected the art of sculpture, depicted man as a heroic being, and inspired viewers and artists across centuries. Such men advanced their respective fields by orders of magnitude. Who is their equivalent in the field of medicine? His name, which few people today recognize, is Herman Boerhaave (1668–1738). In his day, Boerhaave was a world-renowned physician and educator. He held three professorial chairs—in medicine, chemistry, and botany—at the University of Leiden and made the Dutch school the focal point of medical education in the Western world. During the Age of Reason, Boerhaave was the undisputed standard-bearer of Enlightenment medicine: When he began his work in medicine, the field was still mired in the mystical methodologies and superstitions of the Middle Ages; by the time he was through, the field was a science concerned with the natural causes and treatments of illnesses. And although his name has since faded into near obscurity, his influence remains. To acquaint you with this heroic man, let us briefly survey the highlights of his life, and then consider his seminal contributions to medicine.
Topic:
Education

230. A Civilized Society: The Necessary Conditions

Author:
Craig Biddle
Publication Date:
10-2010
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Author's note: This is chapter 7 of my book Loving Life: The Morality of Self-Interest and the Facts that Support It (Richmond: Glen Allen Press, 2002), which is an introduction to Ayn Rand's morality of rational egoism. Chapters 1–6 were reprinted in prior issues of TOS. We have seen that being moral consists in being self-interested—acting in a life-promoting manner. We have also seen that what most fundamentally makes life-furthering actions possible to human beings is rational thinking. In order to live, we have to use our mind to discover the requirements of our life, and we have to act accordingly. We begin this chapter with the question: What can prevent us from acting on our judgment? What can stop us from employing our means of survival? Observe that if you are alone on an island, nothing can stop you from acting on your judgment. If you decide that you should acquire some food, you are free to make a spear and go hunting, fashion some tackle and go fishing, or plant a garden and tend to it. And if you obtain food, you are free to eat it, save it, or discard it. Likewise, if you decide that you should build a shelter, you are free to gather materials and construct one. And if you do, you are free to live in it, build an addition onto it, or tear it down. Alone on an island, you are free to act according to the judgment of your mind. But suppose another person shows up on the island, grabs you, and ties you to a tree. Clearly, you are no longer free to act on your judgment: If you had planned to go hunting, you cannot go. If you had planned to build a shelter, you cannot build it. Whatever your plans were, they are now ruined. And if you are not freed from your bondage, you will soon die. The brute's force has come between your planning and your acting, between your thinking and your doing. You can no longer act on your judgment; you can no longer act as your life requires; you can no longer live as a human being. Of course, the brute could feed you and keep you breathing; but a “life” of bondage is not a human life. A human life is a life guided by the judgment of one's own mind. In order to live as human beings, we have to be able to act on our judgment; wild animals aside, the only thing that can stop us from doing so is other people; and the only way they can stop us is by using physical force. Consider another example. A girl is walking to the store intent on using her money to buy some groceries when a man jumps out from an alley, points a gun at her head, and says: “Give me your purse, or die.” Now the girl cannot act according to her plan. Either she is going to give her purse to the thief, or she is going to get shot in the head. In any event, she is not going grocery shopping. By placing a gun between the girl and her goal, the thief is forcing her to act against her judgment—against her means of survival. If she hands her purse to him, and if he flees without shooting her, she can resume acting on her judgment—but, importantly: not with respect to the stolen money. While the thief may be gone, the effect of his force remains. By keeping the girl's money, he continues to prevent her from spending it; and to that extent, he continues to stop her from acting on her judgment. This ongoing force does not thwart the girl's life totally, but it does thwart her life partially: If she had her money, she would either spend it or save it; but since the thief has her money, she can do neither. She cannot use her money as she chooses, and her life is, to that degree, retarded.