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Axing the Subsidies...

Imagine you're in a car being driven by your best friend.  This person's whole life has been about cars -- he loves everything about them, dreams about them, never stops talking about them.  He's not a very good driver, though - but he gets really defensive if you bring it up - if you even look like you'll bring it up.  So... presently you're both in the car and he's driving 95 mph and happens to be heading towards a cliff.  Do you encourage him to go faster?  Do you tell him what a good driver he is?  Would this be doing either of you a favor at this point?

It seems obvious that we won't make farmers more competitive by taking the pressure off of them to be competitive, by protecting them from competition. But that's what subsidies do.  We're not shocked that some farmers are throwing tantrums over the current proposal to cut some subsidies -- they're like the car nut driving us over a cliff and they're defensive as heck about their inability to compete.

My grandfather always said if someone calls you a donkey, laugh -- but if a lot of people call you a donkey, you'd best buy a saddle and sell rides.  That was his way of saying listen to the market -- it tells you what everyone values and how you stack up compared to that.  He'd say you have to work hard at the right things -- just working hard isn't enough.

The vast majority of us figure that out pretty early on in our endeavors to eek out a living.  So what gives some farmers the illusion that they have a birthright to farm?  What gives some of them the audacity to demand that the rest of us have our hard-earned dollars forcibly diverted away from our childrens' college education and other more useful and valued purposes -- just so they can take them and dump them into a black hole of uncompetitiveness? 

My family's history was built on agricultural efforts in Maine.  We don't operate dairy farms and apple orchards anymore.  Now we are bankers, artists, educators, marketers, lawyers and computer geeks.  Living in Kanasas, I have great friends whose families once made -- or continue to make -- their living from farming wheat, sorghum, corn and other ag products.   But they aren't farmers themselves. They're entrepreneurs, doctors, machine shop workers, firemen, educators, and so on...  Where would this country be if all of those bright energetic people had been forced to stay in farming? 

I care a lot about all of them.  I love my kids and my younger brothers, too.  And I have the same message for all of them:  a life worth living means connecting with reality (the world as it is, not how you want it be) and constructively dealing with it so you can apply your unique gifts and talents to add real value to your family, your community, your country, your world.  Add real value -- not the illusion of value.  Not take value away from others.  Add real value.  Value happens to be defined by all those individuals that make up your family, your community, your country, your world -- that is, value is not defined by you.

That makes for hard work in this day and age -- because the very freedom and prosperity that allows for an uncomprehensible myriad of specialization out there in the global markets makes it quite difficult for you to find your place within it.  But that's what you have to do -- just like the rest of us.  And noone else is responsible for getting it done for you.   

"There is perhaps no more poignant grief than that arising from a sense of how useful one might have been to one's fellow men and of one's gifts having been wasted.  That in a free society nobody has the duty to see that a man's talents are properly used, that nobody has claim to an opportunity to use his special gifts, and that, unless he himself finds such opportunity, they are likely to be wasted, is perhaps the gravest reproach directed against a free system and the source of the bitterest resentment.  The consciousness of possessing certain potential capacities naturally leads to the claim that it is somebody else's duty to use them.

[...] The necessity of finding a sphere of usefulness, an appropriate job, ourselves is the hardest discipline that a free society imposes on us.  It is, however, inseperable from freedom, since nobody can assure each man that his gifts will be properly used unless he has the power to coerce others to use them.

[...] It is of the essence of a free society that a man's value and remuneration depend not on capacity in the abstract but on success in turning it into concrete service which is useful to others who can reciprocate.  And the chief aim of freedom is to provide both the opportunity and the inducement to insure maximum use of knowledge that an individual can acquire.[...]" -- F.A. Hayek, The Constitution of Liberty

There have been times in history when societies have believed so passionately in an indivudual's right to be free from the coercion of others that a lot of people were willing to sacrifice their lives to achieve and maintain it for the rest of us who have benefitted greatly.  They knew that without freedom, the human race is doomed to extinction.  Freedom doesn't guarantee anything but opportunity.  But if you work hard, listen to the market, become a life-long discoverer and learner, you probably will succeed.

Let's get rid of all this subsidization, this coddling mentality we've developed that is leading us down the path of being perpetually parented into extinction.

Hayek and Progress

I am having the time of my life. This new role I am in is incredible - the people I get to work with and learn from, the ideas, the challenges... I miss trading and technology, but this new role... it seems like everyday I have a new peak experience. There's so much to learn, so many exciting ideas and opportunities to have a real impact.

At the same time I get this pit in my stomach if I think too much about what I need to accomplish -- how will I ever do it? I have 5 months to assemble a book on Market Based Management. Fortunately I have access to some of the brightest minds on the planet. But the writing part is torturous -- it's like turning blood into words. I write five pages, I end up with a couple of sentences. Even those might not be acceptable to the editorial board.

I think Soren Kierkegaard wrote that if one wished to write the truth, one had to first become the truth. That gives me pause.

But the ideas... how could I have been so ignorant of these writers and thinkers I am reading today -- Polanyi, Hayek, Mises, Maslow, Horney... one book after the other... the experience of reading them is ineffable -- every page leaps out with incredible insights. All my synpases seem to fire at once... This is what I've been trying to say -- this is how the world works - I've seen it but didn't have the words / concepts / framework to explain -- YES! YES!

Example: today I am reading The Constitution of Liberty by F.A. Hayek -- in part 2 of his chapter, "The Common Sense of Progress" he is talking about how progress in our normal sense is purposeful -- that we as individuals or groups have an goal in mind and organize our resources and plan our efforts to achieve what we see as attainable. But that isn't "social progress" -- our society doesn't advance like that. It evolves -- progress is a discovery process, searching into the unknown with unpredictable consequences. Human reason cannot predict or shape its future -- not even in science can this be done (I've seen this theme in Polanyi's Republic of Science) -- to attempt to corral scienctific discovery towards some deliberate aim is to hinder progress.

He then points out that "progress" might mean achieving what we've been striving for - but that we might not always like the results and not everyone gains from it. The result is a state, progress is a process. And here's the payload: the states don't matter -- it's the process:

"... What matters is the successful striving for what at each moment seems attainable. it is not the fruits of past success but the living in and for the future in which human intelligence proves itself. Progress is movement for movement's sake, for it is the process of learning, and in the effects of having learned something new, that man enjoy's the gift of his intelligence."

He continues to build from there to make that case that it is progress - this evolutionary discovery process that is the never ending quest for future understanding - that makes society, "most cheerful," as Adam Smith coined it -- and that it fundamentally requires maximum individual liberty to work, and that this by necessity means there will be inequality in society... but that we're all better off by it.

This stuff hits me so hard I have to be careful who I talk with in the hours after I read it... I worry sometimes that I come across like a Dennis Hopper character, "it's like... WOW man... like all this stuff is like interconnected with the great cosmic flow man do you groove on that?" -- or from Apocalypse Now when he says stuff like, "Do you know that 'if' is the middle word in 'life'?" -- Hands waving in the air, wild-eyed, hyped on caffeine and ideas.

Back to reading.

Real Social Security Starts with Freedom.

It's generally a bad idea to respond emotionally to anything.  It's even worse to put it in writing.  And you'd have to be an idiot to publish it.

Trifecta.

I wrote the following letter to the editors of our local newspaper, the Wichita Eagle, in response to this "My View" opinion piece that appeared Monday on Social Security privatization...  It was published today. 

Hopefully in the process of pairing my words down from 678 to 200 so the Eagle's submission page would accept it, I made it less agitated.  I need to send these things George before I submit them.

To the Editor:

The commentary, "Privatizing Social Security is Bad Idea," (Feb. 1 My View) made three incorrect claims.

Social Security is facing a real crisis. You and I cannot take out a $1 million loan and call ourselves millionaires, but that is how our government declares Social Security to be solvent.

Social Security did not "lift" generations out of poverty. Government can't wave a wand and --"poof!" --money for all. It was the ingenuity and hard work of individuals driving a productivity boom coupled with trade liberalization that produced the wealth on which Social Security feeds.

Finally, pitting "Wall Street" and slick snake-oil salesmen against the "workingman" is an insulting appeal to fear, not an argument.

Let's change this unfair system that doesn't allow the poorest of workers to keep what they've worked hard for but cannot save and pass on to their children. Let's be done with arrogant social "experts" who strip us of dignity in the name of "protecting" what can't be protected.

Give people the freedom and the responsibility that comes with it. Get out of their way so they can live as they see fit. Then watch the economic explosion it creates. That is social "security."

In retrospect, I wish I'd written the last two sentences differently --

Then watch the explosion of prosperity it creates.  That is social security.

Ah well... next time I'll sleep on it.