Wednesday, March 4, 2009

Pragmatism Doesn't Work

The Wall Street Journal editorial of March 3, 2009 notes:

As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.
I have argued previously that Mr. Obama is a pragmatist [1, 2], that is, he dispenses with ideology and believes one must act. However, in order for any plan to work, it must take into account the role of cause and effect. In this context, a plan that defines “working” as an improvement in the economy would need to take into account the role of cause and effect as dictated by the laws of economics. The rejection of ideology as such implies a negation of the role of cause and effect and to that extent, there is no way in which his policies could “work”, except by chance. In this sense, any policy based on pragmatism can not work.

Of course, Mr. Obama’s definition of "work" may be entirely different from a rational person. To the extent that he wishes us all to be equally miserable then his plan is certainly working. Although this seems comical, it is not far off. Mr. Obama’s plans are not just indifferent to cause and effect – they imply an attempt to actively flout the laws of economics. He wishes to penalize the productive and reward the unproductive yet at the same time wishes producers to formulate expectations of increases in the value of productive assets as would be represented by a rise in equity prices. But, as the Wall Street Journal notes:

The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health

Since pragmatism is a philosophy of nothing yet desires actions to “work” there must be a default philosophy which implicitly grades the action. In Obama’s case, his default philosophy of Christian Marxism upholds mysticism, altruism, and collectivism. This bastardization of non-ideology with Marxism is what accounts for the contradictory spectacle before us – the attempt to bring about economic prosperity upon a basis of statist controls designed to arbitrarily redistribute the earnings of the productive to the non-productive, i.e., the attempt to increase production by punishing the producers.

It is time Americans wake up to the role of ideas in politics and proudly and unapologetically assert their right to life, liberty, and the pursuit of happiness upon the basis of a philosophy that recognizes the validity of reason and that pesky thing known as reality.

2 comments:

Anonymous said...

You close by calling for Americans to "unapologetically assert their right to life, liberty, and the pursuit of happiness."

I think an intuitive, but often overlooked, component of this common refrain is the "pursuit of happiness." All too often Americans omit the words "pursuit of" and believe that happiness is a right unto itself. This grave misconception merits further investigation as the assumed "right to happiness" is a central plank of our redistributive society.

I look forward to your future insights.

Doug Reich said...

Thanks for your comment.

This is an excellent point and really gets to the heart of a major issue. The fundamental issue pertains to the nature of individual rights. Rights pertain to the freedom of action not guarantee of receiving an object.

The receipt of an object as a "right" implies that it is provided by someone else. So a "right" to happiness implies that someone must make you happy and would qualify as a violation of their rights. You can't have a right that entails a violation of someone else's rights. If you claim a "right" to health care, who is going to be forced to provide it?

The idea that a right is an obligation of someone else is profoundly evil and a total inversion of the proper concept of rights. This doctrine is a consequence of the morality of altruism which holds that self-sacrifice is the good. Morality from a pro-life perspective means that the good is that which furthers life. Such an egoistic moral code is necessary if a man is to survive and flourish.

The consequence of an egoistic moral code in political terms is the concept of rights as freedom of action. In other words, if it is good to act in the pursuit of your own life and values, it makes sense that a pre-condition would be the freedom to think and act since you could not survive properly without this freedom.

I can't help but quote Ayn Rand since I can't put it any better than this:
(http://aynrandlexicon.com/lexicon/individualrights.html)


A “right” is a moral principle defining and sanctioning a man’s freedom of action in a social context. There is only one fundamental right (all the others are its consequences or corollaries): a man’s right to his own life. Life is a process of self-sustaining and self-generated action; the right to life means the right to engage in self-sustaining and self-generated action—which means: the freedom to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life. (Such is the meaning of the right to life, liberty and the pursuit of happiness.)

The concept of a “right” pertains only to action—specifically, to freedom of action. It means freedom from physical compulsion, coercion or interference by other men.

Thus, for every individual, a right is the moral sanction of a positive—of his freedom to act on his own judgment, for his own goals, by his own voluntary, uncoerced choice. As to his neighbors, his rights impose no obligations on them except of a negative kind: to abstain from violating his rights.

The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.

Bear in mind that the right to property is a right to action, like all the others: it is not the right to an object, but to the action and the consequences of producing or earning that object. It is not a guarantee that a man will earn any property, but only a guarantee that he will own it if he earns it. It is the right to gain, to keep, to use and to dispose of material values.