The Triumph of Individualism

The common good.

The will of the people.

Unity and equality.

The slogans pour out of the mouths of politicians constantly, all claiming to hold the public's best interests at heart. And what's wrong with that? After all, politicians are society's "public servants". The problem with these sayings is that they are all rooted in a common philosophy called "collectivism". Collectivism is the belief that individual right is not an end to itself; rather, individual rights only exist to serve the broader society, or "collective". The group is the lowest common denominator, not the separate people that form the makeup of that group. As Dr. Andrew Bernstein said, "Collectivism is the political theory that states that the will of the people is omnipotent, an individual must obey; that society as a whole, not the individual, is the unit of moral value."

If your internal fire alarm went off when you read this, congratulate yourself. Collectivism sounds good on the outside, as it allegedly serves to benefit the majority of people. The core, however, is rotten. Collectivism is not benevolent, and it is not moral. Consider these quotes by some outstanding gentlemen:

"The unity of a nation's spirit and will are worth far more than the freedom of the spirit and will of an individual."

"We must abolish the cult of the individual, once and for all!"

This first quote is from Nazi Fuhrer Adolph Hitler, the second from Soviet Premier Nikita S. Khrushchev; these two men followed the collectivist ideal to the letter. The Jews? The German leadership and people perceived them to be a threat to "the group", in this case the German nation and the Nazi Party. It didn't matter that they were individually innocent, and that no Jew had hurt any German any more than a member of some other racial group. All that mattered was their collective, and the Jews were different. How about the bourgeoisie in the Soviet Union? They had done nothing morally wrong, but they were richer than the other dirt-poor peasants of the country; for the greater good to be served, their property had to be either distributed evenly, and their lives had to be shattered forever to ensure that they would never reach a higher status again.

Both Nazi Germany and the Soviet Union extensively cracked down on dissent. They had to in order to cement unity within their countries, because any dissent meant that there was something different in the group; the group was no longer the lowest common denominator. Collectivism could not be practiced if there was even a minor difference of agreement in the group. Dissent means individualism, and individualism is the enemy of collectivism.

Speaking of individualism, what exactly does individualism entail? Individualism is cemented in the principle of the right to self-ownership: you own yourself and your property, and no human being can take that away from you. The right to self-ownership logically leads to a second principle: the principle of non-aggression, which states that anyone may do anything they wish with their lives and their property, so long as they do not infringe on anyone else's lives or property. It is the political version of the Golden Rule: do unto others.

This is not a promotion of anarchism, nor a condemnation of teamwork. It is only involuntary "teamwork" that I write against, for in this is rooted coercion and force. Individualism is the only way to secure a free society; the only alternative is collectivism, and collectivism can only lead down the road to tyranny and injustice. There can be no true freedom and prosperity in a system in which everyone is in constant violation of each other's rights.

Individualism is responsible for the innovation and liberty that has created so much for those countries that follow it, while collectivist nations are consistently found in poverty and oppression. History warns us of this: deep into the past, individuals consistently surrendered themselves to their tribes/cities/kingdoms; their collectives. People reasoned that in order to ensure survival, they needed to band together into a strong group and clamp down on individuality. However, this merely mired those primitive people in the mud of the Dark Ages. It was only once society took the step of allowing the individuals to act freely in the late Middle Ages that civilization began to flourish. Do not listen to the so-called progressives who call for the world to return to collectivism. Collectivism is the philosophy of the past; individualism is the bold new leap into the future.

Power and Corruption

The most common arguments for any political program are inevitably that it will "do a lot of good" or "fight poverty" or "help the children". All of these arguments may be true, but even then they ignore one of the most powerful lines of reasoning against expanding the size of government: that the power to do good always can be and often will be twisted to become the power to do evil. Take the recent debate over universal healthcare in America; even if the arguments in favor of the proposed plan were true (that the poor would all be covered, that the quality of healthcare would increase, that the plan would not bankrupt the country), I would still strongly oppose it, simply for the fact that it increases the power of government.

A historical example of this can be found by comparing the French and the English monarchies throughout the Middle Ages and early Modern Era. From the very beginning, the English people had very bad experiences with their monarches; these experiences grew and grew until the nobles of England forced King John to sign the Magna Carta in 1215. This document sealed England to a somewhat limited form of monarchy, preventing the king from domineering over the nobles or the people. The Magna Carta went down in history as an important symbol showing that the King, despite his power, was never above the law.

Contrast this with the French, who started out with a series of excellent rulers in the Carolingian Dynasty (840-987). The kings of France repelled invaders, secured peace, and did great services for their people, so as the centuries passed, the people and nobles of the country gradually gave over bits and pieces of their authority to the monarchy. The power of the king grew greater and greater, until finally, by the Capetian Dynasty (1589-1792), the kings had morphed into outright tyrants. The people had grown so used to having centralized power because of the good kings that they had had, and were unable to discern that the power to do good could always turn into the power to do evil, which the Capetian Dynasty of Louis XIV and others had in abundance.

Be wary of government programs that claim to "stimulate prosperity" or "help the poor" or in any other way create happiness out of thin air. Remember instead that the authority that the government holds is based on political coercion: the power to force others to go against their will. No other body holds this distinction; no corporation or private individual can truly and legally "force" someone to do something, only the government can.

The Market is Innocent, Part III

"The free market failed."

"Greedy businessmen have ruined us all."

"The age of capitalism is over."

Such are the explanations that surround the collapse of the financial and real estate markets from 2007 to 2008, shortly followed by a nationwide recession. Big banks and speculators had made too many risky investments, we are told, and lost their fortunes, putting at risk the entire economy. At the surface this is indeed what took place to set up the crisis. The whole truth, however, requires far more than a surface-level understanding of the boom and bust of the 2000's. To gain an understanding of what happened during the economic bust, one must first understand what took place beforehand--the economic boom

This is the second of a three-part series detailing the complete failure of government intervention and the innocence of the free market in the buildup to the current economic crisis. Parts I and II can be found here and here.

The Fed

In 1913, the Federal Reserve Act was passed by Congress and signed into law by President Woodrow Wilson. The Act created the Federal Reserve System, a central bank for the United States. The purpose of the Federal Reserve, colloquially known as "the Fed", was to stabilize the economy, particularly in the financial sector, by orchestrating controls over the supply and demand of money, also known as implementing "monetary policy." While the Federal Reserve Act was signed into law with good intentions, the Fed has since its inception been a horrific failure at achieving its goals of economic stability.

Business Cycle Goes Vroom

The business cycle is the wave-like motion the economy often seems to take; first, the economy is growing. Booming. Skyrocketing. Suddenly, however, the party comes to an abrupt stop. The economy shrinks down to normal size, unemployment rises, and poverty increases. Consumers slink back to reality, wondering how they could have thought the upward rise could last forever.

Economists have argued that the business cycle is a fact of life in capitalism. "It's something that just happens," they say, "like the coming of the tides or the crowing of the rooster." On the contrary, however, while slight upturns and downturns are a normal thing in a capitalist economy, the dramatic rises and falls that are associated with the business cycle are due to a decidedly un-capitalistic factor: expanded money supply, which takes place when a central bank or other regulatory agency forces the amount of money in circulation beyond normal levels in an attempt to spur on consumption and prosperity. The Federal Reserve, as the acting central bank of the United States, is the primary source of an expanded money supply.

The first main example of the Federal Reserve's harmful interventions into the economy takes place in the Roaring 20's and the subsequent Great Depression. Through the 1920's, the Federal Reserve increased the raw amount of money in circulation by over 60%. This increase in the amount of money available spurred spending and production; investors had plenty of new capital to invest in new businesses, consumers were able to buy more products, and economists proclaimed the world economy to be on a new path of prosperity and peace.

The "prosperity" created by the expansion of the money supply was an illusion, however. All the newly available capital meant that businesses that normally never would have gotten off the ground due to inefficiency and lack of productivity were able to stand for a while. In addition to this, borrowing and spending must be backed up by saving and producing, while all the spending and consumption started in the 1920's essentially created a house of cards; one small error and the entire economy would collapse. That error came in 1929; the stock market slowly began to tumble, then freefall as investors realized that they had made too many investments, and that their investments were largely placed in very, very sick enterprises. Businesses began to fail, investors lost their money, and consumers lost their buying power.

Round and Round We Go Again

If the situation described above sounds eerily similar to the one the economy is currently in as of this writing, it's because it is. Throughout the late 1990's and early 2000's, the Federal Reserve manipulated interest rates to spur new borrowing for homeowners. Families that previously were unable to get a loan for a new home now found themselves able to purchase houses normally available only to the upper and middle classes. Construction companies and mortgage banks raked in enormous profits as business boomed.

Everything looked fine and dandy. Families had homes, companies made money, and everybody seemed happier. But underneath the surface, trouble loomed, as it always does. Right around the corner was an economic crisis so large that some would proclaim it the next Great Depression. Suddenly, the world would be forced to take off its rose-colored glasses and see the rotten, infested foundation of the American economy.

The housing market peaked in 2006; prices slowly began to seep downward, then freefall into 2007. In an attempt to prop up failing corporations, the federal government began to "bail out" various enterprises with billions upon billions of taxpayer money. The Federal Reserve began to lower interest rates even further, trying to stave off financial collapse. Both outgoing President George Bush and incoming President Barack Obama passed massive spending legislation to stimulate the economy.

Blame spewed from the mouths of every politico and commentator with someone to talk to; most of the blame centered "irresponsible bankers" and "predatory lending" and "financial deregulation". Sadly, very little of the blame was directed upon the root causes of the crisis: over-regulation of the financial sector, well-meaning housing initiatives, and ultimately the Federal Reserve. So few wish to focus on these institutions because of their role in bringing the happy times of the economic boom--indeed, they wish for them to bring the boom back-- but the truth of the matter is that the prosperity that America held in its hands for the better part of that decade was a sham, a sham that could only result in a collapse. Unfortunately, unless the federal government turns its path away from loose monetary and fiscal policy, the cycle of boom and bust will only continue. There is hope, however: Americans are waking up to the massive fraud of the current economic system. If the American people rise up and demand true revolution (not the phony hope-and-change jingle), the nation may very well return to a solid policy of economic liberty and prosperity.