Thursday, September 18, 2014

Hate Capitalism?

Column for week of September 8, 2014

     Many attack and vilify capitalism.  Others praise and
defend capitalism,  Why?

     Imagine two people battling over the virtues of Pat
Smith.  One despises and hates Pat.  The other sees virtue
worthy of sainthood.  Which one is right?  Could they both be
right?  Yes, they could.  There are two Pat Smiths.  One is a
51-years old male pedophile and mass murder.  The other is a
23-years old female who devotes her life to rescuing orphans.

     Until the disputants recognize that there are two very
different people called Pat Smith, they are unlikely to resolve
their differences.  Add a half dozen more Pat Smiths and we will
have something similar to the endless battles over capitalism. 
Most of the people battling over capitalism never bother to
compare their definitions of capitalism.  Many don't even have a
definition in mind.

     What, then, is capitalism?  Even more basic, what is
capital?  Our ultimate goal of production is consumer goods,
things that people can use.  Capital is the resources, both natural
and man made, that are useful in the production of consumer
goods.  Capital includes iron ore, mines, steel mills and auto
factories.  It also includes tractors, fertilizer and herbicides.  Add
to those schools, roads, offices, stores and a million other things.

     Without capital we can't produce anything.  All we would
have is whatever consumer goods nature provided.  In other
words, everyone alive would be a hunter gatherer living hand to
mouth.

     It is hard to believe that those demeaning capitalism want
to put an end to capital.  It must be the "ism" that they hate. 
Every economic system on earth is founded on capital. 
Socialists, fascists, communists, mercantilists, crony capitalists,
free market capitalists, and all combinations of the forgoing can
fairly be called capitalists.  All of these systems attempt to
accumulate capital to use in the production of consumer goods. 
They strongly disagree on how to accumulate capital.

     One writer defined capitalism as "a system of voluntary
economic exchanges between parties without government interest
or intervention."  That is a nice definition.  It doesn't describe
capital or even mention it.  What he has described is free
markets.  Why on earth call it capitalism?  "Free markets" is a
much more descriptive name, and far less confusing.  The term
"free markets" also distinguishes this system from all of the
other economic systems, all of which are far from free.

     Some people who defend capitalism do define what they
defend as free markets.  That definition is lost when they refer
only to capitalism.   The main thing called capitalism today is
the economies similar to the US economy.

     The US economy is predominately crony capitalism
where government uses force to reward the rich and powerful
special interests at the expense of the general interests of just
about everyone else.  If you believe we have freedom in the
marketplace,  try starting a business while ignoring government. 
See how far you get before a special interest sends government
to shut you down.

     In New England a woman started a food boat selling food
to boaters.  The customers thought it was great.  A newspaper
ran an article about the food boat.  The next day government
shut the food boat down.

     Our economy is immersed in crony capitalism.  The
average person can be forgiven for believing that capitalism
means crony capitalism rather than free markets.  I hate the term
capitalism.  It is misleading and confusing.  Defend freedom in
the marketplace under its own name, free markets.

     Those who can't tear themselves free from the word
capitalism should at least include a first name.  Defend free
market capitalism.  Condemn crony capitalism.

     The Occupy Wall Street crowd was almost right.  Wall
Street is mostly crony capitalism.  The core problem isn't Wall
Street.  The core of the problem is the government that
empowers Wall Street.  Those who  believe that government will
save us from Wall Street probably hire foxes to guard their
chickens.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Sunday, September 7, 2014

What to Do About ISIS

Column for week of September 1, 2014                            

     This Country's war hawks would have us believe that the
survival of the US depends on immediately destroying ISIS. 
They want US troops on the ground in Iraq and Syria
immediately, or sooner.  We must destroy ISIS, ISIL or
whatever it calls itself tomorrow.

     Before rushing into another war, or rekindling an old war,
it might be well to take a closer look at the enemy and consider
what war might accomplish.  ISIS is powered by militant
Muslims who are eager to kill anyone who refuses to become a
Muslim.  They are also quite willing to kill Muslims who aren't
militant and murderous enough.

     ISIS draws its strength from the same pool of militants as
does Al-Qaeda, the Taliban and Boko Haram.  ISIS isn't a new
adversary.  It is merely another arm of the most militant segment
of Islam.  These militant thugs have been waging civil war
against the rest of Islam for ages.  They speak of ruling the
world.  Before seriously taking on the world they must first
conquer Islam.

     The militants hurl threats at the US while having a full
time job carving out a base in the world of Islam.  They might
back up those threats with some sort of murderous attack.  Such
an attack would be mainly motivated by the desire to strengthen
their hand in the Muslim world.

     The US and its allies have been at war for nearly a
decade and a half trying to destroy Al-Qaeda and the Taliban. 
The victory parade is still a few blocks away.  What reason do
we have to believe destruction of ISIS will be quicker or easier?

     I don't doubt that the US military could quickly end
ISIS's control of its foothold in Iraq and Syria.  It quickly ended
Saddam Hussein's control of Iraq.  What did that accomplish?  It
made many Iraqis more militant.  The militants blended with the
general population popping out to attack when they saw fit.

     For so long as there is a sizable pool of murderous
militants in the Islamic world, they will continue to be a threat
to moderate Muslims and the rest of the world.  No matter how
successful an attack by the US military might be in the short
term, it won't eradicate militant Muslims or end their murderous
ways.

     Dispersing the militants and giving them more material
for their recruiting posters doesn't seem much like victory. 
Wanting to eradicate militant Islam and doing it are two very
different things.

     The only solution is for Islam to purge itself of the
militants.  Outside intervention only encourages other Muslims
to rally around or at least tolerate the militants.

     The US may be able to help by providing support to
moderates in the Muslim world.  Even in this the US should
keep a low profile and be very choosy about who it supports. 
ISIS is now using weapons and equipment supplied by the US
and captured by ISIS.

     A few decades ago the US armed the Taliban in its fight
against the Soviet backed government of Afghanistan.  Much to
our regret the Taliban prevailed.

     About a year ago the president of the US and a flock of
war hawks wanted to aid Syrian rebels in overthrowing the
government of Syria.  Those rebels included what is now called
ISIS.  Many in the US now want to intervene on the side of the
Syrian government.  What if the US still hasn't got it right?

     Moderate Islamic powers are coming to fear the militants. 
Let them spend some of their oil money defending themselves
from the militants.  We don't have a dog in that fight.  If one of
their dogs snaps at us, deal with it.  Otherwise stay out and don't
make matters worse.

     Militant Islam will never rise close to the level of a
world power.  Its tactics are to destroy rather than produce. 
Power is based on production.  Without the backing of oil
money, militant Muslims would be little more than camel
jockeys with spears.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, August 28, 2014

The Heat of the Moment

Column for week of August 25, 2014

     Periodically obsessions sweep through the population. 
Hula hoops and cabbage patch dolls were fairly harmless.  Some
obsessions are less benign.  History reminds us of Salem's
obsession with killing witches.  A mere couple of decades ago
an obsession with imaginary sex offenses at day care centers
swept the nation.  Many lives were ruined before this craze was
exposed as a fraud perpetrated by zealots.

     Most people are now familiar with the zero tolerance
craze sweeping through schools.  Zero tolerance for guns means
zero tolerance for gun like trinkets on key chains, pictures of
guns, drawings of guns, pointed fingers, sandwiches chewed into
a gun shape, and even talking about toy guns at a bus stop.

     For sometime now summer usually brings a report or two
of someone leaving an infant in a hot car to roast while the adult
gets drunk or pursues some other vitally important matter.   This
is tragic.  Perhaps the most amazing thing is that in a nation of
more than 300 million people it usually happens only a couple
of times a year.

     Far more people deliberately kill their children. 
Thousands more die from adult conduct that is irresponsible
beyond belief.  Be that as it may, kids alone in cars is the latest
obsession.  The children baked in cars are usually infants
incapable of helping themselves.  The current craze extends to
older children.  There is a difference.

     My mother left me alone in the car from time to time
while going into a store or someone's house.   It was boring but
still probably preferable to being dragged into a store, unless it
was a candy store.

     I still vividly remember one adventure alone in the car at
a neighbor's house.  My mother was in the house.  I was bored
and looking for something to do.  Part of that something turned
out to be pushing the big shiny button on the steering column.

     No, the car didn't explode or lunge into the house.  I
wasn't part of a James Bond movie.  Nothing happened.  And,
nothing continued to happen when my mother returned to the
car.  The car wouldn't start.  The ignition switch was stuck in
off.  I didn't know what I did.  Neither did mother.  Mother
called dad who came and instantly undid what I had done.

     Now I know what happened.  Unusual for its day the car
had a steering column lock.  The key cylinder had been
removed.  The button I pushed locked the steering column and
ignition switch.  All it took to unlock the switch was to put a
finger in the key cylinder hole and push.  Mother didn't know
that.  So, even long ago there were hazards in leaving kids alone
in cars.

     The hazards have grown exponentially with the latest
craze.  A mother accidentally locked her children in her car with
the keys also in the car.  While she was frantically trying to
figure out how to get the car open some helpful soul called the
cops.  The cops arrested the mother.

     Another mother got out of her car to smoke in a parking
lot.  While she was smoking the cops arrested her for leaving the
kids in the car.  I guess leaving doesn't require going very far
away.

     Sometimes tragedy strikes  A mother left her daughter in
the car while the mother went to the bank.  She is dead now, the
mother not the daughter.  The daughter is fine.  The mother was
killed in a bank robbery.  Cars aren't always the most dangerous
place for children.

     The lesson should be to use common sense. 
Unfortunately common sense isn't common enough that everyone
is able to find it.   There is reason to be concerned about
children alone in cars.  A knee jerk reaction that a child alone in
a car equals disaster is just plain wrong.  And, it can lead to
more harm than good.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Monday, August 25, 2014

How Twisted Can It Get?

Column for week of August 18, 2014

     Please buckle your seatbelt before reading this column. 
It will be a wild, twisted ride.

     The US government forces the use of ethanol in vehicle
fuel.  It also subsidizes production of ethanol.   That same
government also placed a hefty tariff on imported ethanol.  The
reason for the tariff is to protect the US producers of expensive
corn based ethanol from less expensive ethanol made from
sugarcane grown in the tropics.  Sugarcane can be grown much
more efficiently in the tropics than in the US.  That tariff also
protects drivers from lower fuel prices.

     The government also uses tariffs and quotas to block the
importing of sugar.  Government actions make sugar cost about
twice as much in the US as in the rest of the world.  This is
purely a ripoff of sugar users for the benefit of the powerful
sugar producers' lobby.  Everything so far is simply government
granting favors to powerful special interests.  In other words,
government doing what it does best.

     Imagine my surprise when I saw a headline about a
Nebraska ethanol plant giving up on corn and producing ethanol
from sugar.  How could it pay to replace corn with expensive
sugar?  Why did the government even allow its favorite
sweetener to replace its favorite grain?

     Confusing matters even more, I discovered that the
ethanol plant was buying its sugar from none other than the
government of the U.S. of A.  Why does the US government
have sugar to sell?

     Obviously I haven't laid out the complete story yet.  The
US government buys sugar to keep the price high.  That can
work.  Should sugar buyers say "Thank you?"

     Won't the government's sale of sugar defeat its purpose
for buying the sugar?  Not necessarily.  Government sells the
sugar for nonhuman consumption.  I am all but certain that most
ethanol plants are nonhuman.  Of course, the limit on the use of
the sugar makes it sell at a lower price.  Apparently that price is
so low that it makes sense, and dollars, to make ethanol from
sugar.

     The government selling food for nonhuman consumption
is nothing new.   While in grade school I read about the
government buying potatoes, dying them blue, and selling them
for nonhuman consumption.  Some things never change.

     Let us consider some of the consequences of all this
intervention in the market. The artificially high price for sugar
motivated sugar users to seek less expensive alternatives.  This
made corn syrup the preferred sweetener for soft drinks and
many other products.

     At least it is preferred by the manufacturers.  Not all
consumers are on board.  The claimed health hazards of high
fructose corn syrup do appear to be over blown.  Consider that
the sweetener in honey is identical to high fructose corn syrup. 
Unscrupulous honey sellers mix corn syrup with honey.  Also,
when the body digests sugar the first step is to break the sugar
down to the molecules that make up corn syrup.

     Now sugar is replacing corn in the manufacture of
ethanol.  Obviously that displaced corn can be used to make
corn syrup.  The corn syrup can replace the sugar displaced from
soft drinks.  Instead of cars powered by corn and people
powered by sugar, we will have cars powered by sugar and
people powered by corn.  I stand in awe of yet another miracle
worked by government.

     The net effect is the taxpayers are paying double the free
market price for their sugar.  Then they are taxed to subsidize
sugar purchases for an ethanol plant.  What a sweet deal.

     Does anyone besides politicians, bureaucrats and
lobbyists benefit from the scheme concocted by government?  I
give government too much credit.  It didn't concoct most of the
scheme.  Many of the results were the accidental byproducts of
politicians and bureaucrats fiddling with things they didn't half
understand.   In other words, It was just a normal day's work in
D.C.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, August 21, 2014

Is Money Wealth?

Column for week of August 11, 2014                               

     People with large amounts of money are commonly
called wealthy.  Does this prove that money is wealth?  Money
isn't eatable.  It doesn't make good houses.  It isn't much good
for transportation.  Money is almost useless, except for one
thing.  Money has value only if it can be exchanged for real
wealth.

     Consider a dry cleaner's claim check for a coat.  It is just
a piece of paper with words on it.  In itself it has no more value
than an empty candy wrapper.  The claim check derives it value
from the coat in represents.  Destroy the claim check and no
value is lost  The coat still exists.  There may be some confusion
about who is entitled to the coat.

     Destroy the coat and the claim check will be worthless. 
The claim check derived its value from the coat.  Likewise
money derives its value from the real wealth that can be bought
with it.  Money isn't wealth.  Creating money doesn't create
wealth.  Destroying money doesn't destroy wealth.  As with the
claim check for a coat, destruction of money may affect who is
entitled to the wealth.

     Money is sometimes considered useful for storing wealth. 
This is an illusion.  Money has value only so long as someone
will accept it in exchange for real wealth.  The value of money
is based on faith in the money being accepted in exchange for
real wealth.  Destroy that faith and the money is worthless.

     Unlike a claim check for a coat, money doesn't entitle the
holder to demand anything from anyone.  The owner can refuse
to accept money in exchange for his wealth.  In practice stable
money works like a claim check.  If one million dollars is spent
each day, each dollar will buy one millionth of what is sold.

     There are two ways to change the value of money.  One
is to change the quantity of goods being sold.  In our example if
sellers cut in half the goods offered for sale, the million dollars
will only buy half as much.  It will take two dollars to buy what
one bought before.

     If buyers cut their spending to $500,000 a day, each
dollar will buy twice as much as before.  Increasing the quantity
of goods sold or reducing the quantity of money spent will
increase the purchasing power of the dollar.

     If both are increased or decreased by the same percent, 
the purchasing power of a dollar will be unchanged.  It isn't the
amount of goods available for sale or the amount of money
available to spend  that drives prices.  The amount of money
being spent and the amount of goods being sold determines
prices.

     This explains how the Federal Reserve could create about
three trillion new dollars over the past six or so years without
causing rampant inflation.  Most of those new dollars are still on
deposit at the Federal reserve rather than being spent.  If those
dollars escape into the marketplace, look out.  Price inflation
will soar as the value of the diluted dollars shrinks.

     The only way to store wealth is to store real wealth, food,
clothing, autos, factories, machines etc.  The only real wealth is
consumer goods and things useful for producing consumer
goods.

     Money will retain its value as claim checks only so long
as someone produces real wealth that they will exchange for
money.  Using money to store value will work only so long as
the money supply doesn't grow substantially faster than the
supply of goods produced and offered for sale in exchange for
money.

     With paper money and fractional reserve banking we are
at the mercy of government and the banks as to how fast the
money supply will grow.  How comforting is it that using the
reserves already created private banks could flood the market
with about 20 trillion dollars of new credit money.  Twenty
trillion dollars is more than either the annual gross domestic
product or the national debt.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Monday, August 11, 2014

What Is Natural Law?

Column for week of August 4, 2014

     For as long as I remember I have heard that the
Declaration of Independence and Constitution are based on
natural law and inalienable rights.  I never saw a coherent
explanation of how it worked.

     What is the foundation of natural law?  The first clue is
that we should look to the nature of man to find principles on
which to build.

     An individual has only two options.  Either he is free to
control himself and make his own choices, or he is controlled by
others.  Another name for control is ownership.  The owner has
the right to control what he owns.  The flip side is, he owns
what he has the right to control.

     An individual has only two options.  Either the individual
owns himself, or is owned by others.  The options are freedom
or slavery.  In partial slavery the individual is only partially
owned by others.

     Slavery is repugnant to humans.  Still, some willingly
enslave others.  They are far less enthusiastic about being
enslaved.

     Thus, we find in the nature of individuals the first
principle of natural law.  The individual must own himself. 
Slavery violates the nature of man.  I am considering only the
relationships among humans.  I leave it to the theologians to
ponder humans' relationships with deity.

     To survive we must work and produce at least the
necessities for life.  Even living off nature requires effort to
harvest and use nature's bounty.  The second principle of natural
law flows from the first.  Individuals are entitled to own the
fruits of their labor.

     Humans bring ingenuity and labor to their tasks.  All
other resources are found in nature.  As long as those resources
lay untouched, no one owns them.  Individuals claim those
resources by possessing and improving them.

     The individual owns that with which he is the first to mix
his efforts.  The person who picks wild berries or mines
unclaimed ore owns the berries and the ore.  If he cultivates the
berries or builds a mine the individual gains ownership of the
berry patch or the mine.  They become an extension of the
individual and he owns them as part of his self.  Simply making
a claim of ownership isn't enough.  Only using and controlling
the resources creates ownership.

     Of course, owners must be free to exchange with others. 
The right to freely trade is a natural part of self ownership.

     Not all individuals respect the ownership of others.  The
third principle of natural law is the individual's right to defend
himself and the resources he has rightfully claimed.  This right
includes possession and use of tools, including weapons, which
may be useful in defending himself and his property.  Interfering
with individuals' rights to self defense violates the natural rights
of individuals.

     Free, self owning, individuals have the right to choose to
associate, or not associate, with others.  All associations must be
voluntary on the part of all parties.

     Other rights that many of us deem important flow
naturally from self ownership.  I only have space for a few
examples.

     Individuals have the right to freely communicate with all
others who are willing to listen.  Everyone also has the right to
refuse to listen.  Each may use any resources he owns or is
authorized to use by the owner.  He may build a printing press
or a platform.  No one owes him either.  No one has to
volunteer to listen.

     Also, each has the right to use his resources to practice
his religion, unless his religious practices violate the natural,
universal rights of all individuals.  No one has the right to steal
or murder, even if he claims his religion requires it.

     Reasoning from the basic principles of self ownership, we
can find answers to nearly every question about conflicts among
individuals.  Not only that, the answers are compatible with most
moral principles commonly recognized today.  We don't need
half a million pages of laws.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, August 7, 2014

Remembering the Day Joe Camel Died

Column for week of July 28, 2014            

     I noticed an article reporting on a New England
legislator's plan to ban all unskimmed milk in day care facilities. 
I passed it by as another squirrelly idea from New England.

     Then I read about a proposed law from a New England
state that would ban serving chocolate milk with student lunches. 
It was time to quarantine New England before another wave of
nanny state laws swept across the land.

     Too late.  The next article reported the virus had already
spread to the heartland.  Fargo North Dakota had adopted an
ordinance banning the serving of more than six ounces a day of
juice in day care facilities.  The nanny state is on another march.

     The rest of this column is an obituary for Joe Camel that
I first published in August 1997.  By the end it should be
apparent why I am reaching into the past.

     Joe Camel enjoyed a brief but tumultuous career in public
relations and annoyance.  Troubled by threat of execution by his
enemies, Joe chose to control his destiny by falling on his own
sword.

     Mr. Camel will no doubt be missed by his friends. 
Supposedly he did have some.  I am not among them.

     It seems only yesterday that I met Joe for the first time. 
His contorted face stared blankly at me from a billboard.  I was
sure he must be a joke --  a very bad joke.  Joe was not blessed
by his creator.  Why would anyone choose an aesthetically
challenged camel as spokesanimal for their product? 

     Perhaps it is not socially correct to speak ill of the
departed.  I will not evade reality or beat around the bush.  Joe
was one ugly camel.  That is to say quite a bit.  When is the last
time you heard anyone say, "Isn't that a beautiful camel?"

     Joe Camel was so ugly that his mother probably double
diapered him -- one to cover his face.  Perhaps it was this lack
of motherly love that pushed young Joe into the wrong crowd.

     If I had been in charge of marketing for Camels, I would
have sought ways to put Joe Camel on the Marlboro package.  I
would have seen this as the next best thing to branding
Marlboros with a giant skull and crossbones.

     Joe Camel on the Marlboro package -- that brings up an
interesting image.  Imagine the Marlboro Man coughing and
wheezing, riding a stumbling Joe Camel into the sunset.  Would
this not have been a fitting end for both careers?

     I was confident that Joe would pass from the scene far
sooner than he did.  I guess I overlooked the obvious.  Why
would anyone attracted to cigarettes be repelled by the world's
ugliest camel?

     Perhaps smoking affects more senses than taste and
smell.  Is it possible that smoking impairs vision?  Maybe it's
that "smoke gets in your eyes" thing.  Is it possible that smokers
actually saw ugly Mr. Camel as beautiful?

     The one inescapable fact is that the passing of Joe Camel
removes a spot of aesthetic blight from the American scene.  I
would have been repelled by Mr. Camel if he had been the
spokesanimal for apple pie or Gideon Bibles.

     Though I won't miss Joe, I take no pleasure in the
circumstances of his demise.  Even an ugly cartoon camel
deserves better than to be hounded to death by self righteous
bureaucrats and do gooders who insist on imposing their lifestyle
on everyone else.

     When the lifestyle vigilantes came for Joe, masses
cheered.  Will those same millions cheer when the vigilantes
come for Mayor McCheese, the Pillsbury Dough Boy, the
Budweiser frogs, and Big Boy?  The death of ugly Joe Camel
was one more nail in freedom's coffin.  How long will it be
before we all remember with regret the day Joe Camel died?

aldmccallum@gmail.com
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Copyright 1997 and 2014
Albert D. McCallum