by Jay Hanson (04/01/97)
“… the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices from the air, are distilling their frenzy from some academic scribbler of a few years back.”
—J. M. Keynes, 1935
“The first thing a man will do for his ideals is lie.”
—Joseph Schumpeter, 1942
The Problem
Lying madmen in authority are driving humanity into a mass grave. The theoretical justification for this wholesale slaughter comes from political philosophers and economists who assume that people are rational. They are wrong.
The Warning
In 1992, both the US National Academy of Sciences and the Royal Society of London warned in a joint statement that science and technology may NOT be able to save us:
“If current predictions of population growth prove accurate and patterns of human activity on the planet remain unchanged, science and technology may not be able to prevent either irreversible degradation of the environment or continued poverty for much of the world.”
“The future of our planet is in the balance. Sustainable development can be achieved, but only if irreversible degradation of the environment can be halted in time. The next 30 years may be crucial.” [1]
Never before in history had the two most prestigious groups of scientists in the world issued a joint statement!
Now, five of these years are gone, and global devastation is still increasing exponentially while giant trans-national corporations relentlessly drive billions towards their deaths:
“West Africa is becoming THE symbol of worldwide demographic, environmental, and societal stress, in which criminal anarchy emerges as the real ‘strategic’ danger. Disease, overpopulation, unprovoked crime, scarcity of resources, refugee migrations, the increasing erosion of nation-states and international borders, and the empowerment of private armies, security firms, and international drug cartels are now most tellingly demonstrated through a West African prism. West Africa provides an appropriate introduction to the issues, often extremely unpleasant to discuss, that will soon confront our civilization.” [2]
Yet America’s politicians are calling for more business as usual (plunder as usual): “With the … plan for economic growth, our economy will achieve its full potential with 3.5 percent—or higher—growth per year, putting our country back on the right track and giving every American family the chance to achieve the American Dream.” [3]
“Arbeit Macht Frei” (Work Brings Freedom)
the sign over the gates of Auschwitz,
placed there by Major Rudolf Hoss,
commandant of the camp. [4]
What’s wrong with our politicians? Why can’t they see that they are leading us all to a dead end?
They can’t see because they have money in their eyes—corporate money. All corporations use the same formula: destruction for profit—and then use the profit for bribes. An executive with the influential public-relations firm of Hill & Knowlton describes the corporate death grip this way:
“The big corporations, our clients, are scared shitless of the environmental movement. They sense that there’s a majority out there and that the emotions are all on the other side—if they can be heard. They think the politicians are going to yield to the emotions. I think the corporations are wrong about that. I think the companies will have to give in only at insignificant levels. Because the companies are too strong, they’re the establishment. The environmentalists are going to have to be like the mob in the square in Romania before they prevail.” [5]
What can be done in the 25 years we have left? Probably nothing, because corporations like it the way it is, and as long as they can make enough profit to bribe our politicians, it will stay that way. According to Victor Crawford, a former lobbyist for the Tobacco Institute:
“If you ever want to see a bunch of cowboys work, watch Philip Morris. They are tough. I mean they shoot from the hip. … and they’re getting bolder. It’s a take-no-prisoners fight. You’re talking about $100 billion a year in gross profits . … And man, anything goes. And anything will go.” [6]
And what “goes” in American politics is bribery: “Regardless of party affiliation, tobacco PAC contributions are the clearest indicator of how legislators vote on bills affecting tobacco. And in many cases, voting records of legislators don’t match their rhetoric.” [7]
It’s easy to see our bribed politicians as little more than high-priced whores—new whores every two years—a bit like changing sheets when they get too dirty. Unfortunately, it’s no joke when mass murder is part of the sex act! During the last 40 years, roughly 17 million Americans have been killed by tobacco smoke while tobacco companies have pocketed something like a thousand billion dollars. Moreover, all of us watched tobacco company CEOs lie to Congress on television—and apparently get away with it. Lying, stonewalling, and killing for 40 years!!
Congressional Testimony on April 14, 1994:
“Philip Morris research does not establish
that smoking is addictive.” [8]
How can corporations get away with murder? The theoretical justification for corporate murder rests on the fatal fiction that people are “rational” [9] and are only getting what they have rationally chosen.
Phillip Morris statement:
“Smoking is a personal choice,
and so is quitting.”
The Fatal Fiction
From Plato to our present society, we can trace the history of the idea of reason through the work of Aristotle, Bacon, Descartes, and especially the English philosopher John Locke. In 1664, Locke argued that there is a natural law governing humans and that it can be known by human reason: “And reason … teaches all mankind who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty or possessions.”
In 1776, Adam Smith placed reason at the heart of capitalism. Smith said that laissez-faire (let alone) economics would allow rational, self-interested individuals to raise the wealth of the working class automatically, as if by an “Invisible Hand.” Thus, human reason became the cornerstone of modern political and economic theory.
But not everyone agreed that people are driven by reason. In 1739, the Scottish philosopher David Hume argued people were not driven by reason, but by passions.
Reason Is The Slave Of The Passions
“Nothing is more usual in philosophy, and even in common life, than to talk of the combat of passion and reason, to give the preference to reason, and to assert that men are only so far virtuous as they conform themselves to its dictates. Every rational creature, ’tis said, is oblig’d to regulate his actions by reason; and if any other motive or principle challenge the direction of his conduct, he ought to oppose it, till it be entirely subdu’d, or at least brought to a conformity with that superior principle. On this method of thinking the greatest part of moral philosophy, ancient and modern, seems to be founded … In order to shew the fallacy of all this philosophy, I shall endeavour to prove first, that reason alone can never be a motive to any action of the will; and secondly, that it can never oppose passion in the direction of the will.”—David Hume, TREATISE OF HUMAN NATURE
Modern evolution theory agrees with Hume. It finds that the human brain is, in large part, a machine for winning arguments, a machine for convincing its owner and others that its owner is right. The brain is like a good lawyer: it defends the passions of its owner—no matter how odious—by trying to convince the world with moral claims and logic. Like a lawyer, the human brain wants victory—not truth—and like a lawyer, it is sometimes more admirable for skill than for virtue. Thus, people are NOT rational [10].
Friendly Fire
According to Robert Wright, “We are far from the only dishonest species, but we are probably the most dishonest, if only because we do the most talking.” [11] This is how tobacco companies lie by implication and omission, in order to transform passions into profits:
“The advertising imagery used to promote tobacco use among young people particularly appeals to those with low self esteem and emotional insecurity. … One of the best examples of this was the transformation of Marlboro Cigarettes from a red-tipped cigarette for women to the cigarette for the macho cowboy. … The wild spirit of the Marlboro man captured the adolescent imagination. … In the late 1980’s the advertising theme for Vantage cigarettes began to feature professional-caliber athletes like wind surfers, aerobic dancers, downhill ski-racers, and auto-racers. These advertisements depict physical activity requiring strength or stamina beyond those of everyday activity, i.e., smoking does not harm you.”
“During the 1980’s, advertising for Salem cigarettes also became more youth-oriented. Whereas the dominant advertising theme for Salem cigarettes used to be clean fresh country air, during the 1980’s Salem ads were populated by muscular surfers and beach bunnies, fun-loving party animals, and other attractive adolescent role models. … Newport ads frequently show men and women in sexually suggestive positions always having fun using the slogan ‘Alive with pleasure.’ … Another successful advertising campaign has been the ‘You’ve come a long way baby’ campaign promoting Virginia Slims cigarettes. One of the most important psychological needs of most adolescent girls is to become independent from their parents. By associating smoking with women’s liberation, Philip Morris hopes to create in the minds of these teenage girls the vision of smoking as a symbol of autonomy and independence. … The ultimate status symbol and secret desire of almost every teenage boy is a powerful motorcycle. It is for this reason that so many cigarette brands have used motorcycle imagery to encourage teenage boys to smoke. … The greatest success that Reynolds had in its effort to gain on Philip Morris in the youth market is the ‘Joe Camel’ cartoon character. …” [12]
One can see advertising as nothing more than passionate lying, and the right-wing credo “do as you damn well please” [13] is a call for “freedom to kill”.
But how can these lying killers live with themselves? Is there some moral element missing from corporate management?
The Banality Of Evil
Adolf Eichmann was the Nazi official responsible for the murder of millions of Jews. During World War II, he was in charge of “the final solution of the Jewish problem” which sent Jews from all over German-occupied Europe to their deaths. After the war, Eichmann was tried and convicted of “crimes against humanity”, and then hanged. His crime is an extremely serious category of criminal human rights abuse. International law defines crimes against humanity by virtue of their “mass nature” (a large number of victims), and it must also be shown that a group was targeted for mass murder because of its status as a group. RJ Reynolds: “Realistically, if our Company is to survive and prosper, over the long term we must get our share of the youth market. In my opinion, this will require new brands tailored to the youth market.”
One of the most striking aspects of the Nazi Holocaust is the totally unremarkable nature of the killers themselves. Eichmann’s experience demonstrated how established values can be distorted and twisted by society to make people do unspeakable things to other people. His accomplices included “doctors, lawyers, scholars, bankers, and economists” that planned the necessary steps to exterminate the Jews. It’s important to remember that these professionals didn’t actually vote on the “final solution”, they merely carried out the plan.
Here is how the plan is carried out nowadays:
“The freedom of the market is not merely
the best guarantor of our prosperity,
it is the chief guarantor of our rights.” [14]
What could have transformed these totally unremarkable people into mass murderers? What lies did Adolph Eichmann and these ordinary folks tell themselves so they could sleep at night?
RJ Reynolds: “smoking is no more addictive
than coffee, tea, or Twinkies.”
Hannah Arendt discovered that Eichmann did not originally subscribe to mass murder, indeed such a violent solution was alien to him. During discussions at the Wannsee Conference, Eichmann saw, to his great astonishment, that all these respectable people (he had the greatest respect for bourgeois society) not only agreed with his proposals, but followed his remarks on killing Jews eagerly and enthusiastically. He was convinced he must be doing the right thing because no one contradicted him, neither priest nor politician nor one of the bureaucrats—no one. [15]
Eichmann: “At that moment, I sensed a kind of Pontius Pilate feeling, for I felt free of all guilt.” After all, who was he to judge?
Could the culture of capitalism function as kind of a modern Wannsee Conference for today’s corporate mass murderers? Does the belief in human reason give us “a kind of Pontius Pilate feeling”? After all, who are we to judge?
Phillip Morris:
“Cigarette smoking is not addictive.”
Corporate Rule
Before the Civil War of 1861, citizens controlled the corporations. Up to that time, corporations were chartered for a specific limited purpose (for example, building a toll road or canal) and for a specific, limited period of time (usually 20 or 30 years). [16]
Each corporation was chartered to achieve a specific social goal that a legislature decided was in the public interest. At the end of the corporation’s lifetime, its assets were distributed among the shareholders and the corporation ceased to exist. The charter limited the number of owners; the amount of capital they could aggregate was also limited. The owners were personally responsible for any liabilities or debts the company incurred, including wages owed to workers. Often profits were specifically limited in the charter. Corporations were not established merely to “make a profit.”
Early Americans feared corporations as a threat to democracy and freedom. They feared that the owners (shareholders) would amass great wealth, control jobs and production, buy the newspapers, dominate the courts and control elections (one-dollar-one-vote). Well, our grandfathers were right, that’s exactly what happened!
What can be done in the 25 years we have left? If the history of corporate rule is any indicator, certainly not enough—and perhaps nothing. But we DO have a place to start: the tobacco companies. Top management should be tried for “crimes against humanity”, and during the course of the trial, put the entire stinking, rotten “do as you damn well please” economic system on trial too!
“Philip Morris does not manipulate nor independently
control the level of nicotine in our products.”
BULLSHIT!
References:
Dead Link
p. 24, WHO WILL TELL THE PEOPLE ,William Greider; Simon and Schuster, 1992. ISBN 0-671-68891-X
Dead Link
[Dead Link]
[Dead Link]
What do economists think most people are like? Believe it or not, ninety percent of the existing economists are working within a framework like this or very near to it:
“Rational Man” is described as a person who is an “optimizer” that:
a) has a complete knowledge of the set of possible different actions to be undertaken;
b) has a complete knowledge of the complete set of the possible states of the world (state space);
c) has a subjective probability mapping of the state space;
d) has a theory (a very clever theory) that enables him to compute the effective pay-offs of each action in relation to each state of the world;
e) optimizes the return of his choice by fully exploiting the available information.
[ In brief this person is in a situation that H. Simon describes as “weak substantive uncertainty” and of “no procedural uncertainty”, and has “no computational limitations”. ]
Here I define “rational” as the ability to carefully weigh the important, known variables and make that decision which is most likely to achieve the desired end.
People routinely fail this test—they do not make inferences according to Bayes’ Theorem, which is a formula used to calculate the probability that a particular event will occur. They give recently presented information undue importance, thereby producing answers that are not rational.
Difficulties People Have With Probabilistic Inference
Where Will It End
Patch Disturbance and the Human Niche
Dead Link
Dead Link
“There, ladies and gentlemen, you have the Cato Institute’s program in a nutshell: government should be against the law.”
Page not found at Cato Institute
Dead Link
p. 114, EICHMANN IN JERUSALEM: A Report on the Banality of Evil, Hannah Arendt; Penguin, 1963; ISBN 0-14-018765-0
Dead Link
“Debunking ” Laissez Faire
by George Soros
Newsweek, march 31, 1997
MY ATLANTIC MONTHLY Essay, The Capitalist Threat,” has aroused the ire of Robert J. Samuelson (“Crackpot Prophet, JUDGMENT CALLS, March 10) for its perceived attack on the capitalist system. I wasn’t attacking capitalism, only its excesses and laissez faire ideology.
I pointed out a curious affinity between laissez faire ideology and Marxism: both lay claim to scientific validity. The Marxist claim has been fully discredited. But laissez faire ideology is derived from the most respectable of social sciences, economics, and its claim to scientific validity still requires debunking. I suspect that Samuelson prefers to dismiss my ideas as jumbled, rather than to entertain the possibility that the scientific foundations of laissez faire are less than secure.
Our understanding of the world in which we live is inherently imperfect. This creates difficulties for the social sciences from which the natural sciences are exempt. Scientific method has discovered universally valid generalizations that can explain and predict events in the natural world. To make such generalizations possible, the events must be independent of statements that relate to them.
But in society, participants must make decisions about events that are contingent on their decisions. The separation between statements and facts, a characteristic of science, is lacking. Participants are obliged to act on the basis of imperfect understanding, bringing biases to bear, with unfortunate consequences for the social sciences. Participants’ thinking introduces an element of indeterminacy missing from the natural sciences.
Economic theory has sought to imitate l9th-century physics by introducing the concept of equilibrium. The postulate of a long-run equilibrium is indispensable to turning economics into a hard science. Unfortunately, the participants’ bias can wreak havoc with equilibrium, particularly in financial markets. The participants’ bias can influence the future that the markets are supposed to discount.
Sometimes the interaction between the participants’ thinking and the actual state of affairs sets off a self-reinforcing process that doesn’t leave the underlying reality unaffected. The absence of equilibrium deprives economics od its claim to being a hard science and also deprives laissez faire ideology of its scientific underpinnings. Outcomes do not necessarily correspond to expectations, and actions have unintended consequences. Instead of perfect markets, this leads to the concept of open society.
Since nobody is in possession of the ultimate truth, we need institutions and attitudes that allow people with different views and interests to live together in peace. Markets are the best mechanisms for correcting individual errors, but government intervention and collective action are needed to protect common interests and correct inequities in the capitalist system. Laissez faire ideology—which holds that the common interest is best served when each individual pursues his own particular interest—is inadequate for holding our open society together.
My main contention in the Adantic Monthly essay is that the concept of open society, which not only recognizes the multiplicity of cultures and traditions but actively advocates pluralism, could serve as a unifying principle for our global society. The trouble is that the concept is neither recognized nor accepted.
GEORGE SOROS, Chairman, Open Society Institute NEW YORK, N.Y.
The BIG Lie
“We are far from the only dishonest species, but we are probably the most dishonest, if only because we do the most talking.”
—Wright, THE MORAL ANIMAL
THE INVISIBLE HAND
Adam Smith said that “laissez faire” (let alone) economics would allow selfish individuals to raise the welfare of all, as if by an “Invisible Hand.”
“… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
FREE TO LOSE
Milton Friedman is the best known, and most widely respected, free-market economist in the entire world. Friedman won the Nobel Prize for economics in 1976.
Capitalism & Freedom (1962) set forth the case for market liberalism at a time when almost everyone accepted the premises of the welfare- and regulatory-state as beyond reproach. Free to Choose (1980) was the best selling nonfiction book in the United States for the year 1980, and it was translated into most major languages.
Here Friedman identifies Smith’s most important insight:
“Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit” [p. xv, Milton and Rose Friedman, FREE TO CHOOSE; AVON, 1979; ISBN 0-380-52548-8]
Although Friedman is one of the most influential economists of the twentieth century, he is lying, economists do not even define the word “benefit”—let alone measure it.
In 1992, both the US National Academy of Sciences and the Royal Society of London warned in a joint statement that science and technology may NOT be able to save us:
“If current predictions of population growth prove accurate and patterns of human activity on the planet remain unchanged, science and technology may not be able to prevent either irreversible degradation of the environment or continued poverty for much of the world.”
“The future of our planet is in the balance. Sustainable development can be achieved, but only if irreversible degradation of the environment can be halted in time. The next 30 years may be crucial.” Here
Never before in history had the two most prestigious groups of scientists in the world issued a joint statement!
Now, five of these years are gone, and global devastation is still increasing exponentially while giant trans-national corporations—and their lackeys, the economists—relentlessly drive billions towards their deaths.