Sunday, 25 January 2009

Entry into the IPA Kennard Freedom Prize

This is my entrance into the 2009 Kennard Freedom Prize.

Or: How to repackage Objectivism.

What responsibility, if any, do governments have for the liberty, prosperity and security of individuals?

By Callum McPetrie

NB: in this essay, “Capitalism” (with an upper-case “C”) refers to laissez-faire capitalism, not the mixed economy. “capitalism” is used in the general meaning of the word. The same rule applies for other ideologies and their respective definitions.

Ever since at least World War I and the development of the modern social democratic state, many people in the Western World believe that the primary responsibility of government, along with protecting citizens from force and fraud, is protecting them economically with a “safety net” and economic intervention to “fine tune” the economy, and regulate with the public interest in mind.

These ideas of government are built on the premise of the “common good” (meaning, to act in a way that benefits the majority of the citizenry, even if at the expense of other citizens), and the philosophy of Collectivism (which Socialism builds upon). Similarly, the idea of a government restricted to protecting citizens from force and fraud derives from the idea of individualism, which attributes to the individual inalienable rights to his life and the fruits of his labour (which Capitalism builds upon). Even so, most defence of Individualism today is based on the fact that it provides the best outcome for the greatest number –not on the premise of the morality of individual rights.

Although a majority of people, through the economics of Milton Friedman, believe that the free market and governmental restraint provides the best outcomes most of the time, the guiding principle of morality throughout most of history has been Collectivism, creating the moral-practical dichotomy and paving the way for statism and intrusive government. This essay will set out how Individualism and the libertarian idea of government restricted to protecting citizens from force is the only responsibility of government, why it works, and why it’s moral.

Crucial to understanding the development of these ideas, however, is the history behind them.

The History of Individual Rights

From Plato to the Enlightenment

The idea of the common good can be traced back to Plato. In his book The Republic, Plato discusses a communitarian society in which every citizen has responsibilities they must fulfill. This idea is still common around the world, such as, for instance, with military conscription. Aristotle, another famous philosopher, founded the idea of morality being based in reality, an idea crucial to later Enlightenment thinking, and is known as the “father of logic” –another important development.

Throughout most of the history of Christianity, European governments were theocratic monarchies in which citizens placed duty to God as the highest purpose in their Earthly lives. All European societies had some idea of class, with serfs (or later, slaves) as the lowest class, and the King or Queen as the highest person in society. The rights of citizens, if they had any, were determined by the Monarchy.

The Enlightenment of the 17th and 18th Centuries, with its renewed emphasis on Aristotelian Realism and Reason inherited from the rediscovery of Greek thinking in the Renaissance, was when the idea of individual rights was first developed by John Locke. Britain became the first power to fully integrate individual rights into its system of law, a tradition it exported throughout the world (note that most of the world’s richest countries outside Europe were colonies of Britain).

At the same time, Adam Smith developed his economic theories in The Wealth of Nations, and governments ended the mercantilism of previous centuries. The outcome was a massive increase in the standard of living in the 19th century.

Industrial Revolution

In 1830, an English writer called Thomas Macaulay stated:

“If any person had told the Parliament … after the crash in 1720 that in 1830 the wealth of England would surpass all their wildest dreams … that London would be twice as large … the rate of mortality would have been diminished to one half of what it was then … that men would be in the habit of sailing without wind and would be beginning to ride without horses … the prediction would have come true.”

The facts back him up. In 1830, as infant mortality declined, England’s average age lowered to 15 (families were still big, an inheritance from feudal culture). New technology in clothes production allowed entire populations to be clothed. Countless diseases that had infected and killed countless Britons were wiped out, and travel by land and sea became a lot quicker. During the nineteenth century, the European population increased by 300 million –one hundred fold on any previous century. Life expectancy in Britain increased from approx. 25-30 to 45-50, and Britain became the most prosperous society the world had seen. The idea of a limited government based on individual rights was working, and until WWI few doubted its success. The Industrial Revolution produced a wealthy, stable middle class, able to moderate the institutions of society.

The American Experience

The United States was the first nation ever to have a government entirely built on the idea of individual rights, and the libertarian idea of government, as laid out in the Constitution and Declaration of Independence.

As a result, America became the wealthiest nation in the world in the late nineteenth century, overtaking Britain, and became a refuge for peoples from around the world. During the late nineteenth century, Thomas Edison invented the light bulb, providing a safe way to light homes, and railways provided cheap transportation across the continent, allowing for social mobility. In 1903, the Model T Ford was first produced, and the Wright Brothers demonstrated powered flight. Despite the prevalent racism and slavery inherited from Europe, minorities also had a chance to succeed, as the story of George Washington Carver, a great innovator in the field of agriculture, shows.

The developments of 19th Century capitalism, by providing a strong, wealthy middle class, brought about social reform such as rights for women and later, blacks and minorities. Capitalism paved the way for equality before the law.

The Twentieth Century

What Happened?

The first half of the twentieth century, however, did not go down well. Old European rivalries, mostly put aside during the nineteenth century, spilled over in WWI. The Soviet Union was formed in 1917 out of an ancient, inefficient tyranny. The Great Depression, a result of government-controlled money and an intrusive Herbert Hoover, soured the public opinion of capitalism, and Hitler was brought to power in Germany, starting WWII. Except in the United States, the general viewpoint swung toward collectivism (and its corollary, socialism) as the best political ideology. The economics of John Maynard Keynes became popular, as did the welfare state.

Government socialism did not work well. Governments racked up huge debt, and citizens had to bear the brunt of it with high taxes. Strikes organised by powerful unions were regular, and often turned into riots. Cities were ugly and crime-ridden. People became very dissatisfied as a feeling of hopelessness spread when recession hit in the 1970s, with high inflation and unemployment throughout the West.

The Return of Capitalism (Almost)

The turnaround toward capitalism started in the late 1970s. Populaces distraught with poor economic planning and corruption brought Ronald Reagan and Margaret Thatcher to power. The roaring Asian Tigers demonstrated the new zeal for capitalism, and economic reforms became commonplace. The theories of Milton Friedman led to a rediscovery of the economics of self-interest underpinning human progress, through economic incentives such as the law of supply and demand. The libertarian idea of governmental restraint grew in popularity.

In 1991, the Soviet Union collapsed. Communism as an ideology had been refuted, and the horrors of communism under Stalin and Mao were revealed. Capitalism was back, and one commentator even called it “the end of history”. Capitalism’s critics went from claiming that it produced too little wealth for too few people (the unions) to claiming that it produced too much wealth for too many people (the environmentalists).

Despite progress in the forms of privatisation and looser business regulation, government kept Keynesian controls on monetary supply and introduced strict environmental regulations in the 1990s and 2000s, such as the Resource Management Act in New Zealand.

Moral Defence of Individualism


Individualism, through capitalism, proved itself to be the best socio-political system over the last two centuries, creating unprecedented wealth for great numbers of people. Although most laymen support capitalism on these grounds, the majority of capitalism’s supporters still believe that government must be active in providing support for the poor and regulating the market. Despite many economic arguments against the welfare state and regulations such as the minimum wage and affirmative action, these ideas still remain strong.

This is because the idea of a regulatory “mixed” economy is based on Utilitarianism, which accepts Collectivist ethics. Such Utilitarians support capitalism on the grounds that it provides the best outcome for the most people. However, as well as having an economic side, most societal issues –the welfare state being the best example- are more fundamentally moral issues, concerning justice and morality. Although most utilitarian supporters of capitalism disagree about the means of the welfare state to achieve equality, they accept the goal of the socialists who do believe in governmental force to achieve that goal. In most cases, there is no moral difference between capitalism’s supporters (unless on an arbitrary premise, such as “greed works”) and its critics. It is on those collectivist moral grounds that the welfare state gets support.

In turn, the combination of capitalism as a means of achieving a collectivist goal leads to the moral-practical dichotomy. Individualism (to certain degrees), most laymen believe, is essential to progress, but collectivism and the ethics of sacrifice are morally superior.

Individualism and Capitalism as Morally Superior

Contrary to these beliefs, Individualism is morally superior to Collectivism and Collectivist ideologies, the reason being that Individualism is the only socio-political ideology based on the idea of individual rights. Individual rights come from the idea that man is the sole beneficiary of his own production, which derives from the idea that the use of reason to reach human ends as good.

As philosophers know, man is a being with a volitional, conceptuall consciousness (the one presupposing the other). Other forms of life have consciousness to varying degrees; only humans have the ability to think conceptually. Thinking conceptually requires a process of identification, integration and understanding, known as reason. As man cannot obtain the values needed for life from the few instincts he has, he needs to use his reason, and apply it to the outside world to obtain values.

Life is a continual process of obtaining values, and all beings need a goal; this goal is self-preservation (in order to reproduce, for plants and animals). In perceptual or unconscious beings, this goal is pursued automatically; humans, having volition, need a purpose. For humans, this purpose is happiness - “happiness” being a state not of spur-of-the-moment whim, but of understanding that a conscious, joyous life is the ultimate reward of human action. Reason, his only tool of survival, is the only means by which he can obtain happiness, both on a physical and psychological level (as it is from reason that emotions, as opposed to impulses or sensations, derive).

To obtain happiness, and to live life on earth, man needs a code of morality, a guide to behaviour. The hallmark of a morality based on proper human happiness is a devotion to rationality, and the social conditions that allow it to thrive –individual rights, by verifying the morality of obtaining values through the use of reason.

In the Oxford English Dictionary, rights are “a moral or legal entitlement to have or do something”. Individual rights, however, are more commonly known as “negative rights”; i.e., the right to do what you wish providing it doesn’t harm others. These rights are the moral basis on which to build a society.

To establish the link between reason and rights, the idea of “force” needs to be examined. “Force” is involuntary action between two individuals, such as theft, and necessarily involves the negation of reality, and the impotence of reason. Take for example, bank robbery. Not only does the robber continually need to deny and change his stories, he has to rely on the blindness of others (such as the police) to remain legitimate, meaning that truth gets replaced by the arbitrary, and reason by wishful thinking. There is also a psychological aspect to the use of force –self-hate, by declaring oneself useless in the creation of values. Men (and societies) who consider force the only way to survive end up destroying themselves (witness any dictatorship or anarchy throughout history). Reason is the only tool of creating values; force destroys them, and renders use of the mind impossible (witness the destruction of all tyrannies throughout history).

Individual, inalienable Rights are the means of keeping the institutions of society under the law; the word “inalienable” means that, if government commits an act of force, that government is wrong –rights are separate from government action. Individual Rights protect man from men, and are not subject to a majority vote. Rights are the legal manifestations of the fact that the use of man’s mind is good, and that men who use their mind to produce objects of value to human life are morally superior to those who live, by force, off the minds of others –as they have chosen life and happiness, and the virtues necessary to go about obtaining values in order to reach that goals, as the proper way to live life.

This is why individualism works –because it teaches man that the use of the mind is good, and therefore a government based on non-initiation of force is good.


The libertarian idea of government, based on Individualism, is morally superior to government force in the name of the “common good”, as it is the only idea of government that recognizes that man has a right to his own life, liberty and property, and only through holding up the use of man’s mind as good can a prosperous and human civilisation become a reality.

In history as in economics, the facts back this up. Individualism has brought about an unprecedented increase in human welfare, which was unthinkable beforehand.

Unfortunately, the morality of the modern age, based on self-sacrifice and its socio-political manifestation, Collectivism, are proving a threat to Individualism and Capitalism, and most supporters of Individualism and Individual Rights (including philosophers and economists) have been unable to defend those ideas on moral grounds, which has allowed socialism to creep into modern society. If Individualism is to have a future, it needs to be defended on moral grounds.

On both practical and moral grounds, the libertarian idea of government is the only proper political philosophy –as it is built on the idea of man’s life as good.

In answer to the question: government has no responsibility for the prosperity and security of individuals; its only responsibility to protect their liberty, from force and fraud.


The Bourgeois Virtues, Deirdre McCloskey, pg 9, Apology, 2006
America Alone, Mark Steyn, pg 6, Chapter 1, 2006
Black Innovators and Entrepreneurs Under Capitalism, Andrew Bernstein
The Capitalist Manifesto, Andrew Bernstein, Part One, Chapters Three, Four, Five, 2005
Objectivism: The Philosophy of Ayn Rand, Leonard Peikoff, Chapters 7, 8, 10, Epilogue
Philosophy: Who Needs It, Ayn Rand, Chapter 7, pg 91, 1984
A fuller discussion of the philosophy underlying Individualism can be found in the works of Ayn Rand such as Atlas Shrugged, The Fountainhead and The Virtue of Selfishness, and the works of Leonard Peikoff.
The ideas of John Locke can be found in his books An Essay Concerning Human Understanding and Two Treatises of Government. The ideas of Adam Smith can be found is his book The Wealth of Nations.


MC-Shalom said...

You Bail Them Out, We Opt Out.

Dear, I should say Expensive Chairman Ben S. Bernanke,

All of Our Economic Problems Find They Root in the Existence of Credit.

Out of the $5,000,000,000,000 bail out money for the banks, that is $1,000 for every inhabitant of this planet, what is it exactly that WE, The People, got?

If my bank doesn't pay back its credits, how come I still must pay mines?

If my bank gets 0% Loans, how come I don't?

At the same time, everyday, some of us are losing our home or even our jobs.

Credit discriminates against people of lower economic classes, as such it is unconstitutional, isn't it? It is an supra national stealth weapon of class struggle.

Credit is a predatory practice. When the predator finishes up the preys he starves to death. What did you expect?

Where are you exactly in that food chain?

Credit gets in the way of All the Principles of Equal Opportunity and Free Market.

Credit is a Stealth Weapon of Mass Destruction.

Credit is Mathematically Inept, Morally Unacceptable.

You Bail Them Out, We Opt Out

Opting Out Is Both Free and Strictly Anonymous.

My Solution: The Credit Free, Free Market Economy.

Is Both Dynamic on the Short Run & Stable on the Long Run, The Only Available Short Run Solution.

I Am, Hence, Leading The Exit Out of Credit:

Let me Outline for You my Proposed Strategy:

My Prescription to Preserve Our Belongings.

Our Property Title: Our Free, Strictly Anonymous Right to Opt Out of Credit.

Our Credit Free Money: The Dinar-Shekel AKA The DaSh, Symbol: - .

Asset Transfer - Our Right Grant Operation - Our Wealth Multiplier.

A Specific Application of Employment, Interest and Money.
[A Tract Intended For my Fellows Economists].

If Risk Free Interest Rates Are at 0.00% Doesn't That Mean That Credit is Worthless Already?

Since credit based currencies are managed by setting short-term interest rates, on which you have lost all control, can we still say that are managing?

We Need, Hence, Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.

In This Age of Turbulence The People Wants an Exit Out of Credit: An Adventure in a New World Economic Order.

The only other option would be to wait till most of the productive assets of the economy get physically destroyed either by war or by rust.

It will be either awfully deadly or dramatically long.

A price none of us can afford to pay.

“The current crisis can be overcome only by developing a sense of common purpose. The alternative to a new international order is chaos.”

- Henry A. Kissinger

What Else?

Until We Succeed the Economy Will Necessarily Sink Into a Deeper and Deeper Depression

You Bail Them Out, Let's Opt Out!

Check Out How Many of Us Are Already on Their Way to Opt Out of Credit.

Let me provide you with a link to my press release for my open letter to you:

Chairman Ben S. Bernanke, Quantitative [Ooops! I Meant Credit] Easing Can't Work!

I am, Mr Chairman, Yours Sincerely [Do I really have the choice?],

Shalom P. Hamou AKA 'MC-Shalom'
Chief Economist - Master Conductor
1 7 7 6 - Annuit Cœptis
Tel: +972 54 441-7640
Fax: +972 3 741-0824

Sus said...

Callum, that essay is a beaut. Well done. I loved this line in particular:

"Individual rights protects man from men." So simple and yet so misunderstood. Some of the right-wing blogs should have a think about that ...

There's something I didn't get though:

"In 1830, as infant mortality declined, England’s average age lowered to 15 (families were still big, an inheritance from feudal culture) .."

Infant mortality rates dropping/England's average age lowered to 15? What am I missing there??

Anyway, all the very best for the competition and school this year. Year 12?

Callum said...

Sus, what it means is that children weren't dying at birth as much as they were beforehand -infant mortality was conquered.

Thanks for the compliment -Year 11.

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