John Maynard Keynes — not exactly history’s greatest opponent of government spending — is reported to have said he would be worried if government outlays ever surpassed 25 percent of GDP. Well, in recent years both American and British government expenditures have hovered around 40 percent of GDP. The bulk of that spending, perhaps as much as 70 percent in Britain, goes to feed the ravenous welfare state.

Clearly it’s time to question the welfare state. But such questions are too often viewed as taboo. Anyone who challenges it is viewed as seeking a return to the “dog-eat-dog” world of unfettered capitalism — a world where sellers supposedly exploited buyers, employers exploited workers, the rich exploited the poor.

But capitalism, to say nothing of poor old Fido, has gotten a bad rap.

Capitalism — real capitalism, not the mixed economies that have existed for the past century — is the system based on private property, free production, and voluntary trade. It’s not a zero-sum game where people battle over a fixed pie. Each person is free to create wealth and to trade it with others, such that they all benefit.

That’s the beauty of capitalism. Because all economic relationships are voluntary, people only enter into them when each party thinks it’s to his advantage. When you accept a job, for instance, it’s not because the employer forced you to work at the point of a gun. It’s because you valued the paycheck more than other possible uses of your time. It’s a gain for you and a gain for your employer. In some cases you may not be thrilled with the work or the pay, but the fact that a win may be smaller than you would have preferred doesn’t change the fact that it’s a win. And if what first seemed like a win turns out badly, you’re free to make a new bargain.

Capitalism isn’t dog-eat-dog: It’s win-win.

We don’t have capitalism anymore — not in Britain, not in the rest of Europe, not in the United States. What we have instead are massive welfare states. And if the false charge against capitalism is that it allows “the strong” to exploit “the weak,” then the true nature of the welfare state is that it allows “the weak” — i.e., the unproductive — to exploit “the strong” — i.e., the productive.

And exploiting they are. The Davey family, for instance, made headlines in 2010 for receiving £42,000 in state-provided benefits while driving a Mercedes, enjoying cutting-edge electronics, and continuing to have children (at the time of the story they had seven with another on the way). Mrs. Davey had never worked, and Mr. Davey had quit his job after he figured out he could do better by living on the dole. “I don’t feel bad about being subsidized by people who are working,” Mrs. Davey told The Daily Mail.

This sort of story does not represent some bizarre failure of the system — it captures the system’s spirit.

The truth is that the goal of the welfare state is to make the productive sacrifice for the unproductive. It establishes the principle that a person is entitled to state support simply by virtue of his need. But the state doesn’t have any money. In order to provide support, it has to take money from the people who earned it. Translation? A person’s need entitles him to your money. The less value he creates, the more rewards you owe him — and the more value you create, the greater your duty to serve him, and all the Daveys of the world. As Ayn Rand put it in her novel Atlas Shrugged, “If you succeed, any man who fails is your master; if you fail, any man who succeeds is your serf.”

How is that fair?

In place of capitalism’s philosophy of win-win, the welfare state puts everyone’s wealth up for grabs, ensuring that one person’s gain comes at his neighbor’s expense. Talk about dog-eat-dog.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Just when Apple was introducing its latest iPad, the government announced that Apple was among six companies being investigated over ebook pricing. As that investigation appears to be nearing its conclusion, here are three things everyone needs to know about the case.

1. The government is targeting voluntary agreements

What is the offense these companies are accused of committing? Apple pioneered an agreement with five leading book publishers to change the way ebooks are priced.

The old pricing model allowed sellers such as Amazon and Apple to set ebook prices. Apple suggested that the publishers switch to a so-called agency-pricing model: the publishers would set the price and Apple’s ebook store would take a 30 percent share. The one condition that Apple put on the agreement was that the publishers could not sell their ebooks for less elsewhere. (In other words, the publishers had to convince companies such as Amazon to agree to the same deal.)

So what’s the problem? It’s true that these agreements limit the pricing options of companies such as Amazon. But all contracts involve limitations and restraints. The salient issue is that Apple couldn’t force the deal on the publishers, the publishers couldn’t force the deal on other ebook sellers, and no one could force customers to pay higher prices. We’re talking about free, voluntary contractual arrangements that the government has no business interfering with.

It’s also true that ebook prices have risen somewhat since the deal. Who cares? Traditional books may be made from trees but they don’t grow on trees — and ebooks and ebook readers such as the iPad definitely don’t grow on trees. These are amazing values created by publishers and by companies such as Apple. Those companies have a right to offer their products for sale at whatever prices and on whatever terms they choose. They cannot make us buy them. (If they could, why would they charge only $15? Why not $50? Why not $1,000?)

There is no mystically ordained “right” price for ebooks — the right price is the one voluntarily agreed to between sellers and buyers. Sure, some buyers may complain about ebook prices — but they are also buying an incredible number of ebooks.

What in the world entitles a bunch of bureaucrats who have created nothing to interfere with these voluntary transactions and declare that they get to decide how ebooks should be priced?

2. The government isn’t protecting competition — it’s punishing it

Competition, in the simplest terms, is business rivalry: it’s the actions businesses take to outdo each other in the production of wealth. It requires only one thing from government: the freedom to compete.

Under freedom of competition, companies engage in all sorts of competitive actions in order to maximize their profits: they strive to innovate, to improve customer service, to lower production costs, to engage in strategic alliances with other producers, to experiment with pricing strategies.

Take the agreement that’s under fire in this case. When the companies agreed on certain pricing arrangements, this was not a limitation on competition but a form of competition. They judged that, all things considered, they could maximize profits by having publishers rather than booksellers set ebook prices.

At no point was anyone’s freedom of competition limited. No one is barred from competing by the ebook arrangement. Any publisher or distributor who chose not to sign the agreement is free to charge whatever it wants for ebooks, and any consumer is free not to buy from those who did sign.

No private action can interfere with this competitive process; the only thing that can is government force. It is only government that can stop us from engaging in free, voluntary trading relationships.

And this is precisely what antitrust laws do: they restrict freedom of competition. They stop companies from engaging in perfectly legitimate, perfectly voluntary competitive actions, such as the sorts of pricing agreements that have come under fire in the Apple case.

3. Antitrust laws punish great companies

Because antitrust laws are vague and contradictory, practically any successful business can be targeted for enforcement.

Just take the issue of pricing. Apple and the publishers are in trouble for “colluding” — setting prices in concert with each other. But antitrust also punishes setting prices “too low” — that’s “predatory pricing.” And it also punishes setting prices “too high” — that’s proof of “monopoly power.”

If the government tried to apply antitrust laws consistently, it would amount to the abolition of business. In practice, what it does is go after the most successful companies. That’s why the annals of antitrust read like a who’s who of great businesses: Standard Oil, Alcoa, GE, IBM, Microsoft, Intel, Google, Apple.

The effect of being put in the antitrust crosshairs should not be taken lightly. Throughout the eighties and nineties, Microsoft was one of the most innovative companies in the world. But over the last decade? Not so much. Joe Wilcox, managing editor of BetaNews, places the blame heavily on antitrust:

Windows innovation stagnated during the last decade, as Microsoft backed off the so-called middleware categories covered by the antitrust case and withheld integrating new technologies into the operating system that should have kept the platform vital and created more opportunities for third-party developers.

The mere prospect of an investigation is enough to rattle and discourage businessmen, even if the government never takes the case to court.

In a September 2010 interview, Whole Foods CEO John Mackey was asked about his company’s merger with the Wild Oats grocery chain. “[I]t’s been great,” said Mackey. “Our Wild Oats same-store sales were up like 16 percent in the second quarter.” But when asked whether he would do the merger again, Mackey answered with an emphatic “No.”:

We’ll never do another merger that requires FTC approval. It was the worst experience of Whole Foods’ corporate life. All my e-mails were examined by the FTC. The thirty million dollars in legal fees. . . . For what? To prove we weren’t a monopoly? Everyone knows we’re not.

Treating productive businessmen this way is a profound injustice, and the price paid — by them and us — is incalculable. Innovators such as Apple deserve thanks and they deserve freedom — not the shackles of antitrust.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Reacting to calls for cuts in entitlement programs, House Democrat Henry Waxman fumed: “The Republicans want us to repeal the twentieth century.” Sound bites don’t get much better than that. After all, the world before the twentieth century — before the New Deal, the New Frontier, the Great Society — was a dark, dangerous, heartless place where hordes of Americans starved in the streets.

Except it wasn’t and they didn’t. The actual history of America shows something else entirely: picking your neighbors’ pockets is not a necessity of survival. Before America’s entitlement state, free individuals planned for and coped with tough times, taking responsibility for their own lives.

In the 19th century, even though capitalism had only existed for a short time, and had just started putting a dent in pre-capitalism’s legacy of poverty, the vast, vast majority of Americans were already able to support their own lives through their own productive work. Only a tiny fraction of a sliver of a minority depended on assistance and aid — and there was no shortage of aid available to help that minority.

But in a culture that revered individual responsibility and regarded being “on the dole” as shameful, formal charity was almost always a last resort. Typically people who hit tough times would first dip into their savings. They might take out loans and get their hands on whatever commercial credit was available. If that wasn’t enough, they might insist that other family members enter the workforce. And that was just the start.

“Those in need,” historian Walter Trattner writes, “. . . looked first to family, kin, and neighbors for aid, including the landlord, who sometimes deferred the rent; the local butcher or grocer, who frequently carried them for a while by allowing bills to go unpaid; and the local saloonkeeper, who often came to their aid by providing loans and outright gifts, including free meals and, on occasion, temporary jobs. Next, the needy sought assistance from various agencies in the community — those of their own devising, such as churches or religious groups, social and fraternal associations, mutual aid societies, local ethnic groups, and trade unions.”

One of the most fascinating phenomena to arise during this time were mutual aid societies — organizations that let people insure against the very risks that entitlement programs would later claim to address. These societies were not charities, but private associations of individuals. Those who chose to join would voluntarily pay membership dues in return for a defined schedule of benefits, which, depending on the society, could include life insurance, permanent disability, sickness and accident, old-age, or funeral benefits.

Mutual aid societies weren’t private precursors to the entitlement state, with its one-size-fits-all schemes like Social Security and Medicare. Because the societies were private, they offered a wide range of options to fit a wide range of needs. And because they were voluntary, individuals joined only when the programs made financial sense to them. How many of us would throw dollar bills down the Social Security money pit if we had a choice?

Only when other options were exhausted would people turn to formal private charities. By the mid-nineteenth century, groups aiming to help widows, orphans, and other “worthy poor” were launched in every major city in America. There were some government welfare programs, but they were minuscule compared to private efforts.

In 1910, in New York State, for instance, 151 private benevolent groups provided care for children, and 216 provided care for adults or adults with children. If you were homeless in Chicago in 1933, for example, you could find shelter at one of the city’s 614 YMCAs, or one of its 89 Salvation Army barracks, or one of its 75 Goodwill Industries dormitories.

“In fact,” writes Trattner, “so rapidly did private agencies multiply that before long America’s larger cities had what to many people was an embarrassing number of them. Charity directories took as many as 100 pages to list and describe the numerous voluntary agencies that sought to alleviate misery, and combat every imaginable emergency.”

It all makes you wonder: If Americans could thrive without an entitlement state a century ago, how much easier would it be today, when Americans are so rich that 95 percent of our “poor” own color TVs? But we won’t get rid of the entitlement state until we get rid of today’s widespread entitlement mentality, and return to a society in which individual responsibility is the watchword.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Nearly thirty years after her death, Ayn Rand’s novels continue to be wildly popular — Atlas Shrugged alone is selling more today than it did when it was first published in 1957 — more than one million copies have sold since the 2008 elections.

Especially among Tea Partiers, Ayn Rand is being hailed a prophet. How could she have anticipated, more than 50 years ago, a United States spinning out of financial control, plagued by soaring spending and crippling regulations?

How could she have painted villains who seem ripped from today’s headlines?

There’s Wesley Mouch, who in the face of failed government programs screams like Rep. Barney Frank (D) of Massachusetts for wider powers. 

There’s Eugene Lawson, “the banker with a heart,” who like former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke is ever ready with a bailout. 

There’s Mr. Thompson, who like President Obama seeks to rally the country behind pious platitudes. 

There’s Orren Boyle, who like President Bush says that we must abandon free-market principles to save the free market.

And in the face of this onslaught, what can you do? Should you, like Rand’s heroes, “go Galt,” stop working, retreat to a secluded valley, and try to rebuild only when the country has collapsed?

Rand was asked these very questions in her own lifetime. Her answers might surprise you. 

In the 1970s, America was in a deep financial crisis (a new word, stagflation, had to be coined), urban violence was rampant, and power-seeking politicians like President Nixon instituted wage and price controls that led to, among other things, gas stations with no gas. 

How, people wondered, could Rand have foreseen all this? Was she a prophet? No, she answered. She had simply identified the basic cause of why the country was veering from crisis to new crisis.

Was the solution to “go Galt” and quit society? No, Rand again answered. The solution was simultaneously much easier and much harder. “So long as we have not yet reached the state of censorship of ideas,” she once said, “one does not have to leave a society in the way the characters did in Atlas Shrugged. . . . But you know what one does have to do? One has to break relationships with the culture. . . . [D]iscard all the ideas — the entire cultural philosophy which is dominant today.”

Now, the fact that Atlas Shrugged is not a political novel might surprise you. But the book’s point is that our plight is caused not by corrupt politicians (who are only a symptom) or some alleged flaw in human nature. It’s caused by the philosophic ideas and moral ideals most of us embrace.

“You have cried that man’s sins are destroying the world and you have cursed human nature for its unwillingness to practice the virtues you demanded,” the novel’s hero John Galt declares to a country in crisis. “Since virtue, to you, consists of sacrifice, you have demanded more sacrifices at every successive disaster.”

He elaborates: “You have sacrificed justice to mercy.” (For example, calls to make homeownership “accessible” to those who could not afford it and then bailouts and foreclosure freezes to spare them when they couldn’t pay.)

“You have sacrificed reason to faith.” (For example, attempts to prevent stem cell research on Biblical grounds, or blind faith that Mr. Obama’s deliberately empty rhetoric about hope and change will magically produce prosperity.)

“You have sacrificed wealth to need.” (For example, Bush’s prescription drug benefit and Obamacare, both enacted because people needed “free” health care.)

“You have sacrificed self-esteem to self-denial.” (For example, attacks on Bill Gates for making a fortune; applause when he gives that fortune away.)

 “You have sacrificed happiness to duty.” (For example, every president’s Kennedyesque exhortations to “Ask not what your country can do for you — ask what you can do for your country.”)

The result? “Why . . . do you shrink in horror from the sight of the world around you? That world is not the product of your sins, it is the product and the image of your virtues. It is your moral ideal brought into reality . . .”

This is what Atlas Shrugged is asking us to question: our ideals. Rethink our convictions and philosophy of life from the ground up. Without doing so, it argues, we won’t escape further crises.

Strike, the book urges us, but intellectually, since to strike means to reject the fundamental terms of your opponents and assert your own.

This kind of thinking is difficult, Rand held, but necessary to enter the Atlantis depicted toward the end of the novel. 

If Atlas Shrugged has been on your list of books-I’ve-been-meaning-to-get-to, then consider finding out for yourself how a story published in 1957 so eerily captures the world we live in today and so beautifully presents a road to a brighter future.

Postscript: And if you’re like the millions who prefer reading e-books, I highly recommend the just-released Atlas Shrugged app for iPad: it includes the unabridged text of the classic novel, and offers a glimpse into the backstory of the book and sketches out the essentials of Rand’s original philosophic system, Objectivism. 

About The Author

Onkar Ghate

Chief Philosophy Officer and Senior Fellow, Ayn Rand Institute

This book challenges the orthodox view of Lochner v. New York as a politically motivated judicial coup that ushered in an era of laissez-faire constitutionalism. In Rehabilitating Lochner, Professor David E. Bernstein has produced a serious and significant work of historical revisionism, one intended to enrich our understanding of substantive due process analysis under the Fourteenth Amendment. Bernstein‘s special focus is constitutional protection for liberty of contract: whence it came, how it applied, and where it led. He does not, however, undertake the task of showing that Lochner was correctly decided or that its theory of judicial review was sound…

Download full article

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

Apple Computer, which for decades played second fiddle to Microsoft, has achieved the unthinkable. Not only has it surpassed Microsoft as the nation’s biggest tech company (in terms of market capitalization), but it’s now poised to displace Exxon Mobil as the nation’s largest company.

With Apple’s crowd-pleasing success has come antitrust scrutiny. Both the Justice Department and Federal Trade Commission are investigating Apple’s business practices. News reports of antitrust enforcers’ “keen interest” in Apple are reminiscent of how Microsoft was targeted back in the 1990s, for the sin of packaging Web browsers and media players with its popular Windows operating system.

Said one former FTC official: “Apple is playing right out of Microsoft’s playbook — and it’s one they complained about a lot.”

Why is one of America’s most admired and successful companies caught in the prosecutorial cross hairs? Apple is being targeted for business practices that date back to the company’s earliest days.

In the personal computer arena, it has long been notorious for maintaining tight control over hardware and software. But so long as Microsoft’s more “open” licensing and software policies enjoyed vastly greater market success, antitrust authorities swarmed around Microsoft and left Apple alone.

Nowadays, however, Apple’s tight quality controls are helping generate breakthrough sales of iPhones, iPods and iPads, devices that customers love to load up with useful “apps.” Some apps are educational, some entertaining, some commercial.

To maintain quality control, Apple issued take-it-or-leave-it terms to outside software developers. These contract terms required that Apple’s own software tools be used in creating apps. As a result, certain apps created with competing software, such as Adobe’s Flash program, were not allowed on Apple devices.

Such practices, it was whispered, are “anticompetitive.” Antitrust investigators fanned out in search of jealous competitors and disgruntled software developers who could help legally demonize Apple’s money-making business practices (as Apple itself previously did to Microsoft).

Right on cue, Adobe ran full-page newspaper ads accusing Apple’s policies of “taking away your freedom to choose . . . what you experience on the Web.” Just last month (in response to this antitrust pressure?), Apple relaxed its rules on development tools, so long as the resulting apps don’t download code.

Meanwhile, antitrust storm clouds are gathering around iTunes (Apple’s copy-protected online music service since 2003), the iPad (Apple has been warned against making exclusive contracts with publishers of electronic books), and iAd (a mobile advertising service to compete with Google). In each case, Apple’s chief offense seems to be its innovative touch — its ability to create cool new products, expand the market by attracting loyal customers, and make a pile of money in the process.

We are told that antitrust regulators safeguard consumers against “anti-competitive” behavior from companies like Apple. But in reality, this is what competition looks like.

Apple is buffeted at every step by a competitive whirlwind, surrounded by talented rivals waiting for the slightest stumble (witness the recent “Antennagate” kerfuffle). Because Apple cannot force customers to buy its products, the company has no power to stop the competitive process. If Apple ever stops offering superior consumer value, its market share will fall accordingly.

Antitrust law gains adherents by conflating government monopolies with companies that earn their dominant market position. But unlike the Post Office, whose plodding inefficiency is shielded by a legal monopoly on delivering first-class mail, Apple’s success is not a product of government coercion.

On the contrary, Apple profits from the free choices of individual consumers applying their own standards of excellence. Instead of Apple’s iPod, customers could have bought Microsoft’s low-selling Zune music device. Instead of Apple’s iPhone, they could have flocked to Microsoft’s failed Kin smart phone. Instead of Apple’s iPads, they could have bought one of Microsoft’s tablet computers.

Can it be that antitrust prosecution of Apple would serve no purpose other than punishing the company for its success? The evidence points in that direction.

If prior antitrust proceedings against industry giants are any indication, Apple stands to lose hundreds of millions of dollars in employee time, lawyer fees and government penalties — not to mention the lurking possibility of criminal prosecution and jail time. And then there’s the impossible-to-quantify loss of innovative ardor — the nonexistent profits from devices that will not be invented if Apple is forced by antitrust exposure to keep a low profile.

Here’s a radical thought: What if there were no antitrust laws for government and struggling competitors to use to threaten the success of innovative companies like Apple?

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

Washington — The House Ways and Means Committee is now reviewing President Obama’s “Financial Crisis Responsibility Fee,” a bank tax that will fall on some institutions that never asked for money from the Troubled Asset Relief Program, never took TARP money, or already paid back TARP money. In promoting the measure, supporters have been invoking widespread anger over bank bailouts, brazenly ignoring the fact that this punitive tax would punish businesses that eagerly fed at the public trough in the wake of the crisis as well as those that did not.

Since the advent of capitalism, businessmen have been denounced for the corrupt actions of a few political profiteers. To help understand that there is a distinction, consider two characters in Ayn Rand’s 1957 novel Atlas Shrugged. In the book, Rand describes two opposite kinds of businessmen — those she calls the “producers” and those she calls the “looters.”

The producers, such as Hank Rearden, inventor of a new metal stronger and cheaper than steel, work tirelessly to create products that improve human life. The looters are basically pseudobusinessmen, like the incompetent steel executive Orren Boyle, who get unearned riches by getting special favors from politicians. Their business isn’t business, but political pull.

It is the producers who make life possible: who keep grocery shelves stocked; who discover new lifesaving drugs; who make computers faster, buildings taller, and airplanes safer.

The looters, on the other hand, leech off the wealth created by producers.

The novel rejects the widespread notion that both the producer Reardens and the looter Boyles are fundamentally united by a desire for profit. Only the Reardens, she argues, deserve to be called profit-seekers, because they earn rewards through productive effort; the Boyles are antieffort parasites seeking unearned loot.

But it’s not only unearned wealth the looters want. In Atlas Shrugged, Boyle uses his influence to throttle Rearden with progressively harsher government controls and regulations, because he can’t survive except by hindering the competition.

Producers, however, don’t need special favors, only freedom: the freedom to produce, to trade voluntarily, and, if they succeed, to keep the profits. As a country becomes less free, it creates and unleashes more and more Boyles, who succeed at the expense of the Reardens.

America, today, is still a land of producers. Our country is full of industrialists, managers, and financiers who display the ruthlessly high standards, exceptional intelligence, and extraordinary work ethic that are characteristic of a producer.

When Apple was nearly ready to release the first iPhone, for instance, CEO Steve Jobs looked at the enclosure design and announced to his team, “I just don’t love this. I can’t convince myself to fall in love with this.” Mr. Jobs was asking his team to toss out a year’s work and start over. “And you know what everybody said?” Jobs later noted. “Sign us up.” That is the mentality of a producer — the commitment to settle for nothing but one’s best. It’s a mentality you can still find in many sectors of the economy.

But the Boyles are on the rise, growing fat on bailouts, handouts, and other sundry opportunities for political profiteering. For every producer like BB&T bank’s John Allison, who opposed Washington’s bailouts and was forced to accept government money, there seem to be ten like former General Motors CEO Rick Wagoner, demanding tax dollars to prop up their failing companies.

Meanwhile, today’s real-life Boyles constantly lobby for government restraints on their more able competitors. Remember when the überproductive Bill Gates started giving away free Web browsers to his customers, and Netscape ran to Washington demanding that Microsoft be shackled via antitrust laws?

Yes, it can sometimes be hard to tell the producers from the looters. As government becomes more entangled in our economic affairs, even the Reardens of the world are forced to lobby Washington — not to reap unearned rewards, but to protect themselves from the Boyles. (It’s no accident that before Microsoft came under antitrust fire, it spent virtually nothing on lobbyists, while today it spends many millions.) What’s more, many businessmen are mixed cases — part producer, part political profiteer.

However difficult it may be to classify individual businessmen, though, it’s crucial to keep the two categories separate when praising or condemning the businessmen who appear in the headlines and before congressional panels. If we don’t, it’s the Boyles who benefit and the Reardens who suffer.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Eight years after 9/11 and in the shadow of two protracted U.S. military campaigns in the Middle East, the enemy is not only undefeated but emboldened and resurgent. What went wrong — and what should we do going forward?

Winning the Unwinnable War shows how our own policy ideas led to 9/11 and then crippled our response in the Middle East, and it makes the case for an unsettling conclusion: By subordinating military victory to perverse, allegedly moral constraints, Washington’s policy has undermined our national security. Owing to the significant influence of Just War Theory and neoconservatism, the Bush administration consciously put the imperative of shielding civilians and bringing them elections above the goal of eliminating real threats to our security. Consequently, this policy left our enemies stronger, and America weaker, than before. The dominant alternative to Bush-esque idealism in foreign policy — so-called realism — has made a strong comeback under the tenure of Barack Obama. But this nonjudgmental, supposedly practical approach is precisely what helped unleash the enemy prior to 9/11.

The message of the essays in this thematic collection is that only by radically rethinking our foreign policy in the Middle East can we achieve victory over the enemy that attacked us on 9/11. We need a new moral foundation for our Middle East policy. That new starting point for U.S. policy is the moral ideal championed by the philosopher Ayn Rand: rational self-interest. Implementing this approach entails objectively defining our national interest as protecting the lives and freedoms of Americans — and then taking principled action to safeguard them. The book lays out the necessary steps for achieving victory and for securing America’s long-range interests in the volatile Middle East.

• Read chapters 6 and 7 in the PDF.
• Buy the book
• See also: An Unwinnable War?

About The Author

Elan Journo

Senior Fellow and Vice President of Content Products, Ayn Rand Institute

Author’s note: The following is the introduction to Winning the Unwinnable War: America’s Self-Crippled Response to Islamic Totalitarianism.

“I don’t think you can win it. . . . I don’t have any . . . definite end [for the war]”
— President George W. Bush 1

The warriors came in search of an elusive Taliban leader. Operating in the mountains of eastern Afghanistan, the team of Navy SEALs was on difficult terrain in an area rife with Islamist fighters. The four men set off after their quarry. But sometime around noon that day, the men were boxed into an impossible situation. Three Afghan men, along with about one hundred goats, happened upon the team’s position. What should the SEALs do?

Their mission potentially compromised, they interrogated the Afghan herders. But they got nothing. Nothing they could count on. “How could we know,” recalls one of the SEALs, “if they were affiliated with a Taliban militia group or sworn by some tribal blood pact to inform the Taliban leaders of anything suspicious-looking they found in the mountains?” It was impossible to know for sure. This was war, and the “strictly correct military decision would still be to kill them without further discussion, because we could not know their intentions.” Working behind enemy lines, the team was sent there “by our senior commanders. We have a right to do everything we can to save our own lives. The military decision is obvious. To turn them loose would be wrong.”

But the men of SEAL Team 10 knew one more thing. They knew that doing the right thing for their mission — and their own lives — could very well mean spending the rest of their days behind bars at Leavenworth. The men were subject to military rules of engagement that placed a mandate on all warriors to avoid civilian casualties at all costs. They were expected to bend over backward to protect Afghans, even if that meant forfeiting an opportunity to kill Islamist fighters and their commanders, and even if that meant imperiling their own lives.

The SEALs were in a bind. Should they do what Washington and the military establishment deemed moral — release the herders and assume a higher risk of death — or protect themselves and carry out their mission — but suffer for it back home? The men — Lt. Michael Murphy; Sonar Technician 2nd Class Matthew Axelson; Gunner’s Mate 2nd Class Danny Dietz; and Hospital Corpsman 2nd Class Marcus Luttrell — took a vote.

They let the herders go.

Later that afternoon, a contingent of about 100–140 Taliban fighters swarmed upon the team. The four Americans were hugely outnumbered. The battle was fierce. Dietz fought on after taking five bullets, but succumbed to a sixth, in the head. Murphy and Axelson were killed not long after. When the air support that the SEALs had called for finally arrived, all sixteen members of the rescuing team were killed by the Islamists. Luttrell was the lone survivor, and only just. 2

The scene of carnage on that mountainside in Afghanistan captures something essential about American policy. What made the deadly ambush all the more tragic is that in reaching their decision, those brave SEALs complied with the policies handed down to them from higher-ups in the military and endorsed by the nation’s commander-in-chief. Their decision to place the moral injunction to selflessness ahead of their mission and their very lives encapsulates the defining theme of Washington’s policy response to 9/11.

Across all fronts U.S. soldiers are made to fight under the same, if not even more stringent, battlefield rules. Prior to the start of the Afghanistan War and the Iraq War, for instance, the military’s legal advisors combed through the Pentagon’s list of potential targets, and expansive “no-strike” lists were drawn up. 3 Included on the no-strike lists were cultural sites, electrical plants, broadcast facilities — a host of legitimate strategic targets ruled untouchable, for fear of affronting or harming civilians. To tighten the ropes binding the hands of the military, some artillery batteries “were programmed with a list of sites that could not be fired on without a manual override,” which would require an OK from the top brass. 4 From top to bottom, the Bush administration consciously put the moral imperative of shielding civilians and bringing them elections above the goal of eliminating real threats to our security.

This book shows how our own policy ideas led to 9/11 and then crippled our response in the Middle East, and makes the case for an unsettling conclusion: By subordinating military victory to perverse, allegedly moral constraints, Washington’s policy has undermined our national security. Only by radically rethinking our foreign policy in the Middle East can we achieve victory over the enemy that attacked us on 9/11.

But from the outset the Bush administration had insisted that we’re in a new kind of war — an unwinnable war. To scale back people’s expectations, it told us not to wait for a defeated enemy to surrender, in the way that Japan did aboard the USS Missouri in 1945.

This much is true: the “war on terror” is essentially different from our actions in World War II. Back then, we brought Japan to its knees within four years of Pearl Harbor — yet eight years after 9/11, against a far weaker enemy, we find ourselves enmeshed in two unresolved conflicts (Iraq and Afghanistan) while further mass-casualty attacks and new flashpoints (such as Pakistan) loom. Why?

It is not for lack of military strength and prowess; in that regard America is the most powerful nation on earth. It is not for a lack of troops, or planning, or any sort of bungled execution. Our soldiers have amply demonstrated their skill and courage — when they were allowed to fight. But such occasions were deliberately few; for as a matter of policy Washington sent them, like the SEALs in Afghanistan, into combat but prohibited them from fighting to win. This underscores how Bush’s war indeed differs from the triumphant, all-out military campaign against Japan — and how it is far from a new kind of war. It is in fact an eerie replay of Vietnam.

The philosopher Ayn Rand observed, at the time, that in the Vietnam War “American forces were not permitted to act, but only to react; they were to ‘contain’ the enemy, but not to beat him.” Nevertheless Vietnam — like the fiascos of today — was seen as discrediting military action, even though (as Rand observed) U.S. soldiers in Vietnam were thrust into “a war they had never been allowed to fight. They were defeated, it is claimed — two years after their withdrawal from Vietnam. The ignominious collapse of the South Vietnamese, when left on their own, is being acclaimed as an American military failure.” 5

For good reason Vietnam was called a “no-win” war. Rand properly laid the blame for the disaster at the feet of American politicians and their intellectual advisors. The entire “war on terror” is likewise a no-win war. His words redolent of the Vietnam era, President Bush told an interviewer on NBC’s “Today” show that “I don’t think you can win [the war],” and that he blithely envisioned no definite end for it (see the epigraph). His words have been self-fulfilling. In the current conflict — as in Vietnam — the disaster is due not to a military failure. We are in an unwinnable war, but only because of the ideas setting the direction of our foreign policy.

Irrational ideas have shaped the Mideast policy not just of George W. Bush, but also of earlier administrations that had to confront the Islamist movement — from Jimmy Carter on. And although President Obama glided into office as the candidate of “change,” his administration brings us full circle to the appeasing policies that characterized the run-up to 9/11 (see chapter 1). The irrationality of American policy all but guarantees that the Islamist movement will continue to menace the American public and that this conflict will figure prominently in foreign-policy thinking for years to come.

But the overarching message of this book — that certain dominant ideas about morality subvert American policy — should not be taken as a rejection of the need for morality, per se, in foreign policy. Far from it. Trying to implement a foreign policy unguided by the right moral principles is like trying to cross an eight-lane freeway blindfolded and with your ears plugged. Seat-of-the-pants amoral temporizing does not a policy make, and practically it is inimical to achieving U.S. security. What we demonstrate in the following pages is that the United States needs to challenge the specific morality that currently dominates our policy — and instead adopt better, more American, ideas.

To that end, we offer a new vision and specific policy recommendations for how to address ongoing problems and threats deriving from the Middle East. Those suggestions — and, broadly, all the critiques offered in this book — originate neither from a liberal, nor a conservative, nor a libertarian, nor a neoconservative outlook. Their frame of reference, instead, is the secular, individualist moral system defined by Ayn Rand. Taking U.S. policy in this new direction would enable us properly to conceptualize and achieve America’s long-range self-interest: the safeguarding of our lives from foreign aggressors.

No one can predict with certainty what will unfold in the interval between the writing of this book and your reading of these words. But given the entrenched policy trends described in these pages, the lessons of the last eight years will likely go unlearned — much to the detriment of our security. My hope is that this book will counteract those trends by awakening Americans to the actual nature of the war we are in, and that in fact, if we’re guided by the right ideas, the war against Islamic totalitarianism is winnable.

* * *

The book’s central argument is developed across seven essays. Although each essay is self-contained, I encourage you to read them all in sequence because they are parts of a thematic whole. To aid the reader in integrating the steps of the argument, I offer the following outline of the topics covered and their logical progression.

Part 1 considers the nature of the Islamist threat, its origin, and the role of U.S. policy in empowering that menace. Chapter 1 demonstrates how unprincipled U.S. policy — from Carter through Clinton — worked to galvanize the enemy to bring its holy war to our shores on 9/11. Chapter 2 explores the widely evaded nature and goals of the enemy, and indicates how that should figure in America’s military response.

Part 2 focuses on the change in policies that were the impetus for Washington’s military operations in Iraq and Afghanistan. Chapter 3 exposes the nature of Bush’s crusade for “democracy” — sometimes called the Forward Strategy for Freedom — and the destructive moral ideas that informed it. Chapter 4 identifies the ruinous impact on U.S. self-defense of “Just War Theory” — the widely accepted doctrine of morality in war. Chapter 5 brings out the profound opposition between neoconservative thought (a major ideological influence on Bush’s war policy) and America’s true national interest in foreign policy.

Taken together, what these three chapters argue is that America effectively renounced the fully achievable goal of defeating the enemy — for the sake of a welfare mission to serve the poor and oppressed of the Middle East. With the goal of victory abandoned, war certainly becomes unwinnable.

Part 3 looks at what Bush’s policies have wrought in the Middle East — and what the Obama administration should do. Chapter 6 surveys Afghanistan, post-surge Iraq, and the broader Islamist threat emanating from Pakistan, Iran, and elsewhere. Bush’s policy, it is argued, has actually left the enemy stronger than before 9/11. The enduring threats we face and the depressingly inadequate policy options being considered underline the pressing need for a real alternative to the conventional mold in foreign policy. Although the enemy grows stronger, chapter 7 argues that victory remains achievable. The way forward requires that we adopt a radically different approach to our foreign policy in the Middle East — one founded on a different moral framework.

* * *

A word on the genesis of the essays in this collection. All but three of the essays originally appeared, in somewhat different form, in The Objective Standard between 2006 and 2007. The exceptions are chapters 1, 6, and 7. These were written in winter 2008–09, and are published here for the first time.

Elan Journo
The Ayn Rand Institute
May 2009

About The Author

Elan Journo

Senior Fellow and Vice President of Content Products, Ayn Rand Institute

ABSTRACT:

It is widely believed that man-made greenhouse gas emissions are increasing overall vulnerability to climate-related disasters, and that, consequently, policies aimed at cutting off these emissions are urgently needed. But a broader perspective on climate vulnerability suggests that the most important factors influencing susceptibility to climate-related threats are not climatologic, but political and economic. The dramatic degree to which industrial development under capitalism has reduced the risk of harm from severe climate events in the industrialized world is significantly under-appreciated in the climate debate. Consequently, so too is the degree to which green climate and energy policies would undermine the protection that industrial capitalism affords — by interfering with individual freedoms, distorting market forces, and impeding continued industrial development and economic growth. The effect of such policies would, ironically, be a worsening of overall vulnerability to climate.

1. INTRODUCTION

Severe climate events have become a weapon in the rhetorical arsenal of green politics. Hurricane Katrina became the literal poster child for global warming when the movie placard for Al Gore’s An Inconvenient Truth depicted a satellite image of the storm blowing out of a set of industrial smokestacks. No climate-related disaster occurs today without being seized upon as a cautionary tale against the purported threat of anthropogenic climate change.

The  claim  that  man-made  greenhouse  gas  emissions  are  causing  large-scale changes to the earth’s climate systems — dramatically increasing the risk of climate catastrophe — is omnipresent and trumpeted daily with ever-increasing alarm. Climate-related tragedies past and present are routinely used to underscore the theme of man’s vulnerability to the climate. Consider the following from Spencer Weart’s book The Discovery of Global Warming:

In 1972 a drought ravaged crops in the Soviet Union, disrupting world grain markets, and the Indian monsoon failed. In the United States the Midwest was struck by droughts severe enough to show up repeatedly on the front pages of newspapers and on television news programs. Most dramatic of all, years of drought in the African Sahel reached an appalling peak, starving millions, killing hundreds of thousands, and bringing on mass migrations. Television and magazine pictures of sun-blasted fields and emaciated refugees brought home just what climate change could signify for all of us.1

The intended implications are clear: all of us are dangerously susceptible to the ravages of climate; to protect ourselves we must immediately adopt drastic policies aimed at cutting off greenhouse gas emissions.

And such policies are not merely being pondered, but are steadily moving toward political reality. International negotiators will meet in Copenhagen in December 2009 to hammer out a much stronger successor to 1997’s Kyoto Protocol, which imposed on its signatories binding emissions cuts.2  3  Also, as of this writing (April 2009), a draft bill before the U.S. Congress would impose energy rationing in a variety of guises: a cap-and-trade system rationing U.S. carbon emissions, a renewable energy mandate, forced energy efficiency programs, and more.4 Should the bill fail, regulation of greenhouse gases might still go forward in the United States since the EPA — following the Supreme Court — has “found” them to be air pollutants under the Clean Air Act.5

The lurid examples of climate-related tragedy fuel this political agenda by imparting a sense of panicked urgency. They convey the impression that something is happening that is unprecedented in human history — that where mankind once flourished in a world with a stable, benign climate, we are now facing an apocalyptic hell beyond all capacity to manage.

But vulnerability to the climate has been a feature of human existence for all of human history; there have always been droughts and floods and hurricanes and heat waves — and there always will be, regardless of what happens to atmospheric greenhouse gas concentrations. Moreover, the history of industrial development has been one of an ever-increasing ability to cope with natural disasters — an ever-increasing resilience against them.

Yet none of this is sufficiently appreciated in the climate debate. We in the industrialized world tend to ignore or forget just how harsh and precarious life was in the preindustrial era, and still is today in nonindustrialized countries. We take industrial development for granted and tend not to consider the ways it actually reduces our climate vulnerability. We also take for granted the political and economic freedoms that make industrial development possible and fail to recognize the myriad ways that proposed climate and energy policies would undermine those freedoms.

A proper assessment of proposed green policies requires a broader perspective on climate vulnerability than one that focuses merely on climatologic factors. In particular, the role of political and economic factors must also be considered. To what degree is susceptibility to climate-related threats reduced by policies that expand political freedom and thereby foster industrial development and economic growth? And to what degree is climate vulnerability actually worsened by policies that interfere with market freedoms and thereby restrict development and growth? Given the far-reaching implications of proposed energy and climate policies, such a broader consideration of climate vulnerability is urgently needed.

2. CLIMATE VULNERABILITY: PREINDUSTRIAL AND POST

Nature has never been unqualifiedly hospitable to man. Whatever periods of human flourishing occurred in the preindustrial era, they occurred against a general background of unrelenting hardship and privation. For most of human history, life has consisted of a precarious struggle to eke out a bare subsistence at the constant mercy of drought and disease, storm and flood, famine and plague.

Prior to the widespread utilization of coal in the eighteenth century, the primary sources of fuel for heating, cooking, and other uses were biomass fuels such as wood and animal dung (still true in many poor countries today). With access only to fuels of such low energy-density and to rudimentary technology, people in preindustrial civilizations had little control over nature and were easily overwhelmed by its powerful forces.6

Ramshackle dwellings and primitive fuels afforded little protection against the elements. Describing everyday life in sixteenth-century Europe, historian William Manchester writes of

tiny cabins of crossed laths stuffed with grass or straw, inadequately shielded from rain, snow, and wind. They lacked even a chimney; smoke from the cabin’s fire left through a small hole in the thatched roof — where, unsurprisingly, fires frequently broke out. These homes were without glass windows or shutters; in a storm, or in frigid weather, openings in the walls could only be stuffed with straw, rags — whatever was handy.7

Shelters of such poor quality were typical for people the world over until as recently as several generations ago. In countries at even moderately northern latitudes, a prodigious labor was required just to keep from freezing through a normal winter — let alone cope with unusual extremes of cold. For instance, a typical household on the early American frontier consumed thousands of pounds of firewood every year — twenty to forty cords annually, according to one estimate (forty cords being a stack of wood four feet high by four feet deep by 320 feet long) — which of course had to be gathered or chopped by hand.8 And in return for the meager warmth such fuels provided, they posed serious health risks of their own. “They can generate high levels of poisonous carbon monoxide,” writes energy analyst Vaclav Smil, “while poorly-vented combustion, in shallow pits or fireplaces, produces high concentrations of fine particulates, including various carcinogens. Repeated inhalation of this smoke leads to impaired lung function and chronic respiratory diseases (bronchitis, emphysema).”9

Smil also writes of the “millennia-long stagnation” in the development of preindustrial agriculture, which he attributes partly to “the inadequate power and relatively high energy cost of the only two kinds of prime movers available for field work; human and animal muscles.”10 Primitive technology and ignorance of sophisticated agricultural methods left preindustrial farmers with little control over the results of their toil. The threat of drought, crop failure, and starvation was omnipresent and periodic famines that regularly decimated whole populations were the rule not the exception.11

Undernourished and lacking access to clean drinking water or basic sanitation, completely ignorant of medical science, helpless before natural threats they couldn’t understand or predict — individuals in the preindustrial world were completely at the mercy of whatever adversities nature threw their way. Little wonder, then, that life expectancy has been so low for most of human history. Estimates of life expectancy in prehistoric eras put it at somewhere between twenty and thirty years, and it remained below forty years right up through the start of the nineteenth century.12

Yet life expectancy in developed countries today is as high as eighty years — and it should go without saying that the majority of people in today’s industrialized world enjoy a length and quality of life incomparably superior to the squalid misery alluded to above. In the brief span of two centuries, human life has been completely transformed — transformed by extraordinary advances in science, technology, and medicine and by the growth of market institutions and the expansion of political and economic freedom associated with the birth of industrial capitalism.

Too often, we take for granted the astonishing and life-saving products of industrial capitalism and industrial-scale energy. We in the developed world don’t think about the fact that things we regard as completely commonplace and unremarkable would seem, to anyone from any previous period in history, an absolutely unimaginable miracle. We forget, as we flood our homes with light by a casual flick of a switch, that through most of human history (and still today in many parts of the world) the close of day meant darkness and an end to all activity. The precarious existence of the preindustrial farmer doesn’t even register as a glimmer in our consciousness as we walk into our modern grocery stores, with their shelves upon shelves of fresh, healthful foods — prepared, packaged, refrigerated, and relatively inexpensive — all supplied and served by a vast infrastructure of agricultural, transportation, and business and marketing systems.

We hardly even notice when our furnaces fire up automatically, sending hot water through radiators or blowing warm air through vents in our well-insulated walls — or when a different setting sends in an air-conditioned breeze to drive off the heat of summer. Rightly concerned about heat waves and spells of extreme cold, we forget just how much more suffering and death such climate events inflict on people lacking modern amenities. This holds true even in developed countries today where the cost of energy has, for example, limited the adoption of air conditioning. More than thirty thousand deaths were attributed to the heat wave that struck Western Europe in 2003 — widely taken as a sign of the extreme threat posed by global warming.13 But, as Patrick Michaels has pointed out, the temperatures that exacted such a tragic toll that summer were lower than those in Western America, where no deaths were attributed to the heat. “The difference,” argued Michaels, “is air conditioning run by affordable energy.”14

Or, consider Spencer Weart’s drought example, which he takes as portending the future threat that climate change “could signify for all of us.”15 It is true that severe drought did indeed strike the regions he mentions in 1972, and the consequences were indeed harsh: food rationing in the Soviet Union, famine in India that persisted through the mid-70s, and mass starvation in sub–Saharan Africa, which went on for decades as the drought continued through much of the ’80s and ’90s. But from a historical perspective, these tragic events are unfortunately nothing unusual. What really stands out as remarkable and unprecedented is the negligible effect of the drought in the United States.

Despite drought conditions severe enough to rate comparison with the 1930s Dust Bowl, Americans saw only minor economic losses and fluctuations in food prices.16 It is telling that the most that Weart could find to say was that the Midwest droughts showed up on “the front pages of newspapers and on television news programs.”17 Observe that they specifically did not “show up” at all on people’s waistlines and barely registered on their pocketbooks. Such resilience is testament to the adaptive flexibility of an industrialized economy and a (relatively) free market — to industrial capitalism’s ability to respond quickly when normal conditions are disrupted. While the other regions mentioned suffered a total failure of their food production and distribution systems, the United States donated surplus food supplies to Africa, sold food grains to India, and arranged a massive sale of wheat to the Soviet Union in late 1972.18 19 20

Contrast this to the helplessness before nature of India’s peasant farmers or the Sahel’s nomadic tribes. Why were they unable to benefit from the agricultural practices that empowered the American farmers — the irrigation of fields, the use of fertilizers and pesticides, and the application of sophisticated methods of agricultural management? What role did their primitive cultural traditions and their countries’ oppressive political systems play in suppressing the industrial development and free market mechanisms that made such advances possible? And in the case of the Soviet Union, should there really be any surprise that its state-owned collective farms were unable to cope with unfavorable weather conditions? Even under good conditions — and with the advantage of some of the most fertile agricultural land in the world — the central planners of the Soviet agricultural ministry were rarely able to coerce adequate food production.

Looked at from the vantage point of human history, recent climate-related tragedies suggest an opposite perspective to that offered by the advocates of green policies. The message these and numerous other examples convey is not “man’s vulnerability to climate,” but his vulnerability only under the wrong political and economic conditions. Standing out above all else is the unprecedented degree of protection from climate-related threats that exists under industrial capitalism.

Consider the poster child of global warming alarm: Hurricane Katrina. In 1970, a severe tropical cyclone struck the coast of the Bay of Bengal, in what is today Bangladesh. It is estimated that the storm was a category 3 cyclone, and the death toll it left in its wake was estimated to have been as high as three hundred thousand people.21 Compare this with Hurricane Katrina, which struck New Orleans in 2005. By the time it made landfall Katrina was also a category 3 storm and the directly affected population was comparable to that in Bangladesh.22 23 Yet the number of people dead or missing was far, far less — estimates put it at around two thousand.24

Without denying the tragedy of the lives lost to Katrina, two thousand versus three hundred thousand is an incredible difference. In assessing what accounts for that difference, one can debate the relative roles of social, political, geographic and climatologic factors, but there can be no question of the fundamental and decisive importance of the technology and infrastructure made possible by industrial capitalism. Unlike the helpless victims of the Bangladesh storm, the citizens of New Orleans  could  rely  on  advanced  early  warning systems  and  a  functioning communications infrastructure, modern vehicles and paved roads to facilitate evacuation and transport relief supplies, sturdier homes and structures and advanced flood control systems, etc. Indeed, much of this even failed in New Orleans: the levees were breached, many people couldn’t or wouldn’t evacuate, the relief effort was delayed, and so on. Yet, even in spite of these failures, hundreds of thousands of lives were saved by the products of industrial technology and industrial-scale energy.

This is the real lesson of today’s climate-related tragedies: the immeasurable degree to which industrial development under capitalism has reduced our vulnerability to climate threats.

3. CLIMATE VULNERABILITY AND DISTORTIONS OF THE FREE MARKET

A corollary lesson is the degree to which our protection against climate disasters is weakened by government policies that obstruct the life-saving benefits of industrial capitalism or otherwise interfere with the mechanisms of the free market.

It is arguable that — though it was orders of magnitude lower than in Bangladesh — the toll in New Orleans was still higher than it need have been. Consider the following 2006 statement from ten of the world’s top hurricane experts, who point out that “a Katrina-like storm or worse was (and is) inevitable even in a stable climate” and suggest that while the “possible influence of climate change on hurricane activity” is an important scientific question, it is not “the main hurricane problem facing the United States.” 

Rapidly escalating hurricane damage in recent decades owes much to government policies that serve to subsidize risk. State regulation of insurance is captive to political pressures that hold down premiums in risky coastal areas at the expense of higher premiums in less risky places. Federal flood insurance programs likewise undercharge property owners in vulnerable areas. Federal disaster policies, while providing obvious humanitarian benefits, also serve to promote risky behavior in the long run.25

By distorting the free market price signals individuals use to guide their choices, these and myriad other government interventions and regulations, going back decades, have lured people into floodplains and produced a higher overall vulnerability to hurricanes and flooding.

Or, consider the role of government policies in enhancing the risks from wildfire — another item on the laundry list of disasters that many fear will be exacerbated by global warming. With every major blaze that occurs today the news reports never fail to include prominent mention of climate change (notwithstanding the obligatory caveat that no individual wildfire can be attributed to it).

In February 2009, for instance, a number of severe bushfires raged through southeastern Australia, killing 173 people and destroying thirteen hundred homes as they burned more than 4,500 square kilometers (1.1 million acres) — the deadliest bushfires in Australia’s history.26 27 28 Not surprisingly, this was widely reported in the press as a sign of what global warming has in store for Australia’s future. For instance, a New York Times story — ostensibly about the role of arson in setting the fires ablaze — included the following:

Climate scientists say that no single rare event like the deadly heat wave or fires can be attributed to global warming, but the chances of experiencing such conditions are rising along with the temperature. . . . The flooding in the northeast and the combustible conditions in the south were consistent with what is forecast as a result of recent shifts in climate patterns linked to rising concentrations of greenhouse gases. . . .29

Another story asserted that “the government’s failure to set tough greenhouse gas emissions targets would endanger lives.”30

But while there is no question that high temperatures and dry conditions are crucial causal factors in the risk and severity of wildfire, the “only controllable factor” — according to meteorologist and bushfire expert David Packham — is the fuel that feeds the fires: “the dead leaves, pieces of bark and grass that become the gas that feeds the 50m high flames.”31

Packham argues that the bush, properly managed, need not pose nearly such a deadly threat. The main factor that kept residents as dangerously exposed as they were was the green policies of local government councils that restricted the clearing of trees and brush. 

Fuels build up year after year at an approximate rate of one tonne a hectare a year, up to a maximum of about 30 tonnes a hectare. If the fuels exceed about eight tonnes a hectare, disastrous fires can and will occur. Every objective analysis of the dynamics of fuel and fire concludes that unless the fuels are maintained at near the levels that our indigenous stewards of the land achieved, then we will have unhealthy and unsafe forests that from time to time will generate disasters such as the one that erupted on Saturday.

It has been a difficult lesson for me to accept that despite the severe damage to our forests and even a fatal fire in our nation’s capital, the political decision has been to do nothing that will change the extreme threat to which our forests and rural lands are exposed.

In the wake of the tragedy, distressing stories emerged of bushfire victims who had repeatedly pleaded for controlled burns and other fire prevention measures, but who were rebuffed by local governments citing “threats to biodiversity.”32 Regional councils refused to trim out-of-control vegetation on public lands and even prevented people from clearing firebreaks on their own, private property.33

Liam Sheahan, a resident who disregarded such restrictions and cleared a one hundred meter swath around his property in 2002, ended up before a local magistrate facing legal charges. A two-year court battle ended with Sheahan’s conviction, costing him $100,000 in fines and legal fees. “We’ve got thousands of trees on our property. We cleared about 247,” said Sheahan. The result? “The house is safe because we did all that. We have got proof right here. We are the only house standing in a two-kilometre area.”34

In light of such political policies restricting people’s freedom to protect their own safety on their own property, it is bordering on criminal to point to emissions reductions — on the assumption that they might someday have a salutary effect on Australia’s climate — as the primary call to action as a precaution against extreme bushfires.

4. THE THREAT OF MISANTHROPOGENIC CLIMATE POLICY

The industrial revolution and the development of industrial-scale energy required the unprecedented political freedom of England and the United States. This is what has made us comparatively safe from droughts, wildfires, hurricanes and the like. Policies restricting that freedom and interfering with market forces undermine this achievement and increase our climate vulnerability. Property owners have an obvious reason to reduce bush or forest fuel loads long before they pose a risk of unprecedented, extreme wildfire — but too many governments today prohibit such actions. Similarly, if the risk of living in a flood-prone coastal community was properly reflected in market prices — such as flood insurance premiums, home values, unsubsidized relief and recovery costs, and so on — individuals could act accordingly without false assurances of safety. It is only policies that distort such price signals and market forces that give rise to mounting dangers that go unattended for decades.

And the threat of more such destructive policies is only growing. The failure to appreciate how a truly free market operates and the unprecedented degree to which industrial capitalism has reduced vulnerability to climate-related risks is behind much of the alarm over “unchecked climate change.” Ignoring the fact that no civilization in human history has ever achieved greater protection against climate disasters than today’s industrialized nations, people are whipping themselves into a hysterical frenzy over the belief that changes in the earth’s climate will be an unmanageable calamity.

But under capitalism, there is no special problem of adapting to changes in the earth’s climate — even large-scale changes. Whether man-made or not, when such changes occur (as they have already occurred in human history), they would merely constitute one set of factors among all the others that are constantly integrated by and reflected in a free market. Individuals are continually making decisions and taking actions to enrich their own lives, based on the best knowledge they can acquire and the opportunities in the market. If, over the course of decades, some regions become warmer and others colder, or some regions become drier and others wetter, or sea levels rise or sea levels fall — these changes would simply be reflected in people’s knowledge and economic decisions. There is no reason to regard these changes any differently from any other forces driving continual market evolution and adaptation. And the more widespread industrial civilization is — the more readily available industrial-scale energy and the other products of industrial capitalism are — the easier the adaptation.

But this is not a perspective widely shared today. “Needless to say, a sea level rise of one meter by 2100 would be an unmitigated catastrophe for the planet,” shrieks climate activist Joe Romm.

The first meter of SLR [sea level rise] would flood 17% of Bangladesh, displacing tens of millions of people, and reducing its rice-farming land by 50 percent. Globally, it would create more than 100 million environmental refugees and inundate over 13,000 square miles of this country [America].35

Environmental refugees? A sea level rise of one meter by next month would be a catastrophe creating environmental refugees. A sea level rise of one meter by 2100 — i.e., barely more than one centimeter per year — would be a steady change that could be addressed in myriad ways and need not create a single refugee.*

But advocates of green policies are not interested in freedom. Restrictions on freedom are the essence of green climate and energy policies, which far from loosening the fetters of government interference, will tighten them considerably. “It’s important to change the light bulbs,” preaches Al Gore, “but it’s much more important to change the laws.”36

Our entire modern civilization is powered by industrial-scale energy. More than 86 percent of the world’s energy comes from burning fossil fuels — i.e., from the very process of creating carbon dioxide (and water) by oxidizing hydrocarbons. At the same time, an insignificant 2 percent of the world’s energy comes from renewable sources such as solar and wind.37 Despite the feverish claims of green energy prophets such as Gore, the obstacles to a rapid scale-up of current solar and wind technologies are beyond formidable.38  39  Yet, the almost universally accepted “solution” for the alleged problem of man-made climate change is to cut off greenhouse gas emissions by imposing worldwide draconian controls on energy production and consumption.

Even leaving aside the question of whether or not greenhouse gases are the dominant agent driving the earth’s climate (which is far from “settled” despite the insistent claims of an unchallengeable scientific consensus to the contrary) — it would still be absurd to adopt the policy of emissions reduction as the “solution.”

Even if representatives from all of the major greenhouse gas emitting nations could agree to binding emissions targets (including China and India, whose populations are finally enjoying the benefits of serious industrial development); and even if those agreements were to translate into laws actually enacted in each of those countries (recall that the U.S. Senate voted against ratifying the Kyoto Protocol); and even if those laws were implemented and enforced in ways that actually reduced emissions (until the recent, severe global recession, hardly any Kyoto signatories were on track to meeting their emissions targets, and emissions had been increasing under the European Union’s cap and trade system); and even if the net effect is that global atmospheric greenhouse gas concentrations actually stabilize and diminish; and even if that actually has the effect of stabilizing or reducing global temperatures — even if all these steps, none of which are trivial, were accomplished — what would be the result? A heavy and permanent stifling of the global economy, a significant expansion of government controls and regulations, a significant restriction of personal freedom, widespread energy privation, and considerable sacrifice inflicted on those who can least afford it — and in the end, a global civilization that, deprived of industrialization and energy, is far, far less capable of coping with severe climate events.

Far from solving the problem of climate-related risk, this absurdly indirect, Rube Goldberg policy would, tragically and ironically, make us more vulnerable to the climate.40

5. CONCLUSION

A broader perspective on climate vulnerability suggests that industrial development under capitalism is not merely one factor among others influencing susceptibility to climate-related risks. Rather, it is the dominant factor, reducing climate vulnerability to a degree that makes all other factors irrelevant.

But the life-saving value of industrial capitalism is profoundly unappreciated in today’s culture. This is not merely because people have forgotten or ignored its history, but because its opponents have actively sought to bury and distort that history. As Ayn Rand explains:

No politico-economic system in history has ever proved its value so eloquently or has benefited mankind so greatly as capitalism — and none has ever been attacked so savagely, viciously, and blindly. The flood of misinformation, misrepresentation, distortion, and outright falsehood about capitalism is such that the young people of today have no idea (and virtually no way of discovering any idea) of its actual nature. While archeologists are rummaging through the ruins of millennia for scraps of pottery and bits of bones, from which to reconstruct some information about prehistorical existence — the events of less than a century ago are hidden under a mound more impenetrable than the geological debris of winds, floods, and earthquakes: a mound of silence.41

The debate over climate and energy policy raises fundamental questions. But ultimately, it is not a debate over how many parts-per-million of carbon dioxide should be in the atmosphere, or whether the average global temperature should be 57 degrees or 62 degrees — as if we can control that anyway.

Fundamentally, this is a debate about how society should be organized. The advocates of statism have made their position clear and are actively working to advance their cause. It is time for those who value freedom to do the same.

*Would be a steady change that could be addressed in myriad ways and need not create a single refugee — so long as people are free.

About The Author

Keith Lockitch

Vice President of Education and Senior Fellow, Ayn Rand Institute