McCain didn't create the BlackBerry, Obama can't create jobs.

The Washington Post takes its story cues from Barack Obama, or so it appears. The Post ran the headline: “McCain Didn’t Create BlackBerry, Despite Adviser’s Claim.” And they note that Obama had beat them to this accusation. Obama’s campaign said: the claim that [John McCain] invented the BlackBerry would have been the most preposterous thing said all week.”

The problem is this isn’t quite what was said at all. The Post contains the full comment but still claims: “John McCain did not invent the BlackBerry. Early this morning, his top economics adviser claimed that he did.” Well, no he didn’t. What he said isn’t exactly true but what he said isn’t exactly what Obama’s people and the Washington Post, as if there is a difference, said either.

Douglas Holtz-Eakin, McCain’s adviser, said: “Telecommunications of the United States is a premier innovation in the past 15 years -- comes right through the Commerce Committee -- so you’re looking at the miracle John McCain helped create and that’s what he did.”

If we dissect that for a second we will see that Obama and the Post are distorting the quote. And we will see that Holtz-Eakin has an entirely absurd view of entrepreneurship but one held by most political hacks.

Holtz-Eakin said that the Commerce Committee legislates on telecommunications and therefore John McCain “helped create” the innovations of telecommunications that we have seen. He didn’t say McCain invented the BlackBerry, that is merely an Obama/media distortion. What he claimed was that somehow the Commerce Committee helped create telecommunications innovations, and since McCain is on that committee, he “helped create” these innovations. That is quite a bit different from what the Obama/media people are claiming.

Not only is that different but it is the same sort of line we hear from politicians all the time. How many times have you heard a politician claim that he “created jobs” for the American public? Politicians regularly claim credit for things that other people do. This is par for the course. Democrats do it, Republicans do it, independents do it.

Holtz-Eakin is wrong, McCain didn’t even “help create” innovations in telecommunications. The major reason we had massive innovation in telecommunications is the deregulation that began 40 years ago. The Ma Bell monopoly, which was a legal monopoly not a technological one, was broken up. And suddenly consumers had choices. McCain wasn’t in the Senate when that happened, he was in prison in North Vietnam.

But more importantly no Senator “helped create” the technological innovations we see today. What happened was that politicians got out of the way. They didn’t invent, innovate of create. Nor did they help invent, innovate or create. They merely stopped hindering. Now some of those who worship at the altar of “great leaders” may argue that by getting out of the way politicians still “help create” good things. That is like a man claiming he helped heal his wife because he stopped hitting her with a 2 x 4.

Getting out of the way, so that others can create, is not helping. It is merely ceasing to hinder. The value that results is entirely the result of those who do the actual innovation.

The truth is that John McCain wasn’t even in the Senate when the deregulation, which allowed the innovation to take place, was passed. And, more importantly, no politician can take credit for what the private sector does.

The politician has only one tactic he can use -- that is force. Politics is not the art of consent or voluntary exchange. It is coercive manipulation of people. It can distort and destroy but it can’t create net value. It can only redirect value or redistribute it. But the redistribution of value is not the same thing as creating it.

Let us say that the political process puts some money in my pocket in the form of a subsidy. I then go out and use that money to put something of value into my life-- say a new television. Should the politician get create for creating some value? No. This is merely another version of the fallacy that Frederic Bastiat exposed almost two centuries ago in his essay “What is Seen and What is Not Seen”.

To give me a television, or the resources to buy a television, the politician must first take an equal amount, or more, of resources from others. The value that is created is my life exists only because it is first destroyed in the lives of others. No new net value is created. Existing value is merely redistributed and in the process of redistribution some of that value is consumed by the political process. The actual net result is a destruction of value.

The politician who claims his highway legislation creates jobs is equally concentrating on what we see while ignoring what we don’t see. We see the highway workers. And, if we look no further, we assume the legislation created jobs. What we don’t immediately see is how those workers are paid.

The income that they receive, thus “creating” the jobs, first comes from taxpayers. Those funds are no longer available for use in a manner that satisfies the taxpayer. He can’t spend the money where he wishes. For simplicity assume that there are merely two ways of spending that money -- one is on highway construction and the other is on shoes. Consumers get more highways but fewer shoes. The shoes they would have bought are never made, shoe sales are lower than they would have been had consumers been free to spend their own money, as they wished. The number of jobs in the shoe industry is lower than it would have been had the politicians stayed out of things.

The “creation” of jobs is an illusion. Yes, jobs now exist in highway construction that wouldn’t have existed before. But jobs that would have existed in the shoe industry are either destroyed, or prevented from coming into existence. What is given with the one hand is first taken with the other. And since, as the resources are moved from one hand to the other, a bit of them are put into the pocket of those doing the redistribution, the total value of jobs created is smaller than the value of jobs destroyed. The result is a net loss.

If a businessman took $1 million from the company account to run a division that produced $750,000 in income, everyone would see it as destroying $250,000 in value. But the politician is not so obvious because he isn’t taking the costs from the same account where the income is deposited. He is taking from the accounts of millions of people and showering it on a few select people. People see the millions showered on the favored few and tend to ignore the millions of petty thefts necessary to hand out this “generous” gift. By distributing the cost among millions of accounts the actual cost of the “benefits” is hidden from the public. And the politician gets away with pretending that he has actually created something.

John McCain didn’t “help create” the BlackBerry. No politician did. Barack Obama can’t “create jobs” as he promises to do. No politician can. The absurdity of the remark about telecommunications is precisely the same lie that the Obama camp tells about creating jobs. Of course, the Washington Post won’t run a story about that. While they don’t buy the BlackBerry illusion they do believe the jobs illusion. While they don’t think McCain can create telecommunication innovations they do think Obama can create jobs. So before they too loudly condemn the absurd remark by the McCain adviser they ought to first look in the mirror.

Was Bastiat a "devout Catholic"?

I have always been interested in the life of Frederic Bastiat, perhaps because it was cut so short. Bastiat was a fighter for classical liberal values in France during some of the most tumultuous years in French history. He was a member of the French Assembly where he sat on the Left with Prodhoun. But Bastiat was no socialist -- on the contrary he was a fervent opponent of socialism.

I was reading an article by Prof. Brian Baugus for The Independent Journal regarding Bastiat. And I was a bit baffled by the claim that Bastiat was “a devout Catholic.” Very little that I have read on the man seems to affirm that idea. Certainly; like most Frenchmen of his day, he was born a Catholic, but I never found any indication that he was particularly religious. His writings refer to a deity in the same sort of vague generalities as used by most Enlightened deists of the time.

In fact, prior to this statement by Baugus I’ve only run across one indication that Bastiat was religious. The Catholic Encyclopedia claimed that while Bastiat “was fitted to understand and defend Catholic truth” that was not the case. Instead “the prejudices in the midst of which he lived kept him aloof from the Faith until the very eve of his death.”

When the Catholic Encyclopedia says Bastiat was “aloof from the Faith” that hardly sounds as if he were a “devout Catholic.” They claim that only “in his last hour” did Bastiat become a Christian. Of course, last minute deathbed conversions, most of them invented by the faithful and not by the dying individual, are easy to manufacture. The evidence to support such death bed conversions are usually lacking in substance. The Catholic Encyclopedia gives no source for the claim that Bastiat converted before his death.

The Right-wing, anti-Semite Joseph Sobran, himself a traditionalist Catholic, says that Bastiat was “a devout Catholic” but he offers no source for this assertion. Certainly Bastiat attended a Catholic school but other options didn’t exist and one doesn’t judge an adult’s religious views based on his childhood education. Another Right-wing blog calls Bastiat the “the great Catholic liberal” but again they don't even attempt to substantiat this claim.

While it is easy to assert that Bastiat was a devout Catholic, there is no evidence presented to substantiate the claim. Most those making this assertion seem to be conservative Catholics though Baugus is a evangelical Baptist.

Bastiat did not live much like a devout Catholic. He did marry very briefly. Just before he turned 30 he married Marie Hiard but they separated almost immediately and no other romantic incidents are documented. His one lifelong relationship was with Felix Coudroy. The Encyclopedia Britannica describes Coudroy as Bastiat’s “able, dearly loved and lifelong friend.” While none of this is definitive, it does raise the question as to whether Bastiat was a gay man but, like most of Bastiat's private life, there is precious little actual evidence beyond the circumstantial.

The circumstances of Bastiat’s death are tragic. Still a young man, he suffered from tuberculosis. His physicians recommended he seek a warmer climate for his health and in late 1850 he went to Rome. It was there that he died on Christmas Eve. While the Catholic Encyclopedia claims he had a deathbed religious experience I have never been able to find an independent account of this alleged incident.

The evidence that Bastiat was a “devout “Catholic seems non-existent. By the Catholic Encyclopedia’s own assertion he remained “aloof from the Faith” his entire life, until he allegedly had a conversion minutes before he died. But we can find no evidence for this conversation. I have not even been able to find a description of Bastiat’s last minutes of life. Other than the fact that he was in Rome, I don’t know where in Rome. I don’t know if he died in a hospital, or in a hotel where he was staying, or in the private home of a friend. There is no account that I’ve seen of who was with him during these last moments and I know of no contemporary account describing his death except in the most broad terms.

Bastiat is one of the great mysteries of libertarianism. Much of his private life remained private and apparently so did his death. We don’t know why he married or why his wife left him almost immediately. Most of Bastiat’s relationships were of a political nature. He was an avid debater for libertarian ideas but his private life remained relatively secret. Outside his political activities the only person he spent much time with was Felix Coudroy. And where Coudroy was, when Bastiat died, doesn’t appear to be known. We know little about Coudroy himself other than he was Bastiat’s neighbor and that the two men spent a considerable amount of time in one another’s company.

There are many things we don’t know about Bastiat. But I can not find evidence that he was devout Catholic and the Catholic Encyclopedia implies he wasn't. Other than an undocumented claim of a last minute conversion we have no indication that Bastiat was anything more than a deistically inclined son of the Age of Enlightenment.

Bastiat is one of the most well-known figures of his day. His writings still influence people today. Yet no major biography has even been published. The closest to it is George Roche’s Bastiat: A Man Alone. Yet Roche spends much of the time describing Bastiat’s writings and beliefs on economics. We have a rudimentary description of his life but what is missing is the kind of detailed discussion that most biographies contain. One could say that Bastiat is one of the most obscure, well-known figures in libertarian history. And, unless someone uncovers new evidence, there is little reason to describe Bastiat as a “devout Catholic.” Such a description seems more like wishful thinking than history.

What is liberalism?

Liberalism, properly understood, is the historic advocate of individual freedom. It has promoted the rule of law and private property, with free exchange of goods and ideas. Its opposition to censorship and state economic controls were based on the same principle. Liberalism, as the name implies, is the fundamental belief in a political ideal where individuals are free to pursue their own goals, in their own ways, provided they do not infringe on the equal liberty of others.

As such it is primarily concerned with issues of human rights. Two prominent liberal philosophers put it this way: "Rights are the language through which liberalism is spoken." The entire liberal philosophy revolves around the primacy of the rights of the individual.

Thomas Jefferson put this liberal ideal into one succinct paragraph in his magnificent Declaration of Independence: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness, - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the Governed...."

Liberalism turned the prevailing doctrines of human rights and politics upside-down. For centuries it was assumed that man lived for the sake of the State; that what rights he possessed were gifts, given to him by his King or government. Liberals argued that the opposite was true. People possessed rights first and governments receive their sanction from the people. The government is not the giver of rights to the people but the people are the source for the legitimacy of the government.

The French liberal Frederic Bastiat explained liberal principles in his classic work The Law. Bastiat starts first with the fact that all people are given the gift of life. But he says that life "cannot maintain itself alone." Humans have "marvelous faculties" to produce that which is required for life and man sits amidst "a variety of natural resources." "By the application of our faculties to these natural resources we convert them into products and use them. This process is necessary in order that life may run its appointed course."

To survive man must apply his rational mind to natural resources. Life requires freedom and if man is to survive he must keep the product of his labour or, in other words, he must have rights to property. Liberals have argued that it is for this reason that legitimate governments are created. Jefferson said the purpose of government is to secure rights already held by the individual. Bastiat explained it this way:

"Life, faculties, production - in other words, individuality, liberty, property - this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that cause men to make laws in the first place."

In a liberal society the primary function of government is to protect the pre-existing rights of the individual. The government grants no rights but merely acts to prevent others from infringing on such rights. Liberalism does not attempt to tell man how to live, or what moral principles to hold. It deals simply with his material well being in this world. It provides a framework in which each individual can find personal happiness or fulfillment according to his or her own values. In his book Liberalism Ludwig von Mises wrote:

"It is not from a disdain for spiritual goods that liberalism concerns itself exclusively with man¹s material well-being, but from a conviction that what is highest and deepest in man cannot be touched by any outward regulation. It seeks to produce only outer well-being because it knows that inner, spiritual riches cannot come to man from without, but only from within his own heart. It does not aim at creating anything but the outward preconditions for the inner life."

The way in which liberalism does this is by establishing a basic principle for how people must interact with one another. This principle is that all interaction must be done by mutual consent. Each individual is thus free to pursue his own happiness in a regime of freedom, regulated only by the equal liberty and rights of others. The proper method of interaction economically is one where individuals trade value for value. Thus, in a truly liberal society, the economy is one of free markets and property rights. Individuals seeking their own well-being produce goods and services for exchange with other individuals who are also seeking their own good. No trade will take place in a free economy unless all the trading partners believe they will benefit. To improve their own life each individual must also improve the lives of others, even if this is not his intent.

In a society where government is limited to the protection of rights, individuals may pursue varying sets of values. Thus liberalism is the only system which allows for pluralism, or the pursuit of contradictory sets of values. The function of the state is not to impose one set of values on everyone, but to allow the free exchange of goods, services and ideas. It protects, equally, every group within the society, but it does not place the values of any one group higher than others. Liberalism respects man¹s most important right: the right to think for himself. It does not seek to control his mind but leaves him free to use his rational faculties to the best of his ability.

Applied liberalism means free minds and free markets. But for man to be free, government must be limited. Most liberals have, therefore, advocated constitutional restraints which limit the powers of government. If the purpose of government is to protect the rights of people then the purpose of a constitution is to limit the powers of government.

Liberalism arose because governments have been the most effective means for the destruction of human rights and human liberties. An all-powerful government - even one motivated by the best of intentions - is a potent threat to human freedom. And liberals believe that without freedom man cannot flourish and prosper. Thus liberals have historically spoken of absolute human rights and limited governments. And this, they believe, is what a constitution is meant to guarantee.

Liberalism does not espouse one over-riding utopian ideal for everyone. It recognizes the diversity of human life and it understands that the pursuit of utopia is far more likely to end up on the road to hell. Thus, it proposes a society based on equal rights and equal liberties. Each man, woman and child, is free to seek their own happiness, provided only that they respect the equal rights of one another. Only in this free society is there the chance for substantial prosperity and only when man is free from hunger and disease is he capable of pursuing his higher values - whatever they may be. Liberalism is not utopian. It seeks a rational framework to allow a diversity of ideas and peoples to flourish.

But liberalism recognises that a society of equal rights will not lead to one of equal results. And a society which promotes equal results, will not be one which has equal rights. Liberalism, properly understood, defends equal liberty. And when all are equally free the results will be vastly different.

Wealth will be created - not distributed. Those who can reach for heights will do so and the rest of us will benefit from their actions though, that was not their motivation. The state will be of limited importance, acting only to protect rights. Those who reach the top in the business world will have done so because they are good at what they do and not because they have political pull or are related to some official. The result, though not the intention, will be an uplifting of the poorest in society. Jobs will be created as a necessary component of the profit seeking of the entrepreneurs.

But when this happens there will be greater and greater economic inequality. But so what? Why should everyone be equally poor? The poor will have their living standards vastly improved and the wealthy will be even wealthier. If prosperity is our goal then why worry about an inequalitiy of results?

And this is the crucial difference between liberalism and socialism. Liberalism, based on an ethics of achievement, advocates equal freedom, resulting in unequal results. Socialism, based on the ethics of envy, demands equal results, which requires limiting freedom. Thus with liberalism we have freedom, prosperity and unequal distribution of wealth. With socialism we have equality, poverty and no freedom. As much as we might want there to be a third alternative, it doesn't exist.