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The Origins of the Deep State in North America

By Guest Post May 10, 2019

by Matthew Ehret

“Two systems are before the world; the one looks to increasing the proportion of persons and of capital engaged in trade and transportation, and therefore to diminishing the proportion engaged in producing commodities with which to trade, with necessarily diminished return to the labor of all; while the other looks to increasing the proportion engaged in the work of production, and diminishing that engaged in trade and transportation, with increased return to all, giving to the laborer good wages, and to the owner of capital good profits… One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.”

-Henry C. Carey (Lincoln’s advisor), Harmony of Interests, 1856

The British Hand Behind the Deep State Today

With the election of Donald Trump in November 2016, it has become apparent for that America isn’t what many thought it was.

Suddenly, for the first time since the assassination of John F. Kennedy in 1963, there was no longer one America but rather two opposing forces within America itself, and the question was raised “which is the real America and what is it that Trump was re-activating?”

Here was a political leader who wasn’t from the technocratic establishment, and who campaigned to work with Russia and China, end regime change wars, reverse the nation-killing effects of NAFTA, reviving the JFK-era space mission and even discussed restoring Glass Steagall.

A clue to what he chose to represent can be witnessed in his defense of the “American System” when he said “this is the system our Founders wanted. Our greatest American leaders — including George Washington, Hamilton, Jackson, Lincoln — they all agreed that for America to be a strong nation it must also be a great manufacturing nation.”

Soon, it became apparent that this Deep State structure mobilized to stop the re-emergence of the American System was not even American as many had supposed, but rather of a purely British Imperial pedigree and was even caught working against British nationalists such as Jeremy Corbyn. It finally came to light that the British Empire had never gone away after WWII, but had evoked a powerful sleight of hand after FDR’s untimely death in 1945.

How did this happen? By what means and motives did this Deep State arise? Was it always there or were there key moments in history that give us clarity into its origins and how it took over both America and other nations alike?

By approaching history shaped by a battle between British and American systems of social order (which represents much more than merely British or American nations per se), a “master key” to unlock the secrets of Britain’s takeover of America (and Europe) can be found by exploring the strange case of Canada.

What is this “strange partly British/partly American monarchy of the Americas”? At the best of times, it was uplifted by the best constitutional traditions of America cited by Donald Trump above, and at the worst of times, it was a platform to spread British intrigues upon the world exemplified by the Montreal-based assassinations of American System leaders Abraham Lincoln in 1865 and John F. Kennedy in 1963. Today those intrigues are led by such Rhodes Scholars as Chrystia Freeland and the modern Round Table movement of Ben Rowswell who have together played leading roles in the overthrow of Venezuela, the protection of fascists in Ukraine and advance of NATO against Russia and China.

The time has come to drag some skeletons out of the closet.

Lincoln’s American System Goes Global

Canada’s struggle for existence as a sovereign nation has been caught between two opposing views of mankind represented by the British and American System of social organization. As the great economist Henry C. Carey laid out while he was advancing the policy of Abraham Lincoln, the American System was designed to become a global system operating amongst sovereign nations for the progress and mutual benefit of each and all. By the end of the 19^th century, American System thinking was resonating with statesmen and patriots in all corners of the globe who were fed up with the ancient imperial system of British Free Trade that had always strived to maintain a world divided and monopolized. This view for a post-colonial world was exemplified by Lincoln-ally and first Governor of Colorado William Gilpin who described a world united by railways across all continents centered around the Bering Strait rail connection. This was outlined in his widely read 1890 “The Cosmopolitan Railway”.

Although British propagandists had made every attempt to keep the illusion of the sacredness of the British System alive in the minds of its subjects, the undeniable increase of quality of life, and creative thought expressed by the American System everywhere it was applied become too strong to ignore… especially within colonies such as Canada that had long suffered a fragmented, and underdeveloped identity as the price paid for loyalty to the British Empire.

In Germany, the American System-inspired Zollverein (customs union) had not only unified a divided nation but elevated it to a level of productive power and sovereignty which had outpaced the monopoly power of the British East India Company. In Japan, American engineers helped assemble trains funded by a national banking system, and protective tariff during the Meiji Restoration.

In Russia, American System follower Sergei Witte, Transport Minister and close advisor to Czar Alexander II, revolutionized the Russian economy with the American made trains that rolled across the Trans-Siberian Railway. Under the influence of Witte and other American System allies Czar Nicholas II endorsed the Bering Strait rail connection in 1905, though a tragic turn of fate sabotaged it from unfolding.

Not even the Ottoman Empire remained untouched by the inspiration for progress, as the Berlin to Baghdad Railway was begun with the intention of unleashing a bold program of modernization of southwest Asia.

The American System Touches the Canadian Mind

In Canada, admirers of Lincoln and Henry C. Carey found their spokesman in the great American System statesman Isaac Buchanan (1). Buchanan rose to his highest position of political office in the Dominion of Canada when in April 1864, the new MacDonald-Taché Ministry appointed him the President of the Executive Council. This put him in firm opposition to the Imperial agenda of George Brown, and the later Prime Minister John A. Macdonald, of whom he and all patriotic co-thinkers counted as bitter enemies to Canada’s independence and progress. The policy which Buchanan advocated as he rose to higher prominence was outlined in his December 1863 speech:

“The adoption by England for herself of this transcendental principle [Free Trade] has all but lost the Colonies, and her madly attempting to make it the principle of the British Empire would entirely alienate the Colonies. Though pretending to unusual intelligence, the Manchester Schools are, as a class, as void of knowledge of the world as of patriotic principle… As a necessary consequence of the legislation of England, Canada will require England to assent to the establishment of two things: 1^st, an American Zollverein [aka: Customs Union]. 2^nd: Canada to be made neutral territory in time of any war between England and the United States”. (2)

While the customs union modeled on the Zollverein program of American System economist Friedrich List in Germany laid out by Buchanan, was temporarily defeated during the operation known as the Articles of Confederation in 1867, the potential for its re-emergence returned in 1896 with the election of Wilfrid Laurier, Canada’s next Prime Minister. By 1911, the customs union policy advanced by Laurier, who was a devout admirer of Abraham Lincoln, finally came to fruition. Laurier long recognized that Canada’s interests did not reside in the anti-American program of MacDonald which simply tied Canada into greater dependence towards the mother country, but rather with the interests of its southern neighbour. His Reciprocity program proposed to lower protective tariffs with the USA primarily on agriculture, but with the intention to electrify and industrialize Canada, a nation which Laurier saw as supporting 60 million people within two decades. With the collaboration of his close advisors, Adam Shortt, Oscar Skelton and later William Lyon Mackenzie King, Laurier navigated the minefield of his British enemies active throughout the Canadian landscape in the form of the Masonic “Orange Order” of Ontario, and later, the insidious Round Table movement.

While Laurier’s attempts to actualize a true Reciprocity Treaty of 1911 that involved free trade among North American economies united under a protective tariff against British dumping of cheap goods, it would not last, as every resource available to the British run Orange Order and Round Table were activated to ensure the Reciprocity’s final defeat and the downfall of Laurier’s Liberal government and its replacement by the Conservative government of Sir Robert Borden in its stead.(3) Laurier described the situation in Canada after this event:

“Canada is now governed by a junta sitting at London, known as “The Round Table”, with ramifications in Toronto, in Winnipeg, in Victoria, with Tories and Grits receiving their ideas from London and insidiously forcing them on their respective parties.” (4)

Two years before Laurier uttered this warning, the founder of the Round Table movement, Lord Milner wrote to one of his co-conspirators laying out the strategic danger faced by Buchanan and Laurier’s program with America:

“As between the three possibilities of the future: 1. Closer Imperial Union, 2. Union with the U.S. and 3. Independence, I believe definitely that No. 2 is the real danger. I do not think the Canadians themselves are aware of it… they are wonderfully immature in political reflection on the big issues, and hardly realize how powerful the influences are…” (5)

Without understanding either the existential struggle between the two opposing systems related above, or the creation of the Round Table movement by a new breed of British Imperialist as a response to Lincoln’s international victory in the face of the total bankruptcy of the British Empire at the turn of the last century, then no Canadian could honestly ever make sense of what has shaped his or her cultural and political landscape. It is the purpose of this present report to shed a clear light upon some of the principal actors on this stage of universal history with the hope that the reader’s powers of insight may be strengthened such that those necessary powers of judgment required to lead both Canada and the world out of our current plunge into a new dark age may yet occur.

The Round Table Movement: New Racist Breed, Same Racist Species

The Round Table movement served as the intellectual center of the international operations to regain control of the British Empire and took on several incarnations over the 20th century. It worked in tandem with the Coefficients Club, the Fabian Society, and the Rhodes Trust, all of whom witnessed members moving in and out of each other’s ranks. The historian Carrol Quigley, of Georgetown University wrote of this cabal in his posthumously published “Anglo-American Establishment” (6):

“This organization has been able to conceal its existence quite successfully, and many of its most influential members, satisfied to possess the reality rather than the appearance of power, are unknown even to close students of British history. This is the more surprising when we learn that one of the chief methods by which this Group works has been through propaganda.

It plotted the Jameson Raid of 1895; it caused the Boer War of 1899-1902; it set up and controls the Rhodes Trust; it created the Union of South Africa in 1906-1910; it established the South African periodical The State in 1908; it founded the British Empire periodical The Round Table in 1910, and this remains the mouthpiece of the Group; it has been the most powerful single influence in All Souls, Balliol, and New Colleges at Oxford for more than a generation; it has controlled The Times for more than fifty years, with the exception of the three years 1919-1922, it publicized the idea of and the name “British Commonwealth of Nations” in the period 1908-1918, it was the chief influence in Lloyd George’s war administration in 1917-1919 and dominated the British delegation to the Peace Conference of 1919; it had a great deal to do with the formation and management of the League of Nations and of the system of mandates; it founded the Royal Institute of International Affairs in 1919 and still controls it; it was one of the chief influences on British policy toward Ireland, Palestine, and India in the period 1917-1945; it was a very important influence on the policy of appeasement of Germany during the years 1920-1940; and it controlled and still controls, to a very considerable extent, the sources and the writing of the history of British Imperial and foreign policy since the Boer War.” (7)

To understand the pedigree of the Round Table movement as it was “officially” unveiled in 1910 as the ideological shaper of the policies and paradigm of the new “managerial class” of international imperialists dedicated to the salvation of the British Empire under an “Imperial Federation”, it would be necessary to go back a few decades prior, to 1873-74. It was in this year that a young Canadian named George Parkin lectured at Oxford on the subject imperial union as the sacred duty of all Anglo Saxons to advance. Parkin is popularly heralded by Oxford historians as “the man who shifted the mind of England”.

1873-1902 Empire on the Verge of Collapse: Re-organize or Perish

During this same period, a grouping of Imperial intellectuals known as the “X Club” (f. 1865) centering on Thomas Huxley, Matthew Arnold, Herbert Spencer, and Joseph Hooker were assigned the responsibility to overhaul the British Empire’s controlling ideological structures that had proven themselves worn out. Each would specialize in various branches of the sciences and would all promote gradualist interpretations of change to counteract explanations which required creative leaps. This program was applied with the intention of 1) saving the collapsing empire and 2) establishing the foundation of a new scientific religion based upon Charles Darwin’s highly materialistic model of Natural Selection as the explanation for the evolution and differentiation of new species.

As X Club co-founder Herbert Spencer went on to elaborate the system of “social Darwinism” as the logical outgrowth of Darwin’s system into human affairs, the intention behind the propagation of the Darwinian program was never “the enlightenment liberalism in battle against the ignorant dogmas of religion”, as it is so often recounted by popular historians of science. Rather, the “revolution in science” initiated by the X Club was merely the re-packaging of an idea as old as Babylon: The control of the masses by a system of oligarchical rule, simply under a new type of “scientific dictatorship”. But how, when the demonstration of creative reason’s power to elevate humanity’s conditions of life by encouraging new discoveries and applied technologies, as promoted by the American System of Political Economy, would the world now accept the conditions of mental and political enslavement demanded by the imperialist in a fixed system struggle for diminishing returns?

This was the challenge upon which young Oxford men would set their creative energies using the “scientific” reasoning established by Thomas Huxley’s X Club and for the service of the ruling oligarchical families of Europe. George Parkin like all young Oxford men at this time was highly influenced by this network’s ideas and used them to justify the “natural scientific inevitability” of the hegemony of the strong over the weak. In this case, the Anglo Saxon master race dominating the inferior peoples of the earth. This message could be seen in his 1892 work Imperial Federation: “Nations take long to grow, but there are periods when, as in the long-delayed flowering of certain plants, or in the crystallization of chemical solutions, new forms are taken with extreme rapidity. There are the strongest reasons for believing that the British nation has such a period immediately before it. The necessity for the creation of a body of sound public opinion upon the relations to each other of the various parts of the Empire is therefore urgent.” (8)

In elaborating upon the danger of the British System’s collapse in light of nationalist movements following the American System model, Parkin went on to ask: “Has our capacity for political organization reached its utmost limit? For the British people, this is the question of questions. In the whole range of possible political variations in the future, there is no issue of such far-reaching significance, not merely for our own people but for the world at large, as the question whether the British Empire shall remain a political unit… or yielding to disintegrating forces shall allow the stream of the national life to be parted into many separate channels.” (9)

One of Parkin’s Oxford contemporaries was Alfred Milner, a character who plays a vicious role in our drama as the catalyzer behind the formation of the Round Table Movement. Milner credited Parkin with giving his life direction from that point on (10). It was during 1876 that another contemporary of Milner and Parkin, named Cecil Rhodes left Oxford in order to make a fortune on a cotton plantation in South Africa. All three characters were also highly influenced by John Ruskin, the leader of the “artistic” branch of British Intelligence led by the “Pre-Raphaelite Society”.

The proceeds of Rhodes’ cotton fortune were multiplied many times by ventures into the diamond industry of South Africa, allowing him to rise to gargantuan heights of political power and wealth, peaking with his appointment as Prime Minister of Cape Town and Founder of Rhodesia. The current London-centered mineral cartels Rio Tinto, De Beers, and Lonrho now pillaging Africa, as well as the legacy of Apartheid which has stained so much of South Africa’s history are among two aspects of the scarring legacy Rhodes has passed down to present times.

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Business

Henry Hazlitt in the Long Term: Politics is too important to be taken seriously.

By Guest Post April 27, 2019

By Bob Luddy

The following article is based on my recent lecture at the Mises Institute in Auburn, Alabama, entitled: “Henry Hazlitt’s Long-Term Economic Thinking: Foundation of Entrepreneurial Excellence.” Here I will explore morality as Hazlitt’s foundational theme in economics.

Henry Hazlitt is considered to be one of the best financial journalists of the 20^th century.“He was a giant in financial journalism,” as Jim Grant pointed out in his 2014 Mises Institute lecture entitled “Hazlitt, My Hero.”

Aside from his journalism, Hazlitt was a prolific writer who summed-up economics in “one lesson” in 1946.

Economics in One Lesson was based, in part, on Frederic Bastiat’s essay, What Is Seen and What Is Not Seen, and delves into the importance of aspects of the economy that are never spoken about, because they never happen. Hazlitt goes one step further, summing up economics not simply as a series of transactions with hidden implications, but in terms of long-term effects outliving the short-term effects of every economic principle or policy.

Hazlitt wrote more than twenty books and was the principal editorial writer on finance and economics for the New York Times for twelve years and was a columnist for Newsweek for twenty years. His writing was thoughtful, incisive, and influential. And he played a significant role in supporting, introducing, and explaining the ideas of Ludwig von Mises and Friedrich Hayek.

Though incisive, Hazlitt’s opinions were still subject to criticism. He opposed many popular government initiatives in his day: The New Deal, the Bretton Woods Agreement, and the Marshall Plan. This opposition led to his departure from the New York Times and contributed towards ending his twenty-year-long collaboration with Newsweek.

Henry Hazlitt enabled readers not only to think clearly but correctly. As Hazlitt’s departure from thatNew York Times indicates, organizations and government demand compliance with existing ideas and punish critical thinkers. Hazlitt’s economic thinking was revolutionary, but his thoughts on morality were paramount.

In his book, The Foundations of Morality, Hazlitt defines morality as “not the subordination of the ‘individual’ to ‘society,’ but the subordination of immediate objectives to long-term ones.” As in his understanding of economics, he realized that the long-term interests of the individual would serve the long-term interests of society.

These long-term interests of the individual depend on social cooperation. As he points out: “Social cooperation is the foremost means by which the majority of us attain most of our ends.” (The Foundations of Morality, p. 13.)

These important principles are often lost on our society today. The challenge for entrepreneurs and leaders is to focus on the long term, in spite of tremendous pressure to think only about the short term.

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Economics

Fraud: Green New Deal Plagiarized From UN Report

By Guest Post March 20, 2019

by Patrick Wood

In a stunning revelation from a 2009 UN document titled “Rethinking the Economic Recovery: A Global Green New Deal“, it is discovered that Alexandria Ocasio-Cortez’ (AOC) Green New Deal is not a new movement of the people, but rather a crafty (and plagiarized) creation of a small group of global elite working through the United Nations.

This 144-page report was headed by Edward B. Barbier, a professor of Economics and Finance at the University of Wyoming at the time, but specifically prepared for the United Nations Environment Programme (UNEP)

It was UNEP that sponsored the infamous 1992 Earth Summit in Rio de Janeiro that catalyzed the doctrine of Sustainable Development and produced the Agenda 21 book labeled The Agenda for the 21st Century. UNEP has been at the root of every intellectually bankrupt scheme to flip the world into its resource-based economic system while driving a fatal nail into Capitalism and Free Enterprise. In my books Technocracy Rising and Technocracy: The Hard Road to World Order, I have extensively documented that Sustainable Development is nothing more than warmed-over Technocracy from the 1930s.

Barbier credits a number of people as important contributors to his paper, but two in particuiar ring a loud bell: the Center for American Progress (CAP) and the Peterson Institute for International Economics. (PIIE)

Center for American Progress

CAP was founded by John Podesta, a prominent member and operative of the Trilateral Commission. Podesta was the principal architect for the U.S. environmental policy for well over 2 decades. He served as Bill Clinton’s Chief of Staff, Special Counselor to Barack Obama and Hillary Clinton’s 2016 Campaign Manager. In July 2002, the UN Secretary-General appointed him to the High-Level Panel On Post-2015 Development Agenda that created the text for the Paris Climate Agreement in 2015.

The Board of Directors for CAP includes Sen. Tom Daschle (Chairman), Stacey Abrams, Donald Sussman, and California billionaire climate activist Tom Steyer.

Peterson Institute for International Economics

PIIE was founded by Peter G. Peterson (1926-2018), a principal member of the Trilateral Commission for decades. PIIE’s Board of Directors is a Who’s Who of the Trilateral Commission and includes Lawrence Summers, C. Fred Bergsten, Richard N. Cooper, Stanley Fischer, Robert Zoellick, Alan Greenspan, Carla A. Hills, George P. Schultz, Paul A. Volcker, and Ernesto Zedillo. The PIIE paper cited by Barbier was A Green Global Recovery? Assessing US Economic Stimulus and the Prospects for International Coordination

Plagiarized: Familiar Language

Echoing AOC’s rhetoric, the Barbier’s UNEP report states,

The multiple crises threatening the world economy today demand the same kind of initiative as shown by Roosevelt’s New Deal in the 1930s, but at the global scale and embracing a wider vision. (p. 5)

In an article by VOX titled Alexandria Ocasio-Cortez is making the Green New Deal a 2020 litmus test, it stated,

Until now, the Green New Deal has been more of an idea than an actual policy. This week, an Ocasio-Cortez resolution is set to make its debut. The plan prioritizes climate change, but its strength lies in its symbolic ties to one of the Democratic party’s biggest historical successes: the original New Deal under President Franklin Delano Roosevelt.

The comparison to Franklin Delano Roosevelt has been prominent from the first day that Ocasio-Cortez became a public figure.

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Business

Why Bastiat Deserves to Be in the Pantheon of Great Economic Theorists

By Guest Post March 8, 2019

By Donald J. Boudreaux

Frédéric Bastiat (1801-50) is known today among economists—if he is known at all—as at best a brilliant polemicist. An economic theorist he most certainly was not—such is the common opinion.

I believe this common opinion to be mistaken. To explain why first requires a discussion of the nature of a theory.

A Theory Is a Story

As I tell students in my Principles of Microeconomics courses, a theory is a story that assists us in making better sense of reality. And a theorist is a storyteller who offers this assistance.

A story that explains the price only of bread is not a proper theory of prices, even if it is highly believable.

Stories, of course, differ in their believability. A story that explains, say, the Industrial Revolution as being the result of new knowledge imparted to us by aliens from another galaxy is completely unbelievable. Some other, more believable story is called for—one, say, that features a change in people’s attitudes toward commerce and innovation.

But for a story to deserve to be called a theory requires that it also be generalizable.

In economics, supply-and-demand analysis is a general account of how prices are formed and change. It’s not a story about the formation of the price of only one item, such as bread. It’s an outline for telling believable stories about the formation of all prices—from the prices of toy planes to those of jumbo jetliners, from the wages earned by motel maids to those earned by Tom Hanks. A story that explains the price only of bread is not a proper theory of prices, even if it is highly believable.

To be generalizable, a story whose creator wishes it to be regarded as a serious theory must make that story abstract. Being abstract, however, makes the story—standing alone—barren. As such, it engenders no understanding of the physical or social world. But it proves itself to be a good theory if, when relevant details of reality are added to it, those of us who encounter this story go, “Aha! Now I understand reality better than I did before!”

The core purpose of all theories is the creation of improved understanding. A theory that does not cause those who hear or read it to go, “Aha!” is worthless.

Bastiat the Theorist

And so we return to Bastiat. He’s one of history’s most brilliant tellers of economic stories. This fact, I’m convinced, justifies calling Bastiat a great economic theorist.

Who can read Bastiat’s satirical portrayal of sunlight as an unfairly low-priced import and not go, “Aha!”

Consider Bastiat’s famous 1843 “Petition of the Manufacturers of Candles.” In this short essay, Bastiat radiantly conveyed economists’ understanding that artificially contrived scarcities make the general population worse off even if they increase the wealth of a small handful of individuals. Who other than the most benighted protectionist can read Bastiat’s satirical portrayal of sunlight as an unfairly low-priced import and not go, “Aha! Of course, inexpensive imports that ‘flood’ into a country no more impoverish that country than does the light sent to us free by the sun!”

Another example is Bastiat’s even-shorter essay “A Negative Railway.” Here Bastiat revealed the flaw in the argument of a gentleman who insisted that if a railroad connecting Paris to Bayonne were forced to have a stop at Bordeaux, the wealth of the French people would be enhanced. The hapless target of Bastiat’s brilliance based his conclusion on the correct observation that forcing trains to stop at Bordeaux would increase the incomes of porters, restaurateurs, and some other people in Bordeaux.

Yet Bastiat didn’t settle for drily noting that, after paying these higher incomes, railways and their passengers would have less money to spend on goods and services offered by suppliers in locations other than Bordeaux. Instead, Bastiat followed the proposal’s logic in a way uniquely revealing: If forcing trains to stop at Bordeaux will increase the total wealth of the people of France, so too will the total wealth of the people of France be increased if trains are obliged to stop also at Angoulême. And if also at Angoulême, then the French will be enriched even further if a third stop is required at Poitiers. And if at Poitiers, then at each and every location between Paris and Bayonne.

Bastiat revealed the proposal to be flawed by showing that, if its logic were sound, the railway that would do the most good for the French people is one that is nothing but a series of stops—a negative railway!

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Accounting

Why Does Amazon Pay $0 in Federal Income Taxes?

By Guest Post February 22, 2019

by Tyler Cowen

Amazon is valued at nearly $800 billion, yet the company reportedly paid $0 in federal income taxes last year. Why?

The main reason Amazon as a corporate entity does not pay much in taxes is because the company so vigorously reinvests its profit. The resulting expensing provisions lower their tax liabilities, in some cases down to zero or near-zero.

That is, in fact, the kind of incentive our tax system is supposed to create, and does so only imperfectly, noting that many economists have suggested moving to full expensing.

(NB: You can’t hate both share buybacks and profit reinvestment!)

Amazon pays plenty in terms of payroll taxes and also state and local taxes. Nor should you forget the taxes paid by Amazon’s employees on their wages. Not only is that direct revenue to various levels of government, but the incidence of those taxes falls somewhat on Amazon, which now must pay higher wages to offset the tax burden faced by their employees.

Check out the Foundtation for Economic Freedom

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Economics

A Quiz to See How “Woke” You Are on World Poverty

By Guest Post February 19, 2019

by Barry Brownstein for FEE.org

By now you have probably heard the exhortation “stay woke.” To be woke means a person is “an informed, questioning, self-educating individual” who “look[s] past the provided narrative.” Yet, most among the self-proclaimed woke are still fast asleep. They may have a facile way of imparting narratives about issues, but those narratives are often based on neither sound facts nor theories.

In his book Factfulness, Hans Rosling, the late great professor of international health, offers 13 fact questions to test “our knowledge about the world.” One of those questions is foundational to our beliefs about the state of the world:

In the last 20 years, the proportion of the world population living in extreme poverty has …

A: almost doubled

B: remained more or less the same

C: almost halved.

The answer is C:

“Over the past twenty years, the proportion of the global population living in extreme poverty has halved.” Rosling considers this a “revolutionary” change—“the most important change that has happened in the world in [his] lifetime.” He adds, “It is also a pretty basic fact to know about life on Earth. But people do not know it. On average only 7 percent—less than one in ten!—get it right.”

About this dramatic change in the reduction in the world’s poor, most are not woke. Many of the self-proclaimed woke cling to a variation of the narrative that capitalism is impoverishing the world. Their illusions may be shared by many, but that doesn’t make them right.

Rosling adds these pointed observations:

The Democrats and Republicans in the United States often claim that their opponents don’t know the facts. If they measured their own knowledge instead of pointing at each other, maybe everyone could become more humble. When we polled in the United States, only 5 percent picked the right answer. The other 95 percent, regardless of their voting preference, believed either that the extreme poverty rate had not changed over the last 20 years, or, worse, that it had actually doubled—which is literally the opposite of what has actually happened.

If you think the “better-educated” would do better, you would be wrong. Rosling writes:

I have tested audiences from all around the world and from all walks of life: medical students, teachers, university lecturers, eminent scientists, investment bankers, executives in multinational companies, journalists, activists, and even senior political decision makers. These are highly educated people who take an interest in the world. But most of them—a stunning majority of them—get most of the answers wrong. Some of these groups even score worse than the general public; some of the most appalling results came from a group of Nobel laureates and medical researchers.

Those sharing their opinions on social media, professional pundits, and professors are mostly profoundly ignorant about basic facts. Worse, Rosling writes:

Not only devastatingly wrong, but systematically wrong. By which I mean that these test results are not random. They are worse than random: they are worse than the results I would get if the people answering my questions had no knowledge at all.

The systemic bias is in one direction: “Every group of people,” Rosling surveyed, “thinks the world is more frightening, more violent, and more hopeless—in short, more dramatic—than it really is.”

If You Can Observe a Thing

Why, Rosling asks, “is the misconception of a gap between the rich and the poor so hard to change?” Rosling writes, “Dividing the world into two distinct sides is simple and intuitive, and also dramatic because it implies conflict, and we do it without thinking, all the time.” Thus, Rosling observes, journalists “prefer stories of extreme poverty and billionaires to stories about the vast majority of people slowly dragging themselves toward better lives.”

Rosling offers many other cognitive biases, such as a “negativity instinct,” that prevent us from seeing the tremendous progress occurring in the world. These biases are significant, and behind these cognitive biases are theoretical biases.

Albert Einstein observed to his colleague Werner Heisenberg, “Whether you can observe a thing or not depends on the theory which you use. It is theory which decides what can be observed.”

If you understand why free markets have lifted billions out of poverty, you will see the evidence.

If you understand why free markets have lifted billions out of poverty, you will see the evidence. If you are waiting for a socialist revolution to help people rise above poverty, you will be blind to the billions who already have.

According to Rosling, “The picture that most Westerners see in the media and carry around in their heads” is this: “The rich are getting richer and the poor are getting poorer; and the number of poor just keeps increasing; and we will soon run out of resources unless we do something drastic.”

How Woke Are You?

To complement Rosling’s fact-based quiz, I offer this 15-question economics self-assessment taken from a 45-question assessment developed by me and my wife Deborah, a marketing professor, for an MBA economics and business environment course.

This self-assessment will measure your understanding of the conditions under which society can continue to progress and lift billions more out of poverty. Theoretical grounding will help you look past the “provided narrative” blaring at us daily that bigger government is needed to alleviate suffering and save the world.

How woke are you? The real woke understand economics.

On a scale of “1 to 7,” where “1” means “strongly disagree” and “7” means “strongly agree,” select the number that best represents the extent to which you agree or disagree with each of the following statements:

I have trouble conceiving of an economic order that is not deliberately made for a specific purpose.
It is likely that a group of well-intentioned government energy experts can direct energy research toward the next breakthrough in sources of efficient energy.
Because resource scarcity constrains the economy, the government must have the power to allocate resources.
As markets become more complex, the need for government regulation becomes greater.
There is a conflict of interest between consumers and corporations earning profits on a free market.
Government planning is needed to bring order and coordination to what would otherwise be chaotic social and economic conditions.
If other countries refuse to lower tariffs, it is in the interest of the United States to raise tariffs.
There must be a level playing field for international trade to be fair.
Individuals or small groups of people can know only a fraction of the knowledge that society uses.
Humanity can achieve more than “individual human reason could design or foresee.”
The basic economic problem is to use bits of knowledge that are dispersed and not held by anyone in totality.
Freedom to succeed or fail is a necessary condition for discovering the terms of mutually beneficial exchange.
It is not large corporations but government-created barriers to competition which are the most harmful to consumers.
Only the conduct of the players, but not the outcome of the game, can be said to be “just” in economic matters.
Spontaneous order can coordinate the conflicting actions and plans of different individuals and corporations.

Your Woke Score:

For questions 1-8, add your points. A real woke person will score 8; that is, they will strongly disagree with all of these statements.

For questions 9-15, add your points. A real woke person will score 49; that is, they will strongly agree with all of these statements.

Becoming More Woke

If you want to improve your theoretical understanding, I offer this short reading list of essential essays. The self-proclaimed woke are fast asleep, but you don’t have to be.

F.A. Hayek: “Cosmos and Taxis” in Law, Legislation and Liberty, Volume 1: Rules and Order

F.A. Hayek: “Individualism: True and False”

F.A. Hayek: “The Use of Knowledge in Society”

F.A. Hayek: “‘Social’ or Distributive Justice” in Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice

F.A. Hayek: “Planning and Democracy” and “Planning and The Rule of Law” in The Road to Serfdom

Israel Kirzner: “Competition, Regulation, and the Market Process: An ‘Austrian’ Perspective

Murray Rothbard: “Justice and Property Rights”

Ludwig Von Mises: “Profit and Loss”

Checkout the Foundation for Economic Education

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Capitalism

Freedom of Choice is What Sets Capitalism Apart — Not Competition

By Guest Post February 1, 2019

by Antony Sammeroff for the Mises Institute

Capitalism has often been described by as “a system of competition” by its adversaries, or a system “based on competition.” Naturally, this assertion is usually coupled with a spirited oration on how this “tooth n’ nail” competition psychologically corrupts us – pitting man against man in a “race to the bottom.”

Many of capitalism’s most vocal advocates have, themselves, imbibed this premise uncritically. They leap to fervent defenses of competition, extolling its virtues — real or perceived. In my view, this is a mistake. To accept without evaluation the presupposition that capitalism is a system of competition — in contrast to other hypothetical systems of cooperation (namely socialism and communism) — is to frame the very debate itself in leftist terms and play the game on an unfairly tilted game-board.

Competition Is Fierce for Government-Controlled Resources

This is not to say that those who defend competition do not raise some worthy points. For example: If not competition, then what is the alternative? Is there to be one central provider of each good and service available who gets to decide on our behalf how it is best to be produced and then allocated? Add to that, that if competition is wrong in the market, then why not in the political sphere? Surely democracy is out of the question if competition is a corrupting factor, because what do political candidates do if not compete for office? Think of the competition this generates between political parties, not to mention the ensuing competition between firms and individuals for preferential treatment from politicians and legislators, competition between lobbyists, think-tanks, and voters, to receive benefits out of the public purse. If the free and voluntary section of society is a system of competition, how much more so is government? Surely democracy is a “system of competition.” Politicians are competing for the very machinations of control in our society. For the right to pass and enforce laws which apply to everyone (whether they agree with them or not) and to force them to pay for their enforcement. They are not simply competing for market share where the winner of the competition is the one that satisfies the most demand. We can sidestep the more mundane economic arguments in favor of competition for the moment, such as the case that it increases efficiency and cheapens goods while driving innovation, as we are all familiar with them already.

Capitalism Is About Voluntary Exchange

This is not to say that competition is necessarily an evil either. The problem lies in defining capitalism as “a system of competition” — in comparison to other systems which are supposedly “cooperative” — is a rhetorical ploy. Those who profess it may honestly believe it to be so, but it’s not true. Capitalism is not “a system of competition.” any more than any other system. Capitalism (at least in its free-market, laissez-faire ideal) is a system of the voluntary exchange of goods and services in the absence of physical coercion, theft, compulsion or fraud, predicated upon the fundamental right to own and accumulate property.

Or, for brevity: Capitalism is a system of voluntary exchange, predicated upon the right to own property.

One might even venture, therefore, that it is capitalism that is the system most characterized by cooperation.

Granted, upon seeing this definition, many would still debate us over the morality of accumulating property. Or perhaps whether the “negative” right to ownership when it comes to the rich should take precedence over the “positive” right to healthcare or education at their expense when it comes to the poor. We can even debate whether the relationship between capitalists and their employees are really free of coercion given the power disparity between the two groups. Indeed these are debates I delight in exploring further. However, none of this is a justification for defining capitalism as a system of that is more competition-based than others.

Because Scarcity Exists, Competition Will Always Exist Under Any System

After all, it is not the presence of private property or the free exchange of goods that creates the presence of competition in a capitalist system. Scarcity causes that. In any situation of scarcity of resources, there is bound to be some form of competition over those resources (as well as over how those resources are allocated).

If we have a system that allows voluntary exchange, some competition is bound to arise out of that, but that would happen under any system. Even if you had a completely communistic society, which was centrally planned and involved no exchange of money whatsoever, people’s time would still be limited. If you were a filmmaker in this society, you would probably want as many people to see your films as possible. As would every other film-maker. This would put you at least somewhat in competition with them. Does this mean that communism, too, is a system of competition? Certainly, you would be competing for the only customer — the sponsorship of the state. Corruption and cronyism would surely be the result. Who gets their film made and who doesn’t? Who allocates the highly desirable job of being a film-maker over the undesirable job of being a street-sweeper or refuse collector, and how can their favor be courted? The competition will commence, but instead of being decided by the free and voluntary exchange of film-goers, investors and film-makers it will be decided by someone else, I would argue, in a rather more authoritarian fashion. (For a particularly vivid and chilling illustration of how communism substitutes market competition over customers (which is at least tied to the provision of desirable services) for the completely unmeritocratic competition over gaining favor from the corrupt power structure of the state, I refer the reader to Ayn Rand’s first novel, We The Living.)

Competition is just a feature of living in a world of scarcity and would exist in any system. Socialism cannot do away with competition – nor can any other system.

Opportunity Cost Means Competition Is Everywhere

The implications of these facts reach into any circumstances of scarcity beyond the economy. For example, supposing two friends each invite me over to dinner of an evening, I might have to make a choice between their invitations which will result in one of them losing out on my company. Does this then mean that friendship is a system of competition?

We can’t see all of our friends all of the time, or even all of them at the same time. Even if we do, we are bound to have to split our attention between them. In addition to that, we can only maintain so many close friendships at once, and we definitely can’t be friends with everyone. All of this means that inevitably we have to make choices. We each make decisions on who to make and maintain friendships with based upon our value judgments, conscious or unconscious. Perhaps based on how happy we feel around them, how long we have known one another, how much we have in common, how much we trust someone or how loyal they have shown themselves to be, how much they educate, enrich or enlighten us, or perhaps based upon what roles they allow us to fulfill in their lives. There can be countless other reasons. The fact is we decide. People who feel that they will benefit from our company, for whatever reason, will make attempts to spend time with us. We will invariably begin to make choices on who to spend time with based upon our values, schedule, and what other activities we are willing sacrifice to see them. These are basic facts of life, but they hardly make friendship a system of competition.

Similarly, on the market, our time and resources are limited. We make value-based judgments about choices of products and services to consume based upon what utility we think they will bring to us, sacrificing some options to others. Maybe we will choose a coffee shop based on which has the best-tasting coffee, or maybe based on which provides the nicest atmosphere, or maybe based on which is closest, or where the customer service is best, or which is the cheapest, or which we have gone to the longest and therefore find familiar, or perhaps even based on which we think has the best ethos — for example, because they are a social enterprise that only sells fair trade produce and deliberately seeks to employ and train disadvantaged people. The fact is we decide. Each service provider believes they will benefit from our custom and will make attempts to attract us, placing an upward pressure on the quality of services and a downward pressure on price which we may correctly identify as a form of competition. Since human beings are not infallible, sometimes someone might buy a coffee that they don’t end up liking, but over the long term, the competition is likely to be won by the satisfaction of customers.

The Benefits of Free Choice

The miraculous wonder we miss when we focus our attention upon the competition which derives from choice is the ability to choose itself. For example, supposing two commercial events are being held on the same evening. Each prospective patron will want to choose whichever event appeals to them the most, and for whatever reasons they choose based upon what they value in an event. Now, to simply mention that these events are “in competition”

The Mises Institute, “Austrian Economics, Freedom, and Peace”

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Communication

Don’t bother inviting me to catch up over coffee — I’m done networking and I’m starting to think you should be, too

By Guest Post January 31, 2019

by Shana Lebowitz

Will networking help you build a successful career? I’ve never been sure.
Mostly, traditional networking seems to me like it takes a lot of time and effort.
Some experts say building connections is a practical strategy, in case you ever lose your job.
Other experts say you’re better off working and developing concrete skills than schmoozing.

A few weeks ago, one of my coworkers at Business Insider created a Slack channel called #lunch-buddy. Anyone who joined the channel would be randomly paired with another BI employee; the two would then meet for lunch, or coffee, or maybe just a walk, and get to know each other.

This initiative seemed to me a brilliant idea. Generally speaking, my coworkers are lovely people, but I know only a sliver personally. And when it comes to employees in other departments — say, product or finance — I’m curious to know what they do all day because, as it stands, I have no clue. (I imagine the feeling is mutual.)

I typed “#lunch-buddy” into the Slack search bar. And then I closed out of it. It was a Monday morning and, already, I was behind on work. I imagined that, by the time my buddy and I arranged to meet up, I’d be even farther behind. Inevitably, I’d wind up nibbling nervously on a sandwich while sneaking glances at my phone to make sure no one was Slacking me. This buddy business was not going to work out, at least not for me.

I should mention that, when the email about the lunch-buddy program went out, I was in the middle of reporting a story about networking. My specific goal was to figure out whether networking was good for your career, as so many influencers would have it, or bad. Good because you meet interesting new people who can introduce you to interesting new job opportunities, clients, and projects. Bad because you spend so much time schmoozing that you forget to, you know, work.

I wasn’t sure where I stood on the subject. As the lunch-buddy incident had made clear, I theoretically supported networking, but wasn’t very adept at practicing it. On LinkedIn, I posed the question to my connections. Unsurprisingly for a networking website, several people who commented said their relationships had always benefited them in their career.

And maybe they’d benefited mine, too. A few years ago, I was looking for a new job and mentioned as much to an old coworker (who’d become a friend) when we got together for drinks. Days later, she emailed me a Business Insider job posting that I’d missed in my search and, well, the rest is history.

Does that count as networking? I’m not sure. I like to think it’s better defined as being a human being with human friends who are willing to help you out.

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Economics

Privatizing Airport Security Would Make Americans Safer and Richer

By Guest Post January 27, 2019

by David Inserra

Overall, this reform has the potential to save taxpayers money, increase their travel safety, and decrease their headaches at the airport.

The flu season isn’t the only thing keeping some Transportation Security Administration agents out of work. As the partial government shutdown rolls on, TSA paychecks aren’t coming in, and more agents are calling in “sick” as a result.

On Monday, the TSA reported a nationwide absence rate of 6.8 percent. That’s far higher than the absence rate of 2.5 percent, which was reported on the same day one year ago.

Noticeably, some airports are doing fine and still paying airport screeners despite the government shutdown. San Francisco International Airport, for example, is able to operate as normal because it is one of 22 airports in the U.S. that use private airport security, not TSA agents.

The Perks of Privatization

There are multiple reasons why reforming the TSA model would prove beneficial. A private model would allow for strengthened accountability, a decrease in operation costs, enhanced management of labor, and better focus on security threats and problems.

Privatizing aviation screenings would be beneficial for security. Private screening services can provide security that is at least as good as federal services, and at a cheaper rate. This is accomplished through the creation of incentive, competition, and accountability.

The core issue with the TSA model is the present conflict of interest created by self-regulation. Currently, the TSA is operating as both the security regulator and security provider.

As Reason Foundation transportation expert Robert W. Poole Jr. testified to Congress:

[The] TSA regulates itself. Arm’s-length regulation is a basic good-government principle; self-regulation is inherently problematic. First, no matter how dedicated TSA leaders and managers are, the natural tendency of any large organization is to defend itself against outside criticism and to make its image as positive as possible. And that raises questions about whether TSA is as rigorous about dealing with performance problems with its own workforce as it is with those that it regulates at arm’s length, such as airlines and airports.

Better Models

The TSA model is quite uncommon worldwide. The more common models utilize the government as a security regulator while a contractor or the airport itself provides security. This automatically pushes accountability and competition higher than the current U.S. model.

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