Lenin

New Trotsky Biography

by Ryan Young on November 19, 2009

in Culture, Personal Liberty, Zeitgeist

Robert Service’s new biography of Trotsky is reviewed in today’s Wall Street Journal. Having read Service’s excellent biography of Lenin a few years ago, this seems like a book worth reading. Joshua Rubenstein’s thoughtful review touches on some thoughts about socialism and socialists.

Socialism had three major failings. The first is what economists study most closely. It is the impossibility of economic calculation under socialism, because of the rejection of prices and money as a medium of exchange. Whether you support socialist ideals or not, it is literally impossible to achieve. Do away with prices and currency, and they will emerge in a different form. They are part of human society.

The second aspect of socialism intrigues philosophers: socialism genuinely sought to change human nature itself. People as they currently are are in no shape to realize Marx’s vision of communist society. So part of the communist program was to actively mold and change people so that vision could one day become a reality.

Before Marx came along, Plato’s Republic and Thomas More’s Utopia were also written about societies with a fundamentally changed human nature. More, knowing his ideal to be impossible, coined the word “utopia,” which literally means “no place.” His book is a pleasant dream (for a collectivist at least), but More knew it was one that could ever come true. We are they way we are. And we’re stuck that way, for better or worse.

This leads us to the third aspect of socialism, which most concerns Trotsky. This is, for me, the most remarkable part, and the most chilling. It is the sheer violence that accompanied Marxism-Leninism everywhere it was tried. And I mean everywhere. Every single country to adopt communism had a checkered human rights record. No exceptions. Not one had anything resembling freedom of speech or press, or due process, or property rights.

Most historians now estimate that communist governments killed around 100,000,000 people. Mostly their own citizens. At no other point in human history have governments been so murderous of their own people. No other ideology has had consequences so bloody as Marxism and its variants.

One reason for the violence is that it allowed the governments to maintain power; resistance is less likely when the prevailing climate is of fear. Another is that human nature is stubborn. If it is to be changed, force is required. But, of course, the basic tenets of humanity are immutable. We are who we are.

Communist leaders, including Trotsky, were simply chilling. Many of them come off as sadists. They seemed to actually enjoy bloodshed. Revel in it. Yet Trotsky still has his admirers today. They need to answer for why they look up to someone who would even have thoughts like the following, let alone give voice to such brutish impulses in public speeches:

“The strength of the French Revolution,” he shouted to a group of revolutionary sailors, “was in the machine that made the enemies of the people shorter by a head. This is a fine device. We must have it in every city.” And have it they did. Once in power, Trotsky advocated show trials and the execution of political prisoners; he suppressed other socialist parties and independent trade unions; he pushed for the censorship of art that did not support the revolution; and he created the institutions of repression that were later turned against him and his followers.

PG&E, Exelon, Duke — progressive companies or energy-rationing profiteers?

by Marlo Lewis on September 29, 2009

in Global Warming

Divide et Impera — divide and conquer — is perhaps the oldest strategic maxim of war, politics, and diplomacy. Businesses succumb to it time and time again. Why?

It is in the general interest of business to preserve an open and competitive marketplace, and to limit tax and regulatory burdens. However, it is often in the special interest of particular firms to expand the size and scope of government in order to collect political “rents” – windfall profits created by market-rigging subsidies, preferences, or mandates. 

When only a few firms engage in rent-seeking, the rent seeker’s concentrated benefits will far outweigh his portion of the diffuse costs imposed on the economy as a whole. But each rent seeker’s success encourages others to get in the game. In time, the costs of government adversely affect millions of bottom lines. Worse, interventionist policies (for example, subsidized lending via Freddie Mac and Fannie May) can create systemic risk and crash entire economies.

V.I. Lenin basically viewed all capitalists as rent seekers. Capitalists are so fixated on short-term gain, he mused, that they will “sell the rope” by which their enemies will hang them. This much is clear — there is no honor among thieves. The more businesses depend on political predation, the easier it is for anti-market interventionists to divide and conquer.

This brings us to the topic of cap-and-trade, a form of energy rationing. There’s money to be made in energy rationing — OPEC proves it! The emission permits in a cap-and-trade program are like the oil production quota in OPEC, the only difference being that they’re tradable. The cap makes the permits a valuable commodity, and Waxman-Markey in the early years would distribute about 85% of all permits free of charge to various industries and interest groups.

So it should come as no surprise that some corporations love Waxman-Markey. Indeed, the corporate coalition known as the United States Climate Action Partnership (US CAP) outlined the main features of the Waxman-Markey bill months before it was introduced in a January 2009 report titled A Blueprint for Legislative Action. US CAP members don’t worry that Waxman-Markey might destroy millions of jobs and trillions of dollars in cumulative GDP. They expect to get a bigger piece of a smaller pie.

US CAP member PG&E pulled out of the U.S. Chamber of Commerce last week citing “irreconcilable differences” over climate change policy. Today’s Bloomberg.Com reports that US CAP member Exelon has announced it will not renew its membership in the Chamber, and that US CAP member Duke Energy will not renew its membership in the National Association of Manufacturers (NAM). 

PG&E, Exelon, and Duke preen themselves as progressive companies who put principle (planetary rescue) ahead of profit. In reality, they seek political rents at the expense of the public interest in limited government, economic growth, and affordable energy. Waxman-Markey sets aside the biggest chunk of free emission permits — 35% — for electric utilities. And their industry representative, the Edison Electric Institute (EEI), is lobbying the Senate to increase the booty to 40%.

How much boodle can a rent seeker make these days? A recently leaked non-public report reveals that Exelon expects Waxman-Markey to generate hundreds of millions of dollars annually for the company.

On June 9, 2009, four days after Waxman-Markey was marked up in the House Energy and Commerce Committee, Hugh Wynne, a senior analyst with BernsteinResearch, led a group of investors to meet with Exelon’s senior management at the company’s headquarters in Chicago. Wynne summarized Exelon’s thinking in a non-public report prepared for Bernstein’s clients:

If passed, [Exelon Chairman] John Rowe calculates the Waxman-Markey bill will add $700 to $750 million to Exelon’s annual revenues for every $10 per metric ton (Mt) increase in the price of CO2 allowances. Such a revenue increase would contribute $0.67-0.72 to earnings per share. Exelon estimates that the price of CO2 allowances, when the law takes effect in 2012, will range from $15 to $18/Mt, implying a positive earnings impact of $1.00 to $1.30 per share.

The Chamber and NAM oppose Waxman-Markey because they promote the general interest of business in a free and healthy economy. Green groups are putting pressure on other companies to leave Chamber and NAM, my colleague Christopher Horner notes. Divide and conquer is, alas, a pathetically easy game to play in an era of big government and climate hysteria. 

The real story is that so many Chamber and NAM members are standing firm, and that most observers do not expect the Senate to pass a cap-and-trade bill this year.

Selling the Rope, as Lenin Predicted

by Ivan Osorio on September 23, 2009

in Culture, Politics as Usual, Sanctimony

The old saying that, “The problem with socialism is socialism; the problem with capitalism is capitalists” proves itself true time and again. So does Lenin’s claim that the capitalists would sell the Bolsheviks the rope with which to hang them. Thus, I’m not too surprised at The Los Angeles Times‘ brief profile of one capitalist doing just as Lenin expected:

He’s been called a bully and a monopolist. Al Gore once labeled him “Darth Vader.” The Wall Street Journal described him as “ruthless” and alleged “self-dealing” in a maze of complicated business transactions. He is a master of the tax-free deal, completely disdains government and most federal regulations, and has expressed a fondness for Rush Limbaugh. This summer he was slapped with a $1.4-million fine by the Justice Department for illegal stock purchases.

Sounds like the perfect target for a hard-hitting Michael Moore documentary, no? But no, we’re talking about Moore’s latest sugar daddy: cable mogul John Malone.

That’s right, Moore’s “Capitalism: A Love Story” is being co-financed and distributed domestically by Overture Films, which is a unit of Malone’s Liberty Media. Moore, who has been railing against Big Media during press junkets promoting the movie, is in bed with the Goldman Sachs of the media world.

Unsurprisingly, Moore tries to excuse this incongruity by appealing to some corporatist state ideal.

Moore, through a spokesman, isn’t making any apologies for having one of Malone’s companies as a backer of his film. “The movie is about HOW people make their money, and specifically criticizes the beast, our out-of-control economic system. …  And for those folks who make their money in ways that don’t exploit or hurt others, then they should be giving a lot more back in tax dollars to help support a more just and fair society. People like John Malone, myself and others who have been blessed, we all ought to be in a 70% tax bracket with the money being used to provide such important services as a real universal and affordable single-payer healthcare system.”

Of course, there is nothing preventing Michael Moore from writing a check to the IRS surrendering the 70 percent of his enormous income, which, by his own view, he does not deserve. As for Malone, the question of “how” posed by Moore’s spokesman should be asked of him. And I’d love to hear his reaction to his business partner’s 70-percent tax proposal.

This isn’t meant to single out Malone, though. As a story published by the Business Journal chain notes, this is part of a wider phenomenon:

Such relationships aren’t unusual in Hollywood, where populist rabble rousers, dreamers and captains of finance long have been united in pursuit of art and profit.

“That’s more the norm than not,” said Michael Taylor, a movie producer, and chairman of film and television production at the School of Cinematic Arts at the University of Southern California in Los Angeles.

Moore’s films have been indictments of broad aspects of American culture: the auto industry in “Roger and Me,” U.S. gun culture in “Bowling for Columbine,” the Bush presidency in “Farenheit 9/11” and the health care system in “Sicko.” The latter three are among the six highest-grossing documentary features in history.

His ability to draw large audiences is why a large media company founded by someone like Malone — who battled regulation to make TCI into a cable TV empire, and whose Libery Media recently started a $50,000 annual prize for journalism covering economic freedom — embraces entertainment without regard to its political viewpoint.

“One of the features, I suppose, of being a titan of industry on that scale is to not micromanage these things and get in the way,” Taylor said.

Yet there is a very big difference between getting in the way and not knowing — or caring — what it is you’re backing.

Fittingly, this week The Economist launched a new business column named “Schumpeter,” after the great economist of entrepreneurship, Joseph Schumpeter. This is timely, because Schumpeter’s dire warning about the future of the free market is one we should always keep in mind. As the column notes:

The prophet of capitalism’s creative powers also understood the precariousness of the capitalist achievement. He pointed out that successful firms depend upon a complex ecology that has been created over centuries. He wrote extensively about the development of the joint-stock company and the rise of stockmarkets. He also understood that capitalism might be destroyed by its own success. He worried that a “new class” of bureaucrats and intellectuals were determined to tame capitalism’s animal spirits.

Today, we can look back and see the rise of that “new class” happening alongside the rise of the state over the last century. Entrepreneurs — Business Journal describes Malone as “libertarian” — should know better than to support the kind of intellecutal poison that seeks to do them in. (Thanks to Margaret Griffis for the LA Times link.)