Tuesday, October 22, 2013

The fallacies of Social Contract theory

This is a repost of something I wrote on another forum.

I've heard the Social Contract Theory used a number of times here as an argument against libertarian or Objectivist arguments for freedom and natural rights, but I've never really directly answered them, basically because there is nothing to answer. I do reject the concept of a social contract, but that is irrelevant. Even if I were to concede that there is a social contract, and that I am willingly bound to it, it changes nothing about the arguments for or against individual freedom.
First of all, we need to understand what social contract means. Here is Wikipedia's description:
The term social contract describes a broad class of philosophical theories whose subject is the implied agreements by which people form nations and maintain social order. In laymen's terms this means that the people give up some rights to a government in order to receive social order. Social contract theory provides the rationale behind the historically important notion that legitimate state authority must be derived from the consent of the governed. The starting point for most of these theories is a heuristic examination of the human condition absent any social order, termed the “state of nature” or “natural state”. In this state of being, an individual’s action is bound only by his or her conscience. From this common starting point, the various proponents of social contract theory attempt to explain, in different ways, why it is in an individual’s rational self-interest to voluntarily subrogate the freedom of action one has under the natural state (their so called “natural rights”) in order to obtain the benefits provided by the formation of social structures.
This all sounds very plausible, especially since we do all enjoy great benefits from living in an ordered society, fairly free of rapists, murderers, and thieves. We also gain the benefit of mutual cooperation, with the economic benefits of a division of labor. All this, and more, is very good reason to live in a community with mutually agreed upon rules of conduct.

But, there are a whole number of problems with this theory, not least of which the idea that the freedom we would have in this mythical or metaphorical "natural state" represents natural rights. As I said, living in an ordered society leaves us for the most part free of rapists, murderers, and thieves. In the "natural state", we would NOT be free of such human predators. Whatever our situation in the natural state, it would not be freedom. By forming societies and governments, we are not giving up freedoms, but securing them. Rape, murder and theft are not rights, but their violation.
This should be enough to disprove social contract theory, but it is not my main point. The fact of the matter is that, even if true, social contract theory would not prove natural rights theory wrong. What it is used for, when arguing against Objectivists and libertarians is to distract them, and to tell them to shut up.

If I were to concede social contract theory as true, I could still argue to amend the terms of the contract. Statists of all kinds, communists, welfare statists, "21st century socialists", as well as fascists and theocrats, all want to make changes in government, in our laws, and even in the accepted moral/ethical theories that the law is based on. Our communities amend the "social contract" all the time by different processes of democratic elections, parliamentary procedure, court presedence, and in America, ammendments to the Constitution. These are all different forms of debate and action taken to change the government. But when you use the social contract theory against someone who is arguing for natural rights, all you are basically saying is "This is the way it is. You already agreed to it as it is, so shut up." You are begging the question, assuming that the specific law in question is right and just because it is the law, and thus part of the social contract. If you yourself want to advocate for social change and new laws, you are being a hypocrite. Why should you be free to advocate change to the government, but not Objectivists or libertarians?

What I have noticed in particular is that the social contract theory, in its most general form, is meaningless, with no description of what form society should take. It could be used to justify any social organization, fascism,  democracy,  monarchy, communism, or even a limited contitutional republic with a laissez-faire capitalist economy, whatever the system of the moment happens to be. Any theory that can explain any fact, actually explains nothing. The only way out of this problem is to presuppose some natural law above the contract, giving it a context and moral purpose. There are reasons why we want to live in an ordered society, namely protection of our right to life. This presupposes natural rights, which is what I have always seen social contract theory used to try to disprove.

Thats why it is both a red herring and question begging. Its a distraction, an attempt to get the natural rights advocate arguing about social contract theory instead of the issue at hand. Instead of discussing the consequences of a progressive income tax, whether redistributive policies are moral, whether or not employment is exploitation, the consequences of protectionist tariffs and whose rights they actually violate, or the morality and practicality of Obamacare, or the nature of property rights, it gets us debating the existence of non-existence of  some mythical contract that nobody has ever seen. And it assumes that you can prove the present social system is moral and voluntary because, supposedly, the natural rights theorist has already agreed to live in a society, and live by its rules. In other words, its just a way to say "Shut up, I don't want to hear what you have to say."

Wednesday, November 14, 2012

I just joined Liberty Classroom

I'll be posting on my experiences with this educational resource. Of course, I will not be posting content, since it is a pay site, but take these blog posts as a review of the site.

Liberty Classroom

Monday, October 22, 2012

Obama is getting grey

Has anyone else noticed how much grey hair Obama has gotten over the last four years?



The office of President of the United States is such a stressful job that nobody in his right mind should seek to fill it. Which is why, I think we always get such lousy candidates for the job.

Monday, September 24, 2012

Short Sellers: The crony capitalist's enemy

There are a lot of ways that opponents of capitalism don't understand how important financial markets are to the way a healthy economy functions. They see people who sit in an office or work on the floor of an exchange as parasites on the system, instead of productive members of society like construction workers or people working on an assembly line. With a construction worker (at least when he isn't leaning on a shovel), it is easy to see the product of his labor, what he is contributing to society. Its not quite so easy to see with a stock broker or financial consultant.

But financial markets are VERY important to a smooth running modern economy. Many economists have explained how speculation helps to coordinate the use of resources and stabilize prices. During a harvest, speculators buy up grain when supplies are abundant and prices would otherwise be low. This provides the farmers with higher prices. But then the speculators save the grain for later in the season, keeping it off the market so it will be available when grain supplies would otherwise be scarce.

It is hardest too see the benefit to the whole economy of having short sellers. I myself have trouble getting around the fact that short sellers are betting on the destruction of value. Emotionally, this, to me, seems creepy, destructive, sneaky, even dishonest. But the more intellectual parts of me have to acknowledge the great good that has been done by short sellers. What they do is reveal the rot in our economy, and speed the healing process.

Take Enron for example:  regulators should have known that something was wrong, but they turned a blind eye. It was speculators who uncovered the corruption, made a big profit selling the company short, and demonstrating to the world that the company was, in fact, an empty shell. The short sellers did not destroy Enron. It was already hollowed out and destroyed. We didn't know it, yet.

What the short sellers did was speed the process by which people came to realize all this.

Without the profits available to short sellers, there is not as much motivation to do the research, take a really good look at a company's books and see if it is really as profitable as people think it is.

Sunday, September 16, 2012

The elephant and the blind men

Whenever discussion comes up about the 2008 financial crisis, and I end up asking, again "what free market?", I tend to think of the story of the elephant and the blind men. Everyone knows the story. A group of bland men want to know what an elephant looks like, so they find one, and all of them go to touch it, to feel it and find out what everyone is talking about. One touches the elephant's trunk, and says that an elephant is like a snake. Another is at its ear and says an elephant is like a big banana leaf. A third is at one of its legs and says that an elephant is like a tree trunk. The blind man at the elephant's tail says that it is like a rope, and so on.

A large number of free market observers have each pointed out different aspects of government intervention which helped create the housing bubble and the financial collapse of 2008.

Thomas Sowell, in his book The Housing Boom and Bust, describes land use regulations such as "open space" laws and limits to the height of apartment buildings as the cause of localized high housing prices which government officials all the way up to the White House mistook for a national problem, which they tried to solve with such things as Bill Clinton's "National Homeownership Strategy".

Thomas Woods describes the role of the Austrian Theory of the Business Cycle (ABC) and low interest rated from the Federal Reserve in Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.

Daniel Henninger explains the role of things like deposit insurance in affecting banks' behavior in regards to risk in Welcome to 'Moral Hazard'.

Others show how deposit insurance was created to fix problems that were caused by previous regulation:

A Perfect Stormof Ignorance

Other observers have implicated the SEC's role in turning our rating agencies into a virtual monopoly, requiring banks to use Moody's, S&S, and Fitch, the three big ones, in order to invest in securities:

A Government Failure, Not a Market Failure

End the Credit Rating Monopoly

There is probably a whole lot more I can list, if I just keep digging. No economist, conservative or free market politician or commentator, or blogger has named all the regulations which helped to contribute to the housing bubble and financial crisis of 2008. To fully understand it, or at least try to, you need to read many different sources, each of which provide a small piece of the whole picture. 

For those who love free markets, the housing bubble and the collapse of 2008 provide a target rich environment for blaming government for its interference in markets.

Sunday, August 19, 2012

I went to Occupy

Occupy The Truth, that is. The Tea party is sick and tired of the media's lopsided and biased coverage of them and the Occupy movement. Every time there is some violence in our society, the Tea Party is blamed, even if there is no hint of any link between the perpetrators of mass shootings and the Tea Party. They even have to manufacture stories of Tea Party members spitting on senators and using the "N" word. But if Occupy movement members are caught planning terrorist attacks, the media turns a blind eye.

The truth is that the Tea Party has been a model of civility and respect for the rule of law, while the Occupy movement has been barbaric from the very beginning.

I'm so glad I went to this event. I got to meet Michelle Malkin.

Its Bash Ayn Rand Fest at Huffington Post

The story came out in the news that the new VP candidate, Paul Ryan, is an admirer of Ayn Rand, and the attacks are coming out of the woodwork. A lot of the same old strawman attacks, smears, misrepresentations and outright lies are being told about Ayn Rand.

One of the most blatant is that she was an admirer of a child killer, William Edward Hickman. The source material for this comes from The Journals of Ayn Rand. She wrote about this child murderer, making notes for a story she wanted to write, using Hickman as a model for a major character. What the liars are leaving out is that in those journals, Rand calls Hickman "depraved" and a "Purposeless monster".

The other big smear is the very true fact that Ayn Rand accepted Social Security and Medicare payments near the end if her life, supposedly proving that she was a hypocrite, and could not live by her unrealistic moral philosophy. But in no way was accepting SS and Medicare hypocritical. She had payed taxes most of her life in America, and she considered taxation to be theft. As she explained years before she accepted any such payments, in an essay called “The Question of Scholarships,” in The Objectivist, 1966:

Since there is no such thing as the right of some men to vote away the rights of others, and no such thing as the right of the government to seize the property of some men for the unearned benefit of others—the advocates and supporters of the welfare state are morally guilty of robbing their opponents, and the fact that the robbery is legalized makes it morally worse, not better. The victims do not have to add self-inflicted martyrdom to the injury done to them by others; they do not have to let the looters profit doubly, by letting them distribute the money exclusively to the parasites who clamored for it. Whenever the welfare-state laws offer them some small restitution, the victims should take it . . . .

The same moral principles and considerations apply to the issue of accepting social security, unemployment insurance or other payments of that kind. It is obvious, in such cases, that a man receives his own money which was taken from him by force, directly and specifically, without his consent, against his own choice. Those who advocated such laws are morally guilty, since they assumed the “right” to force employers and unwilling co-workers. But the victims, who opposed such laws, have a clear right to any refund of their own money—and they would not advance the cause of freedom if they left their money, unclaimed, for the benefit of the welfare-state administration.
But since there are some people who need an excuse, any excuse at all, to reject Ayn Rand and everything she said, the continue to cling to these smear tactics, and refuse to even apologize when their falseness is pointed out to them.