Ayn Rand in the UK: Yaron Brook's UK speeches

Last February Dr Brook visited the UK to speak at Oxford University (here and here) and at the Adam Smith Institute in London. He also gave a fascinating interview just before the ASI speech.

Videos of the London interview and speech are now available on YouTube.

Interview (about 28 minutes in total)
London interview Part 1 - Ayn Rand in the UK; what "free markets"?; the actual causes of the economic crisis
London Interview Part 2 - Why everyone always blames the bankers
London Interview Part 3 - Why the $9B Stimulus Package must fail and what would succeed
London Interview Part 4 - President Obama; the future of the Right

Capitalism without Guilt: the moral case for freedom - main speech (about 32 minutes in total)
ASI speech Part 1
ASI Speech Part 2
ASI Speech Part 3
ASI Speech Part 4

Capitalism without Guilt - Q&A session (about 27 minutes in total)
ASI speech Part 5 - Is it in one's own interest to save a drowning child?
ASI speech Part 6 - Did the Republican Party's move towards religion put off voters?
ASI speech Part 7 - How can we communicate the true nature of capitalism to those unversed in economics?
ASI speech Part 8 - What is the proper role of government?
ASI speech Part 9 - How can the philosophy of Objectivism be reconciled with democracy?
ASI speech Part 10 - Views on Ron Paul; Should Holocaust deniers be prosecuted?
ASI speech Part 11 - Views on torture; Aren't altruism and socialism incompatible; How can we make the emotional case for capitalism; Should we be optimistic?

Among Dr Brooks's innumerable virtues as a speaker is his habit of addressing the wider implications of every question - so you'll get a lot more out of the clips above than the brief descriptions suggest.

To see the whole collection in one place, just go to

http://www.youtube.com/user/AynRandForum

Oliver Williams made and uploaded the videos.

Andrew Medworth, the interviewer, posted an account of all these events on his blog.

Why we need more chairs 5

It's because somebody else (that blotched arrangement) always tries to hog The Best Chair, and I just can't get comfy on inferior surfaces.

There's no pragmatic way out

Tara Smith wrote an arresting article on "The Menace of Pragmatism" in the Fall 2008 issue of The Objective Standard. She explained that

[w]hile pragmatism presents itself as a tool of reason and enjoys the image of mature moderation, of common sense and practical "realism," in truth it is anything but realistic or practical. Pragmatism has become a highly corrosive force in people's thinking.

Later on she identifies the key features of the pragmatic style (it could hardly be called a method) of thinking:

• A short-range perspective


• The inability (or refusal) to think in principle.


• The denial of definite identity.


• The refusal to rule out possibilities.

Professor Smith's article has many examples; but I came upon a concretisation of the psychological process involved in a totally different source, a World War II thriller I'm reading [The Polish Officer by Alan Furst].

It snowed, early in November, and those who read signs and portents in the weather saw malevolence in it. The Germans had lost no time stealing Polish coal, the open railcars rattled ceaselessly across the Oder bridges into ancient, warlike Prussia. The men who ran the coal companies in ancient, warlike Prussia were astonished at how much money they made in this way - commercial logic had always been based on buying a little lower, selling a little higher. But buying for virtually nothing, well, perhaps the wife ought to have the diamond leaf-pin after all. Hitler was scary, he gave those huge, towering, patriotic speeches on the radio, that meant war for God's sake, and war ruined business, in the long run, and worse. But this, this wasn't exactly war - this was a form of mercantile heaven, and who got hurt? A few Poles?

The thugs in charge of economic regulation in Britain and America, like the Fascists of the 1930s, are getting away with a course of action that verges on insanity and can only lead to ruin. As far as Britain's Gordon Brown is concerned, borrowing billions from the producers of the future works quite well in the short run, because the opinion polls report that his popularity has increased, and other European politicians have praised him for his economic leadership. It's true that injecting all those billions of nonexistent money into the economy doesn't seem to have eased the flow of credit much yet... But perhaps, somehow, Keynesian economics will succeed this time round, if only government ministers can bully financial institutions into making magic work.

The mixed economy v. capitalism

Two recent articles, one by BBC reporter Robert Peston in the Times Online, and one by Ayn Rand Institute analyst Alex Epstein in the the Telegraph Blogs, present contrasting analyses of the economic crisis. Peston thinks capitalism will have to metamorphose:

A New Capitalism is likely to emerge from the rubble, one which may well seem fairer and less alienating than the model of the past 30 years. The system's salvation may require it to be kinder, gentler, less divisive, less of a casino in which the winner takes all.

Epstein says that the system we have had for the last hundred years is not capitalism at all:

[G]enuine capitalism was abandoned long ago in favor of a mixed economy - an unstable combination of economic freedom and economic coercion by government. Today's crisis, like the 1970s stagflation before it and the Great Depression before it, took place under, and is growing under, a mixed economy - not a free market.

Peston blames private enterprise:

Who's to blame? The short answer is all of us. But it's hard to mount a convincing argument against the notion that the most at fault were the banks and bankers - because they systematically failed to do what they were handsomely remunerated to do, which was to assess properly the risks of all that lending. Their survival as institutions now wholly depends on the goodwill of governments and taxpayers.

Epstein blames the crisis on the failure of decades of regulation:

In fact, today's crisis illustrates the evils of government intervention in the economy and vindicates supporters of laissez-faire capitalism. The traditional, laissez-faire view of government, held by thinkers such as philosopher Ayn Rand and economist Ludwig Von Mises, was that the sole purpose of government was to protect individuals rights against force and fraud.

This purpose necessitates, in Rand's words, "the abolition of any and all forms of government intervention in production and trade." Laissez-faire thinkers explained how any and all of the supposedly moderate, progressive government interventions in the economy, from the money-printing Federal Reserve to government insurance of failing banks, were morally unjust and economically disastrous.

Peston thinks the solution is still more government interference:

But the biggest lesson of all is that we are a million miles from having created the political and regulatory institutions to help us to contain the risks of globalisation. If the unfettered movement of capital, goods and services is going to survive, if there is not going to be a retreat into national fortresses that could impoverish all of us over the longer term, we will have to find a far better way of monitoring global risks and of bringing governments together to deal with them.

Epstein thinks the solution is laissez-faire capitalism:

To anyone who is unhappy with the direction the economy is going, take note: the free market philosophy has not failed-the unfree market philosophy has failed. Do your homework, speak up, and put the interventionists on the defensive.

Do you think that spending money you don't have, but that somebody else is going to have to earn, is a moral way to conduct economic affairs? Do you think that businessmen ought to be the servants of politicians? Do you think that forcing banks to make unsound loans is the way to cure a disaster brought about by government-induced imprudence? If not, read Alex Epstein's article in full (it is brief and clear) and follow his advice - if you do want to be free.

Here's hoping

Now that the weather has turned bitterly cold, I find myself afflicted with an inchoate aspiration. I want to... Help those with less Heating than myself? No, that doesn't sound right at all. I want to... Hark the Herald angels sing? No, not so soon after Halloween. Let's see: I want to... Hide my savings under my duvet? Sure, but I'd Have to convert them to Hard cash first. I want to... beHead the Chancellor perhaps, or at least shave off his eyebrows? (Yes, but hagainst the law.)

Shhh! Let me concentrate. Now then: I want to... um... Hug a Hairy Hominid? No, no, no! I really want to... Hibernate? Closer, but not there. I want to... Have a Holiday in Hawaii! Yes, that's it. Phew! Just goes to show how far you can stray from your real needs when you confuse your aspirations with your aspirates.

The Independent earns its name

The Independent is an interesting newspaper. It is mostly left wing, but sometimes it presents unconventional viewpoints. Nothing could be less conventional, or more right, than this article by Dominic Lawson. An extract:

John Maynard Keynes, rather than Ludwig von Mises, is the economist whose name is currently being invoked on the airwaves in Britain. in his own day, too, Keynes obliterated Mises: it became fashionable to believe that Roosevelt's New Deal was a kind of successful rudimentary application of Keynesianism.

Yet Roosevelt's policy of massive intervention by the state to prop up wage rates and inflate credit gets a much better press than it ever deserved. Consider this: in September 1931 the US unemployment rate was 17.4 per cent and the Dow Jones industrial Average stood at 140. By January 1938, unemployment was still at 17.4 per cent, and the Dow Average had dropped to 121.

Mises' followers insist that the present problems in the economies of the West have not been caused by laissez-faire, but by the opposite: politically sensitive central bankers so desperate to prevent any stock market slump that they cut interest rates to a level which turbo-charged the debt markets. So when George Osborne, as he did yesterday, declares that "laissez-faire is dead", the Mises-ites – one of whom is the libertarian ex-Presidential candidate, Congressman Ron Paul – would protest that such a policy was never tried in the first place.

Read the whole thing. Also read Andrew Medworth's comment, which identifies the fundamental issue:

A crucial question, not addressed by this article, is why these disastrous policies were followed in the first place. Here we must turn to moral philosophy. Ayn Rand, herself a great fan of Mises, observed that laissez-faire policies such as the gold standard depend crucially on egoism, the view that self-interest is man's proper fundamental motivation. Government inflation has always been justified by the claim that it helps the poor: ultimately, of course, it harms us all, but if we want to see a change, we must address the moral issues behind the policy debate.

Capitalism is the only practical socio-economic system because it is the only moral system.

Killing the messengers doesn't change the facts

To the British government, and a distressing proportion of economic commentators, it's still all about spin: the problem with the markets is lack of confidence. Silence the doomsayers, and all will be well; credit will continue to flow to the unworthy, and no one will have to call in the loans any time soon. Subjectivism rules: if you just believe that everything is fine, it will be - so long as we manage to suppress those spivs who tell it like it is.

Well, here's a different view:

In Defense of Speculators and Short-Sellers

By Amit Ghate

Everywhere today government bureaucrats and media pundits blame
unwanted price movements on speculators and short-sellers. If prices
are "too high"--it's the fault of greedy
speculators; if prices are "too low"--it's the work
of evil short-sellers. To hear these critics tell it, speculators have
the ability to create artificially high prices, while short-sellers
can wantonly destroy sound companies. (Ignore for now the obvious
question: "Where are the short-sellers in markets that are 'too
high' and the speculators in markets that are 'too low'?")

The critics then claim that since neither speculators nor
short-sellers perform any positive economic function, barring them
from the marketplace is an appropriate remedy, one that's long
past due. (Recently the United States did just this by making some
shorting illegal.)

So to begin, let's ask what the critics consider a
"correct" price? Clearly it's not the price which
obtains when all market participants are free to engage in trade based
on their best judgment, because this is precisely the free-market
price--a price which they so vociferously condemn. But if "too
low" and "too high" aren't judged relative to
the free market, what is the standard? Stripped of euphemism: their
wishes.

For example, they wish--contrary to all relevant facts--that oil be
priced at $20/barrel and that Lehman's stock trade at $80/share.
Never mind that environmental policy has prevented the drilling of oil
and the development of nuclear power for decades now, or that Chinese
and Indian oil consumption is growing relentlessly; forget too that
Lehman chose to leverage itself at 35:1 and made riskier trades year
after year--if these critics wish for a price, then that should be the
price, facts be damned!

But of course, attempting to set prices by wishing doesn't--and
can't--work, not for Lenin, Stalin or Brezhnev; or for Paulson,
Bernanke and Bush. If prices are to reflect reality, they must be the
result of an objective process of discovery and judgment performed by
interested actors.

So just as doctors specialize in identifying and evaluating the facts
affecting health and disease, speculators and short-sellers specialize
in identifying and evaluating the facts pertinent to market prices.
They make it their business to understand economic facts like supply
and demand, and then risk their capital on their judgment, properly
profiting if they're right and losing if they're wrong.
Thus in a free market, rather than prices being set by wish or decree,
they are set by a rational process, one which benefits from the
knowledge of all who participate.

For instance, if speculators believe that future oil supplies
won't match demand, they buy oil, increasing its price. If
they're right, and oil prices continue to increase, they sell
their positions, profiting from their insight but also capping prices
as their supply comes to market; furthermore, their initial effect on
prices signals to the market that greater oil supplies are needed and
reduced oil consumption is appropriate--efficiently allowing market
participants to adjust their actions to the facts.

So too for short-sellers. If they judge that Enron is cooking the
books, or that Lehman is insolvent, they can seek to profit from their
insight by short-sales. These lower stock prices in the present and
convey to the market that there are potential problems with the
companies, helping others avoid losses in the stocks. And if shorts
are proved correct, rather than exacerbating any price slide, they
actually mitigate price declines when they buy their positions back.
(Of course, short-sellers, like speculators, only profit if their
judgment is correct. If they short a productive, undervalued firm,
say, e.g., Wal-Mart or Apple, they lose when the actual facts belie
their predictions.)

Consider the recent failure of Lehman, where critics claim that
short-sellers caused the decline by obscuring and distorting the
company's true value. The facts say otherwise. When the
government shopped Lehman to potential buyers, opening the books to
them, not a single buyer emerged, not at any price! Everyone who
examined the company concluded it was worthless. This was the fact
that short-sellers grasped earlier than others--it wasn't a fact
they created.

Speculators and short-sellers don't create facts, they seek to
identify and respond to them; and in the process they help adjust
prices to economic conditions and establish smooth and liquid markets.
As a result--instead of being scapegoated and banished--they should be
respected and welcomed for the productive role they play in our
markets.

Amit Ghate is a guest writer for the Ayn Rand Center for Individual
Rights, a division of the Ayn Rand Institute. He is a full-time trader
who often speculates and shorts.



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You can also see this article, and others on the financial crisis, on Amit Gate's blog, Thrutch.