Money Talks: Prof Tibor Machan

This issue the OT locks horns with one of the libertarian movement’s most eminent ethical thinkers – Professor Tibor Machan of the Argyros School of Business and Ethics, Chapman University, California,  whose views can be found on his blog, A Passion for Liberty. Whilst Prof Machan’s views are provocative, and many occupiers may find much to disagree with here, he’s nevertheless staunchly opposed to government subsidies For banks and corporations. Read on and be provoked… 

The Occupied Times: What measures do you think would start to solve this global crisis?

Tibor Machan: Well, I am a convinced libertarian. Ever since I was smuggled out of communist Hungary, or shortly afterward, I have championed the fully free society where no one gets to order anyone else about (apart from children and the severely handicapped). I have debated the matter with innumerable statists and never found any of them convincing. I have written some 35 books on the topic and considered criticisms, objections galore, but freedom is my answer to most of the world’s human-made problems.

OT: I think you share common ground with the Occupy movement when you criticise the corporate bailouts.

TM: Certainly bailouts are wrong. Everyone seems to want to beat everyone else to the various public treasuries (which tend to contain only borrowed monies now). It is a Hobbesian world out there, it appears, with everyone getting what he or she can get.

OT: Do you believe in the ultimate selfishness of mankind?

TM: It doesn’t have to be this way! But a great many people seem to find that to be desirable since they believe they will be among the powerful. As to what is right, that would be a world in which individual rights are fully respected and competently protected. By the way, true selfishness, prudence, is healthy. Check out what Socrates and Aristotle thought about promoting one’s true self-interest! It is the rapacious sort that is vicious.

OT: You’ve talked about how commerce has had a very bad press for hundreds, even thousands of years – tracing back anti-business sentiment to Plato, Aristotle and the Bible…

TM: From the start commerce or business had been linked to soulless materialism, a value-free approach, and thus has done battle with the more spiritual views of human life, but these are false alternatives in my view! Intellectuals, today, are a kind of clergy who scoff at wealth, technological progress and economic growth. There isn’t enough solid intellectual, philosophical criticism of this (to my mind misguided) outlook. Still, living well has always been an attractive prospect.

OT: The film and book, The Corporation, puts forward the thesis that corporations are psychopathic. What’s your take on this?

TM: Sadly, this is very misguided. People organise corporations in order to prosper economically, which is a very fine thing, but because of some of what I said above, this approach has not gained respectability among the intellectuals, clergy and pundits. There is a general hostility that’s still very much part of our culture against freedom of choice – e.g. “ordinary people don’t handle freedom properly and need to be directed by politicians and educators” – and this infects the attitude toward corporate commerce. Corporate commerce is very much part of life, but it has acquired this reputation of being amoral, ethically deaf and dumb. The false notion that the right ethics is altruism, a life of relentless self-sacrifice, supports this, since commerce and its institutions are clearly aiming at creating wealth for their agents.

OT: But the opposite of unrestrained profiteering doesn’t have to be “relentless self-sacrifice”. Can’t you imagine a criticism of corporate excesses and predatory practices coming from a place of pro-business, pro-prosperity, pro-capitalism?

TM: Calling it ‘predatory’ shows it really isn’t capitalist at all! Predation is doing violence to people and their property.

OT: In the free-market which you advocate, some Corporations have become all-powerful, putting small and medium sized companies out of business. How can we even the playing field (or should we even try?)

TM: The notion of an even playing field is a false ideal. Small people and large people are both people, after all! It is a mistake to try to cut everyone to the same size. Here the best lesson comes from George Orwell’s Animal Farm, in my view.

OT: You say: “corporations are what people organise in order to prosper” but you’d presumably agree that there’s more than one way to prosper? The Mafia is a fairly prosperous organization…

TM: Of course I meant prosper peacefully!

OT: What about arms companies? – or would you withdraw ‘morals’ from the field of economics, and leave everything to ‘law’?

TM: Morality applies in all voluntary human affairs – whenever people do what they choose to do, their conduct is open to moral assessment, for better or worse. Arms companies that trade with criminals are themselves criminal. Only trades with defensive customers are legitimate. Otherwise it’s like trading with murderers, child-molesters, rapists, robbers and the like – all criminal!

OT: If the only limit to economic action is the law, how do you protect the law and regulation from the business interests they’re meant to regulate?

TM: Interesting, but sadly the only answer I have is education. Also, let’s be clear that pollution and other negative externalities are the result of the lack of full protection of private property rights.

OT: What about when the law no longer works in the interests of the majority of the population?

TM: Sadly, those who have power will try to make it work for them, so the law and morality need to be taught and implemented widely enough, in order to restrain them. Government is always captured by the powerful in the land!

OT: Could give any examples of this?

TM: Huge drug companies have politicians they pay off, including bureaucrats in the FDA (Food and Drug Administration). In brief, this is what economists call “capturing the regulators” through a process of hiring them when they move back into the private sector. The education industry has many politicians seduced into thinking that universities, colleges and such may be funded from confiscated funds, funds obtained through the extortion process called taxation (which comes to us from feudal times when monarchs took ‘rent’ from their subjects at gunpoint).

OT: Some people believe land tax is a fairer tax…

TM: I know of the Henry George position on this and it doesn’t have any justice in support of it. Moreover, even if some land is owned undeserved, it is a non-sequitur to believe that this entitles others to confiscate it. It should be adjudicated in a court of law, not by bureaucrats. The case against taxation is complex, but ultimately taxation is extortionist.

OT: Do you believe in state-funded education?

TM: I don’t believe that the government may get involved in anything apart from adjudicating disputes and protection of individual rights (including from foreign and domestic aggressors). No one has the moral, or should have the political authority to rob Peter to supposedly benefit Paul, be it through education, medicine, the arts, sciences, whatever. Such aggressive policies underlie corruption, wielding of power of some over others. I do not believe economic ‘power’ or wealth is aggressive if it is come by peacefully.

OT: And welfare?

TM: Welfare states pretend to serve the poor, but in fact serve fat cats who capture the government routinely. It is not the stereotypical single mother who soaks the government for welfare, but mostly businesses, farms and banks who with their subsidies and protectionist laws are keeping others away from the free market! If the governments acted like referees do at a game, staying out unless someone violates the rules, they would do the job for which liberal theorists like the American Founders supported them: “to secure our rights.”

OT: So if there is no tax, where does the money come from for basic policing and for all the ‘adjudicating’ and ‘refereeing’ that the state would need to do?

TM: As a consistent libertarian I do not use the term ‘state’ but ‘government’ to label the institution established to protect individual rights. Government and the maintenance of law can be funded by a contract fee.

Since contracts need to be backed by law, a fee can be charged when they are entered into – of course, one would be free to rely on a handshake but no sane person would do this with major economic transactions. The funds raised this way would suffice to fund the kind of minimal government that a just society requires.

OT: You say “It is a mistake to try to cut everyone to the same size” – would you then oppose measures to break up ‘too-big-to-fail’ institutions – for example, those institutions (most of them banks) deemed ‘systemically important’?

TM: Yes, if they got big peacefully, they must be left alone. Just as very tall basketball players need to be kept within the rule, that is – no handicapping except when the fans demand it and that’s in a game, after all, not in life. Again, the issue isn’t size but peacefulness!

OT: Presumably then, left alone to fail as well to thrive?

TM: Exactly. None should be deemed too big to fail if the risks are assumed voluntarily.

OT: Do you sympathise with the Occupy movement’s desire for transparency in government?

TM: Of course I am for transparency, but I’m afraid Occupy seems to me too diverse, too unfocused, and too emotional to do any good other than perhaps call attention to some problems…

OT: If you had a banner to wave yourself at a financial protest, what would you paint on it?

TM: “Assert yourselves, but very thoughtfully!”

These are not views necessarily endorsed by The Occupied Times. If you disagree with Tibor Machan, why not send us a rebuttal and we will publish the best ones online.