Saturday, January 15, 2011

Sustainability Is a Conservative Ideology

The totalitarian left has long disingenuously misapplied words such as liberal, progressive, democratic and rightsLiberal means a supporter of freedom, but the left uses it to mean a supporter of authoritarian state control.  Progressive means support for progress, but the left uses it to mean advocacy of policies that squelch progress. Democratic means popular power but the left uses it to mean elite power, especially its own.  Rights imply legal protection from violence, but the left uses it to mean the violent attainment of ends of which it approves.

The latest term that the the totalitarian left has corrupted is sustainabilityDictionary.com, defines to sustain as to support or bear the weight of; to keep from giving way; to keep up or keep going, as an action or process; and in a number of other ways.  The notion of to keep up or keep going means the same as conserving, which is defined as preventing decay, waste or loss and using natural resources wisely, preserving or saving, as in conserving the woodlands.

The earliest version of environmentalism was called conservation, a term linked to sustainability.  Only fools would fail to conserve resources but to make such conservation or sustainability the main point is niggardly.  The main point is liberty, on which American culture is based. Liberty may imply conservation or conservatism but more often it has implied improvement, change and progress.  Most Americans have come to enjoy the fruit of the experimentation to which liberty has led. Experimentation led to material and spiritual progress, not to conservativsm, reaction and sustainability.

At its heart, the left has always been a conservative movement. It aims to reinstate the tribalism of ancient times and, in the context of today's global society, to do so through  re-institution of the medieval world:  a global secular church, the United Nations; a federal Empire; a banking aristocracy;  and an academic priesthood.  The left's reactionary faith is not humanism but sustainability.  Human beings are the problem and their eradication, their murder, is its ultimate goal.  

Liberty and experimentation lead to discovery.   The innovation of new technology permits humanity to improve its standard of living as it uses resources.  Discovery permits humanity to make use of new resources in new ways.  Human beings do not need to fear scarcity so long as they are free to improve their lives, especially in the context of markets that allocate resources so that they are distributed among their best uses.  But if liberty is curtailed, as has occurred here since 1908, experimentation is reduced and progress stalls.



We can do better than sustainability.  Sustainability is for the hunting grounds of kings and princes; the backwaters of pre-industrial and ancient societies; for the frontier of 14th century Europe.  A nation based on freedom thinks in terms of improvement, progress and growth.  It is surely a sign that Progressivism has finally failed that its admitted aim is sustainability and conservation, not progress.




Key to Sustainability: Kick the UN out of the US and Get the US out of the UN

Glenda R. McGee sent me a Daily Caller blog about the UN's crackpot Agenda 21, which has caught on in a wide range of US governmental bodies ranging from county environmental departments to the Obama administration. Daily Caller's Jim Simpson points out that the terminology that the radical left and the UN have adopted, such as "sustainability", are code for radical social reorganization along Spartan lines (the Spartans had the kind of collectivist, highly controlled society that today's left advocates, with the Obama-Emanuel youth training movement very much in the Spartan communistic tradition).  Daily Caller does a good job of dissecting the code, much of which amounts to fear and loathing of freedom, human happiness and economic progress.  Given the environmental movement's staunch opposition to progress and technology, claiming that it is "progressive" is perhaps a worse abuse of language than calling authoritarian left-wingers "liberals."

The notion of "sustainability" is vacuous.  A way of life is sustainable if the participants conceive of a way of sustaining it.  Technology has proven remarkably inventive not in sustaining but in expanding standards of living. Such expansion has been stalled by the kinds of policies the environmentalists advocate.The chief enemies to sustainability are regulation, government, the Federal Reserve Bank, the United Nations, and authoritarian environmentalism.

As Simpson's article makes clear, UN Agenda 21's land control theme is a form of totalitarian communism that is more radical than Stalin's and Mao's. Environmentalism is a violent totalitarian movement very much in these extremist traditions.  Which is not to say that the environment is not an important concern.  The rule of law and private property are much better at maintaining the environment optimally than regulation and social reorganization.

It is frightening that the United Nations, which was founded on the premise that it would contribute to world peace, has become an organization that advocates human resettlement and mass murder.  It is time for the United States to rethink its involvement in the United Nations.  There is a place for a multilateral peace organization, but not for initiatives like UN Agenda 21 and the reactionary environmental movement.  The UN should be kicked out of the US, and the US needs to resign from the UN.

The New Health Care Law Will Impoverish You: Here's Why

I just submitted this to Mike Marnell, crusading editor of the Lincoln Eagle out of Kingston, NY.

The New Health Care Law Will Impoverish You: Here's Why
Mitchell Langbert, Ph.D.*

In the 1990s the Clinton administration and the left wingers who dominate the Democratic Party pushed through the Family and Medical Leave Act (FMLA).  Democrats claimed that it would improve efficiency and reduce costs because employers would no longer terminate employees on sick leave and so save on costs arising from turnover.  For instance, the University of California's Andrew E. Scharlach and Blanche Grosswald  claimed in Social Service Review that FMLA provided so great a bounty to employers that it ought to be expanded to include the smallest firms, which can be bankrupted by increases in employment costs.   As well, the University of North Carolina's Christopher Ruhm claimed in the Journal of Economic Perspectives that FMLA's costs would be minimal and that it might contribute to increasing efficiency because employers without the benefit of government regulation overlooked employees' needs for family and medical leave.

After FMLA passed, Scharlach's, Grosswald's and Ruhm's claims turned out to be pap.  Hallmark Cards reported that FMLA increased its leave costs by 35%.  Southwest Airlines, the best run (and most union-friendly) airline stated that reservation agents were gaming leave provisions to get extra overtime.  Southwest added that "FMLA has forced employers to abandon their attendance reward policies… once an employee claims that his or her absence was an FMLA covered absence, it cannot be considered in determining whether the employee is eligible for a perfect attendance award."  

Worse, FMLA led to litigation. The Department of Labor held that employees in intense, assembly-line and service environments must be given leaves of as little as six minutes.  Because some employer processes depend on minute-to-minute responsiveness, employers have reported disruption and dramatic cost impact.  The Eighth Circuit Court of Appeals held in Caldwell v. Holland of Texas that employers could be held liable for FMLA violations even if the employee does not comply with notification requirements.  Employers who discharge an employee when FMLA might be involved may be liable.  Thus, every time an employee is fired firms must spend time and money to investigate potential FMLA violations. Uncertainty raises costs.
Health Care Law an FMLA Redux
Much like the debate concerning the FMLA, left-wing academics, attorneys, economists and the legacy media filled the recent health reform debate with promises of improved efficiencies and reduced costs.  For example, in an August 12, 2009 editorial The New York Times promised that small business would "reap substantial benefits" if only health care reform were passed.  Healthier work forces would enable small business to attract and retain talented workers.  Insurance rates would fall.  Yet, as the two health care laws, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act go into effect, The Times's David Brooks writes that because employers are likely to dump the worst risks onto the insurance exchanges the exchanges’ costs might be three times as great as the Congressional Budget Office projected, as much as $1.4 trillion, and "the price of the health care law could double."  

Costs Do Not Decline

The Website of the Society for Human Resource Management (SHRM) reports a High Roads, Inc. survey that finds that 25 percent of employers say that there is insufficient federal guidance as to what they need to communicate to employees concerning the new health care law.  Another survey by Price Waterhouse Coopers finds that Employers are raising deductibles and that healthcare costs for 2011 are expected to increase by nine percent, six times the inflation rate.  Much of the cost increase is due to Medicare's dumping costs onto employers.  Medicare is reducing hospital payment rates and more than 40 percent of employers aim to increase employee contributions and increase medical cost sharing.  

Costs Imposed on Small Employers

Lisa Horn, SHRM's government affairs director pointed out in May 2010 that key issues of health reform are the elimination of pre-existing conditions restrictions and tax penalties for people who chose not to be covered and employers who do not offer health coverage. Employers with over 50 employees who do not offer coverage will have to pay a fine of $3,000 per employee if at least one employee receives a government subsidy and if the employer does not contribute at least 60 percent of the employee's cost. Employers must offer "free choice vouchers" to employees to purchase insurance on government-enforced exchanges.  Employers with 200 employees must automatically enroll employees. The value of health benefits must be reported on W-2s. Generous benefit plans that cost over $10,200 for an individual will have to pay a 40 percent excise tax. The law requires break time for female employees to express breast milk at work for their nursing children.  Human resource managers are scrambling to figure out how to do this. 
Bureaucracy Runs Wild

Much like the FMLA, academics and legacy journalists argued strenuously for the health care law but did not consider  the bureaucratic complexity with which the Obama administration and the Democratic Congress were about to hamstring the US economy.  A professor of social services, Harold Pollack, circulated a letter in favor of the Obama health care plan in early 2010.  Numerous left-wing academics signed it.  But few of them will suffer from declining job opportunities and the shrinking economy that will result from the explosion in health care bureaucracy. 

In May 2010 SHRM's Lisa Horn described the health reform laws as "complicated."  On January 4, 2011 SHRM reported about the government's publication of "frequently asked questions". FAQs involved automatic enrollment, dependent coverage of children to age 26, standards for summaries of benefits, grandfathered health plans and the exemption of employers with fewer than 50 employees.  SHRM notes that the health reform laws will require that firms re-write their policies and employment manuals multiple times through 2014. Experts anticipate significant employee relations issues.  

There will be plenty of bureaucratic work and costs for left-wing lawyers and benefit managers.  The American economy will become ever less innovative at the same time.  And as the economy becomes less innovative, the average American's real wage will continue to stagnate.
*Mitchell Langbert is associate professor at Brooklyn College-CUNY. He blogs at http://www.mitchell-langbert.blogspot.com

Wednesday, January 12, 2011

New Year's Resolution: Ethics Is HR's Business

I submitted the following article to the American Institute of Certified Public Accountants' newsletter, AICPA Career Insider

New Year's Resolution: Ethics Is HR's Business
Mitchell Langbert,  Ph.D.

In the last two years several leading institutional players,  to include the Society for Human Resource Management, the Business Roundtable's Institute for Corporate Ethics, and the Deloitte accounting firm have noticed that trust between firms and their employees has flagged and that trust can, or ought to be, viewed as an ethical issue.  A 2009 Business Roundtable and Arthur W. Page Society survey found that the public sees a power imbalance that enables business to abuse its position.  The Business Roundtable recommends renewal of public trust in business through common sense:  the production of quality services; steady jobs in healthful environments; and reasonable stockholder returns. Last year, Deloitte found that of one third of Americans who plan to seek a job, 48 percent cite a loss of trust due to poor communication as a reason.  Deloitte notes that lack of trust affects talent management.  Moreover, competence and ethics go together.  91% of employees say that they are more likely to be ethical when they fit their jobs. 

But, if we are to believe Adam Smith's Theory of Moral Sentiments,  trust is, as statisticians might put it, a dependent rather than an independent variable. That is, trust depends on good ethics. It is not good ethics. As Smith argues[1]:

Our rank and credit among our equals…depend very much upon … our character and conduct, or upon the confidence, esteem and good will which these naturally excite... 

Three virtues, in Smith's view, constitute good character:  prudence with respect to our dealings, justice and beneficence with respect to others. Self-command is needed to ensure that knowledge of the right thing to do is accompanied by ethical action.[2] In these claims Smith follows the ideas of Plato, Aristotle and the Stoic philosopher Zeno, who emphasize virtue and self-restraint.  Smith distinguishes between commutative justice, according to which which we do no harm to others and distributive justice, according to which we give due credit. Much as Deloitte found, Smith argued in 1759 that a good life-work fit relates to ethics[3]:

(W)e are said to do injustice to ourselves when we appear not to give sufficient attention to any particular object of self-interest. In this last sense, what is called justice means the same thing with the exact and perfect propriety of conduct and behavior, and comprehends in it not only the offices of both commutative and distributive justice, but of every other virtue, of prudence, of fortitude, of temperance.
 
Smith writes in the Aristotelian tradition of virtue ethics, according to which virtues or competencies ground ethics.  In Nicomachean Ethics  Aristotle claims that virtues, especially prudence, self-command, courage (risk neutrality) and most of all justice  need to be applied through practical wisdom and deliberation, which are similar to what Daniel Goleman has called emotional intelligence.[4]


Virtue Ethics as Emotional Intelligence

The 18th century Enlightenment philosophies of David Hume and Immanuel Kant created a gulf between ethics and competence.  Hume claims that there is no logical foundation for ethics and that ethics is pure emotion. Kant claims that ethics is based on practical reason.  In the late twentieth century Alisdair MacIntyre[5] pointed out that the attempt to absolutely ground ethics in emotion or reason through sweeping philosophical systems lead to Nietzsche's nihilism and rejection of ethics altogether.  Nietzschean nihilism is reflected in the evolution of management thought through writers like Chester Barnard, who claims that morality is malleable and grounded in the executive's ability to manipulate employees' emotions.[6] Arguably, the Nietzschean mindset has influenced fallen managers and investment bankers like Jeffrey Skilling and Ivan Boesky.  It is unfortunate that the Nietzschean view has come to be associated with business and capitalism when capitalism  more directly rests on the benevolent self-interest of Smith and Aristotle. 

Once the gulf between emotional intelligence and practical wisdom is bridged Milton Friedman's claim that business's job is to produce a profit in opposition to corporate social responsibility falls by the wayside.  It is business's job to produce a profit consistent with ethical norms, justice and benevolence. Neo-classical economic theory makes similar implicit assumptions.  The equation of wage and marginal revenue product echoes Aristotle's concept of justice as proportion, and some philosophers even have controversially claimed that Aristotle was the first to enunciate marginalist economic theory.   Given the free market's foundations of justice and benevolence,  illegal or unethical behavior is as bad as losing money.  We have seen this demonstrated again and again in government and business.  The failures of Robert Moses and Robert McNamara in government were failures of competence.  The failures of Long Term Capital Management and Arthur Anderson were also so.

Ethics Is a Human Resource Function

The Sophists were the first to claim that ethics is relative and can be viewed as a teachable competence.  Plato argued that ethics has a natural foundation and it depends on universal Ideas.  Aristotle agreed that ethics depends on natural foundations but that it needs to be applied particularly, to the appropriate circumstances, and the competencies on which it depends are subject to what March and Simon, 2,400 years later, call bounded rationality.[7]  Smith saw his ethical system as consistent with the Aristotelian view. Several Enlightenment philosophers, most importantly Kant, rejected Aristotle's emphasis on judicious contextual and particular application of virtues and argued for Platonic ethical universality.  This has the unfortunate effect of banishing ethics from profit seeking because there are always exceptions to universal ethical laws.  The exceptions debase ethical currency and managers adopt Nietzschean nihilism. In contrast, Smith grounded his ethics on virtue and competency and does not make universalistic claims.  Smith argues that culture modifies underlying natural ethical patterns.

Human resource managers are expert in understanding and applying competencies.  Job analysis is the gathering of valid information about jobs including job specifications or tasks and job criteria or competencies.  In fact, the trend in job analysis has been away from emphasis on duty or task and toward competency.  Yet, the classical Greek word for competency, arĂȘte, is the same as the word for virtue.  Hence, in Aristotle's view (if Aristotle could have imagined a world based on technology and trade, neither of which he saw as important or even desirable beyond a small degree) human resource managers are the arbiters of virtue in the corporation. Moreover, there are universals but they are modified by circumstances.  Universal rules need to be tempered with judgment and deliberation.

More to the point, justice is the fundamental competency on which all job responsibilities are based. Its application is imperfect and subject to cognitive limits on rationality. Practical deliberation and judgment are crucial to all professional and managerial jobs but without justice cooperation and coordination necessary in large firms are impossible.  Hence, HR managers ought to be the advocates of justice in the corporation.  For upon justice prudence, benevolence and all other competencies as we define them today depend.


[1] Adam Smith, Theory of Moral Sentiments. Boston: Wells and Lilly, 1817.  Volume II, p. 26
[2] Ibid., p. 65
[3] Ibid., p. 112
[4] Daniel Goleman, Emotional Intelligence: Why It Can Matter More than IQ. New York: Bantam Books, 1995.                             
[5] Alisdair MacIntyre, After Virtue: A Study in Moral Theory. Notre Dame, Ind.: University of Notre Dame Press, 1981.
[6] Chester Barnard, Functions of the Executive. Cambridge, Mass.: Harvard University Press, 1938.
[7] James G. March and Herbert Simon, Organizations.  New York: John Wiley and Sons, 1958.

It's Elementary, Watson: Chuck Your Copy of The Week

I had to wait in a doctor's office this afternoon during my wife's visit.  I opened a magazine called The Week.  I hadn't read any legacy media publication in eight months.  The Week selects articles from other legacy media, claiming to offer "the best" of the week. I was surprised at how bad The Week's material is.  It is not just dumb and lacking in perspective. The ideological tenor is shrill.  The writers are so badly educated that they cannot develop coherent arguments.  Republicans, in The Week's opinion, are ignorant fools who do not believe the obvious scientific proof of global warming. Of course, that proof is not discussed. Nor do the editors seem to know what the scientific evidence is. They read that it exists in The New York Times and anyone who disagrees with The Times is, in their view, foolish.  In short, it is The Week's editors who are fools.

They certainly think they know what science is.  In their opinion there is a consensus of opinion, developed by The New York Times, and anyone who disagrees with the consensus opposes science. They are unfamiliar with elementary concepts such as falsifiability.  More so, The Week does not provide news.  Because the editors lack the education to grasp what drives current events, they are incapable of discussing current events coherently.  The information they offer is a tale told by an idiot.

The Week reminds me of Sherlock Holmes.  Recall Holmes's remarks in A Study in Scarlet and elsewhere that one should avoid mental clutter in order to do one's job efficiently.  My recollection is that he also says somewhere that he does not know that the earth revolves around the sun and that he intends to forget the fact as soon as possible.  The legacy media makes me feel like Holmes. The information it provides is meaningless; the incoherent chatter of owls and cuckoos, asses, apes and dogs.

I attended the Kingston-Rhinebeck Tea Party last night. About 30 people were present. The discussions were lively. I spoke to the group about organizing letter writing and publicity campaigns.  Many people are interested in taking part. The founder, Tom Santopietro, mentioned that the teachers' unions in New York have over 400,000 members (disclosure: I am a member of the New York State Union of Teachers, NYSUT).  The Tea Party has its work cut out.  But a gradual organization can begin to form a meaningful resistance to the government-Wall Street nexus.  I am being optimistic, of course.

I got a gift certificate to Applebee's and my wife and I had dinner there tonight. The waitress was from Albuquerque and she told us that houses in Taos, one of my favorite places, cost about $180,000 and condos cost somewhat less.  The question occurs to me, why bother with New York?  I don't have an answer other than that my job is here and I spent ten years rehabbing my beautiful home.  Other than that, New Mexico seems like a good option.

Tuesday, January 11, 2011

Howard S. Katz, RIP

My old friend and former business associate, Howard S. Katz, has died according to Kitco.com and Zionist Gold Report (h/t Glenda McGee).  Zionist Gold Report cites an obituary in the Nashua Telegraph.

>According to an obituary in New Hampshire’s daily newspaper, Nashua Telegraph, Howard S. Katz, a long-time commentator on Kitco.com passed away on Dec. 23, 2010 at the age of 72. Howard was a financial analyst and editor-in-chief of The One-Handed Economist and the former Gold Bug Newsletters. He was born in Providence, and had lived in New Hampshire for 10 years.

>His biography on Kitco.com states that he was one of the early gold bugs of the late ‘60s and ‘70s, turning bullish on gold in 1965. He turned increasingly skeptical about gold as it mounted its final rise in 1979, and he called the top after the close on Jan. 21, 1980 (with gold at $825.50/oz.). Howard was also the head of the Committee to Establish the Gold Standard and worked with Congressman Ron Paul for the passage of the American eagle gold coin bill of 1986.

>He published several newsletters; The Speculator (1964- 1972), The Gold Bug (1973-1986) and The One- handed Economist (1996-present). He is also the author of three published books on money: The Paper Aristocracy (1976), The Warmongers (1979) and Honest Money – Now! (1979).
 
In the late 1970s, before I moved to California to attend the UCLA Graduate School of Management, I was the treasurer of Katz's Committee to Establish the Gold Standard.  At the time Howard lived in a small apartment on Fourth Avenue in lower Manhattan.  I worked with him on his congressional campaign bid in Manhattan (I may have been  his only staff member).  I was learning to drive at the time, and Howard gave me a few tips.  Although he came in near last in the race he spread the pro-gold message.  Ronald Reagan was elected a year or two later.  The end of the late 1970s' high inflation, as Howard liked  to emphasize, was the product of the Carter administration, not the Reagan administration. President Carter had appointed Paul Volcker, who adopted monetarist Fed policies.  Volcker's policies popped the Keynesian stagflation of the 1970s that followed upon Richard M. NIxon's pronouncement that “we are all Keynesians now”; the out-of-control public sector unionism in New York and elsewhere; and the monetary policy-induced inflation of the late 1960s and 1970s. But, as Howard also frequently emphasized, Reagan renewed the inflationary pattern through the Keynesian supply sider argument.

Howard had been a member of the Free Libertarian Party in Manhattan prior to my joining it in 1977.   A few years ago Howard gave me his unpublished manuscript Wolf in Sheep's Clothing that I have yet to review. I had reviewed a draft of his revised "Paper Aristocracy" which I do not believe was re-published.  Paper Aristocracy is out of print but sometimes used copies are available at Amazon.com.

I recall clearly his visiting Congressman Ron Paul in the late 1970s  to discuss gold issues with him.  Hence,  Katz has influenced Paul's pro-hard money ideas today.  Katz unquestionably has influenced national debate on monetary policy and renewed public concern about the Federal Reserve Bank. 

Before any one else in post World War II America, Katz emphasized the Jacksonian insight that the central bank is a redistribution mechanism from poor to rich.  Hence, the Keynesian claim that the Fed helps labor and small business is pap.  He claimed that economists and advocates of progressivism fall into two categories: the smart dissemblers who are manipulating the system to their and Wall Street's advantage, such as Alan Greenspan, and the vast majority of useful idiots, economists who actually believe the Keynesian theory.

Howard made similar points about the Fabian socialism of people like Sidney and Beatrice Webb, namely, that their socialist ideologies were a "wolf in sheep's clothing."  He argued that there are two categories of advocates of destructive socialist policies: those who actually believe them, the majority of useful idiots, and those who understand their vicious implications and use them to gain power.

I lost contact with Howard when I attended UCLA in 1979.  In 2004 or so in the face of impending gold price increases I spent several weeks attempting to renew contact and tracked him down in Nashua.  At the time, he published his newsletter, the One Handed Economist, via Xeroxing.  I suggested that he start a small website, which we did after a year or two of deliberation.  He asked a different friend to run his website about two years ago. Also, he changed the name to "the Gold Speculator."

Howard had a tremendous effect on many libertarians' and gold advocates’ thinking.  He will be sorely missed.