The Lie of Moral Mercantilism
By Anthony Wile - May 24, 2014

Three news items caught my attention recently. They speak to mercantilist immorality, and I'll explain more clearly what that means toward the end of this article. First, let's look at the news items.

An article entitled, "Car Exec Loses Money On Electric Cars, Says 'I Hope You Don't Buy It,' " reports that the CEO of Fiat Chrysler has indicated that he is selling electric cars, but only because he has to. The US government basically mandates the production of the cars and the price at which Fiat Chrysler can sell them.

This is a shame because Fiat is struggling to keep Chrysler afloat, and being forced to sell cars at a loss is no way to improve the bottom line.

Here's more from the article:

[The Exec] said he hopes that people don't buy his company's electric car, the Fiat 500e, which he is forced to sell at a loss because of state and federal mandates.

"I hope you don't buy it because every time I sell one it costs me $14,000," Sergio Marchionne told the audience at the Brookings Institute during a discussion of the auto bailout. As head of Fiat in 2009, Marchionne stepped in to help guide Chrysler through the auto-bailout and out of bankruptcy.

"I'm honest enough to tell you that I will make the car, I'll make it available which is my requirement but I will sell the limit of what I need to sell and not one more," said Marchionne. Fiat Chrysler produces two Fiat 500s …

In his candid remarks, Marchionne blamed regulations set in place in California and by President Obama. "Because of California and there's mandates which keep on moving the impositions back on car makers to produce cars that are zero-emission vehicles," said Marchionne. "The other one is because of the initiative that was put in place by Obama back in 2011 with the new emission rules which are effectively binding the industry until 2025."

A second article I noticed is entitled, "Elon Musk says he lost a multi-billion-dollar contract when SpaceX didn't hire a public official," and can be found at QZ.com.

Musk claims that his company SpaceX was pushed out of the running for a big space-industrial contract because SpaceX refused to indicate that it would hire the government official running the bidding process at the time.

Here's how the article explains:

SpaceX, Musk's orbital transport firm, has been competing for a major contract to put US Air Force satellites in orbit. With a dearth of private investment in space and the end of the US space shuttle program, SpaceX has quickly leapt to the fore of aerospace firms with the help of contracts from NASA to provide re-supply missions to the International Space Station and develop a manned spacecraft to fly astronauts there …

In a no-bid process, United Launch Alliance (ULA), a joint venture of Lockheed Martin and Boeing, received a bulk contract worth billions of dollars for 36 rocket launches earlier this year, despite plans to introduce more competition and other cost-saving measures.

Musk's tweets yesterday focused on what happened next: The man who awarded ULA the contract, defense official Roger "Scott" Correll, was hired soon after his retirement to handle government relations at Aerojet Rocketdyne, a company that builds rocket engines for ULA. Musk didn't mince words online when offering his interpretation of events:

"[It's] likely AF official Correll was told by ULA/Rocketdyne that a rich VP job was his if he gave them a sole source contract … "

The final item is one we've mentioned before and has to do with the sudden resignation of a prominent climatologist who came under a terrible attack after he joined a think tank that is mildly skeptical of the warmist position when it comes to climate change.

The resignation was widely reported. One of the most thorough explanations is seemingly provided by Der Spiegel, in an article entitled, "A Heated Debate: Are Climate Scientists Being Forced to Toe the Line?"

Here's how it begins:

Lennart Bengtsson says he was pressured by colleagues to step down from his role at the controversial Global Warming Policy Foundation.

After joining a controversial lobby group critical of climate change, meteorologist Lennart Bengtsson claims he was shunned by colleagues, leading him to quit. Some scientists complain pressure to conform to consensus opinion has become a serious hindrance in the field.

News that Lennart Bengtsson, the respected former director of Germany's Max Planck Institute for Meteorology, had joined the Global Warming Policy Foundation (GWPF), sent shockwaves through the climate research community. GWPF is most notable for its skepticism about climate change and its efforts to undermine the position of the United Nations Intergovernmental Panel on Climate Change (IPCC). The tremors his decision sent through the scientific community shocked Bengtsson.

The scientist said colleagues placed so much pressure on him after joining GWPF that he withdrew from the group out of fear for his own health. Bengtsson added that his treatment had been reminiscent of the persecution of suspected Communists in the United States during the era of McCarthyism in the 1950s.


The reason to present these articles is to re-emphasize just how common mercantilism is in the modern era: The use and the abuse of the force of the state to advance personal and corporate agendas is perhaps the most significant challenge the West faces in the 21st century. Every other abuse can be seen as flowing from it.

In the first example, above, we can see that Fiat Chrysler is being forced to produce electric cars at a loss. Somebody is no doubt directly benefiting from this coercion because certainly if Fiat Chrysler could help it, it wouldn't be producing loss-making vehicles.

In the SpaceX example, the benefits of corruption are clearer. Apparently, a government official steered a contract away from SpaceX because the official had been guaranteed a lucrative position by the company that ultimately won the contract.

The third example shows clearly that even distinguished scientists who try to go against common, warmist wisdom are subject to scurrilous and powerful attacks. In this case, the attacks were so vicious that Dr. Bengtsson felt he had no choice but to resign and cede the field of debate.

Just to make my point clearer, I'll mention one more example, one provided via another article at QZ.com and entitled, "Are there major mistakes in the bombshell economics book of the year?"

The article explains the following:

Thomas Piketty's Capital in the 21st Century has been at the center of the economic conversation this year, raising questions about inequality and what to do about it. While disagreements over his conclusions abounded, nearly everyone agreed that collecting the historic data underlying the work was an important accomplishment.

Now, the Financial Times' Chris Giles reports errors and strange practices in Piketty's spreadsheets, akin to the errors found in a similarly conversation-defining publication, Carmen Reinhardt and Ken Rogoff's working paper "Growth in a Time of Debt".

Piketty collected historical data from numerous wealthy countries to assemble his accounting of centuries worth of national wealth. But data can be spotty and imprecise, so he needed to adjust raw data for the book. Giles, examining his spreadsheets, finds transcription errors, adjustments that don't add up, and unexplained assumptions about inequality data in years without much information.

While you should read Giles' whole article for all the details (it's not behind the FT's usual paywall), here's an example to provide the flavor: When constructing an average measure of European wealth inequality, he does not control for population but uses a simple average across countries, which would distort the final product …

We covered Piketty's book not long ago and didn't think much of it. You can read the article here:

Corporatism Finds Its Pied Piper

An excerpt from our analysis of a Reuters article that reported on his book:

The [Reuters] article proposes that it is necessary to confront the growing rage of ever-poorer populations with solutions that will produce increased income equality. … People generally should beware of research and solutions that call for even MORE government involvement to combat the immense problems that the bureaucracy has already created.

Interestingly, Piketty's "research" does not seem to extend to proposing solutions, though the Reuters article makes it clear that it is governmental action – and regulations no doubt – that will have to provide the antidote. Nothing else will do.

We were not surprised by Piketty's analysis, nor the inevitable indications that government must provide the antidote to the current levels of wealth polarization taking place. It is probably the reason that he was apparently sloppy with the data. Propaganda is always the primary concern when it comes to abetting the mercantilist meme.

In fact, it is ever thus. Under the guise of democratic activism, an agenda is surely being advanced that inevitably and consistently supports an ever more centralized sociopolitical and economic environment worldwide. What we call mercantilism is constantly used to advance this agenda, and the objective for the most part is to drain away freedom of choice.

  • Electric cars with their lack of power and long recharging timelines are not as yet competitive with fuel-driven autos. They actually REDUCE the freedom of travel that has been provided to the average individual via gasoline-powered vehicles – and one can anticipate further such reductions as the electric-car meme evolves.
  • The concentration of power in the hands of a few providers within the military-industrial complex is well known but its anti-freedom impact is less well understood. Basically, this "old boy's" network concentrates capital with individuals and corporations that never question its agenda. This is a main reason for the West's ruinous, serial wars – which are gradually bankrupting the West as it endeavours to spread "democracy" around the world.
  • The warmist attack on carbon-based energy is well known by now, but the vituperation with which it is prosecuted behind the scenes is less well known. Hopefully, the resignation of Bengtsson will shine a strong light on what is really going on. Warmist solutions promote the implementation of a tremendous level of social and economic control that will surely erode living standards and freedom around the world.
  • Finally, there is Piketty with his painstaking (though apparently inaccurate) analysis of how capitalism is consistently expanding wealth inequities. Presumably, the solution is to be more government-enforced "leveling" even though it is government itself – via central banking and taxation – that is creating the inequities in the first place (not "capitalism," as Piketty contends).

Each of the above examples indicates a clear agenda at work, one that consolidates power at federal levels in the hands of bureaucrats. What is not mentioned is that the West's powerful governments are evidently and obviously subject to behind-the-scenes pressure by those intent on further globalization. Government power is merely a tool (a useful one).

We've advanced the idea that it is immoral for people who believe in freedom and free markets to support memes that are actively draining freedom from the world. Instead, we suggest that people select elements of free-market thinking to support.

One such, of course, is the decriminalization and legalization of marijuana that High Alert itself is involved in promoting. While it is true that the "marijuana meme" ultimately seems to be a power elite project, the current reality – one we want to support – is that barriers to the use of this historically beneficial plant are quickly crumbling.

When it comes to marijuana, mercantilism is lessening and freedom of choice is expanding, at least for now. That's a trend I'm "cultivating."

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