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Tibor Machan on Freedom, the US Economy, Business and President Obama's Growing Market Prejudice
By Anthony Wile - June 03, 2012

Introduction: Tibor Machan is currently Professor Emeritus, Department of Philosophy, Auburn University, Alabama, and holds the R. C. Hoiles Endowed Chair in Business Ethics and Free Enterprise at the Argyros School of Business & Economics, Chapman University. He is also a research fellow at the Hoover Institution, Stanford University. Machan, who earned BA (Claremont McKenna College), MA (New York University) and Ph.D. (University of California at Santa Barbara) degrees in philosophy, has written numerous books and papers in the field of philosophy, including on issues surrounding the free market. Machan was selected as the 2003 President of the American Society for Value Inquiry, and delivered the presidential address on December 29, 2002, in Philadelphia, at the Eastern Division meetings of the American Philosophical Association, titled "Aristotle & Business."

Daily Bell: You are a most thoughtful analyst of liberty. In this interview we want to delve into freedom, how it works and why it is preferable to the kinds of command-and-control social structures that are so often suggested in this day and age. We want to use your recent editorials as a jumping off point and we'd like to start with the issue of business itself. Why are more and more top business people so disparaging of their own professions and welcoming of government interference?

Tibor Machan: That's a good question. I've written on this in the past. One example that comes to mind is Ted Turner who traveled to Washington to ask Congress to "shove down the throats of broadcasters" a TV violence rating system. Then there's Donald Trump who not so long ago wanted the government to put a tax on Native American casinos. It didn't occur to Trump to ask the government to lighten his tax load – or taxes generally. No, he just wanted to extend taxes to a new population!

Turner's advocacy of government censorship of broadcasting is horrible. He wanted the First Amendment to be voided even though he had built a business around its successful implementation and the protections it provided.

Turner and Trump are good examples of self-hating businesspeople who take advantage of freedoms in the US but then want to deprive others of a similar opportunity. Multiply their attitude by a thousand, perhaps a million. It's a kind of modern disease, in that such for one reason or another never seem to think about the ramifications of their actions – or how they will affect the prospects of their children. It's really sad, and immoral as well, in my view.

Daily Bell: Can you put that in the context of the recently bungled Facebook IPO? Was that a group acting in their own selfish self-interest? Is there a parallel?

Tibor Machan: There is certainly a lot of complaining about the Facebook IPO … but no, I don't think it is the same. I am somewhat skeptical about all these claims regarding market manipulation. The bottom line is that a relationship has been consummated between shareholders and management and now it is time for the Facebook officials to get to work and build the business they've been paid handsomely to create. Shareholders have entrusted Facebook with their wealth and now Facebook technologists will decide what to do with their newfound resources. Hopefully, there will be ROI but there is no guarantee, of course.

Daily Bell: Let's move on to another topic of interest, the case of George Zimmerman. You made a point in an editorial about Trayvon Martin's use of a hoodie and how that might have affected Zimmerman. But in doing so you were trying to make a larger point as well.

Tibor Machan: Yes, actually it was Fox reporter Geraldo Rivera's perspective. He mentioned that hoodies tend to cover up a person's face, much the way large sunglasses do. That is, it could be suggested that the use of a hoodie might have made Zimmerman even more suspicious than he already was.

Of course, it would be politically incorrect to mention this, which is probably why I haven't read any analysis of Martin's use of a hoodie. It may also be sending a message of defiance of public authority, though I'm not trying to connect hoodies to crime or criminal actions. But the use of a hoodie and the lack of ANY commentary about it other than Rivera's is just one more aspect of why people are tuning out on the mainstream media. Its political correctness is a kind of sickness.

The Martin shooting, no matter how it turns out, was a tragedy for the Martin family and for the larger community. But it is also going to be a tragedy, or at least a debacle, for the mainstream media, which is once again, generally speaking, proving its incompetence and bias.

Even the apology of Zimmerman was spun in a totally inaccurate way. An apology implies that Zimmerman was taking responsibility for doing something wrong. It wasn't an apology. It was an acknowledgement. He said, "I am sorry for the loss of your son." But he didn't admit guilt. He didn't start down the slippery slope toward confession. He expressed sorrow to grieving parents.

It's really incredible that his statement can be reported as an apology of sorts, with the added implication that it is a kind of confession. But this case seems to me to have significant political overtones anyway, starting with President Barack Obama's statement that if he'd had a son, that individual would "look a lot like Trayvon."

Daily Bell: We've written about this ourselves. The Obama administration seems intent on demagoguing a number of issues, but our feeling is that he doesn't have much to run on so he's going to run on issues having to do with race or gender, anything to avoid running on his economic or foreign policy record.

Tibor Machan: I agree … though he's like any politician in that regard. He'll run to his strengths, so we shouldn't be surprised. All politicians seem to be pragmatists, certainly in this day and age. But the Obama administration even more than usual has elevated pragmatism into a kind of operative philosophy.

Daily Bell: In the past you've mentioned a friend of the administration, Cass Sunstein …

Tibor Machan: Yes, Sunstein's main claim to fame as a "public intellectual" is his idea of "nudging" or "libertarian paternalism." He's an expert at using government to create incentives that shove people with greater or lesser force toward activities that are said or perceived to be desirable. His ideas reference research done by late Harvard behaviorist psychologist, B. F. Skinner. It's behavior modification, not to put too fine a point on it. I recently made the following comparison:

Suppose my neighbor wants his guests to stop wearing shoes in his home, so he leaves bits and pieces of suggestions to them as they enter it that lead them to take off their shoes and proceed into the home only in socks. OK, but they need not visit him in the first place. So when they realize they're being manipulated into doing stuff they don't want to do – say, showing people the condition of their socks – they can just not visit at all or take some evasive action. There are numerous such situations in our lives, when those with whom we interact desire for us and try to induce us to act in certain ways and we can either comply or opt out.

The difference between private sector nudging and public sector nudging, however, is that with governmental nudging, force is involved. There's no escape from the nudging.

Daily Bell: Example?

Tibor Machan: Around the country now you have to step outside an establishment, even a bar, if you want to smoke. This is a kind of nudging but it is not one that gives you a choice. If you don't submit to the nudge and take your cigarette outside, you can be fined or even go to the jail. That's some nudge.

Daily Bell: An incarceration kind of nudge.


Tibor Machan: But it's the kind that Sunstein seems to favor. It is part of a larger philosophy that I find highly offensive. It has to do with Sunstein's certainty that government itself is not just the protector of rights but the provider as well. This approach predictably discards one of the principles of the Founding Fathers' exceptionalism when it came to the US. They enshrined the idea – rhetorically anyway – that natural law ought to be respected when it came to government power.

You can find this reflected in the Declaration of Independence that speaks of a natural right to life, liberty and the pursuit of happiness. As I wrote, "they are unalienable so long as we remain human!" But Professor Sunstein co-authored a book, The Cost of Rights: Why Liberty Depends on Taxes, that argues almost exactly the reverse of what Thomas Jefferson and the founders believed.

Sunstein is of the opinion that the state is not the guarantor but the fount of all human rights. This moves the conversation about liberty back a good deal. He basically gives monarchs, czars and dictators a free pass. The head of state has the power to determine what's good for us, even though he doesn't bother to justify it with any philosophical underpinning that I can see. For Sunstein and others like him, the state's access to force and expertise with brute physical power is justification enough.

Daily Bell: Doesn't this touch on a larger issue having to do with a basic lack of respect for the organizational elements of the free market itself and its ability to structure elements of a livable society far more efficiently for the most part than government?

Tibor Machan: Obama is certainly the child of thinkers who have influenced him – people like Sunstein, unfortunately. He has said, for instance, that he believes in job creation rather than wealth creation, as if one could have either/or in a still relatively free society.

It's not just Obama, of course, but the entire milieu in which he moves and functions. I've written about this extensively. There is a portion of the American intelligentsia that is just possessed by the notion that the marketplace is intrinsically evil − writers like John Grisham, directors like Oliver Stone, playwrights like Arthur Miller. And people like Sunstein as well. The goal of all these people is a kind of command-and-control economy that will allow them to organize the world according to their vision of what the world should be.

Daily Bell: Markets get in their way.

Tibor Machan: Markets are messy exactly because their workings and outcomes cannot be predicted. Many of the West's leaders and leading thinkers are uncomfortable with this kind of process. It is human nature to want one's prejudices reflected and confirmed by governance. Human nature actually hasn't changed in that regard. To some degree a contempt for commerce is hard-wired into the system of any ruling elite.

Plato bashed traders in his dialogues, and Aristotle didn't have much use for them either. But is business really a lowly profession? Is the pursuit of commerce somehow distasteful?

Aristotle thought a life devoted to contemplation was ideal so you're not going to find much admiration for practical, wealth-creation types there. And his attitude is with us still. Theoreticians, not practical people, get the headlines and Nobel Prizes. We've inhaled the idea that only the life of the mind is worthwhile, or something to be emulated. Men of action who seek worldly wealth and fame are regarded with admiration if they succeed – but there's something else as well, a sense that such worldly ambition is a not so admirable as a life of the mind.

This is untrue, of course, and even immoral. There is a great deal to be said for commerce and enlightened self-interest generally. Without people in business, our quality of life would be no better now than it was millennia ago when we were still living in caves. Archeologists now say that cities were created for purposes of trade and that civilization evolved to cultivate a critical mass of markets.

Charles Baudelaire once said that that "Commerce is natural, therefore shameful" but, in fact, that is just the point. Commerce is part of a larger natural law – we're commercial animals – traders – and there is nothing shameful about it. Those like President Obama and his advisors feel they are above such things, though I notice that Obama usually finds the business class more attractive as new election campaigns draw close. Then he generally stops the wealth bashing, at least for a while.

Daily Bell: That seems to be happening now, though we read he's not getting as good a reception from his donors as he once did.

Tibor Machan: It's astonishing how many donors he does still have given his general attitude toward business. I've pointed out that he once said, "When you're president, as opposed to the head of a private equity firm, your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot."

This all sounds very presidential but when you unpack it, it's downright scary. He is not the Czar of US economic affairs, though he seems to think he is. In the deepest sense, he's in office to administer the laws that matter most, having to do with everyone's rights to life, liberty, and pursuit of happiness. I put it this way:

Just like the cop on the beat, the task isn't to get everyone to where he or she is going but to secure everyone's liberty to go wherever he or she wants to go, including, if that's how the citizenry chooses, staying put. (Freedom has no particular goal; it has to do with making it possible for citizens to choose their goals, so long as these are peaceful ones.)

You see? The cop is there to help secure your freedom. But it is up to YOU where you want to go. It is not up to the officer to consult with you about your destination. That is your business. He is simply there to help secure your right to travel as you wish to.

I think President Obama and too many other lawmakers are mightily confused about this point. Over time the boundaries have blurred and today Obama really does believe it's his business to consult with you on your goals and how you are going to travel to your destination – and even why you are headed there.

Daily Bell: He's becoming a "minder" rather than a public servant.

Tibor Machan: There's something else as well. As Obama believes that wealth creation is somehow demeaning, he's biased toward a society that discourages wealth creation. He's not just going to mind society; he's going to actively take it in the wrong direction. I've studied his thinking and actions, and it seems evident to me, for instance, that he really believes wealth can be created by taking taxes and putting them into public works.

Of course, this doesn't work very well for the most part because it is almost impossible to know what, if any, public works are actually going to create long-term jobs. But he really believes that if he throws enough money at government-created enterprises that some of it will stick.

What he's trying to do is replace the market itself – which he finds messy and distasteful – with the predictable command-and-control approach of government-managed "economic" policies.

Daily Bell: He seems to find the military-industrial complex attractive in that regard.

Tibor Machan: Yes, another good point. The military-industrial complex inhabits a gray area between government-initiated job creation and the private market. Military enterprises are attractive to bureaucrats generally because they are not strictly speaking public sector creations, but they are much more controllable in many ways than the usually unpredictable private sector.

Daily Bell: Of course, as Randolph Bourne wrote famously, "War is the health of the state."

Tibor Machan: The state does have a role in defense of the nation but the US government has gone far off course in this regard. There were strictly limited functions laid out in the Declaration of Independence and the US Constitution as regards military procedures. Government was to be restrained and act only to defend the country in the face of a clear and demonstrable danger.

Think how far we've drifted away from that. Just as the government interferes endlessly in the lives of the average American citizen, so it does overseas as well. This is definitely a disease of modern liberalism, in my view, the idea that government can always "do it better." It provides justification for any kind of meddling.

What Obama and modern bureaucrats generally have "evolved beyond" is the whole idea of limited government. President George Washington warned about foreign entanglements and built his farewell address around limited government. The idea was that you couldn't attack another country simply to gain a competitive or industrial advantage. If you coveted a resource, you had to trade to receive it – not invade.

But the trouble is, once a country abandons self-restraint and begins to act in a bullying way, it's very difficult to return to limitations. For one thing, it will have developed a class of individuals that will have a stake in justifying the status quo. These individuals will be apologists in a way for violence.

Even more importantly, the country indulging in this sort of action can be seen to have lost its collective moral compass. When it comes to the US, a country that has traditionally been an example of restraint, the world is now a more dangerous place because rogue regimes see justification for their own violence in the example the US is now setting. The US is regularly providing justifications for international thuggery now. This has both economic and security-oriented ramifications.

Daily Bell: From your perspective, then, the US government under Obama has lost its way both economically and militarily.

Tibor Machan: It's not just under Obama. It's larger than any one administration. It's what the ancient Greeks used to call sophistry, a redefinition of what freedom is. That's what makes it so pernicious. Now, there are, admittedly, several senses of the term "freedom" in use. In particular, there is negative and positive freedom. The former is strongly associated with the American political tradition – spelled out, for example, in the Declaration of Independence and the Bill of Rights – the latter with the ideas of FDR's New Deal.

The first means being free from the dictates of others; the second means being supported by those dictates and hopefully advantaged. The free society as understood by classical liberals attempts to secure the ability to be free from interference. Modern liberals have stood this idea on its head. Today's liberalism stresses ways that government can affirmatively provide "rights" via various methodologies of confiscatory taxation. Freedom in the classical sense meant an absence of coercion. Freedom in the modern sense means the state is to be employed as a guarantor and facilitator of one's life and even one's lifestyle. I find this to be a big problem.

Daily Bell: Do you see any solution?

Tibor Machan: Well, I'm afraid it is not going to come via the political process at this point, though perhaps the election of Congressman Ron Paul might have helped. That seems more and more unlikely. What it is going to take is extensive education to reacquaint people with limited government and the perils of redefining freedoms and rights the way modern liberals want to define them.

Daily Bell: Sounds like we have our work cut out for us. Is the Internet helping?

Tibor Machan: The Internet is providing us with a very good tool, a kind of megaphone, but ultimately it is still up to us, those who believe in limited government and personal freedom, to state the message and offer the education.

Daily Bell: You've certainly been doing that, Dr. Machan. Thanks for sitting down with us again and for providing so many insightful articles about freedom.

Tibor Machan: Thanks for having me back.

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