The Tom Woods Show, Episode 817: “Death by HR”

[Death by HR: How Affirmative Action Cripples Organizations]

The Tom Woods podcast on Death by HR is here, and on Youtube here. We ran overtime a bit, but aside from editing out some lapses and timechecks, they ran almost all of our discussion.

I invented a new term, “reverse regulatory capture,” to describe how HR culture has generally come to accept the attitudes of the progressive regulators and labor lawyers toward much of their work. One of my editors told me when I used “Stockholm Syndrome” to describe the phenomenon that many readers would not understand what that term meant — here’s an explanation. Often used when talking about Patty Hearst, the heiress kidnapped by the Symbionese Liberation Army in 1974 who adopted the revolutionary name Tania and participated in bank robberies with them. Responding to someone who holds power over you by first pretending to adopt their values to avoid punishments, and eventually coming to truly believe them. HR has complied with government enforcement so long that its thinkers and educational programs have adopted the progressive values of the regulators.

I took his introductory comments as a blurb for the book:

“Interesting, cutting, incisive book about what’s really going on in HR departments in companies across the country.” — Tom Woods, senior fellow of the Mises Institute and host of The Tom Woods Show


The book is currently available in: trade paperback from Amazon, Barnes and Noble, and other bookselling web sites; Kindle ebook format from Amazon exclusively; and as an audiobook from Audible and Amazon.

Death by HR: How Affirmative Action Cripples Organizations

Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations, in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat…. It is time to turn the tide against this madness and Death by HR is an important research tool…  All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.


More reading:

A Clinton Christmas Carol
“High Tech Under Diversity Pressure
Ban the Box, Credit Scores, Current Salaries: The Road to Hiring Blind
HireVue, Video Interviews, and AI Job Searches
“Death by HR” – Diversity Programs Don’t Work

Death by HR: Audio Introduction

Death by HR: How Affirmative Action Cripples Organizations

Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations,]

The Tom Woods podcast will be doing a segment on Death by HR tomorrow, and when they send me the link I’ll put it up here so my readers can listen. I wasn’t familiar with his extensive writings or his career, but it’s impressive as seen in his Wikipedia entry. His current web site is here, and his podcast show is popular — old episodes are here. He’s closely associated with Peter Schiff and has him on frequently as a guest, and he recently started the Contra Krugman podcast — which uses the New York Times columnist Paul Krugman’s partisan writings on economics and current affairs as a foil to discuss more realistic economic ideas.

I enjoyed our discussion and was gratified that he supports the book. I did a practice segment a few days ago that turned out well enough that I’m posting it as a good short introduction to me as the author and the ideas in the book. Tom’s interview segment will be 15 minutes or so, and directed to a few areas of interest, so the focus is different — there’s not too much overlap.

So enjoy and pass on the audio of Jeb Kinnison introducing “Death by HR.”


The book is currently available in: trade paperback from Amazon, Barnes and Noble, and other bookselling web sites; Kindle ebook format from Amazon exclusively; and as an audiobook from Audible and Amazon.

Death by HR: How Affirmative Action Cripples Organizations

Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations, in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat…. It is time to turn the tide against this madness and Death by HR is an important research tool…  All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.


More reading:

A Clinton Christmas Carol
“High Tech Under Diversity Pressure
Ban the Box, Credit Scores, Current Salaries: The Road to Hiring Blind
HireVue, Video Interviews, and AI Job Searches
“Death by HR” – Diversity Programs Don’t Work

“Death by HR” – First One-Star Hatchet Job Review!

 

Death by HR: How Affirmative Action Cripples Organizations

Death by HR

[Death by HR: How Affirmative Action Cripples Organizations, available now for Kindle and itrade paperback.]

Anyone who has written a book even mildly critical of the Progressive Conventional Wisdom has experienced getting negative reviews attacking the book to shore up the political beliefs of the reviewer. So here’s the first negative review at Amazon for Death by HR:

1.0 out of 5 stars
Nonsense
By Bryce on December 17, 2016

The argument that HR departments consist of women and minorities and for that reason force companies to hire women and minorities is unsupportable, as is the view that there’s something wrong with integrating a business. Forbes, McKinsey, and the Harvard Business School all agree that diversity is a key driver of internal innovation and business growth.

The argument that hiring women and minorities is problematic is based entirely on the premise that white males are better workers than women and minorities. Only insecure white males believe that.

The author’s ideas for avoiding the perceived “problems” of HR are laughable. The top business websites advise against relying on LinkedIn, where people blatantly falsify their qualifications. Following the advice in this book would probably lead to discrimination lawsuits if the business didn’t self-destruct before reaching that point.

I read an advance copy of this rant and I’m sorry I wasted my time.

I don’t know who this person is, but I did send out some advance copies to people writing on HR topics, and I knew there’d be some hostility from them since the book questions most of the bedrock beliefs of “HR people” about the value of diversity and the goals of most HR types.

Taking the statements made one by one:

“The argument that HR departments consist of women and minorities and for that reason force companies to hire women and minorities is unsupportable…” This argument was never made; apparently too subtle for the reviewer, the book suggests companies respond to labor regulation and threat of lawsuits by hiring HR staff as buffers and compliance officers, and that because they can make their EEOC numbers look better by doing so, tend to hire more women and minorities in HR where their role in production is seen as less critical. Over time that led to a prevailing HR culture that identifies as much with the progressive overseers as with company management, harming the business by replacing its goals with those of a social welfare organization.

“…[also unsupportable is] the view that there’s something wrong with integrating a business.” The book suggests there’s something wrong with the view that integration is necessarily important or a worthy goal to be prioritized ahead of productivity, efficiency, and creative accomplishment. Enlightened management will manage the business in whatever way is necessary to survive and grow. Sometimes this will mean creating a highly-diverse, integrated team, and sometimes it will require a monoculture of staffers who act and think largely alike for a specific purpose. The point is not to defend discriminatory practices, but to refrain from pressuring businesses to jump through hoops of political approval to escape government punishments.

The reviewer is steeped in the conventional wisdom, and goes on to appeal to authority to avoid dealing with the arguments and studies cited in the book: “Forbes, McKinsey, and the Harvard Business School all agree that diversity is a key driver of internal innovation and business growth.” The book cites a number of Harvard Business Review articles debunking the faith-based belief that diversity is necessarily a plus for businesses. One chapter traces the few unscientific studies that support this belief and how they were amplified and cited over and over again to confirm what the promoters wanted to believe. “Diversity” in the form of a variety of races, colors, and beliefs in an organization can help, hinder, or more typically be irrelevant to organizational performance. But since many HR staffers now believe that promoting diversity is their job, no amount of citations or logic will ever dent their belief.

The individual worker’s attitudes and aptitudes, knowledge and skills, and ability to communicate and work with others are vastly more important than any superficial classifications of race, sex, religion, or national origin. Martin Luther King had this right, and the progressive HR religion is simply wrong and damaging the quest for true equality of opportunity.

“The argument that hiring women and minorities is problematic is based entirely on the premise that white males are better workers than women and minorities. Only insecure white males believe that.” The reviewer demonstrates the anti-white-male prejudice so common in these types. The book makes no such sexist or racist argument — it does argue that hiring preferences that result in hiring women and minorities who are demonstrably less able or less productive in a job is damaging, both to the organization and to its workers, both those given preference and elevated beyond their ability to succeed and those not given preference and thus denied an opportunity to succeed by affirmative action practices.

I’m told it’s valuable to have reviews from obviously biased partisan types to confirm that one’s book has touched a nerve. So perhaps this review helps sell the book to those who have stopped buying the progressive party line on enforced discriminatory hiring policies and political use of HR as the state’s internal enforcement apparatus.


Death by HR: How Affirmative Action Cripples Organizations

[Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


Ban the Box, Credit Scores, Current Salaries: The Road to Hiring Blind
High Tech Under Diversity Pressure
HireVue, Video Interviews, and AI Job Searches
Diversity Programs Don’t Work

“Death by HR” Released as Audiobook

Death by HR Audiobook Cover

“Death by HR” Audiobook Cover

After much work with narrator Joe Farinacci (who did such a good job with Avoidant) the Amazon/Audible audiobook of Death by HR is finally for sale at these links:

Amazon
Audible

“Attachment Style and Saying I Like You” – Typevolution Blog

Insecure and Secure - credit Sarah Anderson

Insecure and Secure – credit Sarah Anderson

I noticed a clever post at Type•volution linking to this blog’s attachment type pages. The author imagines some typical conversations between the various attachment types, amusingly capturing the flavor of typical interaction scripts for each combination. Recommended reading!

Accountability, Equality, and Partial Fairness

Seal of the Handicapper General - Harrison Bergeron

Seal of the Handicapper General – Harrison Bergeron

One of the bigger problems with the ACA or any health insurance system which outlaws medical rating is its removal of the financial consequences of bad health habits. Progressives believe heavy taxes on cigarettes will reduce smoking and thereby reduce lung cancer and early death; a financial penalty on a self-destructive habit justified by the social welfare state’s future payment of medical expenses. (One issue is whether this is even true — it turns out most actuarial calculations show those who die early as a result of lung cancer have less spent on their medical care in old age and forego social security payments, so they save the welfare state money.)

But if you equalize the cost of medical insurance regardless of health habits, you are reducing the consequences of unhealthy habits and thus encouraging them. Accountability — having to be responsible for one’s actions — suffers under equalizing systems. Drivers with many accidents and drunk-driving convictions on their record will pay much more for (and find it difficult to even obtain) car insurance, and that’s normally considered a Good Thing because we want there to be financial penalties for habits that endanger others, like driving recklessly or under the influence.

The reasonable objection to charging for health insurance based on health record is that health status is only partly controlled by previous habits and behavior; a big chunk is genetics and chance. So it seems unfair to those who are sick because of bad luck in the genetic lottery — or even by accident, as cancers, for example, are thought in some cases to be created by accidental mutations, and only some cancers are caused by avoidable environmental exposures like smoking.

And many children begin life behind the eight-ball, having inherited problematic genes that make them more likely to suffer from conditions that cost a great deal to treat. Should insurance companies be able to use the results of genetic tests to offer low-cost policies to some, and much higher-cost policies to the unlucky?

In a laissez-faire world, insurance is an adversarial game with customers trying to hide any damaging information from the insurer as the policy is being sought, and the insurer doing their best to deny claims afterward. As a result, governments set up insurance commissions and regulators since it was impractical to adjudicate disputes over every consumer’s insurance policy in an expensive court of law. Arbitration and insurance commissions have done a fairly good job in the past of managing this conflict of interest, with some states being more pro-consumer than others.

One partial workaround for the medical rating problems is the idea of “continuous coverage.” The initial risk pool is assumed equal, and anyone who keeps paying for coverage continuously is allowed to stay in that average-risk category because some small part of their earlier premiums is true insurance — covering the risk that a health issue will turn up which makes them a bad risk in the future. Insurance contracts typically cover one year, and so if there is no requirement to continue coverage beyond that contract, rates could adjust upward or renewal could be denied based on negative events that happened during that year. Requiring renewal at the same rate as the rest of the risk pool makes the contract insurance against the long-term costs of treating any illness acquired during the period, not just that year’s costs.

What happens to people who allow their insurance coverage to lapse because they can’t afford the premiums or simply forget to pay? Most states had a high-risk pool with required must-issue, but rates were very high (of course — since the people seeking insurance under it were far more likely to need expensive care in the short term.) Some hybrids, like exclusions for pre-existing conditions for six months or a year, helped get people coverage at in-between prices.

The PPACA (“Obamacare”) tried to eliminate the problem with must-issue (no one could be refused insurance) combined with narrow time windows for seeking coverage and penalties for going uninsured. These were intended to force everyone to get insurance and to keep them paying for their insurance even if they were being charged much more than they were likely to receive in benefits. Younger, healthy people were expected to pay more to cover the costs of older, sicker people. In practice this did not work — even the subsidized rates were too high to get healthy young people to join up, and the penalties of going without insurance were small compared to the inflated new prices for insurance. So individual insurance coverage pools shrank and were dominated by new customers needing a lot of expensive, deferred care, and rates rose further as doctor networks were narrowed and more healthy people stopped paying.

The Supreme Court’s ruling deeming the ACA constitutional was only partial — the attempt to force states to increase Medicaid enrollments was deemed unconstitutional, so many states did not expand Medicaid. This left a bizarre hole in coverage in those states where a person could make too much to get Medicaid coverage, but too little to get private insurance subsidized through the exchanges. And the expansion greatly increased Medicaid enrollments in those states that participated, accounting for nearly all of the decrease in the uninsured in the US, but Medicaid itself has never been shown to improve medical outcomes or decrease mortality, and many people complained that they were forced to join Medicaid when they would have preferred to buy private insurance.

Also, the Supreme Court’s swing voter on the case, Chief Justice John Roberts, specifically warned that the fine for not having approved insurance was only constitutional if it was viewed as a tax, and an increase to the fine to an amount sufficient to force compliance would make it unconstitutional. This cuts off the ACA proponents’ attempt to raise fines to try to force more enrollment.

Which brings us to the subject of this essay — how do we decide what is fair when consequences of simple bad luck and genetics are mixed with the downside of behavior under a person’s control? Suppose a well-off person (let’s say the son from a wealthy family who left him a trust fund) drinks, smokes, and plays video games all day throughout his life. In his 40s now, he’s obese and unhealthy, with emphysema and cardiac problems imminent. Should his expensive future healthcare be subsidized by middle-class families who have worked hard, exercised, and been careful to avoid bad habits? That is the way ACA policies are now set up. Even unsubsidized, policies for wealthy people in poor health are much cheaper under the ACA than they would be in a free market, and those who have restrained their appetites and sacrificed to maintain their health better pay more than they otherwise would to make up for those costs.

But there’s no easy way to separate those “bad unhealthy” people whose illness is due to their own choices from those “deserving unhealthy” people who are ill because of chance or genetic inheritance.

The ACA plan tried to compel more equality of premiums regardless of actual risk or likely use of medical services, which removed some of the incentive for healthier behavior and burdened those who made the effort and sacrifice to keep themselves healthy. This tried to protect those who were simply unlucky, but many of those people are worse off than they were under previous high risk pool plans provided by the states, and have had their care disrupted or cut off by the high prices and narrow networks.

Every complex system is adaptive, and human systems especially so, with people quite capable of understanding the rules and seeking out every loophole to their advantage. The ACA has failed because people aren’t easily herded by programs designed by committees, and by finding the loopholes (paying for one month and using it for three, staying off until actually ill then signing up under the many loopholes in enrollment windows to get expensive care then dropping out again), the people have ensured the ACA cannot be sustained in its current form.

The ACA, which was promoted as saving everyone money, has ended up being much more costly for most than the old system. It has helped a few, but cost far more tax and premium dollars to help those few than a direct subsidy to the existing high-risk pools would have. The redistributionists have again discovered that unintended consequences will make nonsense of their social engineering schemes.

Philosopher John Rawls is usually cited by progressives intent on redistribution; his thought experiment suggested we view a system as just if we would choose it willingly, not knowing in advance what advantages or disadvantages we would be born with. You can argue that much behavior is also dictated by fate — our example of the obese videogamer may well have been doomed by being born into his particular family with parents who could not guide him toward a better way of living. But under that view, no one is responsible for anything, and we know that people can change to overcome even the worst background and genetic inheritance. Removing rewards for modifying one’s behavior toward the socially-valuable means a society which is less civilized and poorer in every way.

The classic Vonnegut story “Harrison Bergeron” takes equality to the extreme. The government has decreed that all must have equal abilities and outcomes, and so those who are more intelligent or talented are handicapped to bring them down to average. Of course, this becomes a nightmare with tragic outcomes as society grinds to a totalitarian halt.

But suppose we already have a little bit of this deadening effect introduced by the government’s emphasis on hiring by ethnicity or sex rather than ability. Would we even realize that the but-for world where only merit is considered would be wealthier, happier, and more fulfilling for most if not all people? If one has never seen a ballet performed to perfection by the most talented dancers on Earth, would we notice that the dancers are being dragged down by lead weights they have been forced to carry — or selected for political reasons rather than talent — making their performance less satisfying?

Socialists and redistributionists tend to think diversity and choice and product improvement are not as important as providing the poorest an equal quantity of goods, and the central planners of the USSR counted quantities of production, not quality; the stories of great quantities of useless, poor-quality, ugly products available from state stores while people schemed and bribed to get better-quality goods from abroad show how central planners failed to understand what mattered to the people. Even Bernie Sanders, who should know better, suggested there was too much choice in deodorant and shoes, and restricting choice would somehow allow more poor people to be fed, clearly missing a lesson or two of the socialist past.

So if you had never seen a perfect ballet or operatic performance, you might not notice how the ones you have seen have been compromised for the sake of political goals. Similarly, if you’ve never seen a world of free enterprise without identitarian politics or Party corruption, you will never realize how much freer and more productive your society might have been. The US overcame a history of race and sex discrimination to more closely approach the standard of merit alone — then has been backsliding incrementally as race- and sex-conscious employment policies took hold. While it appears the US is now limiting progressive overreach by not electing Hillary Clinton president, there has been a lot of damage already, with government agencies especially dysfunctional. It will take a lot of work battling entrenched special interests to reverse the educational system’s failure to teach children civics, history, and economics.


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


For more reading goodness:

Materialism vs Purposeful Life: Trump, Bannon, and Teilhard de Chardin
Sekrit Reform Agenda: Untangling Government: Medical Deregulation
No More Elections or Campaigns: Liquid Democracy
“Death by HR” – High Tech Threatened by Social Justice Activists

Seal of the Handicapper General - Harrison Bergeron

Seal of the Handicapper General – Harrison Bergeron

Followup: Materialism vs Purposeful Life

Crony Capitalism - Prager U

Crony Capitalism – Prager U

Thanks to Instapundit for the link to yesterday’s post, Materialism vs Purposeful Life: Trump, Bannon, and Teilhard de Chardin. I want to expand on some parts and add some new links for completeness.

First, “Lie Swarms,” which discusses how the atomization of media has created copied and mutated lies which swarm the victim from so many directions that the repetition establishes truth for many news consumers:

Spengler said that the attacks on Bannon are an example of the Big Lie. I take issue with that. What we are seeing with Bannon, and have seen and are seeing with Trump, is something different: it is the Lie Swarm.

The Big Lie is an effective propaganda tactic in a centralized, vertical media system dominated by a small number–and in totalitarian systems, basically one–of information channels. Radio or television with a small number of national stations either directly controlled by the state, or subject to substantial state pressure (e.g., the US in the days of the Fairness Doctrine). To oversimplify only a little: one message, one medium.

In the modern fractured information environment, with a proliferation of outlets and social media that allows free access to millions, coordinating on a single message is far more difficult in such a diffuse and fragmented system. But this technology is perfectly suited for unleashing a swarm of half-truths and lies that forms what can best be described as an emergent order. It is not consciously designed by anyone, but without central coordination design it does exhibit order and synergistic behaviors.

One swarm tactic that is becoming increasingly common is Six Degrees of Hitler/Putin/The KKK/etc. Target A has some connection to B who has some connection to C who has a connection with D who said something that could be interpreted as being vaguely fascist . . . so Hitler!

In some respects, it is harder to fight the Lie Swarm than it is the Big Lie in a society where there the media is not rigidly controlled. A single lie can be rebutted if the target of the lie has the ability to make the case and the access to enough eyeballs and ears to do so. It is almost impossible to swat every lie in the swarm, especially since the lies change and mutate from day to day, and since whenever you are in a position of rebutting a lie you tend to draw attention to it. But unrebutted lies are often as treated as facts, so if you don’t kill them all some damage is done.

Bannon, and especially Trump, are primary targets of the Lie Swarm, especially since Trump had the temerity to actually prevail in the election. Don’t get me wrong–there is much about Trump to criticize. But there has been a kind of Gresham’s Law at work here: the bad criticism has driven out the good. Screeching “racist!” “Anti-Semite!” “Fascist!” on the basis of the most twisted and biased interpretation of the flimsiest evidence has overwhelmed substantive argument.

And the Swarm really hasn’t figured out that their attack will do little to get Trump supporters to change their minds. If anything, it will do the opposite, because the “deplorables” know that they are being attacked and smeared as much as Bannon and Trump. Furthermore, the Swarm seems hell-bent on living out Einstein’s definition of insanity: doing the same thing over and over, and expecting different results. Hillary’s whole campaign was based on personal attacks on Trump and his supporters, and she enlisted the Swarm in this endeavor.

And it backfired stupendously. Why should they expect that doubling down on it will work any better?

Behind-the-scenes coordination a la Journolist isn’t even required. The clickbait factories read each other’s output and copy the talking points almost immediately, so a Huff Post article is usually just a simplified and more hysterical version of Daily Beast, which in turn comes from a WaPo writer. See the hype progression on today’s news:

WaPo: Trump picks Sessions for attorney general, Pompeo for CIA. Sen. Jeff Sessions is known for his hard-line views on immigration.

Daily Beast: Donald Trump Puts the White Back in White House, Taps Jeff Sessions For Attorney General. With Jeff Sessions, Mike Flynn, and Steve Bannon, Trump’s early picks suggest he’s doubling down on his ugliest instincts.

HuffPo: DARK AGE A.G. – Civil Rights Groups Condemn Sessions… An ‘Extreme Anti-Immigrant’ Voice… Will ‘Erase 50 Years Of Progress’… Warren: Senate Has ‘Moral’ Obligation To Nix Nomination… FLASHBACK: Too Racist To Be a Judge… Said The Only Issue With KKK Is Their Drug Use… Suggested White Lawyer With Black Clients Was A Race Traitor… Denounced Civil Rights Groups: ‘Un-American’…

We’ve always had yellow journalism, but the clickbait farms are influencing the mainstream sites, making them compete to be more alarmist.


More thoughts on the forms of capitalism and the two forms Steve Bannon decried at the 2014 conference:

But there’s a strand of capitalism today — two strands of it, that are very disturbing.

One is state-sponsored capitalism. And that’s the capitalism you see in China and Russia. I believe it’s what Holy Father [Pope Francis] has seen for most of his life in places like Argentina, where you have this kind of crony capitalism of people that are involved with these military powers-that-be in the government, and it forms a brutal form of capitalism that is really about creating wealth and creating value for a very small subset of people. And it doesn’t spread the tremendous value creation throughout broader distribution patterns that were seen really in the 20th century.

The second form of capitalism that I feel is almost as disturbing, is what I call the Ayn Rand or the Objectivist School of libertarian capitalism. And, look, I’m a big believer in a lot of libertarianism. I have many many friends that’s a very big part of the conservative movement — whether it’s the UKIP movement in England, it’s many of the underpinnings of the populist movement in Europe, and particularly in the United States.

However, that form of capitalism is quite different when you really look at it to what I call the “enlightened capitalism” of the Judeo-Christian West. It is a capitalism that really looks to make people commodities, and to objectify people, and to use them almost — as many of the precepts of Marx — and that is a form of capitalism, particularly to a younger generation [that] they’re really finding quite attractive. And if they don’t see another alternative, it’s going to be an alternative that they gravitate to under this kind of rubric of “personal freedom.”

He correctly calls out crony capitalism, and the fascist capitalism you see in China and Russia to a great extent today, where enterprise is heavily controlled by the state and the corrupt entanglements enrich the connected in both state and enterprise. There’s way too much of that in Obama’s America as well.

His mention of Ayn Rand and Objectivism is interesting. Ms. Rand’s followers have tended to the cultish, with a romantic emphasis that is anachronistic sixty years after she wrote her seminal works. While explicitly atheist, Rand replaced the element of religious purpose with the aggrandizement of the creative individual. As Bannon says, in a time of collectivist thought-police expropriating the fruits of labor and denying any individual credit for achievement (“You didn’t build that,”) her creed can be very attractive to the young rebelling against stifling conformity.

What’s left out of Ayn Rand’s heroic vision is room for the personal altruism of the family and friendship. She railed against mindless altruism and self-sacrifice, but that was aimed at those who glorify sacrifice to the state and abstract others like “public opinion.” She had built her heroes without dependents or those boring long-term attachments that aren’t glamorous or transgressive, so the real underlying motivation for most people, making a better life for not only themselves but their children, family, and friends, was left out. Attachments would have spoiled her superhuman heroes and heroines, and her villains were often relatives — social-climbing wives, clingy brothers and the like.

Libertarian-ish thinking today has evolved to include more nuance and understanding of economics, game theory, and evolutionary psychology. While there is a definite “drive to create” that motivates many artists and business founders, the more important drives are for status (for the esteem of others and attracting better mates) and the obvious fulfillment of basic needs for food, shelter, and security for oneself and attached others.

Capitalism works best conducted in a neutral setting with a predictable legal backing. It is also dependent on trust — the willingness to put some money or effort out despite the risk that the supplier you are contracting with will stiff you or turn in shoddy work. You trust initially because your commitment is small and you’ve checked out the reputation of the supplier, and you trust more later after completing numerous satisfactory transactions with that supplier. You share your good experience with others despite the fact your supplier may gain new customers and raise prices or have less capacity to do your work, because you are also building a reputation and credit for being a good cooperator. This trust is what really makes capitalism efficient and more capable of producing what is satisfactory for others than any other system.

So community on small and large scales is necessary to success. This isn’t “You didn’t build that,” which is intended to imply that government supplied you with the environment critical to your success; the legal system, the roads, the communications nets, and your network of suppliers all use the framework of law and government in the background, but it was the private elements that created the trust and incentives to produce. Law and government are necessary as backstops, but not sufficient, and no one who is productive owes the proceeds of their success to government. Taxes to pay for government need to be neutral, too: extracted as much as possible in proportion to services demanded, kept as low as possible to provide those critical services.

The Pope’s view of capitalism is colored by his Argentinian background; Argentina has been in the grips of crony capitalist-fascist demagogues for decades. But the notion that values are critical to capitalist functioning is reasonable; no business does well to neglect the health and security of its customers and employees, and individual transactions are about more than money and goods exchanged.

Materialism forgets about the human background, and its various flavors are damaging in different ways. Communism purports to replace the profit element and private ownership with central planning and state ownership, which destroys the incentives that make society run. Democratic socialism similarly reduces the rewards of effort and transfers to strangers the fruit of one’s effort, which weakens the strength of community bonds as the state replaces voluntary association. These flawed ideas are based on redistribution of material goods as if they were far more important than human relationships of cooperation and reliance which are critical to happiness and productivity.

Ayn Rand’s ideal society has never been tried, for the obvious reason that human beings are almost never like her characters. It is probably best to view her work as intended to counter the collectivist central planners of her youth in the USSR and later in America; she emulated the romantic socialist propaganda but to promote individualism, which was denigrated at the time. Her vision lacked the bonds between people that make them more than homo economicus, the model of man as cold calculator of transactional benefit.

So Bannon has a point here, even if he oversimplifies the views of today’s libertarian thinkers. Some overarching purpose to life and work is required to make an economy grow, and the Obama era’s stifling correctness and overregulation has been sapping the will to open new businesses and to invest in new employees. Vanquishing religious thought damages the motivation of those who rely on it, and some of the other streams of purpose — emphasis on competition and production — have been deprecated in favor of inclusion and identity politics in staffing (see my book Death by HR below.)


Death by HR: How Affirmative Action Cripples OrganizationsDeath by HR: How Affirmative Action Cripples Organizations

[From Death by HR: How Affirmative Action Cripples Organizations,  available now in Kindle and trade paperback.]

The first review is in: by Elmer T. Jones, author of The Employment Game. 

Corporate HR Scrambles to Halt Publication of “Death by HR”

Nobody gets a job through HR. The purpose of HR is to protect their parent organization against lawsuits for running afoul of the government’s diversity extortion bureaus. HR kills companies by blanketing industry with onerous gender and race labor compliance rules and forcing companies to hire useless HR staff to process the associated paperwork… a tour de force… carefully explains to CEOs how HR poisons their companies and what steps they may take to marginalize this threat… It is time to turn the tide against this madness, and Death by HR is an important research tool… All CEOs should read this book. If you are a mere worker drone but care about your company, you should forward an anonymous copy to him.

 


For more reading goodness:

Materialism vs Purposeful Life: Trump, Bannon, and Teilhard de Chardin
Sekrit Reform Agenda: Untangling Government: Medical Deregulation
No More Elections or Campaigns: Liquid Democracy
“Death by HR” – High Tech Threatened by Social Justice Activists

Crony Capitalism - Prager U

Crony Capitalism – Prager U