Part 2; America: Imagine A World Without Her

(This is a continuation of the previous post because there was too much valuable information to share it all in one post!)

He then moves into the topic of capitalism. He says that America is based on the invention of wealth creation, on the understanding that wealth can be created through innovation and enterprise, not just conquest. The old frontier was new land, now its new wealth and new technology (unending). Many argue that we aren’t entirely responsible for our own success because the roads were built by the people, workers are educated by the people, firefighters are paid by the people, etc. However, everyone has access to these things, and the people who make the most of them will succeed. It does not follow that achievement is unearned. They are trying to argue that the capitalist wealth – all of it – belongs to the community.

He then talks about Adam Smith and how his theories are based on the paradox that individual selfishness can be channeled to the collective benefit of society. This thought is echoed by Rand who says that it is ethical for people to do what is good for themselves. Actual societies must be built on human nature as it is, not as we wish it to be (which is why communism doesn’t work in society, only in families). Successful entrepreneurs (ie. Bill Gates, Mark Zuckerberg) have already made their money and don’t need to come into work every day, however they continue to work because they have the gift of creativity and want to share it with society. They are not primarily motivated by money, they are primarily motivated by the love of what they do. He puts forth the idea that capitalism is based on altruism. This is because success comes from attending to the wants and needs of others. Capitalists who make good profits do so because they are especially good at empathizing with and serving other people. “Extreme sympathy” is when entrepreneurs are providing for the wants of consumers before consumers even know what they want. Profit is simply a measure of how well they have served the wants and needs of their customers. He argues that capitalism civilizes greed in the same way marriage civilizes lust. Labour gets paid ‘wages’, entrepreneurs get paid ‘profits’.

He continues by saying that the monetary value of a person’s contribution is determined by the consumer. The beauty of free markets is that the ‘value’ of each provider is decided precisely by the guy who is going to pay for that provider. The morality of capitalism (and democracy) is rooted in consent. Consent is confirmation on the part of all parties that they are better off; if they weren’t, they wouldn’t make the deal. He also argues that unequal prosperity is better than shared poverty. Are the rich getting richer and the poor getting poorer? No. The richer are getting richer and the poor are getting richer, just not at the same pace. In America today there is virtually no absolute poverty, only relative poverty (ie. You feel poor compared to Bill Gates). American capitalism has helped to create the first mass affluent class in world history, and in the long term, technological capitalism creates deep and abiding equality among citizens. The broad spread of technology and medicine, far from representing a theft by the rich, represents a subsidy on their part that has greatly benefited the larger society. The rich pay the initial high prices that lead to more research and development, and a way to bring the product to the masses.

He then says that overpopulation was considered the main reason China and India were so poor, but then they started to use this to their advantage (“cheap labour”). Technological capitalism has proven to be the greatest anti-poverty scheme ever invented. There is no significant anti-globalization movement in countries like China and India because they know better than American progressives what is good for them. Globalization helps to reduce immigration from poor countries to rich countries. It’s also a force for peace among nations because countries that trade with each other become mutually dependent. Globalization penalizes inefficient American workers but benefits cost conscious American consumers.

Next he talks about American foreign policy. He says that it is based on two simple concepts. (1) Don’t bomb us, (2) trade with us. He argues that, that’s all Americans want from the rest of the world (I’m not sure if I truly believe this, seems idealistic). He says that America has helped other countries and could have colonized but hasn’t. America does not oppose the rise of other powers, as long as they are peaceful trading powers and not violent conquering powers (I think he means as long as they don’t disagree with America’s ideals and give them all their resources….but anyway). He says that we feel inferior to others when we realize we are not as good as they are and that envy is an invisible vice which leads to resentment and frustration.

He then says that the government is inefficient. They waste money because it’s not their money and they are not subject to market forces (ie. They have no bottom line). They don’t have access to the kind of information needed to make good decisions and that people typically have access to at the local level. A centralized government is ill-equipped to make innumerable decisions that are best left to local people, businesses, government, etc. The government purports to be fostering moral action among citizens while in reality, its policies have nothing to do with morality. Coercive government policies strip the virtue out of every transaction.

One of the key features of the common good is that it benefits all citizens, but the author argues that the redistribution of wealth by government is theft. The top 1% of people pay 1/3 of federal income tax, the next 9% pay another 1/3, and the bottom 50% of people pay nothing. In this scenario, surveillance has the benefit of letting the government collect information for its heist (for taking/stealing from citizens).  The information collected through government spying can also be used to achieve social compliance. The benefit of having extensive reams of personal data is that almost anyone can be found to have fallen afoul of the rules sometime or other (not sure how accurate this is). He argues that the government is becoming a vehicle of terror and an instrument of theft because it is spying on it’s own people, and has the power and discretion to decide whom it wants to prosecute. It’s very common for guilty pleas to be the product of risk avoidance at the expense of truth.

He ends off by talking about what the world would be like without America in charge. “We are so used to the world being western, even American, that we have little idea what it would be like if it was not”. The decline could be gradual or sudden (collapse), and will most likely correspond with the rise of Asia. It will be a return to when China and India used to rule the world (5^th century-1750). America’s military, political and cultural power is all derived from its affluence. The key is economic strength. He wants to see countries succeed not through conquest but through wealth creation. The mantra in Asia, Africa and South America is “modernization without westernization”.

His last point is that Chinese hegemony will look different from American hegemony (who would have guessed eh?). He explains that the Chinese have a deeply hierarchical view of the world based on culture and race, and that they are shrewdly exploiting anti-American sentiments to make themselves look like the better alternative. He argues that the Chinese will have no interest in shared global leadership (goal=singular hegemony) and that they have no intention of actually fighting a war with America. Their objective is to show that such a war would be suicidal for America.

Overall this was a really interesting and eye opening book. It provides a good counter argument to a lot of the things we hear in the media. I do think he goes a little too far at times with his “America is amazing” attitude, acting like they are super nice and innocent and have no bad intentions behind anything they do. They definitely have various goals and intentions when they interact with other countries, and I think we won’t know what the best approach is until we have something else to compare it to. If you don't want to read the book (although you should), he also released a documentary by the same name. I haven't watched it yet so i can't promise that it's as good as the book.