Nothing more simple

“Nothing more simple,” returned the count. “I had known the famous Vampa for more than ten years. When he was quite a child, and only a shepherd, I gave him a few gold pieces for showing me my way, and he, in order to repay me, gave me a poniard, the hilt of which he had carved with his own hand, and which you may have seen in my collection of arms. In after years, whether he had forgotten this interchange of presents, which ought to have cemented our friendship, or whether he did not recollect me, he sought to take me, but, on the contrary, it was I who captured him and a dozen of his band. I might have handed him over to Roman justice, which is somewhat expeditious, and which would have been particularly so with him; but I did nothing of the sort—I suffered him and his band to depart.”

“With the condition that they should sin no more,” said Beauchamp, laughing. “I see they kept their promise.”

“No, monsieur,” returned Monte Cristo “upon the simple condition that they should respect myself and my friends. Perhaps what I am about to say may seem strange to you, who are socialists, and vaunt humanity and your duty to your neighbor, but I never seek to protect a society which does not protect me, and which I will even say, generally occupies itself about me only to injure me; and thus by giving them a low place in my esteem, and preserving a neutrality towards them, it is society and my neighbor who are indebted to me.”

“Bravo,” cried Chateau-Renaud; “you are the first man I ever met sufficiently courageous to preach egotism. Bravo, count, bravo!”

The Count of Monte Cristo by Alexandre Dumas

Deep rooted altruism

Plenty of work coupled with a lack of motivation to spend time on editing has meant that its been quite a while since I last wrote a proper,  thought-out post although I do have plenty of accumulated material to write about. While the lack of motivation hasn’t changed, I thought I should just put this down.

In a short conversation over lunch, one of my colleagues talked about how hedge funds are now back in business after all the losses they made recently (probably based on a report from He then went on to say that there should be some protection – government regulation – for the consumers. As I resisted, the discussion went on to the food and drug industries. I mentioned how regulations against drugs prevents people from using new drugs even if they sorely need them and are willing to take the risk. He countered by saying that it is not possible for any individual to take responsibility for evaluating all the available goods (be they drugs or foods) and so a government agency is needed. I replied that doctors should certainly be capable of doing the required evaluation. He replied “saare doctors bike hue hain” – all the doctors are mercenaries and have been bought over (presumably by drug companies). I asked “And how about the employees in the government?” and that was the end of the conversation.

Note the reason given to justify the existence of regulation – the people who are competent to evaluate are mercenaries and so, will not act in the interests of consumers, whereas a neutral government body not motivated by profit, will. There is plenty of evidence – living in India, I will not bother to write about it – about how “neutral” government bureaucrats – known, not so fondly as babus – act. How then does an intelligent guy offer such a reason? The short answer is altruism. Just a week back we had a discussion about altruism in which I argued that it is for moral reasons and not economic ones that people accept socialist ideas. My colleague is well aware of my views and probably does not explicitly believe in altruism himself. But he has not explicitly rejected it as evil either. The deeply rooted morality of altruism makes him look with implicit suspicion at the profit motive and – by extension – at all private activity. It seems safer to trust a faceless bureaucrat working in a non-profit organization than to trust a doctor who stands to profit by selling you unproven drugs regardless of all the corruption that the bureaucracy is famous for. After all, by the altruist morality, the non-profit government organization has a noble aim – to serve others. The private doctor is just a lowly human driven by his own profit (which tends to morph into greed). According to the altruist morality, the doctor would have to make a sacrifice to forego the quick cash that he could make by being unscrupulous. And as everyone knows, very few people make sacrifices. So the altruist morality implicitly implies that private individuals will tend be more unscrupulous than public organizations. The facts do not bear this out. And it is simple to see why. Once one assigns a face to a bureaucrat instead of referring to a convenient collective called the government, it is clear that the bureaucrat is also working for profit. And unlike the doctor, whose career depends on his reputation, his career depends on – as Ayn Rand eloquently described in Atlas Shrugged – the aristocracy of pull. If a doctor makes a mistake or even if he is simply thought to have made a mistake by the public, his career is ruined. The faceless bureaucrat has no such responsibility. The profit motive cannot be abolished just by choosing to think of a certain group of individuals in terms of a collective – government. Within a framework of voluntary trade, the profit motive is not evil but good. It is what makes individuals want to prosper. It is what motivates them to work. Within a coercive framework of government regulation, the profit motive produces what is called “corruption”. A bureaucrat has nothing to gain by being scrupulous and a lot to gain by being unscrupulous at little risk. So he chooses to be unscrupulous. If his actions ever get traced back to him, the altruists have a field day damning his greed and the profit motive. But what is it that is corrupt? An unthinking bureaucrat doing what everyone around him does? Or the ethical system that invariably sets up men in situations where they stand to gain by duping others?

One should also look at the secondary consequences of oppressive regulations (take a look at other pages on FA/RM too). Regulations enormously raise the cost of compliance to standards – both directly in terms of the costs of running a regulatory agency and indirectly through the aristocracy of pull (lobbying is a nice euphemism). This effectively puts local small-scale industry at an enormous disadvantage and gives an unfair advantage to the bigger players. It also converts local, easily correctable problems such as occasional food poisoning into large systemic problems (in the same way as centrally controlled money supply creates systemic problems in the financial sector). The first strengthens the aristocracy of pull. The second creates even more demands for its continued existence.

At the end of the discussion, another colleague with whom I recently had a long discussion about the concept of sacrifice (note the reference to sacrifice above) mentioned that it will take another 50 years for people to reject socialist ideas. Today people look to the government for a solution to every problem. That is true. But socialist ideas will never be rejected until one first rejects their basis – the altruist morality – and discovers the alternative – egoism. The history of the U.S. which is now descending into just the sort of socialism that India is coming out of is proof of this fact.

Hypotheticals, egoism, intuition and Heumer

Via this debate on Aristotle The Geek’s blog, I came across this critique of Ayn Rand’s essay “The Objectivist Ethics” on Michael Heumer’s website. After reading through the mind-numbing (primarily because of its length) critique and disagreeing with it, I took a look at some other pages on his site and found this critique of egoism. Heumer is a self-described intuitionist (I will have to read more on his precise views on intuitions) and he constructs a hypothetical in which he claims that an egoist would have to murder a person for a very minor benefit. Then he claims that since it is self-evident that murder is wrong egoism cannot be true.

Consider the nature of his hypothetical

I just happen to have in my pocket a hand-held disintegrator ray, though. The gun will quickly disintegrate any person I aim it at. It is believed that victims of disintegration suffer brief but horrible agony while being disintegrated, but after that, no trace of them is left. …then I see this homeless guy ahead, just wandering down the street. …Assume that I live in a society in which homeless people are so little respected that my action is both legal and socially acceptable. Homeless people are regularly beaten up, set on fire, etc., with impunity. Passers-by even regard it as an amusing entertainment. So I will not be punished for my action. (emphasis mine)

Heumer claims that the fact that the events in such a hypothetical might never come to pass does not mean that we can reject the hypothetical itself (as he claims several Objectivists do). And he is right. There is nothing wrong with using hypotheticals to test theories. In fact, without the use of hypotheticals, I don’t think anyone can arrive at any useful abstract ideas. Though there is nothing wrong in considering the hypothetical, Heumer’s arguement simply does not hold. First, no rational egoist will actually murder a homeless guy on the street to save a couple of seconds (more on this later). Second, even if I grant Heumer – here is another hypothetical! – his claim that an egoist would have to murder the homeless guy in his hypothetical, Heumer’s intuitionism is not enough to reject egoism. Heumer’s intuitions did not arise in a world where the kind of events in his hypothetical ever happen (note the emphasized lines above). Therefore his intuitions are ill equipped to deal with his hypothetical. In fact, this is always true. Any intuition, by its very nature is ill equipped to deal with unusual situations. This is so irrespective of the source of the intuition – whether it be evolution or culture or experience.

Consider another hypothetical. Suppose Heumer actually lived in a society like the one he describes. Moreover, suppose that his ancestors also lived in such societies over the last 20000 years. As Heumer writes (correctly), the person framing the hypothetical gets to stipulate what goes on in the hypothetical. So I can very well stipulate this. What would Heumer’s intuition be if he grew up in such a world? Would it still be that murdering a person to save a couple of seconds is wrong? I don’t think so. Heumer’s hypothetical – far from being a proof that egoism is wrong – is actually a proof that intuitions are of limited use (at best) in judging an idea. Intuitions can tell you that a particular idea needs more or less thought. They cannot tell you whether a particular idea is right or wrong.

Would a (rational) egoist actually commit a murder to save a couple of seconds? Rand’s egoism (which is what Heumer is targeting) requires a person to be always rational. Rationality does not mean that one should weigh all the possible consequences of every conceivable action – presumably by assigning probabilities and utilities and then calculating some sort of expected utility. Rationality means that man must recognize that he cannot do such calculus because the world is an extremely calculated place. Rationality means that man must instead find principles on which to base his actions. Rationality means that man must not waste his time attempting to do some impossible calculus (calculating all the probabilities is impossible) to save a couple of seconds.

Finally, here is another hypothetical for Heumer (and for all those who like to create absurd hypotheticals to “prove” that egoism is wrong). Suppose that you are walking down a street with a gun in your pocket and see a person sitting on a bench just next to you with a bag beside him. You see a young boy in the window of a house on the other side of the street. The boy shouts and tells you that the person on the bench is actually a terrorist, that the bag beside him contains explosives and he is about to detonate them. What should you do? The challenge: based on your intuitions, tell me what you would do. Would the answer be the same if the location in the hypothetical were
a) a road in a peaceful village in rural America
b) a road in Pakistan on which the Pakistani president is due to travel
c) the road outside your own house with the boy being your neighbour’s son
(Hint: Does morality apply to such situations?)

Book Review: The Future of Freedom


Fareed Zakaria’s book “The Future of Freedom – Illiberal Democracy at Home & Abroad” is a critique of democracy. Zakaria notes that democracy is not the same thing as constitutional liberty. He notes that democracy is a process of selecting governments whereas constitutional liberalism is about selecting government’s goals and refers to the Western tradition of seeking to protect an individual’s autonomy and dignity against coercion. Drawing examples from history and from around the world, he argues that societies that had liberal institutions, the rule of law and protection of property rights were able to turn into liberal democracies, whereas in societies that did not have such institutions, democracy allowed tyrants, demagogues, dictators and autocrats to cement their power. He argues that the presence of the church as an independent authority from the state helped in preventing concentration of power and allowed liberal institutions to develop. Similarly he argues that the political strength of the landed aristocracy in England was good for liberty as it helped to institutionalize property rights and kept the monarchy weak, while the political strength of the state in France was bad for liberty as it kept society dependent on the state.

Zakaria picks several examples of countries around the world that tried to democratize too early – before developing the necessary social institutions, or before becoming sufficently wealthy – and failed. He also notes that the wealth necessary for a liberal democracy must be earned wealth and not the wealth obtained from taxing a canal or exporting oil.

Regarding the Middle East, Zakaria denies that there is anything specific about Islam that makes its followers more susceptible to authoritarian rule. He also rejects the idea that Islamic terrorism has anything to do with poverty in the Muslim world. He notes that until the 1940s and 1950s, Arab countries seemed to be doing better than several other newly democratizing ones. Instead he blames the total failure of politics in the Arab region for the rise of radical Islam. He writes that with no free press and no political parties, mosques became the place to discuss politics, and the language of opposition became the language of religion. He also notes that the Arab states have allowed free reign to the most extreme clerics to give themselves legitimacy.

Regarding the American political system, Zakaria writes that since the 1960s all of America’s political institutions have democratized. He cites several examples – the selection of candidates by primaries instead of party decisions, the campaign finance laws that made candidates dependent on fundraisers, the expanded number of sub-committees, the changing of rules to allow unlimited number of bills, the open committee meetings and recorded votes and the system of referendums and initiatives. He describes how all these changes have opened up politics to the influence of special interest groups and lobbyists and how democracy has defeated itself with all its institutions being controlled not by a majority but by a variety of highly motivated minorities and special interest groups.

Zakaria goes on to describe the deep changes that democratization has caused even outside politics. He describes how religious figures like Billy Graham and Jerry Falwell have toned down religion to make it appeal to the masses. Zakaria writes that in general, members of professions such as law, medicine and accounting were public spirited individuals who operated on high standards and these standards have deteriorated with time. He blames this on the changes made to make these industries more open and competitive such as the decision to allow lawyers to advertise and to allow accountants to charge contingency fees. He writes that the internet frenzy destroyed the separation between the bankers and the researchers in the banking and brokerage industries, opening up conflicts of interest and perverse incentives. He writes that the central shift underlying these changes is the role of the elites. He writes that while elites in the earlier days saw themselves as elites and recognized their responsibilities, today’s elites are a bunch of smart college graduates, who are not conscious of their elite status and thus enjoy power without exercising responsibility. He writes how a school such as Groton which once emphasized character over achievement in its students now focuses only on achievement. He describes how in the movie “Titanic”, the first class passengers are shown to scramble into the small number of lifeboats, whereas in the actual accounts of survivors, the “women and children first” convention was observed almost without exception among the upper classes. He writes “The movie-makers altered the story for good reason: no one would believe it today.”

In his concluding chapter Zakaria writes that the 20th century was marked by the regulation of capitalism and the deregulation of democracy and that both experiments overreached. He writes that whenever a problem arose, the solution was more democracy and more regulations. He writes that the way out of the problems is to delegate democracy to mostly autonomous entities, that are limited by democracy but shielded from political pressures. He writes that the institutions and attitudes that preserved liberal democratic capitalism, built up over centuries are being destroyed in decades and if these trends continue, democracy will face a crisis of legitimacy. He finishes with “Eighty years ago, Woodrow Wilson took America into the twentieth century with a challenge to make the world safe for democracy. As we enter the twenty-first century, our task is to make democracy safe for the world.”


Zakaria’s critique is very welcome today in an age where democracy is often seen as unquestionably good and historically inevitable. The numerous examples he draws clearly show that it is neither. His description of the state of American politics and the role of democracy in causing it is well presented with concrete examples. He makes a number of good points in this book. And yet, there is something missing in his analysis. There are atleast three distinct phenomena that he refers to as democratization – the way people select their government and the increased amount of power that elected representatives have, the way people make economic decisions and the increased importance these decisions have in shaping the economy, and the shift from “high culture” to “popular culture”. While these phenomena are certainly related, they should not be lumped together under a single concept, especially considering that the purpose of the book is to examine the problems with democracy. It is only the first phenomenon that can accurately be called democratization. Including the other two phenomena under the same concept makes the concept useless for analytical purposes – something that Zakaria himself warns about at the start of the book.

Consider these phenomena in more detail.

Political democracy:
All over the world, government powers and policies are increasingly being determined by popular opinion (or atleast what is seen as popular opinion). Politics is increasingly seen as a struggle for inclusion and representation and not as a means to achieve a proper social organization. The focus is increasingly on ‘who gets to make decisions‘ and not on ‘what decisions are made and whether they are legitimate‘. In the absence or weakening of any limits on political power, government necessarily become corrupt, illiberal and dysfuncional. Special interest groups take over such a system and dominate all policy making. This is a problem inherent in democracy and Zakaria does well to illustrate this.

Economic changes (“consumerism”): 
In the last few decades the bargaining power that “consumers” enjoy has risen steadily. We have come a long way from Henry Ford’s times (“You can have any color as long as it’s black”). This is a result of technological progress and has almost nothing to do with democracy. The only connection it has with (political) democracy is that it makes democracy more dangerous and its ill effects more catastrophic. It is impossible for people today to know about the workings of the global economy in any sort of detail. Which makes it impossible for the government (whether democratic or not) to control or regulate the economy effectively. Zakaria does not discuss these issues much and incorrectly labels this phenomenon as part of a process of democratization.

Rise of popular culture and the decline of values:
In the last few decades, high culture has declined and popular culture has risen. Zakaria uses a quote by Seabrook to describe this process “The old cultural arbiters, whose job was to decide what was ‘good’ in the sense of ‘valuable’ were being replaced by a new type of arbiter, whose skill was to define ‘good’ in terms of ‘popular’…” This decline of high culture goes hand in hand with a general decline in values – people no longer have rigid standards for judging behavior, the word ‘judgemental’ has become a perjorative and a good number of people would assert that there are no objective values. Zakaria does a good job of describing the symptoms of this trend. However he does not even attempt to examine its causes. But without an understanding of these causes, there is no way to reverse the ill-effects of democracy. Consider Zakaria’s proposed solution – the creation of autonomous regulatory bodies such as the US Federal Reserve (which he considers a success and seems to hold in high esteem). Today we see that the Federal Reserve has not been able to prevent a catastrophe and there is strong evidence to suggest that the catastrophe was in fact its own creation.

It is clear from the book that Zakaria is troubled by the general decline of values and that he respects the older value system, atleast in a general sense. He writes

It is easy to mock the Anglo-American elite, with its striking air of high-minded paternalism, born of a cultural sense of superiority. But it also embodied certain values – fair play, decency, liberty, and a Protestant sense of mission – that helped set standards for society…When powerful people acknowledge that there are certain standards for behavior, they limit their own power, however indirectly, and signal to society, “This is what we strive for.”

and a couple of pages earlier describing the decline of the elite status of the WASPs (White Anglo-Saxon Protestants)

As America became more diverse, open, and inclusive over the twentieth century, the WASP establishment faced a dilemna: it could maintain its power and refuse to allow new entrants into its sanctuaries, or it could open up to the new rising non-WASP members of society…But in the end the WASPs opened the doors to their club… Therein lay the seeds of the establishment’s own destruction… The WASPs made this move partly because they were pushed, but also because they knew it was the right thing to do. Confronted with a choice between their privilege and their values, they chose the latter.

If this description is correct, there is a paradox. The elite chose their values over privilege and yet this choice helped in the decline of their values. This paradox is at the heart of all of man’s problems. It has plagued people throughout the ages. The way out of this paradox is a code of ethics that is geared to man’s life, here on earth, by which the moral is also the practical and which when practised results in both material and spiritual reward – the code of rational egoism.

The complete expression of the constitutional liberal democracy that Zakaria wants to protect is a system of capitalism and it can only be protected with an explicit moral base. Although Zakaria presents a quite insightful analysis of the workings of democracy and its problems, he does not discuss the foundations of politics at all, and without it, his book is incomplete.

Note: This post can also be found on with an independent comments section.

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