As a libertarian, I respectfully make no bones about my belief that the highest value a country can embrace is the rights of the individual. With that, government’s major legitimate function is simply to protect those rights. This creates an environment where people can create value and trade freely with one another. (Protected from force and fraud).
This results in a very prosperous society for all; one in which a huge middle class exists and where charity abounds for those who truly cannot help themselves.
Very understandably then, I’m often asked if my belief in the rights of the individual conflicts with Law #3, The Law of Influence, from John David Mann‘s and my book, The Go-Giver:
“Your influence is determined by how abundantly you place other peoples’ interests first.”
Before answering, let’s take the question even a step further: “wouldn’t this focus on the rights of the individual make being part of an athletic team, a business team, a charity or committee nearly impossible? I mean, if one (or, if everyone!) is putting their own individuality first, how can they put other peoples’ interests first; how can they be part of a cohesive, effective unit?
Here’s my response to both:
A rational individual understands that he or she benefits most from cooperation with others (i.e., an “other-focus” rather than a “self-focus”).
A very simple example is the person who sells a product or service. They complete the sale (accomplish their individual goal) only by providing value to the other person. To do this, they must focus, not on their own needs, but on the needs of that person. By the “nature of the thing” they must put the other person’s interests first.
Now, take that same principle in terms of any type of relationship, whether business, social, sports, or romantic. It plays out the same way every time.
Politically speaking, the question might be: “Well, if individuals are so much better served focusing on other peoples’ interests, why, Bob, do you take such issue with big government and Socialism? After all, this is where the rights of the individual are totally subjugated and the interests of the whole are put first?
Aside from the fact that socialism hurts the masses (especially the poor and middle class) and freedom helps everyone, the reason is simple: One is based on choice and the other on force.
And, to me, that makes all the difference.
Your thoughts?
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Bob, you’re articles are always insightful & you are certainly not afraid to jump into the thick of it.
Clearly, there is nothing incongruent with protecting the rights of the individual rights and cooperation with others, even actively focusing on their needs, wants and desires.
I do not assert having any real political leg to stand on to make an intelligent contribution to this article (and I’m not silly enough to make second-hand claims that reveal ignorance rather than a true understanding of the issues), but I can’t help but ask how government can be called upon to protect the rights of the individual and at the same time protect the less fortunate from force or fraud without at least dipping its toe into Socialism?
Obviously, there is no strictly Capitalist Society and no strictly Socialist one, and if I were any sort of influential political leader, I have no idea how I would honor The Individual and protect those less fortunate at the same time. Unfortunately, the trickle-down-effect is mostly theoretical, rather than seen in practice.
Hi Tshombe, thank you for your comment. And, thank you for your questions. Let me ask you, if I may, to explain why you feel government would need to dip its toe into Socialism in order to protect the less fortunate from force and fraud? The less fortunate, as well as the more fortunate, are protected from force and fraud the same way; through the rule of law, where all are treated equally under the law. So, I’m not sure I understand the question.
Regarding there being no strictly Capitalist Society, you are correct. And, while that is unfortunate, the good news is that even with a “mainly Capitalistic” framework there can still be great prosperity. Regarding there being no strictly socialistic society, sure there are. As Randy Gage says, Socialism is simply Communism with lipstick.
Regarding your sentence, in which you wrote: “I have no idea how I would honor The Individual and protect those less fortunate at the same time.”
Again, I’m not sure what the actual quandary is there. You protect the less fortunate by protecting their individual rights, same as anyone else. Of course, if you mean something different, than please let me know and I’ll respond to that.
The most disturbing thing you wrote, Tshombe, is something I constantly see, and that is where you wrote: :Unfortunately, the trickle-down-effect is mostly theoretical, rather than seen in practice.”
Please explain that. Because, actually, the trickle-down-effect (providing it has not been ruined via Corporatism and other government meddling) is actually EXACTLY what works.
Thank you again for writing.
Thanks so much for the response, Bob. I especially appreciate your asking for clarity because it could be (and probably is, as I concede my ignorance) that we’re talking about two different things.
Yes, I can see where if the rule of law actually protected ALL individuals equally that in theory such a system should work. However, even in the simplest of examples, this is difficult to achieve.
The American (and other countries) Institution of Slavery is perhaps an extreme example of where certain Americans enjoyed the “benefits” of Capitalism at the expense of the Individual Rights of other Americans.
This likewise occurred with what eventually become the Labor Movement.
Laws were enacted to protect these people from mistreatment, but we know first of all, that laws do not equate to equal treatment in the absence of with will or mechanism to enforce them. Secondly, as in the case of Unions v Management, when one entity is considered too powerful, there’s another law to protect the other. There’s this back-and-forth business that to me ends up convoluting the whole thing.
We get a situation where either/both feel entitled to what was put in place to protect the one or the other.
I see many cases here in the Pacific Northwest of companies who are practicing the trickle-down-effect. There are companies like Amazon, Microsoft, Starbucks, and Trader Joes (as well as a host of smaller companies) who absolutely use profits to not only better their own life but also to contribute to both the prosperity of their employees and their communities. They see this as smart business practice. Likely, they also genuinely care about others.
I hope that we continue to move in that direction.
The challenge is that Business (with a Capital B) hasn’t actively sought to ‘abundantly place other peoples’ interests first’ in the same breath they are actively seeking their own as Individuals (This may be what you allude to by Corporatism.) until either forced by economics (I may be using the wrong word here, but I mean that people are beginning to want to spend their dollars with companies who honor their employees and their communities) or by government intervention.
Then what happens is the government intervention becomes “government meddling.”
I’m not an advocate for Pure Socialism either, though I’ve seen smaller examples of where social ownership or cooperative enterprises (like employee-owned businesses) are working.
I’m probably on shaky ground on this one, but I think something should be done about public education. Though not guaranteed by the federal constitution, it is guaranteed by every state constitution. Merely having the law clearly doesn’t give equal protection to all of our citizens.
How do you fund and regulate Education, for example, if not run by the government?
Obviously, it’s not working, and my concern is that it may not work under Capitalism, that is, a complete privatization of Education, either.
Of course, that’s likely a moot question, since in our current climate, there’s no way (short of a miracle….uh, did I say that?) government will get out of the Education Business.
I guess I’m all over the map here (and I don’t know that I answered any of your questions or simply created new ones), and I think my point is that it although I’d hope that people are inherently giving and understand we live in a society with other people besides ourselves, there are abuses both under Capitalism and Socialism as political philosophies-in-action (as I understand them, of course.).
(Incidentally, which countries are strictly Socialist….or, rather, ‘Communist with Lipstick’?)
Hi Tshombe, to make it easier, I’m going to reprint your above letter and respond to individual points. I’ll put “BOB:” before me responses:
Tshombe wrote: Thanks so much for the response, Bob. I especially appreciate your asking for clarity because it could be (and probably is, as I concede my ignorance) that we’re talking about two different things.
BOB: I appreciate your questions, and clarifications.
Tshombe wrote: Yes, I can see where if the rule of law actually protected ALL individuals equally that in theory such a system should work. However, even in the simplest of examples, this is difficult to achieve.
BOB: It is difficult to achieve, but should always be the goal. We as citizens must hold our politicians accountable to making this their number one priority.
Tshombe wrote: The American (and other countries) Institution of Slavery is perhaps an extreme example of where certain Americans enjoyed the “benefits” of Capitalism at the expense of the Individual Rights of other Americans.
BOB: Slavery was a totally monstrous institution and abomination, and the number one example of government NOT doing its job in protecting the rights of the individual. By the very nature of their being such a thing as slavery, there could *not* be free-enterprise. Please see my reference to this in my original article that I hyperlinked to four paragraphs from the bottom of the article.
Tshombe wrote: This likewise occurred with what eventually become the Labor Movement.
BOB: Not at all. Even though working conditions were at that time what we would now consider to be horrendous, not only was no one forced to work at these factories, they clamored for the available jobs, moving from even far worse circumstances. Of course, as we know, they were indeed working in horrible conditions and this is what eventually would lead to unionization.
Tshombe wrote: Laws were enacted to protect these people from mistreatment, but we know first of all, that laws do not equate to equal treatment in the absence of with will or mechanism to enforce them.
BOB: That’s true. And, there is too much to go into regarding this in this limited space but, by and large, government intervention doesn’t work in these cases and usually causes more problems than they solve. It should be between the employers and the employees coming to an agreement voluntarily.
Tshombe wrote: Secondly, as in the case of Unions v Management, when one entity is considered too powerful, there’s another law to protect the other. There’s this back-and-forth business that to me ends up convoluting the whole thing.
BOB: Tshombe, if government stayed out of it (and they have no business involving themselves here) then it would be up to the company and the unions to work out an agreement. The problem (and please understand this – this is big) is when both the business and the unions attempt to “buy the influence” of the politicians, having special rules, laws and regulations enacted, THIS is when it ends up being convoluted. When government stays out of the way, things work themselves out. (Other than, of course, protecting against force and fraud – that IS their legitimate function)
Tshombe wrote: We get a situation where either/both feel entitled to what was put in place to protect the one or the other.
BOB: And, neither are *entitled* to anything other than the right to negotiate with the other and each side act according to what they believe is in their best interests.
Tshombe wrote: I see many cases here in the Pacific Northwest of companies who are practicing the trickle-down-effect. There are companies like Amazon, Microsoft, Starbucks, and Trader Joes (as well as a host of smaller companies) who absolutely use profits to not only better their own life but also to contribute to both the prosperity of their employees and their communities. They see this as smart business practice. Likely, they also genuinely care about others.
BOB: Ahhh, here is where you are misunderstanding the idea of trickle-down. Trickle-down has nothing to do with charity. It is a totally *natural phenomenon.” Yes, it contributes to both the prosperity of their employees and community, but is *NOT* dependent on any type of extra benevolence. It is a natural result of doing business. The company produces value and receives income. That income goes to the employees. They spend their money at various places within the community (based on the value provided by those from whom they buy). That income then goes to the employees who spend their money at various….and it goes on and on. This is how a community, a city, a state and a country become prosperous. And, that is what “Trickle-down” is all about (of course, I provided an extremely cursory example). And, here is the key to “Trickle-down” working…government stays out of the way and let’s people and companies operate (aside from protecting against force and fraud). When companies can create value for others, they make money, and everyone benefits. It really is as simple as that.
Tshombe wrote: The challenge is that Business (with a Capital B) hasn’t actively sought to ‘abundantly place other peoples’ interests first’ in the same breath they are actively seeking their own as Individuals
BOB: In a free-enterprise-based, truly Capitalistic society, the ONLY way a company can benefit is by putting the interest of the customer first. Because, without special rules and regulations in their favor granted to them by government in exchange for donations and other goodies (which is Corporatism), the only way they can make money is by pleasing the customer. After all, if a person doesn’t have to buy from you, then you sure better make sure you focus on providing value to them if you want the sale. See how that works? This is exactly what I wrote about in the article (see 8th paragraph, where I provide the example).
Tshombe wrote: (This may be what you allude to by Corporatism.)
BOB: No, Corporatism is where government hands out special favors, rules and regulations to companies and industries (that create less competition for those companies and industries) in exchange for huge donations to their campaigns and other goodies.
Tshombe wrote: until either forced by economics (I may be using the wrong word here, but I mean that people are beginning to want to spend their dollars with companies who honor their employees and their communities) or by government intervention.
BOB: People spend their money for a variety of reasons, based on their needs, wants, desires and values. Government is best staying out of that, and letting people and companies exchange with each other freely.
Tshombe wrote: Then what happens is the government intervention becomes “government meddling.”
BOB: We have seen the results and are still seeing them.
Tshombe wrote: I’m not an advocate for Pure Socialism either, though I’ve seen smaller examples of where social ownership or cooperative enterprises (like employee-owned businesses) are working.
BOB: When people or companies voluntarily (i.e., their own choice) get together to form a cooperative or joint ownership, that is *not* Socialism.
Tshombe wrote: I’m probably on shaky ground on this one, but I think something should be done about public education. Though not guaranteed by the federal constitution, it is guaranteed by every state constitution. Merely having the law clearly doesn’t give equal protection to all of our citizens.
BOB: Government has been heavily involved in our educational system. How is that working out? Not so good, is it. I have little doubt that education should be totally privatized. But, there is simply not enough room here to answer all the questions you probably have about it. Let’s just say that – as of now – the poor have *not* been well-served by our Socialistic educational system. They would be much better served by a free market educational system. Again, just not enough room here to answer all the questions there are about this. Perhaps a separate blog post sometime in the future.
Tshombe wrote: How do you fund and regulate Education, for example, if not run by the government?
BOB: You fund it through traditional market means. And, not only will it be much less expensive, it will be much more serving of the actual clients; the parents and students. In terms of regulation, many ways. The best way is through private accredidation.
Tshombe wrote: Obviously, it’s not working, and my concern is that it may not work under Capitalism, that is, a complete privatization of Education, either.
BOB: It undoubtedly would work under a free-market system. Just like going to your local privately-owned supermarket brings you the most choices of the best products at the least expensive prices. Wherever government is least involved, the choices are better, more plentiful and less expensive.
Tshombe wrote: Of course, that’s likely a moot question, since in our current climate, there’s no way (short of a miracle….uh, did I say that?) government will get out of the Education Business.
BOB: I agree.
Tshombe wrote: I guess I’m all over the map here (and I don’t know that I answered any of your questions or simply created new ones), and I think my point is that it although I’d hope that people are inherently giving and understand we live in a society with other people besides ourselves, there are abuses both under Capitalism and Socialism as political philosophies-in-action (as I understand them, of course.).
BOB: There are always abuses, regardless of the system. The question is, which system is better and is worthy of the goal of being kept as pure as possible. And, based on both the past and the present, the answer is Capitalism.
Tshombe wrote: (Incidentally, which countries are strictly Socialist….or, rather, ‘Communist with Lipstick’?)
Bob: Many, so let’s choose just two: Cuba and North Korea.
Tshombe, you might want to read through some of my past blog posts on Capitalism vs. Socialism. I think I’ll answer a lot of your questions there, and within the questions and answers below.
WOW – This article is SO great Bob!!!!! This one sentence “Your influence is determined by how abundantly you place other peoples’ interests first.” just put so much peace to mind in me. Now I have NO speck of doubt left, that I’m on the right track. Thank you so much!!!! You have no idea how much this means to me. Lots of hugs and love to you ♥
Thanks so much, Bob, for the thorough reply. I will most definitely read the other articles you reference, so that I am using terms and their concepts accurately.
I do want to say that I’m not talking about charity either, at least not in reference to the trickle down effect (although when a company does encourage or sponsor charity, that value can “trickle down” to their employees).
What I am suggesting is that these companies pay a wage that is truly livable and see value in providing healthcare and other benefits that contribute to the welfare of their employees, who then can, in turn, contribute to the economy in other ways of their choosing.
While the government mandates a minimum wage, in many cases, it isn’t very livable.
I guess I wonder when is government involvement considered too intrusive? I have my thoughts on that in any given situation, but I’m sure that everyone else has there’s.
In the end, a company’s chief objective is to make a profit. As you say, if they aren’t the only gig in town, they of necessity have to take into consideration what their customers and/or employees want.
But, if they ARE the only gig in town, left to their own devices, I wonder if most would do the right thing (whatever that is!)
Thank you, Lene. You always have such kind and encouraging feedback! Love and hugs back!
Hi Tshombe, I’m going to again answer some of your thoughts and questions in order and again will begin my responses with “BOB:”
Tshombe wrote: I do want to say that I’m not talking about charity either, at least not in reference to the trickle down effect (although when a company does encourage or sponsor charity, that value can “trickle down” to their employees).
BOB: That’s a different topic and really has nothing to do with what we are discussing.
Tshombe wrote: What I am suggesting is that these companies pay a wage that is truly livable and see value in providing healthcare and other benefits that contribute to the welfare of their employees, who then can, in turn, contribute to the economy in other ways of their choosing.
BOB: That’s fine. But, it’s really a different topic, Tshombe. Please know, however, that good intentions aside, there is a vested interest that company has for offering a good salary and benefits. The best way to attract the talent they want is to offer a good package. It’s good business to take care of your employees. Again, all this is good, but it’s an unintentional “red herring” in that it is really not the topic you are asking about.
Tshombe wrote: While the government mandates a minimum wage, in many cases, it isn’t very livable.
BOB: Minimum wage itself also causes more unemployment, especially for younger workers, minorities and unskilled laborers. Do a study on that sometime; it will blow you away.
Tshombe wrote: I guess I wonder when is government involvement considered too intrusive? I have my thoughts on that in any given situation, but I’m sure that everyone else has there’s.
BOB: Yes, lots of people have different thoughts. Mine is in alignment with our Bill of Rights and Constitution. Government’s legitimate function is to protect the rights of its citizens. Sure, reasonable people can talk about infrastructure and a few other areas outside that, but we should be (actually, should have been) very careful about allowing as much encroachment into our personal lives as we have.
Tshombe wrote: In the end, a company’s chief objective is to make a profit. As you say, if they aren’t the only gig in town, they of necessity have to take into consideration what their customers and/or employees want.
BOB: Yes. And, even if they ARE the only gig/game in town.
Tshombe wrote: But, if they ARE the only gig in town, left to their own devices, I wonder if most would do the right thing (whatever that is!)
BOB: “Whatever that is” is decided by both the company and the consumer. Even if a company is the only game in town (or in the world) they still have to have customers to make a profit. Obviously, the more competition, the better it is for the consumer. But, something that most people don’t know is that the only monopolies are either government monopolies or government-sponsored/created monopolies. Other than with the help of government force it’s very difficult to create a monopoly. By the way, much of Corporatism is an attempt by companies and industry to create a monopoly. As long as we are at it, let’s go back to your “only game in town” and “would they do the right thing” question. Remember, we don’t have to depend on their doing the “right thing” (whatever that means – let’s say it’s generically providing value to their customers at a fair price) out of the goodness of their hearts. As you said, there goal is to make a profit. They can be the only game in town but if they charge too high a price, people will either stop using them completely or cut back. Back when Rockefeller was trying to capture the oil market (he never could succeed in making it a true monopoly) he actually offered oil to consumers very *cheaply.* Why? Because, when he did, they bought more of it and he made a bigger profit.
Tshombe, while I’m very much enjoying the conversation, let me suggest that you first go through some of those articles I mentioned, and maybe download Mary Ruwart’s book, “Healing Our World” at http://www.ruwart.com/Healing/ (or you can buy the updated version). That will give you some really good information that will help you to more intuitively understand the basic premises involved.
Wow, what long responses to your post. I think I will keep mine short and just say to me choice is the key. So you can choose to have less or more influence, but the premise still applies.
Thanks Bob. Sorry about that. As I mentioned, I intend to read the articles you reference so that we’re speaking the same language.
We either are talking about two (or several) different things, as you say, or I’m not making the correct inquiries, and/or I’m not very articulate at explaining myself very well.
Likely all of the above.
Doug, thank you.
Tshombe, nothing to be sorry about. I think you are VERY articulate. It’s just a topic with many facets (though very few premises) and, unless it’s studied more deeply than the media soundbite-type explanations we are accustomed to, can be rather confusing, as well as counter-intuitive.