Showing posts with label economic risk. Show all posts
Showing posts with label economic risk. Show all posts

Sunday, March 29, 2009

Quiet conscience makes one strong - by Judge Jim Gray

Last week we discussed the importance of returning to American values. This is truly important because, in many ways, our great country is now at a crossroads. Will we continue to build upon the values that helped to make us great, including a reliance upon our native ingenuity, creativity, and work ethic? Or will we get soft and look evermore toward bigger government to take care of us?

Today we are facing daunting challenges to our economic way of life. So it’s naturally important for our general feelings of economic confidence to believe that government is “doing something” positive about the situation. But this also brings upon us the risk that we, and the government, will see government as the solution to our problems. And that is a dangerous course to take for our future, and for the future of our children.

Alexis de Tocqueville, after his famous tour of the United States in 1831, drew attention to this problem when he said that people are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. So people strive to satisfy them both at once, and that leads to irresolvable problems. Then de Tocqueville went on to anticipate the time that democracy would eventually collapse. He said that would occur when the people’s elected officials finally learned that they could bribe the people into voting for them with the people’s own money.

We are close to that situation today. It is time for us both to be aware of this fact, and to take action to assure it doesn’t happen. How can this be done? First by understanding that government is not the answer to our problems. In fact, as stated by President Ronald Reagan, in many ways government really is the problem because it tends to destroy private initiative.

Second, we must not accept mediocrity or laziness — in any one or any thing, beginning with ourselves. I once had a clerk who had a hand-written sign on her desk that said “If it’s to be, it’s up to me.” This means, among other things, that if a system, or a government program, is not working, it is up to us to fix it.

For example, if a television program is harmful for our children because it shows too much violence or sexual content, don’t rely upon government to act: Monitor what your children watch, and turn off the television if the program is unsuitable. If there is no money in making television programs that cater to violence or sex, Hollywood will make different types of shows.

In addition, each of us can help to change our social morays. That means, among other things, that if a male, regardless of age, fathers a child, that male is responsible for the child’s support and upbringing. Every time! Our mores should be that a real man supports his family. But somehow society has allowed our social mores to be accepting of out-of-wedlock births and single motherhood. So, since it is our country, it is our responsibility to change away from that acceptance.

As a trial judge with 25 years of experience on the bench, I can also tell you that today we have many too many of our young people locked up. These are our children, so what is the matter with us?

Most of the problems are caused by a failure to have positive mentors and other role models for our children. We must realize that someone will always mentor our children.

And if it is not from their parents, debate teachers, basketball coaches, or YMCA instructors, children will get their mentoring from gang leaders, drug dealers, or even people like Charles Manson. Say what you will, Manson was brilliant at “mentoring” his “family,” and there are many people in our world today just like him. But give our children another vision, and the children will discover another way.

Let’s also help more to get government and its never-ending laws more out of our lives. For example, no employers hire people so they can discriminate against and harass them for racial, gender, or sexual-preference reasons, and then fire them. That makes no sense in real life. In fact, in almost every case, the employers have already “passed the test” by hiring those employees. So we should change our laws to allow an employer to fire any employee within the first year of two – for any reason at all.

What would be the result of changing this employment law? More of these protected classes of people would have jobs. Today, if an employer gets sued for discrimination, that employer, whether found liable or not, is likely to think: “Who needs it? Why should I take a risk in the future by hiring such a person?” But if there were this period of immunity to see if the employee was able to be productive, even if the original employee didn’t work out, the employer would not be deterred from hiring someone similar in the future. So this law actually works against equality in employment.

There is a story that, at the close of our Constitutional Convention, Benjamin Franklin was asked what type of government the delegates had agreed upon for our country. He responded: “A Republic, if you can keep it.” Our Founding Fathers established for us a government ruled by law, but based upon the individual “We the People” as the sovereign.

But each of us must do our part. If we don’t vote and oversee government, some special interest will. If we don’t monitor and mentor our children, and provide them with productive visions of the future, they will be more likely to become unproductive and antisocial. And if we are not vigilant, even in these turbulent economic times, we will lose our cherished Republic.

As Anne Frank wrote in her diary, which became a literary classic: “A quiet conscience makes one strong.” She is right. We need that quiet conscience now. We must rely on ourselves and our innate abilities and ethics to overcome our problems of today. And we must not give in to the false but seductive allure that the answer lies with the all-knowing and all-protective government.

If it’s to be, it’s up to me.



JAMES P. GRAY is a retired judge of the Orange County Superior Court, the author of Wearing the Robe – the Art and Responsibilities of Judging in Today’s Courts (Square One Press, 2008), and can be contacted at JimPGray@sbcglobal.net or via his website at www.JudgeJimGray.com.

Monday, December 1, 2008

“FREE TO CHOOSE” IS THE SLOGAN FOR PROSPERITY" by Judge Jim Gray

“FREE TO CHOOSE” IS THE SLOGAN FOR PROSPERITY - by Judge Jim Gray 01/06/08



  We are about to enter another New Year. May it meet your (reasonable) expectations, and may you prosper.


  Okay, that is the formality, but I actually hope it comes to pass. Nevertheless, for us to maximize everyone’s chances of fulfilling those desires for prosperity, we must listen better to that great thinker and Nobel Prize-winning economist Dr. Milton Friedman and his equally brilliant wife Rose.


  Yes, we as citizens and voters actually have to consider economics, because this is the “invisible hand” that in so many ways drives our decision-making process and also that of our great nation as well. And the basis for our prosperity is simple: the basis is “choice,” or as the Friedmans put it in the title of the economic bible they wrote, we must be “Free to Choose.”


  What does that mean? It means that the foundations of prosperity based upon our free choice are private property rights, a fair and foreseeable system of justice, and entrepreneurship and all of the calculated economic risk-taking that this entails.  


This sounds like intellectual egg-head talk, but it really is not. It simply means that we must set up a system that maximizes ways people can choose for themselves how to work and spend their money, instead of having the government make those choices for them. This necessarily means that people will benefit from the good choices they make and be responsible for poor ones. But that is the way to prosperity. Therefore, every time the government substitutes its “wisdom” for ours, it is taking us farther away from prosperity.  


For example, if you feel you get good value for your money by having a particular person cut your hair, why should the government require a license before that person can do that work? Remember, if the work is not worth the money charged, the would-be barber will go out of business regardless of what the government license says.


Of course we will still need things like protections against environmental pollution and recourse for defective or even harmful products. But fortunately in most ways the justice system can handle those issues.


  So how do property rights fit into this discussion? Let me give you an example. Consider that there was a grove of apple trees growing wild somewhere along the Oregon Trail during the covered wagon days. So when a wagon train would come upon it, the travelers would pick more of the ripe apples than they needed – why not, they’re free?  


  Then the people in the next train would probably pick all of the remaining ripe apples, and most of the green ones as well. Why not, they’re free, and the travelers can always feed the unripe apples to their oxen. So soon there would be no more apples at all on the trees. But the people in the next train would cut down the branches and even the trunks of the trees to use as firewood. Why not? They can use the wood, and if they do not cut it down, someone else behind them will.


  Therefore, in this situation not only would no one plant, feed and prune the trees and harvest the apples for maximum benefit, the trees would actually be plundered and soon destroyed. But if a private person had enforceable ownership rights to the apple grove, enforced by a fair and foreseeable system of justice, there would very likely be an abundance of apples for all.


  In other words, with enforceable property rights, people have the incentive to work hard and plan for the long run future because they will profit from their efforts. But without those property rights, the incentives instead are for people to plunder the resources in the short run before someone else does so.


  Now to take this discussion one step farther, who has more incentive to plant, organize and develop a better apple grove, private people working for their own self-interest, or the government? For the answer to that question, ask the people of Poland, the Czech Republic or Cuba. Or compare the productivity level of South as opposed to North Korea, or previously West Germany as opposed to East Germany. Furthermore, what is a better way to decide how many washing machines to manufacture, or how many black cars to produce instead of red cars? To have a government bureaucrat make the decision, or a private company that is sensitive to the free market choices of its customers?  


To have a system of government decisions in the marketplace leads to what the Friedmans call the “tyranny of control.” And bureaucrats always have a natural tendency to increase their power and their area of influence. That is a major explanation for our government being so large and controlling today. But to have the decisions made privately brings the most rational decisions in manufacturing and distribution. And that brings prosperity!


  So let us keep in mind and adhere to the teachings of the Friedmans. The free market actually works! All a country needs to be prosperous is a vigorous system of entrepreneurship – not natural resources (Look at Japan!) or even access to the latest technology (Look at Botswana!).  


  And if you still disagree with this statement, let me clinch it by asking you a few of Milton Friedman’s questions: “Why do you believe that political self-interest works better than economic self-interest? Or why do you believe that government bureaucrats can make more rational choices for you than you can? (And by the way, if the government accumulates more power, the industrialists and other private interests will simply take it over and control it anyway.)  


So when will we find these governmental “angels of the public good” to better organize our society? And why haven’t we found them yet? The plain reality is, as stated by the Friedmans, that all societies run on greed, but the prosperous societies run on individuals that run on their personal interests. Competition under a fair and foreseeable justice system pushes us to advance and, once again this brings prosperity.


  Look at the recent experiences in Ireland and New Zealand, where large cuts in taxes and government spending directly resulted in substantial increases in investment and entrepreneurship. This has also been seen in Botswana, which has in a short time progressed from one of Africa’s poorest nations into one of middle-range income. The truth is that no peoples have broken away from poverty except under a system of capitalism and free trade, and that means free economic choice. (Today’s China is another case in point.) The big problems come when foreign aid and government interference undercut the local entrepreneurship.


  As a result, our efforts at foreign aid would be ever much more successful in non-emergency situations if we would make small business loans of money or even farm animals to the people at the bottom of the economic ladder, instead of providing loans of money and products directly to foreign governments. The former are used by the people to set up and expand local businesses, which create prosperity; the latter are most often used by politicians to purchase expensive automobiles and end up in Swiss bank accounts.


  So I believe the Friedmans would conclude this discussion by saying that there are four ways to spend money. The first is that you will spend your own money on yourself. That will be done carefully, and you probably will get your money’s worth. The second is you will spend your money on someone else. Then you will mostly get your money’s worth, but you will be careful not to spend too much. The third is you can spend someone else’s money on yourself. There you will probably get fairly good deals on things you mostly do not need. And fourth, you can spend someone else’s money on someone else. There you will get our nation’s public school system, which we will discuss in a future column.


There certainly is a need for a federal government, but that need is generally just for a strong military, national court system and police network, system of currency, and matters of foreign relations. For other government roles we should go back to the concept of Federalism – which made our country great! That means that the most local government that is able effectively to address a particular issue would have the authority and power to do so. Finally, as it states in both the 9th and 10th Amendments to the U.S. Constitution, the rest of the powers should be reserved for the people themselves. And, as the Friedmans would quickly say, that would allow the people to be Free to Choose.


  So as the New Year is upon us, let us come together and decide to change away from a bigger and ever more encroaching government. And we can do it simply by asking ourselves when it comes time to vote which candidates or propositions would more encourage free choice for the most people and responsibility for the choices made?  


So now armed with the slogan “Free to Choose,” I sincerely wish you all a Prosperous New Year!

James P. Gray is a Judge of the Superior Court in California, the author of Why Our Drug Laws Have Failed and What We Can Do About It - A Judicial Indictment of the War on Drugs (Temple University Press, 2001) and Wearing The Robe - The Art And Responsibilities of Judging In Today's Courts, has a blog at http://judgejamesgray.blogspot.com/. http://www.judgejimgray.com, and can be contacted at www.judgejimgray.com.