Editor's note: In today's edition of the weekend Masters Series, we complete Casey Research founder Doug Casey's discussion of the "New Class" of pseudo-intellectuals who have corrupted America's largest institutions. (You can read part I here.)
As he explains in this interview with Casey Research editor Louis James – originally published in a November issue of their free weekly e-letter Conversations with Casey – the pseudo-intellectuals' fear of risk has resulted in a mindset that claims for everyone not only the right to succeed, but also the right to success – whether or not they earn it. And the consequences have been terrible...
Louis: The adoption of the "precautionary principle" – the idea that no new things should be allowed until they are proven safe – by so many greens shows that you were spot on. Never mind the transition from agrarian to industrial society or now to the information age – the precautionary principle would have kept our species from becoming cavemen, as it would and could never have been shown that it was safe to come down from the trees.
Doug: Sad but true. These people actually hate the idea of the ascent of man and dislike the concept that mankind's destiny lies in the stars. And it connects to what you were saying about this personality type hating risk and seeking safety. That relates to the next problem area:
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Health and Safety. The New Class believes man incapable of making a rational or informed judgment about what risks he accepts. Like many who enjoy privileged lifestyles, the New Class tends to be afraid of risk or change. As a result, even the normal risks of living are blown out of all proportion. Since the New Class is better educated and more sophisticated than the population at large, it tends to believe it knows what is best for the "masses."
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The end product, of course, is a busybody mentality, which is only natural, since social workers, politicians, and pundits are really only professional busybodies; their job descriptions are to set standards for others and then make sure those others conform to their standards. And, after all, if "society" is going to pay the costs of an individual's sickness or injury, it follows that society's New Class guardians should ensure that the individual behaves appropriately, regardless of whether or not those who have to obey the rules, and pay taxes for the privilege, like it.
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L: Sounds like the bioethicists we were just talking about.
Doug: Bioethicists are a newly minted subclass of the group we're talking about. Take their focus on a "fair and equitable health care system." Instead of unleashing the power of the marketplace to advance medical technology, they want to set up a vast bureaucracy, which they – of course – will control. It's part of the notion of "social justice," about which I wrote in this chapter almost 20 years ago:
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Social justice. The New Class translates social justice as not just equality before the law or equality of opportunity, but as equality of income and standing. In their calculation two wrongs can make a right, which is what "affirmative action" is all about. As a result, people are treated not so much as individuals, but as members of racial, religious, or other groups. This serves to entrench the very problem the New Class claims to want to solve, and as a bonus sets up an atmosphere for class warfare.
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L: Or to put it back in my more psychological way of looking at it, this personality type, which fears risk, doesn't want equality of opportunity, but equality of outcomes. Equal opportunity is possible in a free society. It is, perhaps, one way of defining a truly free society.
But freedom to risk for greater gain is also the freedom to fail and have to start again. That won't do. In this worldview, everyone must succeed. They think everyone doesn't have just a right to try to succeed, but a right to success – whether or not they earn it. Everyone should have a car, a home, education, medical services, and much more. It never occurs to them – they cannot allow themselves to ask – how these things can all be guaranteed without the power to compel some people to provide them.
Doug: Yes, but it's not just economic ignorance, it's willful economic ignorance. They think they know how things "should" be... know what path economic development should take for everyone. And they're not only willing but enthusiastically anxious for the state to enforce it. End of discussion.
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Economic development. Much emphasis was placed on "jobs" during the 1992 elections, although exactly what that meant wasn't made clear. A process of elimination is helpful. We know jobs in fast-food restaurants aren't socially acceptable, and factory and other repetitive work is behind the power curve.
But the world is not yet ready for everyone to be a TV producer, lawyer, lobbyist, consultant, or some other kind of symbolic analyst. What kind of job might the candidates have meant? It's tough to create productive work for people when you do not let the market tell you what it wants. But the New Class will tell the market what it should want. That is called an "industrial policy."
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Of course the government can create jobs by hiring people for public works projects, shoring up the country's deteriorating infrastructure. (The paradox of why the government-owned infrastructure is collapsing, but privately owned buildings are well maintained, is never addressed.)
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Another alternative brought forward by those who believe in an industrial policy is to make large grants to large companies to employ large numbers of workers. One alternative not likely to get wide attention is the firing of government employees and the elimination of taxes and regulations to get the economy moving.
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The peer pressure, social opprobrium, and moral approbation – and overt regulations – arising from New Class values result in the fact that people tend to work less hard, take fewer risks, and seek more leisure. Obviously, everyone makes these choices for themselves, but if the Wright brothers had to develop an airplane in today's environment, they likely would have become discouraged before they succeeded.
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L: Wow – you sure called that one right. It's as though the Obama administration read your list of things not to do and adopted it as its game plan.
Doug: No crystal ball was required. That government will do not just the wrong thing, but the exact opposite of the right thing, is one of the safest bets any speculator can make. It stems from the New Class' clear fear and loathing of having to compete and win in the free market.
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Free markets. Since the manifest bankruptcy of socialist systems around the world, it has become less fashionable or credible to deny the benefits of a free market. Instead the emphasis has changed to "perfecting" the markets through a government-private "partnership" of "national industrial policy," "targeted spending," and other euphemisms for planning, directing, and controlling the economy.
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The trouble with the market's "invisible hand" is that it moves too slowly to suit people who want results while they are in office. Although the results may be what the market – that is, most people – wants, the New Class believes the majority of people do not know what is in their best interests. The New Class will grudgingly acknowledge that free markets and capitalism can be "efficient," but then claim they aren't adequately "moral," i.e., in tune with the values of planners. Regulation is likely to increase, not decrease.
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L: OK – I can see that no crystal ball was required for that one. In spite of some deregulation in the Reagan era, the pathology of government is to always increase its power over every level of economic activity, to the detriment of innovation and entrepreneurship.
Doug: Entrepreneurship is the next one:
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Entrepreneurialism. Entrepreneurs and businessmen in general are held in low esteem by the New Class. Businessmen employ workers, which leads to the presumption that they also exploit them. They advertise, which means they "induce" people to buy things they don't really "need.'' They make a lot of money, so they are expanding the gap between rich and poor.
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New Class attitudes toward business are similar to the attitude of European aristocrats toward work in general: It is best left to the lower classes and those who haven't found a way to rise above it. The fact that businessmen are typically "doers" leads the New Class, who see themselves as "thinkers," to look down on them. It's a culture clash, and businessmen are viewed suspiciously, unless they can prove their social value in some way other than just making a profit. Someone who makes a million dollars producing a new razor or a cancer cure is looked upon as if he alone, and not all of society, were the beneficiary.
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L: Ayn Rand spoke about this in her last speech, when she touched on the self-destruction of the American businessman.
Doug: That fits in with the fall of the "America that Was" we've talked about before. And that relates to the last of set of relevant values I wrote about in '93:
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Traditional values. Boy Scout virtues are out and radical chic is in. Nineteenth-century values (courage, perseverance, responsibility, and achievement) are out. John Wayne is unhip; Alan Alda is a more acceptable male role model. Some lip service will be paid to traditional values to appease the silent majority.
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But these traditional values are pretty much held in contempt by the New Class. "Alternative lifestyles" will likely meet with tacit approval, if not encouragement. That's not to be confused with the get-along-go-along tolerance for, and encouragement of, diversity typical of libertarians. The New Class harbors an active dislike for "middle-class values" and a desire to create a new set of values. In the process, it may create the conditions for active class warfare.
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L: That reminds me of something I think Nathaniel Brandon once said of those who hold this worldview. They claim the moral high ground and berate us, saying: "You must love everyone – or we'll kill you."
Doug: That's exactly the sort of New-Class arrogance I was writing about.
L: All good – but that was, as you say, almost 20 years ago. Would you change the list or update it in some way?
Doug: Not really, except to say that the views of these people have not only gotten more extreme, they have become more widely accepted. They're now insinuated throughout society, they're accepted as givens, and have corrupted people's assumptions. So it's rather predictable that personal freedoms are vanishing and the world is moving toward a "kinder and gentler"… version of Orwell's 1984.
L: OK... Investment implications?
Doug: Well, it's yet another argument in favor of the view that things will have to get worse before they can get better. The next stage of the Greater Depression might change a few things... Fortunately or unfortunately, depending on how you look at these things, that's exactly the direction things are headed…
L: Any chance of a more positive conversation next week?
Doug: Well, if things getting worse is a step toward things getting better, we've just had a very positive conversation. As you know, I always like to look on the bright side. But on the other hand, I have to say what's on my radar now are more signs of World War III approaching.
L: OK, Mr. Optimist. I'll just keep singing in the rain.
Editor's note: Casey Research originally published this interview in its free weekly e-letter Conversations with Casey... The letter is considered a must-read around our office. Recently, they compiled their favorites into a new book, Totally Incorrect.
Porter has called it "the most important... and dangerous" book he's read recently. He was so impressed... he ordered several thousand copies to give to subscribers – for free. You won't even have to pay shipping and handling. To find out how to get a copy, click here.