The Ultimate Minority

Whenever you find that you are on the side of the majority, it is time to reform – Mark Twain

Management by Objective, as practiced, loves goal setting and measurables. The old mantra “if you can’t measure it, you can’t manage it” is uttered every 1.2 seconds in some office, somewhere in America.

It works like this: Measure a result over some period of time, decide on a goal for better numbers, communicate that goal to subordinates, and hold them accountable for attaining the goal. On-time shipments averaged 80% over the last year? Set the goal at 90%. Average GPA for a student body is 2.0? Mandate a requirement that the school reach an average of 2.5 within three years. This is also the favored method of the bureaucrat and the central planner.

When Dr. Deming spotted such practice, he would always ask: “By what method?” How would you attain such a goal? And if you could get better results simply by decree, what prevented you from doing it the year before?

“Must have been goofing off”, Deming chided.

Brian Joiner expanded on Dr. Deming’s work by teaching that there are three ways you can get better numbers out of a system:

1) Improve the system.

2) Distort the system.

3) Distort the numbers.

That’s it. Three choices. The subjects, given a new goal to reach, will follow one of the three methods. Let’s look at methods #2 and #3 first, since lacking any tools and methods for real systemic improvement, people usually resort to one or the other. Method #2, distort the system, may take the form of “show me what you’ll measure, and I’ll show you how I behave.” It means that people will shift their priorities from one task to another if they know it is being scrutinized closely. Less time and effort will be spent on Task A because management has stressed that Task B must improve. Of course, Task A was the big push last month, but management can only keep up with so many priorities. As a result, we get local improvement in one area, but no real systemic improvement because some other area suffers a lack of effort or attention. This leads to management playing the old whack-a-mole game, like the one at the arcade. Holding a padded mallet, moles pop up out of holes and the player beats them down, only to have another mole pop up from a different hole, and on and on… The management version of whack-a-mole involves keeping up with all of the goals and priorities while employees shift their efforts around to meet the big push of the moment. Method #2 may also involve changing the system to its detriment to make better results, as measured, more easily attainable. In the case of student GPAs, we may simply make tests easier, inflating grades but with no net benefit to the learners.

Method #3, distort the numbers, is much simpler. We simply fudge the figures. An inspector, charged with reporting the number of defects per worker, may fail to report defects to save a co-worker from discipline or firing. The defects are hidden, the numbers get better, but quality did not improve.

There are countless ways methods #2 and #3 can be carried out, limited only by the creativity of the workers. McDonald’s installed an electronic eye below the drive-up window of their restaurants to count the cars as they pulled up. The vehicles-per-hour figures were sent up to corporate, and goals were established. A consultant schooled in the Deming management methods knew the right question to ask: “What do you do when your numbers are running low?” A grinning employee showed her – they would dangle a bag out the window, back and forth across the electronic eye to run up the counter.

Bank tellers seldom have a perfectly balanced till at the end of their work day. Overages and shortages occur. A new branch manager, intent on eliminating the problems, simply mandated that they will not be tolerated. Anyone turning in a till with anything other than a balance would face discipline, a few occurrences would result in their dismissal. Within a short time, he got his results. All of the tills were balanced, day in and day out. Corporate management was impressed and the manager was rewarded for the exemplary performance of his branch. How was it accomplished? Within the ranks of the tellers, a sophisticated banking and lending operation had developed; anyone with an overage would keep it outside the system, and would turn in a balanced till. Anyone with a shortage would borrow from the overages bank, and would turn in a balanced till.

The numbers improved, but the system did not. In fact, the effort expended in running the subsystem of banking and lending diverted time and effort from customer service and real system improvement.

If we want better results, we have to improve the system that delivers the results. Real improvement comes from the introduction of better methods, an understanding of the System of Profound Knowledge, and the methodology of the Plan-Do-Study-Act cycle.

Corporatism

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As a business owner and a true advocate of free markets, I have, in the past, had a difficult time defending free market principles when people point out the problems in areas such as health care, big pharma, and Enron-type scandals.

I found the answer in my studies on corporatism.

Corporatism is the dirty relationship between government and corporations. It is also a key component of socialism – Mussolini was a champion of corporatism. You can identify it by several characteristics, but one of the simplest and most concise measures is this: Profits are privatized, while losses are socialized.

The Military Industrial Complex is a blatant example of corporatism. When you get into the who’s who of the MIC, you find the same names popping up time and time again. These people move from government positions, both elected and appointed, to top executive positions in the companies of the MIC, and into large, influential lobbying organizations on the behalf of the MIC. It’s a giant revolving door. They are powerful, highly politically connected individuals working to benefit the corporations at the expense of the American people.

When the US government sends helicopters to South American governments to fight the “war on drugs” who do you think lobbied for this decision? Agencies representing the interests of the helicopter maker.

In the 1990s, the Mexican government went on a spree of massive inflation, ravaging their financial system. The US government and its Federal Reserve bailed out the Mexican government on the backs of the American taxpayer. Congress was against it, but the Fed got it done. It turns out that large US investment banks were holding $21 billion in bad debt to Mexican public and private institutions. A key player in the bailout was Treasury Secretary Robert Rubin, the former head of Goldman Sachs. Goldman Sachs held a large share of the Mexican debt, and shortly after the bailout reported record profits. Profits were privatized, losses were socialized. You pay the bill.

The Federal Reserve system is an 800 lb gorilla of corporatism. It is not a government agency, it is owned by the member banks. The Fed has the government protected monopoly on the printing of money. It protects its member banks from failure with the promise of simply printing more money when they make bad investments. The US government borrows money from the Fed, the Fed creates the money out of thin air, and the taxpayers pay interest to the Fed for its role in printing and supplying money to the government.

Then there’s the holy grail of the corporatist: Government contracts. You get to charge $4000 for an ashtray! It’d be pretty hard to not make a buck with that deal. When your budget estimates break down and your project is going to take twice as much time and cost twice as much money, the treasury ponies up.

Look at the whole Blackwater affair. A highly politically connected corporatist builds a security company, and contracts its services to the US government. They call it “privatizing” functions that are normally the province of government. Blackwater gets vast amounts of taxpayer money, then carries out the wishes of the government in doing its dirty work. When the actions of Blackwater are exposed, the corporatist willingly fills his role as the scapegoat.

Hearings are held and well publicized in the mainstream media. Politicians scramble for airtime in the show trial – you can actually see them chomping at the bit – grandstanding in demonstration to the masses that they are fighting in their interest, blaming privatization, challenging these greedy “capitalists” and promising more regulation and accountability. If there’s one thing a politician loves, it’s having someone to blame.

All the while, official government bureaucratic blunders, scandals, and abuses are swept under the rug as quickly as possible. The message gets out to the people: Evil private corporations are being reined in by your representatives. They can’t be trusted. Give the government more control, the market doesn’t work. It’s a win-win proposition for both parties. Government officials get to decry privatization and the market, and the corporatist gets his guaranteed profits.

The examples are many, but let’s get back to the theory and practice of corporatism. It is not the free market at work! It is a violation of free market principles.

Murray Rothbard explained that monopolies and cartels cannot exist in a free market. Let’s say the three biggest steel producers in early industrial America, together holding 90% of the market share, want to assure their profitability despite declining productivity. They band together and agree to set pricing for their products. Here’s a few of the things that will happen:

1) As prices go up, the industry will begin to seek alternative materials. Brass, aluminum, and plastics, for example. This lowers demand for the steel industry, further pressuring their efficiency and profitability.

2) High prices of steel catch the attention of entrepreneurs, who see large profits to be made in the industry. It attracts investment in smaller, leaner, more efficient operations to compete with the big three, seeking to take advantage of the handsome profit margins.

3) The big three start to undercut one another, making side-deals with their best customers…”I’m supposed to charge you x, but you’re one of our best customers. I’ll give you a 15% discount, just don’t let anyone know you’re getting this deal…”

All of these factors continue to the detriment of the cartel. Markets are swift and judicious, if you’re not providing value in the market place, alternatives will emerge.

How does the monopoly or cartel survive? By seeking protection from the government. They will agree to heavy regulation to create a barrier to entry for smaller competitors. They will seek protection from imports in the form of tariffs.

Look into any example of government antitrust legislation, and you will find that it is always to the benefit of some politically favored corporatist entity. It is always done in the name of “protecting the consumer,” yet it always benefits the few at the expense of many.

There is a symbiotic relationship between government and large corporations. Both are immensely bureaucratic, so they work on the same level. Government benefits by imposing unending regulation on the corporations in the name of protecting workers, viewed by the people as their government protecting them from greedy capitalists. The corporations benefit because the regulation burdens smaller competitors, and they get protectionist trade-offs.

New regulation that favors corporatism is sometimes hailed, sometimes opposed by the corporatist. In either case, it is a ploy to gain public support for the measure. The bankers feigned outcry over the formation of the Federal Reserve system. Government sold it to the people as a means of protecting their money from greedy bankers, and when the people saw that Rockefeller was against it, it justified their support because the baron was being reigned in by their protectors. Rockefeller, of course, was one of the architects of the Federal Reserve system, and went on to amass fortune that would have been impossible in free market banking. Corporatists that support regulation are portrayed as altruistic, the rare non-greedy capitalist who agrees to limitations for the benefit of the people, to keep his greedy competitors in check. In the end, he always benefits while the consumer loses and competition is stifled.

As Ron Paul says, we have lost our way. We have lost our confidence in free markets. We look to government for solutions to everything. Corporatism is the tool governments use to undermine confidence in free markets, and to gain control over all production. Mussolini would be proud.

Money, Banking and the Federal Reserve, produced by the Ludwig von Mises Institute.

This is the premier introduction to understanding what money is, how governments always seek to control the economy through currency manipulation, and their partner in crime, the central bank – in the US, the unlawful Federal Reserve System.

There are several other videos out there, two that I can think of off-hand are produced by socialists and the monetarists. Both provide generally decent histories of central banking and currency manipulation, but their solutions are more of the same: More government control. Only the Mises video represents the true free market solution to money and banking. Enjoy!


In a nutshell, this is the true objective of the invasion and occupation of Iraq:

The US government wanted to establish a foothold in the Middle East, to install a friendly puppet government that would provide a cheap supply of oil (how’s that working out at the pump?) and an imperial base of operations in the region. This is a mercantilist policy, a plan to gain control over natural resources in foreign lands.

In the process, the empire has decimated the Iraqi infrastructure, killed hundreds of thousands of its people – a million by some accounts – and is now dividing the remaining people into factions that it can better control.

But what about what will happen if we leave? Won’t there be chaos and disorder?

Yes.

There is chaos and disorder now. The country is in disarray, whatever order is apparent is the disorder of military occupation and martial law.

Our troops are occupiers, charged with quashing rebellion against the empire. This is a losing proposition, and only assures that the morale of our troops will continue to degrade as the occupation continues. US troops will dehumanize the Iraqi subjects on an increasing scale. Drug use will escalate, crimes against the Iraqi people will grow in frequency and severity. The Iraqi people will continue to grow in resistance as more and more people become desperate to expel their foreign occupiers.

We hear talk of the US “winning the war.” What does this mean? For all intents and purposes, the US military “won the war” on April 15, 2003 when the invasion was complete, Baghdad and Tikrit were taken, and Sadaam Hussein went into hiding. The Iraqi Army was vanquished, and Hussein was no longer in power.

This is not a war, this is a five-year occupation, and the US military will never “win” an occupation. Organized military is never a match for guerrilla fighters intent on taking back their land.

Iraq was a nation formed at the convenience of Western powers, and was only held together by a military dictatorship. The collapse of the Hussein regime has presented an opportunity for the various factions to seek their own ends. The only solution is for the US to get out of the region and to allow the people to settle the issue themselves. It appears as though they would divide the country into several sovereign states, if left to their own devices. If this allows them to eventually find peace, so be it. Any disorder that results in the transitional period is their own, and they won’t have the US in their way.

The war was unlawful and unnecessary, but it was won. The occupation is unlawful, makes us less safe, and will ultimately fail at the expense of hundreds of thousands of lives and the US economy. Empires don’t fail because they are defeated militarily, they fail because they over extend themselves and destroy their wealth.

We establish governments to protect our rights, and delegate to them the exclusive use of force in the resolution of conflict when our rights are violated.

Rights are based in property. Your rights to the ownership of your property (including your own body, your labor, and the things you acquire through lawful exchange with another) are absolute and inalienable.

So now this government, which we established to protect our life, liberty, and property… taxes our property. And if we don’t pay the state its ransom, it uses the force we delegated it to take our property away.

Something has gone horribly wrong here. This does not sound like a right to ownership to me, it sounds like we are privileged to hold land so long as we’re paying tribute to the state – a privilege that will be revoked and the land taken away from us if we don’t pay.

I got involved today in helping a family member understand the foreclosure process. Take a look at the wording of this FAQ from the Clinton County, MI web site:

Q. If I don’t pay my taxes, will I really lose my house and property?

A. YES. Property owners who had delinquent taxes under the old law could lose their property, but they had more time to pay and more “second chances”. Under the new law, if your taxes are delinquent for three years, that’s it. You’ve lost the property.

Q. What happens after my property is Foreclosed? How do I get it back?

A. FORECLOSURE IS FINAL. YOU CANNOT GET YOUR PROPERTY BACK AFTER IT HAS BEEN FORECLOSED. PROPERTY THAT HAS BEEN FORECLOSED WILL BE SOLD AT PUBLIC AUCTION.

That reads like an owner extending privileges to me. It also reads like an overbearing parent threatening punishment on a misbehaving child – “That’s it, you lose!” and “WE’LL YELL AT YOU IN CAPS TO ASSURE THAT YOU UNDERSTAND.”

You don’t own your property, you lease it from the state. The parasite that is government has grown into a full-scale disease, with complete control over the host.

When people submit themselves to a legislature of their own making, it is obvious that they cannot let that legislature destroy that which they had hoped to secure in entering into society. Whenever the legislature tries to take away or destroy the property of the people, or reduce them to slavery under arbitrary power, it puts itself into a state of war against the people, who are then immediately justified in rejecting it.

- John Locke

Civil Disobedience by Henry David Thoreau, a free audio book on Librivox.org.

I downloaded this book in two parts and listened to it 2-3 times in just a few days. It is that good.

Thoreau was jailed for not paying a tax. He chose not to pay the tax because he did not support the US government for its support of slavery and its war with Mexico. Thoreau believed that by funding the government, he was sanctioning its actions, so he opted out.

When he was jailed, he remained defiant and spent his time reflecting on the nature of the state and its use of force. He urges us to withdraw support for illegitimate government, and hints that if everyone did, they would have no room to fill their prisons with all of the non-compliants. His friend, Ralph Waldo Emerson, visited him at the jail and asked him what he was doing in there. Thoreau’s response was to question what Emerson was doing “out there.”

The reading of this book is excellent. It is one of those rare moments that I enjoyed the voice of the reader better than my own. He brings Thoreau’s words to life with drama and power. Check them out at:
Part One

Part Two

Step One:  Separate the US government and its actions from the American people and the American system as an ideal.

“We” didn’t invade Iraq, the US government and its twisted leadership did.  “We” didn’t “invite the attacks of 9/11,” our government and its foreign policy created resentment by people who see it as an imperial occupier of their land, and manipulator of their governments.

When you see people get all up in arms because someone criticizes the government, and they attack that person as “un-American” or “unpatriotic,”  stop and think:  What is un-American about criticizing bad government?  What is patriotic about blindly following a government that is violating the law?

A true patriot stands for the principles upon which this country was founded.  He insists that his government follow the Rule of Law, the Constitution of the United States.  He remembers that the oath of office binds the sworn to protect the Constitution against all enemies, foreign and domestic.

There is nothing patriotic about blindly obeying and following government with a “my country right or wrong” mentality.  In fact, this is the opposite of patriotism.  It is belligerent nationalism, jingoism…State worship.  It is the major contributing factor allowing government to devolve from a constitutional republic to tyranny, because in order to survive, all governments, regardless of form, must have legitimacy in the eyes of their constituents.

The scoundrel is the one who, under the guise of “patriotism,” does not question the actions of government, he merely follows.  He values the status quo, and sees government as legitimate in its role of keeping the order.  And he is easily led to accept tyranny and despotism as necessary to keep order in a society of miscreants.

He would have been a Tory in the American Revolution.  He would have been a national socialist in Hitler’s Germany.   And he will be the one to accept without question those who rule him if this country becomes a military dictatorship.

I know several of them personally, and I see many of them in the news media.  To them I say, as Samuel Adams did:

Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen.

The quote above, “War is the Health of the State,” is that of Randolph Bourne, and it sums up my personal view of war. This has not always been the case.

I thought it appropriate to give a personal history of my views, to show how I was once like so many in my understanding of war, and to introduce some of the readings and thoughts that have led to my current perspective.

I was 7 years old when U.S. involvement in the Vietnam war was over, so I do not have many memories of that conflict. January 1991 marked the beginning of the Gulf War, and the beginning of my personal evolution.

I was 25 years old when the U.S. military launched Operation Desert Storm. I tuned in to CNN daily to gather all of the information that I could. I marveled at the footage and the commentary depicting surgical strikes, scud missile intercepts, bunker-busters, and bouncing betty’s.

While I’ve always taken issue with big government, I put aside my differences for the cause – war has a rallying effect. I didn’t know much about the history of the Middle East, but I listened intently to the talking heads and politicians as they explained who the villains were, who we were there to save, and how our presence was necessary. I remember the debate as to whether the U.S. should “police the world” and thought, perhaps, it was our reluctant role to keep the peace, fight the spread of tyranny, and promote liberty around the world. We were, after all, the world’s lone superpower after the fall of the Soviet Union.

I remember studying the rules of the draft, and learning that as a 25 year old, I would be late in line to have my number called up. Four months after the U.S. invasion, I would turn 26 and would be (mostly) clear of the draft. But my friends and I talked often about what it would take for us to get involved, as we were patriotic young men and believed in the cause of liberty. We weighed in on the questions of how long this war would go, to what degree it would escalate, how many countries would be involved, and who would be fighting whom, as the criteria for our involvement.

I cheered our troops on, and when the war was over I went to a t-shirt printing shop and had a shirt made with the U.S. flag emblazoned on the front, and radical looking letters shouting “Anybody Else Want Some?” written across the flag. It was a big hit when I wore it in public. The people were swelled with pride in a swift, decisive victory. All was well with the world; we had shed the demons of Vietnam, my country had shown that it can deliver justice in rapid fashion, and the war was over.

I was a war supporter.

Next entry: Part 2

Do you know the difference? Unfortunately, most people think we live in a democracy. Every day in the media, in speeches by our elected representatives, the word “democracy” is used as though it were synonymous with freedom.

It is not. Democracy is antithetical to freedom.

Our Founding Fathers were clear on the distinction, and were clear on the fact that they had established a Republic. Not a democracy.

In fact, the word “democracy” appears nowhere in the Declaration of Independence or the Constitution.

Article IV, Section 4 of the Constitution guarantees “to every State in this Union, a Republican Form of Government.”

Our Pledge of Allegiance states “…And to the Republic, for which it stands…”

Refer back to my earlier post on Individual Rights. You were born with them – therefore, sovereign power resides with the Individual. No majority vote can take away your rights.

In a democracy, sovereign power resides in the group as a whole. And so, majority vote rules. Rights can be granted and taken away from the individual. So can property.

The purpose of a republic is to secure the rights of the individual. Our Constitution was specifically designed to limit the powers of government, to assure that the rights of individuals were not compromised. It uses negative language regarding the role of government throughout: “Shall not abridge, infringe, deny, disparage, and shall not be violated, nor be denied.”

We are, today, in the downward spiral of democracy. Both on the individual rights front, and on the fiscal policy front.

Alexander Fraser Tytler said: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, followed always by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”

What has resulted is a top-down government with central power at the top (federal) and the states all lining up like calves to suck at the teet of the federal government. Exactly the opposite of the intended design.

When asked what kind of government had been established, Ben Franklin stated “A Republic – if you can keep it…”

Rights and Privileges

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Consider these statements:

“I am an American Citizen, therefore, I have these rights…”

- or -

“These rights are granted to me by the Constitution…”

- or -

“The U.S. Government gives me these rights…”

All of the above statements are WRONG. Yet most people probably wouldn’t take issue with them.

Your government does not grant you rights. Government is an institution designed to acknowledge and protect your rights.

The constitution did not grant your rights. It was a document designed to define and limit the power of government. The Bill of Rights enumerates your rights, but it did not create them.

Your Individual Rights are inherent in being human. It doesn’t matter where or when you were born – you have the same rights. The only difference is the degree to which they are violated by the government you live under.