The Myth of Class Struggle

Check out this video for a very interesting lecture debunking the hypothesis of class struggle.

Intellectuals and Society: Poverty And Wealth

Intellectuals have a great tendency to see poverty as a great moral problem to which they have the solution. The human race began in poverty, so there's no mysterious explanation as to why some people are poor. The question is why have some people gotten prosperous, and in particular why some have gotten prosperous to a greater degree than others. But everybody started poor, so poverty is not a mystery to be solved by intellectuals. More than that, intellectuals have no interest in what creates wealth, and what inhibits the creation of wealth. They are very concerned about the distribution of it, but they act as if wealth just exists - somehow. It's like manna from heaven, it's only a question of how we split it up.

[...] Most intellectuals in most countries around the world see the issue as how those who are more prosperous should be brought down, and moreover that the people who are lagging should cling to their culture. I don’t know how you're going to keep on doing what you've always done and get results that are different from what you’ve always gotten.

Thomas Sowell

What is wealth?! This is a basic question one might ask. Paper money is not wealth! Wealth are the actual goods and services that a person has access to. Wealth are the goods and services which can be used to satisfy our human desires and needs.

A fish swimming in the ocean is not wealth. A fish caught in the net of a fisherman is wealth. The difference is that the fish in the ocean is not accessible to anyone, it cannot satisfy hunger by the virtue of existing. However, once that fish is caught, it becomes accessible and can satisfy hunger. Then, and only then, that fish is considered wealth.

Rocks found in nature are not wealth. A house that is built with those rocks is wealth, because houses can be used to satisfy the need for shelter.

In other words, our wealth depends on our capacity to transform raw materials found in nature into useful products that we can use in our everyday life. This process requires deliberate actions made by individuals.

A caveman no matter how much wealthier he is compared to his fellow cavemen is much less wealthier than most of the people we consider as poor in our day and age. There are two fundamentally different ways to measure poverty and wealth. The first is absolute measurement; Such measurement would lead us to see how the poor individuals of today are indeed much wealthier than their predecessors. The second way is comparative; That is comparing the wealth of one person to another. However, the second way can lead to disasters in terms of human progress. Most intellectuals on the left-wing of politics focus on the question of wealth in the comparative sense, but without the faintest understanding of how their type of analysis affects wealth in the absolute sense.

Having millions of dollars means nothing if there were no fish to eat, no houses to live in, no cars to drive, or no mobiles to use. In a world without goods and services, it does not make a difference if you have a million dollars or no money at all, because there is nothing to buy in the first place. Money derives its value from the goods and services you can buy, not from any intrinsic value that money has.

Without Microsoft Inc. there would be no MS Windows to buy; Without Apple Inc. there would be no iPads to buy; Without GM Ford Inc. there would be no cars to buy; And without IBM Inc. there would be no computers. Without the effort the individuals behind those companies invested, the products which we take for granted would not have existed. So, is it reasonable to claim that it is unfair that Bill Gates owns more money than other people, when the reason he became rich is that individuals found the products and services his company provided beneficial to billions of people around the globe?! Every single individual who bought MS Windows has participated in creating Bill Gate's wealth: His wealth is proportional to the amount of service he provided to individual people.

There is general fallacy that people generally commit when thinking that paper money is a measure of wealth. For example, let's say a person bought a car for 4000$; Did that person lose wealth or gain wealth?! Most people would say that this person lost wealth because he now has 4000$ less. This is the fallacy of thinking that money is a measure of wealth. 4000$ sitting in a bank account is worthless if you do not benefit from it. So, the person who bought the car has converted "virtual" wealth in the form of paper money into real wealth which is the car. The car itself is the real wealth, not the paper money.

Real wealth is a function of technology (also called "capital"). Real wealth depends on our ability to convert raw materials found in nature into useful products that we can use in our real life. A fishing net is technology: It enables fishermen to extract fish found in the ocean into fish that we can consume. Before the invention of fishing nets, people had to catch fish by their bare hands. Such a method might require numerous hours to get 4 or 5 fishes to eat. Using fishing nets we can now get hundreds of fish to eat in a small amount of time. The fishing net is thus called capital.

It can be easily seen that in a primitive society that has not invented fishing nets would be much poorer (even if the fish were evenly distributed among members of that society) than one where fishing nets have been invented (even if the fish is not evenly distributed) because the second society has higher yield of fish. Yield is the amount of resources required to obtain certain goods; Time is one of the resources that is required obtain goods; So, the higher yield in the second society is because they were able to produce more fish in a given amount of time. This increased efficiency would improve the wealth of society as a whole and the individuals within that society.

In a primitive society, if an oil field exploded in your farm, this would be a disaster, because the crude oil would destroy your crops. In that case, oil is not wealth because the technology that makes use of oil has not been discovered yet. On the other hand, in today's world this would be great fortune, because that oil can be used to run cars or be used in industry; Oil is now a commodity that serves our human needs. In other words, a primitive society cannot convert the natural resource of oil into a valuable commodity, but an industrial society does.

In short, wealth is a function of technology. The discoveries that improve our use of scarce raw materials that are found in nature. Whether it is a fish that you don't have the tools to hunt, or the oil that you cannot put to use in your day-to-day life. And those technological advancements are what creates real wealth.

Technology makes it possible to divide labor and makes better use of our time. In a primitive society (assuming it depended on fishing to eat), all people would be busy fishing because each individual can barely feed himself and his family. However, once the technology of fishing nets are discovered, only a handful of people would become fishermen and the rest would go about their day trying to make other kinds of products that they desire or need. Those individuals can then trade their products with the fishermen to satisfy their hunger, and the fishermen would have excess fish and food that they would be glad to trade their fish for the other services that have now become possible due to the process of freeing up people's time to provide new services. In this scenario, those new products -that were not possible before- are how a society as a whole become more wealthy and prosperous than another society that is not using that technology.

In other words, the technology of fishing nets freed up the time of the people in that society. They can now think about philosophy, make up theories about geometry and math, or make scientific discoveries. All of these endeavors would consequently be used to invent new technologies that would bring that society even more technological advancements that is needed to create more wealth.

Some people worry that improved technology like automated industries are not good because then the people who worked in those factories would lose their jobs. But in reality, this is how real wealth is created; Those people are now freed up and can make better use of their productive capacity and employ that capacity in new services that were not possible before, or in places they are needed more. Those automated industries can now produce more products in less time at a cheaper prince, and the workforce is now available to provide their services in other products and services.

Technology does have the short-term effect of causing some people to lose their jobs. Another example is the email. The mailman might be upset that his job is now obsolete since people can now use the email, but if every new technological advancement had to be discouraged due to it's short-term impact on a small sector of individuals nothing would ever be accomplished.

Wealth creation generally tends to improve society as a whole. And the wealth distribution generally remains roughly constant among different sectors of society like say, business owners and employees. The wealth gap might increase, but this should not be considered as a serious problem.

To give a numerical example, let's suppose that a certain sum of money is going to be divided between you and another person (say, 30% to you and 70% to the other person). In that setup, which is better: Splitting 100$ such that you get 30$ and 70$ for the other person?! Or splitting 1000$ such that you get 300$ and 700$ for the other person?! If you focus on the wealth gap, you would conclude that splitting a 100$ is better because the gap is 40$ compared to 400$. On the other hand, if you focus on absolute wealth you conclude that splitting 1000$ is better because you got more money. [Of course, we should not focus on paper money, but real wealth in terms of products and services, but let's assume that the purchasing power of money in this example is constant.]

Empirical evidence generally shows that the best way to improve the quality of life for all people (regardless of economic class) in the long-term is not to redistribute wealth, but to increase the wealth of the nation in absolute terms. Wealth does naturally flow around, and the more wealth that exists the more there is to go around.

It is a known fact (although not commonly understood and sometimes deliberately ignored) that socialism and communism have negative impact on real wealth. Socialism destroys real wealth (for many reasons that will be explained in later posts), and in the long-run all wealth would ultimately be destroyed, leaving society in dire poverty in terms of absolute wealth. One of the reasons is that our wealth depends on our capacity to transform raw materials found in nature into useful products that we can use in our everyday life. Socialism and communism interfere with the natural mechanisms that enables us to put natural resources into their most efficient use. This in turn would turn the natural progress towards more wealth in the opposite direction of less wealth, until wealth runs out completely.

Economics and The Theory of Value (2)

Profit in the Subjective Theory of Value:
In the previous part, we discussed Karl Marx's theory of exploitation, and the thesis that profit is made though exploitation of one person of another. The subjective theory of value provides an alternative explanation of how profit is made in trade.

Let's review the story of Mr. Jesus Lover and Mr. Jesus Hater discussed earlier. In that story, Mr. Jesus Lover got a T-shirt as a gift with "I hate Jesus" written on it. Mr. Jesus Hater got a T-shirt as a gift with "I love Jesus" written on it. In this scenario, both of these individuals have negative valuation of the items they have.

Unlike our previous example, in this scenario, those individuals don't know each other; So, they are not going to engage in direct trade. Instead, let's suppose there is Mr. Trader. Mr. Trader meets Mr. Jesus Lover and offers him 6$ to get that shirt. Later, Mr. Trader meets Mr. Jesus Hater and offers him another 6$ to get that shirt from him.

Note that each of these trades are good bargains for these individuals, since for each of them, the shirt they have is worthless; But now each one of them has 6$ instead of a worthless shirt!!

Suppose now that Mr. Trader puts these shirts on sale. He offers both shirts for 10$. Let's assume that Mr. Jesus Lover values the first T-shirt for 12$, and Mr. Jesus Hater values the second T-shirt for 12$ also. Both of these individuals visit Mr. Trader's shop and buy their favorite shirts for 10$.

Let's examine what happened with this step-by-step table:



As we can see, Mr. Jesus Lover started out with a worthless shirt and 10$ in his pocket. He ended up with a shirt he subjectively values at 12$ and 6$ in his pocket. Giving him a total of 18$ in value. Mr. Jesus Lover has gained the equivalent of 8$ in this process!!

Mr. Jesus Hater started out with a worthless shirt and 10$ in his pocket. He ended with a shirt he subjectively values at 12$ and 6$ in his pocket. Mr. Jesus Hater gained the equivalent of 8$ in this process.

Mr. Trader started out with 12$ in his pocket, and ended up with 20$ in his pocket. Mr. Trader has made a profit of 8$ as well...

As a total for all people involved, we started with the equivalent of 32$ in value, and ended up with the equivalent of 56$ in value. The net gain for all people involved is the equivalent of 24$... Also, note that each step in this process increases the amount of value in the system, because each step is itself a positive-sum game as the people involved wouldn't trade unless each one of them subjectively views the trade as profitable.

By understanding this scenario, we learn three very important lessons:
1- In trade, everyone involved is a winner.
2- Trade CREATES new value.
3- In trade, profit is made in the process of different subjective valuation of the same commodities.

In our scenario, Mr. Trader profited from the process of transferring the ownership title of the two shirts, from the individuals who least wanted those items, to the hands of those who most wanted those items.

In technical economic terminology, profit is made by efficient allocation and reallocation of resources. In our example, the trader served to reallocate the existing resources (the shirts), from it's inefficient initial allocation (as worthless shirts) to their more efficient allocation (valued shirts).

Labor is a resource just like any other resource in the market. And business owners maximize their profit by allocating labor to it's most efficient use. This might not be easily understood as the trading example, and I will elaborate on this in future posts.

Trade brings profit by increasing the efficiency of allocating resources. In the T-shirts example, profit was made by goods simply exchanging hands. But, this is not the only way trade is beneficial. Trade also improves efficiency by conserving resources. See video below as another example of how trade increases efficiency of allocating resources in a more concrete sense.




In this series:
Economics and The Theory of Value (1)
Economics and The Theory of Value (2)
Next: Economics and The Theory of Value (3)

Economics and The Theory of Value (1)

An important concept in the theory of economics is the theory of value. Unfortunately, numerous economical theories have misguided theories of value. The prevalent theory of value in the 19th century is called "The labor theory of value" and most economists of that time used that theory of value.

Karl Marx in his formulation of the economic system of communism had made five fatal flaws in making in his theories. Those flaws are:
1- Using the labor theory of value.
2- Lack of understanding of information propagation and signaling in the market.
3- Lack of understanding of the role of discovery, learning, and creativity in the market.
4- Misinterpreting the direction of history (historical materialism).
5- Lack of understanding of the laws of causality (the relationship between cause and effect).

In this post, I will address the first topic, namely the theory of value. Hopefully, in future posts I will address the rest of the flaws in Karl Marx's theory of economics. Please note that most of the flaws in Karl Marx's theory were result of poor understanding of economics in the 19th century, so this post is not meant to question the intelligence of Karl Marx, but rather review his theory in the light of advances in economic theory in the 20th and the 21st century.


The Labor Theory of Value:
The labor theory of value states that the value of a commodity is proportional to the amount of labor that went into the production of that commodity. This means that any two commodities that had the same amount of labor invested in them should be equally priced, and sold for the same price. Similarly, if twice the amount of labor went into one commodity, then it's price should be double.

The labor theory of value is part of a sub-class of theories of value, called objective theories of value. Objective theories of value are those theories that state that commodities should have a specific value (and consequently specific price). Labor is one of the metrics that objective theories of value use.


The Subjective Theory of Value:
The subjective theory of value state that the value of a commodity is subjectively determined by both producers and consumers.

To illustrate the flaws of the labor theory of value, let's consider this example:

Let's assume for the sake of argument, that the same amount of labor went into the production of those two T-shirts. Do both T-shirts have the same value?! Certainly not! For a person who loves Jesus, the second T-shirt has negative value. That is to say, that person would not take the second T-shirt even if it was offered for free! Different people would have different valuations for the same commodity. This means that objective theories of value are all necessarily false including -among others- the labor theory of value.


Trade is a Positive-Sum Game:
A positive-sum game is the type of game where the sum of values of all players after the process is larger than the sum of values of all players before the process.

Let's consider an example of a zero-sum game to illustrate the meaning of the term. Let's say that two friends make a bet on the outcome of a football match, such that the loser of the bet would pay the winner of the bet 10$. This is a zero-sum game because in order for one person to gain 10$, the other person has to lose 10$. So, the winner had 10$ before, and 20$ after. The loser had 10$ before, and 0$ after. The sum of money before was 10$+10$ = 20$, and after is 20$+0$ = 20$.

Since, the difference in the amount before and after is zero, then it is a zero-sum game. In other words, in a zero-sum game, in order for one player to gain a certain amount of value, the other player must lose an equal amount of value.

Sexual intercourse is a good example of a positive-sum game. Both parties involved in a sexual interaction gain satisfaction. In other words, it is a win-win situation, where all players gain value.

Is trade a zero-sum game? Positive-sum game? Or negative-sum game?

If we assume that commodities have a fixed objective value, then trade is a zero-sum game. If PersonX owned ItemX and PersonY owned ItemY, and those items had fixed objective values, then a trade will not change the sum of values in the system.

However, when we assume the subjective theory of value, we see how trade is a positive-sum game. To illustrate that, let's go back to our T-shirts example. Say, Mr. Jesus Lover got the "I hate Jesus" T-shirt as a gift. And his friend, Mr. Jesus Hater got the "I love Jesus" T-shirt as a gift. Both of these individuals have negative valuation of the items they received. On the other hand, they both have positive valuation of the item their friend has received.

Let's say, Mr. Jesus Lover proposes a trade to Mr. Jesus Hater. Let's consider the conditions on which this trade will be successful.
1- Mr. Jesus Lover values the shirt his friend has more than he values the shirt he already has; Otherwise, he wouldn't have proposed the trade in the first place.
2- Mr. Jesus Hater values the shirt his friend offered more than he values the shirt he already has. If he did not value it more, he would refuse to make the trade.

From (1) and (2), we can easily see that voluntary trade is necessarily a positive-sum game.


Karl Marx's Theory of Exploitation:
I am not going to explore Marx's theory of exploitation in full, it is a mathematically intensive theory. But what is important to realize, is that the whole theory is based on the labor theory of value, and that trade is a zero-sum game.

According to the theory of exploitation, every trade is either neutral or exploitative. So, if two individuals enter into a trade, they are either going to trade items of equal value, or trade items of different values. In the case two people trade of items of different values, the person who got the more valuable item is an "exploiter", and the person who got the less valuable item is "exploited".

Then Marx focused on the trade between a business owner (the capitalist) and the employee (proletariat). And then went on to prove that the wages employees get is necessarily exploitative. In other words, employees are always exploited.

The proof is relatively simple. The price at which a product that is sold on the market equals the amount of labor that went into making the product. So, the only way the business owner can make a profit is to pay his employees less than the true value of their labor. So, the only way a business owner can make any profit whatsoever, is by exploiting his employees. And the more profit a business owner makes, the more exploitative his wages are.

To give a numerical example, let's say a cars factory owner bought the raw materials (steel and other raw materials) for 200$. This 200$ is the value of labor required to mine those raw materials. He then hires one worker to assemble a car in his factory. Later, the factory owner sells the car for, say, 1200$. According to the labor theory of value, the price of the car (1200$) is the value of the total labor that went into the production of the car. The value that the worker at the factory added is 1000$ (since 200$ was the price of the raw materials). So, if the factory owner gives his worker 800$ as a salary, and keeps 200$ as profit, then the factory owner has exploited his worker by not compensating him for 20% of his labor (200$ of the 1000$).

It can be easily seen, how in the labor theory of value, any profit a business owner makes is necessarily an act of exploiting his workers. Fortunately, it is obvious that the labor theory of value is not a valid assumption to build a theory.

It is also important to note that, Karl Marx's theory of historical materialism is derived from his theory of exploitation, and so, that theory as well needs to be put in question.


In this series:
Economics and The Theory of Value (1)
Economics and The Theory of Value (2)
Next: Economics and The Theory of Value (3)

How Good Is Greed?!

Is greed a virtue or a vice?! Economist Walter Williams believes that greed is the noblest of human motivations... I happen to agree, do you?!

See this video of Walter Williams explaining the virtues of greed.

Socialism: Behind The Curtains

This post is a prelude to posts that critique socialism/communism.

The question is: If it was proven beyond reasonable doubt that socialism would lead to massive poverty, would you still support socialism?! If making everyone equal in terms of financial wealth meant that the average wealth of people in a socialist society is below the average of wealth in a capitalist society, would that change your mind?! What if the average wealth in a socialist society will be below the poverty level by today's standards, would that concern you?!

Would you rather live in a society where everyone is equally "poor"?! Or a society where wealth is disproportionate, but where even the poorest individuals are relatively well-off?!

I would love to hear from anyone who supports socialism/communism their perspective on the subject. Is financial equality the be-all-end-all value?!

Do The Minimum Wage Laws Cause Poverty?

Government intervention in a free market causes lots of problems. Minimum wage laws are just one example of how the government limiting the freedom of individuals to create contracts hurts individuals.

To better understand how minimum wage laws hurts individuals and causes poverty, check the videos below:
Does the Minimum Wage Hurt Workers?
John Stossel - The State Against Blacks
How the Minimum Wage Creates Unemployment
The Job-Killing Impact of Minimum Wage Laws

The Problem of Welfare State

It is well-understood that the welfare state and socialism are incompatible with Libertarian politics. While the philosophical reasons for this position need to be addressed, however, without such philosophical analysis it can still be easily seen why welfare and socialism are incompatible with liberty and the principles of a liberal society. To illustrate this in the most simple terms, check this YouTube video titled: Self-ownership or Socialism?

Share your thoughts.

The Separation of State And Economics

In relation to politics and religion, a general belief is usually held with the slogan "The Separation of State and Church", which holds that a government should not be involved in the private life of citizens, and consequently should not endorse any religious affiliations, and should not regulate the religious life of private citizens. The resulting system is usually called "political secularism".

However, the concept that a government should not be involved in the private life of citizens is usually not applied to economics. A similar slogan can be introduced which can be expressed as "The Separation of State and Economics". This means that the government should not endorse any economic affiliations, and should not regulate the economic life of private citizens. The resulting system is usually called "laissez-faire capitalism".

Some might argue that such a system is actually promoting one form of economics over another, but nothing can be further from the truth, as I will try to explain in this post. What would most likely be confusing to most people is the difference between "state capitalism", and "laissez-faire capitalism". State capitalism is the form of capitalism that most people are familiar with, that is practiced in countries that advocate capitalism as an economic system do. And when people are thinking of capitalism they are usually thinking of state capitalism, because this is the system that is being implemented worldwide in the contemporary time.

To make an analogy with the more familiar concept of secularism, one of the basic tenets of secularism is freedom of religion. This means that private citizens have the right to choose their own religion and practice their religious views insofar that they do not abuse the rights of others to the freedom of religion. For example, in a secular society, the death penalty for apostasy (changing one's own religion) is an illegal practice. This is because penalizing apostasy restrains the religious freedoms. Similarly, laissez-faire capitalism does force individuals to participate in any economic system; It's only purpose is to protect the individuals from being coerced into adopting an economic system. The same cannot be said about state capitalism, which practices coercion in economic matters. In short, laissez-faire capitalism is a direct consequence of what might be called: "Freedom of Economics".

The major opponent of capitalism is communism. While state capitalism is a corrupt version of the ideals of capitalism which as previously discussed is embodied in laissez-faire capitalism, communism cannot be called anything except economic tyranny. It is a system where everybody is a slave. Of course, this claim does require explanation, and I will try to provide some explanations.

The basics of liberty and freedom rely on some concepts, these include: Autonomy, Individual Rights, Agency, and Responsibility. Let's touch these concepts briefly.

1- Autonomy:
Autonomy is defined as the capacity to choose, and act according to the will. This means that a person has the capacity to think and make choices (called: "Freedom of Thought"), and that they can act according to their will without coercion (called: "Freedom from Coercion", also related to the concept of "Freedom from Violence"). The only way that you can force any person to act in contradiction to their will is through aggression, usually in the form of physical threats and violence.

A liberal system would respect the autonomy of individuals.

2- Individual Rights:
The source of all individual rights is what is usually called "The Right to Life". The right to life can be defined as a moral principle that respects the right of the individual to live, and provide the means to sustain their life. This translates to that an individual has the right to take actions whose purpose is the support, furtherance, and enjoyment of one's own life.

Numerous supporting rights exist to protect the right to life. Those rights are usually called "individual rights". Examples are numerous, but to name a few: All the positive freedoms provided by society, such as freedom of religion, speech, and economics. And the negative freedoms that are advocated, such as freedom from violence, racism, and brutality. Some rights have emerged to protect the rights of individuals who are being systematically denied their rights, examples include: Women rights, gay rights, ...etc. Those rights exist to support the fundamental right to life that all humans are morally entitled to.

3- Agency:
Agency is defined as the capacity of an entity (usually, a person) to influence reality. This is a concept that is tightly connected with the concept of autonomy discussed earlier. Autonomy is the capacity of action according to the will. Agency is the idea that an action has observable consequences.

In philosophical context, agency is the opposite of the concept of fate. Fate is the idea that whatever actions happen, the outcome is the same. For example, if it was your fate to have an accident and die tomorrow, then no matter what actions you take, or any amount of precautions you make, the outcome will remain the same. [PS: Don't confuse the concept of fate with determinism.]

In personal and social contexts, the idea of social dynamics is the application of agency. Social dynamic means that a person can change their circumstances. For example, abandoning race-based slavery is an application of social agency. If a person was regarded a slave simply because that person has black skin, then that person lacks agency in his or her status as a slave. Numerous women's rights are also motivated by this social agency concept. If a woman is denied being an active member of society, holding a position of leadership, or work simply because she was born as a female, then that woman is being stripped of her social agency. Similarly, abandonment of bourgeois economics is an application of economic agency. In bourgeois societies, people are born into an economic class and they remain in that economic class. So, people who were in the working class had no means no change that, same applied to the middle class, and the ruling class. However, in capitalism, a person born in a poor family can make good economic decision and become rich. Rich people can make poor economic decisions and become poor or middle class, even sometimes go bankrupt. This phenomenon is called social class dynamic, and is a direct consequence of economic agency.

In short, in this context, agency means that the actions you take as an autonomous agent can and will affect your life.

4- Responsibility:
Responsibility is defined as the recognition that actions have consequences. With the assumption that an individual is an autonomous agent, the individual needs to accept that the actions they make based on their will and the choices they decide to make are going to affect their life due to their agency in their own life. Accepting that proposition is the basis of personal responsibility.

Autonomy and agency are not the same concept, although they are connected. Responsibility only arises when both autonomy and agency are in place. For example, a robot that is remotely controlled by an operator is an agent. But it is not autonomous. It is not autonomous because it does not make choices or decisions. However, this robot can make actions that affect reality, and hence it is an agent. A remotely controlled robot has no responsibility if it's operator directed it to commit murder [it is an the agent of murder in this case]. The responsibility lies with the autonomous agent; Which in this case is the operator of the robot.

On the other hand, if we imagine the existence of an invisible ghost, such ghost can be thought of as an autonomous non-agent. It is autonomous if it can make decisions about various things, for example, it's whereabouts. But, assuming that this ghost has no capacity to actually change anything in reality, this ghost has no agency. This should clarify the distinction between autonomy and agency.

Obviously, as stated earlier, responsibility is a necessity that arises from the recognition that humans posses the qualities of autonomy and agency at the same time. Hence, such humans would be autonomous agents. They are responsible because they can make their own decisions and act on them (ie. autonomous), and their actions have observable consequences on their reality (ie. agents), and recognize the relationship between their actions and it's consequences (ie. responsible). Denying any of those propositions means that person lacks liberty.

From the four principles that we just discussed in relation to liberty, let's see how those concepts apply to a communist economic system. Karl Marx devised a slogan in support of his economic system that states: "From each according to their ability, to each according to their needs." It is obvious that such a slogan contradicts every principle of liberty that we have discussed. If this isn't obvious, let us try and analyze how this principle relates to the economic freedom of the individuals.

First, let's look at the autonomy of individuals in the light of that statement. "From each according to their ability", this implies an obligation of the individual to provide everything they can if they are able to provide it. This denies every concept of autonomy that an individual has. What exactly is the individual ability?! And more importantly, who or what is the arbiter of an individual's ability?! Such a slogan strips humans of their decision making process. They have no choices. You cannot expect a person to do everything that he can do. I can (ie. posses the ability) to take a knife and stab the next person I see. Fortunately, I choose not to act on that ability. I am an autonomous person, I am not a controlled robot. Therefore, the actions I make are based on a process of knowing what I can do, and then deciding if I want to do them or not.

Additionally, as an autonomous person, I can try to make actions that are outside of my ability. I can try to lift a block of steel that weights a ton. I most certainly will fail at that task, because it is outside of my ability, but the important thing here is that I can try to test the limits of my ability.

Therefore, an autonomous person has no obligation to act based on his ability. He might be able to do things, but choose not to do them. And he might be unable to do things, yet choose to make an attempt. It is clear here, that this slogan denies a person his autonomy.

What about need?! "To each according to their needs". Once again, autonomous agents should have the choice of deciding what they need. Do I as an autonomous agent need a big mansion?! Or is a humble cottage enough for my needs?! Again, an autonomous agent should be the one to decide what they need. They are the arbiters of their needs. A liberal government would not prescribe the needs of the individuals, the individuals must decide what their needs are.

Secondly, let's address agency. "To each according to their needs" is a direct violation of agency. Just as claiming that a person with black skin must be a slave, and nothing they can do will change that (hence taking away his social agency), this proposed system means that what you get is predetermined by one's needs. Hence, we are denying the agency of people as to what they can get, by defining what they get by what they need. What if someone has the desire to get something they don't need?! What if someone decides that they don't want to get something that they do need?! Both of these individuals are being stripped of their agency, because regardless of their actions they will get things that have been predefined as their personal needs. Obviously, such a system can be only called absolute tyranny.

Third, let's address responsibility. The primary motive of a welfare state or a communist society is the denial of responsibility. Individuals who advocate welfare states or communism would rather not make any economical decisions, and leave all the decisions onto the government to regulate their economic life. Naturally, no liberty can ever be achieved by individuals who deny their responsibility towards their life, including among others their economic life. Communism strives to create a classless society where all people are of the same economic standing. No rich and poor individuals, all people are of the same economic standing.

Obviously, such desire is based on the desire to eliminate the social and economic dynamics. However, it is ignored that those dynamics are a direct result of social and economic agency. Actions matter. Actions creates change and dynamics. An individual who accepts their own agency, recognized that their actions have consequences. Acting while denying consequences of one's actions is the very definition of irresponsibility. Such irresponsibility is devastating to society, and comes at direct contradiction with the principles of liberty.

Capitalism advocates economic agency. Individuals are responsible for their own economic well-being. The consequences of an individual's actions and economic decisions are what makes them rich or poor. It is a great responsibility, but denying the individual responsibility has devastating effects.

Finally, the issue of individual rights is a vast and complicated issue. It will not be addressed in this entry, hopefully it will have it's own entry in a future post because it would require enormous amounts of explanation. However, to put it in a nutshell, some of the supporting rights relating to the right to life are the right to productivity and the right to property [whose purpose is to support the right to productivity]. The reasons for those rights need further explanations, but it is reasonably understood that in a communist society, the government has a monopoly on productivity and ownership. Such monopoly is devastating to any liberal system, and denies individuals their right to life.

In conclusion, I believe that anyone who proclaims to value liberty needs to think and address the problems raised, and realize that protecting liberty and individual rights has to be accompanied by the principle of separation of state and economics. State intervention in economics is undesirable and contradicts every principle of a liberal society.