Corporatizing America – The Gift & Guilt of Libertarianism & Ayn Rand
Surviving & Prospering in the New Economy
Ideas can be dangerous. And the danger can strike from several different directions. This article gives you the human story along with an analysis of policy and the conversion of the term, ‘privatization’ to mean corporatization.
Ideas were and are the basic building blocks of the human world, the first human tools. It was our thoughts and ideas which gave birth to the innovations which transformed us from Neolithic Hunter-Gatherers to a people who accept change as a continuous progression of ‘things’ which make life more interesting, efficient, and fun. Philosophy, and its mother theology, are sets of ideas organized to build structures within which we live.
If you want human ideas to work you need to make sure the foundations are sound. The final proof for any idea is whether or not it delivers what was expected without unacceptable consequences. But ideas can be presented in ways which make them seductive, allowing us to overlook those unexpected consequences. Ideas can also seduce the originator, who for reasons of ego or profit, refuses to see the problems caused when the idea is used. These missteps can leave monumental destruction in their wake.
All ideas rest on the foundation of previous ideas which may embody mistaken or neglectful compromises. No idea of substance, carrying with it significant potential impact, should be adopted until the problem it is to solve is understood to the foundation.
The Origin of Privatization
The idea of privatization originated with Dr. Robert Poole in the early 1970s. Bob started with trash collection. Now the same idea is being used to justify leasing highways paid for by Americans to foreign interests along with other resources intended to be held, in perpetuity, for future generations of Americans. Additionally, the use of eminent domain is being used to seize land and destroy communities. Water supplies, the oceans, and the ‘right to pollute’ have also been commodified using the same general set of ideas.
These ‘policies’ provide the means to carry out a transfer of wealth of monumental proportions, a consequence Bob might not have anticipated but which he failed either to see or to challenge when he proposed the idea.
If Bob had proposed the Trans Texas Corridor and the use of eminent domain in 1976 he would have had no traction in the then nascent Freedom Movement, then, largely subsumed within the Libertarian Party. But what he proposed sounded good, cutting the cost of government being the stated goal. Clearly, the cost of government has not dropped, however, and trash pickup, outsourced to private corporations, has resulted in more layers of corruption as government converted trash pickup into a way for them to funnel money to their friends. Whole industries have been founded on the idea.
It was not the original, simple idea which was flawed, however. The devil is in the details, as they say but the idea was Bob’s and with origination comes its own form of accountability.
The Goal
The goal for the freedom movement was and is to restore control to individuals as stated in the Declaration of Independence, defined as inherent rights in Natural Law. The tool for carrying out this change was to be the free market. The failure to differentiate between a free market and one which flows through government policy and control caused major problems. This lack of discernment must be placed at the feet of Bob Poole, who failed to keep his own idea on point.
It started with trash collection, or as Ed Crane put it, Garbage Can Libertarianism.
If instead of allowing this tiny slice of individual choice, ‘who will I have pick up my trash?’, to be controlled by government your local town had put the names of contractors on the ballot or enabled folks to choose from a list of businesses willing to collect trash, the right of individuals to choose would have been preserved. That is not what happened, however.
Privatization, as it exists today, is actually corporatization, corporations being included as individuals in the mind of Bob Poole, evidently. The semi-deification of corporations most likely came about through heavy public relations and the helpful writings of Ayn Rand.
Robert Poole, Jr., had a long history in what we call the Freedom Movement. He had earned a Ph. D. at MIT in the late 60s in engineering. The world today is alive with Poole’s intellectual grandchildren, who have provided the means to enslave us. Privatization, among his other ideas, have been employed to chop off tiny slices of our personal autonomy to be sold to corporations, commodified for profit through the power of government. You might ask yourself how a man who prided himself on his ability to think logically could have made such a mistake. I’m going to tell you because understanding how it happened makes undoing the damage easier and amours us against future mistakes.
Introducing Bob Poole
I first met Bob around 1975. He was living and working as an engineer in Santa Barbara, California and in his spare time working on writing, editing, and publishing Reason Magazine.
Bob’s march towards the new fascism started when he began college at MIT with the heady delights of losing his Lutheran roots, discovering Ayn Rand. A strong supporter of Students for Goldwater, where he first met David Nolan, who would go on to found the Libertarian Party, Bob began reading The Liberal Innovator. This was an early magazine to which he subscribed, which introduced him to the ideas of liberty.
It was in the pages of this magazine where Bob saw an advertisement for a magazine, REASON, then produced by one Lannie Friedlander of Boston.
Bob and his wife, Lynn Kinsky, visited Lannie, an undergraduate at Boston U., at his home, where he lived with his mother. Reason Magazine was not doing well financially, consistently going in the hole. But Bob was enthused and interested in becoming involved. The idea of seeing his name and work in print was heady stuff, he said in an interview which took place at Reason Foundation in 1999.
Lannie did not care what Bob wrote, leaving it up to Bob. So the first article Bob produced was on deregulating the air lines, titled, “Fly the Frenzied Skies,” a subject on which Bob felt strongly because of a childhood impacted by not being able to go to Disneyland, then only located in California, from his home in Hyalea, Florida.
Bob’s dad and uncle each worked for an airline, but not the same one. Tom York, Bob’s cousin, was able to go to Disneyland in California because National Airlines flew east and west. Bob’s Dad worked for Eastern which flew north – south. Bob could see the Big Apple for free but not Mickey Mouse. This injustice burned in Bob’s heart, dictating the subject for this first article appearing, according to Bob, in the first offset printed issue. Bob did not realize why he chose this topic until I asked the question during an interview in 1999. His face registered surprise at his own answer.
Bob was lavishly praised for the article and idea, which resulted in the deregulation of air lines in less than ten years. Bob’s reputation was burnished and he was according tremendous respect both from the movement and from the mainstream. Respect, unfortunately, extends trust even when the facts should be more closely examined.
Through Lannie, Bob met Tibor Machan, then living in Santa Barbara and finishing his Ph. D. at the University there. Tibor was also writing for Reason. Bob, Tibor and Manny Klausner, an attorney in Los Angeles, bought Reason from Friedlander in 1970. Their first issue came out in January, 1971. It was this mailing list which was borrowed by Davide Nolan and used to found the Libertarian Party.
Reason Magazine remained mostly a volunteer project, staffed by family and activists until 1978 when the magazine became separate from Reason Foundation, a 501 C3. Running the magazine as a for profit venture was not successful, causing financial and personal pressure on those involved.
In 1976 Poole’s first book, “Cutting Back City Hall,” had been published. The book focused on outsourcing services performed by government to private companies which, through the pressure of competition, would, it was posited, provide better services at lower cost, saving tax payer money while improving the quality of service.
It worked. Immediate improvements in outcomes across a range of applications, starting with trash collection, caused the idea to be applied with increasing frequency while unexpected consequences took over. Some part of the inefficiencies of local government were improved but in the enthusiasm for cutting costs the integrity of individual rights were compromised.
Ratcheting up their readership, Reason Foundation and Freedom Magazine both prospered during the Reagan years which also witnessed the rise in prominence of Cato Foundation, which was funded by Koch Industries but ran as a non profit.
Despite the warm feelings so many had for Ronald Reagan his years in office, in California and then as President, resulted in a rapid shift to centralization of control to government and away from direct control by Americans.
Reagan was never a Conservative, an uncomfortable fact also overlooked by those who listened to rhetoric which seduced them to trust. Reagan’s administrations allowed a far more centralized federal government to come into existence. Reagan’s original supporters for Governor, United Republicans of California, pointed out what had happened in California when they passed a resolution in 1975 begging Americans not to support him if he ran for either president or vice-president.
Government was supposed to be limited.
The original model for American government, exemplified by town government in the colonies, relied on the direct oversight of the people, who could change government as needed. The relationship between the people and government was not as we see it today but one of far simpler cooperation. Few selectmen or moderators, the day to day managers, were compensated, many jobs were carried out by volunteers or were very low paid. ‘Government service’ meant something positive.
Privatization, as proposed by Poole, was outsourcing but due to the already present problems with corruption and the potential for more corruption, given the opportunity, the benefits were short term.
Cutting costs through privatization never resulted in money returned to the tax payers – or even in a cessation of the rise of taxes. Government, local and otherwise, found other uses for the funds. Government also began to look at the sale of ‘services’ like trash collection, in a different light. You can easily imagine them casting their eyes about and assessing how to convert services and property into more money in their pockets, once they saw the opportunity. Government assumed ownership of those tiny slices of our individual autonomy.
Analysis
The Free Market – Competing for the contract to handle trash does bring to bear market force. But if the right of individuals to choose is thereby canceled this does not build a trajectory towards a renewed freedom for individuals. Arguments of ‘efficiency’ are invalid when the focus is our natural right to self-determination. Freedom does not have to be efficient and often is not.
If instead of commodifying the right to collect trash the local limited government had informed residents they could contract with a company and pay less than the price available to them, while at the same time getting out of the trash collection business and eliminating those taxes paid for trash collection this would have advanced the free market. Government would demonstrated respect for the right of the people to control the choice being made.
The issue was never raised as far as I know except in one comment I made to Bob, which he ignored.
Perpetuating the confusion between policy mandated by government and a free market has haunted the freedom movement ever after. In the shuffle, a new generation accepted the new definitions, effectively silencing the authentic voices of both Murray Rothbard and Ludwig von Mises and perpetuating the rebranding of the free market.
The idea of privatization was used to convert the autonomy of choice, by individuals, into a commodity to be sold, rented or traded by corporations through government. Installing a specious personhood for corporations as ‘private individuals’ having taken place due to a clerical error on May 10, 1886. In a comment injected by the clerk, J.C. Bancroft Davis , as his personal opinion, in the transcript of U.S. Supreme Court Decision, Santa Clara County v. Southern Pacific Railroad, Davis wrote the following, “”The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a state to deny any person within its jurisdiction the equal protection of the laws. “
Corporations gained personhood through slow accretion both from the misstatement above and the work of Ayn Rand. Many in the movement failed to question what was according what approached deification.
Business is conducted by individuals, who have inherent rights preceding the existence of government. Neither government or corporations are individuals and have no rights.
In this noisy dichotomy of “government’ vs. “corporate,” the presence of the community as the original place for human cooperation was lost entirely. The community, the cooperative efforts to handle common problems, is far older than government.
The Rhetoric of Freedom becomes The Reality of Fascism
During the period of 1970 – 1990 the centralization of government, formerly opposed by Conservatives and Republicans generally, increased via the rhetoric of freedom coupled to policies which effectively rebranded the meaning of words and ideas inherited from previous generations.
With privatization policies, ‘services’ and control was centralized with tax payers left with no way to impact the onslaught of mandates for which they were forced to pay since these were not set by the people at the local level.
There had been a natural point for dialogue which was never taken up regarding government and its role as a tool of the people. What services did people want? For what were they willing to pay? How could those services be handled cooperatively within their community? This is one of the opportunities lost due to the adoption of privatization, which instead of restoring lost freedom, built a new cadre of control by corporations not answerable to the people at all since they had contracted directly with government.
This happened, ironically, in parallel with the implosion of infrastructure in corporations, taking place through the use of desk top computers to lower their transaction costs. As the potential for a leveler world increased, so did centralized government.
Competition, which produces freedom when exercised by individuals, could not produce a free market outcome when the choices of individuals were muted. In a free market individuals drive choice, creating new choices through need, which begets innovation. When individuals can decide what they want and how to pay for it, as a cooperative community, a free market exists.
This point of contradiction, wherein an enterprise which carried the motto, Free Markets – Free Minds, on its masthead forged new shackles along with a hidden threat for ever more intrusive government was overlooked due to the success and prestige allotted to Poole, Reason Foundation, and others, including Cato Institute.
The unasked question was then and remains, “How do we empower people at the most local level so free markets can reinforce and affirm the rights of individuals?”
The example of privatization is only one which has dramatically harmed freedom.
Alan Greenspan, an early adherent of Ayn Rand’s, presumed to understand the free market, also received a pass when appointed as Chairman of the Federal Reserve System. Those who could have been expected to attack the Federal Reserve System and a monetary policy which has destroyed America were elated, believing Greenspan would be working for a return to free market principles. Wrong. Personal greed trumped ideology.
Ask yourself why others, including Cato Institute, failed to blow the whistle. Bob was in love with his idea. Cato was making money for its founders and producing policy which hammered government policy into place from both the right and the left. Greenspan was living the good life while allowing the infrastructure and policies to be put into place we see playing out today.
Violated Trust
Freedom is far too important to be abandoned to misplaced trust. For some years now, at least since 2008, Bob Poole has been working to ‘privatize’ the highway system in Texas, turning it over to the control of multinational corporations. In 2008 I wrote this article, “Bob Poole and Privatization, Enemies of Freedom,” about the efforts of a new generation of freedom advocates to stop the taking of private land owned by individuals and the sale of public assets. Bob was anxious to ensure his remarks to the committee, entirely supporting the sale of highways and eminent domain, did not become public. Bob hs not responded to multiple emails and phone calls on this subject.
Today champions for limiting government and returning control to the people are fighting privatization in Texas and elsewhere through such organizations at TURF, Texans United for Reform and Freedom. Their spokesman, Terri Hall, is the mother of eight who home schools and is facing a future where her children face a very problematical future due to the efforts of Bob Poole.
Bob lives happily in Florida, playing with the model trains which enchanted him as a child, between trips to Texas to pump for corporate fascism.
Why has no one said anything before now?
When missteps are not corrected those coming after simply accept what they find as true and justifiable. Today, many in the Freedom Movement would still place Poole and Reason as sterling champions of the natural rights of individuals. They are wrong but their mistake is very human and understandable.
Below I quote largely from the 2008 article by Senior Editor for Reason Magazine, Brian Doherty. The article is titled, “40 Years of Free Minds and Free Markets: An oral history of reason,” In the article Doherty quoted Nick Gillespie, who was hired on as an assistant editor of reason in 1993. According to the article Gillespie served as editor in chief from 2000 to 2007 and is currently in charge of reason.tv and reason.com. The article quotes Gillespie, who reports an encounter with Karl Rove in 2001.
“Another sign that we were reaching people on a higher level, an experience that was both exhilarating and dispiriting, was at the American Enterprise Institute dinner in 2001. I went to introduce myself to Karl Rove, but before I could finish saying my name he said, “You’re with reason. I read it all the time. I just sent in my change of address card to Mt. Morris, Illinois.
I thought it was great to have the ear of this guy who was a main adviser in a new administration that promised to cut the size and scope of government and push a humble foreign policy. For a while I was thinking it was cool that what we were writing was read at the highest levels of power. Then I realized early on in the administration that either Rove stopped reading reason or he didn’t understand what we were saying.”
I strongly suggest all advocates of freedom read the Doherty article. Both Doherty and Gillespie accept privatization without question as appropriate policy. Having come to adulthood a generation later than Poole they accept Bob’s idea without question. Yet inherent in the idea is the transfer of existing tax-payer funded resources to the control of corporations, eminent domain in the taking of real private land, the destruction of community integrity, and the right of local people to control decisions impacting their community.
The questions should have been asked in 1976 but it is never too late to learn from our mistakes.
In relaying his story of the American Enterprise Institute Gillespie again reveals his own assumptions in his meeting with Karl Rove. For Gillespie the ideas found in Reason are positive, promoting freedom and individual rights. But to what use did Rove and his associates put privatization, deregulation, and outsourcing? It is far more likely that Rove knew perfectly well what he was doing and read Reason because its rhetoric, and suggested policies, including privatization provided raw material for more ways to steal and compile power. Ideas were, after all, the source of his own power, tools put to use to advance the Neocon agenda. Rove is a political opportunist, not an ideologue. He uses politics to accrue power for himself and his ‘team.” Perhaps Rove’s familiarity with the ideas of Reason should have given Gillespie pause.
Today it is far more obvious that the agenda of Leo Strauss was made frighteningly real, played out in the world using ideas gleaned from all sources. Iraq, torture, the death and desolation of American towns and cities, the homelessness of families from all economic levels, the meltdown of the economy, here and around the world, testify to the power of ideas used to deceive.
I personally believe Strauss and the last 60 years will come to known as the decades when conscience died, which precisely defines psychopathy, a condition now known to be present in 1% of the population, the percentage rising as the power to be grabbed is concentrated.
Those of us who care about freedom have much to consider and little time left. Please start now.
