Government & Policy — VOICES for REASON

Ayn Rand was born on February 2, 1905. To commemorate the 107th anniversary of her birth, ARC analyst Don Watkins has an op-ed on FoxNews.com today, in which he discusses the controversy over Rand’s influence on today’s politics.

“Rand has clearly inspired millions,” he writes, ”But a debate has emerged over the question of Rand’s political influence, with many commentators claiming her ideas have played a key role in shaping the political landscape. . . . But to gauge Rand’s influence, we need to know more about her views than the sound bites we’re typically offered.”

Why are Tea Partiers, political commentators, and politicians talking about a philosopher almost thirty years after her death? Read the article to find out.

As expected (and dreaded, by some), the U.S. Food and Drug Administration has revoked its approval of Avastin for treatment of advanced breast cancer. The Wall Street Journal has reported and editorialized on the event, which came in the form of a 69-page decision by Food and Drug Commissioner Margaret A. Hamburg, M.D.

If you wade through the legalese and medical technicalities all the way to page 38, you will encounter Dr. Hamburg’s crucial conclusion about Avastin’s effects on “PFS.” What’s PFS? It’s an acronym for “progression free survival,” a period of time during which a patient’s disease fails to worsen. In other words, for a patient in a fatal stage of breast cancer, an extra day of PFS = an extra day of no tumor growth.

Back to page 38, where Dr. Hamburg concludes that “the evidence does not show that Avastin has had an effect on PFS large enough to constitute clinical benefit.” The italics are mine—to stress the kind of value judgment Dr. Hamburg is making. What does that mean, “large enough”? According to Dr. Hamburg, it means “large enough to be meaningful to a patient.”

Do you see what’s going on here? Dr. Hamburg, a federal bureaucrat, is claiming a right to decide whether a particular period of delayed tumor growth is “meaningful” to individual patients whom she will never meet, much less examine and treat. In the particular case of Avastin, the latest statistics show that median PFS ranges from 0.8 months to 2.9 months, depending on which study you look at. By putting “median” in italics, I’m stressing that half the women in these studies experienced even longer periods of delayed tumor growth than those deemed not “large enough” to matter. Yet our law permits an FDA bureaucrat to limit these women’s access to medication, simply because an equal number of other women are predicted to benefit less, or not at all.

This is the practical meaning of collectivized medicine, about which I wrote at greater length last year, in a PJMedia op-ed called “The Avastin Travesty”:

But can risks and benefits really be weighed at the level of society as a whole? A society is only a collection of individuals. A society doesn’t enjoy life, or suffer — only individuals do. Metaphors aside, a society doesn’t get sick and die — only individuals do. To appreciate the difference, consider how a rational patient with breast cancer decides whether to undergo drug treatment.

Such a patient weighs (among other things) the statistical likelihood of a favorable result against the statistical likelihood of painful side effects. At all times, her judgment is individual and personal: How will my life improve if these tumors temporarily stop growing? How might side-effects interfere with my enjoyment of life? How much better will I feel if the results are above average — or how much worse, if the results are below average? How much is an additional year, month, or week of relatively normal life worth to me?

The FDA’s experts take professional pride in refusing to allow such individual considerations to influence their decisions. Instead, they float among the statistical clouds, observing that Avastin delays tumor growth by only 3 to 12 weeks on average and that some patients actually get worse after taking the drug. From behind a veneer of scientific respectability supplied by charts and graphs that ignore the individual patient, these experts then ask a question to which no rational answer can be given: What is the meaning to society of one month in an individual’s life?

In the ongoing debate over American medicine, it is crucial to understand how often we are asked to sacrifice the individual’s welfare for the alleged needs of society.

Image: WikiMedia Commons

The latest issue of George Mason Law Review, currently in the mail to subscribers (how quaint that sounds in this digital age), contains my review of an important new book on the landmark Supreme Court case of Lochner v. New York. The book is called Rehabilitating Lochner: Defending Individual Rights Against Progressive Reform, by David E. Bernstein, a professor at George Mason University School of Law.

I welcomed the opportunity to review Bernstein’s book because the Lochner case stands as an enduring symbol of the most important debate in American legal history. Do individuals have natural rights that government must respect, even when political majorities want to infringe upon them? The majority in Lochner said yes—but Justice Oliver Wendell Holmes, Jr., in a famous dissent, said no. In the century since that 1905 case was decided, legal thinkers have returned time and again to Holmes’s dissent, about which I have written at length elsewhere, to support the idea that judges must step aside and allow legislatures to write laws as if individuals have no rights that the majority must recognize.

Bernstein’s book is attracting attention from prominent legal scholars and commentators. Richard Epstein, professor of law at New York University, wrote in the Claremont Review of Books that Bernstein reaffirms a “classical liberal paradigm” that the Supreme Court should employ to “confess, and undo, its prior errors.” In Commentary, Glenn Reynolds—the University of Tennessee law professor and Instapundit guru—wrote: “The false narrative of Lochner has controlled the past for decades, but Bernstein’s clear and incisive work may wrest that control away and move us back to the truth.” And columnist George Will endorsed Bernstein’s argument that “Progressivism . . . is hostile to America’s premise that individuals possess rights that preexist government and are not fully enumerated in the Constitution.”

Rehabilitating Lochner has a limited purpose. It does not set out to resolve the fundamental question whether individuals have natural rights, nor does it even present Bernstein’s view on the matter. It is rather a work of historical revisionism, meant to clear out the nasty underbrush that has grown up around this oft-cited but little understood case. In my review, I summarize Bernstein’s achievement this way:

     Here, then, is the demythologized Lochner. It was a well-reasoned opinion based on strong precedent and time-honored judicial philosophy, not a textually absurd act of judicial malfeasance. It was a sincere attempt to uphold constitutionally protected liberty, not a cynical mask for prejudice. It resulted in the defense of individual liberty against power-wielding political pressure groups, not the surrender of defenseless individuals to callous Social Darwinism. And it was a progenitor of decisions that would recognize constitutionally protected rights in a variety of contexts, not a doctrinal plague-carrier to be exterminated by right-thinking scholars and judges.

It is books like this one that are laying the groundwork for a future in which America’s judiciary—and especially the Supreme Court—can intelligently assess its past conduct and chart a future course that’s consistent with the nation’s founding ideals.

Now that the Obama administration has asked the Supreme Court to decide the fate of Obamacare, conservatives are again waxing enthusiastic about the case’s significance. According to Human Events, for example, “The case before the Supreme Court is our last line of legal defense against a fundamental reconstitution of the relationship between American citizens and their government.”

Last month, in a Daily Caller op-ed, I voiced my opinion that this ship has already sailed—in other words, there has already been a “fundamental reconstitution of the relationship between American citizens and their government,” and the pending Obamacare litigation doesn’t really challenge that consensus:

The only argument with any chance of success in today’s Supreme Court starts by admitting that Congress has authority to control every single economic “activity” known to mankind—farming, building, manufacturing, transporting, storing, insuring, selling, buying, leasing, practicing medicine, operating a hospital, you name it—but then denies any authority to invade the sacred right of “inactivity.”

It’s hard to blame the plaintiffs for relying on this cooked-up technicality. Faced with the Supreme Court’s long-standing and intransigent refusal to uphold the American ideal of individual rights, they really had two options: do nothing, and watch while Obamacare completes the ruin of private health insurance—or sue to overturn the statute, but without daring to challenge Congress’s stranglehold over the economy.

Perhaps in the future, a new generation of Supreme Court justices will be open to interpreting the Commerce Clause objectively. In the meantime, sadly, the Obamacare litigation will do nothing to vindicate the founding fathers’ vision of a government whose authority is limited to protecting individual rights.

Even Randy Barnett, the Georgetown law professor who’s been the intellectual architect of the Obamacare challenges, believes it’s important not to overstate the litigation’s importance. In a recent radio interview, Barnett responded to his host’s comment that a Supreme Court decision striking down Obamacare would mean Congress’s power is “significantly limited.” Barnett answered:

I totally disagree that this is going to limit Congress’ power. I wish it would, Hugh. I wish a victory here would roll back Congress’ power, but it won’t. It’ll just basically say that a power that they’ve gone 230 years without ever exercising before, which is the power to make everybody do business with a private company, that power they’ve never exercised before, they’re not going to be able to exercise in the future. That’s all it’s going to say. And so it’s going to be a very important principle to establish that there still are limits. And if we lose this case, it’s going to be really, really bad. But if we win the case, it’s going to basically preserve the status quo, which is not where I think it ought to be. I think we ought to roll back federal power, but this case is not the case to roll back federal power. This is the case to say this far and no farther.

In contrast to some conservatives, then, Barnett is not under a starry-eyed impression that a favorable Supreme Court opinion will “roll back federal power.” This is a good perspective to keep in mind as the case goes forward.

Image: WikiMedia Commons

Over the next week, ARI speakers will participate in “Capitalism Awareness Week.” Capitalism Awareness Week is being spearheaded by the student publication The Undercurrent, and will feature a series of events at college campuses addressing what capitalism really is and how our country would be far more prosperous and just if markets were free.

• Tonight Yaron Brook will debate Dane Smith, the president of Growth and Justice, on whether regulating capitalism is a moral necessity or moral treason.
• On Thursday, Sept. 29, Don Watkins will tackle America’s entitlement crisis and answer whether the entitlement state and its leading programs—Medicare, Medicaid, and Social Security—can and should survive.
• On Tuesday, Oct. 4, John Allison, an ARI board member and retired chairman and CEO of BB&T Corporation, will discuss the causes, consequences, and cures of the recent financial crisis.

The best part is: all of these events will be streamed live over the web. So be sure to check them out!

More information can be found at capitalismweek.org (which is also where the events can be streamed live).

If intellectual obscenities could be ranked, it would be hard to outdo Elizabeth Warren’s recent tirade against America’s wealth creators:

There is nobody in this country who got rich on his own. Nobody.

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

There is a lot one could say about this quote–notice, for instance, that it totally ignores the benefits made possible by the factory–but I’ll confine myself to this: underlying Warren’s rant is a disastrous view of the proper relationship between the individual and society.

On Warren’s view, society is some collective entity with its own interests and prerogatives, and if you want to be a part of society, you have to surrender some of your interests and prerogatives–above all, some of your freedom. Warren calls it a “social contract.” I call it a “social shakedown.”

The Founding Fathers, in a view they inherited from Locke and which was elaborated by Ayn Rand, had a radically different view of the relationship between the individual and society. They held that society is not some collective entity. It is only a collection of individuals–each with his own aims and interests. The basic problem of politics, they held, was how sovereign individuals could gain the benefits of living in society without surrendering their ability to pursue their own interests.

The solution was to base society on the principle of individual rights: each individual has an inalienable right to life, liberty, property, and the pursuit of happiness. You were free to live your life for your own sake and according to your own independent judgment. The government’s job was simple: to make sure no one interfered in that pursuit by violating your rights. Not to build roads or schools or to confiscate what you earn when you build a factory. To protect your freedom.

The result was the first voluntary society in history–a society where people dealt with one another only by mutual consent to mutual advantage. In such a society, if no voluntary cooperation is possible, individuals are free to go their own way.

In a voluntary society there is no such thing as some undefined, unlimited debt to “society.” Those who educate workers, pave roads, or put out fires are fully remunerated for their work by their customers. They have no further claim on anyone’s wealth–to say nothing of the bizarre idea that their services give Elizabeth Warren or Barack Obama a claim on anyone’s wealth. As for the government itself, that’s more complicated. A limited government is indispensible for individuals to flourish and we certainly have a moral obligation to pay for it. But in today’s context, when most of what government does is violate rights, interfere with wealth creators, and tax away their profits, it takes no small amount of chutzpah to talk about the debt they owe to government.

Individuals do create wealth, and morally they have a right to the wealth they create. But to appreciate that, you have to reject Warren’s collectivist social shakedown in favor of the individualist tradition of the Founding Fathers.

Forbes.com has just published the latest column by Yaron Brook and me, “The Entitlement State is Morally Bankrupt.”

The basic principle behind the entitlement state is that a person’s need entitles him to other people’s wealth. It’s that you have a duty to spend some irreplaceable part of your life laboring, not for the sake of your own life and happiness, but for the sake of others. If you are productive and self-supporting, then according to the entitlement state, you are in hock to those who aren’t. In Marx’s memorable phrase: “From each according to his ability, to each according to his needs.”

As we’ve argued in past columns, no system that treats you as other people’s servant can be called moral. What made America the noblest nation in history was that it was the first country founded on the idea that each of us has a right to live and work for our own sake, that it’s our own job to try to make the most of our life, and that the government’s sole purpose is to protect our freedom to do so.

Some have raised objections to this line of argument, however. Here are three of the most popular objections.

You can read the whole column here.

With Medicare facing unfunded liabilities that top $30 trillion, Washington is scrambling for ways to hold down the program’s soaring costs. And in the usual fashion, the proposals on the table ignore the fact that it is the government that created this problem in the first place.

One of the main ways ObamaCare attempts to address Medicare’s spending spree is by creating the Independent Payment Advisory Board (IPAB), a fifteen-member board empowered to reduce payments to health care providers.

But critics of IPAB have voiced concern that cutting fees for doctors and hospitals will make them less willing to accept Medicare patients and as a result, retirees will find it difficult to find doctors. For the same treatment, doctors today are already paid 20% less by Medicare than they are by private insurers. More than 13% of family physicians don’t accept Medicare patients, and a quarter of doctors limit the number they treat. Under ObamaCare, Medicare’s chief actuary predicts that the program’s payment rates will fall below even Medicaid’s, which infamously underpays doctors by more than 40%, in which case many more doctors will likely stop treating Medicare patients.

Taking a step back, it’s important to recognize that we’ve been debating what to do about skyrocketing Medicare spending since the program was first brought into existence four decades ago. One side argues that Medicare costs are out of control and we need to cut back on spending, and the other side retorts that cutting spending will lead to lower quality care. The usual compromise has been to try to root out “fraud, waste, abuse” through “smart” cuts. But these have proved elusive—Medicare costs continue to rise.

In reality, there are only two basic ways the government can curb its costs—rationing services by shrinking who and what Medicare covers or capping the amount it pays for services, i.e., price controls. Both approaches amount to reducing the amount of care Medicare provides. IPAB is not a novel concept—it is just another price control that will lead to a further shortage of doctors and hospitals, thereby subjecting Medicare patients to longer wait times.

Are we forced then to choose between spending ourselves into bankruptcy and limiting the quality of the elderly population’s medical care? No. This conflict is inherent only in a system where people are forced to subsidize each others’ health care, as we are today.

In a system where you are responsible for your own health care, what your retired neighbor spends on medical services is no one’s business but his own. If he wants to see an expensive specialist or try a costly drug, he is free to do so because the expense will come out of his own pocket (or whatever arrangement he has with a private insurance company). People in such a system pay for the quality of health care they want and can afford.

But in the system we have today, the quality of health care a retiree gets is everybody’s business because it is paid for by our tax dollars. And when taxpayers and their representatives decide that the price of a treatment is more than they are willing to shell out, they cut back by reducing coverage or capping prices. Individual retirees who may have benefited from the treatment then have no choice but to accept poorer quality care. In today’s system, the quality of health care a retiree can get depends not on the kind of care he wants and how much he has saved but on what government bureaucrats have decided they can “afford” to give him.

The solution to Medicare’s problems is not to allow government bureaucrats to dictate how much providers get paid and what level of care is “reasonable.” The solution is to challenge the fundamental idea of the program, which forces all of us to foot the bill for seniors’ health care needs.

Image: dreamstime

Over at The Daily Caller they have my take on the Obamacare litigation. Yes, it would be a good thing to stop Obamacare in the courts. But the victory, if it comes, will stop far short of restoring the Founding Fathers’ vision of political freedom for every American to engage in business and earn a living. In the article, I put it this way:

In desperation, their lawyers tugged on a tiny thread in the vast fabric of Commerce Clause jurisprudence. It turns out that the Court has consistently affirmed Congress’s power to control economic “activity”—but not “inactivity.” Therefore, the plaintiffs argue, Congress surely went too far by enacting the individual mandate, since the decision not to buy insurance is mere “inactivity.”

Let me translate: The only argument with any chance of success in today’s Supreme Court starts by admitting that Congress has authority to control every single economic “activity” known to mankind—farming, building, manufacturing, transporting, storing, insuring, selling, buying, leasing, practicing medicine, operating a hospital, you name it—but then denies any authority to invade the sacred right of “inactivity.”

It’s hard to blame the plaintiffs for relying on this cooked-up technicality. Faced with the Supreme Court’s long-standing and intransigent refusal to uphold the American ideal of individual rights, they really had two options: do nothing, and watch while Obamacare completes the ruin of private health insurance—or sue to overturn the statute, but without daring to challenge Congress’s stranglehold over the economy.

Perhaps in the future, a new generation of Supreme Court justices will be open to interpreting the Commerce Clause objectively. In the meantime, sadly, the Obamacare litigation will do nothing to vindicate the founding fathers’ vision of a government whose authority is limited to protecting individual rights.

If Americans are going to effectively oppose Big Government laws and regulations, they will have to do more than stand up for the right to sit down. They will have to defend the right to engage in economic activity of every kind—without government permission, and without carte blanche regulation by Congress under the Commerce Clause.

Image: Wikimedia Commons

We hear all the time about evil “speculators” driving up the price of oil and other forms of energy. But there is little explanation of what ”speculation” actually is. Yet understanding speculation is not only crucial to understanding these accusations and whether they hold water, but to understand the whole world of energy today. Therefore, the goal of this month’s Power Hour is to demystify speculation and debunk some popular myths about the practice.

To give us clarity on speculation, I brought in an expert on financial markets and speculation, Dr. Eric Dennis. Dr. Dennis was actually trained as a theoretical physicist at CalTech, Princeton, and Santa Barbara—but now works as a high-level executive at a major financial institution, using his mathematical skills to build complex models of financial markets. I have been fortunate enough to know Dr. Dennis for several years now, and he is my go-to person whenever I have a question about speculation or financial markets, since he knows them inside out and can break down the issues in plain English.

Listen to the episode and learn:

• What exactly is speculation?
• Is it a problem that speculation is growing in oil markets—or a good thing?
• Does speculation really drive up prices?
• Do speculators have undue influence over prices?
• What is hedging, and how do speculators make it possible?

And much more!

(By the way, if you want an easy way to fit Power Hour into your schedule, download it to your MP3 player and listen to it during your commute.)

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