Human Action Principles

March 26th, 1995

Lecture Number Eighteen



Wright Brothers in 1903

Ladies and gentlemen, as we begin this lecture, we are once again stepping out of my H.G. Wells time machine into the great forest of giant trees to visit our friends, our old friends, the Galls. You remember them. At any moment, their enemies who live just beyond the giant hill may cross over that hill and attack them.

Tribal members, as always, are relying upon the wisdom and leadership of the tribal elders to protect them from their enemies. Their wisdom gave birth to a profound solution. They will make a sacrificial offering of 12 of the tribe’s most beautiful maidens to the Great God of the Forest in return for his protection.

Now, within the tribe, there is no disagreement as to whether or not human sacrifice is a true means or a false means. There is only one burning issue within the tribe. It is this and it’s important to see what is the most effective approach to human sacrifice?

And before you look down upon these uncivilized primitives, remember that your own tribal leaders, our civilized American tribes and their tribal leaders, rely upon human sacrifice as the ultimate means to the attainment of the greatest good for the greatest number, don’t they? Our strongest and bravest young men are sacrificed upon the field of battle and the people back home are forced to sacrifice to finance all of these battles.

The American tribesmen are forced by their political leaders to sacrifice in order to finance all of their political schemes. The super regressives sacrifice the super progressives on the political altar and all of us are taught to applaud. Both the tribal leaders of the Great Forest and the tribal leaders of America fail to answer the question of questions.

And that is, if the total number of questions that they could be asking approaches infinity and there’s one question that heads the list in importance on this nearly infinite list, one question is really the prime question you should always be asking about everything. Namely, can the means employed attain the end sought?

While I realize this is contrary to popular superstition. Whenever the goal of any tribe at any time is to attain the greatest good for the greatest number, then every form of human sacrifice is a false means. The entire idea of human sacrifice as a means to any progressive goal is a bad idea. In other words, it’s a false means. It was always a bad idea.

But where did this bad idea come from? In the case of the members of the tribe in the Great Forest, they are relying upon the wisdom of their elder statesmen to protect them from all harm. The elder statesmen are themselves relying upon the historical accounts of the wisdom of the ancient elders.

But where did this bad idea that human sacrifice was the means to protection from the enemy, where did this really come from? Well, it started many thousands of moons ago. The ancient tribesmen were about to battle their enemies from beyond the giant hill. Above the valley where the battle was about to be fought, 12 fair maidens had come to see the brave young warriors in action.

Exhausted from the long journey, the young girls found shelter from the summer storm beneath the great branches of a giant tree. Without warning, a bolt of lightning was hurled out of the sky striking the base of the tree. Then a sudden gust of wind bent the giant tree like a bow, snapping the base like a stick. The thundering crash frightened the young maidens out of a deep sleep but the warning was too late. They cannot flee the path of the falling tree.

In the meantime, on the floor of the valley below, the battle begins. Our warriors against the enemy from beyond and unaware of the tragic fate of their 12 maidens. But this was not to be a day without good fortune. The warriors from the tribe we’ve come to know achieve an overwhelming victory, the enemy is driven in flight toward the giant hill.

As the warriors ascend from the valley, they come upon the scene of the tragedy of the 12 maidens. There’s much wailing and cries of grief as the warriors realize what has happened, but in the midst of these lamentations, the chief elder standing atop the fallen tree begins to speak.

“My brothers, it is time to end your tears. Today, we have defeated the enemy, we have driven him in panic flight from our valley, but what has been the cause of our great victory? I will tell you my friends and brothers, this is a sign. The Great God of the Forest has taken these fair maidens for himself. He was so pleased with them that he has guided us to this great triumph over our foes from beyond the hill. We have at last found the secret to the mastery over all of our enemies.”

“And so, brothers and sisters, a year from today, we will return to this now sacred place and we will find another giant tree. There, we will offer up 12 of our fairest maidens as a sacrificial offering to the Great God of the Forest and once again, he will guide us to victory over all of our enemies.”

Now, ladies and gentlemen, the question I’m posing to you is what do the leaders of this uncivilized tribe in the forest have in common with the leaders of our civilized tribe in America? Is that an interesting question? What do they have in common? The leaders of both the civilized tribes and the uncivilized tribes are guided by superstition.

Now we have to ask, could this be an exaggeration? What is superstition? Superstition is a belief or practice resulting from a false conception of causation. That means that wherever you find superstition, you will find people whose human action is guided by their failure to correctly understand causality.

Once you come to the realization that your own tribal leaders are guided by superstition, the question you have to ask then is do you want to follow that leadership? Do you still want to follow it? All of us from the time we are children have been indoctrinated, with few exceptions, to respect these leaders.

Therefore, I have this question for you, can we escape from the indoctrination imposed upon us by the members of our very own tribe? Can we do this? Can you do this? And before that, do you want to do this? Furthermore, can we achieve an understanding of reality independently of our own tribal indoctrinators? And if you can do this, why would you want to?

Furthermore, can we become exceptions to the Locke, Planck, Mises problem? Adults, and especially educated adults, rarely change their most fundamental premises, their most fundamental presuppositions. And if you can be an exception to the Locke, Planck, Mises problem, why would you want to become an exception? Have you thought about this?

You can retain all of your present popularity, recognition, social status without changing any of your most fundamental premises on any subject. Are you aware of this? Aside from the fact that if a few people do not change their most fundamental premises on the subject of government and bureaucratic interventionism, the human race will perish. Other than that, what other motivation might there be to change your thinking?

One of the most compelling reasons has to do with your acquisition of more self-esteem. All right, I have this question for you, if you already have a lot of self-esteem, as I’m sure you do, why would you want any more? You know, self-esteem is not a product that you would normally go shop for. We can’t find it for sale at a department store. Bullocks is now having its semi-annual self-esteem sale, half price, and people are pushing and shoving to get in on the deal. That just doesn’t happen does it?

Therefore, let’s talk about intellectual independence and the enhancement of self-esteem. When you esteem someone, you regard that person with favor, respect, admiration. Self-esteem is the measure of one’s own self-respect and self-admiration.

Now in recent decades, there has been much written, as you know, on the connection between self-esteem and happiness. Studies on the subject seem to show that if you actually like yourself, you will tend to be much happier than if you dislike yourself. Well, I suppose that shouldn’t come as any great surprise to any of us, liking ourselves better is what the enhancement of self-esteem is all about.

Dear friends, if you already like yourself a lot, and have high respect for yourself plus a lot of self-admiration, why would you want any more? You’ve already gotten all you can handle. I won’t ask for a show of hands. Well, because if you understand the concept of self-esteem, you will never reach a time in your life when you will conclude, “Well I’ve had enough.” And so, for each of us, there is always some higher level of self-esteem worthy of attainment.

Each day, you can give yourself your daily assignment. Today, I will enhance my self-esteem as I did yesterday and as I will tomorrow. Every time you enhance your self-esteem, you’re enhancing the most important component of your intangible wealth. I’m going to show you an important connection here, what is the connection between material wealth and non-material wealth?

I’ve given you a fundamental constant of human action named the principle of prosperity. Here is a corollary of that principle, the measure of material progress is the measure of the accumulation of the tools of production. Now, please note I have neither stated, nor have I implied, in any of these seminars that material progress is more important than either cultural progress or intellectual progress. I have never said this.

Optimization theory does not foster a materialistic philosophy. Please note, entrepreneurs, technologists, and investors are responsible for all intellectual and cultural progress. If you think there’s even one exception to this, bring it up and let’s talk about it.

Remember, it is material progress that enhances the potential for both intellectual and cultural progress. As I’m sure you realize, when you’re starving to death, the probability you will accomplish either intellectual or cultural achievements is not large and your interest in the acquisition of non-material wealth is not large.

And so, as you acquire greater and greater amounts of material wealth, your interests will generally shift in the direction of acquiring greater and greater amounts of non-material wealth. And in fact, this is where all the action is in the domain of non-material wealth once you understand it. It will always eclipse the meaning, the importance, and the significance of material wealth.

It turns out there’s a magnificent progressive domino effect that follows the application of the principle of prosperity. The principle of material prosperity is the foundation of intellectual and cultural prosperity.

This means there is no conflict between the acquisition of material goals versus the acquisition of intellectual and cultural goals, which are non-material goals. However, there is a requirement of nature that in your quest for greater satisfaction, you must satisfy your material goals before you can satisfy your intellectual and cultural goals or you will starve to death long before you ever get there.

Now my friends, during this seminar, I have given you a scientific understanding of the seven most critical problems facing every individual on this planet. Namely, international war; two, world starvation; three, widespread poverty; four, economic depression; five, monetary inflation; six, epidemic crime; seven, failing education.

When you can scientifically identify the cause of these larger world problems, all of these, scientifically, that takes it out of the domain of anecdotes and opinions and dogma. When you can do this, it opens the door to your greater understanding of the causes of the smaller problems, which include many of your own personal problems that you deal with every day.

A great many of your personal problems are the result of regressive domino effects of these seven crisis problems, every one of which is itself a regressive domino effect of what? Bureaucratic interventionism, i.e. political action.

During this short seminar, I’ve shown you practical solutions to the world’s largest human action problems. I’ve shown you the practical panaceas that will ultimately have to be implemented, or for mankind there will be no solutions and no future at all.

I’ve shown you how to achieve a dramatic increase in the magnitude of your correct understanding of causality and a spin-off benefit from this is that this will give you a dramatic increase in the magnitude of your self-esteem.

In fact, on the subject of self-esteem, I’m going to give you a criterion each of you can use to measure your own progress throughout your career, which means throughout your life because your entire life is your career. The measure of individual progress is the measure of your accumulation of self-esteem.

This is true for everyone. Each day, you should be accumulating more self-esteem. It doesn’t matter how low or how high your self-esteem is now, you can always add to it. You can always add to your knowledge of causality. Nothing will add to self-esteem more than that.

It is a natural thing for you to like yourself more as a consequence of your understanding more. The majority of people in the world will never come close to your level of understanding causality. One important fact is they have failed to develop the first essential tool to understanding causality, namely, reason.

None of us are born with reason or reasoning capability. As a matter of fact, if you possess the ability to reason, this sets you sharply apart from most of your fellow humans. Have you ever noticed for example how common it is to run into unreasonable people? There are billions of them. The reason they are unreasonable is because they are incapable of reasoning. All people incapable of reason are unreasonable ipso facto.

My old German friend, Johann Wolfgang von Goethe had this to say, “Let us not dream that reason can be popular. Passions and feelings may become popular, but reason always remains the sole property of a few eminent individuals.”

Now please note; Goethe says that reason is always the sole property of a few eminent individuals. I’d like to point out that reason is not a property that any of us are born with. Each of us must develop our own reasoning skills. When you successfully apply your reasoning skills to gain a correct understanding of causality, you may very well and quite properly think of yourself as eminent.

Eminent means you are distinguished as being above others. My friends, there is nothing wrong with being above others if you have earned it. You are above others in what regard? You are above others in your scientific understanding of what the hell is going on, especially in the social domain.

Remember, your education involves any increase in your correct understanding of what? Cause and effect or causation or causality, which are all the same. As you enhance the quality of your education you will enhance the quantity of your self-esteem. The two go together. Like self-esteem, you will also enhance the quality and quantity of your self-confidence.

Self-confidence again is not a product you will find at the Bullocks department store. In fact, the more important the product, the less likely it will be sold at Bullocks or any other store. The more important the product the less likely it will ever go on sale.

If you already have a lot of self-confidence, and I’m sure you do, why would you want more? You’ve already got more than most other people. Why would you want more? Because, like self-esteem, there is no such thing as the maximization of self-confidence. Another important measure of your progress in both your life and your career involves your ability to achieve greater and greater levels of self-confidence.

Therefore, let’s talk about intellectual independence and the enhancement of self-confidence. Optimization theory is designed to give you a scientific understanding of causality, where the subject is human action, social action. Remember that you live in a world in which almost everyone’s fundamental premises and conclusions on the causes of things are derived from one source, indoctrination.

But when you can escape from this indoctrination, when you can achieve an intellectual independence, wherein your fundamental premises and conclusions are based upon independent observation, independent verification, independent confirmation, your perspective of the world totally changes. With that change in perspective comes a new level of self-confidence that can only be understood when it is experienced.

As you continue thinking about the scientific principles that have been introduced here, you will continue to increase your understanding of these principles, but you’ve got to keep thinking about them.

One of these scientific conclusions is this; a free society is the only alternative to the political disharmony that generates war. In time, your confidence in the free society itself as a practical panacea will continue to grow. At the same time, you will add to your level, your own personal level, of self-confidence.

In order for you to continue adding to the magnitude of your self-confidence, there is one fact you must continue to be sensitive to, and that is you live in a world in which almost everyone, from grammar school dropouts to university professors, from ditch diggers to corporation presidents, believe that political compulsion and bureaucratic interventionism is the true means to the greatest good for the greatest number.

This means what? It means that most of your friends, relatives, associates believe that imposed violence is the true means to the greatest good for the greatest number. Almost everybody you know believes that.

The fact that almost everyone you know believes this, and for most people it will be everybody they know believes this with few exceptions, the fact that almost everyone you know believes this should not shake your confidence in the scientific position that violence, in whatever form it may take, is a false means where the goal is to attain the greatest good for the greatest number.

I’m showing you and have been showing you how to refute the popular arguments for the maintenance of slavery. Should we abandon slavery? We have to abandon it or we’ll perish. One of the most popular ideas believed by educated, intelligent, successful people, the ones you know, the ones you associate with, the ones you party with, they embrace the idea that forced distribution of wealth in one form or another is a major solution to the problems of our time.

I live in Orange County, California where the bureaucrats managed to bankrupt themselves. The bureaucrats can’t wait now to raise the taxes in Orange County to make up for all the losses that they were responsible for in the first place. What else is new? This should come as no surprise.

Well, the forced redistribution of wealth, whether it’s in Orange County or anywhere else in the world, is the civilized version of human sacrifice. Where you have the redistribution of someone’s wealth against his will, that someone is going to be sacrificed. You can call it any damn thing you like, but some human is going to be sacrificed and the justification for the sacrifice is a standard theme, well, this sacrifice will bring about the greatest good for the greatest number.

Here’s my dictionary definition of sacrifice. “The surrender of something prized or desirable for the sake of something considered to have a higher or more pressing claim.” In your civilized society, you are forced at gunpoint to make a sacrifice for the good of the tribe. I have this question for you, how does our American tribe differ from the tribe that lives in the Great Forest?

Remember the 12 maidens that were sacrificed during The Dance of the Axes? Remember they were not volunteers. You did get that right? All of you got that? They didn’t volunteer. They were compelled to make the supreme sacrifice. The fact that the tribal leaders may have truly believed that the sacrificial offering of the maidens to the Great God of the Forest would purchase protection from their enemies does not alter the fact that the lives of these maidens were confiscated by the tribal leaders, you do see that.

Your American tribal leaders may truly believe that the sacrificial offering of your own children on the field of battle and the sacrificial offering you must make as parents to pay for the killing of your own children and to pay for the killing of foreigners and their children is necessary for the greatest good for the greatest number. The belief that this will purchase protection from the so-called enemy does not alter the fact that you were forced at gunpoint to pay for the killing of your own children. How do you like that system? What do you think of that system? You were forced to pay for the funding of the killing of your own children. That is our system. You do see that, don’t you?

I will try to convince you that your position is untenable. Don’t be surprised if I do, but have the courage to bring it up if you don’t see it. That’s what’s been going on. What do the tribal leaders in the land of the Great Forest have in common with your tribal leaders in the land of America? Both the tribal leaders in the forest and in America are imposing upon their people a false means to the attainment of the ends that they claim to be seeking.

Dear friends, I don’t know how to tell you this, but one false means is just as false as another false means. One bad bottle of booze that will cause you to go blind is just as bad as another bad bottle of booze that will cause you to go blind.

What do all false means have in common? A false means is any means that will always fail to attain the end sought. Now, you’ve got a precise definition of false means. Add it to your vocabulary. In this science, it has a meaning, a precise meaning. It’s an important term, false means.

Every false means is a bad idea. My friends, your understanding of these things, when your means to understanding is science, gives you an advanced degree of intellectual independence that few people have yet to gain. Remember, the goal of science is to know reality. Every time you add to your understanding of the cause of things, you add to your wealth of self-confidence and self-esteem.

Every time you add to your knowledge of causality, you add to both your intellectual and your emotional excitement. You know, with all of today’s interest in getting high on any one of dozens of different chemicals, I have something for you that can top any chemical high. Would you like to know what it is, anyone? Is one person interested? I’ll share it with you.

One person? Thank you, sir. This high is even legal. The highest high is the self-esteem high and the self-confidence high. With this in mind, I will share you with my favorite quotation from the ancient world of Greece. The most important Greek philosopher who philosophized on the subject of physical action, what we call physics, the science of physics, was Democritus who lived some 2400 years ago.

Democritus is one of the founders of the Atomic Theory. Our word ‘atomic’ comes from the Greek ‘atomos’, which means indivisible. If something is indivisible, that means of course it cannot what? Be divided. Democritus, the illustrious Democritus, philosophized the entire universe is made up of only two things, atoms, which cannot be divided, and the space in between the atoms he called “the void.”

Now when you consider the industrial revolution is only a little more than 200 years old, Democritus has made a remarkable generalization when you realize he made this generalization 2400 years ago, long before any of you, were born.

Please note it takes an uncommon amount of self-confidence and self-esteem to be able to make such a profound, universal generalization in the first place. It was a magnificent wealth of self-confidence and self-esteem that enabled Democritus to make this grand statement. In other words, people with low self-esteem and low self-confidence can’t make giant, universal statements like this.

In fact, if you have low self-esteem, low self-confidence, you can’t generalize effectively at all. You have to have self-confidence to be able to generalize. If you can’t generalize, you will never know anything about anything all the time on all subjects.

Let me give you my favorite quotation from the ancient world, the ancient Greece, Rome. Democritus said, “I would rather understand one cause than be king of Persia.” In those days, you know, Persia was one of the dominant civilizations and to be king of Persia was just about as high as you could go in the political world of those times.

To put his statement into modern perspective, he’s saying, “I would rather understand the true cause of just one single thing and get it right than be president of the United States.” That’s a big concept, a large statement from a large man, a large mind. Democritus was one of the super-intellectual giants in history.

Let’s talk about a new subject, intellectual independence and knowledge acquisition through an understanding of a few simplex generalizations. How can we gain intellectual independence when all of us are dependent upon others for most of the ideas we use?

All of your vocabulary words came from somebody else unless you’re using a word that you coined. This is especially true if your career involves some application of the physical action sciences. We are continually indebted to the physical action scientists who have discovered scientific generalizations about the physical universe. The most important of these generalizations are called principles, or laws of nature.

In your youth, you first heard about Newton’s law of action and reaction, also known as Newton’s Third Law of Motion. Newton discovered three centuries ago this phenomenon of nature. For every force acting on a body, that body exerts a force having equal magnitude and the opposite direction along the same line of action as the original force.

That was in Newton’s language. Even if you did not study physics, you’ve heard the more popular version: For every action, there is an opposite and equal reaction. It’s a popularized version of Newton’s principle. This law, along with Newton’s First and Second Laws of Motion, along with a few dozen other laws of nature, represent the intellectual foundation of all of modern science, especially the physical sciences.

As I said earlier, it takes a good mind to understand a law of nature. When you finally come to understand any law of nature or principle of nature, you will be excited by its intellectual grandeur and practical applications to solution building. When the law itself becomes important to you, you might even take an interest in who discovered the law, especially with the knowledge that all of these laws are hidden from view. You know, therefore, that somebody had to discover them.

Who are they? You only begin to ask that question when the laws or principles become important to you. Laws and principles are important to practically nobody on the planet. Freshman college should be principles and laws 1A. The more important the subject the less likely it will be taught in a university, today at least, with few exceptions.

In this seminar, I’ve been showing you how to build not a science of physical action, but a science of what kind of action? Human action. One of the very first problems to conquer is where to begin such a science. This is not as easy as it sounds. If you don’t begin right, you won’t end right. In von Mises’ Human Action, he devotes the greater part of a chapter to a description of the phenomenon of human action. However, I’m saying it is more than a phenomenon, it is a law of a nature that can be stated as a precise generalization in a single sentence.

Furthermore, I’ve said this is where to begin the science of human action, with this specific constant, this fundamental constant, the law of human action. There was a statement I gave earlier in building a science, if you don’t begin right, you won’t end right.

The law of human action: All human action involves the employment of a chosen means aimed at the attainment of some end of greater satisfaction. And so, we are essentially commanded by nature to go after one thing, greater satisfaction. Please note I’m starting the science of human action with a fundamental constant that cannot be refuted.

But also note, I’ve not asked you to accept this fundamental constant on blind faith. You observe human actions independently of me, human actions you take along with human actions others take, and see if you can identify any exception to the law or any principle I’ve given you.

If you can’t, if you can see that this law of human action always operates the same way without exception, then accept it as a true law, not because you have been indoctrinated, not because you want to pass an examination while you’re playing the game of school, but because you’ve independently verified this to be a true law of nature. That’s why. And the difference is huge.

This is what I mean by intellectual independence. There’s an ironic situation that comes up from time to time with certain people attending this seminar who are afraid that they are being subjected to indoctrination. Many people are afraid to take this seminar because they are afraid they will be indoctrinated.

The irony is when the subject has been human action, virtually everyone has been indoctrinated on the subject, especially in school. In contrast, I am showing you through the vehicle of science how to escape from this indoctrination and achieve true intellectual independence. A complaint I’ve heard from time to time is that this seminar, Mr. Snelson, is so well-organized, doesn’t the seminar itself become a vehicle of indoctrination?

I’ve said from the very beginning, this is a science. One of the necessary and essential characteristics of science is that it is organized knowledge. The most popular definition of science is that science is organized knowledge. That came out of a definition, I believe from Thomas Huxley, who was Darwin’s friend and essentially his publicist. He publicized the Darwinian concepts of evolution.

To criticize the organization qua organization, that’s just academic language for organization as organization, to criticize organization qua organization is to criticize the foundation of science. But science today and science in the past has always been under heavy attack because science always, always does something that a lot of people will never like.

What is it that science is doing that a lot of people don’t like? Science is continually obsoleting traditional ideas, beliefs, and opinions and people do not like this. It’s one of the things they resent the most. Science is always continually making fools out of experts. No expert wants to be perceived as a fool.

It makes conservatives who are trying to conserve the old ways look anachronously outdated. This will always be true because science is always evolving towards better and better explanations of what? Causality. Science can never be conservative. When it is, it’s no longer science.

When the director of the US Patent Office, Charles Duell, made his now famous pronouncement in 1899, “Everything that can be invented, has been invented,” that was before the beginning of this century. Mr. Duell was speaking on behalf of the conservative mentality in its finest hour.

I might point out there were more useful inventions in the next 75 years than the previous 75 years before he made this statement, including things like the airplane, the television. That was good, television, airplanes.

All right, we begin our science of human action with a fundamental constant. All of us are after greater satisfaction during the course of every action we take, but how do we get it? The cause of greater satisfaction is always hidden from view. Whenever the cause of something we either like or dislike is hidden from view, the most successful approach in history to get it unhidden is to apply science to reveal the true cause.

This means we need literally a science of greater satisfaction. In our quest of a science of greater satisfaction, we might ask a question that transcends our own selfish, individual demands for greater satisfaction. Such a question might be, for example, how can society achieve the greatest good for the greatest number?

Related to that, how can society achieve the greatest satisfaction for the greatest number? We can rationally assume that the greatest satisfaction for the greatest number of people has this source, prosperity measured in terms of their acquisition of a greater quantity and quality of food, clothing, housing transportation, shelter, and so forth.

Thus, another question logically follows, what is the road to prosperity and can we arrive at an answer that is more than someone’s mere arbitrary opinion? Yes, we can. There is a human action principle that gives us a scientific answer to this question that is another fundamental constant of the science, like the law of human action, there is no rational argument that can refute this law or principle.

Prosperity has a simplex source. There is only one means to societal prosperity, the accumulation of the tools of consumer production at a faster rate than the accumulation of consumers. Like it or not, this is reality. We can’t change it. This is the one means to prosperity, produce the tools of consumer production at a faster rate than you produce babies.

When you accomplish this, an amazing effect always takes place. If we plot the effect on a graph, it looks like this.

It’s a race between tools and babies. If the tools win, the babies are bequeathed prosperity. And so, if people are increasing at a faster rate than the tools of production that bring us the products, we will always have, in spades, an effect that I call The Poverty Effect.

But if in this race, instead of babies being produced faster than tools are being produced, all we’ve got to do is reverse that and we get another effect. This time the effect is The Prosperity Effect.

But what we have to know is more than this. Most people don’t even know the source of these effects, the poverty effect or the prosperity effect, especially in the poverty nations where babies are produced faster than tools.

Then we have to ask another question, what is the most efficient means of producing tools faster than babies so that all of society can both progress and prosper?

To answer this significant question, we need another fundamental constant. How can we scientifically identify the specific kinds of human actions that will take society in the direction of progress? If a creation of both more and better tools of consumer production adds to progress and is therefore progressive, how could we most effectively and efficiently generate this progress?

First of all, what classes of people are advocates of progress? Well, virtually everyone who sees themselves as educated, intelligent and successful. They’re all advocates of progress. Ask them. Virtually every college professor, clergyman, politician, attorney, medical doctor, engineer, bureaucrat, is an advocate of progress.

Virtually every Socialist, Communist, fascist, extremist, conservative, liberal, Democrat, Republican, they’re all advocates of progress, aren’t they? What else do all of these people have in common? Their concept of just what human actions are progressive and which ones are regressive is imprecise, which means fuzzy and fuzzy-thinking means fuzzy-headed. Fuzzy language means fuzzy-headed.

We think with language. Most people have fuzzy thinking because their language is fuzzy. They would be just as imprecise if you asked them to define freedom, which all of them are for, or define slavery, which all of them are against. And if they can’t define these, what does that mean? They neither know what they’re for nor what they’re against.

Try this on anyone, ask them to define any fundamental term. Write it down. See what they come up with. You’re missing Precision 1A at the university, precision thinking, which is built on precision semantics. Anyone who cannot define their terms doesn’t know what they are talking about and more importantly does not know what they are thinking about.

A solution to this problem is to make a sharp line of demarcation between two opposite kinds of ideas, progressive social actions and regressive social actions, or human actions. We have to distinguish between these two kinds of actions. It is one thing to have progress as a goal but quite another thing to be able to identify the true means to progress.

In order to solve this problem, the first thing you have to be able to identify is the problem itself. For several years, I was sensitive to this problem and it took me a while to devise a practical solution. I came to realize there is another fundamental constant that represents a missing link.

I gave this solution to you earlier, you might call it a progressive direction finder because it tells you the direction to follow that will lead to progress, the law of progressive human action. All human actions are progressive that increase the quantity and quality and effective utilization of the tools of production necessary to meet the consumer’s most urgent demands for goods and services.

This law says that progressive action is a unique kind of action. It is action that accelerates the quantity and quality of those production tools used to produce products demanded by the consumer bosses.

In contrast, if human actions decelerate the quantity and quality of the tools of production used to produce products demanded by consumer bosses, then there is another fundamental constant, the law of regressive social or human action. All social actions or human actions that are regressive decelerate the total quantitative or qualitative accumulation of the tools of production necessary to meet the consumer’s most urgent requirements. This can be called the regressive direction finder. Since it tells you the direction you can follow that will lead to social regression.

Now, as I said, almost everyone claims to be for progress and almost no one claims to be against progress. The advocates of interventionism claim to be for progress and the advocates of non-interventionism claim to be for progress. That should not surprise you. Everybody is for progress. You can’t find anybody for social regression. The question then is this, can both acts of interventionism and non-interventionism be examples of progressive social or human action?

To answer this question, it is necessary to create a precise definition of interventionism. I gave this to you before. Interventionism is any imposed interference with the production distribution and consumption of any product derived through market exchange.

I’ve illustrated examples, many examples, of how interventionism always causes the following effect. It causes, one, the deceleration of the accumulation of the tools of consumer production and, two, prevention of the accumulation of the tools of consumer production. Therefore, what kind of an observable generalization can we make about this interventionism?

All acts of bureaucratic interventionism are regressive. Since all of these acts of interventionism are imposed through violent means, we may also conclude that all acts of bureaucratic violence are regressive. Another way of describing the nature of this bureaucratic violence is this, all acts of bureaucratic interventionism are gun-imposed interferences with free trade.

However, if we can obsolete the use of these interventionist guns and allow both external and internal free trade to flourish, there will be a predictable effect. If we obsolete these regressive human actions, three classes of people will emerge to apply the principle of prosperity and continuing progress. You know who they are, the entrepreneur, the technologist, and the investor.

Where these super-humanitarians prosper, who else prospers? Everybody. It is observable. Henry Ford produces far more wealth for his customers, employees, and stockholders than he can ever produce for himself.

Well, here are six of the fundamental generalizations I’ve discussed that form the foundation of optimization theory, the science of human action.

One, the law of human action. Two, the principle of prosperity. Three, the principle of poverty. Four, the law of progressive human action. Five, the law of regressive human action. Six, the definition of interventionism.

This is a grand total of just six generalizations, each generalization a sentence in length. What can you do with six sentences? If you can integrate or connect them up to form the foundation of a science of human action, or what I call optimization theory, you can apply this science to attenuate war, to attenuate poverty, and optimize peace and prosperity.

If you can integrate these principles to form a new scientific foundation for your perception of reality, you can use them indefinitely to build a more rewarding career. And so, those who attain the greatest understanding of principles will attain the greatest understanding of reality.

All of you are familiar with this popular saying, One picture is worth a thousand words. I’ll share with you a concept that is much more impressive. It’s my version of this, only it eclipses the earlier one. It’s this, one principle is worth a thousand pictures. This is because it is difficult, often impossible, to pictorialize principles.

They’re too abstract for that. For example, here’s the principle of prosperity, which you’ve seen.

And how do you put that in the form of a picture. Maybe you could, to be sure, create a cartoon illustrating tools of production, multiplying faster than babies, but it would lack the semantic precision essential to science.

Why is it so important to grasp these principles and laws of nature? The only people who understand the physical action sciences are those people who have invested in understanding the laws and principles of physical action.

They understand the causes of things when the subject is physical action. In a like manner, the only people who understand the biological action sciences are those people who understand the laws and principles of biological action. Guess what, the only people who understand the human action sciences and optimization theory are those people who understand the laws and principles of human action.

In these six sentences I’ve given you, in the form of three laws of human action, two principles of human action, and one definition, that once understood give you access to a wealth of knowledge. They put you in possession of something unique, namely a scientific understanding of what the hell is going on.

One of the goals of this seminar is to give you in 30 hours the most rapid and profound growth in the quality, utility, and scope of your most fundamental knowledge. This is not done with mirrors, but with your understanding of human action principles, laws, and definitions. When you integrate all of these laws, principles, and definitions in both an organized and rational way you have a science.

A science is a synergistic concept wherein the whole is greater than the sum of its parts. In fact, the science is a continually expanding whole that expands as the foundation of science is applied to add to our knowledge of causality. All right, this is lecture number 18. If you have perfect attendance, you’ve been here some 25 hours or so. I’ve had 24 hours, maybe. One day of your life, I’ve had access to you for one day. That’s all, one day.

How many of you have lived at least 35 years? Okay, that’s more than half of you. And if you have lived 35 years, that’s 12,775 days. I’ve had one. And if you had perfect attendance I’ll have just a little more than one of the 12,775 days. It is your ability to grasp in a little over one day these scientific generalizations on human action that enable you to accomplish what I call an accelerated intellectual evolution.

Evolution means a gradual change. To accelerate means to speed up the course of study. Intellectual means possession of a high degree of mental capacity to understand causality. Accelerated involves a method of speeding up the gradualness of the intellectual change from a lesser to a greater understanding of causality.

Instead of an intellectual evolution that takes place in 20 years or 50 years, an accelerated intellectual evolution takes place over a timespan of some 30 hours of class time. Assuming you get it. If you’ve missed sessions of this seminar, you cannot complete this accelerated intellectual evolution because some of the chunks are missing. Let me see a show of hands of those of you that have perfect attendance. That looks to be about 90% of you.

If you’ve missed a session, you’re invited to make it up the next time the seminar is given without fee. If you’re not certain what sessions you’ve missed, we try to keep a role and we’ll let you know when the seminar is given again. In any case, you’re invited to attend any session you’ve missed when I give the seminar again as my personal guest without tuition fee.

I’m going to take on a new subject by asking you this question and that is, have you ever made a mistake? I won’t ask for a show of hands. Several people have volunteered, I’ve made a mistake. We’ve all made them but the question is what causes them? We’ve all made mistakes but have you analyzed what causes them? A mistake is an error in action that causes some effect you dislike.

What would you say to a salesman who offers to sell you a machine that can only make mistakes?

Let’s say he offers you the machine at half price. What do you think about that, half off? Would this be a good buy? My friends, there is such a machine in the world. It is called the bureaucracy. Therefore, I’m going to talk about the bureaucratic mistake machine and its hidden benefits.

Every adult who’s ever thought about it recognizes that it’s possible to benefit from his mistakes. But we can benefit from bureaucratic mistakes. Can we do this when the bureaucrat who makes the mistake never has to pay for his mistake? Like in Orange County, those guys that blundered and lost all that money, they’re not going to pay for their mistakes. That’s why people want to be bureaucrats, you never have to pay for your mistakes if you’re a bureaucrat. Never.

And this is why they repeat mistakes of the past in the future, because they never have to pay for their mistakes. The new elected politicians always say, “Well, we had nothing to do with it, it was those other guys.” Have you ever heard that story? You’ll always hear that story.

The year 1981 marked the 100th anniversary of the modern bureaucratic state. The bureaucracy as an institution was not even new 100 years before 1981. Bureaucrats have been around for thousands and thousands of years. But these earlier bureaucracies were manned by bureaucrats who were clearly subordinate to the commands of the political rulers.

In 1881 in Germany, the world was introduced to modern bureaucracy, the supremacy of bureaucratic rulership.

Otto von Bismarck 1815 – 1898

It was launched by the German Chancellor, seen here, Otto von Bismarck. The system was named by the Germans ‘social politics.’ Social means of course friendly, friendly relationships. Politics means a form of violence confiscation. Any problem with that? It always means that. Okay, what was the idea behind social politics that Bismarck put forth? The central idea of social politics was to make the violent confiscation of choice appear to be more friendly.

Bismarck was actually called the Iron Chancellor, which sounds friendly enough. His friendly approach to politics included political confiscation of German industrial enterprises. It included the enforcement of strong protective tariffs to protect government monopolies from foreign competition. It included the imposition of workmen’s compulsory insurance, much more interventionism. Does any of this sound familiar?

That was Bismarck’s social politics. Bismarck imposed a program of social politics. It became the forerunner of the bureaucratic state in and throughout Europe. Bureaucracy again means literally ‘bureau rule’ or ‘rule of the bureau.’ Bismarck is the father of the modern concept of rule of the bureau by the bureau and for the bureau.

Half a century later, social politics reached the shores of America. The first American president to make a serious effort to impose social politics, you know who that was, what president? I have answers of Roosevelt, anyone else? The answer was Herbert Hoover. But his success was limited due largely to the fact that he had a hostile congress and he couldn’t get social politics through the congress, mainly because they were hostile to him, not so much to the idea of social politics.

With the subsequent inauguration of President Franklin D. Roosevelt, under Roosevelt’s leadership, Bismarck’s social politics was fully launched in the United States. All of this was explained to you in your American history classes, right?

To make this new experiment more palatable to the people, Roosevelt and his advisors came up with a descriptive slogan for the program. The American version of interventionism German style was given a name taken from the game of cards, The New Deal. And I think this is a fitting metaphor because in both the game of cards and the game of politics, you can only have winners or losers.

Well, from the time of Bismarck, his advocates of social politics have had more than a century to experiment on the people, to experiment on the people with their various schemes of bureaucratic interventionism. Now, wouldn’t you say that 150 years of these human action experiments have given the experimenters a fair chance? What do you think? 125 years, what do you think?

Is that a fair trial? If the goal has been to achieve the greatest satisfaction for the greatest number, then every one of these experiments has failed. The scientific evidence proves that interventionism, as a means for the greater good, in whatever form it may take, has failed. However, my friends, there is some good news to be found in all of this experimentation.

It may be that our knowledge of the certain failure of bureaucratic interventionism to obtain its stated goals has only been crystallized as a result of having given the bureaucracy every opportunity for success. You see, if we’d only had 25 years to experiment, they could claim, “Well, you know, we haven’t had a fair chance to try this out, we need more time.”

Would you expect to hear that? Sure. Well, a century, a century and a quarter, over 100 years of these experiments in Europe have failed. Fifty years of experiments, more than 50 years in America have also failed. Nevertheless, I am suggesting in spite of this that we should not be overly critical of our tribal elders of 50 to 100 years ago who launched these experiments.

It’s only been recently understood that interventionism as the means to the greatest good for the greatest number will always be a great mistake without exception. Remember, I defined a mistake earlier. A mistake is the employment of a false means. The repetitious feature of bureaucratic interventionism is that it consistently fails.

In fact, it is not an overstatement to point out, my friends, the entire bureaucracy is one great mistake machine. It is a human action machine that manufactures, guess what, mistakes. And because the people in general do not like to buy mistakes, the bureaucracy “markets” its mistakes by cramming them down the peoples’ throats at gunpoint. The bureaucratic theme is eat it, it’s good for you! That’s the theme of any bureaucrat and he backs it up with a gun.

In contrast, if you are an entrepreneur, you have to eat your own mistakes, don’t you? At the same time, the bureaucrat is serving his mistakes to the people while he claims to be a servant of the people. But because you are forced to pay for the service, we have to say, well, it’s really a disservice.  My friends, I want to stress that in spite of all of this, it is useful to take a philosophical perspective on the entire subject of bureaucratic mistakes and errors.

Although we can never know for certain, the probability is large that many of these mistakes and errors were necessary steps to progress. One thing we do know for certain is that it is impossible for man to achieve social progress without making many mistakes and errors. The great German intellectual Goethe, one of my favorite people of all time, says this, “error is a natural accompaniment of the struggles and aspirations of man.”

Well there is much room for optimism if you can view the evolution of bureaucracy from a historical perspective. Ladies and gentlemen, it is a mistake to expect our ancestors to be smarter than we are when we have the superior advantage of hindsight. I don’t blame our ancient elders for imposing upon the American people a government based upon interventionism and the confiscation of property and choice.

I don’t blame them. Many of our ancient elders I have great respect for, including Thomas Jefferson, one of the great and important intellectuals in American history. Benjamin Franklin, even more important than Jefferson, and I’ll mention Franklin briefly later. There are others, George Mason, James Madison, all men of exceptional intelligence, wisdom, and quality. They would all be aghast at what we’ve done with the system since their death.

But listen to my Randomhouse dictionary definition of hindsight, “recognition of the nature and requirements of a situation, event and so forth after its occurrence.” It is a great mistake to think we could have made the social journey from a feudal society to a free society without falling into the bureaucratic abyss somewhere along the way. As a society, we have fallen into a bureaucratic hole.

It is deep but it’s not an infinite hole and it is certainly not an astronomical black hole. That means we can climb out of this hole into the light of reality. And if you’re familiar with the writings of the 19th century German political philosopher Karl Marx, one of his main social premises was this: “The social structure cannot make a direct transition from feudalism to communism.”

He claimed there must be an intermediate transition, he called it capitalism. He said there will be a social transition from feudalism to capitalism to communism. Marx was wrong. He was wrong on practically everything he did, not all, but just about everything. In Russia, there was a social change that went directly from Russian feudalism to Russian what? Communism.

In contrast to Marx, I’m taking a different position, namely this. It is improbable that the feudal society could have evolved directly to a free market society. It is highly improbably that could have happened. One thing for certain historically, we did not evolve socially from a feudal society to a free market society. This did not happen.

What I’m saying is this, during your lifetime, we are experiencing a perhaps necessary social transition identified here, I call it modern bureaucracy. Here’s why. A bureaucracy is the product of our societal adolescence. Our entire social structure cannot jump in one quantum leap from infancy to maturity.

There must be a necessary transitional period that I will call societal adolescence. This is true of both humans and societies. We evolve. There is a societal evolution from societal infancy to societal adolescence to societal maturity. A bureaucracy feeds upon the demands of our adolescent mentality. Those people who have, in other words, not yet grown up.

All of you have noticed this common feature of adolescent behavior. The adolescent is always in a great, great hurry to get something for nothing. That’s one of the major characteristics of adolescent behavior, a high demand of something for nothing. The adolescent demands effect without taking the causal steps to get that effect.

Well part of the admission price to adulthood and maturity is the discovery there is no such thing. For every effect, there is a cause. I’ve talked about the system of bureaucratic interventionism as perhaps a necessary transition. Let’s look at another necessary transition Karl Marx called the capitalistic system. Marx actually popularized the term ‘capitalism.’ He didn’t coin it, but he popularized it.

Some of you may have noticed that thus far I have had little or nothing to say about capitalism, either positive or negative. I think the term may have even only come up one time in the whole seminar, the term ‘capitalism.’ Today, the image of capitalism as a social system has been largely tarnished, especially from the view of the individual who sees himself as educated.

Much of this negative image of capitalism stems from a century of anti-capitalistic attacks by those who were envious of the wealth generated by the capitalists, especially the aristocrats in England. And the aristocracy launched a major attack upon factory owners, entrepreneurs in England, because they resented the fact that here is a factory owner living in the next county who now lives in a bigger chateau or mansion than they do.

And he was not born into aristocratic wealth and so the aristocrats tried to destroy the image of the capitalist and they did a very good job of it. Much of this whole distorted view of the Industrial Revolution has come from English historians, English intellectuals who were part of the aristocracy who resented the fact now there’s an intruder.

“We don’t want these nouveau rich to be around. You’re a commoner and you should stay common which means live in a common house and not a mansion.” That’s part of the history of that whole anti-capitalistic posture. Couple this with the fact that most all of the historians of the 20th century have been philosophical Marxists, almost all of them have been Marxists. Almost all of the English professors of this century have been philosophical Marxists.

That was one reason why even the student who majors in English can hardly come out of a college without having a paradigm that is a Marxist paradigm. Well, my dictionary says a capitalist is a person who has extensive capital investments in a business enterprise.

Such a person could be an entrepreneur, investor, or technologist. I’d like to point out now that it was not only the anti-capitalists who tarnished the image of capitalism, but this negative image of capitalism was also greatly augmented, advanced by the capitalists themselves. A significant number of these capitalists of the 19th and 20th centuries failed to understand the paramount importance of establishing and maintaining a successful marriage between two human action principles, the principle of the division of labor and the principle of the free market.

This lack of understanding was due largely to the fact that the importance of this marriage was never explained to them in the first place. They were not born with the knowledge of how the principle of the free market propels the efficiency of the division of labor. No one is born with this knowledge, and because many of these capitalists did not understand causality, they committed a blunder that will bring about the demise of capitalism.

These capitalists enhanced the wrong marriage. Instead of enhancing the marriage between the division of labor and the free market, the capitalist enhanced the marriage between capitalism and the bureaucracy. Karl Marx also predicted the demise of capitalism but he did so for the wrong reason.

The right reason is when the capitalists married the bureaucrats, they gave birth to a great litter of bastard children. I will show you what has led to the death knell of capitalism with one short equation. Capitalism plus interventionism equal mercantilism. What does that mean?

What is mercantilism? We discussed it earlier. A social system of special privilege for special classes imposed with bureaucratic violence. Now, this is not to say that every capitalist sought special privilege from the bureaucracy in order to gain some gun-imposed advantage at the expense of a competitor or a consumer, but it was common enough to start a regressive domino effect.

When the capitalist asked for a special subsidy from the government to finance a railroad or the construction of some manufacturing project, or they asked for protection from some superior competitor, what are these capitalists really demanding? Give us capitalists special privilege and give those competitors and consumers, give them the gun.

But dear friends, as soon as you do this, very quickly others get the message. What do they learn very quickly? “Hey Jack, you know what we just discovered? You can actually use the government as a weapon to gain a gun-enforced advantage over somebody else.” And what’s behind this mentality? For me to gain, they must lose.

And so, the laboring classes cry out, “Give us laborers special privilege and give those capitalists and consumers the gun.” Each time some special class gets special privilege, some other class says, “Wow, this is great, we want in on this. This is the best deal we’ve ever seen.” So what happens? “Give us unemployed special privilege and give the entrepreneurs and consumers the gun.”

“Give us poor people special privilege and give those rich people the gun.” “Give us old people special privilege and give those rich or young people the gun.” I hope you’re becoming sensitive to the regressive domino effects of bureaucratic interventionism. Remember, if you don’t understand the progressive and regressive domino effects, you will never have a clue as to what’s going on in society.

It doesn’t matter upon whose behalf the interventionism is aimed at benefiting, there will be regressive domino effects. The capitalists did not understand capitalism as a science because capitalism, for one reason, was never developed as a consistent science in the first place, built upon a foundation of inviolable or not to be violated principles. This was never constructed.

In short, what was missing from capitalism was an applied science of human action, or what I call optimization theory. To attempt to make capitalism today an inviolable science in my opinion, it’s just too damn late. Too much damage has been done. The death knell for capitalism has already sounded. I think it’s probably irreversible.

Furthermore, the very concept of capitalism creates the impression that the system itself is established for the benefit of an exclusive few. Here’s a typical definition of capitalism: “an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.”

In short, it is an economic system in which ownership of the means of production are maintained chiefly by a few private individuals. In other words, it sounds like an exclusive economic system run both by and for the benefit of a privileged class of people known as capitalists.

And in fact, that is exactly what it does become where there is a marriage between the capitalists and the bureaucrats. It becomes a special, privileged system for special, privileged few capitalists backed up with what? A gun. That’s caused a lot of damage for the image of capitalism, probably irreversible damage.

The grand alternative goal of this is the consummation of a marriage between the free market and the division of labor. Where this marriage flourishes, you have a flourishing society, a free society, a free society is for everyone but the free society can’t build itself any more than a system of railroads can build itself.

You know, it does take a few human actors understanding the railroad technology before you can build a railroad. Therefore, it should come as no surprise that it takes a few human actors understanding a free market technology before you can build a free market and a free society and a win-win society, which are all the same.

Furthermore, from the time of the ancient Greek civilization, it has taken a few thousand years to figure out how to do this. Much of the learning experience has been through trial and error. Trial and error means there will be many mistakes, and much discouragement along the way. This discouragement is our reaction to failure. The failure tells us we’ve chosen the wrong means to attain the ends we’re seeking.

I’d like to point out something. You can have a small success after a small discouragement. You can have a small success after a great discouragement, but you can only have a great success after a great discouragement, especially in the area of technology. Look at the life of Thomas Edison to illustrate that point.

Thomas Edison was the greatest failure in the history of technology. That’s true, no one has ever exceeded the number of his failures. It’s like Babe Ruth is still the strike-out king in baseball, isn’t he? Maybe he’s been surpassed with the longer season, but Babe Ruth was also probably one of the two or three greatest baseball players in the history of baseball.

There are thousands of anecdotes that could illustrate this point, but I’ll share this one with you. It concerns one of the greatest successes in the history of physical action. It was accomplished by those two illustrious technologists from Dayton Ohio, Wilbur, and his brother, Orville. Virtually every school kid has learned that on a North Carolina Beach on December 17, 1903, the Wright brothers actually flew a heavier than air machine through the air with powered, controlled, sustained flight.

It was man’s very first powered flight. Every school kid, when I was in school at least, every school kid knew this. Who knows these days, but the school children learned of a success. But what they did not learn and should learn is the failure and the discouragement that was a prerequisite to the success.

Just two and a half years before the first flight in history, after just experiencing much disappointment with their glider experiments and even after just establishing a world record for glider flight of 389 feet, even after establishing a world record in glider flight for distance, the Wright brothers in their diary entry of July 30, 1901, Wilbur declared to his brother, “Man won’t be flying for a thousand years.”

What do you think of that? Do you think that is any indication of the magnitude of their frustration and discouragement? What do you think? Nevertheless, they triumphed over this discouragement. A machine that can fly with a pilot flying it did not finally arrive 1000 years later, it arrived two and a half years later after they said this and Wilbur and Orville were the pilots. They invented piloting of aircraft.

If that’s all they ever did, that’s not unimportant, to invent the subject of piloting.

Well, the discouragement was large. I’d like to make this point. You can only achieve great success after great discouragement. There are very few exceptions I know of in history, especially where the goal is technological achievement.

The discouragement of the Wright Brothers led them to the further realization that they still had to understand more about what subject? In particular, what subject? It is called aerodynamics, the subject they invented. We have to know more about this. Causality in the domain of aerodynamics, we have to know more or we’ll never be able to fly, not in a thousand years. We’ve got to understand more about causality. To accomplish this aim, they invented one of the most important research tools in the history of aviation, it is called the wind tunnel.

There it is, the one they built. The wind tunnel is a beautiful example of a tool whose only function is to what? Add to our knowledge of causality, cause and effect. In this wind tunnel, they tested more than 200 3” to 9” scale wings. Two hundred of these.

Out of those experiments, with this wind tunnel, they solved the problem of how to achieve stable, sustained, controlled, powered flight in a machine that’s actually heavier than air. That is magnificent. But to get even a little bit excited about it, you have to have some understanding of what was involved.

Everybody born today might say, “So what’s the big deal, flying around, you know? I should get excited about this?” Ladies and gentlemen, one of the significant points I am making here is that out of discouragement we can build major solutions to major problems. It always takes large problems to get the attention of large numbers of people. When the problems are small, nobody pays attention.

It takes a world crisis to get peoples’ attention. Out of this crisis we’re going to build a solution. I hope you will help me build it because I can’t build it all by myself. The origin of the crisis is singular, it’s called bureaucratic interventionism. Bureaucratic interventionism is one of many evolutionary social experiments that failed to achieve the greatest good for the greatest number.

We can look at it from this standpoint, the whole thing was a bad idea from the beginning. It has taken us hundreds of years to demonstrate the magnitude of the bureaucratic failure and just how bad it is. In retrospect, we can all say those who implemented the bureaucracy, well they thought it was a good idea at the time. And they did.

There were not many who were smart enough at the time to have predicted the magnitude of the failure in advance. I want to conclude this session by comparing three different kinds of failure: technological failure, entrepreneurial failure, and bureaucratic failure.

Let’s look at technological failure first. If the Wright brothers failed to solve the problem of flight, is anyone harmed by their failure? What do you think? Nobody’s harmed. If they never figured out how to fly in a machine, no one’s harmed by this. Harm is defined as an imposed bad. This doesn’t impose anything on anybody.

Furthermore, the Wright brothers are assuming all the risk. They were the investors in the project. The money they lose is who’s money? Their money. They’ve assumed all the financial risk. They are also the entrepreneurs of the venture. If they fail, it is their reputation at risk. Furthermore, not only are they assuming the risk as technologists, investors and entrepreneurs, they are risking their very lives.

Could that be risky? Could they be risking their lives? What do you think? Otto Lilienthal, the German aeronautical engineer was killed in 1896 from a glider crash that dropped only 50 feet. An English experimenter named Percy Pilcher was killed in another glider crash from a drop of just 40 feet, he just fell 40 feet, he’s dead.

They were risking their lives learning how to fly machines. What did I say about being a technologist? Extreme high risk to be an entrepreneur, extreme high risk to invest in entrepreneurship and the tools of production, extreme high risk. Their risk was, in part, entrepreneurial loss. The entrepreneur puts forth products for which consumers are unwilling to purchase at a price equal to the total cost of production.

When an entrepreneur experiences loss, this does not mean as a consequence people have been harmed. On the contrary, the product may have brought greater wealth and happiness to the consumers. Perhaps there were just not enough customers. His only serious experimental failing may have been in the marketing method he employed to attract new customers. He may have produced a super quality product at a reasonable price, but the product was ahead of its time.

Finally, the loss may not even be permanent loss. The lessons learned in the course of assuming entrepreneurial loss may represent the key learning experience that leads to the ultimate achievement of entrepreneurial profit.

I’ll give you the statement from Harold Sherman, good advice. He says, “There is no life without mistakes, defeats, and failures. The one secret and the whole secret is to learn to profit from mistakes and failures. To one who has learned this lesson will come not only success, but many successes.”

This is an important concept, and like many wise statements, its correctness depends upon what you’re relating it to. One of the secrets of the success of a free society is that it optimizes individual responsibility for individual human action. Every entrepreneur has a mistake meter. If he makes too many mistakes, he suffers losses. Those mistakes that lead to success are never passed on to his consumers or to members of a free society.

To be sure, investors in the venture can lose. But they assumed the potential risk when they became investors. When the venture earns profits, they can also participate in great profits, as it should be. Great risk, if a venture is successful, should be highly rewarded. With great profits, the risk has been worth it. Simple as that.

The distinction however, between technological failure, entrepreneurial failure on the one hand versus bureaucratic failure on the other hand is not merely a difference in degree, it is a difference in principle. When the bureaucracy fails, who’s harmed? Everyone is harmed.

As all of the people are forced at the point of a gun to support the bureaucracy, remember whenever the bureaucracy fails, when they fail, everyone is forced to pay for the failure. The tax payers will pay for the blundering jackasses that are running the bureaucracy in Orange County.

Furthermore, ditto every other county. I’m not just picking on my county. Furthermore, since the only means to a goal the bureaucracy knows is the confiscation of individual choice, then you’re forced to finance the maintenance of your own slavery. Brilliant concept. What then are the hidden benefits of this bureaucratic mistake machine?

Here they are. The benefit is the bureaucracy provides us with a useful model of a mistake machine. It’s hard to imagine a world in which it would not have been attempted on a grand scale. The attempt has proven once and for all that bureaucratic interventionism as a means is a mistaken means, especially when the goal of the bureaucracy is to achieve the greatest good for the greatest number.

The entire concept of bureaucracy then ladies and gentlemen can best be described as a bad idea. In retrospect, we can see that it was always a bad idea. In the end, the promulgators of bureaucracy can have an out. And it’s really good to give them an out. It’s good to give tyrants an out. What can they say? They can always say this, “Well, we thought it was a good idea at the time.”

That gives them an out. If they have an out, they will be less violent.


© Sustainable Civilization Institute 2010