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Reason's 2009 Webathon! Because Free Minds and Free Markets Aren't Free!

gillespie@reason.com (Nick Gillespie) — Thu, 12 Nov 2009 11:25:00 EST

Free Minds and Free Markets Don't Come Free!

For the next week, Reason magazine Editor in Chief Matt Welch and I will be asking you to please help us keep Reason.org, Reason.com, Reason.tv, and Reason magazine going stronger than ever by giving a tax-deductible donation to Reason Foundation, the nonprofit publisher of the leading libertarian website, video site, and print publication in this and all other known galaxies. (Click on the image above to hear Welch's eloquent spiel and catch—if you're lucky!—a post-video ad for Mucinex!)

If you give $100 (just $6.52 in 1935 dollars!), you'll get all kinds of swag, including a choice between a copy of Brian Doherty's great history of the libertarian movement, Radicals for Capitalism, and Peter Bagge's awesome collection of Reason comics, Everybody is Stupid Except For Me! And your name will appear (if you want) in a cool banner on this very site, thanking you for your help.

The fight for for freedom has never been more important than now. Here we are, a decade into the 21st century, fer chrissakes, and 20 years after the beginning of the end of communism, and the U.S. government owns a car company, has taken over the financial sector, is about to squeeze out the market from health care, is fighting two bum wars, and on and on. Who could have thought it could get worse apres Bush fils? (Plenty of Reason staffers, that's who!)

Reason in all of its iterations is your voice in the public debate, your source for news and commentary from a principled (and non-dogmatic!) libertarian perspective, and a virtual community of the forward-thinkers who can help lead us into a future so bright we'll all need genetically modified corneal implants.

Go here for details. And bring a friend!

Thanks,

Nick Gillespie

Goddess of the Market Author Jennifer Burns on Ayn Rand

Fri, 06 Nov 2009 13:45:00 EST

Reason Senior Editor Katherine Mangu-Ward recently sat down with Jennifer Burns, an assistant professor of political science at the University of Virginia and author of the new book Goddess of the Market: Ayn Rand and the American Right.

Shot and edited by Meredith Bragg.

This is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand.

Go here for more information, other videos, and related materials. Go here for downloadable versions of this video.

Reason Foundation Co-Founder Tibor Machan on Ayn Rand's Great Legacy

Thu, 05 Nov 2009 17:11:00 EST

Tibor Machan was one of the founding partners in Reason Enterprises, which began publishing Reason magazine in 1971, three years after its creation. He became editor in the spring of 1971 and worked with the magazine through the '70s and '80s as an associate editor and senior editor. In 1978 he co-founded the Reason Foundation with Manny Klausner and Bob Poole. Today Machan holds the R. C. Hoiles Chair of Business Ethics and Free Enterprise at the Argyros School of Business & Economics at Chapman University in Orange, California.

"I think that for Ayn Rand to have survived and made a life for herself, she almost needed that edgy personality, otherwise she would have been destroyed," says Machan, who was born in Hungary in 1942. At 14 years of age, his father smuggled Machan out of the country, fearing the Hungarian communist government. His background helps give Machan insight into how the intellectual mind of Ayn Rand functioned. "Her unpleasantness," he says, "ultimately can be fully justified given the treatment she was given when she came out the Soviet Union, told the truth about that country, and nobody paid attention." In 2000, Machan wrote Ayn Rand exploring all the major themes of Ayn Rand's philosophical thought.

Approximately six minutes. Interview by David Nott, camera by Alex Manning, and editing by Hawk Jensen.

This is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand. Go here for more information, other videos, and related materials. Go here for downloadable versions of this video.

Reason Foundation Co-Founder Tibor Machan on Ayn Rand

Thu, 05 Nov 2009 17:00:00 EST

"I think that for Ayn Rand to have survived and made a life for herself, she almost needed that edgy personality, otherwise she would have been destroyed," says Machan, who was born in Hungary in 1939. At 14 years of age, his father smuggled Machan out of the country, fearing the Hungarian communist government. His background helps give Machan insight into how the intellectual mind of Ayn Rand functioned. "Her unpleasantness," he says, "ultimately can be fully justified given the treatment she was given when she came out the Soviet Union, told the truth about that country, and nobody paid attention." In 2000, Machan wrote Ayn Rand exploring all the major themes of Ayn Rand's philosophical thought.

Approximately six minutes. Interview by David Nott, camera by Alex Manning, and editing by Hawk Jensen.

Where Ayn Rand Went Wrong

shikha.dalmia@reason.org (Shikha Dalmia) — Wed, 04 Nov 2009 16:27:00 EST

Love her or hate her, you can't deny that Ayn Rand, the 20th century's most bellicose/eloquent (select adjective based on political persuasion) defender of laissez-faire capitalism, is experiencing a revival. Sales of her 50-year-old magnum opus, Atlas Shrugged, second only to the Bible in terms of influence according to some reader surveys, are soaring even more this year. Two major publishing houses have rushed to release new Rand biographies—by academics, no less—this fall. And there is nary a tea party protest that doesn't prominently splash banners alluding to John Galt, Atlas Shrugged's ubermensch hero.

The latest issue of Reason magazine, with which I am affiliated, has Rand on the cover with a headline proclaiming: "She's Back." GQ echoes the same thing with its own slant, "The Bitch is Back," not to mention a hilariously naughty picture depicting Rand in an S&M outfit standing astride her former devotee Alan Greenspan.

That over 25 years after her death, Rand's persona and ideas command so much attention is testimony to the abiding power of her ideas. Still the question remains, if she is so influential, why are we on the brink of socialized medicine today? Put another way, if Rand were alive, would she be reveling in the renewed attention she is receiving as a measure of her success? Or would she be tearing her hair out in despair at her failure to stop the advancing Big Government juggernaut?

The point is especially powerful if one considers the influence that some of the other great philosophical defenders of liberty have had in the past. John Locke set out to release the individual from the tyranny of religious authorities by enunciating the doctrine of the separation of church and state. Today, this doctrine is the cornerstone of every liberal democracy in the world. Likewise, Adam Smith penned his grand defense of free trade to beat back the mercantilist ideologies that held sway in 18th century Europe. Today, the cause of free trade—notwithstanding occasional bouts of protectionism—is gaining ground worldwide. But Rand's life-long crusade—defeating socialism—which appeared within grasp just two decades ago when the Soviet Union collapsed, now seems to have regressed to the 1930s, when FDR used the economic meltdown to massively intervene in private industry.

Rand's adherents blame this state of affairs on the faulty philosophical principles of society—especially on issues of morality. But replacing false ideas with true ones is precisely what transformative figures do, and certainly what Rand, who firmly believed in the power of reason and truth, was hoping to do. Surely, if she had witnessed the events of last year—the government bailout of banks, the takeover of auto companies, the looming socialization of health care—she'd be wondering where she went wrong. Or, to use her lingo, she'd be "checking her premises."

So where did she go wrong?

Rand's entire project involved liberating the individual from the yoke of collectivism and creating the social, moral and political conditions in which he could live a fully actualized life. Each individual's own happiness is his highest purpose, she said, and boldly declared selfishness to be a virtue—contrary to what various religious and non-religious (communist, fascist, communitarian) preachers of the ethics of self-sacrifice had been saying for ages.

For people like myself, laboring under the twin tyrannies of tradition and socialism when I first read Rand in my native India, this is heady, empowering stuff. It supplies you with the moral and intellectual ammunition to stand up to those claiming to own a piece of you—family, community and state—and take control of your own destiny.

But is self-actualization through productive work--the ultimate goal of this liberation for Rand—all there is to a happy life? Two centuries before Rand arrived on the scene, Adam Smith had already written The Wealth of Nations, a powerful treatise demonstrating why self-interest offers a more secure foundation for a rational society than a selfless dedication to the common good. But he also recognized in the very first sentence of the Theory of Moral Sentiments—his brilliantly nuanced, richly observed study of human morality—that: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it."

Smith spent his whole life examining and reconciling both the self-interested and the "other-interested" side of human nature. Rand, on the other hand, effectively put these two sides at war—limiting her usefulness in the fight to stop the growth of government in the bargain.

Rand sought to provide an individualistic and moral defense of capitalism—not a practical and collectivist one. She understood better than anybody that by unleashing the productive potential of individuals, capitalism delivers untold social benefits. But these benefits weren't the primary reason to defend capitalism, she insisted. Rather, it is that capitalism frees individuals—especially those with exceptional abilities, the Howard Roarks and the John Galts—to reach their highest potential.

By grounding capitalism and economic liberties in the psychic needs of individuals as opposed to, say, GDP growth, Rand avoided the collectivist trap under which individual rights are dependent for their legitimacy on serving some broader social purpose. However, this great virtue of her approach turns into a great vice in the context of her broader message, which seems to regard anything beyond a perfunctory interest in the well-being of others as vaguely illicit.

Unlike Smith, Rand failed to fully recognize that though human beings are not constituted for self-sacrifice, they have an innate need to see others prosper. Hence, there is something crabbed and withholding in her writings, as if she is going out of her way on principle to avoid giving any assurance that everyone in fact would be better off under capitalism. Other libertarian theorists—Friedrich Hayek and Ludwig von Mises—avoided this flaw. But Rand regarded their defense of capitalism as insufficiently pure. And to the extent that it is Rand's—not their—case for capitalism that sticks in the popular imagination, it might enhance—not diminish—the allure of government over free market solutions to social issues such as health coverage for the uninsured.

Most people read Rand when they are young and are deeply moved by her, only to outgrow her by mid-life. Her adherents like to blame this on the moral pusillanimity and irrationality of the readers. But the real problem is perhaps with Rand herself: Her ideology of self-actualization speaks much more to the concerns of the young than the mature—again, because she ignores the "other-interested" side of human nature.

Consider what she wrote in her essay "The Ethics of Emergency": "The proper method of judging when or whether one should help another person is by reference to one's own rational self-interest and one's own hierarchy of values: The time, money or effort one gives or the risk one takes should be proportionate to the value of the person in one's own happiness." This statement certainly doesn't preclude helping others so long as they are important to us. But it doesn't tell us whether we should make them important to us in the first place.

For example, under Rand's schema would a person who abandons some passion in order to look after an elderly parent have a higher or lower moral standing than someone who doesn't (assuming that the parents are equally worthy)? Will the former be happier? More at peace? Rand gives us no real reason to believe so. In fact, the distinct impression one gets from her work is that an individual's first duty is to cultivating his own passions rather than nurturing his interest in the flourishing of those around him (with the possible exception of one's romantic partner). No surprise then that the virtue of generosity or benevolence, though it has pride of place in the work of Aristotle—the only philosopher to whom Rand acknowledges any intellectual debt—occupies a second-class status in her own work.

The fact is that Rand gets harder to take as one grows older and concerns about those around us become more important than our own personal project of self development. The relentless, single-minded dedication to one's passions that Rand seems to favor requires a coldness of the soul, a narrowing of one's humanity—the natural interest in the fortune of others that Smith alludes to—that most people find is not exactly conducive to their happiness.

This has profound and unfortunate political consequences. On the practical level, it makes it difficult to build a strong and growing anti-government movement based solely on Rand's philosophy, because the older cohort of her followers is falling off on a regular basis. On the theoretical level, Rand's ideas offer no real possibility of developing robust civil society responses to address the needs of those down on their luck. It is difficult to imagine a Randian qua Randian, say, volunteering in a soup kitchen to feed the hungry, or even founding the Fraternal Order of Fellow Randians to provide free health coverage and housing to jobless and homeless Randians. Since misfortune and distress are a normal part of the human condition, a philosophy that offers no positive, private solutions to deal with them will just have a harder time making the case against government intervention stick.

Rand's resurgence is certainly a welcome antidote to the Big Government onslaught that the country is experiencing right now. In the age of bailouts, the world certainly needs to hear--loud and clear--her message of personal freedom as well as its corollary, personal responsibility. But if Rand is going to play a starring role in the long-term battle to defeat statist ideologies, rather than making episodic, cameo appearances, her work will require a radical overhaul. Ultimately, the best way to honor her is by making her cause succeed--even if that means jettisoning some of her intellectual baggage.

Shikha Dalmia is a senior analyst at Reason Foundation and a biweekly Forbes columnist. This column originally appeared at Forbes.com.

Video: Manny Klausner on Ayn Rand v. Reason magazine

Wed, 04 Nov 2009 16:00:00 EST

Manuel "Manny" Klausner was one of the founding partners in Reason Enterprises, which began publishing Reason magazine in 1971, three years after the publication's creation. He became editor in the summer of 1972 and a senior editor in June 1978. In 1978 he co-founded the Reason Foundation with Tibor Machan and Bob Poole. He remains on the board of the Reason Foundation today, is a stalwart supporter of the Federalist Society, and a libertarian lawyer extraordinaire.

"Rand is, I think, a very valuable resource in the movement for people who take liberty seriously," says Klausner. "When I was editor of Reason in the early 1970s, we got an article that was submitted that proposed a method for converting the world to libertarianism, and that was by going door-to-door and distributing to every household a copy of Atlas Shrugged. We rejected the article...but it was an example of the kind of impact Rand has had and continues to have on many many people."

Approximately six minutes. Interview by David Nott, camera by Alex Manning, and editing by Hawk Jensen.

This interview is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand. Go here for more information, other videos, and related materials. Go here for downloadable versions of this video.

Reason Foundation Co-Founder Manny Klausner on Ayn Rand

Wed, 04 Nov 2009 15:00:00 EST

Approximately six minutes. Interview by David Nott, camera by Alex Manning, and editing by Hawk Jensen.

Reason Founder Robert Poole on Ayn Rand's Impact

Tue, 03 Nov 2009 17:00:00 EST

Robert W. Poole Jr. was one of the founders of Reason Enterprises, which began publishing Reason magazine with its January 1971 issue. He co-founded the Reason Foundation in 1978 with Manny Klausner and Tibor Machan and has held many titles with the magazine, including editor, managing editor, executive editor, editor-in-chief, and publisher. He remains on the board of the Reason Foundation today and is the Searle Freedom Trust Transportation Fellow and Director of Transportation Policy.

"Rand really inspired a lot of people who otherwise might have become conservatives, like me," says Poole. "If you go back and look at surveys that were done of libertarians in the 1960s, '70s, and even the '80s, and asked what single book or thought leader most inspired you to become a libertarian, it was always Rand by a large large majority—always a plurality and usually a majority."

Approximately six minutes. Interview by Michael C. Moynihan, camera by Dan Hayes, and editing by Hawk Jensen.

This is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand.

Go here for more information, other videos, and related materials.

Go here for downloadable versions of this video.

Reason Foundation's Robert Poole on Ayn Rand's Impact

Tue, 03 Nov 2009 16:00:00 EST

Approximately six minutes. Interview by Michael C. Moynihan, camera by Dan Hayes, and editing by Hawk Jensen.

This is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand.

Go here for more information, other videos, and related materials.

Go here for downloadable versions of this video.

Rand-O-Rama: The Long Shelf Life of Ayn Rand's Legacy

Mon, 02 Nov 2009 11:39:00 EST

Few authors have ever achieved the popularity that the novelist and essayist Ayn Rand (1905-1982) did. With the publication of The Fountainhead in 1943 and Atlas Shrugged in 1958, Rand became a full-blown cultural phenomenon, selling millions of books and inspiring countless readers—ranging from former Federal Reserve Chairman Alan Greenspan to Playboy founder Hugh Hefner to actress Angelina Jolie—with her moral defense of capitalism. A refugee from Soviet Russia, Rand argued that capitalism was the best way of organizing society not simply because it was more efficient than communism but because it allowed the individual to fill his or her potential. A self-declared "radical for capitalism," Rand emphatically rejected collectivism of all stripes and embraced "man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute."

Decades after her death, Rand's work is hotter than ever. In an age of massive government intervention into every aspect of the economy and personal lives, sales of her books are way up and a movie version of Atlas Shrugged is in the works. References to Rand are everywhere from Mad Men to The Colbert Report to The Simpsons and there's even a new critical appreciation, as evidenced by two new biographies, Ayn Rand And The World She Made and Goddess of The Right.

This Reason.tv video is approximately four minutes long and produced by Meredith Bragg and Nick Gillespie, "Rand-O-Rama" analyzes the 21st-century Rand renaissance.

This video is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand. Go here for more information, other videos, and related materials.

The Long Shelf Life of Ayn Rand's Legacy

Mon, 02 Nov 2009 00:00:00 EST

Approximately four minutes long and produced by Meredith Bragg and Nick Gillespie, "Rand-O-Rama" analyzes the 21st-century Rand renaissance.

This video is part of the Reason.tv series Radicals For Capitalism: Celebrating the Ideas of Ayn Rand. Go here for more information, other videos, and related materials.

'The Last Gasp of the Dinosaurs'

matt.welch@reason.com (Matt Welch) — Wed, 28 Oct 2009 11:11:00 EDT

In the April 1996 edition of reason, then-Editor Virginia Postrel wrote a column arguing that “Steve Forbes is a serious candidate” for president. “Not because he’s a rousing speaker,” Postrel observed, “but because he believes in the open-ended future, in the creativity of free people, and in the importance of clear, simple, limited rules within which individuals can shape their own decisions.”

Of those “clear, simple, limited rules,” the most famous was a flat and reduced personal and corporate income tax, an idea that, while never coming close to adoption at the federal level, nonetheless propelled a long-shot magazine publisher with no political experience into a third-place finish in the Republican primaries, including wins in Arizona and Delaware. In 2000 a flat tax song and social conservative dance helped Forbes whisk into second-place at the Iowa caucus, but he quickly dropped out after finishing third in New Hampshire and Delaware. In 2008 Forbes was a strong backer of the doomed Rudolph Giuliani.

Malcolm Stevenson Forbes Jr., 62, is the third Forbes to publish the successful business title of the same name. Founded in 1917, Forbes has gleefully billed itself as the “Capitalist Tool,” lionizing the entrepreneurs who make the world a richer place. In addition to producing its signature lists of the country’s (and globe’s) richest capitalists and companies, the 900,000-circulation magazine has been a staunch opponent of antitrust enforcement, an aggressive supporter of anti-totalitarian movements abroad, and a stubborn purveyor of a sunny, market-based optimism. Last November, at the height of political panic over the financial crisis, Forbes put Forbes himself on the cover, explaining “How Capitalism Will Save Us.”

In July, Editor in Chief Matt Welch interviewed Steve Forbes at the annual FreedomFest conference in Las Vegas.

reason: People know you as Steve Forbes, flat taxer and presidential candidate, but you’re also publisher of Forbes magazine in an era when magazines are struggling. How is Forbes responding to the economic crisis, the publishing crisis, and the transformation of the print industry?

Steve Forbes: When you have a severe recession and you have something transformational as we now see un-folding with the Web, you have to do two things. One, you have to address the immediate circumstances, which means belt tightening, which we did—and we did after 2001, when the economy also went temporarily off of the cliff. But at the same time, you have to invest for the future. And thankfully, 12 years ago, when we went online as did everyone else, we did not make the mistake that many print publishers made, and that was to think you take the printed page, throw it online, and have your electronic publishing. When Thomas Edison invented movies, some people thought you’d film a stage play and that was a feature film. No. It’s an entirely different medium.

We’ve always focused on entrepreneurs, on investors—on capitalist people who want to get ahead, people who want to do things in business. So we saw the website as another platform to reach the same constituency. Our value added is information, insights, and analyses, plus our profound belief in the moral basis of capitalism, which is meeting the needs and wants of other people. If you have that, you don’t get hung up on what the particular platform is.

reason: David Carr had a piece about you guys in The New York Times—a little snarky, but it was interesting. One thing he posited is that in 2009 this whole “Capitalist Tool” stuff is out of fashion; it’s out of step with the times. What’s your broad response to the notion that your stance or ethos is out of step and anachronistic?

Forbes: Well, capitalism—entrepreneurial capitalism, democratic capitalism—always goes through phases where it’s, quote, “out of fashion.” And it’s usually because of catastrophic mistakes made by government. The victim is blamed for it.

But you don’t abandon your mission or your core values because a crisis has put capitalism under a cloud. We went through it in the ’30s, we went through it in the ’70s, the greedy decade of the ’80s. These things do happen. But I think what’s happening in Wash-ington is the last gasp of the dinosaurs of the 1930s. It’s Jurassic Park statism. Oh! Franklin Roosevelt again! Wow! But it’s not working. It didn’t work in the ’30s.

So here we are today, and what’s the response? More spending, more taxes, and the economy is not responding the way it should. But while we’re getting assaulted now, it’s also a chance to regroup and hit these people back, because they are going against human nature, they are going against the impulses that come out of true entrepreneurial capitalism. While they seem to have the commanding heights at the moment, it’s only temporary.

reason: Do you see, to borrow a phrase, some green shoots, not necessarily in the economy, but in the citizen response to Washington economics right now?

Forbes: You see it with the tea parties, and you saw it in the state of Illinois, where the governor proposed tax increases, but the Democratic legislature ended up defeating them. The most amazing thing is now unfolding in California, where they’re seriously considering a flat tax because they’re beginning to realize—the Democrats!—that a highly progressive system doesn’t produce the revenue they need for their progressive programs.

reason: Have you seen an uptick in interest in the flat tax idea? Have people been knocking on your door and saying, “Oh yeah, about that thing.…”

Forbes: It’s not so much knocking on the door as people asking, when you face a severe crisis, what do you do? That’s one contrast between the political world and the commercial world. In the commercial world, failure happens all the time. It’s part and parcel of the system. You try something; it works or doesn’t work. In politics, you often have to go to the cliff before something is done. California’s at the edge of a cliff. They can’t print money. IOUs are not quite the same as legal tender. And so that’s why they’re considering something like the flat tax. Both [Gov. Arnold] Schwarzenegger and now Democrats in the legislature are starting to brood about the idea in sort of sheer desperation. It’s a version of what Ronald Reagan said: You don’t change minds on Capitol Hill through sweet reason; you do it through the heat of public opinion.

reason: Do you see a reawakening of those values, a reawakening in the Republican Party specifically, after eight years of a presidency when government was expanded hysterically, regulation was expanded hysterically? Do you see Republicans rediscovering their limited-government roots?

Forbes: I think it’s beginning to happen. Certainly among the newer, younger members. Or ones such as Paul Ryan from Wisconsin, who gets it on monetary policy, gets it on what’s happening with entitlements. Because, clearly, trying to be a Democrat Lite is not the way to perpetual power. Power does corrupt, and the GOP began to believe that pork will buy you happiness. It didn’t. And in fact, it demoralized the base of the party.

So now we have pork squared with the Obama administration, and it’s an opportunity for the Republicans to quickly regroup and find their voice again. The Obama administration is making a classic mistake of leadership: They feel they have to do it now, but they’re trying to do too much too quickly. It’s going to blow back on them.

reason: Looking at the 2012 Republican presidential hopefuls, especially after Mark Sanford started flying to Argentina a bit too much, do you see any individuals out there who look promising? Are you still considering yourself a candidate? Will you run again?

Forbes: I’m an agitator now, so I’ll leave the running to others. I’ll watch them exercise. But I think in 2010 we’ll get a very clear picture of the field. Right now there’s just too much going on. Too much ferment. If you look at a poll, probably Mitt Romney would be at the top, just because of name recognition. But whoever would have thought three years ago that Barack Obama would beat the Clintons at their own game and win the presidency? So it’s idle speculation.

But there are some names out there—[Louisiana Gov. Bobby] Jindal, Romney, who knows what [Mike] Huckabee might do, maybe [Minnesota Gov. Tim] Pawlenty will get a little more conservative and make a move for it. So who knows, maybe Paul Ryan might emerge, maybe somebody else from the House might emerge.

The key thing is don’t depend on one person. Have many Reagans out there, doing it on the state level, on the local level, and we’ll be OK.

reason: Talking of the “Democrat Lite” characters out there, [New York Mayor Michael] Bloomberg is a favorite of mine. He just announced an eight-point proposal to create or save media jobs on the island of Manhattan. You see a lot of proposals to have the government become involved with bailing out or somehow giving new assistance to legacy print media companies on the theory that they are fundamental to our democracy. What do you think about these initiatives and the ideas behind them?

Forbes: To really survive, newspapers, each one in each city, have to figure out what is their true value added. And it’s not going to be one blueprint for all. They’re each going to have to do it differently. You mentioned David Carr, who wrote a piece a couple months ago about this crazy paper in Boston that is doing very well focusing totally on local events in an iconoclastic way. People read it, whereas traditional newspapers are withering. So you’re going to see not one-size-fits-all but each one trying to pick out the particularities that can enable it to survive.

But nostalgia is a very strong human emotion. And so, you know, canals are preserved, and they’re wonderful tourist things now, even though they’re not real arteries for commerce the way that the railroads became and then highways became or air travel became. So it’s a natural reaction, but at the end of the day, it ain’t gonna get very far, because the world’s not going to stand still. Museums are very nice, but they’re not the way to a vibrant economy.

reason: Someone made the argument that the moment any industry becomes politically engaged, and starts lobbying a lot and starts getting targeted legislation, is not the moment that it becomes powerful but the signal that it’s stopped being powerful.

Forbes: Well it’s a peculiarity of the United States that it’s a sign that you’ve become successful that the government and the politicos go after you. And it does far more harm than any possible good.

You see it time and time again—G.M. in the ’50s and ’60s deliberately kept their market share below 50 percent for fear they’d get an antitrust suit and have to spin off Chevrolet. IBM got an antitrust suit in ’68 and 20 years later was on the verge of bankruptcy. Microsoft is not the feared Darth Vader that it was 10 years ago when the government went after them. One of the things that this administration doesn’t get is that the best antitrust policy is a vibrant marketplace. When profit gives you a message that something is lucrative, others will enter into it. They’re not just going to let you—“Oh, Matt’s doing very well, making a billion dollars on this thing. Good old Matt.” They’re going to say, “How do I get that?” And they’ll plunge in.

reason: What’s your assessment of Obama’s health care package?

Forbes: Well, let’s take the president’s word that health care should be universal and affordable. How is it best achieved? We know government achieves it by rationing. And the markets achieve it by creating more of it, and finding cheaper and better ways to deliver it. What people don’t fully grasp is we don’t have free enterprise in health care today in the United States. It is a hybrid system, because it’s third party. So you have a disconnect between providers and consumers. And what kind of market is it where the consumer doesn’t know what the thing costs? Anything else, you do. What is my hamburger going to cost? What is my car going to cost? But if you go to a hospital and ask what a procedure’s going to cost, they assume either you’re a lunatic or you must not have insurance. Why else would you want to know what the price is? How weird. How unusual. Why? Somebody else is paying.

So the system doesn’t work. And you don’t get the kind of productivity you get everywhere else. We use phones and emails for everything now. Do you do consultation with your physician or nurse by phone or email? Rarely. Or hospitals giving warranties, like you have everywhere else, where if they don’t scope your knee right, you go back and don’t have to pay for it again. Why wouldn’t that be their dime? Because it’s not real competition. They know you’re not writing the checks, so therefore they don’t have to please you; they just have to make sure they get a bureaucratic insurance company to approve it.

But we see from Lasik what happens when you get a real market. It costs a third less than it did 10 years ago. Cosmetic surgery hasn’t had inflation, like you have in the rest of health care, even though demand has increased sixfold in the last 15 years and even though there have been enormous technological innovations. Why? Because you pay for it.

reason: So what do you do? This is such a labyrinthine complexity that creates the sort of mixed market which you describe. Are there simple things that can be done to break the logjam?

Forbes: Yes. Equalize tax treatment. You’re going to give employers a tax deduction, why not individuals? And how about allowing you to shop across state lines for health insurance? Illegal now. If you live in California, want to buy a policy in Seattle, illegal. Interstate Commerce Clause, hello! You don’t need a government insurance company. Just get cross-state competition.

Allowing businesses to pull together. Why not remove barriers to that?

In terms of health savings accounts, if you want a higher deductible than X, you can’t get it. I forget what the number is now for a family plan; you can only go up so high. Remove those limits or substantially raise the caps on those.

If you want to set up a clinic or hospital, in a lot of states you have to get a certificate of need. Well, do you need a certificate of need to open up a grocery store if you want to go against Wal-Mart or Whole Foods? No. You just go and do it. See what happens. But because it’s all third-party paying, well, this is inefficient; it’s sort of a cartel system. Get rid of those kinds of things.

reason: Are you surprised by President Obama since he’s come into office? Anything about his comportment, his policy, the reaction to it?

Forbes: I was hoping he would defy my expectations and turn out to be what a lot of people thought—he’s smart, he’s moderate, he’ll do the right thing—instead of being what he has been so far, which is very much an ideologue. On the left, it’s all 1930s. You spend, you tax, you have government running things because we can do it more efficiently.

reason: I find it interesting that he still gives lip service—and gets away with giving lip service—to limited-government principles, saying things like, “Of course we don’t want the government running automobile companies.” And then in the same paragraph, he’ll say “but they need to consolidate their brands” and get very hyper-specific. He still says, “We don’t want to be in the banking sector; I’d rather be doing X, Y, and Z.” It’s as if he senses these things are unpopular out there.

Forbes: That’s why they have to do this by stealth, or semi-stealth. They know the American people are not in a mood for France North America or Germany North America. So they want to use the crisis to ram this stuff through before anybody realizes. Then you’re dependent and therefore, “Oh, they want to take this away from you”; it’s a fait accompli, it’s a coup. But thankfully the Founders devised a system where this stuff just bloody takes time. They didn’t confuse efficiency in the commercial sector with efficiency in government. We don’t want an efficient government in terms of making laws.

They feared passion. They saw what the wars of religion did to Europe and the bloodshed that engendered. They wanted a system where things could cool off before you did something.

reason: You have a new book out about historical figures and lessons that can be learned from them. What are some historical figures or moments of note that can apply to present-day circumstances?

Forbes: Take Alexander the Great. When Aristotle taught him as a young man, one of the things Aristotle tried to hammer home was you must learn to conquer yourself, i.e., control your passions. Alexander did not. He seemed to think that he was actually a living god, and he destroyed himself. He was immensely talented, but it all collapsed when he died. And that’s what I think may be happening with President Obama today. Putting aside what you think of his policies, he may end up getting very little.

For example, he didn’t realize with the stimulus package that Nancy Pelosi may have run up the limit on one of his credit cards. That $800 billion would have been very helpful from their point of view on trying to finance health care. But no, they spent that. It was overreach. No sense of what the real world is like.

reason: There’s been a lot of talk about the scattered state of the modern GOP, and a lot of discussion specifically about the big tent of Ronald Reagan with evangelical Christians and limited-government people. Is that a marriage that has run its course?

Forbes: No. There are two kinds of big tents. One is when you have mush, and so people come in because there’s nothing there. Another one is recognizing that one of the peculiarities of American politics is, because we are a heterogeneous nation, you have to put together coalitions of people who may not like each other much, and they have their own particular agendas and priorities, but you have to keep this thing together and maybe you can get some things done.

And so you’re always going to have tensions; it’s never going to be smooth. One tendency for parties is to just soften everything to oblivion. Another is where you have priorities, as Reagan did, and use a coalition where there are some basic shared values, but there are always going to be fights and tensions. That’s normal.

What helps keep the country together is that you’re not going to succeed by just being a narrow-based candidate, either geographically or ideologically. You’re always going to have to persuade. Like with a family. Families never agree on anything. Well, we’re like a family. And we have those kinds of disagreements. So be it.