Politics, et Cetera

A publication from The Political Forum, LLC

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Tuesday, December 10, 2013

They Said It:

Highly graduated taxation realizes most completely the supreme danger of democracy, creating a state of things in which one class imposes on another burdens which it is not asked to share, and impels the State into vast schemes of extravagance, under the belief that the whole cost will be thrown upon others.  Dishonest politicians . . . will have no difficulty in drawing impressive contrasts between the luxury of the rich and the necessities of the poor, and in persuading ignorant men that there can be no harm in throwing great burdens of exceptional taxation on a few men, who will still remain immeasurably richer than themselves.  Yet, no truth of political economy is more certain than that a heavy taxation of capital, which starves industry and employment, will fall most severely on the poor.  Graduated taxation, if it is excessive or frequently raised, is inevitably largely drawn from capital.  It discourages its accumulation.  It produces an insecurity which is fatal to its stability, and it is certain to drive great masses of it to other lands.

W.E.H. Lecky, Democracy and Liberty, 1896.



Unless you spent the last couple of weeks living in one of the caves custom designed for the late and not-so-great Osama bin Laden, you likely have heard that Nelson Mandela has died.  This is, first and foremost, a sad and moving event.  The passing of an imposing figure like Mandela, who captured the imagination and the conscience of the world, is a rare and sobering occasion.  And thus it is fitting that early news reports suggest that his funeral was the largest in the world since Winston Churchill’s, which took place nearly a half century ago.

At the same time, Mandela’s death offers the world something greater than merely the opportunity to reflect on the life of an exceptionally rare and heroic man.  He was a towering figure for a reason, that being that his life demonstrated in no uncertain terms the greatness and the possibility of the human experience.  But it also demonstrated the limits of the human spirit and therefore serves as a reminder that this mortal coil is humanity’s burden to bear and will be so long as man endures.

Let us start with the obvious:  Nelson Mandela was a man of matchless grace and magnanimity.  The story by now is well told.  He started out, as countless other African youths in that day, protesting the remnants of colonialism in his country and on his continent.  After the ascension to power of the National Party, he took a greater role in the African National Congress (ANC) and began a career of political dissent.  In 1961, he co-founded a militant arm of the ANC, Umkhonto we Sizwe, and a year later was sentenced to life in prison for sedition against the government.  He served nearly 28 years in brutal, often inhumane conditions, and, upon his release, began negotiations with the regime to end apartheid and transition to a majoritarian government.

Many in the West presumed that Mandela would be a disaster for South Africa and for the world.  He had been a Communist, after all, and had led the violent arm of the ANC in a campaign of sabotage against the government.  Moreover, he had spent nearly all of his most productive years unjustly imprisoned, unconscionably tortured, and undeniably denied any and all human rights.  How, Westerners wondered, could he not emerge from prison embittered and enraged and, more to the point, justifiably so?  What good could his involvement in post-apartheid South Africa possibly bring?  As the columnist Deroy Murdock explained:

By the guiding light of Ronald Wilson Reagan, many young conservatives like me spent much of the 1980s fighting Marxism-Leninism — from the classrooms of radical campuses to the battlefields of Grenada, Nicaragua, and El Salvador, both overtly and covertly.  Having seen Communists terrorize nations around the world while the Berlin Wall still stood, Mandela looked like one more butcher waiting to take his place on the 20th Century’s blood-soaked stage.

The example of the Ayatollah Khomeini also was fresh in our minds.  He went swiftly from exile in Paris to edicts in Tehran and quickly turned Iran into a vicious and bloodthirsty dictatorship at the vanguard of militant Islam.

Nelson Mandela was just another Fidel Castro or a Pol Pot, itching to slip from behind bars, savage his country, and surf atop the bones of his victims.

As Murdock concedes, however, he could not have been more wrong about Mandela.  He could not possibly have foreseen who and what the newly freed Nelson Mandela would become.  Indeed, no one could.

As countless commentators have noted in the wake of his death, Mandela shocked the world when he was released from prison and insisted that the transference of power from the Afrikaner minority to the national majority be peaceful and dignified.  Based on his actions during the transition phase in South Africa, it would be hard to argue that Mandela was not one of the greatest men of the 20th – or any other – century.  Murdock calls him “one of the 20th Century’s greatest moral leaders, right up there with Mahatma Gandhi and Dr. Martin Luther King, Jr.”  If anything, Murdock doesn’t go far enough.

It is, we suppose, a bit trite to note that Mandela invited his jailers to attend his inauguration as his VIP guests.  But then, it is also true.  And the reason this particular incident has been mentioned over and over, in virtually every account of his life, is because it is emblematic of the human capacity not just for forgiveness, but for true righteousness.  Mandela forgave his jailers.  He forgave the leaders of the Apartheid regime.  He famously supported the all-white national rugby team, the Springboks.  He insisted on tolerance and compassion in the transition to majority rule.  But he also sought truth and justice.  Mandela did not paper over the crimes of the Apartheid regime.  He refused to negotiate with the regime unless and until it agreed to relinquish power completely and abide by the will of the people.  His was not merely a mission of forgiveness, but of truly righteous reconciliation.  As the man himself put it:

Today we no longer vow mutual destruction but solemnly acknowledge our interdependence as free and equal citizens of our common motherland.  Today we reaffirm our solemn constitutional compact to live together on the basis of inequality and mutual respect.  Reconciliation, however, does not mean forgetting or trying to bury the pain of conflict. . . . Reconciliation means working together to correct the legacy of past injustice.

Mandela rather famously and unapologetically rescinded several thousand pardons granted by the outgoing regime to those who had committed crimes against humanity by performing their “duties” during the apartheid era.  He and those who served on his Truth and Reconciliation Commission insisted on full and detailed confessions before they would grant clemency to any of the erstwhile regime’s thugs.  He demanded the truth, in short, demanded contrition, but granted immensely powerful forgiveness in return.

Now, we know full well, based on the admonitions in every other obituary we’ve read this past week, that we should be careful to remember that Mandela was just a man and not a saint.  Fair enough.  We will deal with that momentarily.  In the meantime, though, it strikes us that Mandela’s capacity for forgiveness based on truth and contrition makes him comparable at least in some sense to another of the 20th century’s moral giants, a man who will, in fact, be named a saint in less than four months, the late Karol Wojtyla, better known as Pope John Paul II.

John Paul, recall, famously forgave his would-be assassin, Mehmet Ali Agca, while visiting him in prison, which is akin to Mandela’s forgiveness of his jailers.  More to the point, though, this Pope was a man who sought justice and, in so doing, truly spoke truth to power, insisting that true reconciliation cannot exist without acknowledgement of reality.  It was not enough for John Paul that Communism in his native Poland fail.  He insisted on placing that failure in the context of human nature and the truth of human existence.  He put it this way in his 1991encyclical Centessiumus Annus:

[T]he fundamental error of socialism is anthropological in nature.  Socialism considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socioeconomic mechanism.  Socialism, likewise, maintains that the good of the individual can be realized without reference to his free choice, to the unique and exclusive responsibility which he exercises in the face of good or evil.  Man is thus reduced to a series of social relationships, and the concept of the person as the autonomous subject of moral decision disappears, the very subject whose decisions build the social order.  From this mistaken conception of the person there arise both a distortion of law, which defines the sphere of the exercise of freedom, and an opposition to private property.  A person who is deprived of something he can call “his own” and of the possibility of earning a living through his own initiative comes to depend on the social machine and on those who control it.  This makes it much more difficult for him to recognize his dignity as a person and hinders progress toward the building up of an authentic human community.

John Paul, through spiritual accounting and reconciliation, helped forge a peaceful and prosperous post-Communist Eastern Europe, an amazing feat by any measure.  Nelson Mandela, through political accounting and reconciliation, forged a peaceful and democratic South Africa, an equally, if not more, amazing feat.  As a model of personal compassion and a campaigner for political justice, it is hard to think of anyone who compares with Mandela.  What he did in and for South Africa should not be underestimated.

At the same time, unfortunately, it should be overestimated either.  You’ll note that in the above paragraph, we describe post-Communist Eastern Europe as “peaceful and prosperous,” yet we leave the adjective “prosperous” off of our description of South Africa.  There’s a reason for that, of course, namely the fact that South Africa today is anything but prosperous.

As such, it is important to remember that for all his impressive grace and magnanimity, vision and charisma, Nelson Mandela was still a Communist.  Despite his adherents’ insistence to the contrary, he was, most likely, a member of the South African Communist Party.  The political party/revolutionary organization to which he belonged and which he later went on to lead, the ANC, was affiliated with Communist Party, with the Soviet Union, and with the Socialist International.

Mandela’s defenders insist that his and the ANC’s affiliation with the Communists merely constituted a marriage of convenience.  The Communists were the revolutionaries in Africa in the 1950s and the 1960s, and it therefore made sense that the anti-apartheid revolutionaries would be affiliated with and sponsored by Communist organizations.  There is some truth in this, we suppose, but this explanation does not explain the leftist economic tilt of the ANC and its leaders since liberation, up to and including Mandela.  Mandela may well have become a Communist out of convenience, but that is not to say that Communism did not influence his thinking.  Bill Keller, the former public editor for the New York Times, noted precisely this over the weekend in his tribute column to Mandela:

A third reason the Communist affiliation matters is that it helps explain why South Africa has not made greater progress toward improving the lives of its large underclass, rooting out corruption and unifying a fractious populace.  The many failures of the A.N.C. during its 19 years in power can be explained by the fact that it has never fully made the transition from liberation movement to political party, let alone government. The Communist Party is as culpable in that as anyone . . . .

When Keller says that the post-apartheid ANC has not made greater progress toward improving the lives of the nation’s underclass, he means that the ANC’s economic record – as opposed to its political record – is manifestly disastrous.  When he took office in 1994, Mandela, obviously, inherited a rather unfortunate and foundering economy.  The global boycott of the apartheid regime had forced South African industry to nationalize in ways that even the Soviets would have admired.  Mandela, to his credit, immediately privatized much of his nation’s industry during his presidency.  That, however, was not enough.  Far from it.  The largely statist and corrupt policies of the ANC, both during and after Mandela’s presidency, have left the nation in deep economic and social trouble.

Economic growth in South Africa is not only substandard, it is substandard even using the rather sad and depressed standards of sub-Saharan Africa.  Whereas most of the region expects growth next year of roughly 5%, which is typical for developing economies, the IMF predicts that South Africa will, if it is lucky, experience growth roughly half that.  Unemployment is extraordinarily high and poverty remains just as rampant as it was before 1994.  The two decades of ANC rule has brought freedom and political equality, but it has done little for the people of the country with respect to material and educational deficiencies.  In a 2012 examination of the South African economy, The Economist noted the following:

In the 18 years since black-majority rule began and South Africa became a full democracy, its people have made progress.  Many more now have access to clean water and electricity.  Between 1996 and 2010 the proportion living on less than $2 a day fell from 12% to 5%.  The racist legislation of apartheid has been abolished.  The new constitution is liberal and inspiring.

And yet in other ways South Africa is in a worse state than at any point since 1994.  In August police shot dead 34 miners on strike at a platinum mine near Marikana, in North West province.  Since then wildcat strikes have broken out at other mines.  Some operations have been suspended.  Thousands of miners have been sacked.  In September Moody’s, a credit agency, cut South Africa’s sovereign rating, citing the declining quality of the government, growing social stresses and worsening conditions for investment.  Meanwhile, South Africa’s leaders have floundered.  The ANC’s leadership is up for re-election at a party conference in December.  South Africa’s president, Jacob Zuma, faces possible ejection as party leader—which would prevent him from being the ANC’s presidential candidate in elections in 2014.

The past two months’ industrial strife is about more than just pay or perks.  The protests are a symptom of the deep malaise that has taken hold of South Africa.  The ANC was dealt a bad hand in 1994, and it has played that hand badly.  South Africa’s difficulties are now so entrenched that the ANC looks incapable of solving them.

The starkest measure of South Africa’s failure is the yawning gap between rich and poor.  Under apartheid, such inequality was by design.  Since apartheid came to an end, a tiny black elite has accrued great fortunes.  But that has only widened the wealth gap.  South Africa’s Gini coefficient—the best-known measure of inequality, in which 0 is the most equal and 1 the least—was 0.63 in 2009.  In 1993 it was 0.59.  After 18 years of full democracy, South Africa is one of the most unequal countries in the world. . . .

Economic malaise and the chronic failure of government services are an indictment of South Africa’s politicians.  Under apartheid, a role in the ANC was about sacrifice and risk.  Today it is a ticket for the gravy train.  Jobs in national and local politics provide access to public funds and cash from firms eager to buy political influence.  For someone from rural South Africa, who has a poor education and little chance of getting a good job, a seat on the local council may be the only way out of poverty.  Higher up, the rewards are even greater.  The public protector, who looks into public-sector misconduct, is investigating reports that hundreds of millions of rand are to be spent on improving Mr Zuma’s private homestead in the village of Nkandla.

None of this should surprise anyone, of course.  Socialism, Communism, leftist policies  – whatever you call it – have always been an economic disaster and have always exacerbated rather than ameliorated the problems associated with poverty and income inequality.  In a system in which all animals are equal, but some animals are more equal than others, corruption, theft, and economic “malaise” are the inevitable outcomes.  That anyone would be surprised by this, now some two decades after the fall of the Soviet Union, is itself surprising.

Nelson Mandela wanted to remake South Africa.  That much is a given.  And that much is understandable, given the South Africa he inherited.  Through the sheer strength of his will, he was able to remake the country politically.  But he was unable to remake the country economically, largely because such a task is beyond the human capacity to control.  One cannot demand that poverty go away.  One cannot declare an end to inequality.  One cannot simply decide that the human condition be banished.  As the great French intellectual and economist Frédéric Bastiat put it:

[The socialists declare] that the state owes subsistence, well-being, and education to all its citizens; that it should be generous, charitable, involved in everything, devoted to everybody; that its mission is to feed the infants, instruct the young, assure employment to the able-bodied, provide pensions for the disabled; in a word, that it should intervene directly to relieve all suffering, satisfy and anticipate all wants, furnish capital to all enterprises, enlightenment to all minds, balm for all wounds, asylums for all the unfortunate, and even aid to the point of shedding French blood, for all oppressed people on the face of the earth.

Who would not like to see all these benefits flow forth upon the world from the law as from an inexhaustible source? . . . But is it possible? . . . Whence does [the state] draw those resources that it is urged to dispense by way of benefits to individuals?  Is it not from the individuals themselves?  How, then, can these resources be increased by passing through the hands of a parasitical and voracious intermediary?  Is it not clear, on the contrary, that the whole apparatus of government is of such a nature as to absorb many useful resources and to reduce the share of the workers proportionately?  Is it not also evident that the latter will thereby lose a part of their freedom, along with a part of the well-being?

As Nelson Mandela is buried and as the world remembers him and commemorates his life and his gifts to his people, all of this should be remembered and remembered well.  The human capacity to change the world is both remarkable and limited.  The political realm is eminently changeable, while the human condition itself is extraordinarily constant.  The imposition of state remedies, no matter how well intentioned, can do very little to eliminate the burdens of poverty, ignorance, and inequality.

Of course, that is not to say that those burdens cannot be relieved at all, or at least lightened.  They can be.  But those chores are, quite simply, beyond the capacity of the state to perform on its own.  History has shown time and again that only a combination of political liberty and economic liberty can produce the rare confluence of circumstances that can improve the basic human condition.  Man does not have the power; but men (and women) do.

Not everyone understands this, of course, which is to say that not everyone who spoke this morning at Nelson Mandela’s funeral understands the lessons of his life.  Indeed, one man in particular seems more than just a little oblivious.

On the off chance you hadn’t heard, Barack Obama declared last week that his goal for the remainder of his presidency is to address what he calls the “defining challenge of our time,” namely economic inequality.  After nearly five years in office and a host of policies that have actually exacerbated rather than ameliorated economic equality, Obama wants the world to know that he is now going to give “all his efforts” to fixing the unfixable problem.

We’re not sure if Obama is trying to distract people from his disastrous health care plan; if he read and then decided to plagiarize from our wonderful but hopelessly naïve current pope; or if he honestly believes that he has the capacity to change the nature of the human condition through the sheer strength of his will.  In any case, his efforts are all but certain to be either desultory or disastrous – much as Mandela’s efforts at the same were.

As best we can tell, Obama has three problems here.  First, he has no idea how to correct economic inequality.  Indeed, his policies over the last five years have, for the most part, done nothing but aggravate the condition.  As we’ve noted countless times in these pages – and as others have noted elsewhere more eloquently – Obama’s entire economic vision hinges on the idea of a new gentry class that will gladly trade a small increase in taxes in return for a corporatist federal government that will ensure that the “righteous” rich not only stay rich but grow richer.  The “poor” in Obama’s world stay poor, but are better off because of government transfers.  Everyone wins.  The rich are happy, while the poor are assuaged.  What could be better?

The only problem is that this is not a recipe for true conciliation, but for disaster.  As a general rule, we have no problem with income inequality, but inequality created through corruption and cronyism tends more often than not to create dangerous and troubling inequality.  By contrast, inequality created by market forces does the opposite by providing proper incentives, among other things.  In a recent column, Timothy Carney made just this point, writing:

Indonesian businessman Prajogo Pangestu is a political billionaire because the government-owned bank extends him loans on absurdly generous terms and the state erected tariffs to protect his business from competition.

Or here’s a Wall Street Journal account of Russian Mikhail Fridman: “[Fridman was] among a handful of businessmen who helped to finance Boris Yeltsin’s re-election campaign in 1996.  The Kremlin rewarded these men by selling them state-owned oil and metals companies at bargain-basement prices.”

Contrast these men to America’s richest people.  Bill Gates and Warren Buffett haven’t abstained from politics (Buffett is an Obama fundraiser), but they overwhelmingly made their money by inventing well and investing well.

When a country’s wealthiest people got their wealth as Pangestu and Fridman did, inequality places a drag on the economy.  When a country’s wealthiest got wealthy through market means, the resulting inequality has no negative effect on economic growth.

We agree with Carney and happily concede his point about America – but ONLY the America of the present.  Wealth creation based on invention and investment is not necessarily the vision of our ruling class for the future.  Our ruling class has visions of greater political power, greater economic power, and greater ability to determine winners and losers.  This, unfortunately, is the road to Mandela’s South Africa, not Adam Smith’s free market.  Contra Pope Francis, overweening government tends to foster inequality much more than an “economy of inclusion.”

The second problem that Obama faces in his fight against economic inequality is that in addition to having no idea how to fix the problem, he has no idea what causes it.  In his big speech last week, Obama declared that economic inequality is a disaster that has manifold social repercussions:

A new study shows that disparities in education, mental health, obesity, absent fathers, isolation from church, isolation from community groups – these gaps are now as much about growing up rich or poor as they are about anything else.  The gap in test scores between poor kids and wealthy kids is now nearly twice what it is between white kids and black kids.  Kids with working-class parents are 10 times likelier than kids with middle-or-upper-class parents to go through a time when their parents have no income. So the fact is this: The opportunity gap in America is now as much about class as it is about race, and that gap is growing.

This is, to put it delicately, nuts.  Economic inequality doesn’t cause social breakdown.  Social breakdown causes inequality.  As Ben Domenech noted, the President “has the causation completely backward.”  We have written countless times about the deleterious effect of government “aid” on family structure.  We have also noted that the breakdown of civic institutions – those institutions that Tocqueville argued made American democracy superior to its continental cousins – is the goal of leftist politics and an exacerbating force in the collapse of both American liberty and the American middle class.  And yet, here is Obama arguing explicitly for more of the same, for a greater dose of the very pathogen that caused the illness in the first place.

One of the factors that helps explain Mandela’s economic failure in South Africa is the fact that the Apartheid regime actively and consciously deprived the black population of both familial and civic ties.  As with American slavery, breaking contact with the institutions of liberty was used to try to break the desire for liberty.  Ultimately, this policy failed to dampen the human spirit, though it did make economic restoration a far greater challenge.

Obama has no such excuse.  In his eulogy for Mandela, he declared that the great man’s death should be a time for “self-reflection.”  We don’t necessarily disagree.  We wish only that he would heed his own advice.

The third problem that Obama faces in combating economic inequality is that he is fighting reality.  We’ll spare you the “immanentization of eschaton” business and the bit about the liberal dream world – mostly because we hit you with those last week.  Still, the fact remains that economic inequality is part of the human condition, just as surely as the yearning for freedom is.  If there is one thing that the great world leaders have demonstrated that they have in common over the last few weeks, it’s an inability to grasp this basic fact of life.  From Mandela to Obama to Pope Francis, we have seen three of the most significant figures in the last quarter century or more argue that somehow the social contract should include some sort of social leveling; that it is immoral to follow the dictates of the market as opposed to the dictates of the government.  Would that it were that simple.

Nelson Mandela, a great man with an immeasurable desire for justice could not defeat reality.  Pope Francis, a similarly impressive man with an immeasurable capacity for forgiveness and compassion, will not be able to defeat reality.  What chance, then, does Barack Obama, an intellectual fraud and a man with no serious, transcendent strengths have to beat reality?  Need we even answer?

All of this, we think, should be the lesson of Nelson Mandela’s passing.  One man can change a great deal, but he cannot change the reality of the human condition.  And to insist otherwise is both to demonstrate the futility of the action and to exacerbate it, even if unwittingly.

Mandela should rest in peace.  He has earned it.  We only hope that his life – both the good and the not-so-good – can provide a lesson for those who would seek to emulate him.


Copyright 2013. The Political Forum. 8563 Senedo Road, Mt. Jackson, Virginia 22842, tel. 402-261-3175, fax 402-261-3175. All rights reserved. Information contained herein is based on data obtained from recognized services, issuer reports or communications, or other sources believed to be reliable. However, such information has not been verified by us, and we do not make any representations as to its accuracy or completeness, and we are not responsible for typographical errors. Any statements nonfactual in nature constitute only current opinions which are subject to change without notice.