Michael Moore is the Leni Riefenstahl of our time. Or, perhaps he would be better characterized as a Bizzaro World Leni Riefenstahl, because while she propped up with propaganda the political powers of her time, Moore uses the same techniques to bring down the powers of our time, be it GM (Roger and Me), the gun lobby (Bowling for Columbine), the government (Fahrenheit 911), the health care industry (Sicko), or free enterprise (Capitalism: A Love Story).

In this latest installment in his continuing series of what’s wrong with America, Michael Moore takes aim at his biggest target to date, and the result is a disaster. The documentary is not nearly as funny as his previous films, the music selections seem contrived and flat, and the edits and transitions are clumsy, wooden, and not nearly as effective as what we’ve come to expect from the premiere documentarian (Ken Burns notwithstanding) of our time. And, most importantly, the film’s central thesis is so bad that it’s not even wrong.

First, let me confess that even though I have disagreed with most of Michael Moore’s politics and economics throughout his career, I have thoroughly enjoyed his films as skilled and effective works of art and propaganda, never failing to laugh — or be emotionally distraught — at all the places audiences are cued to do so. My willing suspension of disbelief that enables me to take so much pleasure from works of fiction, does not always serve me well when pulled into the narrative arc of a documentary. Thus it is that with his past films I have exited the theater infuriated at the same things Moore is … until I rolled up my sleeves and did some fact checking of my own, at which point Moore’s theses unravel (with the possible exception of Bowling for Columbine, his finest work in my opinion). But with Capitalism: A Love Story, Moore’s propagandistic props are so transparent and contrived that I never was able to suspend disbelief.

What was especially infuriating about Capitalism: A Love Story was the treatment of the people at the bottom end of the economic spectrum. The film is anchored on two eviction stories contrived to pull at the heart strings. One family filmed the eviction process themselves and sent the footage to Moore in hopes he’d use it (many are called, few are chosen), and the other was filmed by Moore’s crew. The message of both is delivered with a sledge hammer: Greedy Evil Soul-Sucking Bankers (think Lionel Barrymore’s villainous Mr. Potter in It’s a Wonderful Life) are tossing out onto the streets of America poor innocent families who are victims of circumstances not of their making. Why? First, because this is what Greedy Evil Soul-Sucking Bankers do for fun on weekends. Two, because the economic crisis caused solely by said bankers has made it impossible for families to make the payments on those subprime loans they were tricked into taking by those same bankers, who themselves were suckered into a Ponzi-like scheme cooked up by Alan Greenspan and his Wall Street/Federal Reserve buddies to take back the homes fully owned by (first) the elderly and (then) the poor. In the fine print that the bankers carefully slipped past the elderly and the poor for these second mortgages and subprime loans, the contracts said that the rates on variable rate loans could go up, and that the house was collateral for the loan such that if the loan payments are not made the home is subject to foreclosure and repossession by the bank (which is what the bankers are hoping happens).

In Michael Moore’s worldview, a goodly portion of the American people are ignorant, uneducated, clueless pinheads too stupid to realize the fundamental principle of a loan: you have to have collateral to secure the loan! No collateral, no loan. You say to the banker “I would like to take out a loan.” The banker says to you “what do you have for collateral?” What happened in the housing boom was that bankers relaxed their standards for what they would require for collateral (and income, assets, etc.) because (1) the government told them to do so and promised to cover their losses if it didn’t work out, and (2) they wanted to make more money; and borrowers wanted in on the cash cow that everyone was milking, from individual house flippers looking for a quick buck, to ordinary families wanting extra cash for remodeling, tuition, or whatever, to mortgage giants wanting corporate expansion. And all were driven by the same motive: greed!

Yes, greed. Those evicted families knew perfectly well what they were doing when they freely chose to climb onto the housing bubble and take it for a ride. I have a much higher view of the American public than does Michael Moore. I don’t think the American people are so stupid or uneducated that they didn’t know what they were doing. This wasn’t rocket science. It was even on television, the ne plus ultra of pop culture! I well remember watching A & E’s television series Flip This House, and reading all those magazine articles and get-rich-quick books on how to make a fortune in the real estate market, and thinking “wow, everyone’s getting rich except me; how can I get in on the action?”

What I felt is, I’m sure, what lots of people felt. I looked into securing a second mortgage on my home in order to build a second home on an undeveloped portion of my hillside property, and then selling it to turn a tidy profit. Everyone was doing it. What could go wrong? Well, for starters I thought, what if it takes longer to build the home than I projected? We all know how slow construction projects can be. Could I make the payments on the second mortgage for an additional six months to a year? And what if I couldn’t sell that second home? Could I make the payments on the new loan indefinitely? What if my income decreased instead of increased, like it was at the time (and, subsequently, did … dramatically!). And what would happen if I couldn’t make the payments? The answer was obvious, and it wasn’t in the fine print: I could lose my primary home.

Forget that! Making a profit on a second home would be nice, but losing my first home would hurt well more than twice as much as making a profit on the second home would feel good. That’s a basic principle of risk aversion: losses hurt twice as much as gains feel good. Now, I’m not really a risk-averse guy (I gave up a secure career as a college professor for an insecure career as a writer and publisher), but even I could see the inherent risks involved when the home you live in could be taken away. My hillside remains sagebrush and wild grass.

What about the people on the other end of the economic spectrum — the bankers and Wall Street moguls? Why aren’t they being evicted. Now, given that I’m a libertarian, you might expect me to come to the defense of Corporate America. Not so. Here I am in complete agreement with Michael Moore that, as I’ve been saying since the day it was first pronounced, “too big to fail” is the great myth of our time. None of these giant corporations — GM, AIG, Bank of America, Goldman Sachs, et al. — should have been bailed out. In fact, they should have been allowed to fail, their stocks go into the toilet, their employees tossed out on to the gilded streets of lower Manhattan, and their CEOs dispersed to work as greeting clerks at Walmart. They gambled and lost on all those securities, bundled securities, derivatives, credit default swaps, and other “financial tools” that I’ll bet not one in a hundred Wall Street experts actually understands. If you really believe in free enterprise, you must accept the freedom to lose everything on such gambles. These CEOs and their corporate lackeys are nothing more than welfare queens who adhere to the motto “in profits we’re capitalists, in losses we’re socialists.” Sorry guys, you can’t have it both ways without corrupting your morals, which you have, along with the politicians you’ve bribed, cajoled and otherwise coerced to your bidding.

The solution? I have some suggestions of my own, but Michael Moore’s solution is beyond bizarre: replace capitalism with democracy. Uh? Replace an economic system with a political system? Even the über liberal Bill Maher was baffled by that one when he hosted Moore on his HBO show. How does a democracy produce automobiles and computers and search engines? It doesn’t. It can’t.

Capitalism: A Love Story, ends with a remarkable film clip that Moore discovered of President Franklin Roosevelt reading from his never proposed second Bill of Rights (he died shortly after and the document died with him). Included in the list are:

• The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
• The right to earn enough to provide adequate food and clothing and recreation;
• The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
• The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
• The right of every family to a decent home;
• The right to adequate medical care and the opportunity to achieve and enjoy good health;
• The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
• The right to a good education.

That’s nice. To this list I would add a computer in every home with wireless Internet access. I’m sure we could all think of many more things “under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed,” in Roosevelt’s words. But there is one question left unstated: Who is going to pay for it? If there is no capitalism, from where will the wealth be generated to pay for all these wonderful things? How much does a “decent” home costs these days, anyway?

Do you see the inherent contradiction? Of course you do. So does Michael Moore, who elsewhere in the film longs for the good old days when the “rich” were taxed 90% of their earnings. So did Willie Sutton, who answered a similar question after being nabbed by the FBI during the Great Depression and asked by a reporter why he robs banks: “Because that’s where the money is.”

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At the Atheist Alliance International conference this past weekend in Burbank, California, the Skeptics Society had a booth in the vendor’s section of book sellers and the like, the latter of which included a table full of bumper stickers. One struck me as a poignant proxy for what I predicted will happen at the end of my book, The Mind of the Market: the Internet as a form of trade will enable freedom to find a way. The bumper sticker reads: The Revolution Will be Tweeted. I presume the reference is to the Iranian elections, the suppression of the protests of the corruption of which were tweeted.

This concept allows me to expand to my blog readers here what I mean by “free trade.” Most of you have pounced on me for using terms like “libertarian” or “capitalism.” But what I mean by free trade is much broader and encompassing: the free exchange of products, services, and ideas between people anywhere in the world anytime they want. To show how broadly I go with this concept, when Chimp A grooms Chimp B, and subsequently when Chimp A is attacked by an alpha male, Chimp B is more likely to come to his aid because they have formed a bond, an attachment, a trading relationship. Grooming in this example is a form of free trade.

Why does this happen? In The Mind of the Market I introduced Bastiat’s Principle, based on an observation by the 19th-century French economist Frédéric Bastiat: “Where goods do not cross frontiers, armies will.” Its corollary elucidates one of the principle steps toward conflict reduction: where goods do cross frontiers, armies will not.

This is a principle, not a law, since there are exceptions both historically and today. Trade — the free exchange of products, services, and ideas between people — will not prevent war, but it attenuates its likelihood. Thinking in terms of probabilities instead of absolutes, trade between groups increases the probability that peaceful and stable relations will continue and decreases the probability that instabilities and conflicts will erupt.

As an example, Yanomamö hunter-gatherers are not only the “fierce people,” as Napoleon Chagnon characterized them, they are also willing traders. Following the political dictum “the enemy of my enemy is my friend,” Yanomamö inter-village trade and reciprocal food exchanges serves as a powerful social glue in the creation of political alliances. As in my Chimp example above, Yanomamö Village A cannot go to Village B and announce that they are worried about being conquered by the more powerful Village C, since this would reveal their own weakness. Instead, Village A forms an alliance with Village B through trade and reciprocal feasting, and as a result they not only gain military protection but also encourage inter-village peace. As a by-product of this politically-motivated economic exchange, even though each Yanomamö band could produce all the products it needs for survival, they often set up a division of labor and a system of trade. The unintended consequence is an increase in both wealth and products. The Yanomamö trade not because they are innate altruists or nascent capitalists, but because they want to form political alliances. “Without these frequent contacts with neighbors,” Chagnon explains, “alliances would be much slower in formation and would be even more unstable once formed. A prerequisite to stable alliance is repetitive visiting and feasting, and the trading mechanism serves to bring about these visits.” Where goods cross Yanomamö frontiers, Yanomamö armies do not.

Bastiat’s Principle holds not only for hunter-gatherers but for consumer-traders as well. Note, for example, that in the modern world of consumer-trading nation states, economic sanctions are among the first steps taken by a nation against another when diplomatic conflict resolution attempts break down. Often such sanctions are imposed for purely economic reasons in a mercantilist mode, as when the United States imposed import tariffs on steel purchased from China and Russia in 2002, which the World Trade Organization declared to be illegal. Economic sanctions are also imposed for political reasons, as when the United States enforced them on Japan after its invasion of China in the 1930s, and these became a prelude (among other factors) to Japan’s retaliatory bombing of Pearl Harbor in 1941 and our involvement in the greatest war in history. Or more recently, economic sanctions were imposed by the U.S. and Japan on India following its 1998 nuclear tests, by the U.S. on Iran because of the latter’s state sponsorship of terrorism, and by the United Nations on Iraq as a tool to force the Iraqi government to comply with U.N. weapons inspectors’ search for weapons of mass destruction.

Economic sanctions send this message: if you do not change your behavior we will no longer trade with you. And by Bastiat’s Principle, where our goods do not cross your frontiers, our armies will. Not inevitably, of course, but often enough in history that the principle retains its veracity. Economic sanctions are not a necessary or even sufficient cause of war, but they are almost always a prelude to war.

In The Mind of the Market I also introduce the Starbucks’ corollary to Bastiat’s Principle: Where Starbucks cross frontiers, armies will not. That is, the free trade of products between peoples, and open access to services across geographic borders, obsoletes the necessity of political borders and thereby decreases the probability that armies will cross them. To the Starbucks corollary I add the Google theory of peace: Where information and knowledge cross frontiers, armies will not. That is, the free trade of information between peoples, and open access to knowledge across geographic borders, obsoletes the necessity of political borders and thereby decreases the probability that armies will cross them.

A stirring example can be seen in Europe. Since the formation of the Treaty of Rome and the European Union — which integrated disparate and historically divided European nations under one economic umbrella — where once invasions and wars were commonplace throughout a thousand years of European history, they are now unthinkable. Try it. Imagine Germany invading France and waging war upon her, or picture France motoring its armies through the Chunnel and then marching them into London to declare the country French. What once made for dramatic literature now sounds like pulp fiction.

The Wikification of the economy adds to the Google theory of peace the entire world economy as practiced by and participated in by billions of people. Wikipedia is the right analogue for this emerging economic phenomenon. It is an open-sourced, peer-produced, mass-collaborated, bottom-up, self-organized, emergent property of millions of people choosing to build the modern equivalent of the Alexandrian library whose purpose it was to make the sum of the world’s knowledge available to everyone in one location. Granted, the ancient Alexandrian Greeks had far less knowledge to store than we do today — by many orders of magnitude — but we have the World Wide Web.

In the long run, no dictator, demagogue, priest, president, or any other pretender to power will be able to control the Googlefication, Wikification, eBayification, MapQuestification, YouTubeification, MySpaceification of information, knowledge, geography, personal relationships, markets, and the economy. Chinese bureaucrats can attempt to put all the firewalls and controls they want on a billion potential Chinese web surfers, but in the long run they will never be able to prevent knowledge, products, and people from finding their way to those who seek them. And to this list we can now add the Twitterfication of information. The revolution will be tweeted. And…

Freedom finds a way.

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Debunking pirate myths reveals how
hidden economic forces generate social order

From countless films and books we all know that, historically, pirates were criminally insane, traitorous thieves, torturers and terrorists. Anarchy was the rule, and the rule of law was nonexistent.

Not so, dissents George Mason University economist Peter T. Leeson in his myth-busting book, The Invisible Hook (Princeton University Press, 2009), which shows how the unseen hand of economic exchange produces social cohesion even among pirates. Piratical mythology can’t be true, in fact, because no community of people could possibly be successful at anything for any length of time if their society were utterly anarchistic. Thus, Leeson says, pirate life was “orderly and honest” and had to be to meet buccaneers’ economic goal of turning a profit. (continue reading…)

Are you a global warming skeptic, or are you skeptical of the global warming skeptics? Your answer depends on how you answer these five questions:

1. Is the earth getting warmer?
2. Is the cause of global warming human activity?
3. How much warmer is it going to get?
4. What are the consequences of a warmer climate?
5. How much should we invest in altering the climate? Here are my answers.

Global warming is real and primarily human caused. With questions 3 and 4, however, estimates include error bars that grow wider the further out we run the models because complex systems like climate are notoriously difficult to predict. I provisionally accept the estimate of the United Nations’ Intergovernmental Panel on Climate Change (IPCC) that the mean global temperature by 2100 will increase by 4.7 degrees Fahrenheit, and that sea levels will rise by about one foot (about the same as they have risen since 1860). Moderate warming with moderate changes.

Question 4 deserves even more skepticism. In his carefully-reasoned and politically-bipartisan book Cool It (Alfred Knopf, 2008), the “skeptical environmentalist” Bjorn Lomborg notes that if global warming continues unchecked through the end of the century there will be 400,000 more heat-related deaths annually; there will be also be 1.8 million fewer cold-related deaths, for a net gain of 1.4 million lives. This is not to say that global warming is good, only that its consequences must be weighed in the balance. For example, Lomborg sites data from the World Wildlife Fund that at most we will lose 15 polar bears a year due to global warming, but what doesn’t get reported is that 49 bears are shot each year. What would be more cost-effective to save polar bear lives — spend hundreds of billions of dollars to lower CO₂ emissions and (maybe) the mean global temperature, or limit hunting permits?

This leads to question 5 — the economics of global climate change — which I think needs a sound dose of skepticism, particularly since the collapse of our economy. Even if all countries had ratified the Kyoto Protocol and lived up to its standards (which most did not), according to the IPCC, at best it would have postponed the 4.70F average increase just five years from 2100 to 2105, at a cost of $180 billion a year! By comparison, although global warming may cause an increase of two million deaths due to hunger annually by 2100, the U.N. estimates that for $10 billion a year we could save 229 million people from hunger annually today. It’s time for economic triage.

Economics is about the efficient allocation of limited resources that have alternative uses. And after the U.S. government allocated a trillion dollars of our limited resources to shore up our flagging financial foundations, those alternative uses have never seemed so pressing. Should we (can we?) really allocate the equivalent of a Manhattan Project to lower CO₂ emissions 50 percent by 2050 and 80 percent by 2100, as the IPCC recommends in order to divert disaster? My answer is no. Why? Because the potential benefits for the costs incurred are simply not warranted.

If you had, say, $50 billion a year to make the world a better place for more people, how would you spend it? In 2004, Lomborg asked this question to a group of scientists and world leaders, including four Nobel laureates. This “Copenhagen Consensus,” as it is called, ranked reduction of CO₂ emissions 16th out of 17 challenges. The top four were: controlling HIV/AIDS, micronutrients for fighting malnutrition, free trade to attenuate poverty, and battling malaria. A 2006 Copenhagen Consensus of U.N. ambassadors constructed a similar list, with communicable diseases, clean drinking water, and malnutrition at the top, and climate change at the bottom. A late 2008 meeting that included five Nobel Laureates recommended that President-elect Barack Obama allocate his promised $150 billion in subsidies for new technologies and $50 billion in foreign aid be allocated for research on malnutrition, immunization, and agricultural technologies. For a cool Kyoto $180 billion you can buy a lot of condoms, vitamin tablets, and mosquito nets and rescue hundreds of millions of people from disease, starvation, and impoverishment.

If you are skeptical of Lomborg and his branch of environmental skepticism, read the Yale University economist William Nordhaus’ technical book A Question of Balance (Yale University Press, 2008). Nordhaus computes the costs-benefits of various recommendations for changing the climate by either 2105 or 2205, primarily focused on the cost of curbing carbon emissions. Economists like to compute future profits and losses based on investments made today, adjusting for the value of a future dollar at an average interest rate of four percent. If we spent a trillion dollars today (the equivalent of the recent bailout or the Iraq war), how much climate change would it buy us in a century at four percent interest? Nordhaus’s calculations are compared to doing nothing, where a plus value is better and a minus value worse than doing nothing. Kyoto with the U.S. is plus one and without the U.S. zero, for example, and a gradually increasing global carbon tax is a plus three. That is, a $1 trillion cost today buys us $3 trillion of benefits in a century. Al Gore’s proposals, by contrast, score a minus 21, where $1 trillion invested today in Gore’s plans would net us a loss of $21 trillion in 2105.

Add to these calculations the numerous other crises we face, such as the housing calamity, the financial meltdown, the coming collapse of social security and medicare, two wars, a failing public education system, etc.

In my opinion we need to chill out on all extremist plans that entail expenses best described as Brobdingnagian, require our intervention into developing countries best portrayed as imperialistic, or involve state controls best portrayed as fascistic. Give green technologies and free markets a chance.

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The week of September 7 I spent in the beautiful Eastern European country of Romania, home of the blood-sucking vampire Count Dracula in Transylvania and the soul-sucking Communist dictator Nicolae Ceaucescu in Bucharest. I was invited by the physicist and historian of science Gheorghe Stratan at the Babes-Bolyai University in Cluj (pronounced Kloog), who translated two of my books, Why People Believe Weird Things and Why Darwin Matters (published by Humanitas publishing house in Romania). Dr. Stratan has also translated books by Richard Dawkins, Carl Sagan, Daniel Dennett, and Ernst Mayr. The central event was an evolution conference in Cluj celebrating the Darwinian bicentennial, and there were many interesting talks on evolutionary biology, history, and cultural impacts.

While I was there the Romanian Humanist Association invited me to give a talk in Bucharest, hosted by the organizers of that fine organization with the very Roman names of Ovidiu Covaciu and Remus Cernea, both of whom were exceptionally kind in escorting me about the city and treating me to their local beers and meals, such as here as Ovidiu and I enjoy an Ursus (Bear) beer and lunch consisting of polenta with pork wrapped in grape leaves.

Ovidiu and I enjoy an Ursus (Bear) beer and lunch consisting of polenta with pork wrapped in grape leaves.

Ceausescu’s monument to himself, People’s Palace, that Trump tried to buy!

Ovidiu and Remus also took me to the infamous “People’s Palace” (now the Palace of the Parliament), constructed by Ceaucescu to be his pyramid-like monument to himself as the largest building in the world. (They claim that the Pentagon is actually the largest by square footage, but that the palace may actually be larger if you don’t count the inner empty unused center courtyard of the Pentagon.) The Palace is unbelievably huge. Inside, the hallways are so wide that you could drive a tank down some of them. The ballrooms are breathtakingly enormous, and of course the exterior exudes strength and power.

Our tour guide told us that after the overthrow of the Communists in 1989, the Palace, still unfinished and bankrupting the country (with the people starving, the streets unlit at night, etc.), that they nearly took an offer of $1 billion from Donald Trump, who wanted to turn the Palace into the world’s largest casino. Somehow that seems fitting. Someone wised up and had the place assessed by an American company, which put the price tag at $22 billion, so The Donald missed what would have been his biggest real estate deal ever.

Inside the Palace hangs the propaganda artwork of Sabin Balasa, commissioned to paint idealized happy Romanians under Communist rule. Here are two classic pieces.

Happy communists! by Sabin Balasa

Idealized peaceful communist woman and man by Sabin Balasa

Most disturbing was the level infusion of religion into science education. (Romanians are overwhelmingly Eastern Orthodox with a level of belief in God approaching 99.9%, an overreaction, my hosts assured me, to the state enforced atheism—you can’t force people to believe.) Here is the 11th grade science textbook featuring the six days of creation, along with a 9th grade biology textbook written by two teams of authors: biologists and theologians, and on whose first page it reads “God Exists.” (Click the thumbnails below to view larger photos in my Flickr photostream.)

Remus is planning on running for President of Romania on a secular government platform that would enforce the separation of church and state, which at this point in the country’s history is going to be difficult. Nevertheless, I support him in his cause. Here is Remus and I in the beautiful Venezia hotel they hosted me in.

Other impressions: Both of my talks were well received, the Romanian people were exceptionally friendly, almost everyone I met my age and younger spoke quite good English , and the city of Cluj was quite beautiful. On the down side, I was amazed at the number of cars in Bucharest (and remember, I’m from L.A.!), jammed into every nook and cranny (without an SUV to be found). I was also stunned by how many people smoke. Everywhere I went the acrid smell of smoke was in the air, including restaurants, which once again reminded me of the tension I feel between my libertarian tendency to prefer freedom, including the freedom to smoke, and my personal preference for a smoke free environment anywhere I go. I know, second hand smoke has not been proven to cause serious lung illnesses, but it sure does stink and bothers me to no end. One market solution, of course, is to allow, say, restaurants to choose to be smoke free or smoke filled, and then let customers decide. But even in the outdoors second-hand smoke stinks and makes it difficult to appreciate the otherwise clean air (well, okay, not with all those cars, but you get the point).

I also got to visit the spectacular Botanical Garden in Cluj where I got an insider’s tour, as well as walking about town a fair amount and going inside a classic Orthodox cathedral:

Orthodox Cathedral much more austere than Catholics, no seats for services! You stand, like at a Springsteen concert

Global warming is real…inside the botanical greenhouse. I was sweating like Bernie Madoff in jail.

Botanical Garden in Cluj

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