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Monthly Newsletter - December 2016

Why Does Propaganda Work? Some People Want ItbyDanielLattier

There’saprincipleinhypnotismthatgoeslikethis:Apersoncannotbehypnotizedagainsthiswill.Hemustbeawillingsubject.Hemustbefullycooperative.

So it goes with propaganda. For propaganda to beeffective,itrequiressubmissivesubjects.AsProfessorNicholasO’Shaughnessywrote,propagandaisa“co-productioninwhichwearewillingparticipants.”

Propagandaistypicallydefinedasthedisseminationof particularly biased information in support ofa political or ideological cause. In his 1965 bookPropaganda: The Formation of Men’s Attitudes,philosopherJacquesEllulprovideduswithsomeofthe basic characteristics of propaganda: it thwartsdialogue, it is geared toward themasses, it utilizesvariousmedia, it iscontinuous, it isnot intendedtomakeonethink.

Disable the Brain

Ifthesearethecharacteristicsofpropaganda,thenitisnoexaggerationtosaythatwearesurroundedbyittoday.Mostnewsorganizationshavebecomepartisanshills and propagandists. They provide viewerswithasteadystreamofvideos,audioclips, images,and articles—most lacking nuance and of dubiousintellectualmerit—thatservetheintendedpurposeofpromotinganideologywhilefuelingdisdainfor the“opposition”.Andtheyhavebecomeverysuccessfuldoingit.

The reason they are successful, I fear, is thatmostpeopletodaywant to be propagandized—thoughtheywouldneveradmitit.Mostpeoplewanttobegiven

ideologicalmarchingordersandtalkingpointsfromanauthority.Mostpeoplehavezerointerest,andseelittlevalue,inengagingwithargumentsputforwardby thosewhoholddifferingpositions,unless it’s toridicule them. Most people want to simply choosethenewsmediaorganizationsthatbestfitwiththeirselected ideologicalcampsand immerse themselvesintheirinformationalstreams.

This realization is unfortunate, but not reallysurprising. Over the past few hundred years we’vehad a massive democratization of public discourseandhighereducationintheWest.Acontinuallylargerpercentageof thepopulationhasgone toschool forlongerandlongerperiodsoftime,andhasbeengiventheimpressionthat,asaresultofthiseducation,theyare enlightened “critical thinkers” whose opinionshaveasmuchvalueasthenextperson’s.

Yet,atthesametime,wemustconfrontthequestionraisedbyDorothySayers inher famous1947essay“TheLostToolsofLearning”:

“Hasiteverstruckyouasodd,orunfortunate,thattoday,when theproportionof literacy throughoutWestern Europe is higher than it has ever been,people should have become susceptible to theinfluenceofadvertisementandmasspropagandatoanextenthithertounheardofandunimagined?”

The fact is, though everyone goes through theeducationsystem today,mostarenotprovidedwiththe building blocks of thought.Most are no longertaught logic.Most arenot shownhow toengage inrationaldebate.

Avoiding Complexity

Andeveniftheseskillswerebettertaughtintoday’sschools, I highly doubt that our situationwould be

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thatmuch better. If history and experience are anyindicators, the difficult reality is that most peopleeitherdon’tpossess the intellectualchops fordoingbattlewithcomplexandcontroversial ideas,or theychoose not to undertake the discipline necessary toacquirethisskill.

In the past, when confrontedwith new or differentideas,peoplewhodidnotachievetheheightsofformaleducationhadthevaluesandtraditionsembeddedintheir communities to fall back on. These providedthem with a foundation—a “common sense”—bywhich to assess the merit those opinions that maydifferfromtheirown.

But today, hyper-individualism, increasedurbanization, the breakdown of the family, andideological divisions have caused a decline in theformative influenceof community, and reducedouraccesstothe“commonsense”thatitcanprovide.

Intellectually insecure and socially uprooted, manypeoplearenowdesperateforsomeauthoritytoclingto,someonewhowillgivesimpleexpression to theinklingsof thoughtsandinstincts towhichtheycanneithergiveadequatevoicenoradequatelyliveout.

Isitanywonder,then,thatsomanypeoplewouldseekoutpropagandatoday,andthatitsproviderswouldbesohappytooblige?

ThispieceoriginallyappearedinIntellectualTakeout

DanistheVicePresidentofIntellectualTakeout.HereceivedhisB.A.inPhilosophyandCatholicStudiesfromtheUniversityofSt.Thomas(MN),andhisM.A.and Ph.D. in Systematic Theology from DuquesneUniversityinPittsburgh,Pennsylvania.YoucanfindhisacademicworkatAcademia.edu.

Secede from the Centrally Planned School SystembyRonPaul

MarylandGovernorLarryHoganrecentlysignedanexecutiveorder forbiddingMarylandpublicschoolsfrombeginningclassesbeforeLaborDay.GovernorHogan’s executive order benefits businesses in

Maryland’scoastalareasthatloseschool-agedsummeremployees and business from Maryland familieswhenschoolsstartinAugust.However,asGovernorHogan’s critics have pointed out, some Marylandschooldistricts,aswellasMarylandschoolchildren,benefitfromanearlierstarttotheschoolyear.

Governor Hogan’s executive order is the latestexample of how centralized government control ofeducation leavesmany students behind.A centrallyplanned education system can no more meet theuniqueneedsofeverychildthanacentrallyplannedeconomicsystemcanmeettheuniqueneedsofeveryworkerandconsumer.

Centralizingeducationatthestateor,worse,federallevelinevitablyleadstopoliticalconflictsoverissuesranging from whether students should be allowedto pray on school grounds, to what should be thecurriculum, to what food should be served in thecafeteria, to who should be allowed to use whichbathroom.

Thecentralizationandpoliticizationof education isrootedintheideathateducationisarightthatmustbeprovidedbythegovernment,insteadofagoodthatindividuals should obtain in themarket. Separatingschool from state would empower parents to findan education system that meets the needs of theirchildreninsteadofusingthepoliticalprocesstoforcetheirideaofagoodeducationonallchildren.

Whilemanypoliticianspraiselocalandparentalcontrolofeducation, thefact isbothmajorpartiesembracefederal control of education. The two sides onlydifferonthedetails.Liberalswhoopposethetestingmandates of No Child Left Behind enthusiasticallybackedPresidentClinton’snationaltestingproposals.TheyalsobacktheObamaadministration’sexpansionoffederalinterferenceintheclassroomviaCommonCore.

Similarly, conservatives who (correctly) notjust opposed Clinton’s initiatives but called forthe abolition of the Department of Educationenthusiastically supported No Child Left Behind.EvenmostconservativeswhoopposeCommonCore,federal bathroom and cafeteriamandates, and other

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016federaleducationpolicies,supportreforming,insteadofeliminating,theDepartmentofEducation.

Politicianswillnotvoluntarilyrelinquishcontrolovereducation to parents. Therefore, parents and otherconcernedcitizensshouldtakeapagefromtheUKandworkto“Ed-Exit”government-controllededucation.ParentsandotherconcernedcitizensshouldpressureCongress to finally shut down the Department ofEducationandreturnthemoneytoAmericanfamilies.Theyalsomustpressurestategovernmentsandlocalschool boards to reject federalmandates, even if itmeansforgoingfederalfunding.

Parents should also explore education alternatives,suchasprivate,charter,andreligiousschools,aswellas homeschooling. Homeschooling is the ultimateform of Ed-Exit. Homeschooling parents have thefreedomtoshapeeveryaspectofeducation—fromthecurriculumtothelengthoftheschooldaytowhattheirchildrenhaveforlunchtowhocanandcannotusethebathroom—tofittheirchild'suniqueneeds.

FirstpublishedbytheRonPaulInstitute.

Thanksgiving Was a Triumph of Capitalism over Collectivism byRichardEbeling

Thistimeoftheyear,whetheringoodeconomictimesorbad,iswhenwegatherwithourfamilyandfriendsandenjoyaThanksgivingmeal together. Itmarksaremembrance of those early Pilgrim Fathers whocrossedtheunchartedoceanfromEuropetomakeanew start in Plymouth,Massachusetts.What is lessappreciatedisthatThanksgivingisalsoacelebrationofthebirthoffreeenterpriseinAmerica.

The English Puritans, who left Great Britain andsailedacrosstheAtlanticontheMayflowerin1620,werenotonlyescapingfromreligiouspersecutionintheirhomeland.TheyalsowantedtoturntheirbacksonwhattheyviewedasthematerialisticandgreedycorruptionoftheOldWorld.

In the New World, they wanted to erect a NewJerusalemthatwouldnotonlybereligiouslydevout,butbebuiltonanewfoundationofcommunalsharing

andsocialaltruism.TheirgoalwasthecommunismofPlato’sRepublic,inwhichallwouldworkandsharein common, knowing neither private property norself-interestedacquisitiveness.

WhatresultedisrecordedinthejournalofGovernorWilliam Bradford, the head of the colony. Thecolonists collectively cleared and worked land, buttheybroughtforthneitherthebountifulharvesttheyhoped for, nor did it create a spirit of shared andcheerfulbrotherhood.

The less industrious members of the colony camelate to their work in the fields, andwere slow andeasy in their labors. Knowing that they and theirfamilieswere toreceiveanequalshareofwhateverthegroupproduced,theysawlittlereasontobemorediligenttheirefforts.Theharderworkingamongthecolonistsbecameresentfulthattheireffortswouldberedistributedtothemoremalingeringmembersofthecolony.Soonthey,too,werecominglatetoworkandwerelessenergeticinthefields.

AsGovernorBradford explained inhis oldEnglish(thoughwiththespellingmodernized):

Fortheyoungmenthatwereableandfitforlaborandservicedidrepinethattheyshouldspendtheirtimeandstrengthtoworkforothermen’swivesandchildren,withoutrecompense.Thestrong,ormenofparts,hadnomoredivisionoffood,clothes,etc.thenhethatwasweakandnotabletodoaquartertheothercould;thiswasthoughtinjustice.Theagedandgravermentoberankedandequalizedinlabor,andfood,clothes,etc.withthemeanerandyoungersort,thoughtitsomeindignantanddisrespectuntothem.And formen’swives to be commanded todo service for othermen, as dressing theirmeat,washingtheirclothes,etc.theydeemeditakindofslavery,neithercouldtheirhusbandsbrookit.

Because of the disincentives and resentments thatspreadamongthepopulation,cropsweresparseandtherationedequalsharesfromthecollectiveharvestwere not enough to ward off starvation and death.Twoyears of communism in practice had left aliveonlyafractionoftheoriginalnumberofthePlymouthcolonists.

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Realizing that another season like those that hadjust passedwouldmean the extinctionof the entirecommunity, the elders of the colony decided to trysomething radically different: the introduction ofprivatepropertyrightsandtherightoftheindividualfamiliestokeepthefruitsoftheirownlabor.

AsGovernorBradfordputit:

Andsoassignedtoeveryfamilyaparcelofland,accordingtotheproportionoftheirnumberforthatend...Thishadaverygoodsuccess;foritmadeallhandsvery industrious,soasmuchmorecornwas planted than otherwise would have been byanymeans theGovernor or any other could use,and saved him a great deal of trouble, and gavefarbettercontent.Thewomennowwentwillinglyintothefield,andtooktheir little-oneswiththemtosetcorn,whichbeforewouldalledgeweakness,andinability;whomtohavecompelledwouldhavebeenthoughtgreattyrannyandoppression.

ThePlymouthColonyexperiencedagreatbountyoffood.Privateownershipmeantthattherewasnowacloselinkbetweenworkandreward.Industrybecametheorderof thedayasthemenandwomenineachfamily went to the fields on their separate privatefarms.Whentheharvesttimecame,notonlydidmanyfamiliesproduceenoughfortheirownneeds,buttheyhad surpluses that they could freely exchangewiththeirneighborsformutualbenefitandimprovement.

InGovernorBradford’swords:

By this time harvest was come, and instead offamine,nowGodgavethemplenty,andthefaceofthingswaschanged,totherejoicingoftheheartsofmany,forwhichtheyblessedGod.Andtheeffectoftheirplantingwaswellseen,forallhad,onewayor other, prettywell to bring the year about, andsomeoftheablersortandmoreindustrioushadtospare,andselltoothers,soasanygeneralwantorfaminehathnot been amongst them since to thisday.

Hard experience had taught the Plymouth coloniststhefallacyanderrorintheideasofthatsincethetimeoftheancientGreekshadpromisedparadisethrough

collectivismrather than individualism.AsGovernorBradfordexpressedit:

Theexperiencethatwashadinthiscommoncourseandcondition,triedsundryyears,andthatamongsttheGodly and sobermen,maywell convince ofthevanityandconceitofPlato’sandotherancients;-- that the taking away of property, and bringinginto a commonwealth, wouldmake them happyand flourishing; as if they were wiser than God.For this community (so far as itwas)was foundtobreedconfusionanddiscontent,andretardmuchemploymentthatwouldhavebeentotheirbenefitandcomfort.

Wasthisrealizationthatcommunismwasincompatiblewithhumannatureandtheprosperityofhumanitytobedespairedorbeacauseforguilt?NotinGovernorBradford’seyes.Itwassimplyamatterofacceptingthataltruismandcollectivismwereinconsistentwiththenatureofman,andthathumaninstitutionsshouldreflecttherealityofman’snatureifheistoprosper.SaidGovernorBradford:

Letnoneobjectthisisman’scorruption,andnothingtothecurseitself.Ianswer,seeingallmenhavethiscorruptioninthem,Godinhiswisdomsawanothercoursefitterforthem.

Thedesireto“spreadthewealth”andforgovernmentto plan and regulate people’s lives is as old as theutopian fantasy in Plato’s Republic. The PilgrimFathers tried and soon realized its bankruptcy andfailureasawayformentolivetogetherinsociety.

They, instead, acceptedman as he is: hardworking,productive,andinnovativewhenallowedthelibertyto follow his own interests in improving his owncircumstancesandthoseofhisfamily.Andevenmore,outofhisindustryresultthequantitiesofusefulgoodsthatenablementotradetotheirmutualbenefit.

In the wilderness of the NewWorld, the PlymouthPilgrims had progressed from the false dream ofcommunism to the sound realism of capitalism.At a timeof economicuncertainty, it isworthwhilerecallingthisbeginningoftheAmericanexperimentandexperiencewithfreedom.

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016ThisisthelessonoftheFirstThanksgiving.Thisyear,whenwesitaroundourdiningtablewithourfamilyand friends, let us also remember thatwhatwe arereally celebrating is the birth of freemen and freeenterpriseinthatNewWorldofAmerica.

The realmeaning ofThanksgiving, in otherwords,is the triumph of capitalism over the failure ofcollectivisminallitsforms.

RichardM.EbelingisBB&TDistinguishedProfessorofEthicsandFreeEnterpriseLeadershipatTheCitadelinCharleston, SouthCarolina.Hewas president oftheFoundationforEconomicEducation(FEE)from2003to2008.

The Bureaucracy Is Now More Powerful Than Congress byGaryGailles

Who creates federal laws? Civics books say it isCongress, but the real answer today may be theexecutive branch. Earlier this year, James Gattusoand Diane Katz reported that just the 229 majorregulationsissuedsince2009addedover$100billioninannualcosts(accordingtotheregulatoryagencies),$22billioncomingin2015.Withestimatesofthetotalregulatorycostsnowexceeding income taxburdensatover$2trillionannually,regulationswerefarmoreburdensomeformanyAmericansthanlegislation.

Unfortunately, missing from this process isaccountabilitytocitizens.Inresponse,somemembersofCongresshaveturnedtosupportingthe"Regulationsfrom the Executive in Need of Scrutiny" (REINS)Act,whichwouldrequireCongresstoapprovemajorregulationsbeforetheycouldtakeeffect.

Why is this necessary when the US Constitutionspecifically assigns all legislative powers toCongress? Because Congress has increasinglyabdicateditslawmakingresponsibility,delegatingitspowerthroughvaguelawsandmandatestoexecutiveagencies,which then imposeandenforce theactualregulationsthatlegallybindAmericans.

The REINS Act, by allowing major regulations

to take effect only if passed by Congress, wouldend the effective delegation of legislative powerto regulatory bureaucrats and restore some of theConstitution’serodedseparationofpowers.Itwouldoffer some real political accountability, by movingusback towardAmericans’ earlierunderstandingoflegislativepowers,guttedinU.S.v.Grimand(1911)andsubsequentcourtrulings.

Before Grimand, Congress had already begungiving administrative agencies power to formulatespecificrulestoimplementCongress’generalpolicyobjectives.ButinGrimand,theSupremeCourtgavesuchadministrativerulingsthefullforceoflaw,withdelegationmushroomingsince.

The resulthasbeenever-growingpower for federalbureaucrats, enacted through reams of rules,imposing massively large costs onAmericans. Butbureaucrats need not clearly spell out their policiesand their consequences to the public, much lesssubmitthemselvesforvoterapproval.Andwhenevera scandal reveals some regulatory abuse or failure,politicianshidefromtheirresponsibilitybyblamingthebureaucratstheydelegatedthepowertoandthenfailedtoeffectivelyoversee.

Thereisanotherverypracticalreasonforreininginourcurrent Pandora’s Box of congressional delegation.The fact that legislators must leave policy detailsvague—tobefilledinlaterbyothers—illustrateshowmembersofCongressdon’tknowenoughabouttheproblemsthey’resupposedlyaddressing.

To adequately address a societal problem requiresdetailedknowledgeoftheproblemandthespecificsofhowitwillbe“fixed.”Butlegislatorswhohadreallymastered such detailswould trumpet them at everyopportunitytoensuretheygotcredit.So,whentheydelegate policy details to agency bureaucrats, theyrevealtheydonotknowthespecificsofaworkablesolution.

Despitetheineffectivenessoflegislativelydelegatingvaguely outlined responsibilities to executiveagencies, it is prevalent because it gives theappearanceofalegislativesolutionwithoutrequiringlegislatorstoactuallyhaveasolution.Givenvoters’

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shaky knowledge of social problems, policies, andpossibilities,suchplay-actingcanworkforpoliticiansalmostaswellas(ifnotbetterthan)actualsolutions.It also provides politicians ready-made scapegoatswheneverthepoliticalheatgetsturnedup,allowingthemtoabsolvethemselvesfromtrueaccountability.

Americans constantly hear public servants’ verbalcommitments to accountability. But it is a sloganmore than a reality. Reinstating a requirement thatCongressapproveall laws,which, ifwearehonest,major regulatory rules amount to, would restoresomemeaningtothatrhetoric.Itwouldforceelectedofficials toanswerforagencyexcessesandfailures,rather than letting themblamebureaucrats for theirownlackofrealsolutions.Andholdingbothexecutiveagenciesand theRepublican-controlledCongress togreater account would be an excellent way for thepresident-electtoprovehiscommitmentto“draintheswamp”offederalabusesandabusers.

Gary M Galles is a professor of economics atPepperdineUniversity.HeistheauthorofThe Apostle of Peace: The Radical Mind of Leonard Read.

Question the Conventional Wisdom about College Degrees byMaryClareReim

Conventionalwisdomsaysthatstudentsneedafour-yeardegreetomakeitintoday’seconomy.Butdothenumbersbackthatup?

AccordingtoanewstudyreleasedbytheDepartmentof Education, students who pursue an occupationalcredential (an education that is career-centered) aremore likely to be employed than thosewho get anacademiccredential.

This suggests that recent efforts to encouragemoreindividuals to pursue college (President BarackObamasaid that allAmericans shouldhaveat leastsome postsecondary education) may be misguided.The data also suggest that the administration’santagonismtowardmorecareer-focusededucationaltracks—oftenprovidedbyfor-profittradeschoolsand

communitycolleges—ismisplaced.

Instead,thesenewdataunderscoretheneedformorediversity and innovation in the higher educationsphere.

Academia Vs. Value

ThestudyusesdatafromtheBeginningPostsecondaryStudents Longitudinal Study (BPS), which trackedstudentswhohadenrolledincollegeforthefirsttime.

Researchers surveyed students starting in 2003 andtracked their progress through 2009.By the end ofthat six-year period, the study found that a greaterproportion of students who earned an occupationalcredentialwereemployed.

Additionally,74percentofthoseemployedstudentswithanoccupationalcredentialwere in jobsrelatedto their field of study, compared to just 53 percentof employed students who earned an academiccredential.

Thesedataillustratetheneedforchangeinthewaypolicymakers think about higher education. Withcollegetuitionatanall-timehighandwithover3.6million students defaulting on their student loans,studentsneedalternativeoptionsforupwardmobilitynowmorethanever.

Unfortunately, our system currently reinforces theidea that a four-year bachelor’s degree is the onlyway toget ahead in today’s economy, regardlessofthepriceorwhatastudentactuallywantstopursue.

Getting Graduates Back to Work

Reforming the outdated accreditation system couldhelpfixthisproblem.TheHigherEducationReformand Opportunity (HERO)Act championed by Sen.MikeLee,R-Utah, andRep.RonDeSantis,R-Fla.,wouldbeasignificantstepinremovingthebarrierstoinnovationinhighereducation.

Under thisplan, stateswouldhave theflexibility toallowanyentity,suchasabusiness, toaccreditandcredential courses of study and individual courses,and students would still have the ability to accessfederalstudentaid.

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016Importantly, this could extend to the businesscommunity to allow those with more discreteknowledge of their field to accredit programs orevenindividualcourses.Thepolicyof“decoupling”(or separating) college accreditation from federalfinancingcreatesamuch-neededrelationshipbetweentheeducationstudentsaregettingand the jobs theyseekupongraduation.

AsLeeexplained:

Today, the federal government restricts access tohigher education and inflates its cost, ensuringunfairlytotheadvantageofspecialinterestsattheexpenseof students, teachers, and taxpayers.Thefederal government does this through its controlover college accreditation. Because eligibilityfor federal student loans is tied to the federalaccreditationregime,weshutoutstudentswhowanttolearn,teacherswhowanttoteach,transformativetechnologies,andcost-savinginnovations.

…myplanwouldgivestatesanewoptiontoenterintoagreementswiththeDepartmentofEducationtocreatetheirown,alternativeaccreditationsystemstoopenupnewoptionsforstudentsqualifyingforfederalaid.

… accreditation could also be available tospecialized programs, individual courses,apprenticeships, professional credentialing, andevencompetency-basedtests.Statescouldaccreditonlinecoursesorhybridmodelswithelementson-andoff-campus.

Additionally, decoupling federal financing fromaccreditation would encourage new and innovativemodelsofhighereducation toemerge. Inacountrywhere high school graduates represent drasticallydifferent backgrounds, interests, and skill sets, itseems shortsighted to assume that everyone shouldpursuethesamefour-yearbachelor’sdegreenomatterwhattheircareerandlifegoalsare.

Althoughcollegeistherightchoiceformany,somestudents would be much better off earning theirdegreeonlineorattendingavocationalschooltolearnaspecificskill—orsomecombinationofallthree.

Thesepersonalizedoptionscanbe significantly lessexpensivethanafour-yearbachelor’sdegreeandcantakeafractionofthetimetocomplete.Breakingapartthehighereducationcartel that reinforces thestatusquo isanessentialfirst step toprovidingbetterandcheaperoptionsforstudents.

ThisstudyfromtheDepartmentofEducationshouldinform policymakers in their understanding ofoccupationaleducationoptions.

While academic tracks have been successful ingettingmanystudentsonthepathtoupwardmobility,studentsneedmoreoptions tofit theiruniqueskillsandgoals.Expandingeducationoptionsbyreformingouraccreditationsystemwouldbeameaningfulfirststep.

ReprintedfromThe Daily Signal

MadougThorryClareReimisaResearchAssociateinEducationPolicyatTheHeritageFoundation.

The Benefits and Perils of Being Self-Employed byDougThorburn

TheyoungclientIrecentlywroteabout(“ThinkTwiceaboutGoingWest,YoungMan,”AmericanThinkerNovember 13, 2016) who asked whether to cometoCalifornia tostarthisbusinessaskedafollow-upquestion,“ShouldIevenbotheropening‘any’smallbusiness?” I figured he could use a primer on thetopicwithall theprosandconsofbeingabusinessownervs.anemployee.

The Freedom

MyexperienceasanEnrolledAgenttaxpropreparingthousandsofentrepreneurs’taxreturnsoverdecadeshas givenme insight into the entrepreneurialmind.Leaving out thosemotivated by the idea they havesomething unique to sharewith potential consumerkings,mostbuddingentrepreneurshavetwoprimarymotivating factors tostartingabusiness.One is theextra freedom the self-employed are perceived toenjoy. There is no boss to answer to (except theconsumer-king!) and there is sometimes greater

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flexibilityintheworkschedule(sometimesnot).

Theself-employedare theultimatedecisionmakersfor their businesses and many of them want to besuch.Theywanttobeabletoblamethemselvesforpoor decisions and take credit for good ones, withfull acceptance of the psychological and monetaryconsequences.

Thefactthatself-employedpeopleoftenworkmanymorehoursthandomostemployees,includingtheirown,maybeoffsetbythefact thatmanylovewhattheydo.

Andlikeme,manydon’tlikebureaucracies.(Decadesago,Ifoundaparticulardistasteforunionizedworkplaceswitheveryoneearningthesamewageregardlessofcompetence,aswellasforoneparticularcompanyIworkedforrifewithbackstabbingalcoholics.)

The Money

Theotherprimarymotivatingfactoristheprospectofahighincomeforthoseinnon-scalable(paidmostlyhourly) professions or the prospect of having littlelimittoincomeforthoseinscalableoccupations(paidwithout limitations as to time and labor; asNassimTalebputsitinTheBlackSwan,“awriterexpendsthesameefforttoattractonesinglereaderasshewouldto capture several hundredmillion”). Most peoplewith the greatest earnings, with the exception ofcrookedpoliticiansandbureaucrats,areorhavebeenentrepreneurs.

Theproblem ingetting there is thathalfof all newbusinessesfailintheirfirstfewyears.Theonesthatsucceedareoftenonlymarginallyprofitable,andthefewthatbecomewildlyprofitableusuallydosoonlyaftertheownerhasenduredyearsof18-hourdays.

Thismaybeduetothecompetitionamongtheself-employedaswellasbetweenbusinesses ingeneral.The desire to be self-employed is so prevalent thatthesupplyofpeoplewhowant tobeself-employedmay be greater than the demand for the productsand services they offer. This tends to decrease theearningsofsoleproprietors.Ihaveseenmanyself-employed individualswho foryears takehome lessafterbusinessexpensesthantheirownemployeesdo

or less than theywouldmake if theywent toworkforsomeoneelse.Theyremaininbusinesssimplytoavoidbeinganemployee.

This brings up the question of how much self-employed people earn compared to their employedcounterparts. To make a fair comparison, allemployeebenefitsmustbeincludedwhencalculatingthe earnings of employees. Such benefits includeretirement plans, medical and disability insurance,overtimecompensation, sickpay,vacationpayand,frequently, other benefits that larger corporationsofferemployees,includingemployeegyms,discountson products and free lunches and training. Thesebenefitsincreasethenumberofproprietorswhowouldbemonetarilybetteroffasemployees.Itmayturnoutthatoverallearningsforemployeesareindeedhigher.

Onereasonearningscanbelowerforself-employedpeopleisbusinessupsanddowns.Businessownersfeel recessions more quickly than employees, whoare often somewhat insulated from such businessconditions because corporations, especially largerones,oftendon’tlayoffuntilamoderateslowdownbecomessevere.

The Knowledge

Another reason for earning less than employedcounterpartsistheextensiveknowledgeself-employedpeoplemust have to ensure success. Frequently, anemployeeneedbeexpertinonlyonespecializedfield.Self-employed people, however, must be at leastgood,ifnotexpert,inmanyfields.

Theyneedtosell theirproductsorservices,sotheyhave to have a good grasp ofmarketing and sales.They decide what must be purchased, how muchandonwhatterms,understandingtheprosandconsof countless options, somust be decent purchasingagents. They need to know what their productscost,directlyandindirectly, includingoverheadandlaborinputs,andhowtoanalyzesuchcosts,asacostaccountantcanbestdo.Beingbothagoodmarketingstrategistandacompetentcostaccountantisessentialto pricing their products or services for maximumprofitinthelongrun.

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016An all-too-common problem is pricing products orservices too low for long-termbusiness sustenance,asifbusinessownersareafraidtoearnaprofit.Manypeople are emotionally at odds with maximizingprofit,despitethefactthatdoingsoisinthelongrunnot only good for the business proprietor but alsofor society: theproprietor stays inbusiness.And, ifhisprofitislargeenoughasjudgedbyhiswould-becompetitors,theyventureintohislineofbusinessandthesupplyoftheproductorservicewillincreaseandprices,alongwithprofitmargins,generallydecline.

Oftenself-employedpeoplemustbesecretariesandbookkeepers and, as inmycase, awriter, publisherandnegotiator(aswhenIdealwiththeIRS).

Theself-employedmustbeabletodoallthesejobsuntil they can afford to hire suchservices—atimethatusuallydoesn’tarriveuntilafter theyhavemasteredthem in making their businessessurvive.

In addition, they need a basicunderstanding of business-relatedfieldssuchasfinance,administration,employee relations, banking,insurance,businesslawandtaxation,so they’ll know when to go to aspecialistforhelp.

Andbesidesall this,successfulself-employedindividualsmustgenerallybe self-motivated, confident, andwell-organized.

The Hopes (mine)

I don’tmean to discourage anyone from becomingself-employed.Evenwithitsdrawbacks,Iprefertoseeasmanypeopleaspossibleinself-employment,ifonlyforreasonsconnectedwithblameandcreditfordecision-makingandproduction.

Ihopethatseeingaself-employedbossatworkwillhelphisemployeesbetterappreciatewhathehasgonethroughbeforetheywerehiredandthechallengeshefacesafter.Employeesshouldrealizetheywouldn’tevenhavethejobwereitnotfortheemployer,contrary

towhatmanyunionheadsandpeopleingovernmentwouldhaveusbelieve.

Ihope,too,thatawould-beself-employedpersonwilldevelopagoodunderstandingofwhathemustdotobecome successful. Too many have pie-in-the-skydreamsofgloryandmoney,settingunrealisticgoalsforthemselveswhich,intheend,thwarttheirsuccess.Business planningbasedon full knowledgeof bothpotentialsandpitfallscanhelptopreventfailureandensuresuccess.

Entrepreneurship in the U.S.

Despite the positives for owners and society,entrepreneurs are becoming an endangered species,asthischartshows:

GraphfromaBrookingsInstitutionpaper,“DecliningBusiness Dynamism in the United States: A LookatStates andMetros” by IanHathaway andRobertE. Litan, http://www.brookings.edu/research/papers/2014/05/declining-business-dynamism-litan.

Therearemanyreasonsentrepreneurshiphasdeclinedin theU.S. since the1970s. One is the increase incompany size in some industries, with fewer firmssellingalargevarietyofproductsandservicesinonelocationsuchasthe“big-box”store.Inonetriptoa

BankNotes -NelsonNash’sMonthlyNewsletter-December2016

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TargetorWal-Mart,youcanpurchaseaplethoraofitemspreviouslypurchasedatseveralsmallerstores;larger volumes allow them to offer lower prices.Costco,BJ’s and Sam’sClub have excelled at this,albeitwithfarlessproductchoice,whilebycontrast,asmallproducerwillstruggletoout-competealargeone.Smallfirmsdosurviveinniches,butthereareonlysomanysuchniches.

Anotherreasonforthereductioninentrepreneurshipisincreasinggovernmentintrusivenessandregulatoryhurdles. Regulationsare farmorevoluminous thanthreedecadesago.Since1993,morethan1.5millionpagesofnewfederalgovernmentrules,proposedrulesand regulations have been published in the FederalRegister—morethan200pagesperday.Thisdoesn’tcountamassiveincreaseinstateandlocalrules.

Thecostofcompliancemaybeaffordableforalargefirm;itmaybecost-prohibitiveforasmallone.Thefact that many start-ups no longer start out smallsupportsthisidea.DanielHannan,aMemberoftheEuropean Parliament, recently said: “The biggestsurprisetome,whenIwasanewlyelectedMEPwastheextent towhich thesegiantcorporationswantedmore regulation. I had supposed, being elected asa conservative, that being private enterprises, theywouldwant freedomof action. Iwasdisabusedofthatwithinaweekofarriving.Theyloveregulationbecause they can afford the compliance costsmoreeasilythantheirsmallerrivals. TheyhavecapturedtheBrusselsmachineandusedit toraisebarrierstoentry,verygood[news]for thecartelofestablishedmultinationals,verybadnewsfor the innovator, thestartup,theentrepreneur.”

Addedtocompliancecostistheriskofunknowinglycommitting felonies in the routine course of one’swork. HarveySilvergatemakes a good case in hisbookThree Felonies a Day: How the Feds Target the Innocentthatbecauseofthemassivenumberoflawswe live under and their pervasive vagueness, all ofushavecommittedfeloniesunknowingly,evenifthe‘three’inhisbooktitleishyperbole.

Manyownersofsmallfirmswork(atnopay)morehoursthantheircounterpartsinlargefirmstomeetall

these regulatory requirements, reducing theowner’snet income and further discouraging the number ofwould-be entrepreneurs. An old joke, a version ofwhich was found in a Playboy magazine issue ofsomeyearsago,speakstothis:

AmanownedafarminKansas.TheDepartmentof Labor received a tip that he was not payingproperwagestohisemployees.Anagentcametointerviewhimandsaid,“Listyouremployeesandtellmehowmuchyoupaythem.”

The farmer said, “I have one ranch hand who’sbeenwithme for three years. I payhim$600 aweekplus roomandboard. Then Ihaveacook.She’sbeenheresixmonths.Shegets$400aweekplusroomandboard.”

“Anybody else?” the agent asked as he scribbledonanotepad.

“Yeah,”thefarmersaid.“There’sahalf-withere.Worksabout18hoursaday.Ipayhim$10aweekandgivehimchewingtobacco.”

“Veryinteresting,”theagentsaid.“Iwanttotalktothathalf-wit.”

The farmer replied, “You’re talkin’ to him rightnow.”

Exacerbating the trend towards fewer entrepreneursis high-handed government with a penchant forcontrolling everyone and everything. Economicfascism, inwhich government directs themeans ofproductionwithoutclaimingoutrightownership,findsitmucheasiertopresideoverfewer,largerbusinessthan countless smaller ones. The consolidation andconcomitantincreaseinthesizeofmedicalbusinessesandinsurersisonecaseoftheresult:thepercentageofself-employedphysicians,forexample,decreasedfrom57%in2000tojust36%in2013andisexpectedtohit33%in2016.

(Economic fascism is not Nazism. As econlib.orgputsit,it’ssocialismwithacapitalistveneer.Bythisdefinition,weliveinalargelyfascistcountryofwhichMussoliniwouldbeproud.Foraterrificdiscussionoffascisminallitsforms,seehttps://fee.org/articles/economic-fascism/.)

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016Finally,entrepreneurshipsuffersbecausethetaxcodeisstackedagainstit.Greatertaxburdensarecreatedby dramatic fluctuations in income, often the casewithentrepreneurs,thanbyrelativelyequalincomesfromyear toyear. Forinstance,assuming2015taxrates and a single filer, a sole proprietor earning$50,000ineachoftwoyearspaystotalincometaxesof nearly $9,500over those twoyears; a proprietorearning$100,000inoneyearandzerothenextpaysatotalofmorethan$16,000.Inanotherexample,asoleproprietorearning$75,000inoneyearandlosing$75,000 the next year pays more than $10,000 inincometaxplus$10,000inself-employment(SocialSecurity) tax in theprofitableyear; evenwithanetoperatinglosscarryover(whichallowshimtooffsetthe$75,000profitwith the$75,000 lossfor incometaxpurposes),he’sstillstuckwiththe$10,000inself-employment tax;butaproprietorwhoearnszero ineachyearpaysnothing.

Irancalculationsforthe$1billionlossthatPresident-ElectDonaldTrumpsuffered in1994. I found thatusingtoday’staxrulesandassumingheusedthenetoperatinglosscarryoverrules(asheshouldhave),ifheearned$1billionineachofthenexttwoyears,hisoveralltaxwouldbe$57milliongreaterthanifhehadearnedone-thirdasmuch(one-third-billion) ineachofthethreeyears.

WhileIprefermoresmallbusinesses,thelibertarianin me suggests that we simply leave the marketalone to do what it will do when it is left alone:serve consumers—whether customers, clients orpatients—in the most cost-effective and efficientway possible. With fewer government regulationsand less intrusiveness, there would likely be manymoresmallbusinessesandespeciallystart-ups,whichwouldcreateamuchmorevibranteconomy,therebyincreasing productivity and hence living standards(thatis,wagesandnetincomes).

Oureconomyhasbeensluggish,withstagnantlivingstandards,foryears.IftheUnitedStatesistoremainaworld leader and its citizens’ incomes are to rise,the economyneeds tobe freedup, not increasinglystrangledbypeoplewhothinktheyknowhowtoliveour livesandspendourearningsbetter thanwedo.

HopefullytherecentRepublicansweepwillturnthissluggishshiparoundbyreducingtheregulatorystate.Perhapsnowisagreattimetostartabusiness,evenifit’snotinCalifornia.

Doug Thorburn, EA, CFP, Alcoholism Researcher,Author of "Alcoholism Myths and Realities" andnumerousotherbooksandarticles."Protectyourselffromfinancialabuse."

VISIONByLeonardE.Read

Note - Frequent readers of BANKNOTES are aware of my relationship with Leonard E. Read and my admiration for his works during his lifetime. In the following issues I will be sharing his book, VISION, one chapter per month. It was written in 1978. What a privilege it was for me to know this great man! –R.NelsonNash

Chapter18

THEROLEOFSELF-DISCIPLINE

Man,proudman!dressedinalittlebriefauthority,playssuchfantastictricksbeforehighheavenasmaketheangelsweep.

-SHAKESPEARE

Self-discipline, as distinguished from beingdisciplined by others-governments, labor unions,neighbors or whoever-is a necessary attainment ifliberty is toprevail.Self-discipline isa requirementineverydepartmentoflife-iflifeistobelivedatitshighest-but I shall limit the following commentaryto this achievement as related to responsibility andauthority.

Discipline is defined as “training that developsselfcontrol,character,ororderlinessandefficiency.”These are the elements of self-discipline, as I shallusetheterm!

Here's the story of how I came upon the idea thatthereisanecessaryandproperrelationshipbetweenresponsibility and authority. In the early forties the

BankNotes -NelsonNash’sMonthlyNewsletter-December2016

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LosAngelesChamberofCommerce,withmyselfasGeneralManager, experienced a far greater successthanlikeorganizationsinmanylargecities.Whydidwehavethousandsofenthusiasticmembersandfinancialsupporterswhilemany business organizationswerescrambling forexistence?Whatwerewedoing thatotherswerenot?Afteragreatdealofpondering,theanswercametomind.

TheL.A.Chamberhad18departments,eachwithamanagerandstaff;150peopleinall.Ineveryinstance,whenassigningprojectstothemanagers,Igavethemnotonlytheresponsibilityfortheundertakingbutalsotheauthoritytoaccomplishit.Itworkedlikemagic.!

Why this procedure? Having had little formalschooling,Iwasobligedtoseektutors.AndfromtheremarkableSocratesIlearnedthatnoneofusknowsverymuch.HowpossiblycouldthebusinessofLosAngeles County be bettered, I asked myself, if itwerebut a reflectionofmyknow-nothing-ness!Byassigningresponsibilityandtheauthoritytogowithit,theinitiativeofmy150associateswastapped;theirinnovativepotentialitiesbloomed;andthetotalknow-howandenergywas tremendous!All ofusworkedwith each other, not one in total command, but ahappycombinationofcompetitionandcooperation.

My predecessor—like most managers of otherChambers—told everybody on his staff what to doandhowtodoit-period!Hisdo-as-I-saytacticfailedtobringout thepotential talentsof anyone.Thus itwas that I chose the working formula: Delegate responsibility and authority commensurately. Thisturns out to be the secret of organizational success,be it inChambersofCommerce, tradeassociations,business corporations, or even preparing a dinnerwithyourwife. If I say,“Pleaseprepare thesalad,”Igivehertheauthoritytomakeitherway.Asinallotherorganizationalarrangements,shemayseekmycounselbutthefinaldecisionishers.Itworks!

Interestingly,itwassome10yearslaterthatIheardthis exact phrasing from another. He was the ViceChairmanofperhapstheworld'slargestcorporation,onehavingmanydivisionsand locations,eachwithitsownpresidentandstaff.Responsibilityfordoing

agoodjobwasdelegatedtoeachofthosepresidentsalongwiththeauthoritytoaccomplishthetask.Diditwork?OneofthegreatestcorporatesuccessesIhaveeverknown!

Asobservedearlier, self-discipline,asdistinguishedfrom being disciplined by others, is a necessaryattainmentiflibertyistoprevail.Andself-disciplinesignificantly relates to both responsibility andauthority.

AsIhavewrittenmanytimes,self-responsibilityandliberty are two parts of the same ideological coin.Neither is possible without the other. Nor is self-responsibilitypossiblewithoutastrictself-discipline.Refusal to turn the responsibility for self over toanother or others, which is to relieve self of life'sproblems, requires adisciplineof thehighestorder.It takes intellectual toughness not to yield to thisseductivetemptation.

Equally destructive is allowing governments toassume the responsibility for our welfare, decidingforuswhatweshalllearnorproduceorwithwhomexchange or the hours wemaywork or prices andwages.Tothusabandonself-controlisasuicidalact.AsVernaHallwrote:“Totheextentthatanindividualturns the responsibility of self over to another orallowsgovernment to take it away, to that extent is the very essence of one's being removed.”

Next, what about self-discipline as related toauthority? Is it necessary? It relates to authority nolessthantoresponsibility.Omissionofself-disciplinefrom either onemakes it ineffective in the other. Itisadouble-barrelednecessityandunlesspracticedinbothwillresultincountlessdisciplinesoverourlivesbygovernmentsandotherdictocrats.

Whenoneisgracedwiththeresponsibility-authoritycombination—those rare stimulative twins—thechances of success are greatly increased.A personthus graced is head and shoulders above those incomparableendeavors.However,ittakesanunusualself-discipline to keep success from going to one'shead.The remedy?Acquiringandkeeping inmind,day-in-and-day-out,thatSocratictruth:knowing next to nothing!

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BankNotes -NelsonNash’sMonthlyNewsletter-December2016At this point, reflect on Shakespeare's wonderfullyphrasedwisdom:“Man, proud man! dressed in a little brief authority, plays such fantastic tricks before high heaven as make the angels weep.”

Countlessindividualsgainthereputationofbeingtopauthorities at thisor thatbitofexpertise-abusinessorlabortycoon,aneconomist,anovelist,awriterofcommunistic doctrine or whatever. They believe asmanyothersdothatnoonerivalsorexcelsthemintheirspecializations,andperhapsnoonedoes.Whatisthemaladythatsooftenfollowstheseself-assessments?ThebeliefthatthereisnothingintheCosmosabovetheirminds!Asaconsequence,manyofthem,asKarlMarx,becomeatheiststheirfinitemindstheAlmightyI!InfiniteConsciousness—Creation—tothemisjustsomuch religiousbuncombe!Man,proudman!Hedoes,indeed,maketheangelsweep!

Theself-disciplinethatwillremedysuchinflatedselfesteem?Nooneknows, for it isas indescribableasintuitive flashes or insights having a Source whichthey in their presumed omniscience have denied.From that condition, how does one regain an openmind?

An open mind to what? To the Infinite Unknown!Rarely will those self-designated authorities graspthisconcept,fortheiregotismsquelchestheirreason.Anyattempttodeflatetheiregotismwillresult(1)inaconfirmationoftheirheadinessand(2)inadislikeofallwould-bereformers.Sowhatcanwedo?Wecanletthemgotheirownway!

Mostimportant,we,too,eachofus,cangohisownway: strive for humility; acknowledge the mysteryof how Creation works its wonders, the wonderfulmiracleofthefreeandunfetteredmarket.Andwemaybe grateful to Shakespeare, whowarned us againstpride,andtoSocrateswhomadeitplaintousthatthemoreweknowthemoreweknowwedonotknow.

Theroleofself-disciplineasrelatedtoresponsibilityand authority is to shield us from dictocraticdisciplinarians and to assure the liberty that bringspeaceonearth,goodwilltowardmen.

Welcome the newest IBC Practitionershttps://www.infinitebanking.org/finder/

ThefollowingfinancialprofessionalsjoinedorrenewedtheirmembershiptoourAuthorized Infinite Banking Concepts Practitioners teamthismonth:

You can view the entire practitioner listing on our website using the Practitioner Finder.IBC Practitioner’shavecompletedtheIBC Practitioner’s Program and have passed the program exam to ensurethat they possess a solid foundation in the theory andimplementation of IBC, as well as an understandingofAustrian economics and its unique insights into ourmonetaryandbankinginstitutions.TheIBC Practitionerhasabroadbaseofknowledgetoensureaminimallevelofcompetencyinalloftheareasafinancialprofessionalneeds,inordertoadequatelydiscussIBCwithhisorherclients.

• WillMoran-Edmonton,Alberta• RussMorgan-Birmingham,Alabama• CharlieJackson-Hillsboro,Texas• MattZimmer-Jamestown,NorthDakota• BryanNelson-SantaAna,California• JamesDalton-Bradenton,Florida• AllanJohnson-PrinceGeorge,BritishColumbia

Nelson’s Newly Added Book Recommendations

https://infinitebanking.org/books/Stillwell and the American Experience in China - 1911-1945byBarbaraTuchman

Nelson’s Favorite Quotes“A power has risen up in the government greaterthanthepeoplethemselves,consistingofmany,andvarious, and powerful interests, combined into onemass,andheldtogetherbythecohesivepowerofthevastsurplus in thebanks.” –JohnC.Calhoun,7thVicePresidentoftheUnitedStates

14www.infinitebanking.org david@infinitebanking.org

BankNotes -NelsonNash’sMonthlyNewsletter-December2016

NNI Live Seminars & Eventshttp://infinitebanking.org/events/

The IBC Seminar, with Nelson Nash, Dr. Robert P Murphy, and L. Carlos Lara

Feburary 11, 2017SheratonBirminghamBirmingham,AL35203

Would you like to attend for half-off the registration price? Contact an Authorized IBC Practitioner and get a 50% off discount code!

Follow this link for registration informationorcontactDavidStearnsforregistrationinformation.

205-276-2977,david@infinitebanking.org

The Whole Truth About Money – Examining the Pros & Cons of Common Financial Vehicles

AOneDaySeminarpresentedbyToddLangfordwithKimButler

Feburary 8, 2017

SheratonBirminghamBirmingham,AL35203

Follow this link for registration information

IBC Practitioners’ Think Tank Symposium InvitationonlyeventforIBCPractitionersandguests

Feburary 9-10, 2017

SheratonBirminghamBirmingham,AL35203

ContactDavidStearnsforregistrationrequirements,205-276-2977,david@infinitebanking.org