Category: Objectivism

Ayn Rand’s Philosophy

John Grisham’s “The Rainmaker”

I recently watched the movie version of John Grisham’s “The Rainmaker”, and I liked the move so much, that I went to Half Price Books and purchased the novel that day. I thought that it presented the trials and tribulations of being a recent law school graduate, trying to make it as a solo-practicing lawyer quite well. I could relate to the fears that the main character Rudy Baylor must overcome as a newly practicing attorney. Going to court is pretty intimidating at first, especially when you are all by yourself, and don’t have the support of a firm with more experienced attorneys to bail you out if you get in over your head. I could also relate to the financial difficulties of the main character, when you don’t necessarily know when and where your next fee is going to come from, and you’ve got bills to pay. As a result, I read this book in 3 days, and enjoyed it immensely.

Although I generally could relate to Rudy Baylor, a couple of things that he did really bothered me. First of all, at the beginning of the novel, a lot of his behavior seems to be motivated by either greed or envy, especially the later. He seemed to hold a lot of resentment towards a lot of different people, and he acted on this resentment from time to time, such as when he destroyed property at a law office because they wouldn’t hire him.

The other thing that really bothered me were his improper ex parte communications with the trial judge throughout the novel. Before I explain what an ex parte communication is, let me explain the basic outline of the plot. The major conflict in the novel is a lawsuit Rudy Baylor files against a very corrupt insurance company, who has denied the claim of his client, who is dying of leukemia. The insurance company has wrongfully denied his client’s claim, and now they file suit, although it is now too late for the client to get the bone marrow transplant that would have saved his life. An ex parte communication is a generally prohibited communication between a party and/or their attorney or representative and the judge when the opposing party, their attorney and/or their representative is not participating in the communication regarding some substantive issue regarding the case before the judge. I am always careful not to engage in ex parte communications with a trial judge because it would get me in trouble, but I also agree that it is, ethically, totally improper, and I think that it can rightfully be prohibited. Our System is an adversarial system, where both parties argue their sides of the case, and then an impartial third party (the judge and/or jury) decides who is right and who is wrong. This system best ensures that the truth will prevail because each side has an incentive to makes its best argument to the judge or jury. Justice should be “blind” in the sense that the winner of a trial should not be based on personal contacts or friendships between a party’s lawyer and the judge, because we are a “nation of laws, not of men”. Ex parte communication would corrupt this adversarial system by allowing you to argue your side of the case without the judge hearing from the other side on the matter, which would thwart a just outcome.

Despite the fact that ex parte communication with the trial judge is improper, the main character, Rudy Baylor, does it over and over again throughout the novel. For instance, in Chapter 26, Rudy Baylor goes to Judge Tyrone Kipler’s office and explains to him why the case should be “fast tracked”, and the insurance company’s lawyer(s) are not there. In Chapter 34, Rudy Baylor, Judge Kipler and the insurance company’s lawyer are having a phone conference over a discovery dispute during a deposition, and the judge orders the insurance company lawyer off the phone, so that he can talk to Rudy Baylor alone. The judge is also hardly what I’d call impartial, since he clearly wants Rudy Baylor to win, and does everything he can to make this happen in the novel, although I agree that, given the set of facts in the novel, Rudy Baylor probably should win.

I agree that, morally, the executives at the fictional insurance company (“Great Benefit”) did something wrong for the simple fact that they had a policy of denying all insurance claims without regard of their merit under the insurance contract. At some point in the novel, it is revealed that the insurance company instructed its employees in their procedures manual to initially deny all claims. I think that this would be fraud. Generally, if you enter into a contract with someone with the present intention of never performing under the contract, then I believe it is considered fraud. While it is not fraud to default on the contract at some later time, so long as you intended to perform at the time you entered into the contract, if you intend to default on the contract at the time you entered into it, then that is fraud. Regardless of the present state of law, I think that it should be fraud, because you are, in essence, taking values from someone, without ever intending to reciprocate. In essence, you are conning them out of values that they wouldn’t part with, if they knew that you didn’t plan to live up to your end of the agreement. Great Benefit was incurring a debt, or obligation, when it accepted people’s insurance premiums. By deciding it was going to initially deny all claims, its managers had a present intention not to pay out under the insurance contract. I think that any corporate executive who instructed the corporation’s employees to deny all claims, regardless of the fact that some of the claims were legitimately covered under the policy, would be guilty of the criminal act of fraud, and could be jailed and/or fined.

Furthermore, if someone did die in the scenario outlined in Grisham’s book, then I think the insurance company executives responsible for the fraudulent scheme to initially deny all claims, despite some of them being meritorious, might be guilty of manslaughter, because they engaged in a reckless act (denying claims regardless of the fact that they were supposed to be covered under the insurance contract), which resulted in the death of an insured person.

I would also note that I do not consider the scenario outlined in the book to be very likely to happen under pure capitalism. I note this fact because I think that Grisham’s probable agenda in writing “The Rainmaker” is to push for Canadian-style socialized medicine. I had never read a “legal thriller” before I read “The Rainmaker” last week. (I have always preferred science fiction novels.) But, I have seen several of the movie versions of Grisham’s novels, and they always have a socialist political-viewpoint. So, I suspect that the message of “The Rainmaker” was: “Private insurance companies are evil because capitalism is evil, so we need socialized medicine, similar to the Canadian version.” However, Grisham is mistaken if he thinks the current American health care system is a free market.

The American medical system is not a free market for several reasons, some of which I will now note. First, Medicare and Medicade drive up prices by providing free medical care to people, who then have no incentive to economize on their use of health care. Second, there probably is no industry more regulated than the health care industry. Patients aren’t free to choose who will provide them with health care thanks to medical licensure statutes. This means they must go to a government-approved doctor. Licensure statutes artificially limit supply by arbitrarily limiting the number of medical practitioners, thereby driving up prices. Patients aren’t free to choose which drugs they will consume, since they must get permission from a government-approved doctor before they can purchase so-called “prescription drugs” from a government-approved pharmacist. Once again, licensure statutes for pharmacists artificially limit supply and drive up prices. When it comes to drugs and medical devices, the government won’t allow innovators to market new drugs and medical products without government approval from the Food and Drug Administration, which can take years. Furthermore, taxes are structured to favor third-party payment of health care, because the government favors employer-provided health insurance by giving companies a tax break for providing it, but if employees want to get their own health insurance, they don’t get the same tax break. This also tends to make people dependent on their employer for continued health-coverage. Additionally, although I think this is less of a problem now, thanks to tort reform, doctor’s malpractice insurance expenses were outrageously high because of arbitrarily high punitive damages awards.

I tend to think that punitive damages awards should be capped. (In a civil suit, “punitive damages” are not the damages a plaintiff receives to repair the damage done to him by the defendant, they are an extra money award given to the plaintiff, just to punish the defendant’s wrongful conduct.) In the book, the fictional insurance company is hit with a massive punitive damages award, but I’m not sure that this is the best way to deal with the problem. I think that the management responsible for the fraudulent scheme in the novel would need to have been removed. The stockholders are probably not responsible at all, yet, they are the ones being punished with a high civil punitive damages award. I think it would make more sense to allow the criminal justice system to handle punishment, rather than the civil courts. As I said earlier, the corporate executives in the novel would probably be guilty of fraud and manslaughter for instituting a policy of denying all claims, which resulted in death.

I also find it doubtful that someone would actually not be able to receive treatment for leukemia under capitalism, even if they had no health insurance, and the treatment cost $200,000, which is how much the bone marrow transplant that the fictional insurance company refuses to pay for in the novel costs. First, I would note that I am uncertain what the cost of $200,000 reflects. Is the $200,000 cost mostly just to cover the “R&D costs” (“Research and Development”) of the procedure, or the actual costs of labor and materials? If the $200,000 cost is mostly to cover the costs of the R&D that went into developing the intellectual property for the procedure, then it would be possible under capitalism for the owners of the intellectual property to give a massive discount to those who actually couldn’t afford the procedure due to poverty. For instance, if $150,000 of the cost of the procedure is to help cover the per-unit costs of the R&D that went into developing the patents and other intellectual property, while only $50,000 represents the cost of labor and materials, then the manufacturer could give a discount to this particular patient, after doing an audit of his personal finances to confirm that he is in fact poor. Even if they could only charge this particular patient, say, $60,000, they would still be making $10,000 on the sale, which is $10,000 they otherwise wouldn’t have gotten. As long as they can perform a financial audit of the patient to determine that he isn’t lying about being poor, then the medical provider can charge rich people more, and poor people less, for the same procedure, and this would likely be the most profitable business plan they could adopt. For instance, with most pharmaceuticals, the manufacturing costs for the drug are extremely low. The reason they cost so much is to cover the expenses of R&D that went into the drug. This means that drug manufacturers could reduce the sales price for those who are genuinely poor, and charge rich people more, without much difficulty, and they would have an incentive to do so, because even if they make a lower profit on the drug for that particular customer, it is still a profit.

Even assuming that the $200,000 cost of a bone marrow transplant is mostly to cover the cost of labor and materials, rather than the cost of research and development, I think that the chances of a poor person getting a loan to cover the costs would be very good under capitalism. According to the novel, the chances of long-term success for the bone marrow transplant were around 90%. The character with leukemia is in his early 20’s, which means that, but for his leukemia, he would probably live to be about 75. So, his chances are 90% that he will live for another 50 years. This is a pretty good bet for an investor. Assume that he works for 50 years and that he can make about $30,000 per year on average, which is about $15 per hour, working 40 hours per week, 50 weeks out of the year. (This is an extremely low-ball figure in my opinion.) This means he would make $1,500,000 over 50 years. Assume he can live off of $15,000 per year ($11,000 is the approximate US poverty line). Then, he can pay $15,000 towards the $200,000 loan every year. Say that $10,000 of the $15,000 he pays every year is interest. This means the loan would be paid off in less than 40 years. The average yearly interest rate the creditor would get would be about 5% under this payment plan. (Actually, it would be a higher interest rate, since he is paying $5,000 towards principle every year, which means principle is being reduced every year, but I can’t remember how to figure the actual average interest rate over 40 years).

Five percent APR is about what you would pay towards a mortgage on a house. Certainly if someone is willing to give you a loan at 5% for a house, they would be willing to give you a loan at 5% for an operation to save your life, especially if the bankruptcy laws said that such a loan is non-dischargeable and they are allowed to garnish your wages and seize all assets if you default on the loan.

This all assumes that there are no private charities that would help a poor person with leukemia (doubtful), and that nobody else, such as his parents, friends, or family members, would be willing to sign a contract making themselves legally responsible for paying part of the loan, which is also a doubtful premise -I would certainly be willing to pay a portion of a friend or immediate family member’s loan for an operation to save their life.

This also assumes that it would, in fact, cost $200,000 under pure capitalism for a bone marrow transplant. I would note that capitalism creates the social conditions of freedom necessary for technological innovation, and reductions in the costs of products. For instance, fetal stem cell research creates the promise that we will soon be able to grow cloned organs and tissues in the lab, which will be a perfect match to your own body’s genetic code, thereby eliminating the risk of tissue rejection. But, every time medical innovators, who are the true “rainmakers”, get hit with massive punitive damages awards in court, or a new regulation by the government, technological innovation tends to dry up.

Religion or Morality?

I have been asked the following question on a couple of occasions by friends and acquaintances who tend to be less interested in philosophy and ethical ideas than I am. (I don’t necessarily consider less interest than I have in such issues to be a vice. It depends on the context of your own life.) When I discuss my atheism with them, they will ask something along the lines of: “What will keep people moral without religion?” It is difficult to answer this question with a 2-minute response, which is normally about all the time I can hope to get from them on the subject. The difficulty of a short response comes from the fact that the question presupposes some more fundamental questions. One of the more important fundamental questions presupposed by this question is: “What is morality and why do we need it?”

Before I begin, I should preface this explanation with the following: I don’t think that the moral system I am describing here is something I came up with first-hand. Most of my thinking in this area has been highly influenced by the writings of Ayn Rand. I discovered her writings at about age 15, and I have been studying them ever since. Reading her works has convinced me that she was far more intelligent than I am, and I’m a pretty smart guy, so that’s saying a lot. If you like what you read here, then I recommend that you pick up some of her non-fiction works like “The Virtue of Selfishness” and read it. However, you also shouldn’t assume that what I am writing here is consistent with what was expressed in Ayn Rand’s writings. Describing her philosophical system is not my purpose here. My purpose is to explain what I believe to be true. As a result, I have tried to stay away from using a lot of terminology that may only be familiar to someone who studies Rand’s ideas. I have endeavored to “put things in my own words”, or to express them in a way that a broad cross-section of society will hopefully understand.

The question “What will keep people moral without religion?” can mean different things, depending on what is meant by “morality”. The questioner could really mean: “What will keep people obeying god’s word so that they can get into Heaven?” If this is really what the person is asking, then the answer is: “Since god and heaven don’t exist, there is no reason for people to act like they do.”, and that would be the end of the discussion. It should also be noted that many atrocities have been committed by people who hold getting into heaven as a goal, so I doubt that this is a good motive for morality, as that is commonly understood in America. Islamic terrorists, various cults in Western nations, and various Christian sects in pre-modern times, have all shown what destruction religion can unleash. (Modern American mainstream religions are so infused with secularism, that the damage they can do is more limited.)

The questioner could have a more secular goal in mind with the question, which is something like: “What will keep people from behaving in a way that is destructive of the social order?” If this is what is really being asked, then the questioner is basically asking: “Without religion (or at least the illusion of religion) what will keep people from robbing, murdering, raping, and enslaving other human beings?” This is a better question to ask because the questioner does seem to have some secular purpose in mind, and it should therefore not be dismissed as quickly as the more mystical variant of the question discussed above. To answer this version of the question, several facts must be understood. The questioner could believe that society is important for at least two reasons: First, he could believe that “society” is a sort of entity, that is more important than any of the individuals that make it up. Second, he could believe that it is easier for him, as an individual, to live in a social setting than to live alone. This first view of society, and the individual’s relationship to it, is commonly known as collectivism. This view mistakenly holds that society is somehow “more than the sum of its parts”. In reality, society is nothing more than a number of individual human beings. This collectivist view of society also holds that the purpose of the individual is to benefit society, rather than social relations benefiting each individual living in society. Collectivism is incompatible with the needs of anyone who wants to live, which means it is incompatible with human life. History has shown this to be true, since not only were collectivist states like the Soviet Union oppressive, they were also poor compared to nations that allowed individuals to pursue their own self-interest to a greater degree. For this reason, if this is what the questioner means when he asks the question “What will keep people moral without religion?”, then I would note that I reject this brand of “morality”. (Any further discussion of what is wrong with collectivism is beyond the scope of what I am writing about here, so I refer you to numerous writings by Ayn Rand on the subject. Her novel “We the Living”, which is set in Soviet Russia, and shows how those who want to live are destroyed under collectivism, is a good place to start.)

A person who is not, implicitly or explicitly, a collectivist probably means something like this by the question: “Without religion what will keep people from behaving in a way that would destroy society, which is only important because every individual person is actually better off living in (a certain type) of society, rather than living alone?” However, to answer this question, it must first be recognized that there are several implicit assumptions expressed in the question. First, the questioner assumes that his life is important; second, the questioner assumes that social existence, in other words, the individual living in a society, is preferable to living alone; and, third, that people need to act in certain ways, and refrain from acting in other ways, to ensure that their self-interest is maximized. Examining these assumptions will help to answer the question.

Addressing the last of these assumptions first, a person must engage in certain behavior if he wants to maximize his chance of living. Long-range planning tends to maximize one’s chances of survival. Deferring some consumption now for the sake of greater rewards later is an important concept that all adults must learn, in order to live successfully. For instance: If you plant some of the seeds you have, rather than eating all of them now, then they will likely grow into more plants later, and you will have even more seeds to consume in the future. If you study hard in school now, then you will have a better job later. A person must also engage in certain behavior for another, somewhat related, reason, which is that the universe acts in accordance with natural law. In other words, things in reality have a certain nature, or identity, and they act in accordance with that nature, which is the law of causality. Examples of natural law abound: If you heat a piece of wood to a certain temperature, under certain other conditions, it will catch on fire. If you eat certain types of plants they will nourish you. Water extinguishes fire under certain conditions. Plants need light to survive. If human beings want to survive, then they must take certain actions.

The fact that human beings must take certain actions, if they want to live, leads to another fundamental observation about why human beings must engage in certain behavior. The facts demonstrating this include: People, like all living organisms, must eat in order to live. People must protect themselves from the elements, by obtaining clothing and shelter. And, people are not automatically born knowing how to maintain their lives. Furthermore, the human mind has a certain nature (a certain identity). Specifically, a person can only gain knowledge by following a specific process of observing the world around him, and reasoning from those observations. This is what is meant here when man is described as “the rational animal”. Additionally, human beings must engage in a process of thought to gain knowledge about the world around them, because they do not automatically know what is in their best interest. If you observe a child, you will see him make choices that a rational adult would not make. For instance, he will eat too much candy and get a stomach ache because he doesn’t know any better. (You can also observe some adults make bad choices, either through ignorance or due to willful irrationality.) This is because human beings must gain knowledge through a process of thought and understanding, and this includes knowledge of what is in their best interests. It must also be clearly understood that the process of thinking is not automatic, and requires effort. This means that if a person is to survive, he must develop a habit of thinking, and applying that reasoning to the task of survival.

Another implicit assumption in the question about morality and religion is the assumption that the questioner’s life is important to him. If the questioner is saying that morality is necessary to maintain a social order that is beneficial to him, then he is implicitly saying that he wants to live, and that living in society will maximize his survival. The choice to live is a basic choice, which logically presupposes all other moral choices. If one chooses to live, then one must make choices in accordance with the standard of “man’s life”. Since human beings have a certain, specific nature, they must act in accordance with that nature, which is the nature of a living man. All of the actions of a human being desiring to live should be in accordance with the standard of “man’s life”. Living by the standard of “man’s life” means living by the standard of human nature, in other words, by the standard of man, the rational being. It should also be noted that the emotional result of living in accordance with the standard of “man’s life” is normally going to be happiness. (Although it may be possible to fail to achieve this state due to factors beyond one’s control. For instance, being placed in a concentration camp or having a terminal illness may make happiness impossible, despite one’s best efforts, but these unusual circumstances are fairly rare. Living in accordance with the standard of “man’s life” is a necessary, but not a sufficient, condition of achieving happiness.) The capacity for happiness is another aspect of human nature.

A final implicit assumption in the question about morality and religion is the assumption that living in society is preferable to living alone. This observation is true. A person who wants to live and achieve happiness can normally do so more successfully living and dealing with other human beings than he can on his own, like Robinson Crusoe. It would be impossible for any individual to produce all of the material products and goods that he enjoys today on his own. Imagine trying to manufacture completely from scratch one’s own computer, TV, food, house, car, and clothing. All of these things are available without needing to know how to create them oneself because of a concept from economics known as “the division of labor”. Basically, this is the idea that by specialization and trade, human beings can produce more than if they had to produce all of the products necessary for survival on their own. Implicit in the idea of trade is the concept of private property rights: that a person is entitled to keep and benefit from the material goods he produces. Also implicit in the concept of trade is the concept of justice: that each person should only receive a benefit, in this case, material goods, because he has earned it. The concepts of private property rights and justice are principles that one must obey in order to live successfully with others in society. In addition to the material benefit one receives from living in society, it should also be noted that there is a certain “emotional” or “spiritual” satisfaction (in a non-mystical sense) from doing so. The concepts involved here are somewhat more complicated than the more obvious material benefits of living in society, but they do exist. These benefits include friendship and romantic love. These relationships also demand that you treat people in a certain way. If you constantly lie to and betray a person, then they will not remain your friend for long, because there is no benefit in it for them. If you constantly fail to live up to promises of fidelity to a lover, then they will soon seek love elsewhere. Such relationships demand that you be honest and that you keep your promises. Furthermore, the need for such relationships demands that you judge others, and determine if they are worthy of your esteem and love.

Implicit in the idea that social existence is preferable to living alone is also the condition that one will be able to create and benefit by the things one creates. For instance, if a farmer is to benefit from living in society, then he must be free to produce crops, and to exchange those crops with others for the things he needs to live. If this social condition is not met, then living alone is actually preferable. For instance, living alone on a desert island is preferable to being in a totalitarian dictatorship or concentration camp, where you are not free to produce the material goods necessary for living, and to form relationships with people of your choice. Only if the society one lives in recognizes and respects the sanctity of the individual to produce the things necessary for his existence and to engage in the sorts of relationships that benefit him emotionally, will it be a society worth living in.

Now that the implicit assumptions contained in the question “What will keep people moral without religion?” have been examined, the answer becomes simple: Morality, by which I mean the principles and standards necessary for living, is necessary precisely because I want to live and pursue my own happiness. If anything else is meant by “morality”, then I reject it as either a mystical fantasy or as a collectivist nightmare, not worthy of my time.

There are many other issues that are closely related to the proper moral system I have set forth here that should be explored in greater detail. For instance, a discussion of government, and its essential role in a proper society, needs to be discussed. I think that government is essential for at least two reasons. First, human beings are not omniscient, they can be mistaken. Second, all people must choose to act right, and they are therefore capable of making the wrong choices. This means that a person can mistakenly believe that another person has committed a wrong, and a process is therefore needed to determine when a particular individual accused of committing a wrong against another has in fact done so. (This “process” owed to all people accused of a crime is commonly referred to as “due process”.) It would also be useful to flesh out the content of morality in the following sense: What are some of the specific “principles and standards” by which one must act in order to live? I have already discussed one, which is the most important: the habit of thinking, and applying that reasoning to the task of survival, which can be described as “rationality”. But simply saying: “If you want to live, then be rational.” is probably not sufficient guidance without looking into what that means in various common situations. But, in order to avoid turning this into a book, I will leave all of that for another time.

Abolish Unauthorized Practice Statutes

This is an article explaining why unauthorized practice of law statutes should be abolished. I agree 100%. I have encountered lawyers who claimed to be proponents of laissez faire capitalism but refused to recognize that unauthorized practice laws are not consistent with capitalism and freedom of contract. Those lawyers are either hypocritical or ignorant -I am neither.

San Antonio Needle Exchange Charity Targeted

I find it hard to believe that there are actually people in the world who believe that so-called “needle exchange” charities should be illegal, but I do live in Texas, so I’m not that surprised. Conservatives here care more about enforcing Christian morality -at the point of the government’s gun- than they do about freedom for the rational individual.

The underlying principle controlling the issue of “clean needle” charities is private property rights. An individual has an absolute, inalienable right to be free to create, gain, keep, sell, and exchange property. This means that individuals should be free to create any substance they want, or any device they want, and to sell or give them away under whatever terms they choose. In practice, this means any private group that wants to give away syringe needles should be free to do so. Law enforcement in such circumstances should be limited to ensuring that the private property rights of others are not violated, which means, for instance, that people obtaining clean needles in that area shouldn’t be allowed to trespass on the private property of neighbors to the private charity. The fact that such private “clean needle” charities help to reduce the spread of disease is a logical consequence of greater freedom. Socialism, more specifically, governmental violations of private property rights, always creates death and misery. Freedom creates the social conditions necessary for promoting man’s life.

The “Will To Live”

Various news articles are reporting on a study which found that age-related disease is not necessarily an accurate indicator of which senior citizens will reach extreme old age. If I understand the article in Forbes correctly, a better indicator of who will live a long time is whether they remain disability-free. The article quotes Dr. James S. Goodwin, director of the Sealy Center on Aging at the University of Texas Medical Branch in Galveston, as saying “…’when people go on to become disabled, that’s the bad sign,’ he added. ‘Because it’s disability that interferes with your life and your ability to thrive — to be physically and mentally able to reach your potential. So really, these things we call diseases could be thought of as risk factors for disability. Because when people become disabled, that’s when they become truly sick. And that’s when they stop living long'”(Forbes, “Disability Stronger Predictor of Longevity Than Disease Is”, 2-11-2008)

It sounds like what these studies are confirming is a “common sense” idea: it’s not just your physical health that determines how long you will live, but your so-called “will to live”. People who become disabled would tend to loose this will to live because they are no longer able to enjoy their lives, and probably become dependent on others for their survival. For a human being, this state is probably, from a mental and emotional stand-point, so untenable that most of us may invariably loose our will to live. If the choice to live in the present is a “basic choice” that necessitates one’s future choices, then I think this makes sense. If one has nothing to look forward to in the future but pain and suffering, then there would be no motivation to make that basic choice to live.