THE HEIGHT OF DISINGENUOUSNESS : INVESTMENT BANKS "MAKING A DIFFERENCE"

OESTERHOUDT STRIKES

Last week, I took a walk in Brooklyn. As I made my way up Tillary Street past Flatbush Avenue, I noticed an incredible commercial message from Charles Schwab adorning a bus stop: "We want to make a difference, not just a buck. Let's make a difference together."

I beg your pardon? Do investment houses really care about making anything more than a buck? Why do people invest money in the first place? To turn one buck into two or more bucks. It's all about making bucks. If investing makes any "difference," it's a differential between the amount invested and the amount returned. And everyone wants that differential to be positive.

But let's leave investors aside for a moment. Let's focus on the institutional guys. You know, the investment bankers who craft bewildering "portfolios" designed to churn fees and hopefully yield a nifty profit for the client. Now, an investment banker exists to do two things: (1) To maximize the monetary return on a client's investment; and (2) To maximize his own fees by selecting appropriate transactions. To be blunt, it is all about money. In fact, investment bankers are more than mere employees; they are fiduciaries. They must subordinate their own interests to their clients' interests. They can even be sued for failing to make enough money, because that shows "they did not sufficiently have their clients interests at heart."

In that light, it is preposterous for Charles Schwab to suggest that investment bankers care about anything more than "making a buck." If they cared about anything else--like "making a difference"--they would lose their jobs, clients and everything else they value.

And what does "making a difference" really mean? Have investment houses suddenly lost their collective minds? Do they want to open soup kitchens or something? Do they want to build houses for the homeless? How about pay for health care for indigents? Is that the kind of "social difference" they want to make? The phrase "making a difference" implies broader service to the public, or even ethical purity. It rings with selfless nobility. Yet such things are completely antithetical to an investment house's primary mission: To make profits for themselves and their private clients. There is nothing "public" or "noble" about that enterprise.

Recent stock market scandals only weaken Charles Schwab's pitiful attempt to appear altruistic. Did Lehman Bros. care about "making a difference" when they lured investors into placing money on a housing market they bet would fail? The bottom line is that people expect investment bankers to engage in dirty dealing. It is par for the course. Worse, most investors would prefer their bankers to engage in the most barely legal conduct possible so long as that conduct yields a maximal return. That is what it means to "make a buck," not "a difference."

Commerce is about making bucks, not a difference. That is just the way it works. And it is the height of disingenuousness for anyone to suggest otherwise, let alone massive investment banks that personify the commercial spirit. If investment banks choose to "make a difference," chances are they do so in order to gain tax advantages, not to soothe their conscience.

Put thematically, the clash between "making a buck" and "making a difference" is a clash between commerce and ethics. It is also a clash between ends and means. Commerce is about ends; ethics is about means. A commercial man only cares about the bottom line, no matter how he gets there (provided he does not risk criminal sanction). An ethical man cares about the way he achieves his goal. When a person commits to making bucks, he has a distinctly result-oriented motive. But when a person wishes to make a difference in the ethical sense, he is as much concerned about the way he brings about positive change as he is concerned about the change itself.

In commerce, means are secondary. Investment houses like Charles Schwab know that. If it suddenly adopted "making a difference" as its primary business model, its clients would leave in droves. And the company's shareholders would angrily vote off the "insane" directors who approved such an idiotic way to do business. In their place, the shareholders would quickly appoint directors with a more sensible business model, namely: "Making a buck."

And the new directors would immediately yank those ridiculous posters from the bus stops.

Hey, at least they would be honest.

HOW TO BE A GOOD PERSON : IN A LANDLORD'S EYES

OESTERHOUDT STRIKES

At some point in our lives, we all wonder whether we are "good people." We live with others. We know how "good people" act. We have an intuitive sense about what makes a person "good." We even hear things about what makes a person "good:" They are friendly, kind, forbearing, compassionate, ethical, honest, caring, loving, trustworthy, gracious, forgiving and generous. "Good people" do not hurt you. They do what they say; and they apologize if they do not. They consider you at the same time they consider themselves. Aristotle and many other philosophers have written tomes about what it takes to be "good." It is an age-old question.

Of course, not everyone can agree on what is "good." You can't know you are a good person until you know what is good in the first place. What is good in one person's eyes may be bad in another. It is easy to lay down absolute standards for goodness. Yet like all ethical dilemmas, only we can say whether we subjectively feel that we have done right. Nonetheless, we can generally all agree that being "good" involves living without intent to injure other people. In that sense, being a "good person" essentially depends on positive motivation. And that positive motivation shines through in good actions toward others. Good people think selflessly; they refuse to hurt others to advance their interests. Bad people do the opposite; they are willing to hurt others to help themselves.

Being a good person is an individual lifestyle. It does not depend on how much money you make or what you do for a living. While it is possible to identify "objective" factors that hint whether a person is "good," true goodness comes from the heart, not from action alone. Enron fraud artists probably donated some money to charity the same year they robbed millions; that donation did not make them good people. No, being good is internal; and good shines through in external action. It is hard to verify. But everyone knows it when they see it.

It is refreshing to know a truly good person because they are rare. In our world, it is hard to be selfless and honorable. There are so many impulsions to discard goodness toward others in order to advance yourself. By the same token, it is hard to be patient. No one wants to wait or understand others' problems. Nor do they want to waste their time on others without reward. After all, people need to fend for themselves. They only have a limited time to get the job done. If they waste their time being nice to others, they might injure their own fortunes. And no one likes to do that. Put simply, we expect most people not to be good; our society frustrates goodness. That is why it is a welcome relief to meet a good person.

There is no formula to being a good person. Yet people throw the term around far more than they should. In many cases, they say someone is "good" solely because they act in a way that enriches them. That misunderstands what it means to be good. A truly good person acts with malice toward no one. The fact that a person acts the way another person wants them to does not make him good. To the contrary, expecting a person to act in a way that is beneficial to you undermines their value as an individual. It "instrumentalizes" them; it makes them pawns in a game you want to win. Just because someone pays you according to a contract does not make them "good." Merely fulfilling an external legal obligation is no shortcut to goodness. A good person holds to his word because it is his word, not because the law threatens him to do so.

Yet many people think that observing external obligations makes you "good." It is easy to make this mistake. After all, complying with the law seems like a "good" thing to do. But the law is indifferent to intention. And intention is the only thing that determines whether a person is good. In that sense, it is possible to seem good by fulfilling every imaginable legal standard. Yet it is also possible to have only bad intentions while complying with the law. You can be a total scoundrel yet do nothing illegal. If a person did not know you, they might say: "Well, he is law-abiding. So he must be a good person." To that extent, fulfilling external obligations can disguise ethical flaws.

I encountered an example to illustrate this easily confused distinction in the New York Post a few days ago. I read an article about some poor web designer who got run over in a Brooklyn street. See N.Y. Post, Horror hit-run in B'klyn, April 19, 2010 at p. 9. The article quoted his landlord. She spoke about his character: "He works. He comes home. He's a very good person (emphasis added)."

What did the landlord know about this guy? How did she know he was a "very good person?" She based her assessment on the fact that he works and comes home. What does that have to do with ethical goodness or pure intention? Nothing. If anything, it reveals that the landlord thinks the web designer was a "good person" solely because he went to his job, came home every night and ostensibly paid the rent. He might have been an utter scoundrel who doublecrossed his friends and broke women's hearts. Yet as far as the landlord was concerned, he was a "good person" because he adhered to his contractual obligations to pay rent. He also was a "good person" because he quietly went to his job and caused no disturbances.

I suppose this is what it takes to be a "good person" in a landlord's eyes. Landlord apply a "formula" for goodness: Have good credit; make an income; cause no trouble; pay your rent; keep your mouth shut; pay next month's rent; pay a late fee after the first. Your intentions do not matter. And "being a good person" means acting exactly the way the landlord wants. In this case, the landlord happened to like the way her tenant behaved because he did what enriched her. She morally approved him because his behavior coincided with her interests. His own ethical qualities did not influence her appraisal. It was "all about her." And that determined whether he was "good."

This gravely misunderstands what it means to be a "good person." A person is not "good" simply because he acts in a way that enriches another. Nor is he "good" simply because he adheres to contractual obligations under law. Rather, goodness is more subtle than that. There is no checklist. Action is not enough. It takes real reflection to see whether someone is good. Getting a rent check in the mail every month does not suffice to prove goodness.

Criminals and scallywags can mail rent checks, too. That does not make them good people.

But who has time to sit down and really think about character in our society? It seems we only care about character when we want to damage a foe with some embarrassing "flaw." And once again, we do that to merely to advance ourselves at their expense. By hurting them, we help ourselves. And hurting others is rarely good.

DEAD FOR A GYM BAG AND SOME DEODORANT

OESTERHOUDT STRIKES

Two days ago, a Manhattan lawyer dropped her gym bag onto subway tracks on the Upper East Side. She leaped down to fetch it. She had difficulty getting back onto the platform, then she panicked as a train came rushing into the station. Horrified witnesses froze. Some told her to lay between the rails so the train would pass over her. Most said nothing and just watched. The lawyer tried to press herself against the platform wall so the train would pass her. It didn't; the train squashed her.

Later, officials reported that the gym bag contained keys, a cellphone, gym clothes and some deodorant. See N.Y. Post, Panic on tracks doomed subway victim, March 13, 2010 at p. 5. It did not contain priceless diamonds or even confidential client files. There was absolutely no need to risk life to save it.

I recount this sad story because it represents yet another occasion on which my writing has foretold true events. Just last month, I penned a satire called "Some People are More Valuable Than Things They Drop on the Tracks." See http://reasoncommercejustice.blogspot.com/2010/02/some-people-are-more-valuable-than_01.html. In that piece, I analyzed the New York Transit System's admonishment never to chase dropped property onto subway tracks. I used satire to show that our society places disproportionate weight on property over human life. At the same time, I made my own perspective clear: That it is grotesque to assign monetary value to individual lives. Still, my own sarcasm now seems eerily macabre in light of this new incident: "Further, I understand that some customers might disregard their own safety if they drop something onto the tracks, such as an iPod or other relatively expensive object;" and "The bottom line is: Property is worth more than individual human beings."

I was trying to elicit uncomfortable laughter when I wrote those words. Anyone with a shred of compassion understands that property is petty compared to human life. Yet at the same time, it is incontestable that property wields immense influence over both our society and individual perspectives. All too often, property seems to mean more than life itself. My satire reflected on that sad truth. It dared to suggest that life was more important. Privately, I held out hope that people would respect their lives more than their property.

But my hopes fell on deaf ears. The Post story shows just how much property means to people, even in very small amounts. Here was a woman with a career--and ostensibly, something to live for--who disregarded her life to save some deodorant and gym clothes. Her property was more important to her than her existence. So she jumped after it, even as a train raced toward her. At that moment, she thought herself less valuable than her gym bag.

Perhaps there are alternative explanations. I can think of several. For starters, the Post article recounts that the victim was a "lawyer" who--according to neighbors--used to wander hallways and elevators in her apartment building "muttering to herself in a strange way." See N.Y. Post, Panic on tracks doomed subway victim, March 13, 2010 at p. 5. One neighbor even said she looked "distressed" and that she was "not 100 percent there."

Many functioning lawyers have latent mental problems. When I practiced law, I knew many "well-respected" attorneys who muttered to themselves in elevators, sighed loudly, grumbled in abject frustration and habitually balled their fists from stress. It is not an easy job. "Getting results" in court is not an exact science; in fact, it is not a science at all. There are no sure things in law practice. Lawyers live with biting uncertainty and deadlines every day. They live on a razor's edge; and they are surrounded by striving, ambitious, ruthless people at every turn. They make their living battling contentious people for money. It is an extraordinarily negative enterprise. Their success depends on chance as much as preparation. Everyone wants something from them: Clients, bosses, judges. Everyone wants results now and no one wants to wait. There is never enough time; and there is always something else to do. They live under the clock; and the clock does not forgive. In fact, no one forgives. It is a fretful, ulcerous existence. That is why it is no wonder that lawyers fall into alcoholism, drug abuse and mental illness at a far greater rate than the general population.

Lawyers on schedules are dangerously unpredictable creatures. You don't want to get in their way; they might do something impulsive. When they have somewhere to be, they get there at all costs, even if it means taking absurd chances with their own lives. I own recalled my uncomfortable days in law practice when I read the Post article. I remembered what stressed-out lawyers are like. My memories helped me understand why this poor woman jumped on the tracks: She was in a hurry; she was trying to squeeze in the gym during her busy day; she did not want to wait for help to get her bag because that would throw off her schedule; if she got behind schedule, she would have to make unpleasant phone calls to disappointed superiors; she wanted to get home before 9 PM; if she waited for help to get her bag, she would never finish her day; and she really wanted to finish her day on time.

On an impulse, she jumped onto the tracks. She did not want to wait. She did not want to make those phone calls. She did not want to fall behind schedule. So she took matters into her own hands and died for deodorant.

I am glad I don't practice law anymore. And no matter how much my satires presage reality, it really saddens me when they do. I am not proud of it.

In the end, it's hard to exaggerate anything to satirical effect. Reality always sees your bet, no matter how high you make it.

DO YOU LIKE REWARDS? WHAT A STUPID QUESTION

OESTERHOUDT STRIKES

Everyone likes rewards. Everyone likes receiving things they like. We are programmed to like rewards. It is in our nature to seek them. It is as natural as hunger or thirst. We rarely do anything unless there is some reward for our efforts. Rewards induce human behavior. As such, they drive all economic activity. After all, who would work if he knew he would receive no pay? Who would work harder if he knew he would receive no greater prize for the extra effort?

All this may seem obvious. But I mention it because Citibank® actually poses the question in its latest advertising campaign. On billboards and on computer screens, Citibank® queries: "Do you like rewards? If you do, you should open an account with us." It then lists various perks that new accountholders receive, like a $50 (taxable) bounty, a potential $100 (taxable) payment for new customer referrals and retail "points" that accumulate whenever they use Citibank® debit cards. So if you charge enough Starbucks® coffee on your card, you'll get a $10 "gift" one day.

Those are the "rewards" they are talking about. And who doesn't like rewards?

People love rewards because people are basically selfish. Rewards reflect personal gain; when a person wins a reward, he benefits. He might receive money or gratification. He might receive an emotional payout. No matter what form a reward takes, it appeals to men's base instinct to profit. For that reason, rewards induce behavior. One man offers a reward in order to persuade another man to act as he wishes. He knows that men like rewards, so he knows men will adapt their behavior to get it. This is no different from any other mammal. Dangle a leftover steak in a dog's face and you can it to do every trick in the book.

Yet this basic mammalian urge for rewards forms the basis for all purposeful economic activity in our "civilized" world. The only difference between men and dogs is that you need to dangle paychecks in their faces, not leftover steak. Then they'll do whatever tricks you want.

Put another way, rewards make us human. They might not bring out the best in us, but they are still central to human existence. People live for rewards. Why else would they do anything? Nature intended it that way. After all, why would human beings--or any animals--propagate if there were not some biological reward for propagating? People like sex because it offers an intense physical reward. Without the reward, no one would want to do it. Nature understands how animals think. And man is just another animal: He needs a selfish incentive to do anything. He needs a reward.

When it comes to rewards, man is different from other animals in a crucial respect: He can manipulate rewards to exploit his fellows. Through language and superior resources, a shrewd man can persuade a weaker man to do just about anything for the right reward. And the shrewd man can dictate the conditions under which the weak man obtains a reward. In sum, those conditions reduce the weak man to the shrewd man's control. Rewards, then, become an instrument of tyranny as well as enterprise.

In modern language, exchange influences rewards. Rewards provide a basis for bargaining. In English, for instance, the dictionary says that a "reward" is "something given in return for good, or, sometimes, evil, or for service, or for something lost." Webster's New World College Dictionary (4th Ed.). Rewards, then, are given in return for something else. They must be "earned." As such, superior men can easily manipulate the terms under which they give rewards. They know everyone wants a reward. So they exploit that natural desire to dominate anyone who seeks one.

English is not the only language that implies bargaining in "rewards." German, too, suggests that rewards must be "earned." The closest translation for "reward" is "belohnen," which means: "to compensate a person for his help or effort." Wahrig Deutsches Wörterbuch S. 249 (Ausgabe 2008) (my translation). "Belohnen," in turn, builds upon a simpler German word: "der Lohn." "Der Lohn" means "wage," or, more specifically: "payment, consideration or compensation for work performed." Id. at S. 955 (my translation).

As in English, German reveals that "rewards" don't fall from trees. They provide incentives for work and service to others. That means the person who gives rewards has the power to dictate the terms under which others will receive them. Rewards give power. After all, the master has power over the dog because he has the leftover steak; he can demand any behavior before he gives it to the dog. In the same way, the employer has power over the employee because he has the paycheck; he can demand any behavior before he gives it to employee. In both cases, men and dogs want rewards. And they do what they are told to get them.

Just like dogs, all men want rewards. They want to increase their wealth. They want to feel good about themselves. They want to experience positive emotions. They are prepared to do tricks to get them. Rewards provide a reason to live. They induce behavior. Sometimes they induce good behavior. But certainly not always. Every criminal seeks some reward. Personal gratification motivates genius as much as it motivates destructive cruelty. In that sense, rewards cut both ways. Offer a man $10,000 and he might write a beautiful essay in a writing contest. Offer another man $10,000 and he will kill anyone you choose. The principle is the same: Rewards induce behavior.

But it is just dumb to ask: "Do you like rewards?" That is the same as asking: "Do you like eating a meal when you're hungry?" Everyone does. It is perfectly natural. It might not be very grandiose to spend your whole life seeking rewards. But it's not very grandiose to spend your whole life eating meals, either. Yet both are quintessentially human activities.

LAWYERS ARE BAD MEN AND CLIENTS ARE ONE-DIMENSIONAL SIMPLETONS...AND THERE'S NOTHING WRONG WITH THAT

AN ESSAY

Over the last few days, I have been paging through my old law school ethics casebook, The Law and Ethics of Lawyering (Foundation Press 4th Ed. 2005). When I took this course in law school, I immediately recognized it was different. No other course investigated ethical quandaries in law practice. Sadly, our professor seemed less concerned with the abstract philosophical dimension to the course than with its technical aspects. After all, it is hard to get lawyers to understand ethics because lawyers understand law.

Contrary to popular belief, law and ethics are distinct from each other. Ethics are internal, subjective conceptions concerning the "right" decisions to take in life's ever-changing circumstances. Ethics depends on individual conscience. Law, by contrast, is nothing more than an official collection of written rules that a State formulates to govern external behavior. Law does not require conscience; it requires only technical compliance.

Applying these definitions, it is easy to see that a person can act legally without being ethical at all.

I have written at length about the incongruous relationship between ethics and law. The relationship is uneasy not just because ethics and law stand at opposite philosophical poles. Rather, the relationship is doubly uneasy because "lawyering" in America is adversarial. It is hard to adhere to ethical norms when you are constantly trying to "beat" your opponent and win money. By the same token, American lawyering is extremely commercial. Successful lawyers win their cases because they want to make money. This makes them "result-oriented." That's bad for ethics because ethics is less concerned with results than with means. An ethical person refuses to act in certain ways or even conceive certain actions. Put another way, ethics disqualifies particular means from consideration. Yet a "result-oriented" person--like the average American lawyer--refuses to take any means off the table. When you want to win, you don't refuse to play all your cards.

Yet this is how lawyers must think. After all, they serve the law, not ethics. The law prescribes conduct through language. Lawyers advise clients how to exploit ambiguities in language to avoid the law's reach. All language is imperfect. The law is no exception. Lawyers seize on the law's linguistic imperfections every day to make a living. How can ethics survive in an atmosphere where everyone just wants to game the system?

Sure, lawyers all must take "ethics courses" just like I did. But teaching "ethics" to a lawyer is something like teaching dining room etiquette to a wild animal. Law students take the ethics course because they must: It is required to graduate. And even then, most students view the course as a meaningless formality. Rather than using the course to cultivate ethical sensibilities and become "ethical people," they learn how to read "official ethics rules," then tailor their behavior to avoid censure from professional boards. In essence, then, the "ethics" course devolves into yet another course on law: How to read written standards and make arguments designed to exploit weaknesses in language.

But I am not your average guy. I might have done well in law school, but I hesitate to call myself a "lawyer." No, I am too interested in theory to be a lawyer. I am too interested in ideas and philosophy to blindly advocate a client's selfish financial interests until I die or retire. Put simply, I think deeply about the law and its relationship to civilization. That disqualifies me from everyday "law practice." My commitment to theory might drastically reduce my income. But it dramatically increases my understanding about the world we inhabit.

When I read text from my old ethics casebook, I relate it to all my other ideas about law and civilization. Recently, for example, I re-read Oliver Wendell Holmes' musing on the lawyer's role in American society. He said: "If you want to know the law and nothing else, you must look at it as a bad man, who cares only for the material consequences which such knowledge enables him to predict, not as a good man, who finds his reasons for conduct, whether inside the law or out of it, it the vaguer sanctions of conscience." The Path of the Law (1920) at p. 169.

Holmes' remark closely tracks my own views about the law and human nature. In short, Holmes understands that the law essentially serves "bad men" who just want to know whether they will lose their bodily freedom or their money, not "good men" who seek answers in the "vaguer sanctions of conscience." In essence, Holmes suggests that the law is fundamentally cynical; it merely provides explicit written standards that enable men to modify their behavior for maximum personal gain. And because the law is cynical, so too are the men who empower it: They just want to enrich themselves.

Holmes calls such men "bad." But in fact, he just means "selfish." It is not necessarily morally "bad" to be selfish. But no one would dispute that "selfishness" is neither noble nor especially praiseworthy. No one remembers men who just want to remain free and make the most money they can. They are selfish; and the law exists for them. Bad or not, the law advances an entirely selfish view of human nature. And there is nothing really wrong with that, because the law holds power over money, property and bodily comfort. Those are selfish men's concerns.

If the law only serves "bad men," where does that leave the "good men?" Holmes draws an important distinction here that mirrors the distinction between law and ethics. He says the law stands for selfish men and their petty motivations, not men who find "reasons for their conduct…in the vaguer sanctions of conscience." By that reasoning, "good men" must have nobler motivations than property acquisition and freedom from jail. "Good men" must craft their lives to follow the "vaguer sanctions of conscience," not just cynical legal commands. In essence, then, "good men" are ethical. Unlike law, ethics is internal. It depends on conscience. An ethical man looks within his own heart to know whether something is right or wrong, not a statute book. He does not exploit ambiguity to slither away from consequences. That is noble and "good."

Does this mean that a person who depends upon his own conscience has no place in the law? It almost appears so. After all, to properly serve the law, one must be cynical. One must look at it as a "bad man." If the law enshrines the "bad man's" motivations, then conscience apparently has no place in it. An ethical man might be cynical about others' motivations. But he will not always act cynically. True allegiance to the law, however, requires constant attention to cynical concerns. Litigants would not win their cases if they suddenly started following their own conscience rather than their hunger for money. If ethics means allegiance to conscience and "higher" motivations than the body and property, then it really has little place in the law. Holmes said as much.

Later in my casebook, I ran across an article that criticized Holmes' "bad man" argument. See William H. Simon, The Ideology of Advocacy, 1978 Wis. L. Rev. 29. In it, Professor Simon contended that Holmes' cynical conception about law compromised clients' "individual dignity" and "personal autonomy" because it required lawyers to assume that all clients have the same ends: Property and bodily comfort. The professor found it distressing that the law induces lawyers to both presume what clients want and "to lobby for a peculiar theory of human nature." Id. at 30-52. He found it lamentable that the law basically reduces "individual clients" to one-dimensional "hypothetical people" with a "few crude ends," namely "maximization of freedom of movement and the accumulation of wealth." Id.

I strongly disagree with this critique. First, while I agree that human individuality is precious, a person cedes any claim to uniqueness the moment he seeks legal redress. When a person invokes the law, he is not trying to soothe his conscience or prove his individuality. Rather, he is trying to win as much property as possible or to avoid going to prison. No matter what a client says, "justice" and "right" are not the main objects for his decision to take legal action. He takes legal action because he seeks to gain what the law can offer. The law does not offer abstract justice or right. It offers property and freedom from bodily restraint. This is all a person can hope to win from legal intervention. It is sheer ignorance--or sheer delusion--to believe it can deliver anything else. Courts do not award "good feelings" or a "sense of justice" with their rulings. No, they enter judgment in particular monetary amounts. If a client wants a spiritual reward, he should go to a church, not a lawyer's office.

Second, there is nothing wrong with imputing goals to a client. The law is not about conscience. It is not about ethics. There is a reason courts are called "Courts of Law," not "Courts of Ethics" or "Courts of Conscience." Clients could rightly complain about sacrificing their individuality if they sought to voice their conscience or their ethics. But when they file suit in a law court, they necessarily subscribe to far baser values. The law can deliver only money or bodily freedom. There is nothing wrong with imputing those base goals to a client, because those are the only things he can hope to gain from the law. If this renders lawyers "lobbyists for a peculiar view of human nature," it is not the lawyer's fault. It is the law's fault. The law is about cynicism, not conscience.

That is why the law really does exist to serve "bad men." And that is also why "good men" have little place in it. Once conscience enters the picture, law supplies no answer. Only ethics can appease the conscience.

Consequently, ethics and law do not mix. I don't care what any Bar Association, court or law professor says to the contrary. Law is external compliance. Ethics is conscientious belief.

And law cares not a fig for either conscience or belief.

A PRIVATELY-OWNED FIRE DEPARTMENT MEANS GREATER SAFETY FOR ALL

AMERICAN ENTREPRENEURS' SERIES

By : Mr. F. Harrison Feuerbach, M.B.A., C.P.A., Chairman and Chief Executive Officer, Wellstone Solutions & Financing Co., Inc. (a Delaware Corporation specializing in service to private-sector incursions into public markets) (1991-present); Member, the Princeton Club of Greater Washington, D.C. (1975-present); Spokesman, Investors for Freedom, a private-interest organization committed to deregulation and economic self-sufficiency (2003-present); Antique Coin Collector; Owner, Harry's Red-Hot Frank Stand (1983-present), Chicago, IL; Victoria's Secret Enthusiast.

It is hard to read the newspaper without encountering a story about brave firefighters. We hear about daring rescues and self-sacrifice. We hear about fearless men who risk everything to pull children away from deadly flames. We even hear touching tales about firefighters who save treasured pets from certain death. On 9/11, firefighters' sacrifices elevated them to near-mythic status in our society. In New York, they even publish a calendar in which they model their flawless bodies for all to admire. Put simply, firefighters enjoy hero status.

People like firefighters because they fight for everyone. They do not distinguish between rich and poor. They risk their lives to save people from burning buildings. That is a noble enterprise. And they do it because it is "a public service." The public likes firefighters because they think firefighters are "working for them," not just for a paycheck. There is a "firefighter spirit" that many find extremely appealing. After all, most people in life just want more money. Firefighters, by contrast, take fulfillment from saving lives, not expanding their bank accounts.

But do you have any idea how expensive it is to maintain a fire department? Fire trucks and fire stations cost money. Every time a fire truck goes out on a call, it costs hundreds of thousands of taxpayer dollars. Every time an ambulance hauls some burn victim to the hospital, that's another few hundred grand. And that's not all. Just keeping firemen fed and ready costs a fortune--those guys can eat. In this sense, while people may admire firefighters for their public service, they sure are paying for it.

In the final analysis, we maintain fire departments because we trust them to keep us safe. Expressed in market terms, fire departments sell safety and safety-related services. If a fire department cannot keep us safe, it is not doing its job. A fire department is "good" if it delivers effective safety-related services in a timely manner. That is really what it's all about. All the mythology and hero worship are really just secondary to the main issue: Selling safety.

In America, it is always more efficient to entrust market activity to private actors. Yet for some reason, municipalities all over the country have decided that fire departments should survive on the public dole. This makes no sense. If municipalities want greater safety, they should open up the market to private entrepreneurs who can compete to deliver more safety to the buying public. At the same time, when private entrepreneurs compete, they have a direct financial interest in satisfying the consumer. That leads to greater innovation and development. Think about it: Because firefighters never faced private competition, they just kept using the same fire-fighting technology that their great-great-grandfathers used: They just spray water on them. But if private firms compete to fight fires, who knows what miraculous new fire-squelching technologies they will discover.

It is time to break the hypnosis surrounding public fire departments. It is time for innovation and customer satisfaction. It is no excuse to say that fire departments have "always been public organizations." In America, we do not rely exclusively on tradition to light our way on modern questions. Rather, when it comes to product delivery, we trust the market. Fire departments deliver a product to market. There is no reason why private firms should not have a chance to deliver a better one at a better price. When they do, the public will receive better fire protection. Consumers will also have greater choice in deciding which fire companies to hire for their safety needs. And firefighters will have a real financial interest in putting out fires. What better way to motivate a fireman to put out a fire than to promise him a healthy profit for a job well done?

We believe that private fire departments will stop fires far better than public ones. No longer will citizens wait for fire trucks to show up. No longer will they tolerate antiquated firefighting methods. And no longer will they pay exorbitant taxes to sustain outmoded "public servants." In a word, when private enterprise competes for business in any area, the public always wins. In this case, the public will benefit from competition in fire protection because the public will be safer. Hiring private fire departments is the answer.

We recognize that it will take some time for the public to adjust to private fire protection. After all, people are accustomed to free public fire protection services. When their houses catch fire, they expect the fire department to show up, put out the fire and charge in to save their lives. They do not expect a bill for those services. After the fire, they simply thank their rescuers. Then they start picking through the ashes to put their lives back together.

But private fire protection services require different protocols. Efficient safety delivery services are not free. In order to enjoy top-notch fire protection technologies, private fire department customers will need to pay first. When a house catches fire, the owner must come downstairs to negotiate a price with the firm's fire safety delivery sales representative. Private fire safety delivery personnel will not begin work until the affected homeowner signs a contract promising to pay the firm's rate, as well as to indemnify all firm employees against harm or injury. Firm employees will not begin fighting the fire until they verify the homeowner's credit and back account information. Homeowners with insufficient funds or credit will not be able to obtain professional fire protection services.

These protocols may surprise citizens accustomed to free public firefighting services. After all, it may seem callous that firefighting professionals would let children burn to death simply because their parents cannot pay the firefighting bill. But timely payment is essential to private enterprise. The entire system would collapse if private businesses do not receive timely compensation for their services. No business would have an incentive to deliver top-notch private fire safety services if it were not assured that customers would pay. As we saw, it is not cheap to run a fire department. Unless customers pay fair market rates for fire protection services, private enterprise would not effectively do its work. Thus, affected homeowners must pay in advance for fire protection services, even if that means their family burns in the meantime. Ensuring payment is the only way to assure vigorous, efficient free market competition.

In the end, firefighting is about safety. Safety is a market product like any other. Private enterprise always delivers products more efficiently than public bureaus. Just as private security firms sell security more efficiently than the police department, so too will private fire protection firms sell fire protection more efficiently than the fire department. Some may find it unfortunate that private services cost money. But money makes things get done so much better.

And the fact remains that better services go to those who can pay for them. Private firefighters do their jobs twice as hard as public firefighters because they actually stand to gain something beyond a bum city paycheck; if they work hard, they might even earn shares in the company. That means private firefighters deliver much more safety than comparable public firefighters. In sum, then, private fire departments will deliver greater safety than public ones.

Privatizing fire departments is an American solution to a genuine national problem. While some say that public service is its own reward, we must disagree. For every critic who claims that a public fireman comes home happy that he "helped people" on the job, we will show you a private fireman who comes home far happier that he just made $100,000 for rescuing children and an antique billiard table. When firemen work harder, everyone is safer. Public service does not induce firemen to work harder. After all, what incentive does a fireman have to put out more fires if he knows he'll get $41,000 pretax a year no matter how many fires he puts out? Why not entice firemen to work harder? To do that, we must make it worth their while. That means instilling the spirit of private enterprise in our firemen. And to do that, we need to make fire departments for-profit ventures.

America does not want governmental interference in private business arrangements. If a product can be sold, Americans want fair prices and innovation, not long waits and lackluster service. Fire safety is a product like any other. In that light, there is no reason why the private market cannot deliver it far more effectively than some ponderous government bureau.

Fire safety is about protecting people. It's time to let Americans choose how to protect themselves from fires. Public service is not the answer. Only motivated, private firefighters will deliver quality fire safety services at the price Americans deserve. It's time to make firefighters into something more than heroes. It's time to make them entrepreneurs with a stake in quality product delivery.

This is not just about saving people from fires. This is about the freedom to choose. Choose private enterprise. You and your children will sleep better in the knowledge that efficient, cost-effective fire protection services are just a phone call away.

Stop the inefficiency. Stop the stagnation. Privatize NOW.

WHAT WOULD YOU DO FOR $40,000? THE PRICE OF BELIEF

AN ESSAY

Sometimes I wish I weren't so cynical. Cynicism is my life philosophy. Although it almost invariably leads me to the truth, I don't really like it. Although it has predicted the future for me more than once, I wish it hadn't. After all, cynicism assumes that everyone has selfish motives and will ultimately take action to satisfy their own interests. That is a pretty bleak view. Yet in our obligation-filled commercial world, it is a consummately realistic one.

I wish I weren't so cynical because I want to believe that everyone does not have a price. Whenever I think about cynicism, I inevitably struggle with principles. After all, a principle stands at odds with expediency. Self-interested people are always "expedient" when it is necessary to fulfill their aims. Principles, by contrast, are inflexible; they do not bend to expediency. Yet all too often in history we hear about "principled" men who stood up for larger ideas to a point, then caved in order to enrich themselves. In other words, every man--and every principle--has a price. The question is merely how much money it takes to convince a man to abandon what he believes.

As a cynic, I find it almost axiomatic that men sell their principles for the "right price." If human beings truly have innately selfish motivations and act ultimately to satisfy their own interests, then no larger idea could ever induce them to ignore themselves. It is natural to expect men to sell out or betray their beliefs when enough gold appears on the table. Although popular mythology teaches us to revile men who do this (the Judas story is the classic Biblical example), we are never surprised when it happens. We live in a difficult world. No one wants to go hungry or die. If it came between adhering to principle and eating, how can we blame a man for simply "betraying what he believes?" It is easier to revile a man who sells out simply to profit. But sometimes men sell their beliefs just to eat or sleep--or to save their families.

Yet we admire men who refuse to compromise their principles for a price. We admire them precisely because they are so rare. Again, cynicism provides a good way to understand why we deify "martyrs" like Jesus Christ and Saint Thomas More. Both men died because they refused to abandon their principles despite pressure. Both had opportunities to take payment and shut up. Both knew they would die for refusing to renounce their beliefs. And they still refused.

From a cynical perspective, we assume that men will always sacrifice their principles for personal gain or to save themselves. Overwhelmingly in human experience, that is what happens. But when it does not happen, we immortalize the person who resisted the impulse to be selfish. Put another way, when a person defies the cynical expectation to act only for himself, he becomes a saint-like figure--or a saint outright. This is what happens when men adhere to their principles. It leads to eternal honor. And that explains why both saints and honor are rare. Everyone has a price: But those who don't become legends.

But I'm not writing about legends today. I'm writing about everyone else who does have a price. And while it might be pathetic to have a price, I argue that it is completely forgivable.

Why is it forgivable to be a dishonorable person who abandons principle whenever profit beckons? It is forgivable because we inhabit a world that expects us to value profit more than honor. No one pays our way in this life. We learn early that we must make our way through the commercial thicket by any means necessary. Without money, we are finished. We can't pay our rent, we can't feed our children and we can't eat. We spend our lives struggling to find ways that yield money; and we never get enough. We learn that profit is good because profit protects us from hardship. When we profit, we stave off bill collectors, bankers and landlords. We feed our children. We increase our comfort and avoid worry. We stay warm. By eliminating a key source for worry, we actually gain the capacity to enjoy ourselves--at least in theory. We are only human; we have bodies. Profit protects our bodies from ruin. If it comes between preserving our bodies from ruin and adhering to a principle that could cost us our bodily comfort, the natural human response is to preserve our bodies.

Only saints spite their bodies for their beliefs. For everyone else, a price will suffice to buy belief.

Some people require less enticement than others. Potential profits not only dissuade men from adhering to principle. They also encourage men to brutalize their fellow man. Profit underlies criminal motivations crime as well as dishonorable ones. In the movie Fargo, for example, two ex-cons agree to kidnap a man's wife for $40,000. Various difficulties intervene and they murder three people in the process. Due to these "unforeseen complications," they demand $80,000 rather than $40,000. Before the drama ends, another two people die and no one makes a dime. The detective who arrests the killer--exceptionally played by Frances McDormand--then says: "All that for a little bit of money. There's more to life than a little bit of money, you know."

That may be so. But money motivates just about everything that people do, even murder. Contract killings have price. Lives--like everything else in the free market-- have a price, too. How much does it take to encourage someone to kill another? Is $40,000 too much? Some people in American society make $40,000 a year; others make it in one day. How about $10,000? $1,000?

This might all seem macabre. Still, the fact remains that potential profits bring out the worst in people. As bad as that is, however, I still think there is a good explanation for it: People in our society learn to be desperate for profit. Without it, they think they will come to ruin. So for those closer to ruin, there is a greater motivation to do unspeakable things for relatively little money. There might be more to life than money. But try telling that to those who don't have much. They are willing to do just about anything for what seems a pittance to others.

How much potential profit would it take to convince the average person to commit murder? How about lying? How about sacrificing integrity or honor? How about acting in a way that clashes with one's conscience? What if a job requires a person to violate his conscience, but if he loses the job, he loses his livelihood? How much does a conscience cost?

Against this background, can anyone resist a sufficient price? Is anyone noble enough to ignore themselves? That's my real question. All I can say is this: Cynicism tells me, as a general matter, that people can be bought. But there are a few extremely rare cases in which they cannot. I find this sad because it really does not take much for a stronger person to cast aside a weaker person's beliefs. Beliefs and conscience are individual. They are subjective. They belong to the person who holds them and no other. If a "little bit of money" is all it takes to sweep them away, what does that say about the value of individuality in our society? Where are the courageous people? Where are the people who will not abandon their beliefs for a price?

All I know is that they are not in the United States Congress.

SOLDIERS ARE SOCIALISTS, EVEN IF THEY DON'T KNOW IT

AN ESSAY

Last summer, I wrote an essay arguing that the United States military is essentially a socialistic institution. http://reasoncommercejustice.blogspot.com/2009/06/military-is-socialistic-because-it_25.html. I made that conclusion because American military authorities "care about men under their command" both in war and peace. I pointed out that soldiers live a "rarefied" existence insulated from harsh commercial reality. That insulation allows them to focus on larger ideals, like "honor" and "political missions." Soldiers also receive free medical care, housing and living necessities from the government. As a whole, these characteristics led me to conclude that the military is "socialistic," even if its armed service protects a capitalistic society that condemns "socialism."

I continue to believe that the American military is a socialistic institution. In fact, I believe it more now than I ever did. When I wrote my previous essay, I focused primarily on larger themes to identify socialistic currents in American military life. But the military is not just abstractly socialistic; it is socialistic right down to the men themselves. It is socialistic in spirit as well as action.

To be clear, when I say "socialistic," I mean that the military provides a comprehensive security net for everyone under its control. But this means far more than merely providing tangible benefits. It also means that people in the military regard their fellow man differently than the way comparable civilians regard others. In commercial American civilian life, other human beings represent potential profits. Civilians have to think this way. Unlike soldiers, they do not get free rent, free health insurance or free child care. They have to fend for themselves. They cannot worry about their fellows too much or they will lose their own commercial struggle.

In the military, however, soldiers must care about each other. In combat, men treasure each other. They do not simply abandon their buddies when they get hurt. They are never indifferent. They put themselves in harm's way to ensure that their comrades survive. They even risk death to retrieve the bodies of friends killed in action.

I find this especially socialistic. Care for one's fellow man is a bedrock in socialist philosophy. In the military, individual soldiers practice that care every day. It is not obligatory care: Soldiers are not related by blood or even bound to each other by contract. No, they are simply comrades in arms. They refuse to allow ill to befall their fellows and they risk all to save them from it. The emphasis lies on one's fellow man, not on oneself. That marks a key distinction between both the military and civilian life, as well as between socialism and capitalism.

Karl Marx criticized capitalism because it tended to separate human beings from one another. When every man must selfishly pursue his own economic fortune in a free market system, he naturally begins to regard his fellow man as a commercial instrument, not as a human being with equal dignity. Although Marx wrote at length about economic esoterica, his main criticism was humanitarian: Capitalism distances human beings from one another and leads to human exploitation.

But in the military, soldiers learn to live with each other and depend on each other to an extent almost unrecognizable in civilian life. They do not distance themselves from each other; they come closer together. While such tight cooperation might reflect the most effective way to accomplish military missions, it also reflects a fundamentally humanitarian outlook. In the movie Black Hawk Down, for instance, one character echoes many "real" American soldiers when he explains why men serve in the military: "We're in this for the guy next to us." In other words, military life leads to a deep care for one's fellow man, no matter what the ultimate political objective may be. In fact, for individual soldiers in combat, "the guy next to us" is everything.

This is no Hollywood sentiment. This is really how soldiers think. They always have, and not just in the United States. Soldiers sign up for additional tours not because they care about the geopolitical ramifications of their deployment, but because they do not want to abandon their friends. They care that much. They care so much that they willingly face death in order to make sure their friends will not face death alone. "We're in this for the guy next to us."

That is a noble motivation. And that is why it is distinctly un-American. In American civilian life, no one really lives "for the guy next to us." No, most people live for "me." Think about catchphrases that encapsulate success in American civilian life: "It's all about me;" "I'm gonna do what I gotta do to make it;" "I need to think about Number One." These phrases might describe effective ways to achieve success in a capitalistic society. They might even yield riches and fame. But there is nothing noble about them. "The guy next to you" is irrelevant to the man who says "It's all about me." Yet that's what it takes to succeed in a society committed to individual profit. And that's the attitude people must take toward their fellows in order to survive. In the end, the motivation necessary for success in American civilian life leads precisely to the danger that concerned Marx: Human alienation and exploitation.

There is a strange irony in all this. Americans praise the military all the time. They thank soldiers for their service. They ascribe immensely positive results to their work. But military life could not be more different from the civilian society soldiers protect. It takes a fundamentally different outlook to be a soldier than it does to be an entrepreneur. What motivates a soldier does not motivate an entrepreneur. What matters to a civilian does not matter to a soldier. Strangely enough, conservatives are the first ones to talk about a "strong military," yet reject socialism across the board. If they just looked at the way military personnel think about their fellow men, they would see the foolishness in that position. The military does not just practice "economic socialism" by ensuring material welfare for its men. It also practices "individual socialism" by inculcating a spirit of concern in every man for the well-being of his fellows. Those sentiments should enrage an American conservative. Yet they keep on saying: "God bless our troops."

God bless those socialists? What a laugh.

In sum, there is more to socialism than tangible social welfare programs. Socialism means true respect for one's fellow man. A socialist does not just concern himself with spending money on people who ostensibly "don't deserve it." A socialist also thinks a certain way about other human beings. He refuses to leave anyone behind or let his neighbor suffer. He does not view him as a potential profit, but rather as a friend who needs help. There is a motivational element to socialism that is--in essence--very noble. There is nothing "evil" about it, no matter how much we learn that "socialism" is a "dirty word." After all, how could something be "un-American" if our own soldiers practice it?

Socialism is about caring for others. Capitalism is about caring for oneself. There are essential motivational differences. When a soldier says: "I'm in this for the guy next to me," his motivation is clear: It's not about him. It's about the other guy.

Why is this a bad sentiment? It might be socialistic. But it's also Christian. And noble, too.

TRAMPLED TO DEATH FOR A 10% DISCOUNT SALE

OESTERHOUDT STRIKES

On November 28, 2008, the Wal-Mart in Valley Stream, N.Y. braced itself for "Black Friday," the notorious shopping frenzy the day after Thanksgiving. It hired temporary employees to work longer hours. It also planned to open earlier and close later. Still, that was not enough to placate a mob of predawn shoppers who assembled at the front door long before the slated 5 AM opening time. These shoppers did not want to wait until 5 AM, so they smashed down the door and stampeded through the entrance. In the process, they trampled a temporary employee to death.

I presume they went straight to the discount aisles and did not even notice what they did.

I read about this story in the New York Daily News. See N.Y. Daily News, Wal-Mart set for shopper frenzy, Nov. 12, 2009 at p. 6. The News reported that Wal-Mart faced prosecution for its "wanton and willful disregard" for its employees' safety. Rather than face crippling fines, however, Wal-Mart struck a deal with prosecutors. It promised to implement better "crowd control measures" this year than it did last year.

This story interested me for two reasons. First, it confirmed to me how truly violent people can be when engaging in commerce. Second, it reminded me that the criminal law does things beyond merely punishing human bodies and individual bank accounts.

I felt genuine horror when I reflected on these rabid shoppers. Why does commerce lead people to behave like this? I have written that commercial language is "warlike:" the words "bargain," "purchase" and "haggle" all derive from violent etymological roots. But language alone does not explain why people smash down doors and crush hapless employees underfoot on their way to bargain bins. Something else is at work here. While language may reveal commerce as a warlike enterprise, the activity itself lends itself to contentiousness, strife, cruelty, selfishness and violence.

What was so important to these shoppers? Why was it so important to buy a few Holiday trinkets before the other guy? What emotions did they feel as they battered down the door and heard the employee struggling to escape from under their feet? Put simply, what did commerce do to these people? When they woke up that morning, they were law-abiding middle class drones. But by 5 AM they had transformed into a stampeding horde indifferent to life and death.

Human beings are acquisitive creatures. They like laying their hands on as many objects as possible and calling them "mine." Capitalist apologists even say that this "impulse to own" gives us the greatest economy the world has ever seen. They say it is pointless to deny it, and that communist countries fell because they tried to meddle with humankind's natural propensity to "competitively strive for ownership."

Property law also taps into this maniacal human urge. It proceeds on the reasoning that people will only work hard in society if they know their toils will translate into more "stuff" to call "mine." John Locke called this "The Labour Theory."

Maybe human acquisitiveness does give us the greatest economy in the world. Maybe it does lead people to work harder. Maybe it leads to innovation and greater good for all. But boiled down to its core, it is pretty damn ugly. It leads to scenes like the scene at Wal-Mart last year. I am not saying that human acquisitiveness does not bring direct benefits to society. I am merely saying that there is nothing noble or even attractive about it. The idea that people are prepared to smash down doors and trample others for a few Holiday savings is proof enough that commerce brings out some pretty horrible impulses in our human fellows.

On the second question, I found it interesting that no one went to jail for this outrage. After all, who was really liable? Everyone pointed the finger at Wal-Mart. But Wal-Mart is not a living human being; it is a noncorporeal corporation, a fanciful "legal person" with intangible rights and responsibilities. In the popular understanding, criminal law inflicts pain on "bad people" as "social revenge" for some dastardly choice they made. But how do you inflict pain on a non-human--even non-biological--entity? Corporations cannot be imprisoned, or tortured, or executed. They cannot even feel scared or anxious. Only living things can feel emotions.

So why did the prosecutor pursue Wal-Mart for the stampede? What could the criminal law do to inflict pain on a corporation? Interestingly enough, the criminal law has other, more subtle powers than merely inflicting bodily pain on humans. It can also target property, and corporations really like property. Corporations are private profit-making machines; they exist solely to enrich the people who own shares in the entity. To make profits--and to fulfill their raison d'etre--corporations need to earn more income than they lose in liabilities. The criminal law can impose fines on a corporation. Fines are "liabilities." If a fine is large enough, it could gravely impact the "income/liability" ratio and lead (gasp) to a quarterly loss.

In this case, Wal-Mart's management obviously did not want to suffer a loss. After all, corporate managers lose their jobs--and fat Christmas bonuses--if they report losses. They knew that a criminal fine would lead to a loss, so they bargained with the prosecutor to avoid that fate. The prosecutor took the opportunity to wring some public good from Wal-Mart's private misdeeds, so he insisted that Wal-Mart "implement greater safety controls next time." Thus, by threatening the corporation's monetary lifeblood, the prosecutor extracted a public benefit from Wal-Mart's transgression.

In this example, we see how the criminal law does more than merely punish individual bodies to vent social revenge. Rather, it can threaten corporations, too. In so doing, it can force corporations to take action that leads to greater safety and accountability. That is a public benefit. And because the criminal law is a public function, we should be glad that it has the power to achieve goals like this.

If we can't hang corporations or throw them in prison, we can at least force them to "do better" by threatening their precious "income/liability" ratios. Such public actions may not be as emotionally satisfying as electrocuting a half-insane child killer or lethally injecting a dubious home invader who had a court-appointed lawyer, but at least it's something.

Human beings respond to threats. So do "noncorporeal" entities like corporations. Humans adjust their behavior if they believe the criminal law will hurt their bodies or take away their money. Corporations will adjust their behavior if they believe the criminal law will impact their bottom lines and cause quarterly losses.

Everyone fears pain. Corporations fear fiscal pain. So that's the pain the criminal law threatens to inflict on them.

I say: "Whatever works."

WHAT'S WORSE, IRAQ OR VIETNAM? LOW POINTS IN AMERICAN HISTORY

AN ESSAY

Before the "conflict" in Vietnam during the 1960s and 1970s, America had a hearty appetite for war. In the decades before Vietnam, Americans had waged several very successful wars against traditional opponents in Europe and Asia. They used their overwhelming industrial might to grind their enemies into submission. And because they always waged war far from home, these wars never directly impacted the civilian population. American cities never burned, nor did rampaging armies rape American women. In short, America had an appetite for war because it won them with comparatively little sacrifice.

But Vietnam tempered America's appetite for war because it was "unwinnable." Unlike the world wars, Vietnam was a civil war between ideological enemies in the same country. The "enemy" did not fight along traditional lines; they fought a dispersed war. They made it difficult for America to leverage its massive industrial might against them. Despite America's massive technological and material advantages, the North Vietnamese continued to resist. They never fought pitched battles with the Americans. They used hit-and-run tactics, preserved their forces and vanished into the jungle. No matter how many B-52 bombers or helicopters the Americans threw at them, they always managed to reappear. For a country accustomed to obliterating its enemies in open combat, this was a rude awakening.

America called Vietnam a "quagmire" because it could not crush its enemies in a single campaign. America does not like "quagmires" for the same reason it does not like unprofitable businesses: If you can't deliver success quick, people lose interest and close you down. America likes quick wins, not protracted struggles. Vietnam was a protracted struggle. When it appeared that no measure of carpet bombing or napalm would bring the North Vietnamese to heel, the American people simply lost interest and gave up.

This was a sobering moment in American history. Ragtag communist rebels turned away the world's most advanced army. The North Vietnamese never defeated the Americans in the field, but they successfully protracted the war long enough to deprive America's will for further combat. In this sense, they did not inflict a "military defeat" on the United States. But they prevented the United States from "achieving victory." That was a first in American history. And it disheartened many Americans.

Disbelief and frustration over the "unsatisfactory result" in Vietnam colored American public opinion about war for decades. During the buildup to the First Gulf War in 1990, President George H.W. Bush reassured the public that the coming conflict in Kuwait would result in "decisive victory." He invoked the "quagmire" in Southeast Asia when he said: "This will not be another Vietnam." He knew that Americans would not tolerate a protracted struggle. So he set his goal modestly: Destroy the Iraqi army, liberate Kuwait and go home. It was an achievable goal. He accomplished it. Unlike Vietnam, the First Gulf War was not a "quagmire" because it had a limited scope. Americans were happy with the outcome.

But the Second Gulf War did not have a limited scope. Unlike his father, President George W. Bush did not set achievable goals when he planned to invade Iraq in 2003. He said he wanted to "find weapons of mass destruction" and "remove Saddam Hussein from power." Yet any novice policy adviser knew that occupying a Middle Eastern country would entail a much broader involvement than merely liberating one Nation from another. Sure enough, this is exactly what happened. After ousting Saddam, American forces assumed a "police role" in Iraq. By removing Saddam, they unleashed a power vacuum that triggered a civil war. American troops found themselves in the crossfire between two warring factions. Casualties mounted. There was no end in sight.

We are still there: Another quagmire.

Both the Second Gulf War and Vietnam represent low points in American history. They both represent moments in which America questions its ability to wage successful wars. They both caused immense dissent at home. But I venture that the "Iraqi adventure" is a lower point in American history than the Vietnam war. I say this because there is a key distinction in motivation between them. I judge history by the intentions of those who animate it. And by that standard, Iraq appears a more unethical struggle than Vietnam.

Although both Vietnam and Iraq resulted in military "quagmires," America had a much purer purpose in Vietnam than it did in Iraq. For better or worse, America involved itself in Vietnam for an almost naive ideological reason: To halt the spread of its philosophical nemesis: Communism. America did not have any particular loyalty to the South Vietnamese government, nor did it have vested commercial interests in Southeast Asia. Instead, it embroiled itself in a bloody civil war 10,000 miles away solely to show that it did not like communism. No matter what you think about communism, you cannot fault the United States for believing in its "principles" in Vietnam. It had a clear philosophical "purpose" in fighting that war. It may have been the wrong purpose, but at least America believed in something to justify its sacrifice.

In short, America's motivations were apparent in Vietnam. And they were based in philosophical disagreement. Vietnam, then, represented America's belief in its own economic system over another. It was a "battle of principles."

But America's motivations for war in Iraq were far less naive. Despite Bush's rhetoric about "delivering democracy to Iraq" and "freeing Iraqis from tyranny," no one really believed those explanations. No, any reasonable person could see that America had massive commercial interests in an oil-producing country like Iraq. Even the Vice President owned shares in a company that stood to greatly benefit from any military involvement in the Middle East.

Worse, America took a dishonest course in shuffling toward war in 2003. President Bush used public hysteria about Islamic terrorism to forge a fanciful link between Osama bin Laden and Iraq. He even exaggerated stories about Iraqi "weapons of mass destruction" to deceive Americans into thinking that invading Iraq was necessary for "self-defense." He presented false testimony to the United Nations and the American public to garner support for military action. All the while, he failed to mention the crude commercial reasons why war in Iraq would benefit industrial interests.

America's "quagmire" in Iraq is not just a military fiasco. It is also the culmination of unethical behavior and dishonesty on an international scale. That is why I think it warrants greater condemnation than American involvement in Vietnam. As bad as Vietnam was, at least the President did not deceive both the international community and his own people to launch an unjust war. In Vietnam, America fought honestly to combat a philosophy it rejected. Everyone was relatively clear about that. But in Iraq, America fought--and still fights--an unnecessary war born in ignorance and deception. Worst, even a mild cynic can see that America has a direct interest in seizing territory in the oil-rich Middle East. And the commercial explanation renders all other explanations disingenuous. There was no such commercial explanation for war in Vietnam.

In sum, both Vietnam and Iraq stand out as bleak moments in American history. Both drove America into social turmoil because they did not result in "quick wins." But because America resorted to dishonesty to garner support for war in Iraq, I conclude that our experience in Iraq is a more embarrassing national humiliation than Vietnam. Unlike our naive--and foolishly misguided--motivations for war in Vietnam, our motivations for war in Iraq were simply crass, greedy and dishonorable. And we even had to lie and cheat to gain popular approval for action.

That is just unethical and shocking.

USING RACIAL BIAS FOR PROFIT

OESTERHOUDT STRIKES

I saw a report yesterday on a local New York City newscast about a private nightclub that allegedly turned away several patrons "because they were black." Apparently, these patrons were all friends with a noted local author who is black, too. She was throwing a party and wanted all her friends to be there. According to the report, the doormen refused her friends entry at about 2 AM last Sunday. The report also mentioned that the club is a popular nightspot. Many people can't get in, even celebrities.

You know what's coming. Now the local author has hired a lawyer and she has filed a $1 billion class action racial discrimination lawsuit against the club. She says that the club's management engaged in racial bias against her and now she has a right to collect money damages. The report did not say which law she invoked in her complaint.

Racial discrimination is alive and well in all multicultural societies. It is not a uniquely American problem. Still, the United States is famous for its racism. Yes, we have a black President now. But this is no "post-racial society." Blacks die at a younger age than any other ethnic group in this country. They make significantly less money. They go to prison in far greater proportions. They consistently score lower on educational achievement tests. And this is no accident: There is a legacy of State-sponsored discrimination at work in America that continues to negatively impact blacks in all life pursuits.

In short, racism exists in America. It always has and it probably always will. It is a constant problem. It deserves condemnation when it appears.

But racism does not explain everything. In many cases, racism does not account for unjust results in social interactions between the races; not every white man is a bigot. I think the New York author's case represents a false racial cry. It is one thing to claim that racism exists in private businesses in the United States. It is one thing to take a principled stand against it. But it is quite another to use purported racial bias as an excuse to sue a business for $1 billion.

In short, financial motives obscure principled ones. Here, the author undoubtedly has a financial motive. If she truly cared about dignity and equality, why would she demand $1 billion to crusade for them? To an objective observer, this looks like a stab at personal paydirt, not a principled call for justice. After all, a crusader for justice wants justice, not a billion dollars.

In theory, awarding money damages for racial discrimination vindicates the Nation's interest in rooting out racism. It works by penalizing businesses for proven racial bias. If racism is unprofitable, so the theory goes, then businesses will not engage in it. But asking for $1 billion from a single nightclub is beyond the pale. It could never possibly pay that amount. If the Plaintiff got what she wanted in this case, the club would cease to exist several times over. And who would benefit from this? A few aggrieved clubgoers who could not drink and dance where they wanted one night? By demanding so much, this Plaintiff loses her moral authority and comes across as a common profiteer.

I venture that it is utterly shameless to use racial discrimination as a pretext for immense personal profit. I find it disgusting when people use this country's bad racial history to extort astronomical sums for personal gain. This author should be ashamed of herself. Even if the club discriminated against her and her friends, she would have done better to ask for a much more modest sum than $1 billion. She could have asked that any damages be paid to an educational fund or something, not her own bank account. If she really cared about racial bias, she would have used the case not so much to enrich herself than to publicly investigate the club's practices. Perhaps that is what she wanted to do along. Yet asking for $1 billion just makes her look like a cheap hustler out for cash, not a principled warrior out for justice.

I am not surprised that the author's lawyer so willingly went along with this circus act. After all, he stands to gain publicity and a hefty fee for his toils. It does not matter whether this is all just a crude attempt to shake a club down by conjuring the ghosts of America's racist past. It does not even matter whether the law supports his position. He has personal motives, just like the Plaintiff. This has nothing to do with remedying continuing racial ills in America. This is about money and fame, pure and simple.

He would be wise to mind the law in this case, too. After all, the Constitution forbids racial discrimination only when the State engages in it. See U.S. Const. Amd. XIV sec. 1 When private businesses discriminate, it is much more difficult to prevail. Federal and State laws prohibit racial discrimination in "places of public accommodation." But those laws require the Plaintiff to prove "discriminatory intent" against the private actor. That is no easy task. It is one thing for a person to think that a private club racially discriminated against him or her. It is quite another to show that a private club had an intentional policy disfavoring blacks. After all, this was a popular club. It turned many people away, including celebrities. It could conjure up virtually any explanation for its decisions. It will never admit "actual racial animus" against blacks.

From a legal standpoint, this is what it takes to win cases like this. It won't happen.

Instead, the author will scream and whine and talk to tabloid newspapers. She will attract attention to herself and boost her book sales. Some will say she suffered racism. Others will say she is exaggerating. Still others will simply ignore her.

No matter the reaction, one thing remains: She is trying to exploit America's sad racial history for crass personal profit. That is downright contemptible.

STOP THE INEFFICIENCY : IT'S TIME TO PRIVATIZE PUBLIC SERVICES

INSTALLMENT # 1 : LAW ENFORCEMENT

By : Mr. A. James Meinecke, M.B.A. (Harvard Business School), President and CEO, Tailor-Targeted Systems Solutions (TTSS), LLC, a Delaware Limited Liability Company; Former Director, Blackwater USA, a consulting agency specializing in private security solutions and diplomacy (1997-2004); Former Chief, Atlanta Police Department (1988-1997); Board Member, The Free Market Society (2001-present); Publisher Laissez-Faire, S’il Vous Plait, an informational newsletter serving America’s corporate boards.

Americans want safe streets and safe workplaces. They don’t want to worry about crime and terrorism on their way to work. They want their children to be safe when they use the Internet and email. Americans also want to know that guilty people are being investigated, captured and punished. America trusts its law enforcement personnel to accomplish these tasks. For decades, government-run American law enforcement kept pace with the criminals.

But we can do better. For a long time, America has trusted Federal, State and local government to enforce its laws. Americans elect representatives to pass laws criminalizing certain conduct. They then rely on Executive agencies—such as the Federal Bureau of Investigation, the State police and local police forces—to corral anyone who violates those laws. Although Executive agencies generally do a fine job investigating, interrogating, prosecuting and punishing criminals, they face a key limitation: They are public servants. And public servants never do a job as well as competitive, motivated private contractors.

Here at Tailor-Targeted Systems Solutions LLC, we want to help America. Specifically, we want to make public services more efficient by cutting the “public” out of “public services.” As effective as State law enforcement efforts may be, imagine how much more effective they would be if private enterprise competed for better ways to catch criminals. The simple truth is that government employees do not have an economic incentive to pursue criminals. They receive low pay and generally enjoy few avenues for financial advancement. No matter how hard they work and how many drug dealers they arrest, they get the same $29,578 a year. Additionally, they have a monopoly on their jobs: They do not feel pressure to introduce better solutions to existing problems. After all, there are no rival police departments to keep them on their toes. We believe that America deserves better. When it comes to catching criminals, we think efficiency comes first.

Many people think that certain government functions should not be private, including law enforcement. These people think that government agents should investigate crime because crime is a public concern. They think that police officers should not be loyal to their own economic interests, but rather the “public good.” In essence, this argument boils down to loyalty: To whom should police officers be loyal? Yet this argument misses an essential point. Namely, it forgets that law enforcement aims to efficiently stop crime, not vindicate the popular will. If it came between stopping ten rapes and vaguely fulfilling “the popular will,” I think every American would say that stopping ten rapes is more important. Complacent State officers cannot stop rape as effectively as dedicated private contractors with an economic interest in stopping rape. When law enforcement professionals have no personal economic stake in stopping crime, they have no reason to be efficient. That is why we must privatize law enforcement. We owe it to our children. If we want safe streets, we must change the way we look at loyalty.

Police officers would do a much better job if they knew they would profit from stopping crime. According to popular understanding, police officers pursue crime because they care about the public good. But the public good pays no bills; money does. If our police officers received a special bonus for every crime they prevent—or for every suspected criminal they catch—we would provide a meaningful incentive for our law enforcement personnel to protect us. In this sense, we propose a corporate model for law enforcement. Rather than requiring “loyalty to the State” from our policemen, we should make them loyal to a private law enforcement company. That company, in turn, would contractually pay them a higher salary than the State, plus bonuses for effective criminal management. When people have real economic incentives to get a job done, they do it much more effectively than someone who receives a discouraging flat rate serving “the public good.” In our view, when police officers have an economic motivation to stop crime, they will stop it much more efficiently than they would “serving the public good” for minimal pay. For example, a police officer would much more willingly investigate a dangerous drug ring knowing he might receive an extra $4,000 per arrest than he would if he knew he would receive nothing more than the usual $29,578 a year for zealously investigating the drug ring. He could use that $4,000 to pay medical bills, car notes or credit card debt. He could use the extra money to buy consumer goods or invest in the stock market. At the same time, he would benefit the public by stopping drug crime. Put simply, when people have an economic reason to do something, they take more chances and get jobs done more effectively than they would without the incentive. That is why we must privatize police forces. Public loyalty does not protect our children. Only private loyalty does.

There is no reason why so-called “traditional public services” should not compete in a free market system. The fact that “traditional public services” are so important only supports the argument that private enterprise should provide them. After all, police services are essential to the community. Private enterprise would provide them more efficiently than the State. In that light, Americans should embrace private solutions to traditionally public services. Private police can catch twice as many criminals as public police in the same time. Results are results. When Americans get better results from private enterprise than public services, they will never go back to public services. Additionally, private enterprise must always stay fresh. There will always be a competitor striving to take a company’s place in the market. In that light, competition will make private businesses even more efficient crime stoppers. After all, if a new police company catches more criminals than the old one, the old company will lose its contract. That will force the old company to invent new, more effective crime control measures to keep pace. All the while, the public benefits. When police forces compete for contracts, the criminals lose and the public wins.

Competition among private police forces will not just reduce crime. It will also drive down costs. Unlike inefficient public police forces, private companies will always need to stay ahead of the curve and deliver results. They will have to stop more crime more quickly than their competitors, all for a competitive price. By competing for contracts, private companies will ensure that taxpayers only pay market rates for law enforcement services, not inflated subsidy rates. If a company can’t cut the mustard, it will lose its contract to a company that can arrest more criminals for less money. This is just the way business works. Yet under the public model, if the police force fails to stop crime, it still costs the same amount. This is not just inefficient. It is also expensive and wasteful. This is why we must privatize our police forces. It will not just stop crime and protect children; it will cost less, too.

Private police forces will pursue criminals much more effectively than public ones. Under the public model, police officers always wear uniforms and other “official, State insigniae.” While this adds a special “government aura” to law enforcement, it also gives criminals far too much warning. They can easily run away whenever they see a uniformed policeman approaching, or they can say: “Put the drugs away; here comes a cop car.” Put simply, public police forces stick out like a sore thumb. And when criminals get away, the public suffers.

Not so under the private model. Private police officers are not really “officers” at all. Rather, they are “employees.” As such, they do not wear uniforms. They do not drive marked cars. They look like regular guys on the street. Criminals will never know whether a law enforcement company employee is nearby, ready to arrest them. This is much more efficient than tipping criminals off by wearing ostentatious silver badges and military-style uniforms. When law enforcement goes private, criminals will start looking over both shoulders. And when criminals are scared, they will not rape women, rob banks or murder children.

Private police employees enjoy another key practical advantage over public police officers: Namely, they are not bound to respect any “constitutional rights.” Public police forces are “State actors.” As such, they must follow the United States Constitution and various State constitutions when investigating and prosecuting crime. This drastically impedes their effectiveness, because constitutions interpose “individual rights” that bar highly efficient crime control practices. By contrast, private law enforcement employees face no such limitations. When they set out to arrest a criminal, they do not need to worry about “warrants,” “probable cause,” “reasonable suspicion,” “privacy,” “the Fourth Amendment,” “Miranda warnings,” “Due Process” or other elaborate judicial fantasies. Rather, they can arrest whomever they please, whenever they please. If they need to tap a phone, they tap it. If they need to search a house, they search it. If they need to wring a confession from a suspect, they wring it. In short, criminals have no refuge when facing private law enforcement employees. And all this adds up to safer streets and safer children.

We should not shrink from privatizing our police forces. We owe it to our children. When it comes to any service, the best solutions are private. Private employees with an interest in success do a job much better than poorly-paid bureaucrats who just want to see 5 o’clock and a pension. Just look at the DMV to see public servants at work. Would you trust your wife’s safety to a DMV employee? Of course not. Yet these people are your police officers. Vigorous private enterprise gives Americans their most cherished goods and services, from medicine to fast food. There is no reason why we should not trust private enterprise to give them something as vital as protection from criminals. Additionally, when we privatize police forces, we will open a whole new employment market, boosting job growth and income levels across the country. Enterprising men and women will study to become law enforcement employees. They will learn to make a decent wage catching criminals. The solution is obvious.

We can do it. America deserves more from its law enforcement professionals, not lackluster donut-eating and clockwatching. We must move away from the idea that only government can do certain jobs. As a Director at Blackwater USA, I showed that privately-employed soldiers could do a better job than the U.S. Army in the field. If private enterprise can wage war in Iraq, it can also protect Americans against dangerous criminals at home. And it can do it more efficiently, too. When employees stand to make more money for doing a better job, everybody wins.

We deserve efficiency. We deserve better pay. We deserve solutions that work. That is why we must bring private enterprise to law enforcement.