This talk was delivered by Michael Williams on “May Day” – International Workers Day – May 1, 2023, to economics students, professors, and administrators at Ben Gurion University in Be’er-Sheva, Israel as part of the Free-Market Road Show, presented by the Austrian Economic Center.

What the world needs now, more than anything, is a Mayday call for the mind.  No, I don’t mean “May Day”, as in the tired, mostly obsolete labor movements of the past.  I mean Mayday! Mayday! Mayday! … as in…we have a life-threatening emergency! – pilots tell me this internationally recognized distress call needs to be repeated three times in a row to cut through the noise and confusion that often accompanies such times of anxiety. 

And, we do seem to have much noise, confusion, and anxiety on an international scale, these days.  The “Mayday” procedure word was conceived as a distress call back in the early 1920s by an officer in charge of radio communications at an airport in England.  He was asked to think of a word that would indicate distress and would be quickly understood by all pilots and ground staff in an emergency. Since much of the air traffic at the time was between England and France, he proposed the term “mayday”, the phonetic equivalent of the French word for “help me”.  If only we had a commonly understood call for the kind of emergency that the world faces today.

On this May 1st, 2023, a Mayday distress call for the mind is more appropriate than to go back to the May—Day legacy of worker’s rights movements.  Don’t get me wrong – I have nothing against collective bargaining or physical labor – all work,  – many union movements of the past were often justified, though if they were accompanied by violence or government force, that cannot be condoned. I also note that public sector unions should be entirely abolished since they make a mockery of the whole concept of good faith negotiation.  

The International Workers’ Day or Labor Day, which started due to late 19^th century events in the US where workers were demanding an 8-hour workday and other improvements in working conditions, isn’t recognized on May 1 in the US but is instead celebrated on the first Monday in September and most Americans just see it as another day off from work, which seems to happen every time government designates a national holiday.  The history of May Day is associated with Marxist/Socialist movements and Americans, in our benevolent and naïve way, are quirky about rejecting anything that sounds like socialism…. while often swallowing gulps of it in practice. 

I mention Marxism – Karl Marx took what was a previous understanding of the Labor Theory of Value and turned it into a horribly vicious moral code, with disastrous and deadly consequences for hundreds of millions of people.  It’s interesting that the person who is regarded as the father of economics – Adam Smith and his invisible hand – started with the labor theory of value, too.  The Labor Theory says it’s the person who does the physical work of producing a product that adds the value, so therefore anyone else – a manager or supervisor, a distributor or other “middleman” or an investor providing capital – they are all just parasites and unfairly, unjustly taking what rightfully belongs to “the worker.”  But we now better understand the role of the mind:  of solving problems, of figuring things out, of management, of leadership, of considered risk-taking and entrepreneurism – yes, we are starting to understand the role of clear thinking.  

If there is no mind telling the hand what to do, we die.  If there wasn’t someone thinking through all the challenges of planting, growing, harvesting, distributing, and selling food products; bringing machines, technology, and processes to make more and better food, millions – no, billions – of people would never have even existed!  If there weren’t the modern entrepreneurs who have revolutionized our lives with automobiles, planes, trains, computers, MRIs and X-rays and other diagnostic machines, smart phones, and – crucially – the energy production that powers them all, all of us would have a much poorer, miserable existence.

This is why we should celebrate the entrepreneur, the person of independent judgement, THE PERSON OF THE MIND and their willingness to act on their best judgement…and harvest what they sew.  

In thinking about my Mayday call for the mind, it’s important to describe Capitalism – since capitalism is the system of the mind – the system where the mind thrives.  I have eight points that I like to share regarding capitalism, though all eight of them ultimately come back to just one principle, if we are talking about politics, that principle being “individual rights”.  Let me briefly touch on all eight.

First, capitalism is proven.  Wherever and to the extent that it is tried, it delivers overwhelmingly positive results for real people. Freedom wins.  But that’s kind of vague – freedom wins?  That vagueness is part of the problem.  We’ve got to define what we mean by capitalism.  I sometimes refer to it as civilized, respectful behavior where trading happens.  But that’s still too vague.  If we’re trying to get clear on capitalism – and I think no matter what your views are about it right now, you should understand what it is and what it is not.  If you’re pro-capitalism, then you should know what you’re for and if you’re anti-capitalism you should know exactly what you’re against.  Capitalism, if we are to define it by essentials, is the system that recognizes and protects individual rights, including and perhaps especially, property rights where all property is privately owned.  

Now let me repeat that and contrast it to some of the things people feel capitalism is.  Capitalism is a system (a social system or a socio-economic-political system) that recognizes individual rights, including property rights where all property is privately owned.  If we define it that way, and I think there’s a good case to define it that way, since those are its essential attributes, then really there are only two other systems:  Collectivism (where individual and property rights don’t matter and aren’t recognized or protected) and a Mixture – where some individual and property rights are protected or maybe some are protected some of the time but not others.  We’ve seen the sheer destruction of human life that collectivism, in various forms, has wrought in the last century – wherever and whenever IT has been tried, it results in misery, starvation and death to millions, and again, we’ve seen the amazing results of capitalism – the system of the mind.  Capitalism is not the equivalent of “big business” or “democracy” or “cronyism” and the idea of “state capitalism” is an oxymoron.  Even people who are generally pro “free markets” are often confused about this. Feel free to ask me more about these contrasts in the Q and A session.

Point #2, production precedes consumption. Much to the contrary of how economics is written about today, where the focus is on “demand” being the driver of economic activity, the reality is that production comes before consumption.  What does this mean?  Well, I spent summers working on my grandmother’s cattle ranch and she had a simpler way of saying it: “if you don’t work, you don’t eat”.  Now, of course you can eat without you yourself working, but that puts you in the category of an infant or a parasite, a permanent state of which is not a good thing.  The point is that someone must work for you to eat, someone must produce for anything to be consumed.  We simply don’t live in the garden of Eden where goods and services are just available without effort – without work, without production – even though capitalism, with its enormous capacity for innovation, problem solving and the resulting abundance, can certainly feel that way for those who are not paying attention.  

How does this happen – HOW does such a system produce such overwhelmingly better results for real people?  This is point three:  the key is that the mind is the source of wealth, and this is the connection to the entrepreneur – this is who we should be grateful for and celebrating. We live in a world that has an abundance of what people call “natural resources”.  But, when you think about it – they aren’t naturally resources at all, at least for humans, unless someone is thinking and then acting rationally upon those thoughts about how to use them, how to form them into things that people can use to survive and thrive. If you look around this room, everything in here from the lights to the chairs to the floors to the microphone I’m using, to the clothes on your back, to the laptop you’re taking notes on to the seemingly magical power outlets in the wall… and then think about how you even got here – not only the car or train or bus or plane, but even the academic things that got you here, the schools and the books and the campus and all the producers who could pay for the teachers to impart knowledge along the way – ALL of them are NOT naturally occurring but products of someone’s thinking; products of someone thinking and then acting rationally upon those thoughts to produce these things.  Yes, the creative, risk-taking, thinking human mind is the source of all wealth….and the basic need of such minds is freedom, since a reasoning mind can’t function under force.

*Here, let me make a quick observation about Israel – today, Israel is one of the most productive, dynamic economies in the world.  Why?  You really don’t have much in the way of natural resources, you’re surrounded by countries that have so much more – especially in the way of oil and energy – but the culture here is much more respectful to and for the mind, for thinking, for problem solving.  You also have a respect and appreciation for risk taking and innovation.  It’s no accident that Israel has more startups than any country in the world outside the US. And it’s no accident that such entrepreneurism produces a better standard of living than all your neighbors.  I’m no expert on Israel but it’s obvious that this country demonstrates, in many ways, how the mind is the source of wealth.

Number 4, Capitalism is congruent with Human Nature.  There is so much to say regarding this point, but we should all realize that there is no automatic knowledge – humans must learn and discover how to deal with the world and how to survive in it, and they must make choices. To live, you must act, and in order to act, you must make choices.  For those choices and actions to be successful, you must use reason – reason is part of human nature, but one must choose to follow such a method.  Also, humans are self-interested:  we do have a desire to better our own condition. This is what it means to want to survive and thrive.  Capitalism, being the only system that protects rights, is the only system where long-term, rational self-interested behavior can truly thrive.

Point 5, Civilization depends upon production and trading.  Civility means respecting other people’s body, mind, and the fruits of their production – that is, civility means respecting other people’s property. When you have a society that shows such respect for each individual, that protects each individual and allows them freedom to produce, they will focus their activities and specialize in what they enjoy and/or do best.  In economics we refer to these concepts as “the division of labor” and “comparative advantage” but it boils down to individuals making choices about how best to improve their own circumstances and then trading with others.  Civil societies have highly developed, interconnected, collaborative economies precisely because of this freedom to produce and trade.

Physical force against another human being is anti-mind, therefore it’s evil.  This is point 6 and of course we’re referring to initiated force – not force in self-defense or force properly used by a military to defend its citizens against aggressors.  There are really only two ways to deal with other human beings:  either you use reason and persuasion, appealing to their mind OR you use physical force, ignoring their judgement, their values, their life and violating their rights.  And, I’m sorry, it doesn’t really count if you can persuade a majority of individuals to use force against a minority – you’re still using force, it’s still anti-mind – and it’s still wrong – even if it feels better for you to hide behind the gang or mob.

All these things that I’m talking about – respect for the individual, production as the way we survive and thrive, the creative human mind being the source of production and wealth, voluntary trade, etc. – all of this requires a system, a system of laws – what we refer to as “the Rule of Law”.  Point number 7 is that the rule of law is a requirement for the protection of rights and for the robust trading of values.  The rule of law boils down to two things:  first, having the correct approach or form, rules of procedure and evidence, due process, having it written down and understandable, not retroactive, etc. – having it be objective.  But it also must have at its center, as its purpose, the protection of rights, rights properly understood.  Capitalism is that system of rights protection through an objective rule of law.  

Lastly, my final point is that Capitalism is the only moral social system.  Because it is congruent with human nature and the requirements of human life, because it protects freedom of thought and action, because it systematically rejects initiated force…it is for these reasons that Capitalism is moral – in fact, it is the only moral system of human interaction.

We have a long way to go in understanding and recognizing the importance and potential of the human mind. Today, we celebrate May Day and Labor Day every year, holidays dedicated to honoring the efforts of “workers”. But what about those workers who do the hardest work – what about the entrepreneurs? You hear “entrepreneur” and think “business guys” in a very narrow sense but we should think of each and every person, every single precious individual as able to organize, pursue and manage their own enterprise – their own life. 

I mentioned at the beginning of my talk that we have a life-threatening emergency and I’m sure many of you thought “ok, I get it – he’s trying to catch our attention but it’s a bit overstated, isn’t it?”.   Well, those people “of the mind” are not necessarily the ones in trouble…. they’ll be fine – in one sense, they are the survivors and can take care of themselves.  It’s our lives that are being threatened by not understanding or appreciating their minds and our own morality.  Those workers, who do the hardest work – the ones who create and build, those who think longer-term and on a grander scale, those who solve the problems and create the solutions that we don’t even see, those who constantly improve and produce a better world and only trade value for value – OUR very lives depend upon THEM.  They are the ones who we should urgently recognize and celebrate.  

No, we don’t need another holiday – we need a new way of thinking EVERYDAY.  We need to encourage more people to embrace that playful, curious, hardworking, risk-taking, failing and getting back up again, spirit  – this doesn’t mean taking the massive risks and enduring the pain and challenges of a start-up is for everyone – but it does mean taking ownership of your own life and being more grateful for those who make your life, the way you live it and want to live it, possible.  That’s why, in the name of justice and a brighter future, I hope you’ll join my MayDay call for the Mind!