Every Bubble Bursts

John_Law_Paper_Money

Paper money (“fiat money”) endorsed by John Law. Photograph is in the public domain.

I grew up in south Mississippi as a twelve-year student of the Ocean Springs School District. I’m grateful for the excellent education given to me there. As early as third grade I was required to study a foreign language (I chose Spanish); at some point I was also introduced to the formal study of Mississippi history, which fascinated me. There I learned one of my earliest lessons in economics–in addition to those being taught to me at home by my father who was a banker. I remember to this day the lessons learned in history class while studying an event known as “the Mississippi Bubble.”

With the arrival in “Biloxey” (now spelled “Biloxi“) of the explorer Pierre LeMoyne d’Iberville in 1699, the French laid claim to a massive amount of land in what would one day be called the United States of America. It stretched from Louisiana to Newfoundland and included territory on both sides of the Mississippi River. You don’t need much creativity to imagine the financial steam that this discovery brought to France. Powerful people with connections to the French monarchy were quick to line up for a piece of the economic pie. You see, some things in history are fairly constant. One of those constants is the sycophancy of influential people who make a better-than-average living from their relations with powerful people in government.

It’s an incredible tale that includes many of the same elements being debated today: fiat paper money, greed, monopolies, Keynesian economics, powerful government, and little benefit to most citizens. If you want to read all the interesting details for yourself (and I certainly recommend that you do so), read the 2012 article by Forbes economist Jesse Colombo, located HERE.

To keep the story to essentials, let me give you a quick review. It seems that a powerful Frenchman of the early 18th century was in dire need of cash. To remedy the situation he turned to a Scottish financier then visiting France, a man named John Law, who introduced the French to a new concept. Rather than trading with precious metals like gold and silver, he suggested to them that a bank should be established by royal decree and that this bank should issue money made of paper. The paper, of course, was of no value except for the promise it carried to its bearer. We now know such money by the name of “fiat” currency, from the Latin word fiat, meaning “let it be done” (the “it” in this case is the assignment of monetary value to something that has no such value except by way of promise and expectation).

A tremendous rush of money began as people sought to capitalize on land in the New World. Law became amazingly wealthy, in cash and in power. He had the power to mint coinage and collect taxes. He had the trust of some of Europe’s most powerful people. He purchased an ailing institution known as the Mississippi Company, gave it a new name and sold shares that expanded in price at an unsustainable rate. The French crown pumped money into his scheme and so many people profited that the French term millionnaire came into vogue.

Eventually, cooler minds began to wonder about the wisdom of investments that skyrocket at such impressive levels while fueled by government-approved fiat money. Confidence faded. Investors demanded gold rather than paper and the entire scheme began to collapse. Company shares were drastically reduced and the millions earned became millions lost. The so-called “bubble” (Colombo says it’s better described as a series of “failed monetary policies“) was a product of excessive monetary growth. In other words, there was an explosion of money but not necessarily of value. In the end, the value of the money declined and inflation set it.

I’ll leave it to my dear readers to discover parallels to today’s world. In the last few months there has been an increase of voices reminding us that all bubbles eventually burst. And economic bubbles always rise higher and faster when inflated with easy government money. Time will tell.

The Truth About Truth

Time Saving Truth From Falsehood and Envy, by Francois Lemoyne (1737)

Time Saving Truth From Falsehood and Envy, by Francois Lemoyne (1737); in retrospect, perhaps it’s a bit of political irony that the day after completing this piece, the artist tragically committed suicide

Last night, while channel surfing, I happened upon a documentary about the flooding of Venice, Italy. According to one city official interviewed on the program, about 100 times a year the tide rises higher than normal and floods the city. The waters of Venice are beautiful when they stay in their canals, but troublesome when they visit themselves upon homes, businesses, and historic cathedrals. Never mind that the Venetians have had problems with their lagoon for centuries or that their city rests atop wood pilings. The producers of this video claimed to know the cause and they proclaimed it passionately. Venice is undoubtedly flooding, they said, because of anthropogenic (human-caused) global warming. It’s worse than that, however. In their own words, “the world is sinking.”

I sympathize with the good people of Venice. But they’ll find an answer to their water problems as they always have. Their history is loaded with past examples of flooding (and taxation to pay for its remedy). In great part this is because its underwater foundation slips a bit lower every year. Even those who believe in human-caused global warming have to admit that “the greatest threat to the city” for most of its history has been “earth subsidence.” In other words, its wooden foundation is slipping deeper and deeper into the mud below.

As a popular science-fiction program once reminded us with the start of every episode, “the truth is out there.” Yes, it certainly is. But to get to it there are a few things you need to understand about the truth. In other words, there is some truth about truth that you need to know–truly!

First, let’s realize that we humans are “wired” to find explanations for things. That, along with our advanced brains, has given us a biological advantage over the other species on the planet. They may be bigger and stronger, but we’re smarter. We’re driven to find answers.

Before you become too proud of your genetic superiority, remember a second important point. We humans are also, in a sense, sociological herd animals. We move in psychological “packs.” Rather than doing the hard work of thinking for ourselves, we often accept what others believe. This can happen for any number of reasons (affection, political preference, religious belief, admiration, physical attraction, etc.). I confess to having a strong distaste for this tendency. As a child, when I did stupid things, my father wisely challenged me. His challenges stuck with me. When I see a parade of others following a “Pied Piper” of any sort, I shy away to watch … and to learn.

A third truth about truth that we must recognize is that money changes everything. Even truth–or what is presented as truth. There are plenty of people who would sell their souls for money. There are even more who would manipulate data for money or accept funding with “strings” attached. When billions and billions in government funding is involved, there simply is no way to know how deeply the influence and corruption have drilled themselves into a search for truth. Big money can come from big government or big corporations. Sometimes both.

Finally, let’s remind ourselves that there is no such thing as pure objectivity. Perhaps Leonard Nemoy’s Mister Spock came close, but even he was half human. We humans are motivated by all sorts of things, and not all of them are bad. Please don’t interpret my words to suggest that I’m a pessimist or misanthrope (a people hater). I’m not. But I am a realist. Call it sin, or imperfection, or simply human reality–but let’s face it. We humans aren’t perfect. Sometimes we respond to our base instinct for self-preservation. Sometimes we’re selfish or greedy. Other times we act with real generosity. Quite often we are a mix of “good” and “bad” at the same time. (As an aside, it strikes me as odd that when government starts doling out money to those “in need,” our human failings are no longer suitable for discussion.)

Lack of objectivity isn’t a bad thing. It’s a very human thing. The problem isn’t that objectivity is lacking. The problem is that we’re not honest about its absence. Wouldn’t it be nice if people claimed their biases so that when they speak of their greatest beliefs and philosophical commitments we can understand where they’re coming from?

Imagine a Fox News broadcast beginning like this:  “Good evening. We here at Fox believe that Barack Obama is the devil. Now on with the news.” Or imagine that CNN begins its nightly programs in this way: “In the interest of honesty, the broadcasters of CNN wish to remind you that we believe that conservatives, Republicans, and Tea-Party people are selfish bastards who want to screw Mexican immigrants and the poor. Here are this evening’s highlights.”

I always find such honesty to be quite refreshing, actually. It’s one of the reasons I named this blog “The Liberty Professor.” If you’re looking for absolute objectivity, you won’t find it here. The truth is that you won’t find it anywhere. But I’m honest about that. Get it?

With all of these caveats in mind, here are a few of the so-called “truths” that I have rejected. I speak only for myself, but I do so after reasoned reflection and research. Each of the issues described is what Patricia King and Karen Kitchener refer to as an “ill-defined problem.” If you’re a teacher or have a philosophical bent, you might enjoy their book entitled Developing Reflective Judgment. In it they argue that an ill-defined problem has more than one possible outcome (as opposed to a well-defined problem with an easy solution).

Let there be fanfare and the blast of trumpet … here are some “truths” that I robustly reject!

1. The Patient Protection and Affordable Care Act (“Obamacare”) was intended by its creators to lower healthcare costs and “fix” what’s wrong with America’s healthcare system. Nope. Not even close. It was designed to move us toward a single-payer healthcare system in which the federal government is financier and supervisor. Promises were made about how much it would cost and how much freedom would be granted to those who already have health insurance. Guesses, estimates, and even lies were offered to us for our mental consumption. The most recent estimate I heard is that it will cost three times as much as promised in the first ten years. In addition, its thousands and thousands of pages of regulations are going to cause premiums to go up for nearly everybody, especially young men. Remember the promise of Barack Obama about your own health insurance? “If you like it, you can keep it,” he insisted. Maybe. If you can afford it. Most of us won’t be able to. We–along with our employers–will be forced to drop private coverage to move into the single-payer (federal) system. The entire law was designed with this in mind. As they say, “out with the old and in with the new.” Don’t forget the words of Barack Obama to the Illinois AFL-CIO in June of 2003: “I happen to be a proponent of the single-payer, universal healthcare program.”

2. Federal gun-control initiatives are being designed to reduce crime and protect our children from violent criminals. Even I have to say that this sounds nice. It’s a feel-good proposal if ever there was one. But that’s not the primary factor for the unconstitutional gun grab taking place before our very eyes. (It has hit some temporary road blocks, but as with Obamacare, its proponents won’t stop until they get what they want.) The real goal is to have a nation in which guns are in the hands only of government officials and to outlaw them for everyone else. When that happens the government will have little to fear from dissenters, and only outlaws will be armed. Everyone with a weapon, whether it’s used in a crime or not, will be subject to arrest and punishment. In addition to maneuvers in Washington, international pressure is being put upon Mr. Obama to sign the UN Arms Trade Treaty. That treaty, like all treaties, will require Senate approval. We can look for one heck of a mud slide when that battle comes. Obama is widely expected to sign the treaty since it moves us one more step toward his goal, and since it provides cover for the confiscation of many types of civilian-owned weapons as well as a UN-supervised, international gun registry. That’s right. According to the president of Iowa Gun Owners, if allowed to keep my .38-caliber pistol I’ll have my name on a UN list as well as a US list.

3. IRS officials did nothing wrong when they targeted conservative groups,Tea-Party organizations, and groups favoring Israel for special scrutiny. Oh, really? That must be why IRS division director Lois Lerner invoked her Fifth-Amendment right against self-incrimination when called to answer questions before Congress. That’s a constitutional perversion of the highest order. Here’s why: She is a government employee called before the people to answer for her actions. The Fifth Amendment of the Constitution was enacted to protect the people from the government, not the other way around. She and her minions at the IRS have the power to pry, to search, to seize, to confiscate, and to order the arrest and imprisonment of citizens. They carry guns. When we, the people, call her to an accounting she suddenly wants to invoke her constitutional rights. She needs to be held in contempt of Congress and the investigation into the matter must continue. Without a doubt, the trail will end in the Oval Office. White House visitors’ logs already demonstrate this.

4. Global warming is a rising disaster caused by human industrial and economic activity. Look, I reject this proposition. But I don’t reject the idea that we should be responsible stewards of our environment. Another of Dad’s witty and wise sayings recognizable to many fellow Southerners is that one should never put fecal material on the handle of the water pump! But the global-warming hype isn’t being controlled by reasonable people who care for the environment. It’s being directed from the upper echelon of government for the sake of raking in more tax money, penalties, and fees to fund bigger government. The “science” behind human-generated global warming is tainted with government money. As some very bright but mistaken academics have argued, the scientific consensus is that human-caused global warming threatens the planet (not just Venice). They insist we need severe limits on economic activity, travel, and energy production; we need more taxes and government-controlled carbon credits. My own research brings me to the conviction that global warming is entirely natural and that the recent warming trend is tapering off. We are probably entering a new period of global cooling. It wouldn’t be the first time, as historians recognize from recent history. Perhaps our children and grandchildren will be subjected to overblown predictions of a new Ice Age!

5. The solution to our economic problems and social injustices is to be found in more government activism. So said Benito Mussolini, Joseph Stalin, Mao Tse-tung and a veritable host of central planners. But when central planning fails it fails big. Guns are needed to keep people in line. Perhaps you’re seeing a pattern? American constitutionalists do not reject all centralized government activity. The Constitution makes provision for the activities of the federal government. But once it’s engaged, the power at the top tends to be centripetal. In other words, it exerts a pull toward itself. Power exercised at the top tends to increase and multiply toward the top, or toward the center of power. The founders of the United States recognized this fact. They had overwhelming historical precedent for it. That’s precisely why power was invested primarily in citizens organized by states, not in the federal government. It’s also why they chose a federated system and not a national government (there is a difference). Only a small number of powers were granted to the federal government. Was it a perfect system? No. It didn’t recognize the rights of slaves, for instance. But its inspiration (that everyone is “created equal” in rights, not abilities) would eventually blossom to repair this immorality as well as other defects.

6. Fatty foods are making us fat and high blood cholesterol is putting us at risk for heart attack. So says an official US government blog and the Centers for Disease Control and Prevention (the CDC). There is even a new government push to monitor the cholesterol of children and to put them on statin drugs if necessary. Research is moving us rapidly away from this thesis. Fat isn’t making us fat. Carbohydrates and sugar are making us fat. They increase inflammation and cause heart disease. Among the scientists and medical doctors now arguing for a new approach to the matter can be counted Dr. Jonny Bowden and Dr. Stephen Sinatra. Check out their excellent and well-researched book, The Great Cholesterol Myth. According to them, the “four horsemen” of the cardiac apocalypse are inflammation, oxidation, sugar, and stress. Dangerous statin drugs, they insist, should be used only by those who already have heart disease. They show strong evidence that statins are useful only because of their anti-inflammatory properties and that lowering cholesterol isn’t the proper approach for stopping heart disease. In their opinion statins should never be given to children. To get the updated research full disseminated, the tie between big pharmaceutical companies and big government must be broken. And doctors who treat patients should never be paid advocates for particular companies or brands. The ties between these entities amount to a contemporary medical mercantilism or corporatocracy–similar to the military-industrial complex that guides so much of our foreign policy.

7. If you love someone you’ll never hurt their feelings. Well, you might not hurt their feelings intentionally–but that’s a whole different matter. Love isn’t a feeling. As Jesuit theologian William O’Malley has pointed out, love is a conscious and active commitment to the well-being of someone. I bring up this point because too many people these days, when arguing politics, seem to be guided less by intellectual consideration and more by emotion. They decide what’s right based upon how their proposals make them feel. The Christian virtue of love is shared by many religions. One doesn’t have to foist one’s Christianity on others to love them, but love nonetheless is a terrific guide for making political decisions. Too often our political debate is framed as if it’s a choice between the people who care for others (the “liberals”) and those who don’t (the “conservatives”). That’s just downright stupid. There are people on both sides of that divide who genuinely care to increase the well-being of others. My complaint is that we can’t decide what’s best based upon how it makes us feel. We need to think and think hard.

So there they are. Seven “truths” that I reject because I don’t think they are true at all. There are others, such as immigration reform (the real reason for which is to secure votes). Each of these is an ill-defined problem with adherents who passionately argue that I’m wrong. So be it. As Martin Luther is reputed to have said, “Here I stand. I can do no other.” But my stance isn’t based upon any attempt to be hard-headed or belligerent. It’s based upon my appropriation of the best information I can find. Don’t take my word on any of it. Do your own research. If I found the information, you can find it as well. I make my own choices and live with the consequences. You must do likewise. Gosh, we don’t hear that too often, do we?

In the final analysis, remember one thing, please. Only in a free society can divergence exist when it comes to values, beliefs, and ideologies. Wherever you stand on the issues, I beg you to be consistent and to be honest with yourself. Don’t give a pass to politicians or government bureaucrats just because they share your preferred political agenda–especially not if they have the privilege of carrying government-issued sidearms.

Avoid schadenfreude. That German word describes the human tendency to take pleasure in the suffering of someone else. If it pleased you to see certain groups targeted by the IRS, remember that it may one day be a group you admire. It could even be you. Political winds blow where they will.

Tyranny hurts us all. Even when it’s applied to our political adversaries.

Sex, Love, and Liberty

THE KISS, by Francesco Hayez, 1859, oil on canvas (located in the Pinacoteca di Brera, Milan)

The Kiss, by Francesco Hayez, 1859, oil painting on canvas (located in the Pinacoteca di Brera, the primary public gallery of Milan, Italy)

As I have often remarked to my students, the most fascinating topics of human existence are sex, religion, and politics (not necessarily in that order). Each is imbued with layers of meaning. Each can be a source of profound liberation and joy, but each can also be used by manipulative individuals for unhealthy control over others. From my perspective as a Christian, the moral quality of all three is enhanced by the presence of genuine love, accurately defined by Jesuit theologian William O’Malley as a conscious and active commitment to another person’s well-being.

All three topics (sex, religion, and politics) merge into a sometimes volatile intersection as Americans debate the issue of gay marriage. After months of reflection, the Liberty Professor has decided to weigh in on the topic. I have hesitated for some time now simply because I recognize that this is a controversial and sensitive subject–and my parsing of the details and components involved will probably offer to everyone something about which they will be unhappy. As the French remind us, c’est la vie.

I trust that my readers come here for honest, libertarian commentary–not necessarily to find total agreement on all issues of the day. My goal in this post is to untangle some of the many threads that combine to make this issue so contentious. It is a complicated subject; the political outcome of the debate, no matter how it ends, will have consequences. The liberty-minded citizen must move cautiously in these waters in order to remain faithful to his or her constitutional values.

1. Let us begin by reminding ourselves that we live in a society of profound moral diversity. This is nothing new. What is new is described by psychologist Kenneth Gergen as “social saturation.” Technology, social mobility, and ease of travel have resulted in a world in which it’s more difficult to withdraw into moral and religious enclaves where we can ignore those whose views differ from our own.

Dealing with such diversity of beliefs has been a hallmark of the American experience from our very beginnings as a people. It resulted in a form of federalism (not nationalism) that intended to leave most decisions in the hands of localized entities (sovereign states) and which forbade governmental favoritism or prohibition in matters of religion. In other words, citizens do not have to agree with one another on the greatest issues of human existence, but they must tolerate one another and refrain from infringements upon one another’s rights.

2. Since I am not an anarchist (neither do most Americans identify themselves as such), let me also propose a second foundation for our discussion on gay marriage: human society functions best when the rights and obligations of its citizens are delineated clearly and fairly enforced. This is not an argument for bigger government. Far from it. What I intend by this statement is to say that citizens have the right to freely enter contracts and agreements as they wish, whether it be for personal or professional reasons. They also have the right to refrain from such contracts, even to their own detriment.

With the perspective of a strict constitutionalist, I argue that government should stay out of those private agreements unless invited in by one or more of the parties involved due to fraud, misrepresentation, or default resulting in damage or loss. This attitude applies even when people enter contractual agreements that I believe to be unwise (such as poor business choices), immoral (such as prostitution), or potentially dangerous (such as the use of an experimental drug). The key to this point is full disclosure and personal freedom. I’m arguing that adults of full mental capacity have the right to arrange their lives and their moral activities as they see fit, with a minimum amount of governmental interference. When such interference is necessary (such as the just hearing of grievances between parties), it should take place on the most local level possible, with only a small and enumerated list of powers being exercised on the federal level (as proposed by the Constitution).

3. Sexuality is an inevitable and vital part of the human experience. It is one of the legitimate pleasures emerging from the fact that humans have bodies. It is also a powerful and mysterious procreative reality–one that should not be used to cause harm to others. Some social prohibitions upon sexual behavior are urgently necessary. The first to come to mind is protection of children against pedophiles. When it comes to fully-informed, consenting adults such as those described in the paragraph above, I am of the opinion that government entities should mostly refrain from the attempt to regulate behavior.

4. Evidence (both scientific and anecdotal) increasingly supports the understanding that genuine, exclusive or predominant homosexual orientation is not experienced as a choice but as a given. My reading of science and my experience with friends and students who self-identify as gay has led me to believe that when it comes to lifestyle “choices,” sexual orientation is not a choice. It’s a situation that must be dealt with by the millions of people who experience it. At this point in the discussion I refer the reader back to point #2, above. I do not find it necessary to address the question of morality here since the decision about this issue doesn’t rest with me. It rests only with those who find themselves in the particular situation being addressed.

5. Speaking philosophically, I believe that the Constitution must be read in light of the Declaration of Independence. In proposing the constitutional thesis that individuals must be allowed to live by their own beliefs and morals, I understand this to be based upon the differing opinions we citizens have with regard to “life, liberty, and the pursuit of happiness” (that phrase comes from the Declaration). Constrained only by the few limitations listed in point #2 (above), citizens should be free to live as they choose so long as they cause no harm or loss to others (there are exceptions to this). In addition, it is the constitutional role of the federal government to treat citizens with equal rights before the law (though it is not the role of government to force all businesses or employers to give identical benefits or services).

6. Both marriage and homosexuality have been around for a long, long time. Their presence cuts across human cultures; I have encountered both in every society that I have ever studied, from primitive to postmodern. Cultures have handled homosexuality in differing ways throughout history. Some have been intolerant of it while others have provided a comfortable niche for it.

Some societies have distinguished between male and female homosexuality. Some cultures have assigned special religious roles to homosexual persons. Even among those societies that find it acceptable, homosexual relations have been distinguished from marriage, with marriage understood as a relationship between man and woman. This understanding was present even in polygamous societies (those where men could have multiple wives) and also in societies where married men were allowed to have male lovers (such as in ancient Greece). In other words, with or without social approval, homosexual relations were deemed to be distinct from marriage. Not surprisingly, it was understood as a different kind of relationship–even when it was given social and religious recognition.

Now let’s get to the crux of my point. Let me spell it out as clearly and as precisely as I can. As a constitutionalist I believe that government should not be in the business of giving benefits to some citizens while denying them to others. As a steadfast general rule, I’d like to see government (especially federal government) do less, interfere less, spend less, dictate less, and possess far less power than it does now. If it’s true that well-ordered relationships are good for society as a whole (such as marriage in which duties and rights are clearly delineated and the relationship is supported by law), then I can find no constitutional reason to deny that same protection to gay couples who freely choose to establish similar relationships.

In other words, I’m arguing for nothing more than equal status before the law for all citizens, including gay couples. To do this, however, government does not have to change the definition of marriage–a definition that seems to be as old as humanity itself. Nor should it. 

Gay couples should have the same legal rights and opportunities as all other citizens. Married couples have a right to see the definition of their relationship remain the same as it was on the day they entered that relationship. This distinction does not constitute an act of bigotry or hatred.

As cultures and societies around the globe have recognized for thousands of years, there are different kinds of relationships. Changing the definition of marriage is not the way to guarantee equal rights before law. It will open the door to limitations on liberty, not to an increase in liberty. If we truly wish to live in a society that tolerates moral diversity, we must refrain from using the law to enforce moral uniformity.

Let’s allow people, associations, and religious congregations to make their own decisions about how to understand these different relationships. Should the federal government try to redefine marriage, it will open the door to legal actions against the very institutions we cherish most by further eroding the constitutional limits placed upon that government. This realization explains why there are voices condemning the proposal–even among our fellow citizens who happen to be gay.

Exchanging Freedom for Security

untitledReal life makes the best classroom. Let me share a recent Facebook exchange. I posted an article by constitutional attorney Michael Connolly explaining some of the vague language and dangerous provisions regarding gun control that were recently signed into law as presidential executive order. It’s entitled “What Just Happened? Tyranny By Executive Order” and I highly recommend it. In response someone replied that “the Patriot Act and NDAA took care of that a long time ago. At least Obamacare will give us something back.”

Honestly, I cringed when I read that comment. The author didn’t disagree with me. She didn’t suggest that my take on tyranny was wrong. In fact, her mention of Obamacare could even be read to suggest that it is also an example of governmental overreach. But at least, as she said, it “will give us something back.” I wonder if she has any clue about the costs that will be associated with that “giving back,” both economically and personally. I wonder if she has taken note of recent studies indicating that it will cost much more than predicted.

If my Facebook friend pays for her own health insurance, she’ll soon be paying more–perhaps even drastically more.  If her employer pays for her coverage she might not know that it’s costing more. That blissful ignorance may be rudely shattered if her employer decides that it cannot no longer pay for her coverage. How ironic it is that some employers are finding the costs of the “Affordable Care Act” too high. They are dropping healthcare coverage from their list of employment benefits or cutting employee work hours so that they no longer are required to provide insurance. Even in the so-called “enlightened” environs of academia the cry goes up: “We didn’t know this would happen.”  They should have known. They were warned.

It’s not my intention to pick on my Facebook friend, but hers is an attitude that we hear all too often these days. As long as we’re getting something in return, then it’s somehow inevitable, perhaps acceptable, that we’re losing our freedoms along the way. Way too many Americans are satisfied with this while the list of governmental offenses grows.

The NDAA allows indefinite detention of US citizens without trial. But at least we’re supposedly safer because of it. Citizens are strip-searched in public in order to board an airplane. Our travel, we are told, is now more secure. A host of new and unreasonable taxes is going into effect (on medical devices, insurance policies, tanning salons, wages, home sales, drugs, and even illness)–but it’s okay because we’re all supposedly getting the health security we need to live our lives to the fullest.

The federal government, in effect, has seized control “over healthcare benefits and financing,” establishing “a one-size-fits-all health system,” and removing healthcare planning from our own hands by putting it in the hands of a vast new bureaucracy with invasive powers.  All of this is in exchange for our security. We are now supposedly secure from terrorism and from sickness. The same manner of thinking is being applied to gun control. If the government just seizes more guns we’ll all be safer.

History suggests otherwise. The philosopher Bertrand Russell once said that “most people would rather die than think; in fact, they do so.” Seems he was right.

The people of the United States have become slaves to their insecurities. We are much like the serfs of medieval Europe, manipulated by the greedy lords in Washington for their own enrichment. Gradually, one liberty at a time, we’re giving our freedom away for chains that will supposedly make us safer. It’s a colossal tragedy.

To paraphrase Benjamin Franklin, “the one who sacrifices freedom for security deserves neither.”

A Simple Lesson in Economics

untitledAlthough I don’t generally post long quotations from other sources here, in this case I’m going to make an exception.  In fact, I’m going to post an entire page. It’s just that good.

Not only is it top-notch information, it’s timely too. As you read it, compare its wisdom to the message coming from our nation’s capital these days.  Big difference.  Given the consequences, I’d say there’s not only an important difference, but a frightening one as well. Barack Obama certainly doesn’t get it (unless his ultimate goal is to bring down and remake the American economy into a socialist model). I don’t think that John Boehner and his merry band of big-government Republicans get it, either. Otherwise they would refuse to cooperate with President Obama’s agenda altogether.

Be sure to read the entire thing (it’s short).  Reflect a few moments.  Then read it again. I suspect it will leave you shaking your head. It’s page 139 of Henry Hazlitt’s fine little volume entitled Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics (Three Rivers Press edition, 1979).  It’s still available if you’d like to purchase a copy for yourself. I highly recommend it; it was written for folks like you and me, folks who aren’t economists but who wish to understand the topic.

Hazlitt was an economist, but also a philosopher and a journalist. He wrote for several influential publications, including the New York Times, the Wall Street Journal, and Newsweek.  He was greatly influenced by economist Ludwig von Mises and the so-called Austrian School of Economics (I have written in this blog before about Mises and the Austrian School). Economics in One Lesson originally appeared in 1946 and it has become a classic economics text. I wish every American would read it, just after they take the time to read the Constitution.

A voice for reason and logic rather than emotionalism and polemics, Hazlitt died in 1993. From the vaults of heaven I bet he’s shaking his head and thinking, “they still don’t get it.” Anyway, here is the extended quotation. I find it inspiring and loaded with common sense. Sadly, common sense isn’t so common in the halls of government. Though it begins with the topic of the minimum wage, it raises broader implications quickly. I have reproduced the page in bold print to make it clear that this is the work of Hazlitt and not my own.

As you read Hazlitt’s words, you may come to the conclusion that our federal government is doing the exact opposite of what it should be doing to assist our citizens in securing their economic recovery. It’s as if Hazlitt were still alive, writing for today.

 

Henry Hazlitt

Henry Hazlitt

“All this is not to argue that there is no way of raising wages. It is merely to point out that the apparently easy method of raising them by government fiat is the wrong way and the worst way.

This is perhaps as good a place as any to point out that what distinguishes many reformers from those who cannot accept their proposals is not their greater philanthropy, but their greater impatience. The question is not whether we wish to see everybody as well off as possible. Among men of good will such an aim can be taken for granted. The real question concerns the proper means of achieving it. And in trying to answer this we must never lose sight of a few elementary truisms. We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.

The best way to raise wages, therefore, is to raise marginal labor productivity. This can be done by many methods: by an increase in capital accumulation–i.e., by an increase in the machines with which the workers are aided; by new inventions and improvement; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees.

So government policy should be directed, not to imposing more burdensome requirements on employers, but to following policies that encourage profits, that encourage employers to expand, to invest in newer and better machines to increase the productivity of workers–in brief, to encourage capital accumulation, instead of discouraging it–and to increase both employment and wage rates.”

(Henry Hazzlit, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics. (New York: Three Rivers Press 1979)

The Truth About Liberalism

Ludwig von Mises, Founder of the "Austrian School" of Economics, and Proponent of Free-Market Capitalism

Ludwig von Mises, Founder of the “Austrian School” of Economics, and Proponent of Free-Market Capitalism

What is liberalism?  What is a liberal education?  Why do college students receive degrees in something called “liberal arts”?  Has liberalism always been what it is today?  These are fascinating questions.

Many people fail to understand that what is now referred to as “liberalism” was once known more by the terms “statism” and “socialism.”  The original version of liberalism–which is often known as classic liberalism–is now found among those who prefer smaller government and free markets.  As the power of monarchies in old Europe came crashing down with the Enlightenment and the dawn of modernity, the “liberals” back then were those who argued that government is valid only when it receives the approval of the people.  Those classic liberals understood that if economic freedom was granted to everyone, wealth could be pursued by all and would no longer be the prerogative of a few powerful lords and ladies.

We Americans are inheritors of this vision.  It came from the great thinkers of Europe and is enshrined in the founding documents of our nation.  “Life, liberty, and the pursuit of happiness” are specifically mentioned in the Declaration of Independence.  There we are told that the power of government is derived from “the consent of the governed.”  If government no longer assists us in securing these aims, “it is the right of the people to alter or to abolish it.”  Note that there is no mention in the Declaration that government should make us happy or give us the things that secure our happiness.  That is up to us.

Liberalism as originally defined was freedom from many evil things:  the powerful grip of royalty, excessive taxation, limits on legitimate business, forced enlistment in the army or navy, and from the destitution caused when economic power is held only by a privileged few.  Those early liberals were apostles of freedom.

The right of kings and princes to rule was a divine right, one granted by Almighty God–or so the people were told.  Who told them that?  The princes and kings, of course.

The first people who engaged in the free exchange of goods or services put a kink in the armor of the powerful.  All it took was for one person to trade something to someone else, not because they were told to do so, and not because a feudal prince demanded it.  They did it because it was of economic benefit to themselves and their loved ones.

With that first exchange the notion of economic liberty was born.  The Genie of Power and Control was out of the bottle.  Kings, princes, and sometimes even popes have been trying to put that genie back ever since.  You see, it’s not just the genie that has a name.  The bottle also has a name.  It’s called Government.

The freedom of making one’s own economic choices has proved its power to make the lives of everyone better.  With its arrival a new light burst upon the affairs of humanity.  As economist Ludwig von Mises wrote in his book Liberalism, “a magnificent economic development took place.  The release of man’s productive powers multiplied the means of subsistence many times over.”  The ideas of classic, original liberalism dropped the infant mortality rate, increased health, and destroyed “the barriers that in earlier ages had separated the lords and serfs.”

But woe to the growing middle class!  When there is creation of genuine wealth, the tax collector is never far behind.  Princes may be rare today or may supposedly be curtailed by constitutions, but we humans lose our abilities to reason when it comes to the hard work and wealth of others.  Under the guise of guaranteeing equality, the monarch has returned to America but with a new name:  the federal government.

Government feeds upon the anxiety and greed of the people who would rather know immediate gratification than long-term security.  As Mises tells us, the light of a free economy emancipated humanity from a society where power was in the hands of “the special interests of certain classes.” In response, what did powerful government do?  It involved itself in those formerly free transactions and once again granted power to its chosen classes of special interest.

This was done, of course, under the guise of securing equality.  What was really guaranteed was not equality but statism, powerful centralized government that increasingly meddled in the affairs of citizens at all levels.  Then, insult was added to injury:  powerful statists and their socialist supporters hijacked the name “liberal.”  Twisting the facts, statists repainted the world to convince the greedy that the free exchange of goods and services was the cause of all the world’s misery and poverty.  The truth was just the opposite.  Those who tried to point this out were labelled as “dangerous” and “radical.”

These days, it would appear that Ludwig von Mises was right:  “nothing is left of liberalism but the name.”  Today’s liberals–who have stolen the name “liberal” from those who value freedom–spend their time condemning the advocates of free markets.  Capitalism, they claim, promotes “only the special interests of certain classes.”  Nothing could be farther from the truth.  Only government has the necessary power to guarantee the success or destruction of any class of people.

America has come full circle.  Is it an economic monarchy that we want?  Call them presidents, senators, congressmen, or bureaucrats–if they wield excessive power they might as well be princes or kings.

Imagine an economic and social system where powerful people constantly tell you what to do, and how to do it.  Imagine that these powerful people live extraordinary lives of privilege.  Imagine that they have armed men and women to enforce their will.  No matter how often they tell you that their actions are “for the common good,” it still sounds like monarchy to me.

Do you duty as a free citizen tomorrow.  Revolt.  Do it peacefully, but revolt.  Remind the political elites that you are not a serf.  We don’t have princes in America.  We don’t have kings.  And we don’t want them.

Mises was inspired by the legendary character Faust, taking for himself the immortal words with which I leave you.  I beg you to remember them tomorrow as you vote:  “No man deserves his freedom or his life who does not daily win them anew.”

Quotations from Ludwig von Mises are drawn from the introductory chapter of the 2012 reprint of his 1962 edition of Liberalism (Important Books imprint, first paperback edition).  The text is also found online, compliments of the Ludwig von Mises Institute at Auburn University.  To access the online version, click HERE.