The backdrop is this… A small Lutheran school in Michigan (the Hosanna-Tabor Evangelical Lutheran Church and School) hired Cheryl Perich to teach many subjects, including theology. After a semester, she developed narcolepsy and said she couldn’t show up for work for a month after the Christmas break. The kids would just have to wait.

But in this competitive market, failing to deliver educational services could be financially devastating, not to mention very detrimental to the kids. So the school hired someone to take her place. When Perich finally showed up for work, she sensed that she had been replaced and prepared a disability lawsuit. The school tried to give her benefits in exchange for resigning, but she refused. So she was finally fired for insubordination and causing disruption.

It’s not a particularly unusual case. Businesses face this sort of thing all the time. The way the law works, businesses are routinely blackmailed by disgruntled employees who demand to be paid, even though they aren’t wanted. It’s beyond me why a person would want to work at a place where he or she is not wanted, but that’s the way it is. And the law, citing their “civil rights” to other people’s money, usually comes down on the side of the worker.

The EEOC decided in favor of the Perich, but the school persisted, and the case went to the high court. Here the justices delivered a surprisingly sensible decision on interesting grounds. The Constitution says that the government can’t interfere with religion. Perich was teaching religion at a religious institution. For the government to demand her reinstated, it would be a clear imposition on this institution and an obvious violation of the First Amendment.

“Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so,” said the court, “intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments.”

Darn right. But wait! What about her “civil rights”? The court said that whatever the employee’s legal rights would be in a normal commercial institution, they can’t possibly apply in the case of a commissioned minister of a religious institution. Otherwise, we would have the government effectively deciding who must or must not be a minister, which obviously contradicts the whole point of the First Amendment.

The language of both the majority and concurring opinions makes a series of uncommonly sensible points. The concurring opinion by Samuel Alito and Elena Kagan points out that it is part of Lutheran teaching that disputes be handled within the community and not be taken to secular courts. But this teacher, Perich, totally disregarded this core principle and immediately started threatening the school with a lawsuit.

Your eyes just pop out to read the court wholly endorsing the Lutheran view: “Hosanna-Tabor discharged the respondent because she threatened to file suit against the church in a civil court. This threat contravened the Lutheran doctrine that disputes among Christians should be resolved internally without resort to the civil court system and all the legal wrangling it entails.” For courts to interfere “would dangerously undermine the religious autonomy.”

Again, darn right.

But you know what the problem here is? The court wrapped its defense of freedom here in clerical robes only. In order to enjoy the autonomous right to hire and fire, you have to be a religious institution, and it has to pertain to someone who is teaching, however little, some aspect of doctrine. That’s the right decision, but why shouldn’t the same principle apply across the board to all commercial institutions and, indeed, to all private institutions? Why should religious institutions be the exclusive beneficiary of a laissez-faire policy?

All businesses, all nonprofits, all private clubs, all neighborhood associations have internal policies and should enjoy the right to manage their own affairs without government intrusion. To impose a government plan on their labor policies is a serious compromise of rights and liberties, which must always include not only the right to associate but to disassociate.

The critics of the case worry that the decision is too broad, so broad that the court didn’t even bother to define what a minister is. The critics are completely wrong. This court decision is the right one, but the problem is that it is too narrow: In the name of freedom, all privately owned groups should be granted the same right to manage themselves.

Interestingly, this case even has implications for the current political war over Mitt Romney’s activities at Bain & Co., a private equity firm that specializes in corporate restructuring. Its work can result in either profits or losses, expansions or closings. People are hired, people are fired. Who decides? The owners and managers do — in response to market trends — so it should be always and everywhere in a free society.

Newt Gingrich, apparently, doesn’t like this idea. He calls Romney a corporate raider who needlessly puts people out of work — as if Gingrich knows better than the stockholders how to run a company.

A particular issue for Gingrich concerns a steel mill in Kansas that Bain was instrumental in closing, leaving massive job losses behind. Hello? Steel? Its production was once integral to the U.S. economy, but those days ended some 30 years ago when overseas companies demonstrated that they could do the same thing at a fraction of the cost. Is Gingrich really suggesting that every means should be used to keep steel plants open, even if it means looting American businesses and consumers who are forced to pay the highest possible prices for no good reason?

This way of thinking puts Gingrich on the side of Cheryl Perich: against the rights of the property owners. Just as the Supreme Court said, such a system would involve massive coercion against people and intolerable intrusions into the private affairs of others.

Whether it is a tiny religious school or a multinational corporation, up with freedom of association and freedom of disassociation! That’s the way liberty works. Its genius is its capacity to adapt the economic environment to a changing world, so that we stay on the path of growth to support rising living standards for humanity. The stasis of a socialist, state-run economy is not an option in today’s world, and neither is the economic stagnation that comes with national protectionism and special privileges for workers. You can’t have genuine profit and expansion without the possibility of losses and plant closings, and without the owners of institutions having control over who can and cannot get paid for services.

What applies to the Lutheran school should apply to every sector of society that is privately owned, whether or not their workers are called ministers. It is not only religion that needs protection against government interference. Everyone does. Granted, this would be a gigantic step in the right direction.

Regards,

Jeffrey Tucker

Implausibly, Freedom Gets a Boost was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It’s true that mail still has a place in the digital world, as the post office says. But the government shouldn’t be the institution to run it. It already has competitors in package delivery but the government stands firmly against letting any private company deliver something like first class mail. And so it has been since the beginning. The state and only the state is permitted to charge people for non-urgent paper mail in a letter envelop.

It’s a control thing. The government is into that. And it is far from new.

Do you know the amazing story of Lysander Spooner? He lived from 1808 to 1887. His first great battle was taking on the post office monopoly. In the 1840s, he was like most people at the time: fed up with the high prices and bad service. But as an intellectual and entrepreneur, he decided to do something about it. He started the American Letter Mail Company, and his letter business gave the government some serious competition.

It opened offices in major cities, organized a network of steamships and railroads, and hired people to get the mail to where it needed to be. His service was both faster and cheaper than the government’s own. Then he published a pamphlet to fight the power: “The Unconstitutionality of the Laws of Congress Prohibiting Private Mails.” It was brilliant. It rallied people to his side. And he made a profit.

The government hated him and his company and began to litigate against him. It dramatically lowered the price for its services, and used public money to cover its losses. The goal was to bankrupt Spooner, and it eventually succeeded. Spooner’s private postal system had to be shut down. It’s the same way the government today shuts down private schools, private currencies, private security, private roads, private companies that ignore the central plan, and anyone else who stands up for freedom.

From this one anecdote alone, you can see that the post office is hardly a “natural monopoly” — something the government has to provide because free enterprise can’t do so. It is a forced monopoly, one kept alive solely through laws and subsidies. If the post office closed its doors today, there would be 1000 companies rushing in to fill the gap. Just as in the 1840s, the results would be cheaper, better services. The government runs the post office because it wants to control the command posts of society, including communication. The Internet as a global communication device snuck up on the state before the state could kill it.

Let’s return to the 19th century. Spooner didn’t go away. He was more than an entrepreneur. He was a brilliant and pioneering intellectual, as the collection The Lysander Spooner Reader makes clear. He was a champion of individual liberty and a passionate opponent of all forms of tyranny. He was an abolitionist before it became fashionable but he also defended the South’s right to secede.

Most incredibly, he was probably the first 19th century American to return to the old anti-Federalist tradition of post-Revolutionary America. He did this by asking the unaskable question: why should the US Constitution — however it is interpreted — be binding on every individual living in this geographic region?

This document was passed generations ago. Maybe you could say that the signers were bound by it, but what about those who opposed it at the time, and what about future generations? Why are the living being forced to live by parchment arrangement made by people long dead? Why are the living bound by a privileged group’s interpretations of its meaning?

In his view, people have rights or they do not have rights. If they have rights, no ancient scroll restricting those rights should have any power to take those rights away. Nor does it matter what a bunch of old guys in black robes say: rights are real things, not legal constructs to be added or reduced based on the results of courtroom deliberations. Plenty of Americans before his time would have agreed with him! It’s still the case.

Now, keep in mind that Spooner lived in a time where the living memory of these debates had not entirely disappeared. He knew what many people today do not know, namely that the Articles of Confederation made for a freer confederation of states than the Constitution. The Constitution amounted to an increase in government power, despite all its language about restricting government power. Remember too that it was only a few years after the Constitution was rammed through that the feds were suddenly jailing people for the speech crime of criticizing the US president!

Spooner spoke plainly: what you call the Constitution has no authority to take away my rights. Hence his famous essay: “Constitution of No Authority.” In “No Treason” he argues that the state has no rights over your freedom of speech. In “Vices Not Crimes,” he shows that people in any society are capable of doing terrible things but the law should only concern itself with aggression against person and property. Reading them all together, as they are in this book, is a radicalizing experience — a liberating experience. It makes you see the world in a completely different way.

It’s true that they aren’t teaching about Spooner in public school. But he was a giant by any standard, the 19th century’s own Thomas Jefferson (but even better than Jefferson on most issues). There is still so much to learn here. It’s no wonder that his legacy has been suppressed.

This edition of his best work is published by Fox & Wilkes, an imprint of Laissez-Faire Books. Incredibly, you are still permitted to buy this and read it without getting arrested — for now.

Regards,

Jeffrey Tucker

Spooner the Prophet was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

I have this contrarian view not because I am cynical or pessimistic, but because I have thoroughly studied this set of rules or “law of the land,” and found them to be antagonistic to individual liberty and state’s rights, and sympathetic to big government. When one compares the constitution that was replaced, The Articles of Confederation, there is little doubt of this truth. Lysander Spooner said this:

“But whether the Constitution really be one thing, or another, this much is certain – that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist.”

In my opinion, there is no doubt that the constitution fully authorized the government that we had and still have today. It is also true that any set of rules is powerless to stop tyranny unless the people enforce and demand compliance on a constant basis. This has never been the case. Even if it had been followed to the letter, it is obvious that liberty would still have been compromised.

Before the current constitution was drafted, there was never any mention or acceptance of the notion that there was a (U)nited States, or that any single nation existed with power over the states. Quite the contrary was the case. It is very troubling that so many Americans have been fooled into believing that the constitution is the basis of our freedom. Nothing could be further from the truth, and nothing could be more misunderstood!

Recently, those like Tom Mullen and Bill Buppert have explained thoroughly why the constitution is not what it is made out to be, and many others have properly denounced this misleading document as well, but the general thinking is still very misguided. Most continue to laud and worship this very flawed piece of parchment, and continue to believe that it is the creator and savior of liberty. Liberty lies in the essence of man, not in documents secretly drafted in the dark of night by the few. The free spirit of the people must awaken before any real freedom becomes evident, and in that awakening they must realize the great importance of the individual and of individual responsibility.

My intent here is not to claim that our original constitution, The Articles of Confederation, were a perfect set of rules, or that any set of rules established by simple men could be perfect. My intent is to expose the lie that is our current constitution. If we as a people could see the truth of why our original constitution was completely scrapped in favor of our current one, maybe a more widespread anger would arise. Once it is accepted that the Hamiltonians in 1787 staged a coup to destroy states rights in favor of federal power, and to destroy individual liberty in favor of nationalism, then maybe more will begin to question their false idolization of the constitution. One could only hope for such an awakening.

Before this constitution, there was no power whatsoever for the federal government to tax. That was left entirely to the individual states. Now the Feds have an unlimited power to tax. In Article 1, Section 8, the taxing clause states, “Congress has the power to lay and collect taxes, duties, imposts, and excises for the common defense and general welfare of the United States.” I see no limits mentioned here whatsoever, and given the term “General Welfare” of the (U)nited States, there is no reason to believe that any restriction was intended. Many so-called constitutional scholars will argue this, saying that all spending must be “constitutional”, or within the confines of the taxing and spending clauses, but these arguments can easily be refuted given the broad and sweeping language in this section. This was in my opinion done explicitly by design. Article 1, Section 8 is nothing if it is not an all-encompassing, unrestricted, and explicit enabler of unlimited governmental power.

Anyone can check the definitions during that period by simply going to the dictionary of that time, Samuel Johnson’s A Dictionary of the English Language. It is immediately obvious that there was little difference in the meaning of general welfare at the time of the founding as there is today. But this is just one example of the obvious misunderstanding by so many in modern times.

Under the Articles of Confederation, there was no president. There was no supreme court. There was no federal taxation, and certainly no immoral income tax. This meant that there was no IRS. There was no federal control of interstate commerce. Congress could not raise an army or draft troops. What this meant, was that the states were sovereign, and no national government existed in any real sense. Because of this, freedom flourished, and tyranny was not evident. So how is it then that this very pro-central government, federal controlling, and powerful national governing system could be created by the same constitution that supposedly set us free? Why were the Articles scrapped entirely if freedom of the people and state’s rights were the objectives sought? I can tell you; at no time did those who supported the drafting and ratification of the U.S constitution in 1787 consider individual freedoms!

There are those who would offer that the Bill of Rights adopted several years later corrected the obvious problems that plagued the constitution, but that thinking is based on the false logic of gullible minds. While those amendments certainly were restrictions on government power, they did nothing to change the original intent, that being one of granting massive and in many cases unlimited power to a federal government.

The constitution allowed for the usurpation of power by the executive branch, it allowed federal courts to approve and sanction authoritarianism by the government over the people, it allowed for legalized forcible theft by the federal government in the form of taxation, and it allowed the federal government both the ability to collect taxes for war, and to also prosecute those wars. These egregious powers given by the constitution to the central government are completely antithetical to liberty, and should never have been considered by any men of character.

The people did not establish our constitution, nor was it inspired by divine intervention as so many suggest. It would be difficult for me to imagine that God would have a hand in the destruction of our inherent and natural rights. No, this flagrantly flawed document was designed and implemented by a few corrupt men led by Alexander Hamilton. Their agenda was guided not by any desire to achieve liberty for all, but by a grand lust for power and control. Had that not been the case, the Declaration of Independence would have been the guide for any new set of rules, and our original constitution would have been even more scrutinized instead of being replaced.

Instead, after 224 years, we now have exactly what the original ruling class desired, an all-powerful central government ruling over the lower classes. This is a rule by the few over the many. As Aristotle said: “rule by the few is aristocracy in its ideal form and oligarchy in its perverted form.” The elite class holds all the cards, while the rest of us now struggle under the thumb of tyranny!

Regards,

Gary D. Barnett

Gary D. Barnett is president of Barnett Financial Services, Inc., in Lewistown, Montana.

Still Fed Up With Constitution Worship was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Market for Liberty imagines a totally free society; one with no government intrusion whatsoever; one in which the free market is left to respond to the demands of individuals, without recourse to institutionalized coercion — implied or actual. Is such a stateless existence even possible, much less preferable? Or, as so many contend, is it merely an academically contrived utopia?

Morris and Linda Tannehill address all the usual fears and protestations that a truly non-governmental — i.e. anarchist society — conjures up.

Whenever there arises in conversation the mere suggestion of a totally free, laissez-faire market, the possibility that human beings might even be able to survive (much less thrive) without the safety net of State control, apologists for “benevolent government” invariably step atop their soapboxes and ask:

“Yes, but who will provide education for the masses, if not the public schools?” or “Who will care for the sick and weak, if not the public hospitals?”

Indeed, these are questions that deserve thoughtful, honest answers. But these questions assume realities that are not in evidence.

They suppose that “the public” (i.e., the state) actually has money to “provide” these services, rather than, as is actually the case, first having to expropriate (steal) it from private, productive individuals. Furthermore, the fallacy of benign governmental control relies on the idea that governments can provide essential services more reliably and cost-effectively than the private sector.

In other words, the government’s obligation to provide essential services is more reliable and effective than the private sector’s opportunity to provide essential services. Admittedly, this debate does not lend itself to easy, black and white conclusions.

But as the Tannehill’s argue persuasively, the free market provides solutions that governments would never dream of. “The big advantage of any action of the free market,” contend the Tannehills, “is that errors and injustices are self-correcting. Because competition creates a need for excellence on the part of each business, a free-market institution must correct its errors in order to survive. Government, on the other hand, survives not by excellence, but by coercion; so an error or flaw in a governmental institution can (and usually will) perpetuate itself almost indefinitely, with its errors being ‘corrected’ by further errors. Private enterprise must, therefore, always be superior to government in any field.”

[It is worth mentioning here that corporations acting in collusion with the state are NOT private enterprises as the Tannehill’s define them. They are simply entities that have co-opted the government’s “gun-for- hire” to do their dirty work for them. Think Wall Street “bailout” recipients and their army of D.C. lobbyists. Indeed, think any institution at all that seeks unfair protection or promotion from the state.]

The lines on the battlefield between the comfort of State control and the liberty of anarchy are familiar to all. The State is a protector, one side argues. The State is a prison guard, the other side argues.

• How, the statist is heard to question, might common disputes find resolution without the currently preferred monopoly of the state’s courts?

• What about private monopolies that would ruthlessly jack up prices and bleed us working class proletariats to death?

• By what means might a laissez-faire society offer protection from foreign aggressors?

• How might the personal liberties underpinning the whole system be protected if it were not for the tireless work of the state’s police and its myriad other law enforcement agencies?

• Indeed, the statist continues, how would “the law” itself even come into being, and in what shape would it find application, in the absence of the all-knowing, all-powerful state?

The Tannehills address these anxieties thoroughly and logically. “Freedom is not only as moral as governmental slavery is immoral,” they write, “it is as practical as government is impractical.”

Discussions criticizing the state’s myriad shortcomings and follies are many. The Tannehills’ Market for Liberty takes the extra step in providing viable, concrete solutions to state-sponsored dilemmas. The Free Market, they argue, can correct the State’s tendency toward costly excesses, and can do so peacefully and voluntarily, simply by following price signals from the market itself.

Market for Liberty is, for all intents and purposes, a very real, practical solution set to those most commonly presented excuses for acquiescing to governmental authority. The government is not merely a “necessary evil,” the Tannehills argue. “It is necessarily evil.”

Of course, Market for Liberty does not project a utopia in which acts of violence simply disappear and where every individual immediately sets off on a long road to perfection. Rather, the authors illustrate how individuals acting in their own self-interest, coming together to engage in mutually-beneficial exchanges, are thus incentivized to act with honesty and integrity.

“The history of governments always has been, and always will be, written in blood, fire and tears,” the Tannehills assert. In Market for Liberty, they show how freedom is not only an alternative to the State, but a far superior one worth, at the very least, our immediate and undivided attention.

Regards,
Joel Bowman
Whiskey & Gunpowder

May 11, 2011

Freedom Naturally: A Review of Morris and Laura Tannehill’s “The Market for Liberty” was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Unfortunately, the quality of this adaptation is representative of its low budget and brief production time. The film meticulously retains the original plot of Rand’s opus, going so far as to lift much of the dialogue directly out of the novel. However, due to the large amount of material being covered, the result leaps through the original plot line in a somewhat disjointed portrayal, which can be difficult to follow. While Johansson is to be commended for finally bringing Atlas Shrugged to cinema after almost 40 years of negotiations, delays, and difficulties, it is disappointing that the end result is not more impressive.

Despite the film’s mediocre quality, its end was met by a surprising response in Reno on Saturday. As the main character, Dagny Taggart, climbs a flame-engulfed hill to be confronted with the destruction of petroleum magnate Ellis Wyatt’s oil fields — the lifeblood of what little remained of the American economy — she screams in terror. The camera pulls away, revealing Wyatt’s parting farewell: “I am leaving it as I found it. Take over. It’s yours.”

The crowded theater began to applaud.

While some people of all ideological persuasions, including libertarians, find Ayn Rand’s rather idiosyncratic beliefs and obscure moral code distasteful, the theater’s reaction captures the hidden resonance of her greatest work on grounds she would not have completely anticipated. Indeed, many of the film’s difficulties are less the fault of the director, and more of Rand herself. The primary protagonists of the book are emotionless industrialists, stilted and one-dimensional in their behaviors, thinking only of metal, railroads, and factories.

Atlas Shrugged is compelling, not for its heroes, but for its villains. Published in 1957, Rand’s description of politicians and lobbyists in a time of economic crisis is almost prophetic. These Washington insiders scheme behind closed doors to retain and expand their power. In elaborate press conferences, they attempt to convince the unsuspecting populace of their legislation’s necessity by vilifying productive companies and portraying their own destructive, self-serving designs as being in the interests of the advancement of equality, stability, and progress.

For instance, in Atlas Shrugged, the lobbyist Wesley Mouch decries the capitalist Hank Rearden’s invention of a wonderful alloy that is stronger than steel. And last week, in the real world, Rep. Jesse Jackson Jr. took to the house floor to declare that Steve Jobs’s iPad was killing jobs. Congress must, according to Jackson, recognize that Apple is driving companies such as Barnes & Noble and Borders out of business, and the company should be stopped in the interests of fairness.

Jackson decried Congress for failing to foster “protection for jobs here in America to ensure that the American people are being put to work.” It’s as if he wanted us to believe the printing press was harmful to the economy because it decreased the demand for scribes. Such a condemnation of a successful business and a demand for protection of failing industries could easily have been lifted directly from Rand’s novel.

However, the similarities are not restricted to a lone Democratic congressman. Similar absurd arguments were bountiful on both sides of the aisle in debates about policies ranging from Obamacare to the bailouts. Americans are directed to believe that if they would just allow the federal government to act in order to prevent further change in the economy, then stability could be restored.

It is this paltry masquerade of politicians feigning action and granting themselves greater power in the name of equality and economic stability that leads Americans to Rand’s story. Indeed, Republicans and Democrats both put on a charade of activity last week, claiming to remedy our nation’s budget woes. Both parties threatened to shut down the government over a series of austerity measures amounting to a final savings of $352 million this fiscal year. That’s $352 million out of budget deficit of approximately $1.6 trillion, or .02 percent of what would be required to actually balance the budget. Politicians bickered over funding for relatively low-cost line items like NPR and Planned Parenthood, all the while ignoring the harsh reality that our public debt is on track to surpass our GDP.

In other words, Republicans and Democrats have managed to mortgage the entire household worth of the United States. Their remedy for this self-imposed tragedy? Grant themselves greater power through increased regulations and rising taxes.

With each repeated failure of federal action to remedy our economic situation, politicians reveal themselves more fully to the American people as nothing but self-serving villains. Their strategy relies on the appearance of action coupled with soaring rhetoric to convince Americans of their good deeds. Meanwhile, these politicians are gambling with our lives and prosperity, risking the well-being of hard-working individuals in thoughtless policies designed merely to secure reelection.

It is due to her apt depiction of these self-serving villains that Ayn Rand’s novel has climbed to number four on the top-sellers list on Amazon and that the film is likely to do far better than its mediocre quality would merit. Americans are growing tired of politicians gambling away their prosperity to preserve their own power. The crowd in Reno applauded as Ellis Wyatt walked away, not because he was some great hero, but because they understood the pain of working tirelessly while a reckless and unproductive government needlessly spends away the results of your labor and rewards your hard work with mounting regulations.

The idea of walking away has become attractive — and indeed, Americans are increasingly leaving the United States for opportunities abroad, with record numbers emigrating to Australia and East Asia.

So long as Ayn Rand’s villains continue to resemble the reality in Washington, the story of Atlas Shrugged will remain popular. The average American may not be a powerful railroad executive or steel magnate, but most believe they are entitled to the fruits of their labor. Many are beginning to realize that their future is being gambled away by politicians whose only risk is losing the votes of the individuals who have lost everything.

Regards,
J. Patrick Rhamey, Jr.
Whiskey & Gunpowder

April 22, 2011

The Continued Relevance of Ayn Rand’s Villains was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It is with great sorrow that much of the population of the planet now has Stockholm syndrome. They’ve grown to adore and fawn after their captors. Billions in the U.K. flock to see their slave masters inaugurated or wed. “Prince William of Wales has taken a bride,” they shout. “What a glorious day!”

The tax slaves happily pull up to checkpoints and show their documents. Papers please!  “Thank goodness for our overseers or we’d all be killed by communists!” Sorry, terrorists; we are the communists now.

Yet the prisoners don’t even notice that some of their shackles are starting to rust and fall to the ground. All of the wealth and prosperity has drained from the system now to the point where the entire control edifice is in danger of collapsing — yet the sheep see that as something to be feared, not cheered.

“The local police station is closing,” they cry. “Who will be there to fine us or give us a good tasering?” the people wonder. “Who will be there to show up well after any problem has occurred and write it down for us?”

It’s gotten so bad now, they say, that they may have to make some things legal. “We should make marijuana legal and then tax it and give the money to the overseers,” they say. “We must feed the State…Even if it means allowing some freedoms!”

Yet, when actually given the chance, via vote, the slaves line up one after another to deny themselves the right to have freedom of choice.

Goethe said, “No one is more hopelessly enslaved than those who falsely believe they are free”.

Land of the free? The poor American, chanting like a raving lunatic that they live in the land of the free when in fact they live in their own proprietary version of North Korea — and in some cases worse. North Koreans can open brokerage accounts in most countries in the world. Americans? Not allowed.

Home of the brave? They stand in line at airports, removing all metal objects, laptops, put their perfume in a see through plastic bag, for no explainable purpose, take off their shoes and belt — all without even being prompted and silently await their pat down.

But, perhaps through all the brainwashing, hypnotism and indoctrination via their 12-16 years of government ‘schooling’ and mainstream media they just don’t even recognize freedom anymore.

We must attack Mexico! They cry, “Mexico is a failed state!” as though that is a bad thing. Why, drugs aren’t even illegal there!  Roll out the B52 Bombers, they rail, to the man who holds the Nobel Peace Prize.

If he wasn’t so busy bombing four other countries, at the moment, he almost certainly would like to. But Mexicans aren’t Muslim and their oil supply is dwindling so they’ll just have to wait for their liberation.

Meanwhile on the streets of the United State they Twitter, they tweet, they Facebook and bleat, oblivious to any reality around them.

“Why do they hate us?” they ponder sometimes. “They hate us for our freedom”, the newscast replies.

Ah, yes, they say, it’s so obvious to see. They are just always going to hate us, because we live in the land of the free. Indeed.

Regards,
Jeff Berwick
The Dollar Vigilante
Whiskey & Gunpowder

April 15, 2011

Land of the Free, Indeed was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Making drugs illegal causes the price to increase, which motivates suppliers to enter the black market to make money. The state gets angry over this economic phenomenon, imposing harsher penalties and more brutally enforcing the laws. That causes prices to go up even more, which motivates more people to enter into the market as suppliers. Ultimately, the black market price gets so high that ordinary citizens are lured into the market in the hopes of scoring big financially.

All the bad consequences of the drug war, however, are not the primary reason for why we should legalize drugs. Freedom is the primary reason to legalize drugs. When the state has the power to put people into jail for ingesting a non-approved substance, there is no way that people in that society can be considered free.

A person is sitting in the privacy of his own living room. He decides to smoke marijuana, snort cocaine, or inject himself with heroin. The state — e.g., the members of Congress, the president, the DEA, the Justice Department — claim the authority to punish the person for doing that.

But it’s that person’s mouth, it’s his body, it’s his health.

Alas, not under terms of the drug war. The state says: We own you, we control you, we regulate you. You do as we say with respect to what you put into your mouth, or else.

How can that possibly be reconciled with fundamental principles of freedom? A society in which freedom is genuine is one in which people are free to engage in any activity, so long as it is peaceful and non-fraudulent. That includes, at a minimum, conduct that could be considered self-destructive.

You want to smoke? That’s your decision. You want to drink? That’s your decision. You want to ingest other drugs, no matter how harmful? That’s your decision. That’s what freedom is all about — the right to live your life the way you want, so long as you don’t initiate force or fraud against others.

Unfortunately, statists take an opposite approach. They say that every person ultimately belongs to society and, therefore, can be controlled and regulated by the state for the benefit of society. Since a person taking drugs is harming society, the collectivist argument goes, the state can send him to his room when he is caught violating drug laws, as much as a parent can do so to a child who violates rules on what he should and shouldn’t put into his mouth.

Most everyone now realizes that government officials benefit tremendously from the drug war, just as drug lords and drug gangs do. There is the ever-burgeoning business of asset forfeiture, including against innocent people, which is a way that the state helps fills its coffers without going through the legislative process of raising taxes. There are the bribes of public officials. And there are simply the jobs that the drug war produces — drug war agents, prosecutors, judges, clerks, and so forth. Thus, it isn’t surprising that among the people who still favor the drug war, government officials and drug lords are at the top of the list. Both groups would be put out of work immediately with drug legalization.

We live in a universe in which bad means beget bad ends. It is not surprising that the drug war produces nothing but bad consequences. Violating a fundamental principle of freedom — what a person chooses to ingest — brings about death, destruction, crisis, chaos, violence, corruption, and other bad consequences. Legalizing drugs would be a major step toward restoring the freedoms of the American people, while also bringing an immediate end to the bad consequences that the drug war produces.

Regards,
Jacob G. Hornberger
Whiskey & Gunpowder

January 21, 2011

The Evils of the Drug War was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

It would appear that the more liberty we lose, the less people are able to imagine how liberty might work. It is a fascinating thing to behold.

• People can no longer imagine a world in which we could be secure without massive invasions of our privacy at every step, and even being strip-searched before boarding airplanes, even though private institutions manage much greater security without any invasions of human rights;

• People can no longer remember how a true free market in medical care would work, even though all the problems of the current system were created by government interventions in the first place;

• People imagine that we need 700 military bases around the world, and endless wars in the Middle East, for “security,” though safe Switzerland doesn’t;

• People think it is insane to think of life without central banks, even though they are modern inventions that have destroyed currency after currency;

• Even meddlesome agencies like the Consumer Products Safety Commission or the Federal Trade Commission strike most people as absolutely essential, even though it is not they who catch the thieves and frauds, but private institutions;

• The idea of privatizing roads or water supplies sounds outlandish, even though we have a long history of both;

• People even wonder how anyone would be educated in the absence of public schools, as if markets themselves didn’t create in America the world’s most literate society in the 18th and 19th centuries.

This list could go on and on. But the problem is that the capacity to imagine freedom – the very source of life for civilization and humanity itself – is being eroded in our society and culture. The less freedom we have, the less people are able to imagine what freedom feels like, and therefore the less they are willing to fight for its restoration.

This has profoundly affected the political culture. We’ve lived through regime after regime, since at least the 1930s, in which the word freedom has been a rhetorical principle only, even as each new regime has taken away ever more freedom.

Now we have a president who doesn’t even bother to pay lip service to the idea of freedom. In fact, I don’t think that the idea has occurred to Obama at all. If the idea of freedom has occurred to him, he must have rejected it as dangerous, or unfair, or unequal, or irresponsible, or something along those lines.

To him, and to many Americans, the goal of government is to be an extension of the personal values of those in charge. I saw a speech in which Obama was making a pitch for national service, the ghastly idea that government should steal 2 years of every young person’s life for slave labor and to inculcate loyalty to leviathan, with no concerns about setting back a young person’s professional and personal life.Now we have a president who doesn’t even bother to pay lip service to the idea of freedom. In fact, I don’t think that the idea has occurred to Obama at all. If the idea of freedom has occurred to him, he must have rejected it as dangerous, or unfair, or unequal, or irresponsible, or something along those lines.

How did Obama justify his support of this idea? He said that when he was a young man, he learned important values from his period of community service. It helped form him and shape him. It helped him understand the troubles of others and think outside his own narrow experience.

Well, I’m happy for him. But he chose this path voluntarily. It is a gigantic leap to go from personal experience to forcing a vicious national plan on the entire country. His presumption here is really taken from the playbook of the totalitarian state: the father-leader will guide his children-citizens in the paths of righteousness, so that they all will become god like the leader himself.

To me, this comment illustrates one of two things. It could show that Obama is a potential dictator in the mold of Stalin, Hitler, and Mao, for the presumptions he puts on exhibit here are just as frightening as any imagined by the worst tyrants in human history. Or, more plausibly, it may be an illustration of Hannah Arendt’s view that totalitarianism is merely an application of the principle of the “banality of evil.”

With this phrase, Arendt meant to draw attention to how people misunderstand the origin and nature of evil regimes. Evil regimes are not always the product of fanatics, paranoids, and sociopaths, though, of course, power breeds fanaticism, paranoia, and sociopathology. Instead, the total state can be built by ordinary people who accept a wrong premise concerning the role of the state in society.

If the role of the state is to ferret out evil thoughts and bad ideas, it must necessarily become totalitarian. If the goal of the state is that all citizens must come to hold the same values as the great leader, whether economic, moral, or cultural, the state must necessarily become totalitarian. If the people are led to believe that scarce resources are best channeled in a direction that producers and consumers would not choose on their own, the result must necessarily be central planning.

On the face of it, many people today do not necessarily reject these premises. No longer is the idea of a state-planned society seen as frightening. What scares people more today is the prospect of a society without a plan, which is to say a society of freedom. But here is the key difference between authority in everyday life – such as that exercised by a parent or a teacher or a pastor or a boss – and the power of the state: the state’s edicts are always and everywhere enforced at the point of a gun.

It is interesting how little we think about that reality – one virtually never hears that truth stated so plainly in a college classroom, for example – but it is the core reality. Everything done by the state is ultimately done by means of aggression, which is to say violence or the threat of violence against the innocent. The total state is really nothing but the continued extension of these statist means throughout every nook and cranny of economic and social life. Thus does the paranoia, megalomania, and fanaticism of the rulers become deadly dangerous to everyone.

It begins in a seemingly small error, a banality. But, with the state, what begins in banality ends in bloodshed.

Let me give another example of the banality of evil. Several decades ago, some crackpots had the idea that mankind’s use of fossil fuels had a warming effect on the weather. Environmentalists were pretty fired up by the notion. So were many politicians. Economists were largely tongue-tied because they had long ago conceded that there are some public goods that the market can’t handle; surely the weather is one of them.

Enough years go by and what do you have? Politicians from all over the world, every last one of them a huckster of some sort only pretending to represent their nations, gathering in a posh resort in Europe to tax the world and plan its weather down to precise temperatures half a century from now.

In the entire history of mankind, there has not been a more preposterous spectacle than this!

I don’t know if it is tragedy or farce that the meeting on global warming came to an end with the politicians racing home to deal with snowstorms and record cold temperatures.

I draw attention to this absurdity to make a more general point. What seems to have escaped the current generation is the notion that was once called freedom. Let me be clear on what I mean by freedom. I mean a social or political condition in which people exercise their own choices concerning what they do with their lives and property. People are permitted to trade and exchange goods and services without impediment or violent interference. They can associate or not associate with anyone of their own choosing. They can arrange their own lives and businesses. They can build, move, innovate, save, invest, and consume on terms that they themselves define.

What will be the results? We cannot predict them, any more than I can know when everyone in this room will wake up tomorrow morning, or what you will have for breakfast. Human choice works this way. There are as many patterns of human choice as there are humans who make choices.

The only real question we should ask is whether the results will be orderly – consistent with peace and prosperity – or chaotic, and thereby at war with human flourishing. The great burden born by the classical liberal tradition, stretching from medieval times to our own, is to make believable the otherwise improbable claim that liberty is the mother, not the daughter, of orderliness.

To be sure, that generation of Americans that seceded from British rule in the late 18th century took the imperative of liberty as a given. They had benefitted from centuries of intellectual work by true liberals who had demonstrated that government does nothing for society but divide and loot people in big and small ways. They had come to believe that the best way to rule a society is not to rule it at all, or, possibly, rule it with the people’s consent in only the most minimal way.

Today, this social order sounds like chaos, not anything we dare try lest we be overrun with terrorists and drug fiends, amidst massive social, economic, and cultural collapse. To me this is very interesting. It is the cultural condition that comes about in the absence of experience with freedom. More precisely, it comes about when people have no notion of the relationship between cause and effect in human affairs.

One might think that it would be enough for most people to log-on to the World Wide Web, browse any major social-networking site or search engine, and gain direct experience with the results of human freedom. No government agency created Facebook and no government agency manages its day-to-day operation. It is the same with Google. Nor did a bureaucratic agency invent the miracle of the iPhone, or the utopian cornucopia of products available at the Walmart down the street.

Meanwhile, look at what the state gives us. The department of motor vehicles. The post office. Spying on our emails and phone calls. Full-body scans at the airport. Restrictions on water use. The court system. Wars. Taxes. Inflation. Business regulations. Public schools. Social Security. The CIA. And another ten thousand failed programs and bureaucracies, the reputation of which is no good no matter who you talk to. Now, one might say, oh sure, the free market gives us the dessert but the government gives us the vegetables to keep us healthy. That view does not account for the horrific reality that more than 100 million people were slaughtered by the state in the 20th century alone, not including its wars.

This is only the most visible cost. As Frédéric Bastiat emphasized, the enormity of the costs of the state can only be discovered in considering its unseen costs: the inventions not brought to market, the businesses not opened, the people whose lives were cut short so that they could not enjoy their full potential, the wealth not used for productive purposes but rather taxed away, the capital accumulation through savings not undertaken because the currency was destroyed and the interest rate held near zero, among an infinitely expandable list of unknowns.

To understand these costs requires intellectual sophistication. To understand the more basic and immediate point that markets work and the state does not, needs less sophistication, but it still requires some degree of understanding of cause and effect. If we lack this understanding, we go through life accepting whatever exists as a given. If there is wealth, there is wealth, and there is nothing else to know. If there is poverty, there is poverty, and we can know no more about it.

It was to address this deep ignorance that the discipline of economics was born in Spain and Italy, the homes of the first industrial revolutions, in the 14th and 15th centuries, and came to the heights of scientific exposition in the 16th century, to be expanded and elaborated upon in the 18th century in England and Germany, in France in the 19th century, finally achieving its fullest presentation in Austria and America in the late-19th and 20th centuries.

And what did economics contribute to human sciences? What was the value that it added? It demonstrated the orderliness of the material world through a careful look at the operation of the price system and the forces that work to organize the production and distribution of scarce goods.

Its main lesson was taught again and again for centuries: government cannot improve on the results of human action achieved through voluntary trade and association. This was its contribution. This was its argument. This was its warning to every would-be social planner: your dreams of domination must be curbed.

In effect, this was a message of freedom, one that inspired revolution after revolution, each of which stemmed from the conviction that humankind would be better off in the absence of rule than in its tyrannical presence. But consider that what had to come before the real revolutions: there had to be this intellectual work that prepared the field of battle, the epic struggle that lasted centuries and continues to this day, between the nation-state and the market economy.

Make no mistake: it is this battle’s outcome that is the most serious obstacle to the establishment and preservation of freedom. The political order in which we live is but an extension of the capacities of our collective cultural imagination. Once we stop imagining freedom, it can vanish, and people won’t even recognize that it is gone. Once it is gone, people can’t imagine that they can or should get it back.

I’m reminded of the experience of an economist associated with the Mises Institute who was invited to Kazakhstan after the fall of the Soviet Union. He was to advise them on a transition to free markets. He talked to officials about privatization and stock markets and monetary reform. He suggested no regulations on business start-ups. The officials were fascinated. They had become convinced of the general case for free enterprise. They understood that socialism means that officials were poor too.

The economist listened to this point and kept waiting for the objection. He nodded his head that this is precisely what people will do. After some time, the government officials became more explicit. They said that they cannot simply step aside and let people move anywhere they want to move. This would mean losing track of the population. It could cause overpopulation in some areas and desolation in others. If the state went along with this idea of free movement, it might as well shut down completely, for it would effectively be relinquishing any and all control over people.And yet, an objection was raised. If people are permitted to open businesses and factories anywhere, and we close state-run factories, how can the state properly plan where people are going to live? After all, people might be tempted to move to places where there are good-paying jobs and away from places where there are no jobs.

And so, in the end, the officials rejected the idea. The entire economic reform movement foundered on the fear of letting people move – a freedom that most everyone in the United States takes for granted, and which hardly ever gives rise to objection.

Now, we might laugh about this, but consider the problem from the point of view of the state. The whole reason you are in office is control. You are there to manage society. What you really and truly fear is that by relinquishing control of people’s movement, you are effectively turning the whole of society over to the wiles of the mob. All order is lost. All security is gone. People make terrible mistakes with their lives. They blame the government for failing to control them. And then what happens? The regime loses power.

In the end, this is what it always comes down to for the state: the preservation of its own power. Everything it does, it does to secure its power and to forestall the diminution of its power. I submit to you that everything else you hear, in the end, is a cover for that fundamental motive.

And yet, this power requires the cooperation of public culture. The rationales for power must convince the citizens. This is why the state must be alert to the status of public opinion. This is also why the state must always encourage fear among the population for what life would be like in the absence of the state.

The political philosopher who did more than anyone else to make this possible was not Marx nor Keynes nor Strauss nor Rousseau. It was the 17th-century philosopher Thomas Hobbes, who laid out a compelling vision of the nightmare of what life is like in the absence of the state. He described such life as “solitary, poor, nasty, brutish, and short.” The natural society, he wrote, was a society of conflict and strife, a place in which no one is safe.

He was writing during the English civil war, and his message seemed believable. But, of course, the conflicts in his time were not the result of natural society, but rather over the control of leviathan itself. So his theory of causation was skewed by circumstance, akin to watching a shipwreck and concluding that the natural and universal state of man is drowning.

And yet today, Hobbesianism is the common element of both left and right. To be sure, the fears are different, stemming from different sets of political values. The left warns us that if we don’t have leviathan, our front yards will be flooded from rising oceans, big business moguls will rob us blind, the poor will starve, the masses will be ignorant, and everything we buy will blow up and kill us. The right warns that in the absence of leviathan society will collapse in cesspools of immorality lorded over by swarthy terrorists preaching a heretical religion.

The goal of both the left and right is that we make our political choices based on these fears. It doesn’t matter so much which package of fear you choose; what matters is that you support a state that purports to keep your nightmare from becoming a reality.

Is there an alternative to fear? Here is where matters become a bit more difficult. We must begin again to imagine that freedom itself could work. In order to do this, we must learn economics. We must come to understand history better. We must study the sciences of human action to re-learn what Juan de Mariana, John Locke, Thomas Jefferson, Thomas Paine, Frédéric Bastiat, Ludwig von Mises, F.A. Hayek, Henry Hazlitt, Murray N. Rothbard, and the entire liberal tradition understood.

What they knew is the great secret of the ages: society contains within itself the capacity for self-management, and there is nothing that government can do to improve on the results of the voluntary association, exchange, creativity, and choices of every member of the human family.

If you know this lesson, if you believe this lesson, you are part of the great liberal tradition. You are also a threat to the regime, not only the one we live under currently, but every regime all over the world, in every time and place. In fact, the greatest guarantor of liberty is an entire population that is a relentless and daily threat to the regime precisely because they embrace this dream of liberty.

The best and only place to start is with yourself. This is the only person that you can really control in the end. And by believing in freedom yourself, you might have made the biggest contribution to civilization you could possibly make. After that, never miss an opportunity to tell the truth. Sometimes thinking the unthinkable, saying the unsayable, teaching the unteachable, is what makes the difference between bondage and sweet liberty.

The title of this talk is “the Misesian vision.” This was the vision of Ludwig von Mises and Murray N. Rothbard. It is the vision of the Mises Institute. It is the vision of every dissident intellectual who dared to stand up to despotism, in every age.

I challenge you to enter into the great struggle of history, and make sure that your days on this earth count for something truly important. It is this struggle that defines our contribution to this world. Freedom is the greatest gift that you can give yourself, and give all of humanity.

Regards,
Lewellyn H Rockwell, Jr.
LewRockwell.com

January 26, 2010

Imagining Freedom with the Help of Mises was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

How about slavery?  Suppose one of your friends began to argue in earnest that slavery was not only beneficial in history because the nations of the west were built on free labor from whipped African backs, but that the nations of the world need to return to a slave economy.  If it’s the only political position they will entertain, would you continue to be their friend?

But suppose to justify the slavery this person said things like, “these people simply cannot take care of themselves,” “they’re far too simple and stupid to live free,” and “they need to be protected from the world and their own bad behavior.”  Could you see how they might have a point?

Suppose this person said the slaves would be allowed to choose their masters and the work they did to serve those masters.  It might be a bit arduous and complicated for the slaves to change their positions, or it may be made simpler with bribes and favors.  But either way the slaves may not work if they don’t have a master’s even hand to guide them.  And if they work for themselves, their most recent master may hunt them down and force them to work for him or even kill them if they resist.  Would that convince you to believe in the righteousness of this person’s plan?

Suppose that the slaves this person wants to create were allowed by their master to keep as much as half of what they earned after all accounts with the master were settled—perhaps they could keep as much as three quarters if they weren’t able to earn much—Instead of just the shacks and rags and vegetable patches that were the bulk of the possessions of slaves in the US of old.  And suppose also the slaves were allowed to trade what they were allowed to keep with other slaves in ways approved of by the masters.  Would you accept their position as reasonable then?

Suppose this person insisted everybody—both you and he included—should be enslaved this way.  And suppose instead of “slaves” this person says these people should be called “citizens,” that the nations of the world may be their masters, and that most of the rest of the people in the world have already submitted to this position.  Would that make the enslavement they propose tolerable?

Regards,
Chris Hitzroth

May 21, 2009

Political Intolerance was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

So when you hear anyone say that the level of taxation in a country should be based on the “ability to pay”, be very afraid. These people are not only coming for your money. They’re coming for your economic liberty too. Ultimately, that means they’re after your political liberty as well.

Progressive taxation is the idea the larger your disposable income, the larger percentage of that income you ‘should’ pay in taxes. Proponents of it—and these days nearly everyone one is—claim it is more ‘fair.” But let’s be honest and call things by their right names and say what progressive taxation is really about.

Even John Stuart Mill, who favoured it, called progressive taxation “a mild form of robbery.” That’s because progressive taxation is about using the tax code to redistribute wealth. It’s base on the class-warfare idea that the rich get rich illicitly and conspire to keep the riches of society for themselves. It uses the law (coercion) to correct what some people see as the social and economic injustice meted out by the marketplace.

But how people treat private property (and wealth IS private property) determines the character of society. A society that promotes the idea of wealth accumulation and that everyone can get rich is one in which standards of living will rise over time. It doesn’t mean getting wealthy is the only or even the most important ambition in life. That’s a matter of personal choice and values. But it just means that if you want to raise standards of living over time, you should guard economic liberty and not use taxation to punish personal incentives.

The only fair argument for progressive taxation is that indirect taxes (consumption taxes) hit the poor harder than they hit the rich. This is certainly true for taxes on consumption goods. But it is not true for income taxes, most of which the poor do not pay anyway. A tax on Gucci handbags is less onerous than a tax on a slab of beer. But that doesn’t justify the argument that just because you can pay more taxes, you should.

When is it ever right for a man to come in to your home and take what’s yours simply because he’d decided that someone else needs it more? And how is the government arbitrarily deciding to raise income tax rates on only certain citizens, based on their ability to pay, any different? Yet that’s the argument for progressive taxation in the modern world. And most people seem to think it’s fair and just.

Mind you, that doesn’t mean that free people can’t use legislatures to levy taxes in order to pay for projects they believe should be provided by the State, like roads, bridges and other infrastructure. But there is a difference between that kind of public spending and public spending financed by wealth redistribution to achieve particular social and economic outcomes.

How did we get to the point in civil society where a democratic majority that does not pay taxes can, through its elected representatives, legally confiscate the wealth of a minority? Friederich Hayek gives the history in, The Constitution of Liberty.

“As is true of many similar measures, progressive taxation has assumed its present importance as a result of having been smuggled in under false pretences. When at the time of the French Revolution and again during the socialist agitation preceding the revolutions of 1848 it was frankly advocated as a means of redistributing incomes, it was decisively rejected. “One ought to execute the author and not the project,” was the liberal Turgot’s indignant response to some early proposals of this sort.

“When in the 1830′s they came to be more widely advocated, J.R. McCulloch expressed the chief objection in the often quoted statement: ‘The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or of their property, you are at sea without a rudder or compass, and there is no amount of injustice and folly you may not commit.’”

“In 1848,” Hayek continues, “Karl Marx and Freidrich Engels frankly proposed ‘a heavy progressive or graduated income tax’ as one of the measures by which, after the first stage of the revolution, ‘the proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeois, to centralise all instruments of production in the hands of the state.’

And these measures they described as ‘means of despotic inroads on the right of property, and on the condition of bourgeois production…measures…which appear economically insufficient and untenable but which, in the course of the movement out strip themselves, necessitate further inroads upon the old social order and are unavoidable as a means of entirely revolutionising the mode of production.’”

If Marx and Engels are to be taken at their word, progressive taxation was never about fairness. It was about putting production “in the hands of the State” and “revolutitionising the mode of production.” In the world of State-run capitalism, this is what we seem like we’re headed towards.

Now, we can take a step back and ask whether a State-run, union owned Chrysler makes a better car than the shareholder owned management-run Chrysler. It’s a fair enough question. We’d argue that government-built and designed cars are going to be about as appealing as a leather boot for breakfast. But that is not really the point.

The point is that the politicians are lying to you about the goal of progressive taxation. The goal is not to produce more “fairness” or “social justice.” It’s to place the State at the centre of economic production, so it can regulate and tax with impunity.

There is both a psychological and crassly economic motive to this movement to displace the free market with the State as the organiser of economic life. The smarty pants elitists in both political parties, with their ties to union and corporate money, really believe the world would be better off it was run be benevolent bureaucratic despots. Or maybe using coercive taxation to steal from the rich is simply envy-based class politics, a kind of populist theft conducted with the consent of a hi-jacked system for passing laws.

Once you go down this road of socking it to the rich instead of reducing spending, you get higher and higher rates of taxation that eventually shrink the economy. Britain adopted the income tax in 1910 and the U.S in 1913. At the time, the top tax rates on income were 8.25% and 7% respectively. Yet within 30 years, thanks to the Great Depression and the World Wars, those rates had risen to 97.5% and 91% respectively.

“Thus in the space of a single generation,” Hayek writes, “what nearly all the supporters of progressive taxation had for half a century asserted could not happen came to pass…All attempts to justify these rates on the basis of capacity to pay was, in consequence, soon abandoned and supporters reverted to the original, but long avoided, justification of the progression as means of brining about a more just distribution of income.”

How much a man should reasonably a pay to the State was no longer an economic question about his ‘ability to pay.’ It was revealed as the purely political decision it always was. Or as Hayek says, it’s “an attempt to impose on society a pattern of distribution determined by majority decision.”

That’s what we meant by the character of society. Do you want to live in a country where over 50% of a man’s income can be taken from him simply because the majority votes for it? In that kind of country you want to live in, where you have no real property rights and you don’t have equality before the law.

Upward income mobility is undermined in this kind of society. People don’t try to get rich because there’s no point in it if your gains are going to be confiscated. The net result of decades of progressive taxation is lower capital formulation, more consumption, less production, and ultimately a lower standard of living for everyone.

In that society, your only means of social and economic advancement is based on your personal connections and political patronage. Not surprisingly, in that society, politicians exercise enormous power. And decisions are not made by businesses that aim to offer consumers better products and services at lower prices; they are made by politicians who aim to cement their electoral position by favouring certain constituencies.

Progressive taxation has nothing to do with fairness, justice, or equality. It is unfair, unjust, an unequal. But hey, if that’s the kind of country you want to live in, or if you’re someone who’s getting the check instead of writing it, that might not seem like such a bad deal.

We’d just advise you to prepare for a lifetime of dependency on busybody politicians who become increasingly grasping, moralistic, and intrusive. If you’re a free man, you’d better pack your bags and look for some other luckier country.

This is not to glorify getting rich as the most important thing in this world (or any other world.) It isn’t. And there are much more important things in life. Whether you choose to pursue material gain is up to you.

And just as a government should not use the tax code to punish the rich, it ought to quit tinkering with it and providing so many deductions and rebates that allow anyone with a good accountant to avoid paying large income taxes. A much simpler taxation system based on consumption would be fairer for everyone and it would force the government to finally live within its means.

Of course that probably won’t happen. Ever. But it would be nice to think so. In the meantime, a society that discourages wealth creation and capital formation through so-called progressive taxation is eventually going to make itself a lot poorer and a lot less free.

Regards,
Dan Denning
Australian Daily Reckoning

May 15, 2009

Progressive Taxation, an Assault on Liberty was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.