Tag Archives: Murray Rothbard

Real Evil: Attributing the Creation of Money to the State

Another good article from the folks over at the Daily Bell! (E)

MONDAY, APRIL 08, 2013

By Staff Report
Sorry, Libertarians, History Shows Bitcoin Isn’t the Future … As we consider the digital-currency phenomenon that is
Bitcoin, bear in mind that there are, broadly speaking, two accounts of the origin and history of money. One is elegant, intuitive and taught in many introductory economics textbooks. The other is true. The financial economist Charles Goodhart, a former member of the Bank of England‘s Monetary Policy Committee, laid out the two views in a 1998 paper, “The Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas.” – Bloomberg

Dominant Social Theme: Money comes from government.

Free-Market Analysis: This is the fundamental fault line between freedom and statism and one reason we’ve spent so much time writing about it and have been subject to so many attacks.

The meme – and we early recognized it as such – that money is a state-sponsored occurrence can be found in such books as Ellen Brown‘s Web of Debt. It is a Greenbacker analysis and one that yields the conclusion that if money is state-sponsored than we can use elements of the state to “change” money and make it more equitable.

This is why the enemies of freedom and solvency are constantly trying to make the argument that money comes from the state. The Bloomberg article, above, makes the same points.

But money did not come from the state. It is ludicrous to argue that it did.

The state cannot make anything and has no incentive to innovate. There is not one single invention so far as we are aware that comes from the state. Everything is invented first in the private market and then adapted as necessary by government.

And that goes for money, too, which developed out of a competitive process, as Murray Rothbard pointed out, between various currencies.

But that is not what the sophists want us to think. They want us to believe that money was invented in the neolithic as a result of war. Here’s more from the article:

The first view, the “M View,” is named after the Austrian 19th century economist and historian Karl Menger, whose 1882 essay “On the Origins of Money” is the canonical statement of an argument that goes back to Aristotle:

As subsistence farming gives way to more complex economies, individuals want to trade. Simple barter (eight bushels of wheat for one barrel of wine) quickly becomes inefficient, because a buyer’s desires won’t always match up with a seller’s inventory. If a merchant comes through the village with wine and all a farmer has to offer is wheat, but the merchant wants nuts, there’s no trade and both parties walk away unfulfilled. Or the farmer has to incur the costs of finding another merchant who will exchange wheat for nuts and then hope that the first merchant hasn’t moved on to the next village.

But if the merchant and the farmer can exchange some other medium, then the trade can happen. This medium of exchange has to be what Menger calls “saleable,” meaning that it’s easily portable, doesn’t spoil over time and can be divided. Denominated coins work, shells and beads also fit the bill. So do cigarettes in POW camps and jails and Tide laundry detergent for drug dealers. This process, Menger argues, happens without the intervention of the state: “Money has not been generated by law. In its origin it is a social, and not a state institution.”

Goodhart points out, however, that Menger is just wrong about the actual history of physical money, especially metal coins. Goodhart writes that coins don’t follow Menger’s account at all. Normal people, after all, can’t judge the quality of hunks of metal the same way they can count cigarettes or shells. They can, however, count coins. Coins need to be minted, and governments are the ideal body to do so. Precious metals that become coins are, well, precious, and stores of them need to be protected from theft. Also, a private mint will always have the incentive to say its coins contain more high-value stuff than they actually do. Governments can last a long time and make multi-generational commitments to their currencies that your local blacksmith can’t.

But why oversee money creation in the first place? This brings us to the second theory of money, which Goodhart calls the “C View,” standing for “cartalist” (chartalist is a more common spelling). To simplify radically, it starts with the idea that states minted money to pay soldiers, and then made that money the only acceptable currency for paying taxes. With a standard currency, tax assessment and collection became easier, and the state could make a small profit from seiginorage.

The state-coin connection has far more historical support than Menger’s organic account. As Goodheart points out, strong, state-building rulers (Charlemagne, Edward I of England) tend to be currency innovators, and he could have easily added Franklin D. Roosevelt’s taking the U.S. off the gold standard in 1933 or Abraham Lincoln financing the Civil War with newly issued greenbacks. The inverse is true too: When states collapse, they usually take their currencies with them. When Japan stopped minting coins in 958, the economy reverted to barter within 50 years. When the Roman Empire collapsed in Western Europe, money creation splintered along new political borders.

If money came about independent of states, as according to the M View, one would think it would outlast transient political structures. Historically, however, this tends not to be the case, a strong argument in favor of the C View.

The article goes on to attack Bitcoin – a “currency” about which we have longstanding doubts. But even though the article is aimed at Bitcoin, what is most disturbing about the article is its mischaracterization of fundamental economic literacy.

The crux sentence of this article is “A private mint will always have the incentive to say its coins contain more high-value stuff than they actually do.”

There are no words to describe the maliciousness of such a misstatement. It really plumbs the depth of depravity.

It is the old market failure argument, but updated and casually tossed off with breathtaking arrogance. If one follows the logic of this statement, one arrives at the conclusion that the private market will always attempt to mislead and that government is a necessity to insure against private market corruption.

If one accepts this nonsensical perspective then everything else flows logically. Government was necessary to create money, to supervise it, etc.

Additionally, and most importantly, since government has MADE money, the process of government can be used to change money and make its creation and distribution more ethical and fair.

And, in fact, this is what Money Power hopes you believe.

There is a huge push underway to get people to believe that if governments are responsible for money instead of “private” monopoly central bankers, the world will benefit and societies will be financially healthy again.

Nothing can be further from the truth. Make no mistake: Those who support Greenbackerism and speak approvingly of Silvio Gesell and Major Douglas are in league with Money Power. They are propounding a myth – that government itself can be the antidote to Money Power.

But only the free market can create and circulate money fairly. Money Power controls the state, which is why statists in the employ of Money Power, want to propound the falsity that the State can liberate money.

It is a con, a falsehood … a dominant social theme.

It starts with the idea that the state created money, a falsehood on every level. It continues with the idea that the state-run money can be controlled by “the people” who can use monopoly central bank for their own benefit. This is of course the language of the Third Reich and the fascism that is now coming back into fashion.

China, India, Russia … we are supposed to believe that because these countries have public central banks, their currency regimes are “better.” What nonsense.

Conclusion: Don’t fall for this sophism. Money was created by the free market and the sooner that the creation and circulation of money is returned to the market via currency competition (including gold and silver) the better off we shall be.

Is Libertarianism Compatible With Religion?

by Laurence M. Vance

Recently by Laurence M. Vance: The Fluoridation Question Revisited


This talk was given at the 2011 Austrian Scholars Conference at the Mises Institute.

I never met Murray Rothbard. I still remember the day when I received a postcard in the mail announcing that he had died. I think that he, an agnostic Jew, and I, a devout Christian, would have gotten along just fine since we shared a common enemy – the state. I still have the postcard and the admiration for Rothbard that I had sixteen years ago.

I think that libertarianism has reached the point where we can safely say that more than at any time in the last fifty years a great number of libertarians are religious people. It was twenty-three years ago – a time when many of us still identified ourselves as liberals or conservatives, and some of you were not old enough to know the difference – when Rothbard opined that “the libertarian movement, and the Libertarian Party, will get nowhere in America – or throughout the world – so long as it is perceived, as it generally is, as a movement dedicated to atheism.” “Nock, Morley, Chodorov, Flynn et al. were not atheists,” he continued, “but for various accidental reasons of history, the libertarian movement after the 1950’s consisted almost exclusively of atheists.” “There is nothing inherently of wrong with this,” explained Rothbard, “except that many libertarians have habitually and wrongly acted as if religious people in general and Christians in particular are pariahs and equivalent to statists.” Just a few months before this, Rothbard had lamented that he was “getting tired of the offhanded smearing of religion that has long been endemic to the libertarian movement.” “Religion,” he said “is generally dismissed as imbecilic at best, inherently evil at worst.”

Although I think that things have greatly improved, many libertarians today are no more accommodating of religion than those in Rothbard’s day. Even though many religious people perhaps deserve the disdain of libertarians because of their faith-based statism, religion itself certainly doesn’t. It was the nonreligious Rothbard who acknowledged that “the greatest and most creative minds in the history of mankind have been deeply and profoundly religious, most of them Christian.”

The question I want to address today is simply this: Is libertarianism compatible with religion? Many libertarians say no, the two are not compatible. Some of them even consider religion to be a greater enemy of human liberty than the state, a proposition that Walter Block has debunked. Many religious people also say no, the two are not compatible. In the minds of some of them, libertarianism is just a synonym for libertinism, an erroneous idea that has also been debunked by Walter Block. (Is there any false notion about libertarianism that Walter Block hasn’t debunked?) Even some conservatives say no, the two are not compatible. Thomas Fleming, the editor of Chronicles magazine, considers the phrase “Christian libertarians” to be “as oxymoronic as Christian socialists.”

Now, although I have some strong opinions about religion – and enough degrees in theology to make sure I offend the greatest number of people – what I personally believe about religion is totally irrelevant. The question of “Is libertarianism compatible with religion?” is a question that Walter Block or the most militant Randian could ask and answer without changing the content of this talk. What you personally believe about religion is also completely immaterial. Whether you think that a particular religion is the absolute truth that you would be willing to die for or that all religions are just a collection of myths and stories mixed with history doesn’t affect the importance of the question. In the end, people are going to side with their religion over the ideas of dead Austrian economists. It is therefore imperative that the question be answered.

Libertarians who ignore the question do so at their peril. If libertarianism is not compatible with religion, then we who believe that the principles of libertarianism are true, just, and right must engage in the futile task of trying to get people to abandon their religion to accept libertarianism. We would face the impossible task of destroying someone’s faith in his God and/or scripture before we could convince him of the truth of libertarianism. Now, you may be both a hard-core atheist and a libertarian, but as Rothbard warned: “We libertarians will never win the hearts and minds of Americans or of the rest of the world if we persist in wrongly identifying libertarianism with atheism. If even Stalin couldn’t stamp out religion, libertarians are not going to succeed with a few Randian syllogisms.”

The title of my paper is no accident. I think religious people have more of a problem with libertarianism than libertarians have with religion. I think it is harder to convince a religious person that libertarianism doesn’t violate the tenets of his religion than to convince a libertarian that religion doesn’t violate the tenets of libertarianism. Although some libertarians deserve the disdain of religious people for their libertinism, I put most of the blame for the need for this talk on religious people because of their ignorance of both libertarianism and religion.

So, all that being said, my short answer to the question of whether libertarianism is compatible with is religion yes. But since it would not be enough just to say “I am religious, I am libertarian, so the answer to the question has to be yes, thank you and good day,” my long answer is what follows.

In order to determine if libertarianism is compatible with religion we must first understand what libertarianism is. The world is full of mistaken notions about libertarianism. It is often misunderstood and mischaracterized by its opponents as discounting human nature and disdaining morality while being grossly naïve and overly utopian. We have all heard the standard clichés, usually out of the mouth of conservatives, religious or otherwise:

  • Libertarians are for abortion.
  • Libertarians are for drug use.
  • Libertarians are against religion.
  • Libertarians are against traditional values.

True, some libertarians might be for and against these things, but so might someone who is not a libertarian.

To get a proper perspective of what libertarianism really is, I turn to two of its greatest proponents: Murray Rothbard and Walter Block.

As described by Rothbard:

Libertarianism is not and does not pretend to be a complete moral, or aesthetic theory; it is only a political theory, that is, the important subset of moral theory that deals with the proper role of violence in social life. . . . Libertarianism holds that the only proper role of violence is to defend person and property against violence, that any use of violence that goes beyond such just defense is itself aggressive, unjust, and criminal. Libertarianism, therefore, is a theory which states that everyone should be free of violent invasion, should be free to do as he sees fit except invade the person or property of another. What a person does with his or her life is vital and important, but is simply irrelevant to libertarianism.

And as explained by Block:

The non-aggression axiom is the lynchpin of the philosophy of libertarianism. It states, simply, that it shall be legal for anyone to do anything he wants, provided only that he not initiate (or threaten) violence against the person or legitimately owned property of another. That is, in the free society, one has the right to manufacture, buy or sell any good or service at any mutually agreeable terms.

In his seminal article “Libertarianism or Libertinism,” Block compactly states the essence of libertarianism:

Libertarianism is a political philosophy. It [is] concerned solely with the proper use of force. Its core premise is that it should be illegal to threaten or initiate violence against a person or his property without his permission; force is justified only in defense or retaliation. That is it, in a nutshell. The rest is mere explanation, elaboration, and qualification – and answering misconceived objections.

And in an article on plumb-line libertarianism, Block simply says: “Libertarianism is solely a political philosophy. It asks one and only one question: Under what conditions is the use of violence justified? And it gives one and only one answer: Violence can be used only in response, or in reaction to, a prior violation of private property rights.” Clearly, libertarianism cannot be simplistically defined, like some Cato guys recently did, as “fiscally conservative, socially liberal.” And I should also say that libertarianism is a way of life, not a lifestyle.

Now that we know what libertarianism is, in order to determine if it is compatible with religion it we must next look at what we mean by religion. Christianity, Judaism, Islam, Buddhism, Hinduism – these are all considered to be the world’s great religions. That, however, is where their similarity begins and ends. Although they do have some common tenets, the constraints of my talent and your time mean that we are going to have to narrow our scope.

The focus of my talk will therefore be on Christianity – but not just because I am a Christian. I suspect that most of the people listening to me right now, or who will listen to a recording or read a transcript of this talk in the future, would identify themselves as Christians. This is not surprising since a majority of Americans still identify themselves as Christians. This does not mean that America is a Christian nation – regardless of what Islamic countries and God and country Red-State Christian fascists think (who would have thought those two groups would be in agreement on anything). It does mean that if we are to reach the majority of Americans with the message of liberty that we should know whether libertarianism is compatible with their religion.

This is a significant year in the history of Christianity. The year 2011 is the four-hundredth anniversary of the publication of the Authorized Version, better known as the King James Version of the Bible because it was translated under the authority of King James I of England, beginning in 1604.

But regardless of which version of Bible is used, to the Christian, the Bible is the supreme authority, not the works of Mises or Rothbard, however highly we may regard them.

The Bible is not only the book that has had the greatest impact on Western Civilization; it is the foundation of Christianity. Christians may differ on certain aspects of their religion, but they are all united in their belief that the Bible is some kind of an authority. For a Christian to say otherwise is to reveal that his religion is really meaningless.

For a Christian to respect the Bible as some kind of an authority to the extent that he might reject libertarianism because of it generally means that such an individual holds to a high view of Scripture or a literal view of the Bible. Obviously, not everything in the Bible is meant to be taken literally. The Bible contains idioms and figures of speech just like any other form of writing. And clearly, Christians have genuine differences of interpretation on certain portions of Scripture. A literal view of the Bible simply means that one accepts literally things in the Bible unless it is clear that they are not to be taken so. Miracles and other supernatural events actually happened. The virgin birth was an actual virgin birth. The resurrection of Christ is a real historical event. And most relevant to the question at hand, the precepts of Christ and the Apostles are meant to be obeyed and followed; they are not just opinions or suggestions to be accepted or rejected at will.

I only mention all this because some people wrongly believe that a literal view of the Bible is just a tenet of fundamentalist Christians. True, it is usually those who are the most ardent Bible literalists that are the toughest nuts to crack when it comes to libertarianism. It shouldn’t be that way, as I will argue in this talk, but that’s the reality. But if those who believe the Bible most literally can be persuaded of the compatibility of libertarianism with their version of Christianity, then those who take a somewhat less literal view of the Bible will not be far behind.

Let me reiterate that what you or I personally believe about the Bible is irrelevant. At issue is simply this: If libertarianism iscompatible with a Christianity grounded on the authority of the Bible, then we have many possible “converts” to the cause of liberty and a free society. But on the other hand, if libertarianism is not compatible with a Christianity grounded on the authority of the Bible, then many Christian Americans, if they take their religion seriously, will be forever hostile or indifferent to liberty and a free society since the primary objections to libertarianism are moral.

So, why do I think that religion – in this case the Christian religion – is compatible with libertarianism? Let me give you two verses of Scripture, one from the Old Testament and one from the New, since Christians accept the authority of both:

Proverbs 3:30 – “Strive not with a man without cause, if he have done thee no harm.”

1 Peter 4:15 – “But let none of you suffer as a murderer, or as a thief, or as an evildoer, or as a busybody in other men’s matters.”

These verses, my friends, embody the essence of libertarianism. Don’t kill anyone, don’t take what’s not yours, don’t do anyone wrong, don’t stick your nose in someone else’s business, and don’t bother anyone if he hasn’t bothered you. Other than that do whatever you want – “Anything that’s peaceful,” as Leonard Read says, for “ye have been called unto liberty,” as the Apostle Paul says. The only caveats for Christians when it comes to liberty are to not let their liberty become a stumbling block to weaker brothers and to not use their liberty for an occasion to the flesh; that is, don’t be a libertine.

And you thought I was going to give you some complicated theological or philosophical argument. The Bible commands the Christian to devise not evil against his neighbor (Proverbs 3:29), love his neighbor as himself (Romans 13:9), show meekness unto all men (Titus 3:2), do good unto all men (Galatians 6:10), provide things honest in the sight of all men (Romans 12:21), and live peaceably with all men (Romans 12:18). If libertarianism is not compatible with these things then it is not compatible with anything.

The Christian is also told in the Bible:

And whatsoever ye do in word or deed, do all in the name of the Lord Jesus, giving thanks to God and the Father by him. (Colossians 3:17)

And whatsoever ye do, do it heartily, as to the Lord, and not unto men. (Colossians 3:23)

Whether therefore ye eat, or drink, or whatsoever ye do, do all to the glory of God. (1 Corinthians 10:31)

Can a Christian assault someone in the name of the Lord Jesus? Can a Christian steal from someone heartily, as to the Lord? Can a Christian kill someone to the glory of God? I think the answer to these questions is obvious. And I also think it is apparent that libertarianism is compatible with the Christian religion.

But I would go a step further. Not only is libertarianism compatible with the most strict, most biblically literal form of Christianity, it is demanded by it. The Christian is enjoined in Scripture to go even beyond the non-aggression principle.

He is told, not to just turn the other cheek, but to “endure hardness” (2 Timothy 2:3), “endure afflictions” (2 Timothy 4:5), and “endure grief” (1 Peter 2:19). Revenge and retaliation for the Christian are not options. Some Christians get hung up on Romans 13 and end up making apologies for the state and its wars. It’s too bad they skipped over Romans 12:

Bless them which persecute you: bless, and curse not. (Romans 12:14)

Recompense to no man evil for evil. (Romans 12:17)

Dearly beloved, avenge not yourselves, but rather give place unto wrath: for it is written, Vengeance is mine; I will repay, saith the Lord. (Romans 12:19)

Overcome evil with good. (Romans 12:21)

So, if libertarianism is more than compatible with the Christian religion, why do religious people – Christians – reject libertarianism? Why aren’t the majority of Christians libertarians instead of liberals, conservatives, Democrats, Republicans, and other assorted statists? Let me briefly give you some reasons. One, misconstruing libertarianism as a hedonistic philosophy instead of a political philosophy. Two, the poor presentation of libertarianism by libertarians. Three, wrongly thinking that libertarianism demands that one be pro-abortion. Four, morality; the two-fold failure to make a distinction between vices and crimes and crimes and sins. And five, social justice; wrongly applying to the government admonitions given to individuals.

I have developed these latter three points elsewhere. On abortion, see my LRC article “Is Ron Paul Wrong on Abortion?” On morality, see my Liberty magazine article “An Open Letter to My Fellow Christians,” which is based on my 2006 ASC lecture “Christianity and Victimless Crimes.” And on social justice, see my little book The Myth of the Just Price, which is the text of my 2008 Lou Church lecture of the same name in which I argue that there should be no government intervention in society or the economy.

I have tried in this talk to show why I believe libertarianism is scripturally compatible with religion. Is everything that has been done in the name of libertarianism compatible with religion? Of course not. But neither is everything that has been done in the name of religion compatible with libertarianism or even with religion. I think it is possible that it might someday be said not only that the greatest and most creative minds in the history of religion have been deeply and profoundly libertarian, but that the greatest and most creative minds in the history of libertarianism have been deeply and profoundly religious.

March 15, 2011


Laurence M. Vance [send him mail] writes from central Florida. He is the author of Christianity and War and Other Essays Against the Warfare State, The Revolution that Wasn’t, and Rethinking the Good War. His latest book is The Quatercentenary of the King James Bible. Visit his website.


Why the War? The Kuwait Connection

by Murray N. Rothbard

This originally appeared in the May 1991 Rothbard-Rockwell Report

Why, exactly, did we go to war in the Gulf? The answer remains murky, but perhaps we can find one explanation by examining the strong and ominous Kuwait Connection in our government. (I am indebted to an excellent article in an obscure New York tabloid, Downtown, by Bob Feldman, “The Kissinger Affair,” March 27.) The Sabahklatura that runs the Kuwait government is immensely wealthy, to the tune of hundreds of billions of dollars, derived from tax/”royalty” loot extracted from oil producers simply because the Sabah tribe claims “sovereignty” over that valuable chunk of desert real estate. The Sabah tribe has no legitimate claim to the oil revenue; it did nothing to homestead or mix its labor or any other resource with the crude oil.

It is reasonable to assume that the Sabah family stands ready to use a modest portion of that ill-gotten wealth to purchase defenders and advocates in the powerful United States. We now focus our attention on the sinister but almost universally Beloved figure of Dr. Henry Kissinger, a lifelong spokesman, counselor, and servitor of the Rockefeller World Empire. Kissinger is so Beloved, in fact, that whenever he appears on Nightline or Crossfire he appears alone, since it seems to be lèse-majesté (or even blasphemy) for anyone to contradict the Great One’s banal and ponderous Teutonic pronouncements. Only a handful of grumblers and malcontents on the extreme right and extreme left disturb this cozy consensus.

In 1954, the 31-year-old Kissinger, a Harvard political scientist and admirer of Metternich, was plucked out of his academic obscurity to become lifelong foreign policy advisor to New York Governor Nelson Aldrich Rockefeller. Doctor K continued in that august role until he assumed the mastery of foreign policy throughout the Nixon and Ford administrations. In that role, Kissinger played a major part in prolonging and extending the Vietnam War, and in the mass murder of civilians entailed by the terror bombings of Vietnam, the secret bombing of Cambodia, and the invasion of Laos.

Since leaving office in 1977, Dr. Kissinger has continued to play a highly influential role in U.S. politics, in the U.S. media, and in the Rockefeller world empire. It was Kissinger, along with David Rockefeller, who was decisive in the disastrous decision of President Carter to admit the recently toppled Shah of Iran, old friend and ally of the Rockefellers into the United States, a decision that led directly to the Iranian hostage crisis and to Carter’s downfall. Today, Kissinger still continues to serve as a trustee of the powerful Rockefeller Brothers Fund, as a counselor to Rockefellers’ Chase Manhattan Bank, and as a member of Chase’s International Advisory Committee. Kissinger’s media influence is evident from his having served on the board of CBS, Inc., and having been a paid consultant to both NBC News and ABC News. That takes care of all three networks.

But Kissinger’s major, and most lucrative role, has come as head of Kissinger Associates in New York City, founded on a loan obtained in 1982 from the international banking firm of E.M. Warburg, Pincus and Company. Nominally, Kissinger Associates (KA) is an “international consulting firm” but “consultant” covers many sins, and in KA‘s case, this means international political influence-peddling for its two dozen or so important corporate clients. In the fullest report on KA, Leslie Gelb in the New York Times Magazine for April 20, 1986, reveals that, in that year, 25 to 30 corporations paid KA between $150,000 and $420,000 each per annum for political influence and access.” As Gelb blandly puts it: “The superstar international consultants [at KA] were certainly people who would get their telephone calls returned from high American government officials and who would also be able to get executives in to see foreign leaders.” I dare say a lot more than mere access could be gained thereby. KA’s offices in New York and Washington are small, but they pack a powerful punch. (Is it mere coincidence that KA’s Park Avenue headquarters is in the same building as the local office of Chase Manhattan Bank’s subsidiary, the Commercial Bank of Kuwait?)

Who were these “superstar international consultants?” One of them, who in 1986 was the vice chairman of KA, is none other than General Brent Scowcroft, former national security advisor under President Ford, and, playing the exact same role under George Bush, serving as the chief architect of the Gulf War. One of the General’s top clients was Kuwait’s government-owned Kuwait Petroleum Corporation, who paid Scowcroft for his services at least from 1984 through 1986. In addition, Scowcroft became a director of Santa Fe International (SFI) in the early 1980s, not long after SFI was purchased by the Kuwait Petroleum Corporation in 1981. Joining Scowcroft on the SFI board was Scowcroft’s old boss, Gerald Ford. One of SFI’s activities is drilling oil wells in Kuwait, an operation which, of course, had to be suspended after the Iraq invasion.

Brent Scowcroft, it is clear, has enjoyed a long-standing and lucrative Kuwait connection. Is it a coincidence that it was Scowcroft’s National Security Council presentation on August 3, 1990, which according to the New York Times (February 21) “crystallized people’s thinking and galvanized support” for a “strong response” to the Iraq invasion of Kuwait?

Scowcroft, by the way, does not exhaust the Republican administrations’ revolving door among Kissinger Associates. Another top KA official, Lawrence Eagleburger, undersecretary of state under Reagan, has returned to high office after a stint at KA as deputy secretary of state under George Bush.

Also vitally important at KA are the members of its board of directors. One director is T. Jefferson Cunningham III, who is also a director of the Midland Bank of Britain, which has also been a KA client. The fascinating point here is that 10.5 percent of this $4 billion bank is owned by the Kuwait government. And Kissinger, as head of KA, is of course concerned to advance the interests of his clients – which include the Midland Bank and therefore the government of Kuwait. Does this connection have anything to do with Kissinger’s ultra-hawkish views on the Gulf War? In the meantime, Kissinger continues to serve on President Bush’s Foreign Intelligence Advisory Board, which gives Kissinger not only a channel for giving advice but also gives him access to national security information which could prove useful to KA’s corporate clients.

Another KA client is the Fluor Corporation, which has a special interest in Saudi Arabia. Shortly before the August 2 invasion, Saudi Arabia decided to launch a $30 to $40 billion project to expand oil production, and granted two huge oil contracts to the Parson and Fluor corporations. (New York Times, August 21)

One member of KA’s board of directors is ARCO Chairman Robert O. Anderson; ARCO, also one of KA’s clients, is engaged in joint oil-exploration and oil-drilling in offshore China with Santa Fe International, the subsidiary of the Kuwait government.

Other KA board members are William D. Rogers, undersecretary of state in the Eisenhower administration, and long-time leading Dewey-Rockefeller Republican in New York; former Citibank (Rockefeller) Chairman Edward Palmer; and Eric Lord Roll, economist and chairman of the board of the London international banking house of S.F. Warburg.

Perhaps the most interesting KA board member is one of the most Beloved figures in the conservative movement, William E. Simon, secretary of treasury in the Nixon and Ford administrations. When Simon left office in 1977, he became a consultant to the Bechtel Corporation, which has had the major massive construction contracts to build oil refineries and cities in Saudi Arabia. In addition, Simon became a consultant to Suliman Olayan, one of the wealthiest and most powerful businessmen in Saudi Arabia. Long a close associate of the oil-rich Saudi royal family, Olayan had served Bechtel well by getting it the multi-billion contract to build the oil city of Jubail. In 1980, furthermore, Olayan hired William Simon to be chairman of two investment firms owned jointly by himself and the influential Saudi Prince Khaled al Saud.

Bechtel, the Rockefellers, and the Saudi royal family have long had an intimate connection. After the Saudis granted the Rockefeller-dominated Aramco oil consortium the monopoly of oil in Saudi Arabia, the Rockefellers brought their pals at Bechtel in on the construction contracts. The Bechtel Corporation, of course, has also contributed George Shultz and Cap Weinberger to high office in Republican administrations. To complete the circle, KA director Simon’s former boss Suliman Olayan was, in 1988, the largest shareholder in the Chase Manhattan Bank after David Rockefeller himself.

The pattern is clear. An old New Left slogan held that “you don’t need a weatherman to tell you how the wind is blowing.” In the same way, you don’t need to be a “conspiracy theorist” to see what’s going on here. All you have to do is be willing to use your eyes.

Murray N. Rothbard (1926–1995) was dean of the Austrian School, founder of modern libertarianism, and chief academic officer of the Mises Institute. He was also editor – with Lew Rockwell – of The Rothbard-Rockwell Report, and appointed Lew as his literary executor. See his books.

The Best of Murray Rothbard

The Elitists Will Not Change Even If they Say They Will.

Our Interests and Their Interests

by Murray N. Rothbard

Excerpted from Rothbard’s 1978 preface to Ludwig von Mises‘s The Clash of Group Interests and Other Essays

In the 20th century, the advocates of free-market economics almost invariably pin the blame for government intervention solely on erroneous ideas – that is, on incorrect ideas about which policies will advance the public weal. To most of these writers, any such concept as “ruling class” sounds impossibly Marxist. In short, what they are really saying is that there are no irreconcilable conflicts of class or group interest in human history, that everyone’s interests are always compatible, and that therefore any political clashes can only stem from misapprehensions of this common interest.

In “The Clash of Group Interests,” Ludwig von Mises, the outstanding champion of the free market in this century, avoids the naïve trap embraced by so many of his colleagues. Instead, Mises sets forth a highly sophisticated and libertarian theory of classes and of class conflict by distinguishing sharply between the free market and government intervention.

It is true that on the free market there are no clashes of class or group interest; all participants benefit from the market and therefore all their interests are in harmony.

But the matter changes drastically, Mises points out, when we move to the intervention of government. For that very intervention necessarily creates conflict between those classes of people who are benefited or privileged by the State and those who are burdened by it. These conflicting classes created by State intervention Mises calls castes. As Mises states,

Thus there prevails a solidarity of interests among all caste members and a conflict of interests among the various castes. Each privileged caste aims at the attainment of new privileges and at the preservation of old ones. Each underprivileged caste aims at the abolition of its disqualifications. Within a caste society there is an irreconcilable antagonism between the interests of the various castes.

In this profound analysis Mises harkens back to the original libertarian theory of class analysis, originated by Charles Comte and Charles Dunoyer, leaders of French laissez-faire liberalism in the early 19th century.

But Mises has a grave problem; as a utilitarian, indeed as someone who equates utilitarianism with economics and with the free market, he has to be able to convince everyone, even those whom he concedes are the ruling castes, that they would be better off in a free market and a free society, and that they too should agitate for this end. He attempts to do this by setting up a dichotomy between “short-run” and “long-run” interests, the latter being termed “the rightly understood” interests. Even the short-run beneficiaries of statism, Mises asserts, will lose in the long run. As Mises puts it,

In the short run an individual or a group may profit from violating the interests of other groups or individuals. But in the long run, in indulging in such actions, they damage their own selfish interests no less than those of the people they have injured. The sacrifice that a man or a group makes in renouncing some short-run gains, lest they endanger the peaceful operation of the apparatus of social cooperation, is merely temporary. It amounts to an abandonment of a small immediate profit for the sake of incomparably greater advantages in the long run.

The great problem here is: why should people always consult their long-run, as contrasted to their short-run, interests? Why is the long run the “right understanding”? Ludwig von Mises, more than any economist of his day, has brought to the discipline the realization of the great and abiding importance of time preference in human action: the preference of achieving a given satisfaction now rather than later. In short, everyone prefers the shorter to the longer run, some to different degrees than others.

How can Mises, as a utilitarian, say that a lower time preference for the present is “better” than a higher? In brief, some moral doctrine beyond utilitarianism is necessary to assert that people should consult their long-run over their short-run interests. This consideration becomes even more important when we consider those cases where government intervention confers great, not “small,” gains on the privileged, and where retribution does not arrive for a very long time, so that the “temporary” in the above quote is a long time indeed.

Mises, in “The Clash of Group Interests,” tries to dismiss war between nations and nationalisms as senseless, at least in the long run. But he does not come to grips with the problem of national boundaries; since the essence of the nation-State is that it has a monopoly of force over a given territorial area, there is ineluctably a conflict of interest between States and their rulers over the size of their territories, the size of the areas over which their dominion is exercised.

While in the free market, each man’s gain is another man’s gain, one State’s gain in territory is necessarily another State’s loss, and so the conflicts of interest over boundaries are irreconcilable – even though they are less important the fewer the government interventions in society.

Mises’s notable theory of classes has been curiously neglected by most of his followers. By bringing it back into prominence, we have to abandon the cozy view that all of us, we and our privileged rulers alike, are in a continuing harmony of interest. By amending Mises’s theory to account for time preference and other problems in his “rightly understood” analysis, we conclude with the still less cozy view that the interests of the State-privileged and of the rest of society are at loggerheads – and further, that only moral principles beyond utilitarianism can ultimately settle the dispute between them.

Reprinted from Mises.org.

Murray N. Rothbard (1926–1995) was dean of the Austrian School, founder of modern libertarianism, and chief academic officer of the Mises Institute. He was also editor – with Lew Rockwell – of The Rothbard-Rockwell Report, and appointed Lew as his literary executor. See his books.

The Best of Murray Rothbard

The Real Ronald Reagan

I was a young man when Reagan ran for office. Disgusted with how my choice in Carter had turned out I voted for Reagan. It was many years until I saw the truth. Murray Rothbard saw it all along. Here is his impression of Reagan after he left office Although I am strongly pro-life, (Rothbard believed in free choice), nevertheless I find myself agreeing with almost everything else he says here. It is quite long, more essay than article, but well worth the effort to understand some of what has gone on the past 50 years or more in America. I am only sorry I did not discover Rothbard until recently since he passed in 1995. I might have come to my senses sooner. Enjoy (E)


Ronald Reagan: An Autopsy

by Murray N. Rothbard
by Murray N. Rothbard

First published in Liberty, Vol. 2, No. 4, March 1989.

Eight years, eight dreary, miserable, mind-numbing years, the years of the Age of Reagan, are at long last coming to an end. These years have surely left an ominous legacy for the future: we shall undoubtedly suffer from the after-shocks of Reaganism for years to come. But at least Himself will not be there, and without the man Reagan, without what has been called his “charisma,” Reaganism cannot nearly be the same. Reagan’s heirs and assigns are a pale shadow of the Master, as we can see from the performance of George Bush. He might try to imitate the notes of Reagan, but the music just ain’t there. Only this provides a glimmer of hope for America: that Reaganism might not survive much beyond Reagan.

Reagan the Man

Many recent memoirs have filled out the details of what some of us have long suspected: that Reagan is basically a cretin who, as a long-time actor, is skilled in reading his assigned lines and performing his assigned tasks. Donald Regan and others have commented on Ronald Reagan’s strange passivity, his never asking questions or offering any ideas of his own, his willingness to wait until others place matters before him. Regan has also remarked that Reagan is happiest when following the set schedule that others have placed before him. The actor, having achieved at last the stardom that had eluded him in Hollywood, reads the lines and performs the action that others – his script-writers, his directors – have told him to follow.

Sometimes, Reagan’s retentive memory – important for an actor – gave his handlers trouble. Evidently lacking the capacity for reasoned thought, Reagan’s mind is filled with anecdotes, most of them dead wrong, that he has soaked up over the years in the course of reading Reader’s Digest or at idle conversation. Once an anecdote enters Reagan’s noodle, it is set in concrete and impossible to correct or dislodge. (Consider, for example, the famous story about the “Chicago welfare queen”: all wrong, but Reagan carried on regardless.)

In the early years of Reagan rule, the press busily checked out Reagan’s beloved anecdotes, and found that almost every one of them was full of holes. But Reagan never veered from his course. Why? God knows there are plenty of correct stories about welfare cheats that he could have clasped to his bosom; why stick to false ones? Evidently, the reason is that Reagan cares little about reality; he lives in his own Hollywood fantasy world, a world of myth, a world in which it is always Morning in America, a world where The Flag is always flying, but where Welfare Cheats mar the contentment of the Land of Oz. So who cares if theactual story is wrong? Let it stand, like a Hollywood story, as a surrogate for the welfare cheats whom everyone knows do exist.

The degree to which Reagan is out of touch with reality was best demonstrated in his concentration camp story. This was not simply a slip of the tongue, a Bushian confusion of December with September. When the Premier of Israel visited Reagan at the White House, the President went on and on for three quarters of an hour explaining why he was pro-Jewish: it was because, being in the Signal Corps in World War II, he visited Buchenwald shortly after the Nazi defeat and helped to take films of that camp. Reagan repeated this story the following day to an Israeli ambassador. But the truth was 180-degrees different; Reagan was not in Europe; he never saw a concentration camp; he spent the entire war in the safety of Hollywood, making films for the armed forces.

Well, what are we to make of this incident? This little saga stayed in the back pages of the press. By that point the media had realized that virtually nothing – no fact, no dark deed – could ever stick to the Teflon President. (Iran-Contra shook things up a bit, but in a few months even that was forgotten.)

There are only two ways to interpret the concentration camp story. Perhaps Reagan engaged in a bald-faced lie. But why? What would he have to gain? Especially after the lie was found out, as it soon would be. The only other way to explain this incident, and a far more plausible one, is that Ronnie lacks the capacity to distinguish fantasy from reality. He would, at least in retrospect, have liked to be filming at Buchenwald. Certainly, it made a better story than the facts. But what are we to call a man who cannot distinguish fantasy from reality?

It is surely frightening to think that the most powerful position in the world has been held for eight years by a man who cannot tell fact from fancy. Even more frightening is the defection of the media, who early lost heart and played the role of a submissive receptacle for photo opportunities and press-release handouts. One reason for this defection was the discovery of Reagan’s Teflon nature. Another likely reason was that journalists who were too feisty and independent would be deprived of their precious access to the Presidential plane or to inside scoops or leaks from the White House. And a third reason was probably the desire not to dwell on the vital and hair-raising fact that the President of the United States, “the leader of the free world” and all that jazz, is nothing more than a demented half-wit.

But why the Teflon? Because of the incredible love affair that Ronald Reagan has enjoyed with the American people. In all my years of fascination with American politics (my early childhood memories are couched in terms of who was President or who was Mayor of New York City or who won what election), I have never seen anything remotely like it. Anyone else universally beloved? Franklin D. Roosevelt was worshipped, to be sure, by most of the American electorate, but there was always a large and magnificent minority who detested every inch of his guts. Truman? He was almost universally reviled in his time; he has only been made an icon in retrospect by the conservative movement. Jack Kennedy, too, is only a hero now that he has been safely interred; before his assassination he was cordially detested by all conservatives. Nobody ever loved Nixon. The closest to universal lovability was Ike, and even he did not inspire the intense devotion accorded to Ronnie Reagan; with Ike it was more of a tranquilized sense of peace and contentment.

But with Reagan, it has been pure love: every nod of the head; every wistful “We-e-ll,” every dumb and flawed anecdote, every snappy salute, sends virtually every American into ecstasy. From all corners of the land came the cry, “I don’t like his policies very much, but I lo-o-ve the man.” Only a few malcontents, popping up here and there, in a few obscure corners of the land, emerged as dedicated and bitter opponents. As one of this tiny minority I can testify that it was a lonely eight years, even within the ranks of the libertarian movement. Sometimes I felt like a lone and unheeded prophet, bringing the plain truth to those who refused to understand. Very often I would be at free-market gatherings, from living rooms to conferences, and I would go on and on about the deficiencies of Reagan’s policies and person, and would be met with responses like “Well of course, he’s not a PhD.”

Me: “No, no, that’s not the point. The man is a blithering idiot. He makes Warren Harding tower like Aristotle.”

Responder: “Ronald Reagan has made us feel good about America.”

Perhaps that’s part of the explanation for the torrent of unconditional love that the American public has poured onto Ronald Reagan. Lost in Hollywood loony-land, Ronnie’s sincere optimism struck a responsive chord in the American masses. The ominous fact that he “made us” feel good about the American State and not just about the country is lost even on many libertarians.

But, in that case, why didn’t Hubert Humphrey’s egregious “politics of joy” evoke the same all-inclusive love? I don’t know the answer, but I’m convinced it’s not simply because Hubert was captive to the dreaded “L-word’ whereas Ronnie is a conservative. It’s lot deeper than that. One of the remarkably Teflon qualities of Reagan is that, even after many years as President, he is still able to act as if he were totally separate from the actions of the government. He can still denounce the government in the same ringing terms he used when he was out of power. And he gets away with it, probably because inside his head, he is still Ronnie Reagan, the mother of anti-government anecdotes as lecturer for General Electric.

In a deep sense, Reagan has not been a functioning part of the government for eight years. Off in Cloud-Cuckoo-Land he is the obedient actor who recites his lines and plays his appointed part. Some commentators have been critical of Reagan for napping in the afternoons, for falling asleep at crucial meetings, for taking long vacations at his beloved ranch. Well, why not? What else does he have to do? Reagan doesn’t actually have to do anything; like Peter Sellers in his last film, all he has to do is be there,the beloved icon, giving his vital sanction to the governmental process.

Reagan’s handlers perceived early on that one threat to Reagan’s Teflon rule would be allowing him to mix it up with members of the press. Away from his teleprompter, Ronnie was a real problem. So very soon, any sort of real press conference, including uninhibited questions and answers, was done away with. The only press “conferences” became shouted questions as Reagan walked quickly to and from the White House helicopter. One of his handlers has written that, despite all efforts, they couldn’t stop Reagan from exercising one peculiar personality trait: his compulsion to answer every question that he hears. But fortunately, not much was risked, since the noise of the helicopter engines would drown out most of the repartee.

The worst moment for the Reagan handlers came, of course during the first debate with Mondale in 1984. For one glorious moment, during the give and take of the debate, the real Reagan emerged: confused, befuddled, out of it. It was a shaky moment, but all the handlers needed to do was to reassure the shocked masses that their beloved President was still sentient, was still there to be a totem to his flock. The handlers blamed Reagan’s showing on “over coaching” they made sure that he slept a lot just before the second debate, and they fed him a snappy mock self-deprecating one-liner about his age. The old boy could still remember his jokes: he got off his lovable crack, and the American masses, with a sigh of relief, clasped him to their bosoms once again.

The Reagan Years: Libertarian Rhetoric, Statist Policies

How did Reagan manage to pursue egregiously statist policies in the name of liberty and of “getting government off our backs?” How was he able to follow this course of deception and mendacity?

Don’t try to get Ronnie off the hook by blaming Congress. Like the general public – and all too many libertarians – Congress was merely a passive receptacle for Ronnie’s wishes. Congress passed the Reagan budgets with a few marginal adjustments here and there – and gave him virtually all the legislation, and ratified all the personnel, he wanted. For one Bork there are thousands who made it. The last eight years have been a Reagan Administration for the Gipper to make or break.

There was no “Reagan Revolution.” Any “revolution” in the direction of liberty (in Ronnie’s words “to get government off our backs”) would reduce the total level of government spending. And that means reduce in absolute terms, not as proportion of the gross national product, or corrected for inflation, or anything else. There is no divine commandment that the federal government must always be at least as great a proportion of the national product as it was in 1980. If the government was a monstrous swollen Leviathan in 1980, as libertarians were surely convinced, as the inchoate American masses were apparently convinced and as Reagan and his cadre claimed to believe, then cutting government spending was in order. At the very least, federal government spending should have been frozen, in absolute terms, so that the rest of the economy would be allowed to grow in contrast. Instead, Ronald Reagan cut nothing, even in the heady first year, 1981.

At first, the only “cut” was in Carter’s last-minute loony-tunes estimates for the future. But in a few short years, Reagan’s spending surpassed even Carter’s irresponsible estimates. Instead, Reagan not only increased government spending by an enormous amount – so enormous that it would take a 40 percent cut to bring us back to Carter’s wild spending totals of 1980 – he even substantially increased the percentage of government spending to GNP. That’s a “revolution”?

The much-heralded 1981 tax cut was more than offset by two tax increases that year. One was “bracket creep,” by which just inflation wafted people into higher tax brackets, so that with the same real income (in terms of purchasing power) people found themselves paying a higher proportion of their income in taxes, even though the official tax rate went down. The other was the usual whopping increase in Social Security taxes which, however, don’t count, in the perverse semantics of our time, as “taxes”; they are only “insurance premiums.” In the ensuing years the Reagan Administration has constantly raised taxes – to punish us for the fake tax cut of 1981 – beginning in 1982 with the largest single tax increase in American history, costing taxpayers $100 billion.

Creative semantics is the way in which Ronnie was able to keep his pledge never to raise taxes while raising them all the time. Reagan’s handlers, as we have seen, annoyed by the stubborn old coot’s sticking to “no new taxes,” finessed the old boy by simply calling the phenomenon by a different name. If the Gipper was addled enough to fall for this trick, so did the American masses – and a large chuck of libertarians and self-proclaimed free-market economists as well! “Let’s close another loophole, Mr. President.” “We-e-ell, OK, then, so long as we’re not raising taxes.” (Definition of loophole: Any and all money the otherguy has earned and that hasn’t been taxed away yet. Your money, of course, has been fairly earned, and shouldn’t be taxed further.)

Income tax rates in the upper brackets have come down. But the odious bipartisan “loophole closing” of the Tax Reform Act of 1986 – an act engineered by our Jacobin egalitarian “free market” economists in the name of “fairness” – raised instead of lowered the income tax paid by most upper-income people. Again: what one hand of government giveth, the other taketh away, and then some. Thus, President-elect Bush has just abandoned his worthy plan to cut the capital gains tax in half, because it would violate the beloved tax fairness instituted by the bipartisan Reganite 1986 “reform.”

The bottom line is that tax revenues have gone up an enormous amount under the eight years of Reagan; the only positive thing we can say for them is that revenues as percentage of the gross national product are up only slightly since 1980. The result: the monstrous deficit, now apparently permanently fixed somewhere around $200 billion, and the accompanying tripling of the total federal debt in the eight blessed years of the Reagan Era. Is that what the highly touted “Reagan Revolution” amounts to, then? A tripling of the national debt?

We should also say a word about another of Ronnie’s great “libertarian” accomplishments. In the late 1970’s, it became obvious even to the man in the street that the Social Security System was bankrupt, kaput. For the first time in fifty years there was an excellent chance to get rid of the biggest single racket that acts as a gigantic Ponzi scheme to fleece the American taxpayer. Instead, Reagan brought in the famed “Randian libertarian” Alan Greenspan, who served as head of a bipartisan commission, performing the miracle of “saving Social Security” and the masses have rested content with the system ever since. How did he “save” it? By raising taxes (oops “premiums”), of course; by that route, the government can “save” any program. (Bipartisan: both parties acting in concert to put both of their hands in your pocket.)

The way Reagan-Greenspan saved Social Security is a superb paradigm of Reagan’s historical function in all areas of his realm; he acted to bail out statism and to co-opt and defuse any libertarian or quasi-libertarian opposition. The method worked brilliantly, for Social Security and other programs.

How about deregulation? Didn’t Ronnie at least deregulate the regulation-ridden economy inherited from the evil Carter? Just the opposite. The outstanding measures of deregulation were all passed by the Carter Administration, and, as is typical of that luckless President, the deregulation was phased in to take effect during the early Reagan years, so that the Gipper could claim the credit. Such was the story with oil and gas deregulation (which the Gipper did advance from September to January of 1981); airline deregulation and the actual abolition of the Civil Aeronautics Board, and deregulation of trucking. That was it.

The Gipper deregulated nothing, abolished nothing. Instead of keeping his pledge to abolish the Departments of Energy and Education, he strengthened them, and even wound up his years in office adding a new Cabinet post, the Secretary of Veterans Affairs. Overall, the quantity and degree of government regulation of the economy was greatly increased and intensified during the Reagan years. The hated OSHA, the scourge of small business and at the time the second most-hated agency of federal government (surely you need not ask which is the first most-hated), was not only not abolished; it too was strengthened and reinforced. Environmentalist restrictions were greatly accelerated, especially after the heady early years when selling off some public lands was briefly mentioned, and the proponents of actually using and developing locked-up government resources (James Watt, Anne Burford, Rita Lavelle) were disgraced and sent packing as a warning to any future “anti-environmentalists.”

The Reagan Administration, supposedly the champion of free trade, has been the most protectionist in American history, raising tariffs, imposing import quotas, and – as another neat bit of creative semantics – twisting the arms of the Japanese to impose “voluntary” export quotas on automobiles and microchips. It has made the farm program the most abysmal of this century: boosting price supports and production quotas, and paying many more billions of taxpayer money to farmers so that they can produce less and raise prices to consumers.

And we should never forget a disastrous and despotic program that has received unanimous support from the media and from the envious American public: the massive witch hunt and reign of terror against the victimless non-crime of “insider trading.” In a country where real criminals – muggers, rapists, and “inside” thieves – are allowed to run rampant, massive resources and publicity are directed toward outlawing the use of one’s superior knowledge and insight in order to make profits on the market.

In the course of this reign of terror, it is not surprising that freedom of speech was the first thing to go by the boards. Government spies and informers busily report conversations over martinis (“Hey Joe, I heard that XYZ Corp. is going to merge with ABC.”) All this is being done by the cartelizing and fascistic Securities and Exchange Commission, the Department of Justice and its much-hailed Savanarola in New York, Rudolf Giuliani. All this is the work of the beloved Gipper, the “free-market,” “libertarian” Reagan Administration. And where are the “conservative libertarians”? Where are the “free market economists” to point this out and condemn it?

Foreign aid, a vast racket by which American taxpayers are mulcted in order to subsidize American export firms and foreign governments (mostly dictatorships), has been vastly expanded under Reagan. The Administration also encouraged the nation’s banks to inflate and pour money down Third World rat-holes; then bailed out the banks and tin-pot socialist dictatorships at the expense of U.S. taxpayers (via tax increases) and consumers (via inflation). Since the discrediting of Friedmanite monetarism by the end of the first Reagan term, the original monetarist policy of allowing the dollar to fluctuate freely has been superseded by Keynesian Secretary of Treasury James Baker, who has concerted with foreign central banks to try to freeze the dollar within various zones. The interference has been, as usual, futile and counterproductive, but that will not stop the soon-to-be even more powerful Baker from trying to fulfill, or at least move strongly toward, the old Keynesian dream of one world fiat paper currency (or at least fixed exchange rates of the various national currencies) issued by one world Central Bank – in short, economic world government.

But didn’t Ronnie “bring down inflation”? Sure, but he did it, not by some miracle, but the old-fashioned way: by the steepest recession (read: depression) since the 1930s. And now, as a result of his inflationary monetary policies, inflation is back with a roar – which the Teflon President will leave as one of his great legacies to the Bush Administration.

And then there is another charming legacy: the reckless inflationary course, encouraged by the Reagan Administration, of the nation’s savings-and-loan banks. Virtually the entire industry is now bankrupt, and FDIC – the federal agency supposedly “insuring” S&L depositors – is bankrupt. Instead of allowing the banks and their deluded depositors to pay the price of their profligacy, everyone of both parties, including our “free-market” Reaganauts, is prepared to use taxpayer money or the printing press to bail out the entire industry – to the tune of an estimated 50 to 100 billion dollars. (These estimates, by the way, come from government sources, which notoriously underestimate future costs of their programs.)

I have been cleaving to the strictly economic realm because even the staunchest pro-Reagan libertarian will not dare to claim that Ronnie has been a blessing for civil liberties. On the contrary. In addition to his reign of terror on Wall Street (who cares about the civil liberties of stock traders anyway?), Reagan worked to escalate toward infinity the insane “war against drugs.” Far from the 1970s movement toward repealing marijuana laws, an ever greater flow of men and resources – countless billions of dollars – are being hysterically poured into combating a drug “problem” that clearly gets worse in direct proportion to the intensity of the “war.”

The outbreak of drug fascism, moreover, is a superb illustration of the interconnectedness of civil liberty and economic freedom. Under cover of combating drugs, the government has cracked down on our economic and financial privacy, so that carrying cash has become prima fade evidence of “laundering” drug money. And so the government steps up its long-cherished campaign to get people to abstain from cash and into using government-controlled banks. The government is already insinuating foreign exchange controls – now the legal obligation to “report” large amounts of cash taken out of the country – into our personal and economic life.

And every day more evil drugs are being found that must be denounced and outlawed: the latest is the dread menace of anabolic steroids. As part of this futile war, we are being urged by the Reaganites to endure compulsory urine testing (supervised, of course, since otherwise the testee might be able to purchase and substitute black market drug-free urine). In this grotesque proposal, government is not onlynot off our backs, it is now also insisting on joining us in the bathroom.

And in the bedroom, too, if Ronnie has his way. Although abortion is not yet illegal, it is not for lack of effort by the Reagan Administration. The relentless Reaganite drive to conservatize the judiciary will likely recriminalize abortion soon, making criminals out of millions of American women each year. George Bush, for less than twenty-four glorious hours, was moved to take a consistent position: if abortion is murder, then all women who engage in abortion are murderers. But it took only a day for his handlers to pull George back from the abyss of logic, and to advocate only criminalizing the doctors, the hired hands of the women who get abortions.

Perhaps the Gipper cannot be directly blamed – but certainly he has set the moral climate – for the increasingly savage Puritanism of the 1980s: the virtual outlawry of smoking, the escalating prohibition of pornography, even the partial bringing back of Prohibition (outlawing drunken driving, raising the legal drinking age to 21, making bartenders – or friendly hosts – legally responsible for someone else’s drunken driving, etc.).

Under Reagan, the civil liberties balance has been retipped in favor of the government and against the people: restricting our freedom to obtain government documents under the Freedom of Information Act and stepping up the penalties on privately printed and disseminated news about activities of the government, on the one hand; more “freedom” for our runaway secret police, the CIA, to restrict the printing of news, and to wiretap private individuals, on the other. And to cap its hypocrisy, as it escalated its war on drugs, the Reagan Administration looked the other way on drug running by its own CIA.

On foreign policy, the best we can say about Ronnie is that he did not launch World War III. Apart from that, his foreign policy was a series of murdering blunders:

  • His idiotic know-nothing intervention into the cauldron of Lebanon, resulting in the murder of several hundred US Marines.
  • His failed attempt – lauded by Reaganites ever since – to murder Colonel Khadafy by an air strike – and succeeding instead in slaying his baby daughter, after which our media sneered at Khadafy for looking haggard, and commented that the baby was “only adopted.”
  • His stumblebum intervention into the Persian Gulf, safeguarding oil tankers of countries allied to Iraq in the Iraq–Iran war. (Ironically, the US. imports practically no oil from the Gulf, unlike Western Europe and Japan, where there was no hysteria and who certainly sent no warships to the Gulf.) In one of the most bizarre events in the history of warfare, the Iraqi sinking of the U.S.S. Stark was dismissed instantly – and without investigation, and in the teeth of considerable evidence to the contrary – as an “accident,” followed immediately by blaming Iran (and using the sinking as an excuse to step up our pro-Iraq intervention in the war). This was followed by a US warship’s sinking of a civilian Iranian airliner, murdering hundreds of civilians, and blaming – you guessed it! – the Iranian government for this catastrophe. More alarming than these actions of the Reagan Administration was the supine and pusillanimous behavior of the media, in allowing the Gipper to get away with all this.

As we all know only too well, the height of Reagan’s Teflon qualities came with Iran-Contra. At the time, I naïvely thought that the scandal would finish the bastard off. But no one saw anything wrong with the Administration’s jailing private arms salesmen to Iran, while at the very same time engaging in arms sales to Iran itself. In Reagan’s America, apparently anything, any crookery, any aggression or mass murder, is OK if allegedly performed for noble, patriotic motives. Only personal greed is considered a no-no.

I have not yet mentioned the great foreign-policy triumph of the Reagan Administration: the invasion and conquest of tiny Grenada, a pitiful little island-country with no army, air force, or navy. A “rescue” operation was launched to save US medical students who never sought our deliverance. Even though the enemy consisted of a handful of Cuban construction workers, it still took us a week to finish the Grenadans off, during the course of which the three wings of our armed forces tripped over each other and our military distinguished itself by bombing a Grenadan hospital. The operation was as much a botch as the Carter attempt to rescue the American hostages. The only difference was that this time the enemy was helpless.

But we won didn’t we? Didn’t we redeem the US loss in Vietnam and allow America to “stand tall”? Yes, we did win. We beat up on a teeny country; and even botched that! If that is supposed to make Americans stand tall, then far better we sit short. Anyway, it’s about time we learned that Short is Beautiful.

The US war against the Sandinistas on the other hand, which has been conducted at enormous expense and waged hand-in-hand with Guatemalan, Honduran, and Salvadoran dictators, is going down the drain, despite illegal CIA mining of harbors and injury to neutral shipping. Even the nearly comatose American public is giving up on the idea of supporting bandit guerrillas, so long as they are anti-Communist, despite the best efforts of Ollie and Secord and Singlaub and Abrams and all the rest of the war crowd.

The Reagan Administration’s continued aid and support to Pol Pot in Cambodia, the most genocidal butcher of our time, is more reprehensible but less visible to most Americans. As a result, Pol Pot’s thugs are mobilizing at this very moment on the Thai border to return and take over Cambodia as soon as the Vietnamese pull out, presumably to renew their bizarre mass murders. But you see, that’s okay with the Reaganites because the Cambodian Commies are guerrilla fighters against the Vietnamese (pro-Soviet) Commies, who by definition are evil. Pol Pot’s butchers as “freedom fighters” show us that, in the arsenal of the Reaganite Right, “freedom,” like “taxes” and many other crucial words, means, as in the case of Humpty Dumpty, whatever they choose it to.

Grenada was the perfect war as far as many conservatives (and apparently much of the American public) were concerned: it was quick and easy to win, with virtually no risk of loss, and allowed ample opportunities to promote the military (and their Commander-in-Chief) as heroes while bragging up the victory on television – in short, allowing the U.S. to glory in its status as a bully. (It helped eradicate the awful memory of Vietnam, which was the perfect war for American centrist liberals: virtually impossible to win, horribly expensive in terms of men and property – and best of all, it could go on forever without resolution, like the War on Poverty, fueling their sense of guilt while providing safe but exciting jobs for members of their techno-bureaucratic class.)

While the American masses do not want war with Russia or even aid to the bandit Contras, they do want an ever-expanding military and other aggravated symbols of a “strong,” “tough” America, an America that will, John Wayne-like, stomp on teeny pests like Commie Grenada, or, perhaps, any very small island that might possess the tone and the ideology of the Ayatollah.

Setting the Stage: The Anti-Government Rebellion of the 1970s

I am convinced that the historic function of Ronald Reagan was to co-opt, eviscerate and ultimately destroy the substantial wave of anti-governmental, and quasi-libertarian, sentiment that erupted in the U.S. during the 1970s. Did he perform this task consciously? Surely too difficult a feat for a man barely compos. No, Reagan was wheeled into performing this task by his Establishment handlers.

The task of co-optation needed to be done because the 1970s, particularly 1973–75, were marked by an unusual and striking conjunction of crisis – crises that fed on each other to lead to a sudden and cumulative disillusionment with the federal government. It was this symbiosis of anti-government reaction that led me to develop my “case for libertarian optimism” during the mid-1970’s, in the expectation of a rapid escalation of libertarian influence in America.

1973–74 saw the abject failure of the Nixon wage-price control program, and the development of something Keynesians assumed could never happen: the combination of double-digit inflation and a severe recession. High unemployment and high inflation happened again, even more intensely, during the greater recession of 1979–82. Since Keynesianism rests on the idea that government should pump in spending during recessions and take out spending during inflationary booms, what happenswhen both occur at the same time? As Rand would say: Blankout! There is no answer. And so, there was disillusionment in the government’s handling of the macro-economy, deepening during the accelerating inflation of the 1970s and the beginnings of recession in 1979.

At the same time, people began to be fed up, increasingly and vocally, with high taxes: income taxes, property taxes, sales taxes, you name it. Especially in the West, an organized tax rebel movement developed, with its own periodicals and organizations However misguided strategically, the spread of the tax rebellion signaled a growing disillusion with big government. I was privileged to be living in California during the election year of 1978, when Proposition 13 was passed. It was a genuinely inspiring sight. In the face of hysterical opposition and smears from the entire California Establishment Democratic and Republican, Big Business and labor, academia, economists, and all of the press the groundswell for Prop 13 burgeoned. Everyone was against it but the people. If the eventual triumph of Ronald Reagan is the best case against “libertarian populism,” Prop. 13 was the best case in its favor.

Also exhilarating was the smashing defeat of US imperialism in Vietnam in 1975 – exhilarating because this first loss of a war by the United States, many of us believed, was bound to get Americans to rethink the disastrous warmongering bipartisan foreign policy that had plagued us since the unlamented days of Woodrow Wilson.

On the civil liberties front, the de facto legalization of marijuana was a sign that the nonsense of drug prohibition would soon be swept away. (Ye gods! Was that only a decade ago?) Inflationary recession; high taxes; prohibition laws; defeat in foreign war; across the board, the conditions seemed admirable for a growing and triumphant libertarianism.

And to top it off, the Watergate crisis (my particular favorite) destroyed the trust of the American masses in the Presidency. For the first time in over a hundred years, the concept of impeachment of the President became, first thinkable, and then a living and glorious process. For a while, I feared that Jimmy Carter, with his lovable cardigan sweater, would restore Americans’ faith in their president, but soon that fear proved groundless.

Surely, it is no accident that it was precisely in this glorious and sudden anti-government surge that libertarian ideas and libertarian scholarship began to spread rapidly in the United States. And it was in 1971 that the tiny Libertarian Party emerged, in 1972 that its first, embryonic presidential candidacy was launched, and 1973 when its first important race was run, for mayor of New York City. The Libertarian Party continued to grow rapidly, almost exponentially, during the 1970s, reaching a climax with the Clark campaign for governor of California during the Prop 13 year of 1978, and with the Clark campaign for the Presidency in 1980. The morning my first article on libertarianism appeared in the New York Times in 1971, a very bright editor at Macmillan, Tom Mandel, called me and asked me to write a book on the subject (it was to become For a New Liberty). Not a libertarian himself, Mandel told me that he believed that libertarianism would become a very important ideology in a few years – and he turned out to be right.

So libertarianism was on a roll in the 1970s. And then Something Happened.

Enter the Neocons

What happened was Ronald Wilson Blithering Reagan. Obviously Reagan did not suddenly descend out of the clouds in 1980. He had been the cherished candidate of the conservative movement, its chosen route to power, ever since Goldwater’s defeat. Goldwater was too blunt and candid, too much an unhandleable Real Person. What was needed was a lovable, manipulable icon. Moreover, Goldwater’s principles were too hard-edged: he was way too much a domestic libertarian, and he was too much an eager warmonger. Both his libertarianism and his passion for nuclear confrontation with the Soviet Union scared the bejesus out of the American masses, as well as the more astute leadership of the conservative movement.

A reconstituted conservative movement would have to drop any libertarian ideology or concrete policies, except to provide a woolly and comfortable mood for suitably gaseous anti-government rhetoric and an improved foreign policy that would make sure that many more billions would go into the military-industrial complex, to step up global pressure against Communism, butavoiding an actual nuclear war. This last point was important: As much as they enjoy the role of the bully, neither the Establishment nor the American people want to risk nuclear war, which might, after all, blow them up as well. Once again, Ronnie Reagan looked like the Answer.

Two important new ingredients entered into, and helped reshape, the conservative movement during the mid 1970’s. One was the emergence of a small but vocal and politically powerful group of neo-conservatives (neocons), who were able, in a remarkably short time, to seize control of the think tanks, the opinion-molding institutions, and finally the politics, of the conservative movement. As ex-liberals, the neocons were greeted as important new converts from the enemy. More importantly, as ex-Trotskyites, the neocons were veteran politicos and organizers, schooled in Marxian cadre organizing and in manipulating the levers of power. They were shrewdly eager to place their own people in crucial opinion molding and money-raising positions, and in ousting those not willing to submit to the neocon program. Understanding the importance of financial support, the neocons knew how to sucker Old Right businessmen into giving them the monetary levers at their numerous foundations and think tanks. In contrast to free-market economists, for example, the neocons were eager to manipulate patriotic symbols and ethical doctrines, doing the microequivalent of Reagan and Bush’s wrapping themselves in the American Flag. Wrapping themselves, also, in such patriotic symbols as The Framers and the Constitution, as well as Family Values, the neocons were easily able to outflank free-market types and keep them narrowly confined to technical economic issues. In short the neocons were easily able to seize the moral and patriotic “high ground.”

The only group willing and able to challenge the neocons on their own moralizing on philosophic turf was, of course, the tiny handful of libertarians; and outright moral libertarianism, with its opposition to statism, theocracy, and foreign war, could never hope to get to first base with conservative businessmen, who, even at the best of times during the Old Right era, had never been happy about individual personal liberty, (e.g. allowing prostitution, pornography, homosexuality, or drugs) or with the libertarians’ individualism and conspicuous lack of piety toward the Pentagon, or toward the precious symbol of the Nation-State, the US flag.

The neocons were (and remain today) New Dealers, as they frankly describe themselves, remarkably without raising any conservative eyebrows. They are what used to be called, in more precise ideological days, “extreme right-wing Social Democrats.” In other words, they are still Roosevelt-Truman-Kennedy-Humphrey Democrats. Their objective, as they moved (partially) into the Republican Party and the conservative movement, was to reshape it to become, with minor changes, a Roosevelt-Truman-etc. movement; that is, a liberal movement shorn of the dread “L” word and of post-McGovern liberalism. To verify this point all we have to do is note how many times Roosevelt, Truman, Kennedy, et al., properly reviled by conservatives while they were alive, are now lauded, even canonized, by the current neocon-run movement, from Ronnie Reagan on down. And no one calls them on this Orwellian revision of conservative movement history.

As statists-to-the-core the neocons had no problem taking the lead in crusades to restrict individual liberties, whether it be in the name of rooting out “subversives,” or of inculcating broadly religious (“Judeo-Christian”) or moral values. They were happy to form a cozy alliance with the Moral Majority, the mass of fundamentalists who entered the arena of conservative politics in the mid-1970s. The fundamentalists were goaded out of their quietist millenarian dreams (e.g., the imminent approach of Armageddon) and into conservative political action by the accumulation of moral permissivism in American life. The legalization of abortion in Roe v. Wade was undoubtedly the trigger, but this decision came on top of a cumulative effect of the sexual revolution, the militant homosexual movement “out of the closet” and into the streets, the spread of pornography, and the visible decay of the public school system. The entry of the Moral Majority transformed American politics, not the least by furnishing the elite cadre of neocons with a mass base to guide and manipulate.

In economic matter, the neocons showed no more love of liberty, though this is obscured by the fact that the neocons wish to trim the welfare state of its post-Sixties excrescences, particularly since these were largely designed to aid black people. What the neocons want is a smaller, more “efficient” welfare state, within which bounds they would graciously allow the market to operate. The market is acceptable as a narrow instrumental device; their view of private property and the free market is essentially identical to Gorbachev’s in the Soviet Union.

Why did the Right permit itself to be bamboozled by the neocons? Largely because the conservatives had been inexorably drifting Stateward in the same manner. In response to the crushing defeat of Goldwater, the Right had become ever less libertarian and less principled, and ever more attuned to the “responsibilities” and moderations of Power. It is a far cry from three decades ago when Bill Buckley used to say that he too is an “anarchist” but that we have to put off all thoughts of liberty until the “international Communist conspiracy” is crushed. Those old Chodorovian libertarian days are long gone, and so isNational Review as any haven for libertarian ideas. War mongering, militarism, theocracy, and limited “free” markets – this is really what Buckleyism amounted to by the late 1970s.

The burgeoning neocons were able to confuse and addle the Democratic Party by breaking with the Carter Administration, at the same time militantly and successfully pressuring it from within. The neocons formed two noisy front groups, the Coalition for a Democratic Majority and the Committee on the Present Danger. By means of these two interlocking groups and their unusual access to influential media, the neocons were able to pressure the Carter Administration into breaking the détente with Russia over the Afghanistan imbroglio and influencing Carter to get rid of the dove Cyrus Vance as Secretary of State and to put foreign policy power into the hands of the Polish émigré hawk and Rockefeller Trilateralist, Zbigniew Brzezinski. In the meantime, the neocons pushed the hysterically hawkish CIA “B” Team report, wailing about alleged Soviet nuclear superiority, which in turn paved the way for the vast gift of spending handed to the military-industrial complex by the incoming Regan Administration. The Afghanistan and “B” Team hysterias, added to the humiliation by the Ayatollah, managed not only to kill off the bedeviled Carter Administration, but also to put the boots to non-intervention and to prepare the nation for a scrapping of the “post-Vietnam syndrome” and a return to the warmongering of the pre-Vietnam Era.

The Reagan candidacy of 1980 was brilliantly designed to weld a coalition providing the public’s instinctive anti-government mood with sweeping, but wholly nonspecific, libertarian rhetoric, as a convenient cover for the diametrically opposite policies designed to satisfy the savvy and politically effective members of that coalition: the neocons, the Buckleyite cons, the Moral Majority, the Rockefellers, the military-industrial complex, and the various Establishment special interests always clustering at the political trough.

Intellectual Corruption

In the face of the stark record, how were the Reaganites able to get away with it? Where did Ronnie get his thick coat of Teflon? Why was he able to follow statist policies and yet convince everyone, including many alleged libertarians, that he was successfully pursuing a “revolution” to get government off our backs?

The essential answer was provided a century ago by Lysander Spooner. Why does the public obey the State, and go further to endorse statist policies that benefit the Power Elite at the public’s own expense? The answer, wrote Spooner, is that the State is supported by three powerful groups: knaves, who know what is going on and benefit from State rule; dupes, who are fooled into thinking that State rule is in their and everyone else’s interest; and cowards, who know the truth but are afraid to proclaim that the emperor has no clothes. I think we can refine Spooner’s analysis and merge the Knave and Coward categories; after all, the renegade sellout confronts the carrot and the stick: the carrot of wealth, cushy jobs, and prestige if he goes along with the Emperor; and the stick of scorn, exclusion from wealth, prestige, and jobs – and perhaps worse – if he fails to go along. The reason that Reagan got away with it – in addition to his aw-shucks “lovability” – is that various powerful groups were either duped or knave-cowardly corrupted into hailing his alleged triumphs and deep-sixing his evident failures.

First, the powerful opinion-molding media. It is conventional wisdom that media people are biased in favor of liberalism, No doubt. But that is not important, because the media, especially elite media who have the most to lose, are also particularly subject to the knave/coward syndrome. If they pander to Reaganism, they get the approval of the deluded masses, their customers, and they get the much-sought-after access to the President and to other big-wigs in government. And access means scoops, carefully planted exclusive leaks, etc. Any sort of effective opposition to the President means, on the other hand, loss of access; the angering of Reagan-deluded masses; and also the angering of their bosses, the owners of the press and television, who are far more conservative than their journalist employees.

One of Reagan’s most notable achievements was his emasculation of the liberal media because of his personal popularity with the masses. Note, for example, the wimpy media treatment of Iran-Contra as compared to their glorious attack on Watergate. Ifthis is liberal media bias, then the liberals need to be saved from their friends.

If the media were willing to go along with Reaganite duplicity and hokum, then so were our quasi-libertarian intellectual leaders. It is true of the libertarian-inclined masses as it has been always true of the conservative masses: they tend to be not too swift in the upper story. During the late 1970s, libertarian intellectuals and free-market economists were growing in number, but they were very few, and they had not yet established institutions with firm ties to journalistic and mass opinion. Hence, the libertarian mood,but not the informed thought, of the masses, was ready for co-optation, especially if led by a charismatic, beloved President.

But we must not under weigh the importance of the traitorous role performed by quasi-libertarian intellectuals and free-market economists during the Reagan years. While their institutions were small and relatively weak, the power and consistency of libertarian thought had managed to bring them considerable prestige and political influence by 1980 – especially since they offered an attractive and consistent alternative to a statist system that was breaking down on all fronts.

But talk about your Knaves! In the history of ideological movements, there have always been people willing to sell their souls and their principles. But never in history have so many sold out for so pitifully little. Hordes of libertarian and free-market intellectuals and activists rushed to Washington to whore after lousy little jobs, crummy little grants, and sporadic little conferences. It is bad enough to sell out; it is far worse to be a two-bit whore. And worst of all in this sickening spectacle were those who went into the tank without so much as a clear offer: betraying the values and principles of a lifetime in order to position themselves in hopes of being propositioned. And so they wriggled around the seats of power in Washington. The intellectual corruption spread rapidly, in proportion to the height and length of jobs in the Reagan Administration. Lifelong opponents of budget deficits remarkably began to weave sophisticated and absurd apologias, now that the great Reagan was piling them up, claiming, very much like the hated left-wing Keynesians of yore, that “deficits don’t matter.”

Shorn of intellectual support, the half-formed libertarian instincts of the American masses remained content with Reaganite rhetoric, and the actual diametrically opposite policies got lost in the shuffle.

Reagan’s Legacy

Has the Reagan Administration done nothing good in its eight ghastly years on earth, you might ask? Yes, it has done one good thing; it has repealed the despotic 55-mile-per-hour highway speed limit. And that is it.

As the Gipper, at bloody long last, goes riding off into the sunset, he leaves us with a hideous legacy. He has succeeded in destroying the libertarian public mood of the late 1970’s, and replaced it with fatuous and menacing patriotic symbols of the Nation-State, especially The Flag, which he first whooped up in his vacuous reelection campaign in 1984, aided by the unfortunate coincidence of the Olympics being held at Los Angeles. (Who will soon forget the raucous baying of the chauvinist mobs: “USA! USA!” every time some American came in third in some petty event?) He has succeeded in corrupting libertarian and free-market intellectuals and institutions, although in Ronnie’s defense it must be noted that the fault lies with the corrupted and not with the corrupter.

It is generally agreed by political analysts that the ideological mood of the public, after eight years of Reaganism, is in support ofeconomic liberalism (that is, an expanded welfare state), and social conservatism (that is, the suppression of civil liberties and the theocratic outlawing of immoral behavior). And, on foreign policy, of course, they stand for militaristic chauvinism. After eight years of Ronnie, the mood of the American masses is to expand the goodies of the welfare-warfare state (though not to increase taxes to pay for these goodies), to swagger abroad and be very tough with nations that can’t fight back, and to crack down on the liberties of groups they don’t like or whose values or culture they disagree with.

It is a decidedly unlovely and unlibertarian wasteland, this picture of America 1989, and who do we have to thank for it? Several groups: the neocons who organized it; the vested interests and the Power Elite who run it; the libertarians and free marketeers who sold out for it; and above all, the universally beloved Ronald Wilson Reagan, Who Made It Possible.

As he rides off into retirement, glowing with the love of the American public, leaving his odious legacy behind, one wonders what this hallowed dimwit might possibly do in retirement that could be at all worthy of the rest of his political career. What very last triumph are we supposed to “win for the Gipper”?

He has tipped his hand: I have just read that as soon as he retires, the Gipper will go on a banquet tour on behalf of the repeal of the 22nd (“Anti-Third Term”) Amendment – the one decent thing the Republicans have accomplished. In the last four decades. The 22nd Amendment was a well-deserved retrospective slap at FDR. It is typical of the depths to which the GOP has fallen in the last few years that Republicans have been actually muttering about joining the effort to repeal this amendment. If they are successful, then Ronald Reagan might be elected again, and reelected well into the 21st century.

In our age of High Tech, I’m sure that his mere physical death could easily have been overcome by his handlers and media mavens. Ronald Reagan will be suitably mummified, trotted out in front of a giant American flag, and some puppet master would have gotten him to give his winsome headshake and some ventriloquist would have imitated the golden tones: “We-e-ell…” (Why not? After all, the living reality of the last four years has not been a helluva lot different.)

Perhaps, after all, Ronald Reagan and almost all the rest of us will finally get our fondest wish: the election forever and ever of the mummified con King Ronnie.

Now there is a legacy for our descendants!

Reprinted from Mises.org.


Murray N. Rothbard (1926–1995) was dean of the Austrian School, founder of modern libertarianism, and academic vice president of the Mises Institute. He was also editor – with Lew Rockwell – of The Rothbard-Rockwell Report, and appointed Lew as his literary executor. See his books.

The Best of Murray Rothbard

Does Favoring Free Enterprise Mean Favoring “Business”?

Source: http://mises.org/daily/4998

by Jeffrey A. Tucker on January 25, 2011

“The first great error here is the mental habit that many have of thinking that big government and big business are somehow at odds.”

American political rhetoric seems to operate on a regular cycle, like a clock, which is why it seems lately like we are reliving the Clinton years.

The story goes like this. A Democratic administration with lefty ideas gets elected, pushes hard for a series of goofy reforms like protosocialized medicine, which prompts a backlash and thereby a rethinking among the rulers, who then tack to the right and become “centrist” by praising the great contribution that the business sector makes to American life.

Most of these grandiose shifts — Obama is going through one now — are illusory and pointless, like slapping a new color of paint on a car that is traveling in one direction in order to fool people into believing that it is a different car going in a different direction.

But what interests me most here is the rhetoric and the way the Left uses it. They imagine that they got themselves in trouble by being seen as too progovernment and not sufficiently in favor of “business” as they understand that term. And so then comes the change when they discover phrases like “private sector” and even words like “capitalism.”

It’s all superficial, and these shifts suggest that the Left accepts a caricature of capitalism: the belief that it is the system that favors the largest and most established capital owners in society. So when things start to go wrong with a socialist agenda, they reach out to the corporate kingpins in the name of becoming friendly to free enterprise.

Look at Obama’s pathetic attempt to reach out to business. The administration claims it is reviewing government regulations to find those for which the cost outruns the benefits. Well, we could make some progress here by turning the Departments of Energy, Education, and Labor into sports arenas, but that’s not what the administration has in mind. Instead, you are to go to Regulations.gov and comment, if you can figure it out. I bumped into one rant that seems typical — some giant racket about home-energy upgrades — but no doubt that this site is more safety valve than work order.

Obama also has some new thing he established in the White House called the Council on Jobs and Competitiveness, and this is supposed to represent his new centrism. And who is to head it? Not the owner of Cupcake Kitchen down the street in my neighborhood but rather Jeff Immelt, the CEO of General Electric, of all people. And this is supposed to signal some kind of new turn for the administration.

Obama’s advisers imagine that his image has become tainted with the impression that he is too much in favor of big government — hmm, where did that come from? — and so now is the time to do the Clinton thing and triangulate by being probusiness, and hence this new council and new appointment.

Yes, it is a hoax on many, many levels. The first great error here is the mental habit that many have of thinking that big government and big business are somehow at odds. The whole of American history from the beginning to the present suggests precisely the opposite. From Alexander Hamilton to Goldman Sachs, a careful look at the history shows that there has been no major expansion of government that some sector of big business hasn’t backed with pressure and funding.

Who won from the mercantilism of the 19th century? Who came out ahead in the war socialism of Woodrow Wilson? Who was the major power behind the economic regimentation of the New Deal? What sectors of American life made out like bandits during World War II and the Cold War and the regulation of medical care and the American workplace in the 1960s and 1970s? Without exception, the corporate elite were behind every push for expanding the leviathan state.

The 19th-century history here has been carefully documented by Thomas DiLorenzo. Murray Rothbard has revealed the role of business in World War I. The postwar period through the New Deal is documented by Butler Shaffer in his great book In Restraint of Trade. The New Deal racket received a thorough exposé with John T. Flynn. The Cold War and after are shown to be radically probusiness in For a New Liberty, as well as Robert Higgs’s excellent works. And this is just the US case: it’s been true in every country where free competition was overtaken by state interventions.

There are several pieces of the puzzle one must understand to see why this is so. The largest companies have a strong interest in crushing upstarts any way they can. In a free market, they do this through better products at better prices. But that’s a hard-knock life. The struggle to stay on top in this rat race consumes all energies. Profits are always threatened in unexpected ways. Market share is never really secure. The capitalist in this system feels like a slave to consumers, and there is always another entrepreneur out there with a better idea to market. Not even gigantic companies can be sure that they can hold on.

In a mixed economy, the government itself becomes an occasion of sin. Capitalists are all-too-happy to jump out of the rat race and reach for the levers of power. And to do what? To grant favors, privileges, security, protection against failure, and, crucially, to stultify competition by imposing business costs they have already absorbed onto their less-lucrative competitors.

This is how the minimum wage and healthcare mandates and every manner of regulations come to be imposed on the entire business sector: it is a tactical move by the dominant players. It is the same with the regulatory agencies, who hardly make a move without pressure and consultation from business interests.

Antitrust is the classic case (protecting big business against competition) but it is true with labor mandates, health mandates, environmental mandates, and everything else. It’s true with patents, great inflations, higher taxes, mandated workplace benefits, consumer-product regulations, and everything else. They are all mechanisms to cartelize the market on behalf of the biggest players, while the rhetoric about the small guy is just the political excuse.

A book that absolutely blew me away was written by Ludwig Erhard, the great, Misesian-influenced reformer of the postwar German economy, a passionate opponent of the interventionist state and a man who deserves nearly all the credit for the so-called miracle experienced by Germany after the war. The book is a patient-but-compelling argument in favor of free competition and a plea to move away from wartime cartelization, from which the German business sector benefited mightily. The book is outstanding on its own terms, but much more interesting is the intended audience: not consumers, not intellectuals, not voters, but business itself, for Erhard knew what so many others seemed not to know, namely, that the business sector is among the least likely to favor the free market. It was this sector more than any other that needed to hear the message.

And this becomes transparently obvious in the case of General Electric, which is as intertwined with the government as the East India Company was in its day. Mr. Immelt himself is a good case in point: not an advocate of free enterprise but rather an enthusiastic champion of regulation, green-energy subsidies, high regulatory barriers in energy, not free trade but export-driven trade, and a loud proponent of regimentation in general insofar as interventions end up benefiting his company. This guy finds a very happy home in the halls of power, pushing for all kinds of policies that the state will love.

But back to Obama’s new “centrism.” What puzzles me is that left-wing triangulation of this sort could possibly fool anyone. The idealistic Left is undoubtedly upset with Obama’s new turn, but are these people really naïve enough to believe that there is such as thing as a big government that is somehow untainted by the backing of big business? As for the chamber-of-commerce Republicans, can they really be fooled into believing that such moves amount to a new friendliness on the part of Obama to the interests of the private sector?

Mises wrote in his inspiring book Liberalism (still the bible of liberty after all these years) that freedom is not about being in favor of the business sector; often the the business sector is the strongest and most well-heeled opponent of freedom.

Did we not learn this during the succession of Bush/Obama bailouts, all designed to privatize the gains of big business and socialize its losses? These bailouts had nothing whatever to do with macroeconomic stabilization or with the general interest of society; they were all about looting society to favor large banks and corporations like General Motors and AIG, protecting the state’s friends from the wiles of market change.

Mises goes on to speak of the tragedy of liberalism. As a doctrine, it is not favored by any single special interest and certainly no single political party. It is nonetheless in the interest of the whole society over the long term; indeed, it is the wellspring of civilization. It is for this reason that Mises believed that liberalism needs dedicated champions in all walks of life. Otherwise we end up with endless cycles of phony change such as we observe by looking at the whole history of presidents after midterm elections.

Jeffrey Tucker is the editor of Mises.org and author of Bourbon for Breakfast: Living Outside the Statist Quo. Send him mail. See Jeffrey A. Tucker’s article archives.


Intellectual Freedom and Learning Versus Patent and Copyright


I’ve given several speeches about intellectual property (IP).1 Tonight I’ll take a somewhat different approach to the subject. Let me ask you a general question. Why are you here at this great (government) school? It’s to have fun, right? But it is also to learn; that is the basic purpose of education: to learn. To be sure, we learn things all the time. A university is a more formalized way of learning, but learning as a general matter is very important. This may sound like a trite observation. We make these comments all the time: “Education is important. Learning is good.”

The Role of Learning and Knowledge in Human Action

But this leads me to the focus of my talk, which is about learning and the importance of information and knowledge, and copying and emulation on the market and in life in general. So let’s think about how learning is important and how it’s used in everyday life.

Ludwig von Mises, the famous Austrian economist, the father of modern Austrian economics, systematized the study of human action and gave it a name: praxeology. This is the study of the logic of human action. Mises analyzes action in very simple, elementary terms. He breaks it down. I want you to think about it. If you haven’t heard of praxeology, don’t be daunted by the expression. The idea is to look at what the components of human action are; what we do every day, all the time.2

The Structure of Human Action: Means and Ends

When a human acts, what is he doing? He looks around the world. He chooses an end or a goal that he wants to achieve, some purpose of his, something he wants to happen, something that would not happen without his active intervention in the world. So he chooses one action over another. He chooses his highest value action or end, and demonstrates this preference by his action.

So we have a chosen end, or goal. But how does an actor achieve the goal he has chosen? He has to select certain means. This is what Mises and the Austrians call means: things that are physically efficacious, things that let you causally interfere in the world to achieve some desired goal.

Let’s take an example. You’re all eating now so let’s take a food example. Let’s say you’re hungry. So you say, “I know I like cake. I know I like chocolate cake. I think I’ll try to acquire a chocolate cake.”

You can see right off the bat that knowledge has entered the picture; the knowledge of what you like. Maybe you’ve learned this from experience, but knowledge is already playing a role in your decisions and actions. It has informed your choice of ends.

So how do you achieve your end? How do you get the chocolate cake? Well, you might obtain a recipe for cake and get the ingredients and tools to make the cake: mixing bowl, eggs, flour, spoon, kitchen, oven. Then you spend some time and effort and make a cake. You make that cake instead ofwatching television or getting your car washed or changing your clothes or making a vanilla cake.

This illustrates that human action is the purposeful use of means to achieve a desired end or result.3 Notice that the means you employ have to be physical or scarce resources, things that are real things in the world, things that you can affect, like the mixing bowl and the oven.4 This is what you employ to achieve your goal. The Austrians, especially Mises, go into the logical structure of human action, which we just discussed, and show that it implies so many things.5 For example, it implies opportunity cost. You choose this goal instead of the other ends. The things that you did not choose are the opportunity cost of your action.

Action also presupposes causality. You have to believe there is a way to achieve your result by manipulating the world in accordance with time-invariant causal laws. The structure of human action also has the concept of profit and loss built in, which is not only a monetary concept, but a psychic concept. Not psychic in the Shirley MacLaine sense, but psychic in the sense of pertaining to mental phenomenon, such as value and ends. For example, if you achieve your goal, which is to obtain a nice chocolate cake, and if it is as you envisioned it, and if you enjoyed it like you expected that you would, then you’ve achieved a profit. If it turns out to be a failure or you don’t enjoy it for some reason, then there is a loss.6

Knowledge as a Guide to Action

Where does this leave the role of learning? Learning is important because it is how we acquire information. Information is important because it gives us knowledge of how the world is. The more knowledge you have, the wider is your universe of choices. You have more ends to choose from, for example.7

Let’s say one person only knows the possibility of making a vanilla cake or a chocolate cake. If he learns that it’s possible to make a coconut cake, now he can choose between three possible goals. So his knowledge of the ends can expand and give him a wider array of choices.

Importantly, you also have to have knowledge of means and causal laws of the world because this informs your choice of means. To be able to choose a given end, you also need to know how to achieve it. You need to have a recipe.8 I don’t mean only food recipes. A recipe in this sense is just a general way to do something by exploiting resources in the world to achieve some end.

You know, for example, that if you take an egg, some flour, and chocolate, mix them in a certain way, and bake it, then, after a while, you have something that is edible. So the role of knowledge in action is to guide action. It is not the means of action. For example, you might know five different ways of getting the cake you desire. One may be to steal the cake. It’s immoral, but it’s a possible way. One may be to bake the cake. Another may be to purchase the cake. Yet another is to hire someone to bake the cake for you. So, in other words, the more knowledge you have, the wider the universe of ends and means that you have to draw on. This is the reason why learning is good.

Consider the great creators in the past — Shakespeare, Michelangelo, Bach, say — they drew upon knowledge that they acquired from the culture they were born into. Even the greatest of inventors, innovators, and creators didn’t think of everything on their own.

Scarcity, the Free Market, and Abundance

Now, let’s think about the role of scarcity in the free market. Given the above-mentioned understanding of what human action is, this very simple structural view of human action — that we use knowledge to guide our choices of ends and of what means to use to achieve the chosen ends — what is the role of external resources? That is, external objects, scarce things in the world? The role of these things is to be used by men to achieve their ends. Knowledge guides your action. It helps you choose what you want to do.

So reflect on the purpose of the free market system. What is its purpose, its role? What is its function or result? It is to help us achieve abundance. We live in a world of scarcity. We don’t live in the Garden of Eden.9 We live in a world where survival is not easy. It’s difficult. We have to find ways to survive because there is scarcity. There aren’t bananas hanging from every tree, enough for everyone to survive off of, but the free market operates to unleash creative energy and to allow tremendous productivity.

If you think about it, although we have scarcity and there is nothing we can do about this fundamental fact of the universe, the free market, in a way, helps us fight and overcome this situation.10 The thing is, the only way you can do this is by having a free market. A free market has to be built on private property principles. The reason we have to have private property is because these things are scarce. Economists call them rivalrous because you can have rivalry or fighting over them. For example, for a productive use to be made of the spoon, in the cake example, someone has to own the spoon. Someone has to be the one person who has the right to control that spoon. How do other people know that a given resource is owned, and who owns it? Property rights set up objective borders. They tell you who owns things. They’re visible and observable.11

This doesn’t mean there is no crime. This doesn’t mean that everybody respects these property rights. There can be thieves, but at least with thieves we can theoretically deal with them with crime prevention techniques. Paraphrasing Hans-Herman Hoppe, thieves and criminals are just a technical problem.12 People who want to live in harmony and use these resources productively have to have a system of property rights to allocate the use of the spoon.

Sometimes it’s said that libertarians believe in property rights and that other political systems do not uphold property rights. This is true in a sense, if you mean property rights in a particular way, but if by “property rights” you mean the right to control a scarce resource, which is what property — ownership — is,13 then every system on the face of the earth upholds some form of property rights. Every system on the earth will have a legal rule that says who is the owner of this platform, who is the owner of that factory, who is the owner of your paycheck.

For example, in the modern quasi-socialist welfare state that we live in today, the ownership rule is that the government owns about half of my paycheck. It’s clear there are property rights. It’s just that I only have about half and the government has the other half.

So in every society the legal system assigns an owner to a given contestable resource. What’s unique about libertarianism is not that we believe in property rights; everyone does. Rather, it’s our particular property rights scheme, which is basically the spinning out of the Lockean idea that the person who owns a given contested resource is the first user of it, or someone that he sold or gave the property to. The purpose of property rights is to permit us to peacefully, productively, and cooperatively use these things that are, unfortunately, scarce and cannot be used by more than one person at a time.14

Cooperation, Emulation, and Competition

I don’t know if all of you have heard of the Misesian “calculation argument,” but in the 1920s, Ludwig von Mises published a seminal paper that explained why socialism cannot work, why economics is literally impossible under full-fledged socialism.15 The reason is there is no way to compare competing projects unless you can do so in cardinal, numerical terms. It’s a very simple idea. You can’t compare building a bridge to planting an orchard. They’re not comparable units. Mises realized that in a free market system with money prices, everything resolves in terms of money. You can compare with money prices. The problem in socialism is you don’t have real money prices. You don’t have real money prices because there is no private property in the means of production. This is the basic insight of Mises as to exactly why a private property system permits the free market to be prosperous and to generate wealth and to fight this condition of scarcity.

The market is producing more things all the time. It doesn’t ever eliminate scarcity, but it fights it. If we had the government off of our backs, you could probably buy a Mercedes for $500. You could buy a microwave oven for a penny. It would not be infinitely plentiful, but it would be so plentiful everyone could have what they wanted.16

What are the key elements of a free market economy that allow this to happen? One is cooperation. The free market, by setting up property borders, allows people to cooperate instead of fighting over a resource.

It also gives rise to competition. My friend Jeff Tucker, of the Mises Institute, related to me a really good formulation of what competition is that was given to him by Larry Reed who is now the president of FEE, the Foundation for Economic Education. Reed’s formulation is “competition is the striving for excellence in the service of others.” That’s true. That’s what it is. You try to constantly improve what you’re making to try to please the customer. This gives rise to a relentless effort on the part of the people in the market to lower cost, to make things more efficiently, to serve customers the best you can because you’re in competition with others.

But we’ve left out one thing. Remember we talked about human action. A key aspect of human action is knowledge. You have to have knowledge to guide your actions. So how does this relate to the market? What’s the role of knowledge in human action, in the market context? It’s emulation.17 If you see someone successful in the market, you emulate them. This is how competition arises. You see someone attracting customers. Let’s say some guy invents a slushee stand and he’s getting a lot of customers. You might build your own slushee stand to compete with him. You copied his idea. So what? Customers are better off. Now the original guy might improve his slushee stand. He might offer more flavors.

This relentless striving to please the customer benefits everyone. This is the process of the market and it presupposes the idea of copying information, learning information, emulating. Competition means you can compete with someone, but you have to respect their property rights. You cannot trespass against them. You can’t steal your competition’s property, but you can “steal” their customers because they don’t own their customers.

Let’s tie this back to the structure of human action. Remember, we said human action uses means and it is guided by knowledge. So the means of action need to be privately owned only because they’re scarce. That’s why we have to have property in those things. Now, you can’t say scarcity is a bad thing, as it’s part of the nature of reality, but it’s definitely a challenge. We humans have to try to overcome scarcity. The free market allows us to create wealth.

Creation of Wealth versus Creation of Property

Now, I want you to think about this for a second. What does it mean to create wealth? Does it mean to actually create an object out of thin air? No. It means to make things that you own more valuable. That increases wealth.18

Imagine two people engaging in a simple exchange. I give you my goat and you give me some eggs from your chickens. Was anything physically created? No. There was just an exchange. But as we know from very basic Austrian economics that one transaction increased the sum total of wealth in society because I wouldn’t have given you my goat if I didn’t want the eggs more. So after the exchange, I’m better off and the same thing for the other guy.19

So just by allowing people freedom and respecting property rights, you can increase wealth, but the key thing to recognize is that wealth is not an object. Value is not a substance. Things are more valuable because they’re in a different shape. They’re more valuable to customers, for example. When we talk about creating wealth, what we mean is we are rearranging things that we already own, rearranging scarce resources to make them more valuable to customers or to yourself.

So, yes, you use your creativity, you use labor to do these things. Labor and creativity can be said to create wealth, but that is just another way of saying that one’s labor and actions are guided by knowledge to transform things that you own already to make them more valuable to you or to others.

I emphasize this because there’s an insidious argument that is commonly used, even by libertarians, by proponents of this idea of intellectual property. The argument goes like this:

Oh sure, I agree with you that if you find something in the state of nature that was never owned, you’re the owner. Finders keepers. Yes, that is one source of ownership. And sure, I agree that if someone transfers something to you by contract, which can include gifts, a contractual consensual voluntary transfer, that is another way you can come to own something.20 That’s another way of acquiring property rights.

So, they admit that we’re right on two things: you can come to own some scarce resource by finding it or buying it.

But they say if you create it, you also own it. It just seems natural. We’re used to thinking about this because what do we say in America? “You makemoney.” Now, all that really means is you had a profit from a certain entrepreneurial endeavor. These metaphors can mislead us if we’re not careful.21 You don’t really make money. (Now the Fed makes money, but that’s a different story! They don’t make real money. They make these artificial tickets we have now by printing them.)

Then they will say there are three ways to acquire ownership of things: you can find it, you can buy it, or you can create it. If you create it you should own it. It’s natural. If there is a thing that someone created, and it’s got to have an owner, well I guess it’s got to be the creator. He’s got the best connection to it. It just makes sense, right? Then they’ll say, well, who created that song? Didn’t you create that song? Who created that painting? Didn’t you create that painting? So, you’re the owner of it. The problem is they’re wrong. Creation is not a third means of acquiring ownership of things.

We can see it in the examples I gave already. Creation just means transforming things you own already. Think about a man who has a big chunk of marble. He owns it because he found it. He didn’t create any new ownable thing. I guess you could say he’s creative in finding it, but he’s not creative in the modern intellectual property sense. His neighbor sneaks over in the middle of the night and carves a statue out of it. Who owns the statue? Under current law, it’s indeterminate. Under libertarian law, the original guy owns it. This is a clear example that creation by the neighbor is notsufficient to give rights. It’s also not necessary since the first guy acquired ownership because he found it. So you can see that creation is neither necessary nor sufficient for property rights and things. Creation is not an independent source of ownership or property rights.

This is the mistake that is made over and over again by pro-IP libertarians. One libertarian philosopher says there are ontologically many types of things out there. Sure there are tangible things, but there are poems and movies. Why can’t we own those too?22

But what about, say, welfare rights? If rights are good, why can’t there by welfare rights? What do modern liberals say? They say, “oh, I believe in property rights, but there is “also” a right to education and a right to food. Now, of course, we libertarians already understand that the problem with this idea is that these rights are not free. They come from something else. When you have a set of rights allocated and you start giving out more rights, they have to start chipping into the previous ones recognized. They have to come from something else. Rights and obligations are correlative. If you have a right to education or welfare, someone’s got to provide it. They have to provide it out of their property. So recognizing “new” rights just amounts to a redistribution of property.

It’s the same thing with intellectual property, which is nothing but a redistribution of rights. It is a redistribution of property rights from the original owner of a thing, to someone who applied at a state agency for some kind of monopoly certificate that gives them the right to go to government courts to ask the court to point their guns at the original owner and tell them “you have to share your property with this guy, or you can’t use it in this way without this guy’s permission.” It is a way of redistributing property rights. The idea that you can just add IP rights to the set of property rights in scarce resources is a pernicious one that leads to redistribution of control that owners have over their property, to other people.

Here is what’s perverse about it. As I’ve already pointed out, the free market is working to let humans overcome scarcity. Yet, you have people who advocate intellectual property rights in the name of the market. What’s going on here? They’re actually imposing an artificial scarcity on things that are non-scarce by their nature.23 The free market is trying to overcome the problem of scarcity. These people are saying, “let’s make something that is already free and not scarce artificially scarce just like real things are.” Why would we want to do this?

Let’s imagine we had the ability to change physical laws so that you could easily duplicate a car just by looking at it. I look at your Rolls Royce and I blink my eyes and I have my own. It didn’t take anything from you. You can still drive your car around. Who would be against that? Well, the auto workers’ union would be against it I guess, but normal people wouldn’t be against this. This would be free wealth — a good thing.

Yet, we already have this idealized situation in the case of knowledge. We have an expanding base of knowledge that we have all benefited from. It is growing all the time with every succeeding generation. The idea of shackling it is crazy. Why would libertarians support the government in imposing restraint on information?

IP as Censorship and Monopoly

There was one free market economist who actually wrote for one of the free market think tanks that many of you have probably read from before. He explicitly says “patents and copyrights slow down the diffusion of new ideas for a reason: to ensure there will be more new ideas to diffuse.”24 We can debate whether he’s right about this means (slowing down the diffusion of ideas by means of state grants of monopoly privilege) achieving this end (ensuring there are more new ideas generated). I think, of course, that he’s wrong — obviously wrong — but he’s admitting that IP advocates want to slow down the spread of ideas. They want to make it more difficult to spread ideas.

There was a recent Salon magazine article about copyright in China. The magazine article’s author sort of innocently stated that “We may have more to gain, economically, from removing impediments to the widespread distribution of knowledge than from attempting to restrict them.”25 Oh really!

It should be no surprise that patent and copyright have such perverse effects. If you realize the history of these statutes, it is no surprise at all. Patents originated in the granting of monopoly privileges by monarchs. The first modern patent statute is called the Statute of Monopolies of 1623 in England. A patent was given to Sir Francis Drake, a notorious pirate, or privateer as he was euphemistically called, in the late 1500s, which authorized him to go around looting Spanish ships. The origin of patents is in privilege, monopoly, and real piracy. So all these proponents of intellectual property who point their fingers at today’s “pirates” and are against piracy, well, there is a link between piracy and intellectual property: they go hand in hand.26

Copyright’s origin is literally in censorship. Before the printing press, the state and the church found it pretty easy to control the distribution of thought. There were certain scribes who would copy books by hand. So the state and church could stop people from copying what they didn’t want copied. The printing press started to upset matters and so the state established an elaborate system of monopolies and controls over the use of printing presses. This led to the Statute of Anne in 1710 in England, is the first modern copyright statute. Actually, part of the reason that some authors in the French Revolution, and even in England, were in favor of modern copyright laws was they wanted the control back. The government was controlling whether their own works could be reproduced. It wasn’t a desire to get this monopoly from the state to go around suing people to stop them from reading their work. It was a desire just to have the ability to have it reproduced and copied.27 So the entire history of patent and copyright lies in statism. It lies in piracy — real piracy — pirates that kill people and break things, not guys that have a Jolly Roger banner on their website.

Let me give an example of a mousetrap. Let’s say some guy makes a mousetrap. He gets the idea to improve the standard mousetrap by coating it with Teflon. He figures these rat guts are sticky; they keep sticking to my mousetrap. I’ll coat it with Teflon and this will make a better mousetrap. So maybe he sells some and when he sells his mousetrap a lot of people learn about it. The realize, “Hey, it’s possible to make a mousetrap out of Teflon. It works even better.”

Let’s say I have some Teflon and a mousetrap. I improve my own mousetrap by adding Teflon to it. Now, the first guy has a patent on his Teflon-coated mousetrap. He can actually get a court order, an injunction, that tells me I cannot make this mousetrap even in the privacy of my own home or I will go to jail. This is really the force of government. So this is just an example of how patent rights literally rob people of their property rights. (Note: the patentee can do this to me even if I independently came up with the idea of a Teflon-coated mousetrap; even if I came up with it first.)28

The IP Mistake

Why did this happen? How did my property get transferred to this patentee? Ultimately, causally, it was transferred because of a mistake, a mistake in the law, a mistake in people’s thinking, a mistake in believing that ideas can be owned. Ideas cannot be owned. Ideas guide action. Means of action are scarce. Property rights are recognized in means because they’re scarce. Ideas are not scarce things. They are infinitely reproducible. The growing body of knowledge is a boon to mankind.

We need to cast off the mistakes of the past. The young libertarians — you get this. You’re immersed in the internet, digital information, easy access to online books and online information, billions of pages of information available at your fingertips, yeasty productivity, copying, emulating, file-sharing, social networking and borrowing. The movie The Social Network depicts Mark Zuckerberg, the creator of Facebook, as being accused of stealing the Winklevoss twins’ idea. He was rightly outraged at the suggestion. He says, “Does a guy who makes a really good chair owe money to anyone who ever made a chair”?29

He’s right. The very idea is ridiculous. Copying information and ideas is not stealing. Learning is not stealing. Using information is not trespass. I urge you young libertarians to stay on the vanguard of intellectual freedom. Fight the shackles of patent and copyright and keep on learning.

Thank you.


Stephan Kinsella is an attorney and libertarian writer in Houston, Senior Fellow of the Ludwig von Mises Institute, the founder and editor ofLibertarian Papers, and founder and Director of the Center for the Study of Innovative Freedom (C4SIF). His most recent book is Property, Freedom, and Society: Essays in Honor of Hans-Hermann Hoppe (co-editor, with Jörg Guido Hülsmann; Mises Institute, 2009).

♡ 2011 Stephan Kinsella. Copying is an act of love. Please copy and share.

Comment on the blog.


  1. This paper is based on my speech of the same title delivered Nov. 6, 2010, at the 2010 Students for Liberty Texas Regional Conference, University of Texas, Austin; audio and video available at www.stephankinsella.com/media/. A previous version was published under the same title in Economic Notes No. 113 (Libertarian Alliance, 2011).All of my articles cited herein may be found at www.stephankinsella.com/publications/. For more extensive treatment of some of the ideas dealt with in this article, see my monograph Against Intellectual Property(Mises 2008), and my articles “The Case Against IP: A Concise Guide,” Mises Daily(Sep. 4, 2009), “Intellectual Property and Libertarianism,” Mises Daily (Nov. 17, 2009), and “What Libertarianism Is,” Mises Daily (August 21, 2009). []
  2. For further discussion of the structure of human action and its relationship to IP, see note 13 and accompanying text, et pass., of my article “Ideas are Free: The Case Against Intellectual Property,” Mises Daily (Nov. 23, 2010). []
  3. For further discussion of the nature of human action, see n.4 and accompanying text of my “Ideas are Free”; also Stephan Kinsella & Patrick Tinsley, “Causation and Aggression,” The Quarterly Journal of Austrian Economics 7 no. 4 (Winter 2004): 97–112. []
  4. Non-scarce things are classified by Austrians as “general conditions” of action, as opposed to scarce means or goods. See Ludwig von Mises, Human Action(Mises Institute, 4th ed., 1996), ch. 4, sec. 1, and Murray N. Rothbard, Man, Economy and State (Mises Institute 2004), ch. 1, sec. 2, both available at mises.org. []
  5. See Hans-Hermann Hoppe, “Praxeology and Economic Science,” in Economic Science and the Austrian Method (Mises Institute, 1995), text following n. 18 (“All of these categories—values, ends, means, choice, preference, cost, profit and loss, as well as time and causality—are implied in the axiom of action.”); idem, A Theory of Socialism and Capitalism: Economics, Politics, and Ethics (Mises Institute 2010 [1989]), p. 141; and idem, “In Defense of Extreme Rationalism: Thoughts on Donald McCloskey’s The Rhetoric of Economics,” Review of Austrian Economics 3, no. 1 (1989), p. 200; both available athanshoppe.com/publications. []
  6. See Mises, Human Action, ch. 4, sec. 4; Rothbard,  Man, Economy and State, ch. 4, sec. 5.C. []
  7. For related commentary, see my post “Knowledge is Power,” C4SIF Blog (Dec. 28, 2010). []
  8. See Rothbard, Man, Economy and State, ch. 1, sec. 8; Kinsella, “Ideas are Free”; and Jeffrey A. Tucker & Stephan Kinsella , “Goods, Scarce and Nonscarce,”Mises Daily (Aug. 25, 2010). []
  9. See Tucker & Kinsella, “Goods, Scarce and Nonscarce,” text at notes 4­–5. []
  10. See the concluding three paragraphs of my “The Death Throes of Pro-IP Libertarianism,” Mises Daily (July 28, 2010). []
  11. See notes 23­–24 and accompanying text of my “Intellectual Property and Libertarianism.” []
  12. See Hans-Hermann Hoppe, “Rothbardian Ethics,” LewRockwell.com (May 20, 2002) (“The existence of Friday the gorilla poses for Crusoe merely a technical problem, not a moral one. Crusoe has no other choice but to learn how to successfully manage and control the movements of the gorilla just as he must learn to manage and control the inanimate objects of his environment.”); idem, Democracy: The God That Failed (Transaction, 2001), pp. 201–202. []
  13. See note 4 to my “Intellectual Property and Libertarianism.” []
  14. For elaboration, see my “What Libertarianism Is.” []
  15. See Ludwig von Mises, Economic Calculation in the Socialist Commonwealth (1920), idem, Human Action, ch. 16, secs. 1–3, and other references in Kinsella, “Knowledge vs. Calculation,” Mises Economics Blog (July 11, 2006). []
  16. See Stephan Kinsella, “How much richer would be in a free society? L. Neil Smith’s great speech,” StephanKinsella.com (Nov. 7, 2009). []
  17. See Jeffrey Tucker’s talk “The Morality of Capitalism,” FEE Freedom University (2010). []
  18. See “Intellectual Property and Libertarianism,” text at n. 26; and Kinsella, “Locke on IP; Mises, Rothbard, and Rand on Creation, Production, and ‘Rearranging,’” Mises Economics Blog (Sep. 29, 2010). []
  19. See Murray N. Rothbard, “Toward a Reconstruction of Utility and Welfare Economics,” Mises Daily (July 8, 2006). []
  20. See Kinsella, “A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability,” Journal of Libertarian Studies 17, no. 2 (Spring 2003): 11-37. []
  21. See Kinsella, “Objectivist Law Prof Mossoff on Copyright; or, the Misuse of Labor, Value, and Creation Metaphors,” Mises Economics Blog (Jan. 3, 2008). []
  22. See Kinsella, “Owning Thoughts and Labor,” Mises Economics Blog (Dec. 11, 2006). []
  23. Kinsella, “IP and Artificial Scarcity,” Mises Economics Blog (Dec. 3, 2009). []
  24. See Kinsella, “Shughart’s Defense of IP,” Mises Economics Blog (Jan. 29, 2010). []
  25. Andrew Leonard, “The key to economic growth: Stealing,” Salon (Aug. 18, 2010). []
  26. See Kinsella, ““How Intellectual Property Hampers Capitalism,” Mises Institute Supporters’ Summit 2010 (Oct. 8-9 2010, Auburn Alabama). []
  27. See Michele Boldrin & David K. Levine, Against Intellectual Monopoly (Cambridge 2008), at ch. 2, text at n. 27 et pass. []
  28. See Kinsella, “Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense,” Mises Economics Blog (Nov. 21, 2009). []
  29. See Jeffrey A. Tucker, “A Movie That Gets It Right,” Mises Daily (Oct. 26, 2010). []

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Creative Commons Attribution 3.0 License – The Libertarian Standard

Justice for All Without the State


by DAVID J. HEINRICH on JUNE 5, 2010 @ 12:00 PM

Writing on The American Conservative website, Daniel McCarthy argues in “Anarcho-Distributism” that the so-called state of nature that libertarians discuss would not resemble what a Stateless society would look like if the State collapsed. He argues that reasoning from the state of nature may not be the correct starting point for conceptualizing or building an alternative political structure. He therefore claims that anarcho-capitalist arguments about how private defense agencies, protection agencies, or dispute resolution organizations work assume a certain level of equality which would not be present in reality and that these institutions of justice would thus favor the rich. I argue in this article that the free marketcan provide justice without disproportionately favoring the rich.

The State of Nature and the Evolution of Law and Custom

Reasoning from the so-called state of nature is useful for making theoretical arguments about what is justified. To libertarians and other righteous people, justification matters and we need to at least be conceptually capable of justification. That said, of course we also need to consider what norms are assumed in society as it has developed. For example, walking up to someone’s door and ringing their doorbell is not normally considered trespassing. It is also worth noting that there are many libertarians consider the wisdom of common law on other evolved law.

No amount of purely libertarian legal theorizing that is disconnected from socially accepted norms and practices can explain why when you walk into a restaurant and order a meal, you have to pay for it, despite signing no contract.

Analyzing the state of nature, even Robinson Crusoe examples, can help us greatly with some legal questions,  including questions about intellectual property. For example, lets say that Bob and Jane are living on an island. They both catch fish to eat. Lets say that Jane discovers a new and more efficient way to catch fish, perhaps a new technique or some kind of improved tool. Bob observes Jane doing this and copies her. There is absolutely nothing wrong with this. Jane has no right to prevent Bob from using his body and property to achieve his goals, even if he copies her techniques. This is a simple example, yet it cuts to the heart of the matter regarding patents.1

Of course, while the above type of reasoning is useful, we cannot reason our way up from nothing to a completely formed legal system. The much-maligned armchair theorizing is sometimes useful to analyze the validity of existing law, but it cannot be used by itself generate an entire legal structure de novo. The libertarian legal theorist must account for local customs, traditions, circumstances, and generally accepted norms and understandings. Libertarian legal theorizing can tell us that consent is required for transactions and other interactions, but it cannot tell us precisely what constitutes consent in various cases, nor can mechanical rules be laid out to rigidly determine this (although rules of thumb are useful).

No amount of purely libertarian legal theorizing that is disconnected from socially accepted norms and practices can explain why when you walk into a restaurant and order a meal, you have to pay for it, despite signing no contract. Nor can theorizing alone even explain why contracts or the words “I accept” sometimes constitute consent, but other times do not. We have to draw upon other disciplines. We recognize that — no matter how this situation historically evolved — walking into a restaurant and ordering a meal does constitute consent to pay for that meal. We recognize this by the same way that we recognize other forms of consent — by common sense and understanding of custom.

Pushing the Button

We always seek to abolish aggression, to abolish State intervention, even if that exposes other problems — which are themselves caused by other Statist interventions.

Daniel McCarthy argues that society would not look like what anarcho-capitalists think it would look like if the State disappeared tomorrow. Regarding these “pushing the button” hypothetical situations, they are merely that. All anarcho-capitalist agitators realize that we need an ideological shift in a certain percentage of the population. Professor Hans-Hermann Hoppe has talked about this in his book, Democracy: The God That Failed, as has Murray N. Rothbard in For a New Liberty: The Libertarian Manifesto.2

What Rothbard actually said was that a real libertarian would push a button to instantaneously abolish all invasion of liberty. Because no button to end aggression exists, this is a hypothetical question regarding one’s mental state. The point of it is to influence our thinking on various issues. The point is that we should always seek to abolish aggression, to abolish State intervention, even if that exposes other problems — which are themselves caused by other Statist interventions. This related to Ludwig von Mises’ observation that interventionism leads to more interventionism: problems caused by State intervention lead to the alleged justification for more intervention. Libertarians must not only boldly oppose this, but also agitate for movement in the other direction.

Returning to the issue of the State, most libertarians recognize that even if the State were torn down tomorrow, it would be rebuilt rather quickly, one way or another, quite possibly in a more despotic form. So long as there are enough people at least willing to tacitly approve of the State and tolerate aggression against them, both in their deeds and in their minds, States will continue to exist. Were the State to collapse, while the masses of the population might not work towards rebuilding it, they would readily tolerate others — the “elite” — doing this.3 As is normally the case, there is no “quick fix”.

Walter Block’s Revolutionary Tribunals

Regarding Professor Walter Block‘s proposed trials4 for former Statists in a free society — which would likely have restitution, and possibly retribution-based elements — I do not think that they are necessarily a recipe for discord and strife. People like Donald Trump, who has used eminent domain to help enrich himself5 ought not to be allowed to keep ill-gotten gains. Serious attempts to trace property back to original owners would not normally be made; however, in cases where proof could be provided and this could be done, claimants would come forth to state their cases. Most likely, these trials would work via the homesteading of claims by first-comers, perhaps by insurance companies providing private dispute resolution services.

These trials would not be arbitrary, but would be brought by specific claimants, either specific victims, or defense insurance companies trying to improve market standing, and indirectly acting on behalf of many victims. The benefits might be seen in terms of lower premiums, which insurance companies homesteading claims against Statists could afford to offer to gain more customers. Another way that this might work is through outlawry trials. Offering insurance for private protection is a a business, and companies cannot afford to insure individuals who are incredibly high risks. Individuals who might be the recipients of much hostility and attempted repossession in a free market — i.e., prominent Statists — would likely have difficulty finding protection agencies willing to protect them. Evidence-based trials could be held at the request of these individuals, in which case their guilt may or may not be proven beyond a reasonable doubt.

Despite my theoretical support for Walter Block’s tribunals of Statists, by the time we have a truly free market, a truly free world, it is unclear whether or not there will be many Statists left to prosecute.

Would Justice Favor Those with the Most Wealth?

Summarily, the wealthy criminal attempting to violate the law at will would, in the very best case, find every conceivable interaction with others much more difficult and expensive and he would rapidly become less wealthy.

Daniel McCarthy argues that in a Stateless society, justice would favor those with the most wealth, and he argues that there would be just as inegalitarian a distribution of wealth in a free market as there is today. I have several responses to this argument.

First, this problem is exacerbated by the State, being a clear target of these aims. Second, this has not happened historically when we have had basically Stateless societies, or nearly so. Consider: Ancient Iceland,6 Ancient Ireland,7 the not so Wild, Wild West,8 and Pennsylvania from 1681 to 1690.9,10 Bryan Caplan, “The Anarcho-Statists of Spain: An Historical, Economic, and Philosophical Analysis of Spanish Anarchism.” This is an excellent article that illustrates the fundamentally Statist mindset of socialist-libertarians when faced with the voluntary decisions embraced by free people. Socialist revolution of any kind, whether allegedly anarchist or libertarian or not, is inherently murderous.

…thousands of people…were murdered because they happened to have political or religious beliefs that the (socialist) Anarchists did not agree with.

When faced with voluntary decisions of free people in a Stateless society, when these decisions affirm a desire for private property rights in objects and land, in consumer and capital goods; the anarcho- socialist, syndicalist, communitarian, communist, neo-Georgist, distributist, etc must either accept those decisions — hence at least tacitly accept the legitimacy of capitalism and private property — or become a Statist and attempt to enforce his brand of socialism.)) Surely, these places did not have basically egalitarian distributions of wealth, and may very well have been more polarized in many ways. Third, almost every market that I can think of caters not just to the rich, but also to the middle class and even the poor. Consider computers, cars, houses, books, food, financial services, restaurants, etc.

Fourth and finally, the argument may be made that justice is different, as it concerns disputes between people, yet this argument is not entirely convincing, partly because of the historical examples to the contrary, but also because even the wealthy in today’s Statist society do not get away with outright theft or crime as is recognized by the masses. The wealthy usually attempt to privilege themselves with the State through systematic rules, not through outright request of special exemptions. Every politically elite group needs at least the tacit approval of those ruled over, no matter how brutal they are. This applies even in the case of dictators who may order soldiers to slaughter protesting civilians, as the dictator needs the soldiers to be willing to follow his orders.

One ought to consider how a private defense agency and associated individuals who protected rich criminals would be perceived in a free market. Their reputation would be ruined, they would not be able to procure clients, they would not be recognized by other dispute resolution organizations, they would be boycotted, etc. Competing private defense agencies would have incentives to cooperate to eliminate these rogue organizations. Furthermore, other wealthy individuals would have incentives to deal with rich criminals. As with the middle class and even poor people, most rich people are good and lawful. Most of these rich people are rich because they provide valuable services or goods that the middle class desire; hence, they have incentive to deal with rich criminals. Rich lawful individuals would also be aware that they too could be victimized by rich criminals.

One more consideration is that life would be difficult for those attempting to circumvent legal norms in a free society and for their protection agencies. Their protection agencies would incur higher costs. And what happens when the wealthy law-breaking clients of these protection agencies have conflicts with one another? Surely they cannot trust their admittedly corrupt protection agencies to provide a just resolution. And seeing as how these corrupt protection agencies would realize they are protecting clients with limited alternatives, would they not charge extremely high premiums? Seeing as how these individuals would be considered outlaws by civilized people, they would also have to pay for bodyguards.

Summarily, the wealthy criminal attempting to violate the law at will would, in the very best case, find every conceivable interaction with others much more difficult and expensive and he would rapidly become less wealthy. He might also find himself considered an outlaw by most (a technical obstacle) and hence a target.

What Libertarians are Fighting For and Against

US law is positive law and for practical purposes of enforcement, the US Constitution means whatevercourts say it means.

It is worth remembering what libertarians are fighting for: liberty, private property rights, the right to one’s body, prosperity, peace, and capitalism. It is also worth remembering what we are fighting against. All of the decrees of the State are ultimately backed by lethal force and necessarily so. If you disobey any State law, edict, executive order, or regulation — no matter how trivial — the police or perhaps soldiers will kill you if necessary. In the United States, at least, they will usually try to apprehend you first. However, if you resist apprehension, and in defending your right to your body use force approaching lethal force, you will be murdered.

An example that comes to mind which fortunately did not end in that is the case of Edward and Elaine Brown. They barricaded themselves into their house and refused to pay Federal income taxes. Although they had stockpiled weapons and food, they were eventually arrested and sent to prison. They were sentenced to 35 and 37 years in prison and will both be 102 years old when released, assuming they survive that long. Tragically, they had the kooky idea that legal arguments regarding the correct interpretation of what the Constitution authorized would acquit them; these kinds of defenses against tax evasion always have and always will fail.11 US law is positive law and for practical purposes of enforcement, the US Constitution means whatever courts say it means.12,13 For citizens, what matters is not what the US Constitution actually seems to mean as written, but what courts say it means, and anticipating the process by which US courts will come to various conclusions.14

In the case of Edward and Elaine Brown, they were not murdered for defending themselves because they did not escalate their defense to the use of deadly force. They were, however, imprisoned. For people who are not hardened criminals, prison is effectively torture. Edward Brown claims to have been tortured in prison.15 I should also note that while using deadly force to defend yourself against State officials will result in your death, it is not a necessary condition and only condition for this to happen: Many of Gandhi’s pacifist protesters were murdered by British soldiers. It thus ought to be clear that any resistance against States, even if entirely peaceful, can be met with lethal force.

Moving Towards a Completely Free World

It is extremely unlikely that we will ever simply go from having a State to not having a State while retaining the same configurations of property-title ownership. Either there will be complete collapse, and hence ruin of many of the rich, or there will be a gradual decline of States both through political change and secessionist movements. Professor Hoppe talks about this when discussing mass decentralized secession. For the prospects of a free world to have any hope, libertarian intellectual elites must work towards a paradigm shift in public opinion about the State and its legitimacy. When enough people in various regions are sufficiently dissatisfied with the State and of the opinion that the free market can better provide for their needs, mass decentralized small secessionist movements can take place. These kinds of decentralized secessionist movements would be more difficult to prevent than was, for example, the attempted secession of the Southern states from the US during the Civil War.16

Where does this all begin? Freedom begins in your mind. It begins with the realization that taxes constitute robbery, that inflation constitutes a kind of theft or fraud. It begins with the realization that those in the government who would take your wealth are no better than criminals who would rob you at gun-point: simply because one calls something “collecting taxes” does not mean it is fundamentally any different from robbery. So we treat governments and their regulations as mere technical obstacles, not moral obstacles. If we pay taxes, we do so out of mere prudence, not out of any ridiculous feeling of moral obligation. Regarding prudence, we should of course keep in mind the above-mentioned example of the Browns and their fate. Libertarians have a long way to go and a lot of work to do in changing people’s minds.


David J. Heinrich is a libertarian anarcho-capitalist, pro-punishment pacifist, photographer, and tennis-lover.


  1. For an excellent paper rebutting intellectual property, see Kinsella, Stephan N., “Against Intellectual Property,” Journal of Libertarian Studies 15, no. 2 (Spring 2001): 1-53. Download PDF This paper is also an excellent reference for other papers on intellectual property and is worth reading for the footnotes alone! []
  2. Part III, Epilogue, A Strategy for Liberty []
  3. A relevant paraphrased quote is, “If a meteor hits the Congregation for the Doctrine of the Faith the result will not be atheism.” []
  4. Walter Block, “Toward a Libertarian Theory of Guilt and Punishment for the Crime of Statism,” in Property, Freedom, & Society: Essays in Honor of Hans-Hermann Hoppe, ed. Jörg Guido Hülsmann and N. Stephan Kinsella (Auburn, AL: Ludwig von Mises Institute, 2009), 137-148 Download PDF and Walter Block, “Libertarian Punishment Theory: Working for, and Donating to, the State,” Libertarian Papers 1, no. 17 (2009): 1-31. Download PDF []
  5. Donald Trump at least attempted to use eminent domain to enrich himself, and had the nerve to express disappointment when on another occasion his vicious plans to use eminent domain to steal another person’s property were rebutted []
  6. Jesse L. Byock, Medieval Iceland: Society, Sagas, and Power (California: University of California Press, 1990).
    David Friedman, “Private Creation and Enforcement of Law: A Historical Case,” The Journal of Legal Studies 8, no. 2, Private Alternatives to the Judicial Process (March 1979): 399-415.
    Roderick T. Long, “Privatization, Viking Style: Model or Misfortune?,” Lew Rockwell Column, June 6, 2002.
    William Ian Miller, Bloodtaking and Peacemaking: Feud, Law, and Society in Saga Iceland (Chicago, IL: University Of Chicago Press, 1997).
    Thomas Whiston, “Medieval Iceland and the Absence of Government,” Mises Daily, December 25, 2002. []
  7. Joseph R. Pedan, “Stateless Societies: Ancient Ireland,” The Libertarian Forum III, no. 4 (April 1971): 3-4,8. Download PDF
    Joseph R. Pedan, “Property Rights in Celtic Irish Law,” Journal of Libertarian Studies 1, no. 2 (1977): 81-95. Download PDF
    Murray N. Rothbard, “Chapter 3: The State: The State as Aggressor,” in For a New Liberty: The Libertarian Manifesto, Revised Manifesto. (Auburn, AL: Ludwig von Mises Institute, 1973), 45-72.
    Murray N. Rothbard, “Chapter 12: The Public Sector, III: Police, Law, and the Courts: Police Protection,” in For a New Liberty: The Libertarian Manifesto, Revised Manifesto. (Auburn, AL: Ludwig von Mises Institute, 1973), 215-241.
    Edward P. Stringham, Anarchy and the Law: The Political Economy of Choice, Illustrated ed. (Transaction Publishers, 2007). []
  8. Terry Anderson and P.J. Hill, “An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West,” Journal of Libertarian Studies 3, no. 1 (1979): 9-29.
    Terry Anderson and P.J. Hill, The Not So Wild, Wild West: Property Rights on the Frontier, 1st ed. (Stanford, CA: Stanford Economics and Finance, 2004).
    Ryan McMaken, “The violent and wild west after all?,” Mises Economics Blog, September 15, 2007.
    Thomas E., Jr. Woods, 33 Questions About American History You’re Not Supposed to Ask, Reprint ed. (New York, NY: Three Rivers Press, 2008). This is an excellent interview by Jeffrey Tucker with Professor Woods. []
  9. Murray N. Rothbard, “Pennsylvania’s Anarchist Experiment: 1681-1690,” Mises Daily, July 8, 2005. []
  10. There is also a list of other anarchist communities on wikipedia, although the description of the socialistic anarchist communities is overly generous. []
  11. Please see the IRS’ Anti-Tax Evasion Scheme website for further details regarding various anti-tax schemes and court-decisions which rebutted them. []
  12. It might be more technically correct to say that US law means whatever courts say provided that officers and soldiers are willing to enforce their decisions; in the ultimate analysis, US law is whatever is enforced via coercive force. It is also worth noting that the same would apply in a free society. In one meaning of the word, law is essentially what is enforced. However, in a free society, the forces acting on the path of the law would be different. []
  13. Although Oliver W. Holmes’ prediction theory of law fell into disrepute after H.L.A. Hart’s attack on it, rehabilitations have been attempted, and it remains a useful framework for citizens to analyze the law within, when deciding upon actions. See:
    Oliver Wendell, Jr. Holmes, “The Path of the Law,” Harvard Law Review 10 (1897): 457, 469.
    Wikipedia, “Prediction theory of law,” Encyclopedia, Wikipedia.
    Wikipedia, “Legal realism,” Encyclopedia, Wikipedia.
    H.L.A. Hart, The Concept of Law, 2nd ed. (Oxford University Press, USA). []
  14. This should disillusion people who think that legal contortions can free them from Statism. []
  15. Margot Sanger-Katz, “When time came, Ed Brown folded (In recorded call, he also complains of cold),” Concord Monitor, October 19, 2007 []
  16. The Civil War was actually not a civil war at all, but an attempted secession by one government and a war of aggression by another. Please see David Gordon’s excellent review, “The Despot Named Lincoln,” of Thomas DiLorenzo’s book, The Real Lincoln. Also consider DiLorenzo’s Lincoln Unmasked.
    David Gordon, “The Despot Named Lincoln,” Mises Daily, September 15, 2009.
    Thomas J. DiLorenzo, The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War, 2nd ed. (New York, NY: Three Rivers Press, 2003).
    Thomas J. DiLorenzo, Lincoln Unmasked: What You’re Not Supposed to Know About Dishonest Abe (New York, NY: Three Rivers Press, 2007). []


Fantastic Libertarian Rapper: Neema V


by Stephan Kinsella on September 22, 2009

in Culture,LewRockwell.com Blog Posts

As noted on LewRockwell.com, there’s a wonderful Rap video by a young libertarian rapper, Neema V (from Houston, so he’s my homie). See the video below, and a great short interview by him on FreeTalkLive, in which Neema V goes on about the influence Ron Paul, Lew Rockwell, and Butler Shaffer had on him (Shaffer’s book Boundaries of Order is featured in the video). This young man is intelligent, thoughtful, pleasant, interesting, and talented (amazing video and song for a home-made solo production). Go Neema V! FYNV!!

Our Efficient, All-Volunteer Killers

The Libertarian Standard

by Brian Martinez on October 18, 2010 @ 9:49 am
in Imperialism,War

Steve Chapman extols the benefits of having an all-volunteer military force:

A few decades ago, the draft was a requirement for any major military undertaking. No one would have dreamed of fighting the Germans and Japanese, or the North Koreans and Chinese, without calling up young men for mandatory service. Not until the waning years of the Vietnam War did the nation elect to rely entirely on volunteers.

It was a controversial step, and one whose durability was very much in doubt. But in the intervening decades, the draft has gone from being indispensable to being unthinkable. Even the extraordinary demands of two difficult wars have not induced a reconsideration.

Anti-conscription badge from WWIEven the military’s leadership recognizes now that armies perform better when they’re filled with people who actually want to be there, and as Chapman points out, it’s a more efficient use of training dollars to spend them on Army careerists than on guys who’d rather be smoking pot and watching football.

If this is the extent of Chapman’s argument then I agree, but I’m not any more comforted by the fact that the military’s bombing and killing of poor people overseas are performed by people who actually want to do that sort of thing.  And he ignores the fact that young men must still notify the government of their whereabouts via Selective Service in case the draft is reinstated.  If the military really does not want conscripted men (and possibly women) among its ranks, why does the infrastructure for conscription still exist?

More dubious is Chapman’s concluding paragraph:

It was once a novel experiment: fielding a force to protect freedom without grossly violating freedom by dragooning young men to serve. But it’s worked so well we’ve almost forgotten there’s an alternative.

“Protect freedom” is a canard I expect from National Review, not a supposedly libertarian publication such as Reason.  Few if any all-volunteer forces have ever been used to protect Americans’ freedoms, even during the Revolutionary War (see volume 4 of Murray Rothbard’s Conceived in Liberty); and there isn’t a single military campaign undertaken in the past century that could be called a legitimate defense of freedom.  If one wishes to sing the praises of America’s efficient, all-volunteer killers, at least one shouldn’t pretend they exist for any reason other than to satisfy the imperialist aims of the Washington elite.

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Statism Left, Right, and Center

by Murray N. Rothbard

Reprinted from Libertarian Review, 1979

“Left,” “Right,” and “center” have increasingly become meaningless categories. Libertarians know that their creed can and does attract people from all parts of the old, obsolete ideological spectrum. As consistent adherents of individual liberty in all aspects of life, we can attract liberals by our devotion to civil liberty and a noninterventionist foreign policy, and conservatives by our adherence to property rights and the free market. But what about the other side of the coin? What about authoritarianism and statism across the board?

For a long while it has been clear that statists, right, left, and center, have been growing more and more alike – that their common devotion to the State has transcended their minor differences in style. In the last decade, all of them have been coagulating into the center, until the differences among “responsible” conservatives, right-wing Social Democrats, neoconservatives, and even such democratic socialists as John Kenneth Galbraith and Robert Heilbroner, have become increasingly difficult to fathom.

The common creed central to all these groupings is support for, and aggrandizement of, the American State, at home and abroad. Abroad, this means support for ever-greater military budgets, for FBI and CIA terrorism, for a foreign policy of global intervention, and absolute backing for the State of Israel. Domestically there are variations, but a general agreement holds that government should not undertake more than it can achieve: in short, a continued, but more efficiently streamlined welfare state. All this is bolstered by an antilibertarian policy on personal freedom, advancing the notion, for either religious or secular reasons, that the State is the proper vehicle for coercively imposing what these people believe to be correct moral principles.

This coalition of statists has been fusing for some years; but recently a new outburst of candor has let many cats out of the proverbial bag. It all began in the summer 1978 issue of the socialist magazine Dissent, edited by ex-Trotskyist Irving Howe. A lead article by the best-selling economist Robert Heilbroner says flat out that socialists should no longer try to peddle the nostrum that central planning in the socialist world of the future will be conjoined with personal freedom, with civil liberties and freedom of speech.

No, says Heilbroner, socialists must face the fact that socialism will have to be authoritarian in order to enforce the dictates of central planning, and will have to be grounded on a “collective morality” enforced upon the public. In short, we cannot, in Heilbroner’s words, have “a socialist cake with bourgeois icing,” – that is, with the preservation of personal freedom.

An intriguing reaction to the Heilbroner piece comes from the right wing. For years, a controversy once raged amidst the intellectual circles on the right between the “traditionalists,” who made no pretense about interest in liberty or individual rights; the libertarians, who have long since abandoned the right wing; and the “fusionists,” led by the late Frank Meyer, who tried to fuse the two positions into a unified amalgam. Both the “trads” and libertarians realized early that the two positions were not only inconsistent but diametrically opposed.

In recent years, the trads have been winning out over the fusionists in the conservative camp, as the conservatives have sidled up more eagerly to power. Now, Dale Vree, a regular columnist for National Review, takes the opportunity to hail the Heilbroner article and to call for a mighty right-left coalition on behalf of statism (“Against Socialist Fusionism,” National Review, December 8, 1978, p. 1547). He also slaps at the fusionists by pointing out that the “socialist fusionists,” those trying to fuse economic collectivism with cultural individualism, necessarily suffer from the same inconsistencies as their counterparts on the right wing, who have tried to join economic individualism with cultural collectivism.

Vree writes,

Heilbroner is also saying what many contributors to NR have said over the last quarter century: you can’t have both freedom and virtue. Take note, traditionalists. Despite his dissonant terminology, Heilbroner is interested in the same thing you’re interested in: virtue.”

But Vree’s enthusiasm for the authoritarian socialist does not stop there. He is also intrigued with the Heilbroner view that a socialist culture must “foster the primacy of the collectivity” rather than the “primacy of the individual.” Moreover, he is happy to applaud Heilbroner’s lauding of the alleged “moral” and “spiritual” focus of socialism as against “bourgeois materialism.” Vree quotes Heilbroner, “Bourgeois culture is focused on the material achievement of the individual. Socialist culture must focus on his or her moral or spiritual achievement.” Vree then adds, “There is a traditional ring to that statement.” And how!

He then applauds Heilbroner’s decrying capitalism because it has “no sense of ‘the good'” and permits “consenting adults” to do anything they please. Reacting in horror from this picture of freedom and diversity, Vree writes, “But, Heilbroner says alluringly, because a socialist society must have a sense of “‘the good’ not everything will be permitted.”

To Vree, it is impossible “to have economic collectivism along with cultural individualism” or vice versa, and so he is happy, like his left-wing counterpart Heilbroner, to opt for collectivism across the board. He concludes by noting the fusion of “right-wing” and “left-wing” libertarianism, and then he calls for a counterfusion on behalf of statism:

Several mavericks have been busy fusing right-wing libertarianism with left-wing libertarianism (anarchism). If the writings of such different socialists as Robert Heilbroner, Christopher Lasch, Morris Janowitz, Midge Decter, and Daniel Bell are indicative of a tendency, we may see the rise of a socialist traditionalist fusionism. One wonders if America contains any “Tory Socialists” on the right side of its aisle who will go out to embrace them.

The whopping error in that paragraph is that one doesn’t have to wonder for a moment.

The Buckleys, the Burnhams and their ilk have been scrambling for such an embrace for a long time – at least in practice. All that is left is the open and candid admission that this is what has been going on.

A new polarization, a new ideological spectrum, is fast taking shape. Big government, coercion, statism – or individual rights, liberty, and voluntarism, across the board, in every facet of American life.

The lines are getting drawn with increasing clarity. Statism vs. liberty. Us or them.

Reprinted from Mises.org.

Murray N. Rothbard (1926–1995) was dean of the Austrian School, founder of modern libertarianism, and academic vice president of the Mises Institute. He was also editor – with Lew Rockwell – of The Rothbard-Rockwell Report, and appointed Lew as his literary executor.

The Best of Murray Rothbard

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