Mises Institute Daily Articles (Full-text version)

Transformation of the American Right

Fri, 06 Nov 2009 03:12:00 -0600

[First published in Continuum, Summer 1964, pp. 220–231]

In the spate of recent books and articles on the burgeoning conservative movement, little has been said of its governing ideas and its intellectual leadership. Instead, attention has been centered on the mass phenomena of the right wing: the Billy James Hargises, the Birchers, the various crusaders for God and country. And yet, the neglect of the ruling ideas of the right wing has obscured its true nature, and has hidden an enormous and significant change in the very nature of the Right that has taken place since World War II.

In fact, due to the total absence of dialogue between various parts of the political spectrum in this country, both Right and Left are largely conducting their argument in what used to be called a severe "cultural lag"; both sides still mistakenly believe that the categories of the debate are the same as they were immediately after the war. In particular, under cover of a certain continuity of rhetoric, the intellectual content and goals of the right wing have been radically transformed in the last decade and a half, and this transformation has gone virtually unnoticed on either Right or Left.

The modern American Right began, in the 1930s and 1940s, as a reaction against the New Deal and the Roosevelt Revolution, and specifically as an opposition to the critical increase of statism and state intervention at home, and to war and state intervention abroad. The guiding motif of what we might call the "Old American Right" was a deep and passionate commitment to individual liberty, and to the belief that this liberty, in the personal and the economic spheres, was gravely menaced by the growth and power of the Leviathan state, at home and abroad.

As individualists and libertarians, the Old Right felt that the growth of statism at home and abroad were corollaries: New Deal coercion, on behalf of an illusory domestic security, was matched by the ultimate coercion of war in pursuit of the illusion of "collective security" abroad; and both forms of intervention brought with them a swelling of state power over society and over the individual. At home, the Supreme Court was looked to for a "strict construction" of the Constitution to check governmental depredation of the liberty of the individual, and conscription was denounced as a return to an unconstitutional form of involuntary servitude.

As the force of the New Deal reached its heights, both foreign and domestic, during World War II, a beleaguered and tiny libertarian opposition began to emerge and to formulate its total critique of prevailing trends in America. Unfortunately, the Left, almost totally committed to the cause of World War II as well as to extensions of the domestic New Deal, saw in the opposition not a principled and reasoned stand for liberty, but a mere blind "isolationism" at best, and, at worst, a conscious or unconscious "parroting of the Goebbels line."

It should not be forgotten that the Left, not so long ago, was not above engaging in its own form of plot hunting and guilt by association. If the Right had its McCarthys and Dillings, the Left had its John Roy Carlsons.

Now it is certainly true that much of this nascent and emerging libertarian Right was tainted with blind chauvinism, with scorn of "foreigners," etc., and that even then an unfortunate bent for plot hunting was becoming evident. But still the prevailing trend, certainly among the intellectuals of the Right, was a principled and trenchant opposition to war and to its concomitant destruction of life and liberty, and of human values.

The Beardian ideal of abstention from European wars was essentially not a chauvinist scorn of the stranger, but a call for America to harken to its ancient aim of serving the world as a beacon light of peace and liberty, rather than as master of a house of correction to set everyone in the world aright by force of bayonet. If the "isolationists" were not themselves libertarian, they were at least moving in that direction, and their ideas needed only refinement and systematization to arrive at that goal.

In the devotion to peace, in the anxiety to limit and confine state military interventions and consequent wars, there was little difference between the right-wing principle of neutrality a generation ago, and the left-wing principle of neutralism today. When we realize this, the essential obsolescence of the old categories of "Right" and "Left" begins to become clear.

The intellectual leaders of this Old Right of World War II and the immediate aftermath were then and remain today almost unknown among the larger body of American intellectuals: Albert Jay Nock, Rose Wilder Lane, Isabel Paterson, Frank Chodorov, Garet Garrett. It almost takes a great effort of the will to recall the principles and objectives of the Old Right, so different is the current right wing today.

The stress, as we have noted, was on individual liberty in all its aspects as against state power: on freedom of speech and action, on economic liberty, on voluntary relations as opposed to coercion, on a peaceful foreign policy. The great threat to that liberty was state power, in its invasion of personal freedom and private property and in its burgeoning military despotism.

Philosophically, the major emphasis was on the natural rights of man, arrived at by an investigation through reason of the laws of man's nature. Historically, the intellectual heroes of the Old Right were such libertarians as John Locke, the Levellers, Jefferson, Paine, Thoreau, Cobden, Spencer, and Bastiat.

In short, this libertarian Right based itself on 18th- and 19th-century liberalism, and began systematically to extend that doctrine even further. The contemporary canon of the Right consisted of Nock's Our Enemy the Stateand Memoirs of a Superfluous Man, Paterson's The God of the Machine (the chapter, "Our Japanized Educational System," virtually launched the postwar reaction against progressive education), and H. L. Mencken's A Mencken Chrestomathy. Its organ of opinion was the now-forgotten monthly broadsheet analysis, edited by Nock's leading disciple, Frank Chodorov. The political thought of this group was well summarized by Chodorov:

The state is an antisocial organization, originating in conquest and concerned only with confiscating production.… There are two ways of making a living, Nock explained. One is the economic means, the other the political means. The first consists of the application of human effort to raw materials so as to bring into being things that people want; the second is the confiscation of the rightful property of others.…

The state is that group of people, who having got hold of the machinery of compulsion, legally or otherwise, use it to better their circumstances; that is the political means.

Nock would hasten to explain that the state consists not only of politicians, but also those who make use of the politicians for their own ends; that would include those we call pressure groups, lobbyists, and all who wrangle special privileges out of the politicians. All the injustices that plague "advanced" societies, he maintained, are traceable to the workings of the state organizations that attach themselves to these societies.

When the Cold War so swiftly succeeded World War II, the Old Right was not bemused — let alone did it lead the war cry. It is difficult to conceive now that the main political opposition to the Cold War was led, not by the Left, then being brought into the war camp by the ADA, but by the "extreme-right-wing Republicans" of that era: by the Howard Buffetts and the Frederick C. Smiths.

It was this group that opposed the Truman Doctrine, NATO, conscription and American entry into the Korean War — with little grateful acknowledgement by left-wing peace groups then or now. In attacking the Truman Doctrine on the floor of Congress, Rep. Buffett, who was to be Taft's Midwestern campaign manager in 1952, declared:

Even if it were desirable, America is not strong enough to police the world by military force. If that attempt is made, the blessings of liberty will be replaced by coercion and tyranny at home. Our Christian ideals cannot be exported to other lands by dollars and guns. Persuasion and example are the methods taught by the Carpenter of Nazareth, and if we believe in Christianity we should try to advance our ideals by his methods. We cannot practice might and force abroad and retain freedom at home. We cannot talk world cooperation and practice power politics.

Among the intellectual leadership of the Old Right, Frank Chodorov vigorously set forth the libertarian position on both the Cold War and the suppression of communists at home. The latter was summed up in the aphorism, "The way to get rid of communists in government jobs is to abolish the jobs." Or, more extensively:

And now we come to the spy hunt — which is, in reality, a heresy trial. What is it that perturbs the inquisitors? They do not ask the suspects: Do you believe in Power? Do you adhere to the idea that the individual exists for the glory of the state?… Are you against taxes, or would you raise them until they absorbed the entire output of the country?… Are you opposed to the principle of conscription? Do you favor more "social gains" under the aegis of an enlarged bureaucracy?…

Such questions might prove embarrassing to the investigators. The answers might bring out a similarity between their ideas and purposes and those of the suspected. They too worship Power.

Under the circumstances, they limit themselves to one question: Are you a member of the Communist Party? And this turns out to mean, have you aligned yourselves with the Moscow branch of the church?

"War is the apotheosis of Power, the ultimate expression of the faith and solidification of its achievement."
– Frank Chodorov

Power worship is presently sectarianized along nationalistic lines… each nation guards its orthodoxy.… Where Power is attainable, the contest between rival sects is unavoidable. If, as seems likely, the American and Russian cults come into violent conflict, apostasy will disappear.… War is the apotheosis of Power, the ultimate expression of the faith and solidification of its achievement.…

The case against the communists involves a principle of freedom that is of transcending importance. It is the right to be wrong. Heterodoxy is a necessary condition of a free society.… The right to make a choice … is important to me, for the freedom of selection is necessary to my sense of personality; it is important to society, because only from the juxtaposition of ideas can we hope to approach the ideal of truth.

Whenever I choose an idea or label it "right," I imply the prerogative of another to reject that idea and label it "wrong." To invalidate his right is to invalidate mine.… If men are punished for espousing communism, shall we stop there? Once we deny the right to be wrong we put a vise on the human mind and put the temptation to turn the handle into the hands of ruthlessness.

And, in May 1949, Chodorov, praising a pamphlet on The Militarization of America issued by The National Council Against Conscription, wrote that "The state cannot intervene in the economic affairs of society without building up its coercive machinery, and that, after all, is militarism. Power is the correlative of politics."

The Old Right reached its full flower in devotion to peace during the Korean War, which provoked several trenchant efforts during the early 1950s. The Foundation for Economic Education (FEE), generally concerned with free-market economics, devoted several studies to the problem. Thus, Leonard E. Read wrote in Conscience on the Battlefield (1951),

It is strange that war, the most brutal of man's activities, requires the utmost delicacy in discussion.… War is liberty's greatest enemy, and the deadly foe of economic progress.… To fight evil with evil is only to make evil general.

In the same year, Dr. F. A. Harper published an FEE pamphlet, In Search of Peace, in which he wrote,

Charges of pacifism are likely to be hurled at anyone who in troubled times raises any question about the race into war. If pacifism means embracing the objective of peace, I am willing to accept the charge. If it means opposing all aggression against others, I am willing to accept the charge also. It is now urgent in the interest of liberty that many persons become "peacemongers."

So the nation goes to war, and while war is going on, the real enemy [the idea of slavery] — long ago forgotten and camouflaged by the processes of war — rides on to victory in both camps.… Further evidence that in war the attack is not leveled at the real enemy is the fact that we seem never to know what to do with "victory."

Are the "liberated" peoples to be shot, or all put in prison camps, or what? Is the national boundary to be moved? Is there to be further destruction of the property of the defeated? Or what?…

False ideas can be attacked only with counter-ideas, facts, and logic.… Nor can the ideas of [Karl Marx] be destroyed today by murder or suicide of their leading exponent, or of any thousands or millions of the devotees.… Least of all can the ideas of Karl Marx be destroyed by murdering innocent victims of the form of slavery he advocated, whether they be conscripts in armies or victims caught in the path of battle.

Ideas must be met by ideas, on the battlefield of belief. And, as late as May 1955, Dean Russell wrote, in FEE's The Conscription Idea,

Those who advocate the "temporary loss" of our freedom in order to preserve it permanently are advocating only one thing: the abolition of liberty.… However good their intentions may be, those people are enemies of your freedom and my freedom; and I fear them far more than I fear any potential Russian threat to my liberty. These sincere but highly emotional patriots are clear and present threats to freedom; the Russians are still thousands of miles away.…

The Russians would only attack us for either of two reasons: fear of our intentions or retaliation to our acts.… As long as we keep troops in countries on Russia's borders, the Russians can be expected to act somewhat as we would act if Russia were to station troops in Guatemala or Mexico.…

I can see no more logic in fighting Russia over Korea or Outer Mongolia, than in fighting England over Cyprus, or France over Morocco.… The historical facts of imperialism … are not sufficient reasons to justify the destruction of freedom within the United States by turning ourselves into a permanent garrison state.… We are rapidly becoming a caricature of the thing we profess to hate.

There is no need to multiply examples. Frank Chodorov consistently worked against the war drive in analysis and later, in 1954, as editor of the Freeman. The right-wing libertarian journal Faith and Freedom featured, in April, 1954, an all-peace issue, with contributions by Garet Garrett, Robert LeFevre, the industrialist Ernest T. Weir, and the present writer.

We might elaborate here on two neglected contributions in that period. One was an essay by Garrett ("The Rise of Empire," 1952, reprinted in The People's Pottage, 1953) which pinpointed the main issue of our time as the rise of a deplorable American imperialism: "We have crossed the boundary that lies between Republic and Empire."

The other was a relatively unnoticed book by Louis Bromfield, A New Pattern for a Tired World (1954), which decried statism, war, conscription, and imperialism. Bromfield wrote with conviction of imperialism and of the revolution of the undeveloped countries:

One of the great failures of our foreign policy throughout the world arises from the fact that we have permitted ourselves to be identified everywhere with the old, doomed, and rotting colonial-imperialist small European nations which once imposed upon so much of the world the pattern of exploitation and economic and political domination.… None of these rebellious, awakening peoples will … trust us or cooperate in any way so long as we remain identified with the economic colonial system of Europe, which represents, even in its capitalistic pattern, the last remnants of feudalism.… We leave these awakening peoples with no choice but to turn to Russian and communist comfort and promise of Utopia.

And on American Cold War policy, Bromfield charged,

Our warmongers and the military apparently believe … that all other nations are unimportant and can be trampled under foot the moment either Russia or the U.S. sees fit to precipitate a war.… To this faction [the warmongers and the military] it seems of small concern that the nations lying between us and Russia would be the most terrible sufferers.…

The growing "neutralism" of the European nations is merely a reasonable, sensible, and civilized reaction, legitimate in every respect when all the factors from Russia's inherent weaknesses to our own meddling and aggressiveness are taken into consideration.… The Korean situation … will not be settled until we withdraw entirely from an area in which we have no right to be and leave the peoples of that area to work out their own problems.

These quotations give the flavor of an era that is so remote as to make it seem incredible that such views should have dominated the American right wing. To the current right wing, which has virtually obliterated its own former position from its memory, such views today would be branded, at the very least, as "soft on communism."

The radical transformation of the right wing can even be seen in the fate of something like the Bricker Amendment. Only a decade ago, the Bricker Amendment was the number-one foreign-policy plank of the right wing, dear to all the "little old ladies in tennis shoes" that used to form its mass base. And the reason the resurgent conservative movement, and its political embodiment in the Goldwater movement, have entirely buried the Bricker Amendment is because that amendment, while defining not the most important or the most idealistic foreign-policy stance, was an expression of the "isolationism," or the fear of the effects of big government upon the individual, that bears no relation to today's New Right.

Much of the Left, however, still writes as if the main trouble with today's Right is its "isolationism," its wish to withdraw from foreign aid or international commitments. Others on the Left claim that the Right's anticommunism is a mere cloak for laissez-fair eeconomic views.

There could not be a more mistaken analysis of the essence of the current position of the American Right. For that position is virtually the reverse: today's right wing is directed, with passion, dedication, and even fanaticism to one overriding goal, to which all other possible goals are totally subordinate. And that goal is the nuclear annihilation of the Soviet Union.

Here is the essence of the New Right, the gauge of the totality of its transformation. As one of its major theoreticians likes to put it, "I have a vision, a great vision of the future — a totally devastated Soviet Union." Here, in brief, is the vision that animates the conservative revival.

For the blight that destroyed the libertarianism of the right wing and effected its transformation was nothing less than hysterical anticommunism. It began with this kind of reasoning: there are two "threats" to liberty: the "internal" threat of domestic socialism, and the "external" threat of Soviet Russia. The external threat is the most important. Therefore, all energies must now be directed to battling and destroying that "threat."

In the course of this shift of focus from statism to communism as the "enemy," the right wing somehow failed to see that the real "external" threat was not Soviet Russia, but a warlike foreign policy of global intervention, and especially the nuclear weapons of mass destruction used to back up such a policy. And they failed to see that the main architect in organizing a foreign policy of global nuclear intervention was the United States. In short, they failed to see that both the "external" and "internal" threats of statism to liberty were essentially domestic.

Under pressure of anticommunist hysteria, the right wing, despite its fondness for quasi-theological or moral cant, has imitated the communists themselves in virtually abandoning all moral principles except one: in this case, the destruction of all opposition, foreign and domestic.

For the immorality of communism is not uniquely diabolic; it stems from the fact that for communists, all other moral principles are expendable before the overriding end of the maintenance and advance of the communist system. But, the right wing has similarly erected as its sole, overriding end the destruction of communists and communist countries, and all other considerations are scrapped to attain that end.

There seems now to be one crucial difference, however; the communists are more convinced than ever that nuclear weapons of annihilation make imperative peaceful coexistence between states, and that social change must come about through internal changes within each state, where conflict would be relatively small-scale and confined. But the right wing has not only failed to learn this lesson; on the contrary, the more terrible modern weaponry has become, the more fanatically determined upon total war the right wing has grown. This seems to be a lunatic position, and undoubtedly it is, but it is important that non-Rightists realize that this is precisely the position of the present-day Right.

Now, of course, no one has ever wanted war per se; Hitler would not have attacked Soviet Russia, for example, if Russia had agreed to surrender unconditionally without war. And neither would the right wing launch an H-bomb attack on Russia if Khrushchev and his government were to resign and turn over the Soviet Union to, let us say, an American army of occupation.

But that is the point: that nothing short of unconditional surrender would satisfy the right wing, or would deflect it from nuclear attack. How does the right wing justify a position that is prima facie monstrous and even crazed? The essential justification is, curiously enough, theological and Christian. It is even Catholic, for while the mass base of the right wing, apart from the Eastern cities, is fundamentalist Protestant, the intellectual leaders are almost all either Catholic or "proto-Catholic." The justification is a willingness to destroy the world, and the human race along with it, for matters of high principle.

The highest principle, as we have seen above, is the destruction of communists, who are, at least implicitly and sometimes explicitly, identified with the devil and his agents upon earth. And, after all, what does the destruction of the world matter when men's immortal souls will continue in eternal life? As the leading publicist of the New Right has said: "If I had to 'push the button,' I would push it unswervingly, in the firm knowledge that I am in the right."

Those who may balk at this blithe attitude toward world destruction are accused of being cowards, and atheistic cowards at that, for only atheists would cling so adamantly to "mere biological life" when great principle is at stake. (Not being a Catholic, I will have to leave the theological refutation of this position to others; I am surprised, however, to hear that mass suicide and mass murder are looked upon approvingly by the Church.)

Another curious justification is the famous "red or dead" dichotomy. But in fact the stark choice of "red or dead" is just as unrealistic an alternative for America as the old "communist or fascist" choice posed by many of the Left in the 1930s. There is at least one other choice: peaceful coexistence and joint nuclear disarmament. Moreover, choosing death over redness is suicide, and one would have thought that suicide was a grave sin for Christians.

And finally this dichotomy allows no reference to the fact that approximately one billion people, now living in communist countries throughout the world, are choosing redness every day, by not committing suicide. Is there no lesson here? Does it make any sense, furthermore, to destroy these people, and untold Americans along with them, thus to "liberate" those who have made their own personal choice for redness over death?

Is it moral, or Christian, to change their choice from life to death by force? In short, is it moral, or Christian, for American conservatives to annihilate millions of Russians, Poles, etc., to "liberate" through murder those who have already made their choice for life?

Also implicit in the right-wing thesis is the view that the devil is omnipotent; that once communism "takes over," a country, it is doomed, and its population might as well be written off to the eternal abyss. That this is a starkly pessimistic view of mankind is obvious; and this is all the more curious in the light of the demonstrations by libertarian economists that socialism cannot provide a viable economic system for an industrial society.

It also studiously ignores the enormous changes that have taken place within communist countries since World War II, the considerable liberalization and even increased emphasis on private enterprise in Russia and many of the countries of eastern Europe.

Communist China's recent expression of concern as to whether Yugoslavia is a socialist country is evidence enough of the alarm felt by communist fundamentalists at the unwilling but headlong retreat from socialism in that communist land. It is also significant that not one right-wing economist or strategist has taken the trouble to consider the surely important question of how one would decommunize Russia if it should surrender to the American army — now or at any other time.

I believe that decommunization could be achieved, and in a way similar to, though much more thoroughgoing than, the path of Yugoslavia; but the point is that the indifference to this problem on the Right is another indication of its central concern: nuclear war. Decommunization is to come about, not through a change in the ideas and actions of the Russian and other peoples, but, according to the Right, through their liquidation.

Evidence of the right-wing subordination of all its other goals and principles to nuclear war against communists is overwhelming, and at every hand. It lies at the root of the obscene eagerness with which the Right hurries to embrace every dictator, no matter how fascistic or bloodstained, who affirms his "anticommunism."

William F. Buckley's "libertarian" apologia for the fascist regime of South Africa in the pages of National Review is a case in point. So is the enormous enthusiasm for Chiang-kai-Shek, for Franco, for Syngman Rhee, and — most recently — for Mme. Nhu. It is not simply that these dictators are welcomed reluctantly, for expediency's sake in the "war against communism." The Right has proceeded, in its war hysteria, far beyond that point.

For now these dictators are better, since their policy is evidently far "harder" on communists and suspected communists than the policy of the democracies. Mme. Nhu, as a Catholic as well as a totalitarian, has touched the heart of every right-wing publicist. There can be nothing "harder" on one's subjects than repressing a religious majority and herding the peasants of the country into concentration camps in order to stave off "communism." The fact that this is hardly a better policy than communism itself makes no imprint whatever on a right wing that often likes to boast of itself as a "conservative-libertarian" movement.

It is tragically ironic and almost incredible that a movement which began, not too many years ago, in a passionate commitment to human liberty, should end as the cheering squad for a Mme. Nhu. Is it really too impolite to wonder how the right wing would now regard the man who was, in his day, the "hardest" and the "toughest" anticommunist of them all: Adolf Hitler?

In domestic affairs, the free-market rhetoric has become simply that: after-dinner talk carrying no enthusiasm or true conviction. Indeed, the promise of laissez-faire now performs the same function for the new American Right as the promise of unlimited abundance under communism did for Stalin. While enslaving and exploiting the Soviet people, Stalin held out a splendid future of utopian abundance that would make current sacrifices worthwhile.

The present-day Right holds out the eventual promise of freedom and the free market after communists shall have been exterminated. If there are any survivors emerging from their civil-defense shelters after the holocaust, they will presumably be allowed to engage in free-market activities, provided, of course, that some other "enemy" shall not have raised its head in the meanwhile.

This total subordination of all concerns to anticommunism accounts for all the otherwise inexplicable reversals on the Right. Thus, the Supreme Court is now bitterly attacked for the opposite reasons as in the 1930s: because it prevents infringements of the state on the liberties of the person. Justice Frankfurter, once assailed as a virtual advocate of tyranny, is now hailed by the Right for his sound, pragmatic conservatism in not interfering with anticommunist persecutions — the fruits, of course, of the selfsame juridical philosophy.

Social Democrats and New Dealers, such as the New Leader, Sidney Hook, Senator Dodd, George Meany, and others are embraced for their "hard anticommunism." The New Leader's collaboration with the right wing in publishing a pro-Chiang propaganda article is indicative of this change in atmosphere, a change that alters all the old categories of "right" and "left" that are still unthinkingly used in political discourse.

It is instructive, finally, to consider the political concerns of Young Americans for Freedom, virtually the political-action arm of National Review. To my knowledge, not one political-action drive of YAF has been directed to an increase of individual liberty or of the free-market; stressed instead have been such items as perpetuating and strengthening HUAC, calls for blockade — and more — of Cuba, opposition to the test-ban treaty, restoring prayer to the public school, and advocacy of local ordinances and "card-parties" coercively interfering with the right of stores to sell goods from communist countries — hardly a contribution to a free market. I believe there is only one exception to this generalization: an eager enthusiasm for the Mitchell program to reduce relief payments in Newburgh, New York, an enthusiasm that may not have been unrelated to the racial issue involved.

Coterminous with the political transformation of the American Right has come a philosophical transformation, and I do not believe that the two are unconnected. The latter greatly bolsters and perpetuates the former. The positive positions of the various conservative thinkers vary greatly; but they all unite in determined opposition to human reason, to individual liberty, to separation of church and state, to all the things that characterized the classical liberal position and its modern extension.

There is, unfortunately, no space here for a full discussion of the current conservative position: but basically it is a return to the essential principles of early 19th-century conservatism. We must realize that the great fact of modern history was the classical liberal revolution against the old order, a "revolution" that expressed itself in many forms: laissez-faire economics, individual liberty, separation of church and state, free trade and international peace, opposition to statism and militarism.

Its great embodiments were the three great revolutions of the late 18th century: the Industrial Revolution, the American Revolution, and the French Revolution. Each, in its way, was part of the general classical-liberal revolution against the old order.

Conservatism emerged, in France, Britain, and elsewhere in Europe, as a conscious, reactionary attempt to smash this revolution and to restore the old order even more systematically than it had been installed before. The essence of that order may be summed up in the famous phrase "Throne and Altar." In short, the old order consisted of a ruling oligarchy of despotic king and royal bureaucracy, aided by feudal landlords and a state church, Anglican or Gallican.

It was an order, as explicated by conservatives, that stressed the overriding importance of "community" — as embodied in the state, of theocratic union of church and state, of the virtues of nationalism and war, of coerced "morality" and of the denigration of the individual subject. And philosophically, reason was derided in behalf of pure faith in ruling tradition.

At first it might seem that this old conservatism is irrelevant to American conservatism today, but I do not believe this to be true. It is true that an American conservative has difficulty finding a legitimate monarch in America. But he does the best he can; the current American right wing is, for one thing, highly enamored of European monarchy, and there is much enthusiasm for restoration of the Hapsburgs.

One leading proto-Catholic conservative still toasts "the King over the water," and Frederick Wilhelmsen apparently regards the Crown of St. Stephen as the summit of Western civilization. Russell Kirk, in turn, seems to prefer the Tory squirearchy of Anglican England. At every hand, Metternich, the Stuarts, and the later Burke have replaced libertarians as historical heroes.

But a king for the United States is, of course, a bit difficult, and conservatives have had to content themselves with makeshifts: with the restoration to historiographical favor, for example, of such statists as Alexander Hamilton, and of solicitude for the peculiar institution of slavery in the South. Willmoore Kendall has found in Congress the apotheosis of conservatism, and asserts not only the right, but the duty of the Greek community to preserve itself from the irritating probing of Socrates.

Everywhere on the Right the "open society" is condemned, and a coerced morality affirmed. God is supposed to be put back into government. Free speech is treated with suspicion and distrust, and the military are hailed as the greatest patriots, and conscription strongly upheld. Western imperialism is trumpeted as the proper way to deal with backward peoples, and pilgrimages are made to Franco's Spain for inspiration in governmental forms. And, at every side, reason is denigrated, and faith in tradition and custom held up as the proper path for man.

It is true that most modern conservatives do not, like their forebears, wish to destroy the industrial system and revert to small farms and happy handicraftsmen — although there is a strong strain of even this idea in contemporary conservatism. But, basically, the current conservatives are supremely indifferent to a free-market economy; they do not blanch at the vast economic distortions imposed by arms contracts or at crippling restrictions on foreign trade, and they could not tolerate a budget cut that would reduce America's military posture in the world.

In fact, such leading conservatives as Ernest van den Haag and Willmoore Kendall have been frankly Keynesian in economics. In the end, all must be subordinated to the state; as William F. Buckley has affirmed: "Where reconciliation of an individual's and the government's interests cannot be achieved, the interests of the government shall be given exclusive consideration." One observer of the conservative movement has commented, "How's that for laissez-faire?" Indeed. Above all, the modern conservative program reduces to dragooning the American people, under the control of the current American version of Throne and Altar, into lockstep uniformity and a closed society dedicated to the overriding end of destroying communism, even at the expense of nuclear annihilation.

What of the old libertarian segment of the Right? Largely they have been submerged in the transformation of the right wing, generally because they have not had articulate spokesmen explaining to them the nature and magnitude of what has taken place. They have largely been bemused by the pervasive idea that there is, in some strong sense, a joint "conservative-libertarian movement," and that no matter how much conservatives may diverge from liberty, they are the libertarian's natural allies — at the same end of the spectrum, and at the polar opposite from socialism. But this idea suffers from the "cultural lag" that we have observed. The Old Right may have been the natural ally of the laissez-faire libertarian, but this is not at all true of the new.

The libertarian needs, perhaps most of all, to be informed by history, and to realize that conservatism was always the polar opposite of classical liberalism. Socialism, in contrast, was not the polar opposite of either, but rather, in my view, a muddled and irrationally contradictory mixture of both liberalism and conservatism. For socialism was essentially a movement to come to terms with the industrial revolution, to try to achieve liberal ends by the use of collectivistic, conservative means.

It tried to achieve the ideals of peace, freedom, and a progressing standard of living by using the collectivist, organicist, hierarchical means of conservatism as adapted to industrial society. As a middle-of-the-road doctrine, it is easy for socialism, once it abandoned the liberal ideals of peace and freedom, to shift completely to the conservative pole in the many varying forms of "national socialism."

Mr. Frank S. Meyer, the leading proponent of a fused "conservative-libertarian movement," has called upon us to ignore the 19th century, "heir to the disruption of the French Revolution," and to go back beyond "the parochial disputes of the 19th century." Such a course would indeed be convenient for Meyer's thesis, as it would sweep away the whole meaning of the liberal and conservative movements. For the point is that both liberalism and conservatism (and socialism as well) found their form and their doctrine precisely in the 19th century, as a result of the struggles between the old order and the new. It is precisely by focusing on the history of the 19th century that we learn of the true origins of the various "isms" of our day, as well as the illogical and mythical nature of the attempted "conservative-libertarian" fusion.

There are some signs, indeed, that from various sides, thinkers are beginning to apprehend the dissolution of the old forms, the obsolescence of the old "left" and "right" stereotypes in American politics, and the invalidity of a fusion of libertarians with an old conservatism redivivus.

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"The blight that destroyed the libertarianism of the right wing and effected its transformation was nothing less than hysterical anticommunism."

Libertarians are beginning to protest; in the pages of New Individualist Review, the outstanding student journal of the Right, Ronald Hamowy, one of its editors in chief, has, in a well-known article, bitterly attacked the conservative philosophy and politics of Buckley and National Review. Dean Benjamin Rogge of Wabash College has contributed a thoughtful critique of the new conservatism, and Howard Buffett has called for an end to conscription.

But New Individualist Review was basically founded in commitment to the conservative-libertarian mythos, and it clearly suffers from being mired in this inner contradiction. Robert LeFevre, head of the libertarian Freedom School, in a trenchant leaflet, Those Who Protest, has pointed out and attacked the transformation of the right wing. And from a different direction, the noted critic Edmund Wilson has now raised his powerful voice to protest both The Cold War and the Income Tax. Perhaps indeed, the country is ripe for a fundamental ideological realignment.

Murray N. Rothbard (1926–1995) was dean of the Austrian School. He was an economist, economic historian, and libertarian political philosopher. See Murray N. Rothbard's article archives.

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Freaking Out over Global Warming

Fri, 06 Nov 2009 02:08:00 -0600

"Readers of these pages know that I am no fan of Paul Krugman. But I do want to explain that I understand why he and Romm freaked out about this chapter."

One of the ugliest battles in the blogosphere climate wars has involved the newly released Superfreakonomics, sequel to the best-selling Freakonomics. In their new book's final chapter, economist Steven Levitt and journalist Stephen Dubner set out to challenge the view that massively restricting carbon emissions is the only hope for averting planetwide catastrophe. Some of the most outspoken advocates for immediate "carbon legislation," such as Joe Romm and Paul Krugman, were appalled by the chapter.

In this article I will link to some of the major commentary on the book so far, and try to explain to Austrian readers why the interventionists were understandably upset. In particular, I want to caution libertarians not to reflexively side with Levitt and Dubner because "they're on our side." I will remind readers of the admitted errors Levitt made in his battles (stemming from the Freakonomics era) with anti-gun-controller John Lott.

Having done all this, at the end of the article my merciful nature will compel me to defend Levitt and Dubner from UC Berkeley economist Brad DeLong's specific claim that their support of geoengineering is somehow "bad economics."

As we'll see, Levitt and Dubner might be wrong in their views on global warming, but if so they are wrong because of the numbers. Regardless of their other possible sins, Levitt and Dubner should be acquitted of DeLong's accusation that they aren't thinking like economists.

A Summary of the Blog Wars

I can't do Levitt and Dubner's presentation justice here; I encourage the interested reader to read the chapter. To summarize very briefly, they argue that if global warming really is a threat, then it does not follow that governments need to enforce draconian cuts in carbon dioxide emissions, which would cost many trillions of dollars over the next few decades.

Instead, a "geoengineering" solution could be adopted to keep the earth cool despite increasing concentrations of greenhouse gases in the atmosphere. Perhaps the most fanciful idea is to suspend a hose using helium balloons, in order to pump sulfur dioxide into the stratosphere. This would reflect some of the incoming sunlight and arrest (or even reverse) global warming, just as occurred after the eruption of Mount Pinatubo in 1991. Best of all, this particular approach would only cost about $250 million total — less than what Al Gore's foundation is spending just to "raise awareness" about climate change.

Naturally, the proponents of massive government interventions into the economy were furious at Levitt and Dubner's claims. Physicist and Clinton administration Department of Energy official Joe Romm got the ball rolling with this fiery post in which he accused the Superfreakonomics writers not merely of being incredibly sloppy in their summary of the climate science but also of consciously distorting the views of the scientists they quoted.

Romm's frequent ally in such matters, Paul Krugman, soon followed suit and claimed that the authors horribly mischaracterized the views of leading climate economists in the chapter. Dubner defended himself and coauthor Levitt against Romm's accusations of intentional distortion in this post, and physicist (and all-around guru) Nathan Myhrvold, one of the primary sources for the chapter, defended himself from Romm's accusations of ignorance here.

Are the Critics Justified?

Readers of these pages know that I am no fan of Paul Krugman, especially when it comes to his views on climate change. But I do want to explain that I understand why he and Romm freaked out about this chapter.

The example that most offended Krugman was Levitt and Dubner's discussion of the work of economist Martin Weitzman. In a passage discussing the thorny issues of climate change — that the risks are very uncertain and won't occur for many years, making it hard to know how much action to take in the present — Levitt and Dubner say,

The economist Martin Weitzman analyzed the best available climate models and concluded the future holds a 5 percent chance of a terrible-case scenario — a rise of more than 10 degrees Celsius.

There is of course great uncertainty even in this estimate of uncertainty. So how should we place a value on this relatively small chance of worldwide catastrophe? (Superfreakonomics, p. 169)

This is the only mention of Weitzman in the chapter, and the overall theme of course is that global warming need not alter modern civilization. In context, then, one certainly gets the impression that Martin Weitzman's work weakens the case for immediate restrictions on carbon emissions.

But this is exactly the opposite of what Weitzman has done. The issues are too technical for a full discussion here, but elsewhere I have explained that Weitzman is one of the interventionists' heroes on the issue of climate change.

"I just want to caution Austrian and libertarian readers not to assume that anyone who 'thinks global warming is a big hoax' is automatically a great scholar."

Even conceding the natural-science "consensus" on human-caused climate change, standard cost-benefit models show that the "optimal carbon tax" starts out fairly modestly, and only increases gradually over the decades. This is because the serious damages from climate change won't really kick in until the end of the century, and so the present discounted value of the "social cost" of an additional ton of carbon dioxide emissions is fairly low.

Weitzman's work upsets this standard conclusion. He has shown the mathematical conditions under which the usual cost-benefit models break down. Weitzman's approach shows that, rather than making a slight marginal adjustment in the trajectory of emissions to "internalize the externality," it can be optimal to aggressively curtail emissions right away in order to minimize the likelihood of experiencing catastrophic climate events.

So it's not so much that Levitt and Dubner lied about Weitzman's work, but their reference was very misleading. Austrians can appreciate what happened by considering this analogy: Suppose a proponent of government healthcare said, "All these critics keep warning about 'socialized medicine.' But Nobel economist Friedrich Hayek wrote in the socialist-calculation debate that there was no logical problem with central planners optimally allocating resources."

Now the above (hypothetical) quotation would be accurate, strictly speaking, but horribly misleading. If it were embedded in a book chapter pushing for a government health-insurance plan, Austrian economists would understandably freak out. Thus, we should be forgiving when Paul Krugman does the same after reading Superfreakonomics on climate change.

One final point, in case the free-market reader simply cannot bring himself to empathize with Paul Krugman — let's not forget what happened in the argument between Steve Levitt and anti-gun-control economist John Lott. Levitt ultimately had to write a letter to a colleague retracting claims he had made regarding Lott's involvement with an issue of the Journal of Law and Economics. In that letter, Levitt made the following correction:

In those emails [I had sent to you], I did not mean to suggest that Dr. John R. Lott, Jr., or anyone acting on his behalf, engaged in bribery or exercised improper influence on the editorial process with respect to the preparation and publication of the Conference Issue. I acknowledge that the articles that were published in the Conference Issue were reviewed by referees engaged by the editors of the JLE. In fact, I was one of the peer referees.

In case the reader's eyes glazed over, let me emphasize the astounding admission in the above sentences by quoting one cynical blogger: "Look at the size of the lies Levitt was throwing around. 'It wasn't a refereed journal,' Levitt says. Not only was it a refereed journal, Levitt was a referee!"

Of course, just because Levitt may have been sloppy and very unfair in his treatment of the work of John Lott, doesn't prove that Romm and Krugman are right when it comes to Levitt's (and coauthor Dubner's) handling of climate change. I just want to caution Austrian and libertarian readers not to assume that anyone who "thinks global warming is a big hoax" is automatically a great scholar.

Now that I've spent so much time criticizing Levitt, let me end this article by defending him from economist Brad DeLong.

DeLong Forgets that Time Is Money

In a series of posts (one, two, and three), DeLong heaps extreme criticism on our authors. Under normal circumstances, DeLong's criticisms would be described as "scathing," yet compared to Romm's treatment, it's kid-glove stuff. For our purposes here, I want to focus on just two of DeLong's (many) complaints. First, DeLong quotes Levitt who said (during an NPR interview),

[I]f you look at the history of modern mankind, I think you will be hard pressed to find any particular problem that was serious that was solved by a behavioral change, as opposed to by a technological solution….

DeLong is astounded by this claim, and responds, "That's just not economics: economics is that incentives change, and as incentives change people's behavior changes."

DeLong is right: what Levitt said is "not economics." Rather, it's a historical claim. Maybe it's right and maybe it's wrong, but DeLong can't trump it by citing a tautology from microeconomics. I am sure that Levitt would concede the narrow point that if governments around the world instituted a massive carbon tax, and enforced it with draconian penalties for evasion, then global emissions would indeed fall quickly.

"I am sure that Levitt would concede the narrow point that if governments around the world instituted a massive carbon tax, and enforced it with draconian penalties for evasion, then global emissions would indeed fall quickly."

But one of Levitt's main points is that governments around the world are not going to do this — that it is naive to expect them to sacrifice their own economies when (in Levitt's opinion) the climate science is not nearly certain enough to justify this painful step.

Levitt is making a prediction — based on his interpretation of history — that if manmade global warming really does require drastic measures in the next few decades, the response will involve various forms of geoengineering, which (Levitt predicts) will cost a tiny fraction of what the carbon mitigation proposals would require. To repeat, I'm not saying I necessarily endorse Levitt's glib proclamations on these points, but DeLong is wrong to dismiss them as somehow "not economics."

Finally let's deal with another point on which DeLong completely misses Levitt's valid argument. He first quotes Levitt:

Now, in the long run, perhaps you'll want to deal with the [high] carbon [dioxide] issue [even with geoengineering] because we're going to have acidification of the oceans and the coral reefs will die if we don't do something about the carbon. But if you just buy the time to keep the Earth cool for a while longer, I am certain that if we invest we will come up with technology that will allow us much more effectively in the future to pull carbon out of the air than we currently have….

DeLong points out that whatever mechanism our descendants use to suck CO2 out of the atmosphere, it will require power generation. He then argues,

So now we have (a) our normal power plants to power our civilization, plus (b) our atmosphere carbon-scrubbing industry, which is (c) powered by even more carbon power plants to generate the power to break the carbon-oxygen bonds that our first set of power plants made. But plants (c) put more carbon into the atmosphere than plants (a) did.

I know, says Steve Levitt, we can power our carbon-scrubbing industry (b) by power plants (c) that use nuclear or solar or… But then why not power our original civilization-sustaining power plants (a) by nuclear or solar or whatever?

Now this is frankly silly. Let's be clear, I think Levitt and Dubner made some major goofs in their chapter, and DeLong (as well as Romm and Krugman) nailed them. But here DeLong is making an obvious mistake. He is neglecting the fact that it will be much, much cheaper to engage in carbon-free energy production the longer we wait. Does DeLong really not see this elementary point and how it makes Levitt's argument perfectly sensible?

For an analogy, consider people who contract a terminal illness and then elect to have their bodies cryonically frozen so that they can be resuscitated and cured in the future. Now maybe that's a good idea or maybe it's not, but it wouldn't really make sense for someone to say, "That's just bad economics! Why go to the trouble of having your cancer cured in the future? Just do it now." Yet that is exactly the argument DeLong has deployed against Levitt.

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"There is a reason that the energy infrastructure in today's market economies is so heavily based upon fossil fuels…"

Conclusion

There is a reason that the energy infrastructure in today's market economies is so heavily based upon fossil fuels: they are by far the cheapest, most reliable forms of energy, given the needs of modern society. Regardless of their (alleged) sloppy scholarship, Levitt and Dubner raise an interesting possibility that deserves careful scrutiny, not ridicule: even if it turns out that unfettered use of fossil fuels will spell unacceptable climate damages to future generations, it does not follow that the only solution is immediate and drastic reductions in carbon emissions.

Another possibility is to buy a few decades' worth of "breathing room" (Myhrvold's phrase in the book) through pumping SO2 into the stratosphere, for example, and then make the transition to carbon-free energy production when it will not be so terribly costly.

It's surprising that some of the people who warn that the fate of the planet itself is it stake are so dismissive of what could be a crucial component of humanity's response to the very dangers of which they're warning.

Robert Murphy, an adjunct scholar of the Mises Institute and a faculty member of the Mises University, runs the blog Free Advice and is the author of The Politically Incorrect Guide to Capitalism, the Study Guide to Man, Economy, and State with Power and Market, the Human Action Study Guide, and The Politically Incorrect Guide to the Great Depression and the New Deal. Send him mail. See Robert P. Murphy's article archives.

A shorter version of this article originally appeared on MasterResource.

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A Path To Runaway US Inflation

Fri, 06 Nov 2009 01:04:00 -0600

"I see green shoots," said Fed Chairman Ben Bernanke on 60 Minutes back in March, doing his best rendition of Haley Joel Osment from the movie The Sixth Sense. Since then, every poor economic headline in the lapdog media has been preceded with the word "unexpected," as if the clueless chairman's pronouncements were suddenly the Gospel, and the economy had indeed recovered.

Phantom US Economic Recovery

Common sense tells us that if phenomenon A causes problem B, then B cannot be rectified unless A is first removed. As an adherent of the Austrian School of economics, I can confidently tell you that a sustainable US recovery is not at hand. An upward blip in the GDP reading (itself a flawed measure of material well-being) must not be mistaken for a sustainable recovery, especially when government borrowing is unprecedentedly high and a lot of the input parameters, not the least of which is the GDP deflator, can be fudged.

I'll borrow an analogy from Peter Schiff. Imagine if you will a victim at the unfortunate end of a Brock Lesnar knuckle sandwich. The blow has knocked him out cold and the medics try to revive him. The best suggestion they can come up with is to have Lesnar pound the man's head even harder with his fists. When the man has seizures from the repeated pounding, a medic (coincidently named Bernanke) screams gleefully "Hurray, he's moving."

Sadly, such is the response to our present crisis by the policy makers in Washington, DC. To solve a problem caused by malinvestments resulting from easy credit at 1 percent interest rates, the Fed is supplying even more easy money at 0.25 percent. None of the malinvestments have been allowed to be liquidated.

Housing prices have been propped up, banks and auto companies have been bailed out, regulations have been increased, debt covenants have been violated, unemployment insurance has been extended. In addition, there's the cap-and-trade bill, the healthcare bill, and a "czar" around every corner.

All of these increase the already-humongous burden on wealth creators. In short, the problems that caused the Great Recession have been compounded. Real output must then necessarily decline. How can anyone logically assert that we are in the beginning of a recovery?

Declining output is not the answer to keep a system with a debt-to-GDP ratio nearing 400 percent (800 percent if you include Social Security and Medicare obligations) solvent. From this vantage point, one can conclude that the real recession is ahead of us, not behind us.

One then must decide whether it will be a deflationary recession or an inflationary recession. Intelligent people can disagree on this, but my take is inflationary.

What's Happening Below the Surface?

Since the Lehman collapse over a year ago, the cracks in the banking system have been papered over with an unprecedented amount of money created out of thin air. However, underneath that surface, the real pool of savings is continually being channeled away from wealth creators to malinvestments such as housing, autos, and banking.

"For a fractional-reserve-banking system to stay solvent, the money supply needs to be continually increased by at least the weighted-average interest rate."

This means that total output will decline eventually because there are no investments being made to maintain capital and improve productive capacity. There may be blips here and there, but they are more likely to be the result of capital consumption than of any sustainable increase in output. Meanwhile, for reasons detailed below, the money supply will constantly increase. We then have the textbook case of more money chasing fewer goods, leading to rampant price escalation.

Deflation Begets Inflation

If you happen to catch a NASCAR race on TV, you might hear a driver screaming over his radio, "Tight, tight, tight … LOOOSE!" This cry is followed invariably by a crash.

What the driver is referring to is his race car's inability to turn the corner. A "tight" condition means the car doesn't want to turn and is heading straight for the wall. A "loose" condition means the car turns too readily and wants to spin out. When a car is difficult to turn, the driver ends up putting so much wheel into it that when the car eventually does turn, it overshoots, spinning out of control; and the driver rear-ends the car into the wall.

This is exactly the scenario I envision for the impending price inflation. Bernanke and company are screaming that there is deflation everywhere they look. To combat this deflation, the Fed will keeping printing money and adding reserves by buying all kinds of assets. This will continue until general prices violently overshoot on the other side, causing runaway price inflation.

The M2 Money-Supply Barometer

The M2 money supply is used by a lot of economists as a barometer to gauge price inflationary pressures. Over the past six months or so, this metric has declined marginally. So if one defines deflation as a reduction in the M2 money supply, then we are indeed experiencing deflation.

On the surface, consumers are finally getting religion, curbing their spending habits and paying down debt. Paying down debt is a deflationary activity because it reduces money supply. Unfortunately, not everyone will be able to pay off their debts.

For a fractional-reserve-banking system to stay solvent, the money supply needs to be continually increased by at least the weighted-average interest rate. This means that money supply needs to grow exponentially.

Consider a system with $100 in loans due in a year at a 10 percent interest rate. The total amount of money in the system is only $100 but the amount due at the end of the year is $110. Where will the $10 come from? It has to be lent into existence at some point prior to when the $110 is due.

"It goes without saying that deflation would have been very painful for any debtor. Consider the most indebted entities: the government, banks, powerful corporations, homeowners, and private equity funds run by insiders."

Absent this increase in money supply, the loan will default. On the other hand, an ever-increasing money supply will quickly lead to runaway price inflation, because real output will be unable to keep pace with money-supply growth.

In a sound-money, 100-percent-reserve-banking system, an overwhelming majority of loans would be made to wealth creators. These loans would be funded by real savings and would eventually be liquidated (to simplify the explanation) by the lenders purchasing the produce of borrowers. These can therefore be called self-liquidating loans. I'm not implying there would be no bad loans, just that bad loans would be minimal compared to our current system, because underwriting would be very strict and the fallout of bad lending decisions would stop with a bank's shareholders.

The vast majority of housing loans and auto loans made during the last boom cannot really be classified as self-liquidating because both of these (I hesitate to call them assets) do not produce anything that can be exchanged for money.

Loan Defaults And Banking-System Collapse

In a fractional-reserve-banking system where debt is being paid down, money supply will decline and eventually prices will follow suit. Businesses will reduce wages to stay profitable. Any debtor will find his debt burden becoming more onerous as there is less money to go around.

Eventually, defaults will begin, with assets moving from debtors to creditors. The banking system will implode and depositors will be wiped out until reserves in the system entirely back up deposits outstanding.

This is precisely the process that should have been allowed to happen since 2008. Left alone, nothing could have prevented this catastrophic collapse. Asset prices would've declined massively, considering that the system had about $10 in credit money for every $1 in reserve (before Bernanke injected about $1 trillion more in reserves).

Why Inflation, Not Deflation?

It goes without saying that deflation would have been very painful for any debtor. Consider the most indebted entities: the government, banks, powerful corporations, homeowners, and private equity funds run by insiders. Given these debtors, is it any wonder that the government chooses bailouts rather than letting the market work its exorcism? Every time there is even the slightest deflation, we'll hear Bernanke et al. saying that all hell will break loose unless something is done about it.

"Deflation causes debt defaults, which in turn cause bank failures, which in turn result in inflation when the government bails out depositors."

If the market were allowed to work, loan defaults would cause bank failures en masse. Bank failures would also wipe out the savings of depositors, because the banks' debt holders will have seniority in bankruptcy proceedings. Yes, all hell will break loose, but only for the people who took imprudent risks like borrowing recklessly or depositing money in unsound banks.

If one bank is allowed to go under and its depositors allowed to be wiped out, you can bet your last dollar that there will be a run on every bank the next day, exacerbating the problem exponentially. The entire banking system would be ruined in a couple of days, with utter chaos, pandemonium, and possibly violence being the rule rather than the exception.

Rather than letting all debtors and depositors be wiped out (and defaulting on its own obligations), the government will intervene via the Fed to shore up the system. The Fed will print money to purchase troubled assets.

The Fed will also print money to fund the US government, because tax revenues will decline precipitously but government mandates will increase (normal operations, transfer payments, unemployment payments, wars, etc.). Once the FDIC runs out of funds to make depositors whole, it will tap into a $500 billion credit line with the Treasury, which in turn will sell bonds to the Fed to raise the money to repay depositors.

Note that when a bank fails but the depositors are made whole, the original money is still in the system and new money is added; this is inflationary. M2 destruction is replaced by M1 creation.

Deflation causes debt defaults, which in turn cause bank failures, which in turn result in inflation when the government bails out depositors. In trying to save debtors and depositors, the policy makers ensure that everyone loses purchasing power via inflation.

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This cycle cannot continue endlessly. One fine day it will blow sky-high. Any event may trigger it, from foreigners unloading US dollars and Treasuries, to US citizens realizing that their money is fast losing its purchasing power.

Conclusion

Being a follower of Austrian Economics, I know that real output will continue to decline. Declining real output will result in lower real savings. Lower real savings will put pressure on debt repayments and defaults will result. Private defaults will wipe out banks and depositors, and they will also cause the government to default on its debt.

The Fed will bail out all the affected parties by creating money. Bailouts cause malinvestments that lower real output, beginning the cycle again. This cannot continue forever: it will eventually result in a runaway-inflationary depression.

Ganesh Rathnam works for an asset management firm in India. He has an MBA from the University of Minnesota as well as a master’s degree in mechanics, also from the University of Minnesota. See his website: ImpassionedLibertarian.com. Send him mail. See Ganesh Rathnam's article archives.

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Classical Natural Law and Libertarian Theory

Thu, 05 Nov 2009 04:16:00 -0600

[From Property, Freedom and Society: Essays in Honor of Hans-Hermann Hoppe.]

Natural Rights and Living Law: Toward an Integration of Rothbard and Leoni

If libertarianism wishes to give up modern political categories, it has to think about law in a different way. Murray N. Rothbard, the most important exponent of the radical libertarian school, is right when he rejects the historicism and relativism of legal realism and when — for the same reasons — he criticizes Hayek and Leoni.

But unfortunately, he does not really grasp the function of the evolution into classic natural law. Furthermore, his idea of building a libertarian code is completely inconsistent with his frequent references to the Greek and Christian legal heritage.[1]

In For a New Liberty, Rothbard points out that the history of a changing and evolving law can be useful in order to find just rules: "since we have a body of common law principles to draw on, however, the task of reason in correcting and amending the common law would be far easier than trying to construct a body of systematic legal principles de novo out of the thin air."[2]

But the relationship between common law and natural law must be seen differently. Common law is not only an interesting tool for discovering natural law: it has its specific role. Positive law needs to interact with natural law principles, but even the latter cannot be considered as self-sufficient.

Moreover, in his defense of rationality, Rothbard does not realize that law cannot be entirely read into the praxeological framework, which is axiomatic and deductive. The division of theory and history puts some disciplines into opposition with others, but above all it makes a distinction within any single field of study.

Economics, for instance, is a theoretical science if considered as political economics, but a historical and empiric activity if it analyzes what happened in the past.[3] This is also true for legal studies, because they have a theoretical part but, at the same time, include many other aspects which, on the contrary, are historical and cannot be examined using logical and a priori methods.

In his methodological writings, Rothbard distinguishes between empiricism and experience, and remarks that the refusal of the first does not imply a devaluation of the second. When he criticizes Mises for his Kantian approach, he finds in human experience exactly the main source of the axioms, the fundamental truths that are the starting point of a theory based on deductive logic.[4] But before the law, Rothbard seems to minimize the contextual and nontheoretical dimension of a large part of legal controversies and especially of positive law.

Using the Thomist framework, in this essay I will emphasize the importance of the lex naturalis, at the same time highlighting a lex humana deeply rooted in the complexity of different ages and societies, related to the subjectivity and specificity of opinions which cannot be fruitfully examined by a praxeological approach. Many problems, and even some inconsistencies of Rothbardian theory, are a consequence of it.

Moreover, the way Rothbard deals with the arguments of causality and liability shows an inadequate understanding of the anthropology of the Austrian School, which moves from a study of human action (intentional and rational) and not by a simple behaviorist analysis.

In integrating Rothbardian libertarianism with positive law, an important contribution comes from Bruno Leoni, who in Freedom and the Law and other writings developed an original contribution to classical liberalism. The Italian scholar can help to improve some parts of Rothbard's libertarian theory of law. If the author of The Ethics of Libertyis much more grounded in natural law and even less naïve before Wertfreiheit,[5] Leoni can correct some limits of the Rothbardian approach and its incapacity to perceive the specificity of law: a practical and largely empirical science, historically situated and essentially oriented to finding reasonable solutions for very specific cases.

If philosophy of law has to investigate the eternal and immutable principles of justice, juridical scholarship must find the best translation of these for the specific problems of a society. For this reason, taking Leoni seriously means imagining a meeting point of natural law doctrine and the requirements of a positive law as a reality in evolution. And it implies an effort to transfer into the legal context the Misesian methodology and its radical separation of theory and history: the sphere of axiomatic and deductive studies (praxeology) and the sphere of research based on experience (history).

We have to remember that specific attention to the historical and evolving features of legal orders has been a crucial element of the Austrian School since its origins. In his Investigations into the Method of the Social Sciences, Carl Menger praises the Historical School of Jurisprudence (Gustav Hugo, Friedrich Carl von Savigny, Barthold Georg Niebuhr), whose origins he dated back to Edmund Burke.

Menger also highlights the individualistic content of evolutionary law with the goal of helping the classical liberal tradition to rediscover its lost roots:

law, like language, is (at least originally) not the product in general of an activity of public authorities aimed at producing it, nor in particular is it the product of positive legislation. It is, instead, the unintended result of a higher wisdom, of the historical development of the nations.[6]

It is exactly in this sense that we can understand Leoni's preference for evolutionary law (Anglo-Saxon law and Roman jus civile): a law not oriented to preserve tradition or spontaneous order per se. On the contrary, Leoni thinks that a polycentric and evolutionary order is in a better position to safeguard individual rights. Rules that emerge from the interpersonal exchange of claims are tools that can effectively protect society from the rulers.

As a student of English legal history, Leoni shows a strong interest in the common law of nature that was at the heart of Edward Coke's perspective. In fact, in that theory law does not express an antirationalist attitude, but, on the contrary, embodies natural reason emerging in an evolutionary way. This legal culture is improved by various contributions (practical, pragmatic, professional) of many people. In this way, law is the consequence of a human activity oriented towards bettering reality using intelligence and experience.

Criticizing modern legal systems, Leoni remarks that

there is far more legislation, there are far more group decisions, far more rigid choices, and far fewer "laws written in living tables," far fewer individual decisions, far fewer free choices in all contemporary political systems that would be necessary in order to preserve individual freedom of choice.[7]

Even if he never adhered to a consistent natural law theory, Leoni tried a sort of reconciliation of natural law and legal realism (positive law rightly understood), exploring the possibility of conjugating the flexibility of ancient common law and the just principles of a universal moral theory.

Leoni had a strong interest in the exploration of the libertarian potentialities of a similar perspective. In his writings, there are many elements of a radical libertarianism refusing any coercion. When some participants of the Claremont seminar about Freedom and the Law asked him who should choose the judges in a free society, he answered: "it is rather immaterial to establish in advance who will appoint the judges, for, in a sense, everybody could do so, as happens to a certain extent when people resort to private arbiters to settle their own quarrels."[8]

In his opinion, the contemporary, statist system should disappear, leaving room for a competitive order of private courts. The convergence of Leoni and Rothbard is evident on many levels, because both imagine the end of the state monopoly on justice and security, with the purpose of opening the road to an institutional competition between people in charge to avoid criminal behaviors.[9]

It is also for this reason that Rothbardian libertarian theory can find in Leoni and, above all, in his understanding of law the way to overcome its theoretical and practical difficulties.

From Praxeology to Thymology: The Role of Positive Law

In its daily development, law refers back to principles, but at the same time it concerns modest but not negligible disputes. Legal reasoning lives essentially in this pragmatic context and it leaves the specific topics of natural law in the background.

In Mises's thought, there is a notion that is extremely useful in helping us grasp the relationship between theory and practice in the law. In fact, in Theory and History, he opposes praxeology to thymology, which is in close relationship with history.[10] Thymology is a branch of history and "derives its knowledge from historical experience."[11] It stands for that set of empirical knowledge of psychological, sociological and even factual character that we use to find our way in relationships with other people. This "literary psychology" is the condition of a rational behavior: "for lack of any better tool, we must take recourse to thymology if we want to anticipate other people's future attitudes and actions."[12]

When Leoni returns to the legal realism tradition (to the law in action that Roscoe Pound opposes to the law in books) and remarks on a correspondence between positive law and what is foreseeable (often using the formula id quod plerumque accidit),[13] he highlights that the positive law is always intelligible in a thymologic perspective. In his explicit purpose of applying Misesian methodology to law, Leoni discovers a praxeological dimension (the most theoretical part, coinciding with the analysis of the individual claims and their interaction), but also another thymological dimension (entirely depending on experience, common opinions and traditions).

His idea is that positive law has a strong relationship with customs. As practical activity, law must reduce uncertainty: it is for this reason that a creditor's claim is legal, because generally a debtor pays back what he has received, while the thief's claim is illegal, because generally people do not steal. The probabilistic analysis is purely empirical, but it is not unreasonable. Our behavior is led very often by the rationality of our past experiences and by our prejudices.

In this sense, Leonian theory of the individual claim is at the same time praxeological and thymological.

It is praxeological because it draws in a deductive way the theoretical conditions of the exchange and the meeting of different individual claims. When, in his writings, he opposes the point of view of the legal professionals (moving from the norms) and the perspective of the philosophers (interested in the origin of the rules), his aim is to reject the positivism prevalent in legal theory.

He has the project of grasping the a priori categories — à la Reinach — subtending all legal orders. When he finds in the individual claim the starting point of a juridical relation, Leoni thinks he has understood a universal datum: his "demand and supply law." If prices emerge from the meeting of the actions of people supplying and demanding, the norms are the effect of the interaction of different claims. This is a universal regularity and, on this ground, he also develops his theoretical (praxeological) remarks about the relationship between legislation and living law, certainty and law, and so on.

But — as in Mises — this positive evaluation of praxeology does not imply a negative opinion of history or of the competence of lawyers. On the contrary, Leoni has the ambition of describing the distinct but connected roles of every sphere.

For this reason, his theory is largely thymological when he remarks that, if it is true — as Mises says — that "thymology tells no more than that man is driven by various innate instincts, various passions, and various ideas,"[14] then it is evident that norms are accepted when they satisfy the claims, the principles and the desires largely shared in a specific society; and the law professionals are exactly well-informed about this peculiar and "local" environment. When Leoni emphasizes the qualities of the jus civile and the ancient common law, he aims to highlight the role of the lawyers and of all the people engaged in the solution to specific and concrete disputes.

Positive Law and History

This is a very important point in a large part of the philosophical tradition. The main Greek and medieval thinkers were clear about the link between natural law (universal) and the contingent (historically defined and, lato sensu, subjective) dimension of situations that we can understand only in specific contexts, as result of the cross of individual preferences.

In Aristotle, for instance, it is clear that there are some universal principles judging every positive law. This passage is very outspoken in this regard:

Universal law is the law of nature. For there really is, as every one to some extent divines, a natural justice and injustice that is binding on all men, even on those who have no association or covenant with each other. It is this that Sophocles's Antigone clearly means when she says that the burial of Polyneices was a just act in spite of the prohibition: she says that it was just by nature.

Not of to-day or yesterday it is,

But lives eternal: none can date its birth.[15]

At the same time, Aristotle holds the opinion that "there are two kinds of right and wrong conduct towards others, one provided for by written ordinances, the other by unwritten." In the second group, a class "springs from exceptional goodness or badness" and it is related to honor, gratitude, friendship, and so on. But the other "makes up for the defects of a community's written code of law. This is what we call equity." This Aristotelian notion of equity is very important. And, at the same time, we have to perceive the relationship between this idea of equity ("the sort of justice which goes beyond the written law")[16] and the idea of phronesis, as prudence and practical wisdom.

Equity and phronesis do not destroy the universal natural law, but they give us a way to understand how it can be possible to arrange some (difficult) situations. We can build a bridge from the natural law and the positive law of our — imperfect — relationship with the others. The perception of the human limits and the complexity of the world push us to appreciate the knowledge preserved by a complex system of legal notions, as developed through centuries of legal history.

For Aristotle, it was clear that a purely deductive method would not suffice to satisfy our exigencies.

Aquinas's lesson moves in the same direction, as is clear in his distinguishing between Natural Law (Lex naturalis) and Human Law (Lex humana). If the moral principles of natural law are unchangeable and can be rationally investigated by moving from some solid axioms, human law is the consequence of cultural and historic contingencies. As Summa Theologiae says, "the natural law contains certain universal precepts which are everlasting, whereas human law contains certain particular precepts according to various emergencies." At the same time, "nothing can be absolutely unchangeable in things that are subject to change. And, therefore, human law cannot be altogether unchangeable."[17]

Aquinas adds that "custom has the force of law, abolishes law, and is the interpreter of law."[18] He accepts customary law because it has the approval of individuals: "because, by the very fact that they tolerate it, they seem to approve of that which is introduced by custom."[19] This law that is dissolved in custom is not natural law, because Aquinas does not believe we can accept a legal order that has historically emerged if it is against justice; but historical evolution modifies positive law and even opens room for different interpretations.[20]

Law and Interpretation

In positive law, there is an essential function of interpretation, because there is always a distance between the norm and the cases in point. As Giorgio Agamben explains, "in the case of law, the application of a norm is no way contained within the norm and cannot be derived from it; otherwise, there would have been the need to create the grand edifice of trial law. Just as between language and world, so between the norm and its application there is no external nexus that allows one to be derived immediately from the other."[21]

What's the meaning of this? Using general rules in concrete and specific situations always implies a decision, and (at least hypothetically) an arbitrary power. The difference between the law in the books and the law in action is largely a consequence of this.

In many writings, Chaïm Perelmen remarks that legal logic is:

a very elaborated, individual case of practical reasoning, which is not a formal demonstration, but an argumentation aiming to persuade and convince those whom it addresses that such a choice, decision or attitude is preferable to concurrent choices, decisions and attitudes.

Perelman adds: "what characterizes an argumentation is its non-constraining character."[22] So, legal reasoning "is not presented as a formally valid deduction from non-temporal truths," because "reasons considered good at one period of time or in one milieu are not in another; they are socially and culturally conditioned as are the convictions and the aspirations of the audience they must convince."[23]

In spite of his disputable skepticism, Perelman is right when he points out that positive law is a "practical" activity, because it is a case-solving operation and often emerges from a transaction of different interests. To a large extent, law is not a science: it is a technique oriented to solving specific problems, because lawyers and judges do not search for the truth, but only the legal truth.

Law and Intentionality

If we analyze liability and causality in Rothbard, we have to recall the fundamental principles of the Austrian tradition.

In a recent article, Hans-Hermann Hoppe criticized his mentor and highlighted how it is contradictory to focus attention on the birth of property (with the homesteading of land) and then to exclude it, accepting a strict liability theory whose positivist and behaviorist origins are evident. Hoppe remarks that "homesteading implies intent," a subjective element; on the contrary, Rothbard's theory of causation and liability ignores this aspect.[24] Austrian School scholars emphasize the role of intentionality as a crucial element at the moment of the origin of private property and of its negation (theft, aggression, etc.).

Not all physical invasions imply liability and, to the contrary, some actions are liable even if there is no physical invasion. In economics, Rothbard was perfectly aware of this and was always very critical of economic schools with positivistic leanings. In 1985, in the preface to Theory and History by Mises, he attacks mainstream positivism, remarking that "to become truly scientific like physics and the other natural sciences, then, economics must shun such concepts as purposes, goals and learning: it must abandon man's mind and write only of mere events."[25] But the main mistake of the American scholar is in analyzing only simple events, avoiding the problem of intentionality and subjective liability, and the consequent need to understand a specific action — made by a particular person, in that one moment and context.

Hoppe is right when he notes a contradiction in Rothbard between this theory of strict liability and the defense of homesteading, which implies another vision of ethics and a different anthropology. When Rothbard condemns as aggression the act of a man claiming and occupying a land previously "homesteaded" by other people, his arguments call for a well-defined idea of morality that it is not consistent with that oversimplified and behaviorist theory of causality and liability.

An Aristotelian-Thomist Libertarianism

For all these reasons, the Thomist distinction between natural law and human law is fundamental, especially if by lex humana we do not conceive of the state law, but our ever-imperfect translation, into norms, of our aspiration to live in a just society. As Paul Sigmund correctly remarked, "human law is the application to specific circumstances of the precepts of reason contained in the natural law."[26] This mediation is always unsatisfying, but at the same time necessary.

Rothbard and Perelman make the symmetrically opposite mistake, because neither admits the autonomy of natural law and positive law. If Perelman reduces natural law to positive law (and reason to reasonableness), Rothbard reduces positive law to natural law (and reasonableness to reason). However, we have to admit the existence of a higher and objective dimension of law (where the rational method of Rothbard is justified) and of a much more prosaic and lower level, which can obtain many advantages from the dialogical and rhetorical approach used by Perelman.

The awareness of the need to mediate between the a priori principles of natural law and a largely inductive knowledge of the legal experience is not always present in Rothbard. But that's why the intellectual heritage of Leoni can be useful in the attempt to develop a libertarian legal theory aiming to protect the dignity and freedom of the individual. [27]

If, in Rothbard, there is the risk of ignoring the specificity of legal reasoning, Leoni remarks on the empirical features of the law and adopts a Misesian standpoint in putting into the right perspective human experience and the role it plays in the practical unfolding of our existence.

Leoni perceives the importance of the positive law, also in a libertarian and antistatist perspective. The vision of what is just by nature has to be rooted in a particular time, embodied in specific institutions and recognizable in many different situations. But the Italian thinker was quite aware that this proposal was a return to the old tradition of natural law. In a very interesting passage, he criticizes Kelsen, saying that sociology of law is "the modern heir of the natural law."[28] And he specifies his idea in this way:

contemporary sociology of law schools can be considered, in a limited sense, and without the derogatory features used by Kelsen, the "modern heirs of natural law," exactly because they are inclined to re-evaluate in "law" the element of the "persuasions" leading the action of people, instead of the "legal order" conceived as dogmatics did.[29]

Conclusion

In spite of his positivism, Leoni can help us grasp the true nature of classical natural law, because he does not prospect for a "libertarian code" like the one envisioned by Rothbard, somewhat conceived on the model of the state legal systems. On the contrary, Freedom and the Law can be the starting-point for a more "classical" understanding of libertarian natural law actually rooted in the Aristotelian-Thomistic tradition.

In other words, in Leoni there is a wide scope for juridical research and for historical evolution, because of his belief in a living law in continuous and close interaction with reality. The legal order has some "essential" elements, but it changes through time, and for this reason it requires constant and challenging work to adjust rules and behavior.

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If we return to the classics, we can better understand the main problems.

Thomist rationalism moves from the awareness of reason's limits. Sigmund highlights exactly this when he says that "Aquinas's system of natural law is and must be incomplete. He could not admit the Aristotelian possibility that nature could provide fully for man's fulfillment."[30] Rothbard himself is not far from this when he points out that a rational approach needs an understanding of the structural imperfection of our minds: "No man is omniscient or infallible — a law, by the way, of man's nature."[31] But this observation has to have significant consequences for legal theory.

Carlo Lottieri is an Italian political philosopher with the University of Siena and Istituto Bruno Leoni whose main interests are in contemporary libertarian thought. Most recently he edited an anthology of writings by Bruno Leoni, Law, Liberty, and the Competitive Market (New Brunswick, N.J.: Transaction, 2009). Send him mail. See Carlo Lottieri's article archives.

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Notes

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[1] The notion of code — in despotic Prussia as well as in Napoleonic France — was connected to the needs of a sovereign power oriented to absorbing the legal order and changing any norm in a simple political decision.

[2] Murray N. Rothbard, For a New Liberty: The Libertarian Manifesto (Lanham, Maryland: University Press of America, 1973), 318.

[3] See Ludwig von Mises, Theory and History (Auburn, Ala.: Mises Institute, 1985).

[4] See Murray N. Rothbard "In Defense of 'Extreme Apriorism'," The Logic of Action One (London: Edward Elgar, 1997), 100–08. Exactly in this sense Larry Sechrest outlines that a "careful examination of Austrian thought will reveal that the praxeological method itself is fundamentally empirical." See Larry J. Sechrest, "Praxeology, Economics, and Law: Issues and Implications," Quarterly Journal of Austrian Economics 7, no. 4 (Winter 2004): 22. In the Aristotelian-Thomist tradition, experience is a source of knowledge: we meet the world (which is common to all us) and we have experiences with a meaning. Rothbard shares this perspective when he distinguishes his position and that of Mises. For this reason, Sechrest opposes Hoppe (and Mises) because of their Kantianism and shares the Rothbardian perspective, embracing the project of "positing an empirical base for the Austrian School." Ibid., 23.

[5] See, in particular, Murray N. Rothbard, "The Symposium on Relativism: A Critique," 1960, memo conserved in the Ludwig von Mises Archives, now in Murray N. Rothbard, Diritto, natura e ragione. Scritti inediti versus Hayek,

Mises, Strauss e Polanyi, Roberta Modugno, ed. (Soveria Mannelli: Rubbettino, 2005), 125–45.

[6] Carl Menger, Investigations into the Method of the Social Sciences, Francis J. Nock, trans. (New York: New York University Press, 1985), 174–75.

[7] Bruno Leoni, Freedom and the Law, 3rd ed. (Indianapolis: Liberty Fund, 1991), 131; my italics.

[8] Ibid., 129.

[9] The notion of polycentric order — as it has been formulated by Michael Polanyi — can be useful to appreciate the complexity of a system based on checks and balances and operating without a written constitution imposed by an authority. Polanyi points out that the invisible hand pushing towards a free-market order is not so different from the forces defining common law and scientific research. The progress of knowledge is grounded on the principles that "every proposed addition to the body of science is subjected to a regular process of scrutiny." We find a similar logic in the legal order, because common law "constitutes a sequence of adjustments between succeeding judges, guided by a parallel interaction between the judges and the general public." Michael Polanyi, The Logic of Liberty (Chicago: University of Chicago Press, 1980), pp. 162–63.

[10] Following Mises, "thymology is a historical discipline." Mises, Theory and History, 313.

[11] Ibid., 272.

[12] Ibid., 313.

[13] Translation: "what usually happens."

[14] Mises, Theory and History, 313.

[15] Aristotle, Rhetoric, 1373b.

[16] Ibid., 1374a.

[17] Saint Thomas Aquinas, On Law, Morality, and Politics, William P. Baumgarth and Richard J. Regan, eds. (Indianapolis-Cambridge: Hackett Publishing Company, 1988), 77.

[18] Ibid., 80.

[19] Ibid., 81. As Anthony Lysska has pointed out, Aquinas "was aware of cultural diversity regarding mores." Anthony J. Lysska, Aquinas's Theory of Natural Law: An Analytic Reconstruction (Oxford: Clarendon Press, 1996), 112.

[20] In the latest development of his theory, Leoni introduced an interesting notion when he spoke about the a-legal claims (in Italian, pretese agiuridiche). Thus, we have not only legal and illegal claims, but also some claims not completely accepted today, that in the future might be considered lawful and legitimate. See Bruno Leoni, "Appunti di filosofia del diritto," in Il diritto come pretesa (Macerata: Liberilibri, 2004), 200.

[21] Giorgio Agamben, State of Exception (Chicago: The University of Chicago Press, 2005), 40.

[22] Chaïm Perelman, Justice, Law and Argument. Essays on Moral and Legal Reasoning, with an Introduction by Harold J. Berman (Dordrecht: Reidel, 1980), 129.

[23] Ibid., 131.

[24] For Hoppe, in Rothbard there is "a strict liability theory." Hans-Hermann Hoppe, "Property, Causality, and Liability," Quarterly Journal of Austrian Economics 7, no. 4 (Winter 2004): 88–89.

[25] Murray N. Rothbard, "Preface" to Mises, Theory and History, iii.

[26] Paul E. Sigmund, Natural Law in Political Thought (Cambridge Mass.: Winthrop, 1971), 39; the italics are mine.

[27] In this sense, natural law has to be ever conceived in a strict relationship with the contingency of social reality. If all were governed by destiny, there would be no room for natural law (because its normative features imply human liberty). But at the same time it is true that the ever-changing character of social relationships forces natural law to have a specific link with history.

[28] Bruno Leoni, Lezioni di filosofia del diritto (Soveria Mannelli: Rubbettino, 2004), 160.

[29] Bruno Leoni, "Oscurità ed incongruenze nella dottrina kelseniana del diritto," in Scritti di scienza politica e teoria del diritto (Milan: Giuffrè, 1980), 202.

[30] Sigmund, Natural Law in Political Thought, 46.

[31] Murray Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982), 11.

Cultivating Sound Ideas

Thu, 05 Nov 2009 03:12:00 -0600

[This review first appeared in the Freeman.]

The Left, the Right, and the State, a collection of 103 essays by Llewellyn Rockwell, looks at the ways both the left and right use the State to pursue their goals. Rockwell, president of the Ludwig von Mises Institute, argues forcefully that our liberty and property are endangered equally by left-wing and right-wing statism. As he puts it, "The left has a laundry list and the right does too. Both represent a grave threat to the only political position that is truly beneficial to the world and its inhabitants: liberty."

Precisely. The great virtue of the book is how Rockwell shows that when people on the political right point to "liberal" increases in government power and say, "They're attacking freedom!" they are correct — as are those on the political left who point to "conservative" increases in government power and say the same thing. The problem Rockwell illuminates is that both camps are blind to the damage done by their own impulses to expand the power of the State. A massive, unrestrained government is a bull in a china shop.

Each reader will undoubtedly find certain essays especially insightful. One of my favorites is "Freedom is Not ‘Public Policy.'" Rockwell argues that one of the worst errors of free-market intellectuals is their discussion of liberty as just another policy option for politicians and bureaucrats to consider. That formulation, he writes, "implies that it is up to the state — its managers and kept intellectuals — to decide how, when, and where freedom is to be permitted." He cites as an egregious example the Reagan administration's approach to tax cutting, when tax cuts were defended on the grounds that they would ultimately bring in more government revenue. We don't cherish freedom, Rockwell observes, because it maximizes the government's haul of money. Instead, tax cuts should be advanced on the grounds that it is right for people to keep and decide how to spend the money they earn.

Rockwell has sharp words for both the left and the right on the ways they have been lured by the siren song of government to abandon principles they formerly held. On the right, for example, he shows that pro-family advocates have been drawn into the big-government orbit with such nonlibertarian policies as school vouchers. He also takes aim at "free-market" scholars who propose "solutions" to welfare-state problems, such as Social Security, that merely involve some trimming of that poisonous plant, rather than uprooting it entirely.

The left also gets taken to the woodshed over issues like its abandonment of free speech in favor of restrictive campus speech codes. And what has become of the old leftist commitment to civil liberties? Today it's little more than a fading memory, with leftist politicians jumping on the bandwagon for the war on drugs, the war on illegal immigration, expansive eminent-domain powers, and so forth. The omnipotent State now tramples all over the rights of "the little guy." The left used to care, but now prefers to turn a blind eye.

After several hundred pages of razor-edged attacks on the waste, folly, and outright evils of "liberal" and "conservative" statism, Rockwell gets to the crucial question: What do we do? Examining and then rejecting various suggested courses, he argues that libertarians must work to cultivate sound ideas. We can make no progress against our greedy, intrusive, authoritarian government so long as most Americans accept the false idea that government action is the key to progress and prosperity.

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For example, since most Americans believe that economic recessions are a natural part of the free market and we need government action to "stimulate the economy" when it turns sick, it's inevitable that politicians will support massive federal spending to cure it. We need to explain the truth about economic cycles to the public. Similarly, most Americans believe that we must have "public" education or else suffer from widespread illiteracy. We need to convey the truth that the market for education works and would deliver far better results at less cost if it were allowed to function.

Indeed — cultivate sound ideas. Reading Rockwell's book will help you do exactly that.

George Leef is book review editor of The Freeman. See his archive at TheFreemanOnline.org. See George C. Leef's article archives.

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