Archive for September, 2011

September 30, 2011

Waiting Your Turn

by Eric T. Phillips

Queues are the most visible sign that the government in involved in a given part of the economy. Because extensive state intervention distorts prices, it disables the market’s efficient rationing system. With market prices gone, the government often turns to the queue as its alternative for distributing scarce resources.

One of the deadliest examples is on display in countries with socialist health care systems. Citizens in Canada, for example, typically have to wait 18 weeks between the time they receive a referral from their doctor to the time they receive treatment. In Australia, New Zealand, and Britain, from 23 to 36 percent of patients have to wait over four months for surgery.

The same principle was on display in America during the gas crisis of the 1970’s. Many people think OPEC caused the fuel shortages when it imposed an oil embargo on the United States in 1973, but in a free economy this action would have simply raised the price of gas. People were forced to line up at gas stations because the federal government imposed a price ceiling on gasoline. In other words, it was illegal for gas companies to charge more than the price dictated by Washington. The result: gas was sold on a first come, first serve basis, so people had to sacrifice their time to secure a place in line.

The entire economy of the Soviet Union was run this way. As Hendrick Smith explains:

The only real taste of stoical shopping vigils in recent American history were the pre-dawn lines at service stations during the gasoline crisis in the winter of 1973-4… But it was temporary and only for one item. Imagine it across the board, all the time, and you realize that Soviet shopping is like a year-round Christmas rush. The accepted norm is that the Soviet woman daily spends two hours in line, seven days a week. . . I noted in the Soviet press that Russians spend 30 billion man-hours in line annually to make purchases…. 30 billion man-hours alone is enough to keep 15 million workers busy year-round on a 40-hour week.

Robert Higgs, during his ten part lecture series, Crisis and Liberty, explains how angry these lines made people in the 70’s. “Americans,” he concludes, “were not really cut out to be good queue standers.” Hopefully this is still true, but the willingness with which Americans line up to be felt up by TSA agents in not encouraging.

September 27, 2011

Exploiting the Occupied

by Eric T. Phillips

Richard Schüller was a colleague of Mises and a high-ranking economic adviser in the Austrian government during the First World War. Along with Gustav Gratz, he co-authored an account of Austria-Hungary’s wartime trade policy. This neglected work, The Economic Policy of Austria-Hungary During the War In Its External Relations, is an excellent case study in how individual state actors and interest groups construct empires. Speaking of the Treaty of Brest-Litovsk, the Treaty of Versailles, and the Treaty of Saint-Germain-en-Laye, Schüller and Gratz explain:

Such a common trait is the endeavor of the victors to use the vanquished countries for the reinforcement of their own economic power. This trait was for centuries familiar, as that which underlay the mercantile wars. It now appears as imperialism, and uses a new, modern technique. Thus, for example, in all the peace treaties of the World War the victors try to secure control of the raw materials of the vanquished countries for as long a time as possible. They demand their delivery under favorable conditions, in one case on credit, in others without even payment, i.e., as a burden on the budget of the vanquished country. Furthermore, they seek to gain influence over important industries by claiming the majority of the shares in companies, setting up monopolies, or occupying industrial areas. Moreover, in spite of gradual modifications in detail, there is everywhere apparent a tendency of the victorious States, in the interests of their own exports, to impose upon the vanquished nations commercial treaties, railway and shipping agreements, and alien control of their harbors and railroads.

The specific methods may change with the times, but ultimately the victors will take the spoils. One need only look at the motivations for America’s most recent war to see how timeless this passage is.

September 24, 2011

The Non-Debate on Foreign Policy

by Eric T. Phillips

Jonathan Bernstein is right. The GOP presidential debates have largely been substance-free on foreign policy.

Why are the debate moderators not trying to provoke more clashes like those between Ron Paul and Rick Santorum? Like Paul, Gary Johnson and Jon Huntsman also dissent from the neoconservative line on war and national security (if not to the same extent). Why won’t the moderators allow them to debate the others on this topic? These events are supposed to be debates, right?

And even aside from the largely ignored moral and strategic dimensions of American foreign policy, it’s absurd that in an election where government spending is supposedly a huge issue, none of the “top tier” Republican candidates are talking about America’s trillion dollarempire.

September 23, 2011

Fox News pumps struggling Santorum

by Eric T. Phillips

At the Fox News debate last night, Rick Santorum was allowed to talk nine times for a total of 7:06. Ron Paul, on the other hand, received only six turns for a total of 4:33. The only candidate who received less attention was Gary Johnson.

Ron Paul is running a solid third in the polls and has raised around $4.5 million. Santorum is 8th in the polls and has raised $600,000.

Like Karl Rove, Fox News looks like it’s yearning for the Bush years.

September 23, 2011

Returning to Normalcy in a Post-9/11 World

by Eric T. Phillips

The destruction of the World Trade Center supposedly “changed everything.” In reality the attack was the predictable outcome of U.S. interventionism in the Middle East, though few Americans realized that at the time. The 1990’s were years of relative peace and prosperity. The sudden end of the Cold War had left the war party without an easily identifiable foreign menace to crusade against, and neither the incompetent Iraqi Army nor demonized little Serbia would shake Americans out of their sense of security. For most, the 1990’s were “normal.” There were no great campaigns against tyranny (only relatively small ones), no major social crusades (only failed ones), and no great expansion of government (only slow and steady growth).

Unfortunately, this normalcy was illusory. Government involvement in health care was fostering the conditions that would lead many to support more government involvement in the future. The Federal Reserve’s inflationary policies were laying the foundation for a bust that the government would use as a pretext to massively expand its regulatory powers. And the government’s imperialism in the Middle East was spurring the growth of anti-American terrorist groups.

The illusion of normalcy was shattered on 9/11. Because the American people had long ignored the government’s actions in the Arab world, they were shocked and confounded by the horrors of 2001 and credulously accepted George Bush’s absurd assertion that the terrorists hated us for “our freedom.” Since then, the war party has capitalized on the public’s continued fear and ignorance to shape the public discourse on war, terrorism, and national defense. Because of this, and not because of any threat that al-Qaeda poses, America is far less free and less secure than it was before the attacks.

The war hysteria that characterized “9/12 America” has slowly—very slowly—abated. Only around a third of the public thinks that the war in Iraq was worth it and that there still should be troops there, and most agree that the U.S. is engaged in too many wars. There’s even budding skepticism of militarism amongst some on the right. But the war party has succeeded in shaping the debate. Most people fatalistically believe that 9/11 did “change everything,” that for whatever reason the world is just more dangerous today, and that the military and police are beyond reproach no matter what they think of homeland security and the wars. As long as Americans continue to accept these premises, the United States will continue to develop into a militaristic police state.

Such a course is not inevitable. Most Americans would prefer to go about their everyday lives undisturbed by political events. Most would prefer, if they thought it was possible, to go back to that 9/10 mentality where they didn’t have to worry about terrorist attacks. Unfortunately, most don’t think such a mentality is possible anymore, largely because the hardcore contingent of red-state fascists who were well represented at the most recent Republican debate still hold a powerful grip on political discourse.

During that debate, Rick Santorum accused Ron Paul of “blaming America” for the 9/11 attacks. When Dr. Paul tried to explain his position, Santorum and Gingrich whispered to each other and snickered, and part of the crowd booed belligerently.

No one wants to be booed. No one wants to be laughed at. And no one wants to be seen as unpatriotic. So the easy thing to do for most Americans who don’t want to be bothered by politics is to keep quiet. But then when someone does have the courage to speak out—like Ron Paul—that person seems strange, and threatened members of the establishment can label him a “kook” or an “extremist.” And no one wants to be a kook…

Also during the debate, Newt Gingrich reminded viewers that “there are people out there who want to kill us.” Since changing the government’s foreign policy is completely out of the question for him, he argued that the already bloated Department of Homeland Security needs to be further expanded. This is exactly what supporters of that bureaucracy have been arguing for years, and they have been getting their way—the DHS’s budget has almost doubled since 2003. And as it has grown, so has the number of people it either directly or indirectly employs. Not only does this create a vested interest in favor of the expansion of the police state, it helps normalize the institution. And once people begin to see the existence of a certain agency as normal and inevitable, it will be easier for the war party to marginalize their critics.

In 1947, for example, when Bill Buckley was defending the idea that the United States needed a huge military establishment to fight the Soviets, he at least called the newly created CIA and the newly consolidated Defense Department what they were—part of a “totalitarian bureaucracy within our shores.” But during the last presidential election, long after the Soviet threat had vanished, Mitt Romney felt so comfortable that these institutions should be a normal part of American life that he chuckled to a Florida radio host, “I sure am laughing at Ron Paul. I got to tell you, anybody that says we got to get rid of the CIA, and the FBI, and that the reason we’re attacked by Jihadists is because of us, is a guy who deserves to have a little bit of humor come his way.”

What has changed so fundamentally about the world since the days before the CIA, FBI, and Department of Homeland Security, when Americans had no reason to fear foreign terrorism? Many people think that the advance of technology has made the world more dangerous. Echoing those statist economists who blithely call laissez-faire principles “horse and buggy economics,” a frequent refrain for people arguing against the noninterventionist foreign policy of the founders is that, “We don’t live in George Washington’s times.” Such replies are not so much arguments as the admission that one has no argument. It is true; we don’t live in George Washington’s times. But what implication does that fact have? As Murray Rothbard wrote, “There is no necessity whatever for morality or political philosophy to change every time technology improves. The fundamental relations of men…are always the same, whatever the era of history.” Changes in technology may affect particular problems in the realm of security, but politically-motivated violence has been part of human society since the dawn of recorded history. Nothing was stopping someone from gunning down Thomas Jefferson in one of his unescorted walks around Washington, and nothing was stopping a Guy Fawkes-type from blowing up Congress. These things didn’t happen before the Civil War because the federal government was small and, by modern standards, had few responsibilities. There was no reason to engage in terrorism in the hopes of influencing its policies.

What has changed is the nation’s dominant political ideology and, as a result, the structure and scope of its government. Thanks to the idea that government experts can run the economy and promote social justice and that armies can build nations and export democracy, the federal government has grown to immense proportions. And along the way, it has made many enemies. This is the source of the present terrorist threat. It’s not that decades of war and police statism have failed to make America safer. These policies are the reason America is in danger in the first place. It follows then, that the best way to undermine terrorism is not to embark on a deadly utopian campaign to “end evil,” or to send the military to the far corners of the world pursuing every Muslim who raises “a piece of cloth on which is written al-Qaeda.” The solution is to stop taking sides in bitter conflicts that have nothing to do with us, and to deal with such threats that do come along on an individual basis within the perimeters of the rule of law.

During the First World War—an example of a bitter conflict that had nothing to do with us if there ever was one—a wave of unprecedented war hysteria swept the country. The government instituted conscription, cartelized the economy, raised taxes, inflated the money supply, and jailed dissenters. After the war ended, Warren Harding ran for president with the promise that his administration would bring about a “return to normalcy.” In office, he let Wilson’s dream of American participation in the League of Nations die and concluded separate peaces with Austria and Germany; he pushed for the reduction of the world’s navies at the Washington Naval Conference of 1921-22; he pardoned Eugene Debs and dozens of other political prisoners; and he cut taxes and regulations in the face of the recession of 1921.

Old progressives and former members of Wilson’s administration, of course, opposed Harding. Many wanted to prolong the wartime controls into peacetime so they could remake the country to their liking. The former head of the War Industries Board, Bernard Baruch, wanted to preserve the Board’s cartelizing policies so industry could remain mobilized for “social needs.” John Dewey was convinced that the “success” of planning during the war had discredited the principles of laissez faire and that the new era of public control over the economy could never be undone. Wilson’s Secretary of the Navy, Josephus Daniels, authored a plan that would have expanded wartime censorship into outright government control of radio.

But with the “threat” of the German and Austrian Empires gone, Wilson and his allies overplayed their hand. No longer could the progressives appeal to a “national emergency” to push through their plans. The public’s war hysteria had abated, and “a return to normalcy” sounded much better to most people than continuing Wilson’s crusade to establish the United States as the policeman of the world. Running against a Wilson disciple in 1920, Harding received 60% of the popular vote in one of the most lopsided presidential elections in American history.

The genius of the current “War on Terrorism” is that “terrorism” can never be fully defeated, and the threat of attack can always be used to rally support for the state. George Bush himself admitted that “victory” in this ill-defined war is impossible. In an interview with Matt Lauer in 2004, he bluntly conceded that there will be no “definite end” and that, “I don’t think you can win it.” In other words, the war can go on forever, and government planners can maintain their hold on society indefinitely.

So while the public is getting tired of the wars and the police state, because so many have accepted the basic premises of the war party’s narrative, real opposition has been slow to form. The solution lies in widening the narrow perimeters of political debate. The only national figure trying to do this is, of course, Ron Paul. The better his presidential campaign does, the better for liberty. The more people that hear that bringing all the troops home, ending the Patriot Act, and abolishing the TSA are actually possible alternatives, the better the chance is for a return to a real, sustainable normalcy.

September 23, 2011

Karl Rove pumps struggling Santorum

by Eric T. Phillips

Karl Rove doesn’t mention Ron Paul in his latest Wall Street Journal piece. But he does mention Rick Santorum, the former senator from Pennsylvania who lost his last election by 18 points and is currently running a strong 2-3% in the polls.

Santorum has been consistently strong in the debates, Rove says, and has even had “Reaganesque moments” on foreign policy.

It is true, Santorum has been forceful on foreign policy questions. Unfortunately, he’s been forcefully wrong. Consider this exchange with Ron Paul over Iran, which is a moment Rove undoubtedly sees as “Reaganesque.” Santorum opines:

Anyone that suggests that Iran is not a threat to this country, is not a threat to stability in the Middle East, is obviously not seeing the world very clearly. [Ron Paul] sees it exactly the same way Barack Obama sees it. That we have to go around and apologize that we have gone out and exerted our influence and created freedom in the world.

First, there is no evidence Iran is developing nuclear weapons. But even if they did, why can’t they be contained like North Korea, Pakistan, China, and Russia? Second, Iran spends about $10 billion a year on their military. The U.S. is spending around $700 billion. Iran has a tiny navy and a small air force that hasn’t been modernized or expanded since 1980. They are incapable of threatening the United States in any conventional way.

It is possible that they have supported insurgents in Iraq, but does that warrant a declaration of war? The Chinese supported the Viet Cong during the Vietnam War. Should the U.S. government have launched World War III in response? Maybe Santorum thinks they should have.

Third, Barack Obama never went around the world apologizing for America. Neoconservatives like Santorum just get upset whenever a president’s rhetoric falls short of the type of belligerent language on display in Bush’s axis of evil speech. As Ed Brayton recently put it, they’re “like the high school jock who beats up on a nerdy kid to establish his ‘cred’ with the other thuggish idiots he hangs out with. He does it because he has a crying, insatiable need to pose and posture because it soothes his insecurities.”

And finally, anyone who suggests that Ron Paul and Barack Obama have similar worldviews obviously isn’t seeing the world very clearly. Ron Paul is a strict noninterventionist who would completely dismantle the American empire. Barack Obama expanded the war in Afghanistan, kept tens of thousands of troops in Iraq, and launched a war in Libya without Congressional authorization.

Santorum continues:

I don’t apologize for the Iranian people being free for a long time, and now they’re under a mullahocracy…

So apparently, because the CIA installed the Shah’s government, it must have been a free regime. Of course, Santorum ignores how the Shah ruled over an extravagant and corrupt government, whose secret police agency, Savak, arrested and brutally tortured the Shah’s political opponents. And it was this corruption that layed the foundation for the very “mullahocracy” that Santorum denounces.

The former senator then goes on to accuse Iran of setting training camps in Venezuela and warns us that if Iran gets nuclear weapons, “the world as we know it will be no more.”

First, the various reports of cooperation between Iran and Venezuela are filled with vague, unsubstantiated, and non-credible accusations. Second, what evidence is there that Iran and Venezuela are so suicidal that they would launch nuclear attacks on the U.S. if they had the chance?

Most of these accusations hinge on the idea that Ahmadinejad is mentally unstable because he called for Israel to be “wiped off the map.” The problem is, this oft-repeated phrase is actually a mistranslation. Read in context, it’s clear that Ahmadinejad was simply reassuring his listeners that the Israeli government would eventually “vanish from the page of time” just as the Shah’s regime, the Soviet regime, and the Hussein regime have.  Obviously, he does see Israel as an enemy. But this speech was hardly a call for suicidal war. American political leaders–like Rick Santorum–call for the end of foreign regimes all the time. Does this mean that they are willing to unleash a nuclear holocaust to ensure the end of every single government that they denounce? Their approach to North Korea answers this question. (And shows why Iran and Venezuela might want nuclear weapons.)

Santorum’s foreign policy, it should be clear, is not predicated on securing the safety of the United States. It’s predicated on spreading his own idea of “freedom” around the world, even at extraordinary costs. Luckily, even the militaristic base of the Republican Party is not warming up to this unrepentent Bushist.Which is why, perhaps, Rove is trying to draw attention to him. Bush’s legacy is ultimately Rove’s legacy. The more the Republican Party is influenced by Ron Paul, and the more George W. Bush’s ideas are discredited, the less relevant Rove will become.

September 21, 2011

Light Bulb Nihilism

by Eric T. Phillips

Margaret Carlson thinks that some Republicans’ opposition to the impending incandescent light bulb ban is evidence that the party has become “unmoored.” This is just one more example, she argues, of how Republicans have come to identify themselves solely by what they are against.

Apparently for her, being in favor of freedom and choice is the same as being in favor of nothing at all.

Writers for the New York Times have similarly categorized opposition to the Obama agenda as nihilism. In other words, to oppose progressivism is to reject all notions of political reality and meaning.

Of course, most Republicans are hardly as anti-government as Carlson and the Times make them out to be. Take the recent debate between the two Republican front-runners as an example. Romney attacked Perry for calling Social Security a “Ponzi Scheme,” and pledged to save the program. Perry, on the other hand, refused to stand unequivocally behind behind his previous rhetoric and backed away from the idea that Social Security should be a state responsibility. Add in the two candidates’ similar positions on Medicare, their support for the police state, and their belligerent foreign policy views, and you have two solidly pro-government ideologies.

But Carlson is worried that some recent criticism of light bulb socialism is a sign that the Republican Party is embracing some kind of nihilistic anarchism. If any of the establishment candidates wins the presidency, she should rest easy.

September 20, 2011

Modern Serfdom

by Eric T. Phillips

I was recently thumbing through Hayek’s Road to Serfdom and I came across a salient quotation. In the forward to the 1956 paperback edition, Hayek argues that the welfare state degrades the character of a people. As evidence, he cites a sociological survey on the effect wartime regulations (soon to be made permanent by the postwar Labour government) were having on young people:

At school, in the place of work, on the journey to and fro, even in the very equipment and provisioning of the home, many of the activities normally possible to human beings are either forbidden or enjoined. Special agencies, called Citizen’s Advice Bureaus, are set up to steer the bewildered through the forest of rules, and to indicate to the persistent the rare clearings where a private person may still make a choice…[The town lad] is conditioned not to lift a finger without referring mentally to the book words first. A time-budget of an ordinary city youth for an ordinary working day would show that he spends great stretches of his waking hours going through the motions that have been predetermined for him by the directives in whose framing he has had no part, whose precise intention he seldom understands, and of whose appropriateness he cannot judge…The inference that what the city lad needs is more discipline and tighter control is too hasty. It would be nearer the mark to say that he is suffering from an overdose of control already…Surveying his parents and his older brothers or sisters he finds them as regulation bound as himself. He sees them so acclimatised to that state that they seldom plan and carry out under their own steam any new social excursion or enterprise. He thus looks forward to no future period at which a sinewy faculty of responsiblility is likely to be of service to himself or others…[The young people] are obliged to stomach so much external and, as it seems to them, meaningless control that they seek escape and recuperation in an absence of discipline as complete as they can make it.

As I see it, the only difference between the society described in this passage and our own is that we lack “Citizen’s Advice Bureaus.”

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