Archive for January, 2010

Howard Zinn on the “Holy” Wars

January 29, 2010

Howard Zinn (1922-2010) on the so-called “good” and “holy” wars of the American Imperium: the Revolutionary War, the Civil War, and WWII.

Howard Zinn on the costs of war.

His final words at Boston University on November 11th, 2009:

“No matter what we are told, no matter what tyrant exists, what border has been crossed, what aggression has taken place, it is not that we are going to be passive in the face of tyranny or aggression. No, but we will find ways other than war to deal with the problems we have. Because war is inevitably, inevitably the indiscriminate massive killing of huge numbers of people and children are a good part of those people. Every war is a war against children. So it is not just getting rid of Saddam Hussein. Think about it, well, we got rid of Saddam Hussein and in the course of it got rid of huge numbers of victims of Saddam Hussein. When you fight a war against a tyrant, who do you kill? You kill the victims of the tyrant.

Anyway, all this is to simply make us think again about war and to think. You know. We are at war now, in Iraq, in Afghanistan, and sort of in Pakistan since we are sending rockets over there killing innocent people in Pakistan. And, we should not accept that. Look for a peace movement to join. Really, look for some peace organization to join. It will look small at first and pitiful and helpless, but that is how movements start. That is how the movement against the Vietnam war started, started with handfuls of people who thought they were helpless, thought they were powerless.

But, remember, the power of the people on top depends on the obedience of the people below.

When people stop obeying, they have no power.

Now, when workers go on strike, huge corporations lose their power. When consumers boycott, huge business establishments have to give in.

When soldiers refuse to fight, as so many soldiers did in Vietnam, so many deserters, so many fraggings, acts of violence by enlisted men against officers in Vietnam, B-52 pilots refusing to fly bombing missions anymore. War cannot go on when enough soldiers refuse the government has to decide we cannot continue. So yes, people have the power if they begin to organize, if they protest and create a strong enough movement they can change things. That is all I wanted to say. Thank you.”

The Real State of the Union Conversation

January 29, 2010

President Obama had a private lunch prior to facing the nation with top advertising execs, oilmen, bankers, and the casino/insurance/house-always-wins industry. That’s where the real policy plans get discussed with no details and absolutely no transparency. Attending the lunch were:

Shelly Lazarus CEO of Ogilvy & Mather Worldwide

Jamie Dimon, chief executive of JPMorgan Chase

James Hackett, chief of Anadarko Petroleum

Rex Tillerson, head of Exxon Mobil

Edward Rust Jr. CEO of State Farm Insurance

Also in attendance were presidential adviser Valerie Jarrett, Chief of Staff Rahm Emanuel, and Treasury Secretary Tim Geithner.

To the Ash Heap of History: Keynes

January 27, 2010

The Macro Hustle & Flow

January 26, 2010

Russ Roberts and John Papola presents…Fear the Boom and Bust: A Hayek vs. Keynes Rap Anthem

A Vision of the Free World

January 26, 2010

The very source of life for civilization and humanity in the absence of enforcement at the point of a gun.

The Misesian Vision by

[This talk was delivered at the Jeremy Davis Mises Circle in Houston, Texas, on January 23, 2010.]

I’m finding it ever more difficult to describe to people the kind of world that the Mises Institute would like to see, with the type of political order that Mises and the entire classical-liberal tradition believed would be most beneficial for mankind.

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

  • People can no longer imagine a world in which we could be secure without massive invasions of our privacy at every step, and even being strip-searched before boarding airplanes, even though private institutions manage much greater security without any invasions of human rights;
  • People can no longer remember how a true free market in medical care would work, even though all the problems of the current system were created by government interventions in the first place;
  • People imagine that we need 700 military bases around the world, and endless wars in the Middle East, for “security,” though safe Switzerland doesn’t;
  • People think it is insane to think of life without central banks, even though they are modern inventions that have destroyed currency after currency;
  • Even meddlesome agencies like the Consumer Products Safety Commission or the Federal Trade Commission strike most people as absolutely essential, even though it is not they who catch the thieves and frauds, but private institutions;
  • The idea of privatizing roads or water supplies sounds outlandish, even though we have a long history of both;
  • People even wonder how anyone would be educated in the absence of public schools, as if markets themselves didn’t create in America the world’s most literate society in the 18th and 19th centuries.

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

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

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

To him, and to many Americans, the goal of government is to be an extension of the personal values of those in charge. I saw a speech in which Obama was making a pitch for national service, the ghastly idea that government should steal 2 years of every young person’s life for slave labor and to inculcate loyalty to leviathan, with no concerns about setting back a young person’s professional and personal life.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And yet, an objection was raised. If people are permitted to open businesses and factories anywhere, and we close state-run factories, how can the state properly plan where people are going to live? After all, people might be tempted to move to places where there are good-paying jobs and away from places where there are no jobs.

The economist listened to this point and kept waiting for the objection. He nodded his head that this is precisely what people will do. After some time, the government officials became more explicit. They said that they cannot simply step aside and let people move anywhere they want to move. This would mean losing track of the population. It could cause overpopulation in some areas and desolation in others. If the state went along with this idea of free movement, it might as well shut down completely, for it would effectively be relinquishing any and all control over people.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This talk was delivered at the Jeremy Davis Mises Circle in Houston, Texas, on January 23, 2010.

Politics and the Power Elite

January 22, 2010

Presented in Fall 1986 at New York Polytechnic University. Recorded by Hans-Hermann Hoppe.

Politics and the Power Elite

Molyneux and Schiff on Voluntaryism and the Collapse of State Power

January 22, 2010

Primary Dealers and Profligate Deliveries…

January 21, 2010

Robert Wenzel on the secret bank bailout:

There’s one method that the Federal Reserve has been employing to shovel money to the bank elite that is rarely mentioned, though I hear the sums that have been shoveled are in the billions and they are showing up on the books of firms like Goldman Sachs as pure profit. It’s really pure scam.

Here’s what went on for months, according to traders familiar with the situation.

When the Federal Reserve buys and sells Treasury securities it does so through primary dealers. Goldman Sachs and JPMorgan are among the select elite firms that, naturally, got into this club.

So when the Fed wants to trade it goes to one of these primary dealers. In the past, to earn a profit, the banks would execute the trade and mark up the price a bit on a buy to the Fed (or mark down a bit to the Fed when they were selling for the Fed ). Since Fed traders have screens showing them where market prices are, in the past primary dealers were allowed small mark ups and mark downs in line with what banks were marking up and down for their other clients. It would be difficult for a primary dealer to get away with an outrageous mark up or down because the Fed trader would have a pretty good idea of where a trade should have been made.

Once the Fed and Treasury started shoveling money in every possible way they could think of to the elite banks, the word came down to Fed traders to “ease up” on the mark ups and down. Let the banks take a “healthy” mark up and mark down, they were told. I’m advised that the “healthy” mark ups and mark downs have resulted in the Fed overpaying on their trades with primary dealers to the tune of billions. These billions are looking like profitable skilled trades, when they are nothing of the kind. They are hidden gifts from the Federal Reserve that are generally unseen, unknown and will never be paid back… (more…)

Who Pays the Federal Reserve? Cui Bono?

January 19, 2010

Murray Rothbard discusses the operations of the banking interests and the roles that Rockefeller and J P Morgan played in setting up the central bank in 1913.

Today almost one hundred years later the Fed goes from crisis to profit in an instant:

The LA Times: The Federal Reserve reported a side benefit to its massive intervention into the financial system a record profit of $46.1 billion last year on the central bank’s investments.

CNN: The Federal Reserve banks made a $52 billion profit in 2009, reaping extra income on the government securities they bought in an effort to stabilize the financial system.

High risk, but easy money in the meantime:

Much of the higher earnings arose due to the Fed’s aggressive program of buying bonds, aiming to push interest rates down across the economy and attempting to stimulate growth. As 2010 begins, the Fed owns $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank might lose money if it later sells those securities in order to attempt to reduce the money supply.

The Fed also made money on its emergency loans to banks and other firms and on special programs to prop up lending, such as one that supports credit cards, auto loans, and other consumer and business lending. Those programs impose interest and fees on participants, with the aim of ensuring that the Fed does not lose money.

The Daily Bell Interviews Tom Woods

January 18, 2010

Daily Bell: Can you summarize the basic points of The Politically Incorrect Guide to American History?

Thomas E. Woods, Jr.: That book argues that the received version of American history is a laughable, ideologically driven distortion of the truth, but one that benefits the state apparatus and its hangers-on. Naturally they want us to believe (among other things) the following:

1) Political decentralization is always bad. Anyone who favors it surely has sinister intentions. Real freedom comes from ceding all powers to the central government, which will employ those powers on behalf of progressive causes.

2) Without government, we’d all be mercilessly exploited by the wicked private sector, and scraping by on subsistence wages. That’s what happened under the “robber barons” of the nineteenth century.

3) All the federal government’s wars have been glorious and just.

The Politically Incorrect Guide to American History smashes all of these, and a great deal else.

Daily Bell: Can you do the same for Meltdown?

Thomas E. Woods, Jr.: I wrote Meltdown because I could see the conventional wisdom – that the free market had caused the financial crisis, and that these blinkered laissez-faire ideologues needed to be put in their place – beginning to ossify. I wanted to make what to me was the obvious case for interventionism as the culprit in the crisis, and the market as the equally obvious solution. (Also, you’d have to be seriously deluded to consider Larry Summers, Robert Rubin, and monetary central planner Alan Greenspan to be laissez-faire ideologues.)

I was seeking to do two things: (1) get the free-market, or “Austrian,” point of view before the public, so it would be clear that a plausible (and indeed compelling) alternative to the conventional wisdom existed; and (2) give supporters of the free market the understanding and the ammunition they needed to defend themselves against the inane claims being made by advocates for the state.

Daily Bell: Can you give us the top five books that someone interested in freedom and free-markets needs to read?

Thomas E. Woods, Jr.: I recommend Henry Hazlitt’s Economics in One Lesson, Murray Rothbard’s What Has Government Done to Our Money?, Ron Paul’s The Revolution: A Manifesto, Lew Rockwell’s The Left, the Right, and the State, and Hans-Hermann Hoppe’s Democracy: The God that Failed. You will never look at things quite the same, and I’m pretty sure you’ll be hooked.

Daily Bell: We consider the regulatory malpractices you identify in Meltdown to be somewhat incidental to the main culprit, which is central bank money manipulation. Agree? Disagree?

Thomas E. Woods, Jr.: I agree, which is why I emphasize the Fed and the monetary system in my public speeches. Still, regulation can intensify the effects of the Fed’s policy, and I think that’s what happened here… (more…)

Remembering Rothbard

January 15, 2010

This month marks the 15th anniversary of the death of Murray Rothbard, arguably the most important libertarian theorist of the twentieth century. Although I only met him once in person, his work was influential in developing my “calling” in a number of ways, and the way he approached his scholarly and activist work for libertarianism over his life provides a number of lessons for advancing our own callings and the freedom movement more broadly.

Put simply, I don’t think I would be where I am today without Rothbard’s work. – Steven Horwitz, Charles A. Dana Professor of Economics at St. Lawrence University

It Is Your Choice Or Our Chains…

January 15, 2010

A discussion of the works of Etienne de la Boetie, November 1, 1530 – August 18, 1563, a French judge, writer, political philosopher, friend of Montaigne, and author of the Discourse on Voluntary Servitude.

Murray Rothbard recognized that for La Boétie the central problem of political theory was why is it that people consent to their own enslavement? La Boétie cuts to the heart of the central problem of political philosophy: the mystery of civil obedience.

Why do people, in all times and most places, obey the commands of the government, which always constitutes a small minority of the society? To La Boétie the spectacle of general consent to despotism is quite puzzling and utterly appalling:

I should like merely to understand how it happens that so many men, so many villages, so many cities, so many nations, sometimes suffer under a single tyrant who has no other power than the power they give him; who is able to harm them only to the extent to which they have the willingness to bear with him; who could do them absolutely no injury unless they preferred to put up with him rather than contradict him. Surely a striking situation! Yet it is so common that one must grieve the more and wonder the less at the spectacle of a million men serving in wretchedness, their necks under the yoke, not constrained by a greater multitude than they . . .

And this mass submission must be out of consent rather than simply out of fear:

Shall we call subjection to such a leader cowardice? . . . [I]f a hundred, if a thousand endure the caprice of a single man, should we not rather say that they lack not the courage but the desire to rise against im, and that such an attitude indicates indifference rather than cowardice? When not a hundred, not a thousand men, but a hundred provinces, a thousand cities, a million men, refuse to assail a single man rom whom the kindest treatment received is the infliction of serfdom and slavery, what shall we call that? Is it cowardice? . . . [W]hen a thousand, a million men, a thousand cities, fail to protect themselves against the domination of one man, this cannot be called cowardly, for cowardice does not sink to such a depth. . . . What monstrous vice, then, is this which does not even deserve to be called cowardice, a vice for which no term can be found vile enough . . . ?

La Boétie’s celebrated and creatively original call for civil disobedience, for mass nonviolent resistance as a method for the overthrow of tyranny, stems directly from the above two premises: the fact that all rule rests on the consent of the subject masses, and the great value of natural liberty. For if tyranny really rests on mass consent, then the obvious means for its overthrow is simply by mass withdrawal of that consent. The weight of tyranny would quickly and suddenly collapse under such a nonviolent revolution. (more…)

The Voice of Harvard Ec10 Speaks…

January 15, 2010

The ultimate insider, and the most mainstream of 1050 Massachusetts Ave. economists lately, Martin Feldstein, continues to warn of a possible double dip recession…

The U.S. economy faces a “significant risk” of another recession in 2010, unless the Obama administration promotes confidence it can manage a growing fiscal deficit, a prominent Harvard University economist said Thursday.

Without public approval, namely from investors, U.S. bond yields will climb, taxes will rise and a fragile recovery will be short lived, Martin Feldstein told Reuters in an interview.

“I don’t think the Obama administration is doing anything to reduce that risk. They are assuming the momentum is there,” said Mr. Feldstein, who is also president-emeritus of the National Bureau of Economic Research, the arbiter of when U.S. recessions begin and end…

Doug Casey on What Comes Next…

January 14, 2010

Doug Casey: It’s the Wile E. Coyote theory of economics. As long as you never look down after running off a cliff chasing the roadrunner, you can keep treading air. Unfortunately, although the power of positive thinking may help in many ways, it’s of zero use if you continue living above your means and making stupid decisions.

Louis James: Insolvency doesn’t seem to matter; as long as everyone has confidence that things will keep going, the experts believe they will. But in the real world, you can’t remain insolvent for long, even if “you” are the United States as a whole society.

Doug: Exactly. My thinking about the stock market is this: corporations have done as “well” as they have mainly by cutting expenses. Laying people off, that sort of thing. So the bottom lines have not fallen as far as we might expect – but the top line has been hit. Revenues are falling for corporations across the board.

L: And the market has to notice this reality sooner or later.

Doug: Yes. The world’s financial system has to adjust to a new reality, one with lower levels of consumption and differing types of production. The legions of unemployed are not going to go back to work anytime soon, at least not doing anything like what they were doing before the bubble burst. The economy is going to continue deleveraging. There’s going to be less debt to allow the purchase of all this stuff people have been buying, resulting in lower corporate earnings. So it’s hard to see revenues doing anything but continue to spiral downwards for years to come.

And then there are financial “accidents” waiting to happen.

L: Like the bank failures the government has admitted it expects this year? The FDIC says there will be more bank failures in 2010 than in 2009, with the spin being that 2010 will be the peak of the crisis.

Doug: Sure. But I also expect corporate bond failures. And there are other things out there. As Porter Stansberry (whose style as an analyst I really like) has pointed out, General Electric – which is really just a hedge fund disguised as an industrial concern at this point – is leveraged thirty to one. It’s a dead man walking. It’s the next AIG. When something like that happens, it really shakes Wall Street to its foundations…

An Economic Ray of Light?

January 14, 2010

…Only for those who caused the financial meltdown in the first place…

Jon Stewart on Henry Paulson, Tim Geithner and the bailouts:

Clusterf#@k to the Poor House

Marc Faber and the Downward Spiral

January 14, 2010

The US is headed for a major debt crisis and Marc Faber has the charts to prove it.

The main problem comes down to two things: 1) ballooning debts and 2) future interest costs. ..

Literature & the Economics of Liberty

January 13, 2010

Literature & the Economics of Liberty: Spontaneous Order in Culture edited by Paul A. Cantor & Stephen Cox

The Slippery Slope Steepens

January 12, 2010

The United States is rather rapidly sliding into a fascist-type state (you can use the “corporatism” euphemism if the truth is too difficult to swallow). The government and their corporate oligarchy are stealing from the people and no longer care if the people have any cake to eat. The process was gradual at first, then accelerated during George Bush Jr’s tenure.

Socialism does not describe what has been happening to the United States at all over the past decade. The military industrial complex, Homeland Security, war against a military tactic (i.e. the “War on Terror”), and unusually aggressive unprovoked invasions into tiny third world countries with no real military are the hallmarks of a more aggressive form of developing collectivism than socialism.

Couple this with the raping of the American taxpayer by corporate bail-outs that were unwarranted and unnecessary, government take-overs of corporations and industries, and the unprecedented infiltration of government ranks by corporate whores and felons like Hanky Pank Paulson and…Geithner … Add it up and we now essentially meet the traditional definition of a fascist state, which is a union of the government and large corporations that run the country with military/imperialist overtones. Because our aggressive and out-of-control government is broke and desperate, more measures to steal from the public and debase the currency are coming. (more…)

The Case Against Geithner

January 12, 2010

Today, Wall Street continues to exploit a policy of government-sponsored giveaways and secrecy to pay themselves billions.

Record-setting bonuses due to banks like Goldman Sachs as early next week.

Yet instead of acting as our cop, Secretary Tim Geithner has become central to what may be a cover-up of the greatest theft in U.S. history.

Here is the evidence.

Venezuela Inches Closer to Zimbabwe

January 12, 2010

President Hugo Chavez, in a live address on state TV, said the bolivar would now have two levels — a preferential rate of 2.6 per dollar for essential imports like food, health and machinery and a 4.3 “petro-dollar” rate for other things.

Trust the Markets and Not the Mandarins

January 12, 2010

“We would do infinitely better trusting the markets than the mandarins at the Federal Reserve.” – Steve Forbes

A conversation with Steve Forbes and Ron Paul.

“Independence does not mean lack of accountability.” -Steve Forbes

“[The Fed] enjoys extraordinary privileges and requires no appropriations from Congress to operate.  To pay for its operations the Fed takes the interest from its bonds, which are bought and paid for by money it creates  out of thin air, and the turns the leftovers to the Treasury Department, talk about the ultimate ATM.” – Steve Forbes

Ron Paul Talks Austrian Economics on The Tonight Show with Jay Leno

January 12, 2010

What? 6:44 for the proof. No, definitely cannot have that!

Joe Salerno on Fox News

January 12, 2010

“Central bankers are politicians with tenure and therefore they are that much more dangerous.” – Joe Salerno

Ron Paul on Keynesian vs. Austrian Economics

January 12, 2010

Ron Paul discussing  Austrian economics and the failures of Keynes on MSNBC. No, can’t have that.

The Military-Industrial Complex and the Economy

January 11, 2010

Washington’s Blog and Zero Hedge provide a little analysis of the last ten years as the Military-Industrial complex ruins the economy:

Everyone knows that the too big to fails and their dishonest and footsy-playing regulators and politicians are largely responsible for trashing the economy.

But the military-industrial complex shares much of the blame.

Nobel prize winning economist Joseph Stiglitz says that the Iraq war will cost $3-5 trillion dollars.

Sure, experts say that the Iraq war has increased the threat of terrorism. See this, this, this, this, this, this and this. And we launched the Iraq war based on the false linkage of Saddam and 9/11, and knowingly false claims that Saddam had WMDs. And top British officials, former CIA director George Tenet, former Treasury Secretary Paul O’Neill and many others say that the Iraq war was planned before 9/11.  But this essay is about dollars and cents.

America is also spending a pretty penny in Afghanistan. The U.S. admits there are only a small handful of Al Qaeda in Afghanistan. As ABC notes(more…)

The Austrian Economists

January 11, 2010

Lew Rockwell on The Austrian Economists Blog:

Good for the people who started a blog called The Austrian Economists. That great name was rejected by some bloggers upset by the domination of what Hans Hoppe has called the main branch of the Austrian School on Google (they should try Googling Lew!), and by the success of the Ron Paul revolution. Why, hoi polloi were getting interested in Mises and Rothbard, and opposing the Fed. Can’t have that. (Thanks to Karen De Coster)

It is our pleasure…

Free Markets and Free Minds in the Ivory Coast

January 11, 2010

A stroll through Bouake, the second largest city in the Ivory Coast via John James of the BBC.  Since its independence from France in 1960, the Ivory Coast has been one of West Africa’s most peaceful and prosperous countries.

Free Markets

“Here no-one can say to you: ‘No, that’s pirated’ or ‘You can’t sell that here,'” [an itinerant salesman] tells me when I ask if he ever has any trouble from the authorities.

“If we were in the south of the country, you could complain that no customs tax has been paid for example, but when you’re in the New Forces-zone everything can come in and be sold,” he says…

Soroland may not be a breakaway zone, but for seven years the inhabitants of this zone have got used to living without government taxes, customs charges and even water and electricity bills.

Reunification – already under way – will be a challenge to complete.

Hussein Doumbia is one of many local business leaders who have learnt to profit from this vast black market zone.

“Things are a lot cheaper than in the south – we see that people from the south often come here to stock up, above all the military who come for all their electronics – mobile phones, DVDs, televisions, everything,” he says.

Free Minds

When civil servants fled south, volunteer teachers, like Ali Ouattara, stepped forward to try to keep things going.

“We didn’t want the kids to become child soldiers, so we tried to give them something. This is how we became teachers,” says Mr Ouattara, who lost his job at the university at the start of the crisis. (more…)

Molinari and Political Parties as “Actual Armies”

January 10, 2010

The laissez-faire liberal economist Gustave de Molinari (1819-1912)  compared political parties to “armies” whose sole aim is to win office, plunder, distribute spoils and jobs, all at the expense of taxpayers in his treatise entitled The Society of Tomorrow. In the very next paragraph he spoke of the so-called power of the press and proclaimed it impotent:

These associations, or political parties, are actual armies which have been trained to pursue power; their immediate objective is to so increase the number of their adherents as to control an electoral majority. Influential electors are for this purpose promised such or such share in the profits which will follow success, but such promises—generally place or privilege—are redeemable only by a multiplication of “places,” which involves a corresponding increase of national enterprises, whether of war or of peace. It is nothing to a politician that the result is increased charges and heavier drains on the vital energy of the people. The unceasing competition under which they labour, first in their efforts to secure office, and next to maintain their position, compels them to make party interest their sole care, and they are in no position to consider whether this personal and immediate interest is in harmony with the general and permanent good of the nation… (more…)

And the Biggest Winners, Among Economists?

January 9, 2010

Niall Ferguson on Dead Men Walking: Why 2009’s truly top thinkers are yesterday’s news:

There is nothing like a really big economic crisis to separate the Cassandras from the Panglosses, the horsemen of the apocalypse from the Kool-Aid-swigging optimists. No, the last year has shown that all is not for the best in the best of all possible worlds. On the contrary, we might be doomed. 

At such times, we do well to remember that most of today’s public intellectuals are mere dwarves, standing on the shoulders of giants. So, if they had e-mail in the hereafter, which of the great thinkers of the past would be entitled to send us a message with the subject line: “I told you so”? And which would prefer to remain offline?

It has, for example, been a bad year for… By contrast, it has been a good year for… A special mention is also due to… Joining…in embarrassed silence, you might think, is… It has been a bumper year, on the other hand, for… The marketplace of ideas has not been nearly so kind this year to…

The biggest intellectual losers of all, however, must be the pioneers of…

And the biggest winners, among economists at least? Step forward the “Austrians” — economists like Ludwig von Mises (1881-1973), who always saw credit-propelled asset bubbles as the biggest threat to the stability of capitalism.

The Austrian School as a Badge of Honor

January 9, 2010

Richard Ebeling writes to Robert Wenzel at

[The Austrian School] is a noble tradition in the history of economics that continues to have time relevancy and application to our current economic circumstances.

I have too much respect and appreciation for the intellectual courage and contributions of those great thinkers from Menger and Bohm-Bawerk to Mises, Hayek, Kirzner and Rothbard to turn my back on a set of ideas that has so profoundly influenced my understanding of the social world and economic order.

And why this name change? Because you feel uncomfortable with some of the “press” that Austrian economics has been received during the current economic crisis?

That would be like expecting Mises and Hayek not to identify themselves with the Austrian tradition any more because Hans Mayer –who was Friedrich von Wieser’s successor as a professor of economics at the University of Vienna– ended up being a public Nazi collaborator after the German takeover of Austria in March 1938.