Friday, 29 July 2016

Hillary: America's Moocher in Chief

Michael Hurd on America's Moocher in Chief - and on those who buy her schtick:

Supporting Hillary Clinton — a so obviously soulless, amoral and character-deprived hollow excuse of a person — is one of the ultimate ways to thumb your nose at reality. “If she can get away with it, so can I.” That’s what drove so many to Obama, but Hillary embodies this psychological disfigurement more obviously than Obama ever could. Put simply: If people weren’t paying attention to what Obama said and did, he could get away with a lot; with Hillary, you already know what she is the moment she opens her mouth. If you still don’t care, then on some level you’ve long since given up on any idea of virtue, whether in your own personal life or the body politic.

Friends of Bill and Hillary Clinton have learned the hard way, over the years, how you get thrown under the bus if you align yourselves with such an amoral couple. They’re at their worst when they’re at the peak of their power. Bill-and-Hillary’s third and fourth terms in office will be the culmination of a plot line worthy of a Netflix television series, and even less believable if — sadly — millions of American voters had not made it all too real.

If Hillary wins this election, you can expect her to turn on many of the same citizens and pressure groups who put her in there. How can we know this? Not only because of her history; but also because lying, looting and subduing the rights of citizens are not practical, sustainable actions. Hillary Clinton, like any power-luster throughout history, depends on the weakness and compliance of her victims. She’s a professional parasite, counting on people’s willingness to mooch off the public in order to feed her power. She is the ultimate moocher, running to be moocher-in-chief.

 

President Obama: “We Don't Look to Be Ruled”

 

A libertarian looks at Obama’s inspiring and much-reported convention speech.
Guest post by Jeffrey Tucker.

Here’s what fascinates me about political rhetoric: when an American politician really seeks to be as compelling as possible — to entice people into moral sympathy with a vision, to elicit trust from the voters, to touch the very core of our aspirations for life and politics — the language of liberty serves the cause best.

Tucker10It’s not the promises of an iron fist that speak to Americans, but rather the opportunities provided by freedom. It is not the power of politics they emphasise but the power of people on their own.

We’ve seen it often over the decades but rarely more poignantly than in President Obama’s speech at the Democratic National Convention. Here we have a president who has spent eight years constructing an apparatus of executive rule, pushing out the boundaries of government imposition as far as possible, in every area of life, most conspicuously in education, surveillance, foreign policy, gun rights, and health care.

And yet, when it comes time to make a case for his party as against the Republican Party, and to make the case for his chosen successor, he gives us these awesome and inspiring words:

We are not a fragile or frightful people. Our power doesn't come from some self-declared savior promising that he alone can restore order. We don't look to be ruled. Tucker11Our power comes from those immortal declarations first put to paper right here in Philadelphia all those years ago; We hold these truths to be self-evident, that all men are created equal; that together, We, the People, can form a more perfect union.
    That's who we are. That's our birthright — the capacity to shape our own destiny…. America has never been about what one person says he'll do for us. It's always been about what can be achieved by us, together, through the hard, slow, sometimes frustrating, but ultimately enduring work of self-government….
   
My grandparents explained that they didn't like show-offs. They didn't admire braggarts or bullies. They didn't respect mean-spiritedness, or folks who were always looking for shortcuts in life. Instead, they valued traits like honesty and hard work. Kindness and courtesy. Humility; responsibility; helping each other out….
Tucker12    That's why anyone who threatens our values, whether fascists or communists or jihadists or homegrown demagogues, will always fail in the end.
   
That's America. Those bonds of affection; that common creed. We don't fear the future; we shape it, embrace it, as one people, stronger together than we are on our own.

Exactly: we don’t look to be ruled. Our value as a people comes not from the top down but from within — from character, resilience, decency, all of which emanate from freedom itself.

Now, you can read that as an attack on Donald Trump, which it surely is. But what is the best way to achieve that? Where is Trump most vulnerable? President Obama found it: Trump aspires to be a strongman, and America is not about that. It’s a very effective critique, even if it emanates from the wrong source. For the Democrats to make such a critique is hypocrisy of the highest order.

Are we really supposed to pretend that the top-down imposition of Obamacare never happened? That Common Core didn’t come to dominate American education? That Obama played no role in the vast expansion of digital surveillance? That Obama’s (and Clinton’s) foreign policy did not extend the mindless war-making of his predecessors and did not unleash unholy hell all over the Middle East and Europe, setting off a catastrophic refugee crisis and spreading the terror threat throughout the world?

tucker13Yes, we are supposed to forget all that. And if we set that aside, there is a wonderful lesson to be learned in the newest iteration of Obama: we don’t look to be ruled. We look to be free of rule.

It has also been generally true that presidents give their best – and most liberty-minded – speeches in the twilight days of their power. Think of George Washington’s Farewell Address and his remark that “the great rule of conduct for us in regard to foreign nations is, in extending our commercial relations, to have with them as little political connection as possible.” Consider Eisenhower’s final warning that “we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” Or Reagan’s final speech, reiterating the vision of America as a “Shining City on a Hill,” and proclaiming: “Countries across the globe are turning to free markets and free speech and turning away from the ideologies of the past.”

tucker14We might ask ourselves: why do powerful people turn to liberty-oriented themes in the last days of their power? Perhaps it is because, in the course of their rule, each of these people gradually discover that ruling is not all it is cracked up to be.

They arrive in their offices with grand ambitions, the perception of a public mandate, and huge plan for making the world conform. What they face is a vast and implacable bureaucracy, a legacy of centuries of lawmaking, a professional class of managers and fixers at all levels of government, an army of special interests and lobbyists who are ready for war to the knife over the slightest changes in the operations of government, and a populace who just never seem to get with the program.

And there are only so many hours in a day. What presidents must probably discover is not how much power they have, but rather the opposite: how much power the apparatus of government has over them. Between all the meetings with dignitaries, the travels, the speeches and public appearances, the flattering of big shots that swirl in and around the White House at all hours, they are wholly dependent on their advisers, who are in turn dependent on theirs, who are in turn dependent on theirs.

tucker15And yet there are moments when presidents do seem to act with genuine authority extending from their own volition. Bush invaded Iraq, and look what that did to the world. Obama threw himself behind Obamacare, with the conviction that a vast array of experts had vetted the system and pronounced it good. The whole thing blew up and wrecked much of what was good in American healthcare. The legacy of his signature legislation is so unpopular that mention of it was reduced to just one oblique reference in his convention speech.

So, yes, the experience of governing can be truly humbling. I can’t imagine the trauma that this is going to cause Trump, whose only experience has been in bossing people around in the private sector in businesses he owns. No one in particular owns government, and the bureaucracy is never more implacable than when faced with someone who purports to be in charge of them.

If presidents were to be honest with themselves, they would have to admit that they were fools to believe that the government, much less the whole nation, could be ruled by their will alone. It’s preposterous to believe that 300 million people — each person with a mind, heart, will, soul all his or her own — can be ruled by anyone.

Someday I hope to read an honest autobiography of a former president:

I arrived flush with anticipation of changing the world. Crowds screamed my name and cried out for me to bring justice, fairness, equality, and happiness to the country. I discovered over time that I personally had very little power at all, and the little I did have was dangerous because the results were nothing like what I had anticipated. I pretended to be important. I kept up appearances. People doted on me constantly.
    And yet I learned, gradually, that I was just one man, and the system swallowed me completely. And that’s probably a good thing too because, in the end, I’m no different from anyone else, no more or less capable, no more or less knowing and brilliant. My main talent was in campaigning and here I excelled. As for governing, I wouldn’t wish it on anyone.

Or as Obama beautifully summed it up: “We don’t looked to be ruled.”


TuckerJeffrey Tucker is Director of Content for the Foundation for Economic Education and CLO of the startup Liberty.me. Author of five books, and many thousands of articles, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the WorldFollow on Twitter and Like on Facebook. Tweets by @jeffreyatucker.
This post first appeared at FEE.

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Wyoming Valley Schoolhouse, by Frank Lloyd Wright

 

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Frank Lloyd Wright designed Wyoming Valley School in 1957 for the children of Wyoming Valley, Wisconsin, three miles from his home at Taliesin.ARoomNEHiResA simple design, based on the Kindersymphonies project three decades before, it was intended to maximise light inside for the children while presenting nature outside unencumbered. It houses two large classrooms, an assembly area, bathrooms and a kitchen.

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Originally designed to use native limestone, the two-room schoolhouse was built with concrete block.WVS Photo

Built in 1957, the building was designed by Frank Lloyd Wright, who donated his design and 2 acres of land to the Wyoming School District in honor of his mother, Anna Lloyd-Jones Wright.  She had been a kindergarten teacher and encouraged his lifelong love of learning.
    The school opened in 1958 with 46 students in grades 1 through 8.  After consolidating with the River Valley School district the building was used by the district 4th graders until being closed in 1990.  The building then changed hands several times but mostly remained empty. In August of 2010 the school was given to the not-for-profit Wyoming Valley School, Inc., by Jeff Jacobsen, a local landowner and neighbour of the school.

It is now a cultural arts centre.

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[Pics by the Wyoming School Cultural Arts Center blog, Frank Lloyd Wright: Master Drawings, Save Wright and Patricia McKinney-Lins]

WVS1960s

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Thursday, 28 July 2016

Quote of the Day: Choosing in ‘The Year of the Low Bar’

 

“The [big] picture is that Clinton and Trump are two of the most flagrantly dishonest, corrupt, power-hungry, unprincipled cronyists ever to seek the Presidency. Thus, in 2016, the Year of the Low Bar, Gary Johnson does not have to be George Washington or even Ronald Reagan to earn my vote. He merely has to be not evil. And I am convinced he more than meets that test…
    “Of course, in this election, some see being a decent human being as a weakness…”
Mark Nitikman, in ‘My Morning with Gary Johnson

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Here’s how to do Auckland’s second harbour crossing

 

 

Simple.

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Unitary Plan: Good news, bad news

 

RMA-web

Since 1:30pm yesterday, when it was released on the council website, every single person in this great little city of ours who is anything to do with land or building or housing has been huddled over their phones, tablets and computers finding out what our most learned lords and masters might be about to allow us all to do on our land. [Notwithstanding that “the very idea of a single long term plan for a 16,100sq km, largely rural region containing a rapidly growing and diversifying urban mass is flawed.”]

I speak of course of the Auckland Unitary Plan.  Written by planners, debated by bureaucrats, shredded by NIMBYs, and argued about by councillors, the “Independent Hearings Panel” yesterday issued its decree on all those deliberations that everyone fully expects to be voted into law on August 19. [Read it all here, if you have days to wade through it. It will take you 5 days. *]

Most of the commentary since release is simply talking its book, so I’ve most mostly just ignored it. [Although I had to laugh at Radio New Zealand calling up two people in Grey Lynn as their “couple of Aucklanders” to talk to.]

Lets start from the beginning. Every rule in a Plan is telling you something you can't do. If you didn't want to do it, they wouldn't need a rule to stop you; so every single rule is an imposition on your property rights. That makes it a plan to hinder your plan. [Maybe time to re-read ‘Capitalists Have a Better Plan.’]

At the same time, every one of your neighbours has the same property rights as you. And they probably have the same or similar expectations of peaceful enjoyment on their property as you do on yours. So that provides the only moral justificatinon for their rules.

Cities grow organically, or try to, reflecting the individual choies folk make in their own context. Planners prefer the shoehorn, making museum-pieces of the parts of cities they favour, and insisting other parts be cooked only to their own recipe.

So in the absence of genuine common law protections of your legitimate rights in your land -- protecting you and your neighbours rights to light and air and support etc., all or any of which can be negotiated between each of you to your own mutual satisfaction (setting up a network of delightful concatenations that help to build an organic city) -- the council's plan is the only thing you have in law protecting you from a new fifteen-storey glue factory next door.

And that's written by planners, well-paid busybodies well-schooled in the idea that they know best. 

So how does their proposed Auckland Unitary Plan shape up in protecting legitimate property rights while limiting the usual impositions on what you can do?

These are just my first impressions

  • The plan generally allows you to do more on your land. Good news. On some land a lot more, on most land a little more—and mostly without taking your neighbour’s sun. So mostly good news.
  • But almost everything you want to do now on your land will require the expense, delay and massive uncertainty of a resource consent. Bad news. Very bad news. So more folk will sit pat, either waiting for a knock on the door from a developer  with more staff and resources than they have to bust through all the hoops, or just putting up with what they already have, wary of putting their head in the planners’ noose. And meanwhile, more planners everywhere will find employment, and delude themselves they’re productively employed -- and your rates on these newly-intensified sites will go up. (Anf if you vote the vile Vic Crone, go up savagely!)
  • The so-called Taniwha Tax has been axed [listen here to the wailing], removing the need on some sites to apply to up to a dozen iwi for a “Cultural Impact Assessment.” Good news. Very good news. This may be thrown out the front door only to make its way in via the back (note for example “that sites of value to mana whenua should be disregarded until the ‘evidential basis of their value has been assembled’”), but sanity at this stage seems to have prevailed. You can probably thank all those so noisily opposed for that. (But eternal vigilance , people. Eternal vigilance.)
  • The blanket prohibition on looking sideways on pre-1944 “heritage” property has gone. Good news on the face of it, allowing these to be used and re-used much more imaginatively. But Heritage Overlays and the like still remain in many parts of the city (as of course do the provisions of the Hysterical Places Act) so there are still serious barriers in place to redeveloping or upgrading so-called heritage property.
  • The rural-urban boundary – the planners’ ring-fence surrounding Auckland and protecting land-bankers’ risk-free profits, has not been smashed. Only moved. So imaginative hamlet development or the like out south or west is still subject to a blanket ban. And as even Labour’s Phil Twyford recognises, “just moving the boundary encourages speculation and land banking to shift to the new boundary.  Only scrapping the boundary will lead to land prices stabilising.” So in the short-term it will

THERE ARE TWO WAYS for mine to gauge what the plan represents:

  • have the planners allowed folk to live as and where they want? in other words, are they Pro-Choice?
  • has the plan made it safe again to be a spec builder? in other words, are they Pro-Affordable Housing?

1.On the first: on the battle over Up or Out, or sprawl versus intensification (as the dichotomy is falsely labelled) the planners and Independent Panel have still cast most weight in the scales for up. Sort of. So in the issue of being Pro-Choice – by which I mean, letting folk live how and where they demand to – we’ve only moved a baby step at best.

2. And on the second: since its birth this city was largely built by small spec builders who bought a spection on spec, building a fine house, and the selling it t a happy family at a small profit. For the longest time now and for all but the top end of the market, that model has mostly been broken. We need to fix spec building to make Auckland affordable again. This plan still does not do that. It has made it safe to be a bigger builder or developer, with the staff and resources to weather the process and all the delays of any development. But all the small spec builders are still largely shut out. You can guess what that means for affordable housing.

Now, with all the regime uncertainty of waiting for the arrival of this long-gestating and much misunderstood Plan, there will be literally thousands of folk who have been sitting on their hands unwilling to risk a cent until they have some certainty. The plan’s release will at least guarantee an explosion of projects in the immediate pipeline.  But with every new project still an uncertain one, with all the delays of a resource consent involved in every one, we may not have the full explosion that the bid for affordable housing really needs.

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* Hugh Pavletich makes the pithy point:

… "If I was to read this at normal speed, at about 200 words per minute, that would take me in excess of 55 days to read this Unitary Plan."
   
The report comes in several parts. It comprises two main overview chapters, published as separate PDFs, which tally 207 pages combined.
   
The 80 individual reports are each between 12 and 37 pages long.
   
Housing campaigner Hugh Pavletich​ is scornful of the sheer size of the Unitary Plan.
   
"If a plan is any more than a thumbnail thick, it is irrelevant because it is beyond people's ability to get their heads around it," he said.
   
But that's just what Auckland's councillors will have to do - they have until August 19 to decide if they accept the recommendations.
   
The above comment actually came from the late Owen McShane … God bless him.

The Circus Spectacle of American Party Conventions

 

Doug French covers the American political convention spectacles that even from this distance have captured, and appalled, so many NZers.

This year’s American political conventions are not the stuff of 1924, when 103 ballots and 16 days were needed to select a nominee. Summarising that spectacle at Madison Square Garden, H.L. Mencken wrote

For there is something about a national convention that makes it as fascinating as a revival or a hanging. It is vulgar, it is ugly, it is stupid, it is tedious, it is hard upon both the higher cerebral centers and the gluteus maximus, and yet it is somehow charming. One sits through long sessions wishing heartily that all the delegates and alternates were dead and in hell – and then suddenly there comes a show so gaudy and hilarious, so melodramatic and obscene, unimaginably exhilarating and preposterous that one lives a gorgeous year in an hour.

I too am charmed, watching the goings-on in Cleveland and Philadelphia safely from my couch. I did have to remind myself that the mobs on the convention floors were adults. Grown men and women waving signs adorned with idiotic hats and, in some cases, glasses, shouting “Lock her up,” or lustily booing Ted Cruz for being Ted Cruz or booing Hillary and Debra Wasserman Schultz because they feel the Bern.

The various networks worked gavel-to-gavel creating drama while the Republicans created fear. Speaker after speaker told the howling mob that a Clinton Presidency will mean we will all have our throats slit in the night. “Politics under democracy consists almost wholly of the discovery, chase and scotching of bugaboos,” wrote Mencken in his Notes on Democracy. “The statesman becomes, in the last analysis, a mere witchhunter, a glorified smeller and snooper, eternally chanting ‘Fe, Fi, Fo, Fum!’”

The Elephant Show

To appease the evangelicals, the Republicans offered plenty of fire and brimstone from the likes of Darrell Scott and Jerry Falwell Jr. However, it was a strong, quiet type, Ben Carson, who went off script to draw a bright line from Saul Alinsky to Lucifer to Hillary Clinton. It must take the intellect of a neurosurgeon to connect Carson’s conclusion put forth to shock the convention hordes: Saul dedicated his book Rules for Radicals to Lucifer and Hillary wrote her thesis on Alinsky, therefore, Hillary worships Lucifer.

To appease the evangelicals, the Republicans offered plenty of fire and brimstone. Dr. Carson was serious as he mixed his faith with his politics. But Mencken contended,

The fraud of democracy, is more amusing than any other – more amusing even, and by miles, than the fraud of religion. Go into your praying-chamber and give sober thought to any of the more characteristic democratic inventions: say, Law Enforcement … If you don’t come out paled and palsied by mirth then you will not laugh on the Last Day itself.

Never has a candidate had so many family members speak in prime time as Trump. [Perhaps he could find so few others to praise him? – Ed.] The family plan went off pretty well excepting poor Melania who ended up with some of Michelle Obama’s old words stuck in her teleprompter. Women I know think Donald Jr. is just dreamy and Ivanka was certainly easier to listen to (and look at) than her father.  But the Trump family convention paled in comparison to the star power mustered night after night by the Democrats

Rachel Maddow and the rest of the MSNBC convention crew were genuinely befuddled by billionaire Peter Thiel’s appearance on the big stage while the TV cameras whirled – after all, as Maddow pointed out, he’s no fan of democracy.  Supposedly, he’s a libertarian, but he didn’t admit to that. Instead the point he stressed was that, like a seventies Tom Robinson, he was proud to be gay.

FrenchIn a 2009 essay, Thiel wrote, "I no longer believe that freedom and democracy are compatible." So what is Thiel thinking, supporting Trump? Inc.com’s Jeff Bercovici has the theory that a Machiavellian Thiel believes Trump to be “a potential President so terrifying that a generation of Americans will come to fear the very idea of presidents – as well as the way that America elects them.”

If you believe that, then you’ll believe the Tinker Tailor Soldier Spy story that Putin’s posse hacked into the DNC’s email system and blew the whistle on head DNC mistress Debra Wasserman Shultz’s systematic election-rigging for Hillary. People who support this theory say that Putin and Trump are close (reportedly) because Trump’s campaign guru Paul Manafort did work for some Russian oligarchs. To complete the improbable turn of events, after the “Bernie or Bust” crowd booed Wasserman Schultz out of the convention, she landed a spot on Hillary’s team.

Prancing Ponies

In Philadelphia, cameras panned through the crowd capturing young women weeping as Bernie Sanders spoke. It was reminiscent of old Beatles and Elvis footage, except Bernie is a curmudgeonly 74 year old who spews a continuous stream of socialist nonsense instead of hit songs.

I love to watch the carnivals of buncombe, but only from a very safe distance.The Bernie crowd especially believes in the power of the majority to have free stuff. “Democracy is shot through with this delight in the incredible, this banal mysticism,” wrote Mencken. “One cannot discuss it without colliding with preposterous postulates, all of them cherished like authentic hairs from the whiskers of Moses himself.”

It was Mencken’s view that Democracy fails for a lack of intelligence. “Physically, they become men, and sprout beards, political delusions, and the desire to propagate their kind. But mentally they remain on the level of schoolboys.”

Yes, the convention floors looked to be full of schoolboys and schoolgirls, jackasses worshipping jackals (to paraphrase the Sage of Baltimore). And while Democracy is failed and foolish, Mencken admitted, “I enjoy democracy immensely.” Me, I love to watch the carnivals of buncombe, but only from a safe distance.

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Kindersymphonie Kindergarten, by Frank Lloyd Wright

 

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Unbuilt 1926 designs for the Oak Park Playground Association.

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Sheer delight!

[Pics from the Visions of Wright site]

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Tuesday, 26 July 2016

Our Monetary System Favours the Rich and Hurts the Poor

 

Anybody watching their savings erode while trying to get into the rapidly-inflating housing market know the scrum is screwed against them, and that price inflation is very far from zero.  Like it or not, one of the three main culprits is the fiat monetary system. “Getting richer at the expense of others through the use of the fiat monetary system, which represents a government monopoly and banking privileges, is unjust,” says Philipp Bagus in this guest post. “This system stays in place because people do not understand its detrimental and fatal consequences such as an unfair redistribution, business cycles, poverty, bigger government, moral decay, and so on. In order to un-do this system we must convince people of all this.”

He’s so convinced of that he just wrote a book: Blind Robbery!: How the Fed, Banks, and Government Steal Our Money, co-written with Andreas Marquart. See Karl-Friedrich Israel's full review on mises.org, who recently spoke with Dr. Bagus about the new book and how certain politically-influential groups benefit from our modern monetary system.

BagusBookMises Institute: In your new book, you contend that our economic system increases wealth inequality by favouring the wealthy. Can you briefly summarise what you mean by this?

Philipp Bagus: Always when new money is produced, there is a redistribution in favour of those who receive the new money and spend it at the old, still low prices and to the detriment of those who receive the new money later and see prices rise faster than their income. In our fiat money system [in which unbacked paper is legally enforced as money] new money can and is produced at almost zero cost. Those actors who are in position to receive the new money first benefit. Among them are the government and the financial system.
    The new money is usually introduced into the market in form of loans. Those, who receive a higher percentage of these loans profit at the cost of those who do not.
    The super-rich have an advantage in this respect. They have an easier access to the new money produced by the banking system in form of loans, because they can offer collateral. They can offer real estate as a collateral for new loans using these loans to buy even more real estate or stocks pushing up prices. A poor person has more difficulties to get a loan in normal times because he does not own assets. Only in dangerous bubble times will he get easy and cheap access to loans. Thus, someone like George Soros may easily give a call to his banker and get a million dollar loan in an instant to buy more assets. A poor or even middle-class person will not get such a million dollar loan so easily, rather they will observe how asset prices are being pushed up and they keep getting relatively poorer. Thus, our fiat monetary system is one often-neglected reason for an increasing wealth inequality.

MI: As we all know, if you’re not already wealthy, it’s difficult to build wealth even if you carefully save a lot of money. What is it about our current economic system that makes this so difficult?

PB: If you save in cash today, your savings will be eroded by price inflation. Asset prices have risen relatively more than income in the past. That means that it becomes ever more difficult to buy a standard house with a standard income. The monetary system drives people to indebt themselves early in life to buy a house. The house will tend to rise in value and the debt will be eroded by price inflation. Saving in cash for 10 or 20 years in order to buy a house is not the smartest way in our monetary system that implies continual and relatively strong increases in the money supply. Things would be very different and in some sense much easier in a pure gold standard.

MI: You have suggested that without the fiat monetary system, it would be more difficult for the wealthy to stay wealthy as they do under the current system. What do you mean by this?

BagusPB: Well, wealthy people have an easier access and a better connection to the banking system, where the new money is produced, simply because they are wealthy and have assets. Similar things apply to companies. Established and big companies that own real estate and other assets will have a relatively easier and cheaper access to new money than small newcomers. If you are wealthy and own parts of an established company with a good connection to financial markets and the banking system, you have an advantage vis-à-vis potential competitors that threaten your position due to the fiat money system. In our system in order to stay rich it has become more important to have a fast and easy access to new money, and it has become less important to be innovative and satisfy consumer wishes in better and cheaper ways. Incumbents are in a sense protected by the fiat monetary system. In a pure gold standard such an artificial protection would disappear.

MI: What would be some practical ways to start un-doing this system we have right now?

PB: This system stays in place because people do not understand its detrimental and fatal consequences such as an unfair redistribution, business cycles, poverty, bigger government, moral decay, and so on. In order to un-do this system we must convince people of all this. The problem here is that our monetary system and monetary theory is quite complex. One would have to explain it in an easy and attractive way so that everyone could understand the problem at hand. That is the reason why Andreas Marquart and I have written our new book that explains the problems of the system in a provocative and easily understandable way. So the most practical step to start un-doing the system would be to spread the message. Once we have succeeded and a critical mass shares our views on the fiat monetary system, it will fall apart on its own and will be taken over simultaneously by private alternatives.

MI: But even in a free market, won’t there be income inequality?

PB: Yes, you are right. We should distinguish between morally justified and unjustified inequality. When someone gets rich because he is productive and satisfies the wishes of people in a cheaper and better way than his competitors, we should applaud him. The resulting income inequality is justified. The problem starts if someone earns an income due to government intervention such as licenses, other regulations, or simply tax transfers. The resulting income inequality is unjustified. Getting richer at the expense of others through the use of the fiat monetary system, which represents a government monopoly and banking privileges, is unjust.


Philipp BagusPhilipp Bagus is an associate professor at Universidad Rey Juan Carlos. He is an associate scholar of the Mises Institute and was awarded the 2011 O.P. Alford III Prize in Libertarian Scholarship. He is the author of The Tragedy of the Euro and coauthor of Deep Freeze: Iceland's Economic Collapse. The Tragedy of the Euro has so far been translated and published in Greek, German, French, Slovak, Polish, Italian, Romanian, Finnish, Spanish, Portuguese, British English, Dutch, Brazilian Portuguese, Bulgarian, and Chinese. He is also co-author with Andreas Marquart of the German language book Warum andere auf Ihre Kosten immer reicher werden. Visit his website at PhilippBagus.com.
This post first appeared at the Mises Daily

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“I alone can solve.”

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Amy Peikoff does a line-by-line analysis of Trump’s sobering Convention speech that I had recommended to me, and I finally had the chance to listen.

Surprise, surprise, she finds it unworthy of a serious presidential candidate. Not to mention dangerous in that, rather than offering concrete proposals for any the changes he talks about (beyond, of course, building a damn wall), his go-to position on almost everything is to change the people – to good people, not the losers presently on the front lines -- to change the people without changing the systems, strategies or tactics that have caused all the problems he bewails.

His mantra is “I alone can solve.” Me and my un-named posse of “good people.” He is "your voice."

It’s the mantra of the political strong man, of a Mussolini – of a government of men, and not of laws. She quotes Tim Sandefur: “Even the worst presidents in the past at least genuflected at the altar of our constitutional structure. Trump promises to smash that altar.”

It's a long analysis, but worth it. (You can ignore the discussion at the end with caller "Ed." But you should probably check out the "facts" to which he thinks he's entitled.)

I epecially like her answer to the claim that not voting for the Trumpanzee is a vote for Killary. She invokes the trolley problem. Appropriately.

Listen in here:
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PS: If you want a shorter record of the Trump Convention instead of the longer analysis, then take a deep breath:
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Monday, 25 July 2016

Vic Crone: “Talk is cheap”

 

This morning my inbox received an email from Victoria Crone. Yours may have too. “Talk is cheap,” she said. “We need a Mayor with fresh ideas who can actually deliver real results. Check out my 10 point plan for housing.”

So, thirsty for fresh ideas, I did.

They weren’t.

There were a lot of platitudes though.

Her first idea, after the hand-wringing boiler plate – her point number one? She wants to host a “housing summit.” A talk-fest. A whole festival of cheap talk. You can already feel all the good vibrations.

But that’s not all. She would also “put communities back at the heart of neighbourhood development,” whatever that means. She woud “release,” land faster than anyone else, “partner” with cronies, and “get tough” on land banking by slapping a huge rates bill on anyone not building what she wants. Not nice, and hardly either fresh or effective.

Not fresh either are ideas to speed up consenting, infrastructure, online consenting, or “aligning Unitary Plan intensification around key transport modes” -- all either being done (allegedly) or under way – or a nonsensical plan mentioned occasionally by the economically illiterate to force developers to build “a mix” of affordable houses in new developments.

So what is new and fresh from the Crone? A report card. A Mayor Crone led council would “provide user-friendly quarterly report cards on progress.”

And that’s it. Her ten fresh ideas. As a perceptive commenter said when she pasted these on Facebook, “It seems these 10 points basically deliver more government: more talk, more bureaucrats, more penalties.”

Talk is cheap, Ms Crone? Well, yes it is.. And bullying bureaucrats are ten-a-plenty.

Auckland doesn’t need another.

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Question for the Day: Do low-wage immigrants make us all poorer?

 

“No,” says John Stuart Mill:

The exportation of labour and capital from [one country to another], from a place where their productive power is less to a place where it is greater, increases by so much the aggregate produce of the labour and capital of the world.  It adds to the joint wealth of the [both countries].
~ Principles of Political Economy, V.xi s50

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Friday, 22 July 2016

Mises: Liberty & Property

 

In some ways, says Jeffrey Tucker, “I think this might be the single most inspiring and informative – and profoundly true – essay that Ludwig Von Mises ever wrote. I've read it a hundred times and each time I find more in it. Some examples are dated but not by much. It speaks a profound truth.”


Liberty and Property
by Ludwig Von Mises

This paper was originally delivered as a lecture at Princeton University, October 1958, at the 9th Meeting of the Mont Pelerin Society.

I

AT THE END of the eighteenth century there prevailed two notions of liberty, each of them very different from what we have in mind today referring to liberty and freedom.

The first of these conceptions was purely academic and without any application to the conduct of political affairs. It was an idea derived from the books of the ancient authors, the study of which was then the sum and substance of higher education. In the eyes of these Greek and Roman writers, freedom was not something that had to be granted to all men. It was a privilege of the minority, to be withheld from the majority. What the Greeks called democracy was, in the light of present-day terminology, not what Lincoln called government by the people, but oligarchy, the sovereignty of full-right citizens in a community in which the masses were meteques or slaves. Even this rather limited freedom after the fourth century before Christ was not dealt with by the philosophers, historians, and orators as a practical constitutional institution. As they saw it, it was a feature of the past irretrievably lost. They bemoaned the passing of this golden age, but they did not know any method of returning to it.

Mises1The second notion of liberty was no less oligarchic, although it was not inspired by any literary reminiscences. It was the ambition of the landed aristocracy, and sometimes also of urban patricians, to preserve their privileges against the rising power of royal absolutism. In most parts of continental Europe, the princes remained victorious in these conflicts. Only in england and in the Netherlands did the gentry and the urban patricians succeed in defeating the dynasties. But what they won was not freedom for all, but only freedom for an elite, for a minority of the people.

We must not condemn as hypocrites the men who in those ages praised liberty, while they preserved the legal disabilities of the many, even serfdom and slavery. They were faced with a problem which they did not know how to solve satisfactorily. The traditional system of production was too narrow for a continually rising population. The number of people for whom there was, in a full sense of the term, no room left by the pre-capitalistic methods of agriculture and artisanship was increasing. These supernumeraries were starving paupers. They were a menace to the preservation of the existing order of society and, for a long time, nobody could think of another order, a state of affairs, that would feed all of these poor wretches. there could not be any question of granting them full civil rights, still less of giving them a share of the conduct of affairs of state. The only expedient the rulers knew was to keep them quiet by resorting to force.

II

THE PRE-CAPITALISTIC system of production was restrictive. Its historical basis was military conquest. The victorious kings had given the land to their paladins. These aristocrats were lords in the literal meaning of the word, as they did not depend on the patronage of consumers buying or abstaining from buying on a market. On the other hand, they themselves were the main customers of the processing industries which, under the guild system, were organised on a corporative scheme. This scheme was opposed to innovation. It forbade deviation from the traditional methods of production. The number of people for whom there were jobs even in agriculture or in the arts and crafts was limited. Under these conditions, many a man, to use the words of Malthus, had to discover that “at nature’s mighty feast there is no vacant cover for him” and that “she tells him to be gone.”1 But some of these outcasts nevertheless managed to survive, begot children, and made the number of destitute grow hopelessly more and more.

Mises2But then came capitalism. It is customary to see the radical innovations that capitalism brought about in the substitution of the mechanical factory for the more primitive and less efficient methods of the artisans’ shops. This is a rather superficial view. The characteristic feature of capitalism that distinguishes it from pre-capitalist methods of production was its new principle of marketing. Capitalism is not simply mass production, but mass production to satisfy the needs of the masses. The arts and crafts of the good old days had catered almost exclusively to the wants of the well-to-do. But the factories produced cheap goods for the many. All the early factories turned out was designed to serve the masses, the same strata that worked in the factories. They served them either by supplying them directly or indirectly by exporting and thus providing for them foreign food and raw materials. This principle of marketing was the signature of early capitalism as it is of present-day capitalism. The employees themselves are the customers consuming the much greater part of all goods produced. They are the sovereign customers who are “always right.” Their buying or abstention from buying determines what has to be produced, in what quantity, and of what quality. In buying what suits them best they make some enterprises profit and expand and make other enterprises lose money and shrink.

Thereby they are continually shifting control of the factors of production into the hands of those businessmen who are most successful in filling their wants. Under capitalism private property of the factors of production is a social function. The entrepreneurs, capitalists, and land owners are mandataries, as it were, of the consumers, and their mandate is revocable. In order to be rich, it is not sufficient to have once saved and accumulated capital. It is necessary to invest it again and again in those lines in which it best fills the wants of the consumers. The market process is a daily repeated plebiscite, and it ejects inevitably from the ranks of profitable people those who do not employ their property according to the orders given by the public. But business, the target of fanatical hatred on the part of all contemporary governments and self-styled intellectuals, acquires and preserves bigness only because it works for the masses. The plants that cater to the luxuries of the few never attain big size. The shortcoming of nineteenth-century historians and politicians was that they failed to realise that the workers were the main consumers of the products of industry. In their view, the wage earner was a man toiling for the sole benefit of a parasitic leisure class. They laboured under the delusion that the factories had impaired the lot of the manual workers. If they had paid any attention to statistics they would easily have discovered the fallaciousness of their opinion. Infant mortality dropped, the average length of life was prolonged, the population multiplied, and the average common man enjoyed amenities of which even the well-to-do of earlier ages did not dream.

Mises3However this unprecedented enrichment of the masses were merely a by-product of the Industrial Revolution. Its main achievement was the transfer of economic supremacy from the owners of land to the totality of the population. The common man was no longer a drudge who had to be satisfied with the crumbs that fell from the tables of the rich. The three pariah castes which were characteristic of the pre-capitalistic ages—the slaves, the serfs, and those people whom patristic and scholastic authors as well as British legislation from the sixteenth to the nineteenth centuries referred to as the poor—disappeared. Their scions became, in this new setting of business, not only free workers, but also customers. This radical change was reflected in the emphasis laid by business on markets. What business needs first of all is markets and again markets. This was the watch-word of capitalistic enterprise. Markets, that means patrons, buyers, consumers. There is under capitalism one way to wealth: to serve the consumers better and cheaper than other people do.

Within the shop and factory the owner—or in the corporations, the representative of the shareholders, the president—is the boss. But this mastership is merely apparent and conditional. It is subject to the supremacy of the consumers. The consumer is king, is the real boss, and the manufacturer is done for if he does not outstrip his competitors in best serving consumers.

It was this great economic transformation that changed the face of the world. It very soon transferred political power from the hands of a privileged minority into the hands of the people. Adult franchise followed in the wake of industrial enfranchisement. The common man, to whom the market process had given the power to choose the entrepreneur and capitalists, acquired the analogous power in the field of government. He became a voter.

Mises4It has been observed by eminent economists, I think first by the late Frank A. Fetter, that the market is a democracy in which every penny gives a right to vote. It would be more correct to say that representative government by the people is an attempt to arrange constitutional affairs according to the model of the market, but this design can never be fully achieved. In the political field it is always the will of the majority that prevails, and the minorities must yield to it. It serves also minorities, provided they are not so insignificant in number as to become negligible. The garment industry produces clothes not only for normal people, but also for the stout, and the publishing trade publishes not only westerns and detective stories for the crowd, but also books for discriminating readers.

There is a second important difference. In the political sphere, there is no means for an individual or a small group of individuals to disobey the will of the majority. But in the intellectual field private property makes rebellion possible. The rebel has to pay a price for his independence; there are in this universe no prizes that can be won without sacrifices. But if a man is willing to pay the price, he is free to deviate from the ruling orthodoxy or neo-orthodoxy.

What would conditions have been in the socialist commonwealth for heretics like Kierkegaard, Schopenhauer, Veblen, or Freud? For Monet, Courbet, Walt Whitman, Rilke, or Kafka? In all ages, pioneers of new ways of thinking and acting could work only because private property made contempt of the majority’s ways possible. Only a few of these separatists were themselves economically independent enough to defy the government into the opinions of the majority. But they found in the climate of the free economy among the public people prepared to aid and support them. What would Marx have done without his patron, the manufacturer Friedrich Engels?

______________

1 Thomas R. Malthus, An Essay on the Principle of Population, 2nd ed. (London, 1803), p. 531.

III

WHAT VITIATES entirely the socialists’ economic critique of capitalism is their failure to grasp the sovereignty of the consumers in the market economy. They see only hierarchical organisation of the various enterprises and plans, and are at a loss to realise that the profit system forces business to serve the consumers. In their dealings with their employers, the unions proceed as if only malice and greed were to prevent what they call management from paying higher wage rates. Their shortsightedness does not see anything beyond the doors of the factory. They and their henchmen talk about the concentration of economic power, and do not realize that economic power is ultimately vested in the hands of the buying public of which the employees themselves form the immense majority. Their inability to comprehend things as they are is reflected in such inappropriate metaphors as industrial kingdom and dukedoms. They are too dull to see the difference between a sovereign king or duke who could be dispossessed only by a more powerful conqueror and a “chocolate king” who forfeits his “kingdom” as soon as the customers prefer to patronise another supplier.

Mises5This distortion is at the bottom of all socialist plans. If any of the socialist chiefs had tried to earn his living by selling hot dogs, he would have learned something about the sovereignty of the customers. But they were professional revolutionaries and their only job was to kindle civil war. Lenin’s ideal was to build a nation’s production effort according to the model of the post office, an outfit that does not depend on the consumers, because its deficits are covered by compulsory collection of taxes. “The whole of society,” he said, was to “become one office and one factory.”2 He did not see that the very character of the office and the factory is entirely changed when it is alone in the world and no longer grants to people the opportunity to choose among the products and services of various enterprises. Because his blindness made it impossible for him to see the role the market and the consumers play under capitalism, he could not see the difference between freedom and slavery. Because in his eyes the workers were only workers and not also customers, he believed they were already slaves under capitalism, and that one did not change their status when nationalizing all plants and shops. Socialism substitutes the sovereignty of a dictator, or committee of dictators, for the sovereignty of the consumers.

Along with the economic sovereignty of the citizens disappears also their political sovereignty. To the unique production plan that annuls any planning on the part of the consumers corresponds in the constitutional sphere the one-party principle that deprives the citizens of any opportunity to plan the course of public affairs. Freedom is indivisible. He who has not the faculty to choose among various brands of canned food or soap, is also deprived of the power to choose between various political parties and programs and to elect the officeholders. He is no longer a man; he becomes a pawn in the hands of the supreme social engineer. Even his freedom to rear progeny will be taken away by eugenics.

Of course, the socialist leaders occasionally assure us that dictatorial tyranny is to last only for the period of transition from capitalism and representative government to the socialist millennium in which everybody’s wants and wishes will be fully satisfied.3 Once the socialist regime is “sufficiently secure to risk criticism,” Miss Joan Robinson, the eminent representative of the British neo-Cambridge school, is kind enough to promise us, “even independent philharmonic societies” will be allowed to exist.4 Thus the liquidation of all dissenters is the condition that will bring us what the communists call freedom. From this point of view we may also understand what another distinguished Englishman, Mr. J.G. Crowther, had in mind when he praised inquisition as “beneficial to science when it protects a rising class.”5 The meaning of all this is clear. When all people meekly bow to a dictator, there will no longer be any dissenters left for liquidation. Caligula, Torquemada, Robespierre would have agreed with this solution.

Mises6The socialists have engineered a semantic revolution in converting the meaning of terms into their opposite. In the vocabulary of their “Newspeak,” as George Orwell called it, there is a term “the one-party principle.” Now, etymologically, party is derived from the noun part. The brotherless part is no longer different from its antonym, the whole; it is identical with it. A brotherless party is not a party, and the one-party principle is in fact a no-party principle. It is a suppression of any kind of opposition. Freedom implies the right to choose between assent and dissent. But in Newspeak it means the duty to assent unconditionally and strict interdiction of dissent. This reversal of the traditional connotation of all words of the political terminology is not merely a peculiarity of the language of the Russian Communists and their Fascist and Nazi disciples. The social order that in abolishing private property deprives the consumers of their autonomy and independence, and thereby subjects every man to the arbitrary discretion of the central planning board, could not win the support of the masses if they were not to camouflage its main character. The socialists would have never duped the voters if they had openly told them that their ultimate end is to cast them into bondage. For exoteric use they were forced to pay lip-service to the traditional appreciation of liberty.

_________________

2 V.I. Lenin, State and Revolution (New York: International Publishers, s.d.) p. 84.
3 Karl Marx, Sur Kritik des Sozialdemoskratischen Programms von Gotha, ed. Kreibich (Reichenberg, 1920), p. 23.
4 Joan Robinson, Private Enterprise and Public Control (published for the Association for Education in Citzenship by the English Universities Press, Ltd., s.d.), pp. 13–14.
5 J.G. Crowther, Social Relations of Science (London, 1941), p. 333.

IV

IT WAS DIFFERENT in the esoteric discussions among the inner circles of the great conspiracy. There the initiated did not dissemble their intentions concerning liberty. Liberty was, in their opinion, certainly a good feature in the past in the frame of bourgeois society because it provided them with the opportunity to embark on their schemes. But once socialism has triumphed, there is no longer any need for free thought and autonomous action on the part of individuals. Any further change can only be a deviation from the perfect state that mankind has attained in reaching the bliss of socialism. Under such conditions, it would be simply lunacy to tolerate dissent.

Mises7Liberty, says the Bolshevist, is a bourgeois prejudice. The common man does not have any ideas of his own, he does not write books, does not hatch heresies, and does not invent new methods of production. He just wants to enjoy life. He has no use for the class interests of the intellectuals who make a living as professional dissenters and innovators.

This is certainly the most arrogant disdain of the plain citizen ever devised. There is no need to argue this point. For the question is not whether or not the common man can himself take advantage of the liberty to think, to speak, and to write books. The question is whether or not the sluggish routinist profits from the freedom granted to those who eclipse him in intelligence and will power.

The common man may look with indifference and even contempt upon the dealings of better people. But he is delighted to enjoy all the benefits which the endeavours of the innovators put at his disposal. He has no comprehension of what in his eyes is merely inane hair-splitting. But as soon as these thoughts and theories are utilized by enterprising businessmen for satisfying some of his latent wishes, he hurries to acquire the new products. The common man is without doubt the main beneficiary of all the accomplishments of modern science and technology.

It is true, a man of average intellectual abilities has no chance to rise to the rank of a captain of industry. But the sovereignty that the market assigns to him in economic affairs stimulates technologists and promoters to convert to his use all the achievements of scientific research. Only people whose intellectual horizon does not extend beyond the internal organisation of the factory and who do not realise what makes the businessmen run, fail to notice this fact.

Mises8The admirers of the Soviet system tell us again and again that freedom is not the supreme good. It is “not worth having,” if it implies poverty. To sacrifice it in order to attain wealth for the masses, is in their eyes fully justified. But for a few unruly individualists who cannot adjust themselves to the ways of regular fellows, all people in Russia are perfectly happy. We may leave it undecided whether this happiness was also shared by the millions of Ukrainian peasants who died from starvation, by the inmates of the forced labour camps, and by the Marxian leaders who were purged. But we cannot pass over the fact that the standard of living was incomparably higher in the free countries of the West than in the communist East. In giving away liberty as the price to be paid for the acquisition of prosperity, the Russians made a poor bargain. [In Soviet Russial] they now have neither the one nor the other.

V

ROMANTIC philosophy laboured under the illusion that in the early ages of history the individual was free and that the course of historical evolution deprived him of his primordial liberty. As Jean Jacques Rousseau saw it, nature accorded men freedom and society enslaved him. In fact, primeval man was at the mercy of every fellow who was stronger and therefore could snatch away from him the scarce means of subsistence. There is in nature nothing to which the name of liberty could be given. The concept of freedom always refers to social relations between men. True, society cannot realise the illusory concept of the individual’s absolute independence. Within society everyone depends on what other people are prepared to contribute to his well-being in return for his own contribution to their well-being. Society is essentially the mutual exchange of services. As far as individuals have the opportunity to choose, they are free; if they are forced by violence or threat of violence to surrender to the terms of an exchange, no matter how they feel about it, they lack freedom. This slave is unfree precisely because the master assigns him his tasks and determines what he has to receive if he fulfills it.

As regards the social apparatus of repression and coercion, the government, there cannot be any question of freedom. Government is essentially the negation of liberty. It is the recourse to violence or threat of violence in order to make all people obey the orders of the government, whether they like it or not. As far as the government’s jurisdiction extends, there is coercion, not freedom. Government is a necessary institution, the means to make the social system of cooperation work smoothly without being disturbed by violent acts on the part of gangsters whether of domestic or of foreign origin. Government is not, as some people like to say, a necessary evil; it is not an evil, but a means, the only means available to make peaceful human coexistence possible. But it is the opposite of liberty. It is beating, imprisoning, hanging. Whatever a government does it is ultimately supported by the actions of armed constables. If the government operates a school or a hospital, the funds required are collected by taxes, i.e., by payments exacted from the citizens.

Mises9If we take into account the fact that, as human nature is, there can neither be civilisation nor peace without the functioning of the government apparatus of violent action, we may call government the most beneficial human institution. But the fact remains that government is repression not freedom. Freedom is to be found only in the sphere in which government does not interfere. Liberty is always freedom from the government. It is the restriction of the government’s interference. It prevails only in the fields in which the citizens have the opportunity to choose the way in which they want to proceed. Civil rights are the statutes that precisely circumscribe the sphere in which the men conducting the affairs of state are permitted to restrict the individuals’ freedom to act.

The ultimate end that men aim at by establishing government is to make possible the operation of a definite system of social cooperation under the principle of the division of labor. If the social system which people want to have is socialism (communism, planning) there is no sphere of freedom left. All citizens are in every regard subject to orders of the government. The state is a total state; the regime is totalitarian. The government alone plans and forces everybody to behave according with this unique plan. In the market economy the individuals are free to choose the way in which they want to integrate themselves into the frame of social cooperation. As far as the sphere of market exchange extends, there is spontaneous action on the part of individuals. Under this system that is called laissez-faire, and which Ferdinand Lassalle dubbed as the night-watchman state, there is freedom because there is a field in which individuals are free to plan for themselves.

The socialists must admit there cannot be any freedom under a socialist system. But they try to obliterate the difference between the servile state and economic freedom by denying that there is any freedom in the mutual exchange of commodities and services on the market. Every market exchange is, in the words of a school of pro-socialist lawyers, “a coercion over other people’s liberty.” There is, in their eyes, no difference worth mentioning between a man’s paying a tax or a fine imposed by a magistrate, or his buying a newspaper or admission to a movie. In each of these cases the man is subject to governing power. He’s not free, for, as professor Hale says, a man’s freedom means “the absence of any obstacle to his use of material goods.”6 This means: I am not free, because a woman who has knitted a sweater, perhaps as a birthday present for her husband, puts an obstacle to my using it. I myself am restricting all other people’s freedom because I object to their using my toothbrush. In doing this I am, according to this doctrine, exercising private governing power, which is analogous to public government power, the powers that the government exercises in imprisoning a man in Sing Sing.

Mises10Those expounding this amazing doctrine consistently conclude that liberty is nowhere to be found. They assert that what they call economic pressures do not essentially differ from the pressures the masters practice with regard to their slaves. They reject what they call private governmental power, but they don’t object to the restriction of liberty by public government power. They want to concentrate all what they call restrictions of liberty in the hands of the government. They attack the institution of private property and the laws that, as they say, stand “ready to enforce property rights—that is, to deny liberty to anyone to act in a way which violates them.”7

A generation ago all housewives prepared soup by proceeding in accordance with the recipes that they had got from their mothers or from a cookbook. Today many housewives prefer to buy a canned soup, to warm it and to serve it to their family. But, say our learned doctors, the canning corporation is in a position to restrict the housewife’s freedom because, in asking a price for the tin can, it puts an obstacle to her use of it. People who did not enjoy the privilege of being tutored by these eminent teachers, would say that the canned product was turned out by the cannery, and that the corporation in producing it removed the greatest obstacle to a consumer’s getting and using a can, viz., its nonexistence. The mere essence of a product cannot gratify anybody without its existence. But they are wrong, say the doctors. The corporation dominates the housewife, it destroys by its excessive concentrated power over her individual freedom, and it is the duty of the government to prevent such a gross offense. Corporations, say, under the auspices of the Ford Foundation, another of this group, Professor Berle, must be subjected to the control of the government.8

Why does our housewife buy the canned product rather than cling to the methods of her mother and grandmother? No doubt because she thinks this way of acting is more advantageous for her than the traditional custom. Nobody forced her. There were people—they are called jobbers, promoters, capitalists, speculators, stock exchange gamblers—who had the idea of satisfying a latent wish of millions of housewives by investing in the cannery industry. And there are other equally selfish capitalists who, in many hundreds of other corporations, provide consumers with many hundreds of other things. The better a corporation serves the public, the more customers it gets, the bigger it grows. Go into the home of the average American family and you will see for whom the wheels of the machines are turning.

Mises11In a free country nobody is prevented from acquiring riches by serving the consumers better than they are served already. What he needs is only brains and hard work. “Modern civilisation, nearly all civilisation,” said Edwin Cannan, the last in a long line of eminent British economists, “is based on the principle of making things pleasant for those who please the market, and unpleasant for those who fail to do so.”9 All this talk about the concentration of economic power is vain. The bigger a corporation is, the more people it serves, the more does it depend on pleasing the consumers, the many, the masses. Economic power, in the market economy, is in the hands of the consumers.

Capitalistic business is not perseverance in the once attained state of production. It is rather ceaseless innovation, daily repeated attempts to improve the provision of the consumers by new, better and cheaper products. Any actual state of production activities is merely transitory. There prevails incessantly the tendency to supplant what is already achieved by something that serves the consumers better. There is consequently under capitalism a continuous circulation of elites. What characterises the men whom one calls the captains of industry is the ability to contribute new ideas and to put them to work. However big a corporation must be, it is doomed as soon as it does not succeed in adjusting itself daily anew to the best possible methods of serving the consumers.

But the politicians and other would-be reformers see only the structure of industry as its exists today. They think that they are clever enough to snatch from business control of the plants as they are today, and to manage them by sticking to already established routines. While the ambitious newcomer, who will be the tycoon of tomorrow, is already preparing plans for things unheard of before, all they have in mind is to conduct affairs along tracks already beaten. There is no record of an industrial innovation contrived and put into practice by bureaucrats. If one does not want to plunge into stagnation, a free hand must be left to those today-unknown men who have the ingenuity to lead mankind forward on the way to more and more satisfactory conditions. This is the main problem of a nation’s economic organisation.

Mises 12Private property of the material factors of production is not a restriction of the freedom of all other people to choose what suits them best. It is, on the contrary, the means that assigns to the common man, in his capacity as a buyer, supremacy in all economic affairs. It is the means to stimulate a nation’s most enterprising men to exert themselves to the best of their abilities in the service of all of the people.

________________

6 Robert L. Hale, Freedom Through Law, Public Control of Private Governing Power (New York: Columbia University, 1952), pp. 4 ff.
7 Ibid., p. 5.
8 A.A. Berle, Jr., Economic Power and the Free Society, a Preliminary Discussion of the Corporation (New York: The Fund for the Republic, 1954).
9 Edwin Cannan, An Economist’s Protest (London, 1928), pp. VI ff.

VI

HOWEVER, one does not exhaustively describe the sweeping changes that capitalism brought about in the conditions of the common man if one merely deals with the supremacy he enjoys on the market as a consumer and in the affairs of state as a voter and with the unprecedented improvement of his standard of living. No less important is the fact that capitalism has made it possible for him to save, to accumulate capital and to invest it. The gulf that in the pre-capitalistic status and caste society separated the owners of property from the penniless poor has been narrowed down. In older ages the journeyman had such a low pay that he could hardly lay by something and, if he nevertheless did so, he could only keep his savings by hoarding and hiding a few coins.

Mises13Under capitalism his competence makes saving possible, and there are institutions that enable him to invest his funds in business. A not inconsiderable amount of the capital employed in American industries is the counterpart of the savings of employees. In acquiring savings deposits, insurance policies, bonds and also common stock, wage earners and salaried people are themselves earning interest and dividends and thereby, in the terminology of Marxism, are exploiters. The common man is directly interested in the flowering of business not only as a consumer and as an employee, but also as an investor. There prevails a tendency to efface to some extent the once sharp difference between those who own factors of production and those who do not. But, of course, this trend can only develop where the market economy is not sabotaged by allegedly social policies. The welfare state with its methods of easy money, credit expansion and undisguised inflation continually takes bites out of all claims payable in units of the nation’s legal tender.

The self-styled champions of the common man are still guided by the obsolete idea that a policy that favours the debtors at the expense of the creditors is very beneficial to the majority of the people. Their inability to comprehend the essential characteristics of the market economy manifests itself also in their failure to see the obvious fact that those whom they feign to aid are creditors in their capacity as savers, policy holders, and owners of bonds.

VII

THE DISTINCTIVE principle of Western social philosophy is individualism. It aims at the creation of a sphere in which the individual is free to think, to choose, and to act without being restrained by the interference of the social apparatus of coercion and oppression, the State. All the spiritual and material achievements of Western civilisation were the result of the operation of this idea of liberty.

Mises14This doctrine and the policies of individualism and of capitalism, its application to economic matters, do not need any apologists or propagandists. The achievements speak for themselves.

The case for capitalism and private property rests, apart from other considerations, also upon the incomparable efficiency of its productive effort. It is this efficiency that makes it possible for capitalistic business to support a rapidly increasing population at a continually improving standard of living. The resulting progressive prosperity of the masses creates a social environment in which the exceptionally gifted individuals are free to give to their fellow-citizens all they are able to give. The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture.

It is a gratuitous pastime to belittle the material achievements of capitalism by observing that there are things that are more essential for mankind than bigger and speedier motorcars, and homes equipped with central heating, air conditioning, refrigerators, washing machines, and television sets. There certainly are such higher and nobler pursuits. But they are higher and nobler precisely because they cannot be aspired to by any external effort, but require the individual’s personal determination and exertion. Those levelling this reproach against capitalism display a rather crude and materialistic view in assuming that moral and spiritual culture could be built either by the government or by the organization of production activities. All that these external factors can achieve in this regard is to bring about an environment and a competence which offers the individuals the opportunity to work at their own personal perfection and edification.

Mises15It is not the fault of capitalism that the masses prefer a boxing match to a performance of Sophocles’ Antigone, jazz music to Beethoven symphonies, and comics to poetry. But it is certain that while pre-capitalistic conditions as they still prevail in the much greater part of the world makes these good things accessible only to a small minority of people,capitalism gives to the many a favourable chance of striving after them.

From whatever angle one may look at capitalism there is no reason to lament the passing of the allegedly good old days. Still less is it justified to long for the totalitarian utopias, whether of the Nazi or of the Soviet type.

We are inaugurating tonight the ninth meeting of the Mont Pelerin Society. It is fitting to remember on this occasion that meetings of this kind in which opinions opposed to those of the majority of our contemporaries and to those of their governments are advanced and are possible only in the climate of liberty and freedom that is the most precious mark of Western civilisation. Let us hope that this right to dissent will never disappear.


Ludwig von Mises

Ludwig von Mises (1881-1973) taught in Vienna and New York and served as a close adviser to the Foundation for Economic Education (FEE), where this piece was first published.
He is considered the leading theorist of the Austrian School of the 20th century.
Ayn Rand once suggested the best course for an intelligent student would be to study Aristotle in philosophy, von Mises in economics, Montessori in education,and Victor Hugo in literature – “If student minorities,” she said, “have succeeded in demanding that they be given courses on such subjects as Zen Buddhism, guerrilla warfare, Swahili, and astrology, then an intellectual student minority can succeed in demanding courses on [these giants]. At the very least, such courses would save the students' mind; potentially, they would save the culture.”

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