Power & Market
Gary North was My Mentor: A Tribute
Every self-respecting writer should have a mentor, a character to refer to, a beacon in the night to turn to in times of difficulty or uncertainty. That full stop represents a safe haven from the storm of commas and other uncertain interludes he must battle every day. The basis thanks to which that same writer is able to bear the weight of the situation that torments him/her. That figure, although in most cases is someone with whom you do not have many contacts, embodies a totem, a support structure on which you develop your skills and ameliorate yourself.
Writers are strange, you might think, and you would have every reason to say it aloud: people who indulge in a river of reflections and mental flights, who write about the lives of others, who give a body to the immateriality of opinions or emotions, yet they need immaterial support. Someone to dedicate their works to, someone to thank for their successes. Very often we thank family and relatives, the legacy of materiality that makes us so empathetic; but in reality, we know that our totem is always there, watching over our words, our ideas and our career.
When this totem passes away, the writer loses a piece of himself. In this world we shouldn't be less, we should be more. Each additional brain would represent a better solution to the problems that arise every day. When death steals life from the physical world, a sense of general pain subsides like thick winter fog after a massive thunderstorm. But the writer makes emotion his weapon: it is the ink in which he dips his pen. And when he is the protagonist of an adverse event, his emotions are elevated to the nth degree; when he learns of a mourning that ink falls on him and like an indelible stain remains there as long as he has breath. And if that mourning concerns a totem, a mentor, a guide, then that stain extends to the depths of his soul.
Torn, torn to shreds. He hands over his suffering to a last poem, an epitaph dedicated to a person who was able to take an immature professional by the hand and accompany him along a path of progressive maturation. The keyboard is blurry and the keys are heavy to press, and it is a struggle to put ideas together because there is only one that silences all the others: "My mentor, my teacher is dead".
At the age of 80, Gary North passed away.
When I started my blog ten years ago, I was looking for an identity. At first it was just a desk where scattered papers fluttered around every day. In that mess of ideas, I found my inspiration in a man who made simplicity and immediacy his strengths. With a single text he was able to communicate in a clear and crystalline way concepts that until then the common imagination had drawn as unattainable by an audience "not properly trained". I immediately fell in love with his writing, striking myself as the legendary mallet of the Scandinavian gods. The magnetism with which he captured the attention was unique, no other writer has been able to create works like his: he spoke to you in an elementary language, yet what you were learning were a much more elaborate analysis than the appearance conveyed. At that moment I knew I had to take his hand if I wanted to find my place.
That's how it was. My way of writing has changed, dragged by the vigorous passion that I felt flow every time I put myself in front of the screen to compose one of my essay. And like a blacksmith's bellows, which blows with greater intensity when the works are of the finest workmanship, my inspiration blew with anxious enthusiasm to churn out new articles and, above all, worthy of being considered as good as North's ones. Each time a mistake, each time a too complicated paragraph, they provided me with the propellant to improve myself and reach a level of optimum comparable to his marvelous works. Composing and communicating to achieve that perfection has been the litany that has accompanied my blog for years.
A mixture of nostalgia and pride assails me when I think back to the exchange of emails we began to have when, taking courage, I had to inform him that I would translate in Italian his Christian Economics into One Lesson. To exorcise the moment in which I would receive an answer, I repeated to myself that he had more important things to do, but when the inbox signaled his answer an explosion of pride and emotion permeated me as I read his answer. It was like the embrace of a father who, enthusiastic about his son, looks at him with eyes full of pride without saying a word. Surprised by my dedication to his writings, he was amazed that someone on the other side of the world had taken his writing as a model and shared it with his fellow citizens. From that moment on, he would write to me every now and then to report him articles worthy of note and that he would like to see them published. But most of all, he was happy that his book would be available in Italian.
And this is how I will remember him: that flash of happiness that made a little writer proud of his teacher, and that "unknown" boy who enthusiastically communicated that he had allowed a wider audience to know your works.
Goodbye dear Gary, until we meet again.
Gary North RIP, 1942–2022
I am sorry to have to report the death of another old friend, Gary North, who passed away a few days after his eightieth birthday. He was by training an economic historian and had a strong commitment to Austrian economics. He greatly admired Mises and Rothbard. He once asked Mises how he had been able to publish his famous article of 1920 on socialist calculation in a journal edited by Max Weber. Mises answered, “Well, I knew him, and I sent it in.” Gary wrote a notable study of Marx, Marx’s Religion of Revolution, and a long and learned commentary on biblical economics. He was also a founder of the Christian Reconstruction movement, along with his father-in-law, R.J. Rushdoony.
He was on Ron Paul’s staff in 1976, and he and Dr. Paul were close friends. For many years, he spoke at Mises Institute conferences, and he was the best debater I have ever heard. In his speaking style, he was highly organized and relentless; but he was in conversation kind and friendly. When I saw him at conferences, we would exchange stories of the old days. Now, alas, I cannot do that anymore.
Go Where the Action Is
In my day-to-day interactions with others, I generally find myself, as a libertarian, far closer to those who would call themselves conservatives than those on the left. It is probably because those I know are far less likely to openly and baldly advocate for invading others’ “life, liberty and estates,” as John Locke phrased it, than the left.
While there is often substantial agreement between myself and conservatives in opposing their opponents’ planned violations of liberty, I also remember how often I have heard conservative commentators attack libertarians with a great deal of vitriol for actually voting libertarian, whenever they think an election might be close. They characterize not voting, because both major parties are far more statist than they can support, or voting for a party that far more completely advocates and defends liberty than do conservative (and not so conservative) Republicans, as an indefensible attack on America, because if they voted Republican, they might swing an election their way. This was particularly noticeable in our last election. But they never seem to recognize that the deviations from and desecrations of liberty proposed by those they support can easily justify libertarians’ failure to fall in line behind them.
Those thoughts were triggered by re-reading Leonard Read’s “Go where the action is,” Ch. 1 in his 1970 book, Talking to myself, because he reflected on the relationship between libertarians and conservatives there. And he went farther than my thoughts on the subject, focusing on how libertarians object to the means conservatives (and alleged conservatives) often utilize in pursuit of political power, because they fail to reflect the fact that “All actions and all ideas inimical to a free society are destructive.” At a time when many Americans are coming to realize the statist abuses of our current government, but fail to distinguish between whether liberty or conservativism is the much better alternative, Read’s reflections are worth our further reflection.
- Strange as it may seem, the Foundation for Economic Education [the libertarian think tank Leonard Read founded and headed for many years] receives more criticism from “conservatives” than from out-and-out socialists.
- Certainly, it’s not because those we call socialists find anything to agree with in the freedom philosophy as we define it; far from that…Nor is it because our “conservative” critics necessarily find flaws in our philosophical position.
- Rather, they disagree with the method we commend to advance the practice of freedom, namely, a concentration on improving the understanding and exposition of each freedom-loving individual. These “conservatives” phrase their scoldings in countless ways, the most pointed being “Why don’t you go where the action is?”
- We agree with their admonition…But where is the action? Our critics think it is out yonder--external, where others are--whereas we believe it is internal--inside each one of us. They insist on reforming the ignoramuses; we say let’s look to the flaws in ourselves and see what can be done about that. When the objective is at the high level of individual freedom, the real action is within the individual--not out yonder, not at all.
- They fail to draw the distinction between methods useful for destructive purposes and those having creative potentialities. Warfare, for instance, is destructive. If you go where the action is, where do you go? To where the confrontation is: the battlefield…Enlightenment, on the other hand, is in the creative realm. If you want to go where the action is, where do you go? Again, to where the confrontation is: between the self as is and the higher self that might be. Build me up!
- The tactics effective in attaining destructive ends remain destructive, regardless of the objective. Guns are not useful for catching ideas.
- All actions and all ideas inimical to a free society are destructive.
- Certain methods have an impressive record of achievement when the purpose has been to destroy freedom. All of them are outgoing, exertions at others, pushful suasion; they range all the way from selling-the-masses propaganda, to pressure group activity, to name-calling, to political promises, to deceit, to intimidation and terror.
- “Conservatives” who do not grasp the nature of this problem observe how effectively these tactics “work” in attaining socialistic or interventionist ends and see no reason why the same tactics won’t achieve their ends. The fact that the end they have in view is diametrically opposed to the socialistic end does not seem to warn them that “the end pre-exists in the means;” that the tactics in each case must be consistent with the ends.
- Consider our end or objective: an essentially free society. Upon what does that possibility rest? Our aspiration is out of the question unless there be numerous citizens of an intellectual, moral, and spiritual quality to set a sufficiently high standard, to serve as pattern-setters or exemplars. There must be men and women who not only understand why self-responsibility and individual freedom work their wonders, but also men and women who put these virtues into daily practice.
- When the trend is away from, not toward, a free society…the drift is marked by a decline in human virtue. The trend in the general societal situation, one way or the other, is merely a register of the drift, one way or the other, in personal quality. What is called the social problem boils down to the matter of individual emergence.
- Individual emergence is not and never will be accomplished by imposition. Not one of the tactics effective in destructive programs is useful here; indeed, these out-going, reforming efforts do more harm than good. It is difficult enough for oneself to emerge as a better person; impossible to force such change in another. Emergence is exclusively a self-help project; the change is internal, not external.
- A remark by our great grandmother comes to mind. At the age of 102 she had been gently reminded, “Granny, you’re talking to yourself again.” She replied, “At least, I’m talking to a sensible person.”
- And, what’s wrong with that? She was working on the right person, and shared her reflections with anyone who chose to listen.
- The present situation may require more and better probing, introspection, talking to ourselves, more skillful sharing…But it is doubtful that the method can be improved.
Gordon is a Genius, and I am a Classical Liberal
David Gordon is a genius, a man whose intellectual abilities and output exceed mine. I make that claim without any sense of envy. I also claim our unequal conditions are beneficial to each other, and society in general. Because of these declarations, I am a classical liberal in the Misesian sense. Let me explain.
First, I need to define left and right as I see them. To do this, I paraphrase Paul Gottfried and delineate left and right in three aspects: artificial versus organic; egalitarian versus hierarchical; and international versus national.
To put the first divide into perspective, consider prohibition of alcohol in the early 1900s. A progressive on the left believed that without alcohol a New Soviet Man would arise. A man who no longer drank his wages, but instead spent his evenings writing poetry and taking his children to operas and symphonies. In contrast, a progressive on the right simply expected life to improve as families had their father’s beer money to use for more appropriate expenses, such as food and rent. Someone on the right would not expect a man’s essence to change, just his actions.1
A more recent example would be George W. Bush’s ownership society. This was a left progressive policy that expected a New Soviet Man to emerge as the keys to a home were turned over.
The next divide is a derivative of the first. Only an artificial construct could posit a world where all are equal in abilities and outcomes; a world where natural hierarchies do not arise. As if rearranging the means of production – property – could create a situation where my abilities equal David’s. More on this later.
The third and final divide is also a derivative of the first, an artificial notion that all groups and peoples agree on the very same means and ends. As if all necessarily share the same view of a good life and, hence, force is justified to instantiate that good life.
In the most general understanding, it is the appeal to the artificial that delineates the left and the right.
Based on the above, I am a man of the right. I neither believe in, nor appeal to, artificial constructs, I accept natural hierarchies and believe people tend to sort into groups with shared beliefs. However, being on the right does not necessarily make me a classical liberal.
Classical Liberalism = Property
“The program of liberalism, therefore, if condensed into a single word, would have to read: property, that is, private ownership of the means of production (for in regard to commodities ready for consumption, private ownership is a matter of course and is not disputed even by the socialists and communists).” Mises, Liberalism
The artificial has no place in classical liberalism. Once artificial arrangements are considered, the evil of what Mises termed, the Fourier complex, arises. This is the belief that one’s failings in life are the result of the current structure of the means of production.
I cannot conceive of a different arrangement of property, absent violence, where my abilities would equal David’s. I will never equal David, our differences are God-given, not structural. I do not believe that under the socialist scheme, "the average human type will rise to the heights of an Aristotle, a Goethe, or a Marx. And above this ridge new peaks will rise.” So I do not allow myself (paraphrasing Mises) to be overwhelmed and seek refuge in the solace of the saving lie of antiliberalism and socialism. Instead, I accept and find comfort in our relative positions.
The benefit of interpersonal differences and hierarchies
I met David once, years ago – we only shook hands at a Mises event on Jekyll Island, so I know little of him in a personal sense. However, I see and read his intellectual output regularly. He is able to produce succinct and detailed reviews and articles that draw on multiple and varied sources. Sure, I could do that as well. But instead of struggling to produce, at best, one similar article per month, David appears to do two or more per week.
I am willing to accept that David may also exceed my abilities in other areas. While David writes on philosophy and political economy, I produce, inter alia, data flows and reports. It may be true that he could produce twice my output, should he take the time to learn the software tools, etc. However, if he focused on data and reports, leaving me to write in his field, much less would be produced in total.
In fact, such a situation would not be to my liking. I much rather read David’s eight or so articles per month and muse on his insights than struggle for 160 hours to produce just one of them. I am better off by even an absolute advantage in David’s favor – we all are.
Being a classical liberal and man of the right, I am able to withstand the siren’s song of envy that loops endlessly in the mainstream media, arts, politics, etc. In all things, being armed with the truth is the best defense. So, instead of championing the destruction of our society, we must stand against the current ideologies, allowing subsequent generations to enjoy the production that arises from ownership of property and self, even when the distribution of talents and outcomes is unequal.
- 1. As a classical liberal, I do not advocate prohibition. I am simply stating those on the left and right expected different outcomes. Certainly, prohibition was a policy failure and a violation of natural rights, and am application of force. However, no New Soviet Man arose due to prohibition. That is true in the US, as well as in the Soviet Union under Gorbachev.
Goodbye, Transitory Inflation, and Hello, Omicron!
All great narratives must come to an end. No one can predict whether the transitory inflation narrative will ever return. But for now, the Federal Reserve and Treasury have officially retired its banner slogan.
Yesterday the New York Times reported Treasury secretary Janet Yellen saying:
I am ready to retire the word transitory … I can agree that that hasn’t been an apt description of what we are dealing with.
This sounds like a light admission of a mistake done by the central planning authority, who, for several months, told us this inflation was believed to be transient in nature. Errors like these illustrate the problem with planning since there is no negative outcome or cost the planner incurs for making such errors.
Yellen’s response was a follow-up to Federal Reserve chair Jerome Powell, who earlier in the week testified before Congress, quoted by CNBC:
[I]t’s probably a good time to retire that word (transitory) and try to explain more clearly what we mean.
Thus, Powell and Yellen have both explicitly laid the transitory inflation to rest. But as any storyteller knows, the close of one narrative allows for the opening of another. According to Yellen, the spread of new variants has “changed that calculus.” She went on to say:
Now the new variant, the Omicron variant—the pandemic could be with us for quite some time and hopefully not completely stifling economic activity, but affecting our behavior in ways that contribute to inflation.
Paying no attention to the Fed’s $8.7 trillion balance sheet or the $21 trillion M2 money supply, the focus is centered on a still little-understood virus.
And the more we read the better (or worse) it gets. The New York Times goes on to explain Yellen’s position and how Omicron could spell trouble in the future:
It could further snarl supply chains and fuel inflation, she noted, but if it dampened economic growth it could blunt price increases. She warned, however, that it could cause “significant problems.”
Strangely enough, Congress never asked Powell about the new variants. But New York Fed president, John Williams, spoke about them, noting they could
slow economic activity and exacerbate inflationary pressures.
With the end of the transitory inflation narrative and the start of the new variants narrative, it’s been quite the week for our economic planners. An exhaustive list of what can be learned from this becomes too onerous to compile. But what becomes clear is that there will always be something which threatens the stability of the economy. There will always be a new problem which attacks the vulnerable, the weak, and the poor. There will always be that external force which can destabilize America, its working class, and its working poor. If it’s not clear by now, that exogenous economic problem is called the Federal Reserve. And the crisis will never resolve so long as they continue to cause economic booms with one hand and economic busts with the other.
Government Spending Cannot "Stimulate" the Economy
Government economic policy is completely backwards. We are told that massive deficit spending, interest rates driven to zero, and now higher taxes on the "rich" will bring the American economy out of the doldrums or whatever fake malady seems to be popular. It is hard to imagine an economy in the doldrums when unemployment, the scourge of mankind for decades, is so low that businesses cannot attract enough workers. That's number one; i.e., is the US economy really so bad? I admit that it always could be better, but we are not in the Great Depression of the 1930s, in which one-fourth of those seeking work could not find a job. At least not yet. Stay tuned, though.
Stimulus Spending and the Cantillon Effect
But let's get back to the main point: Whether or not the US economy is underperforming, can government spending help? That has been the mantra since Keynesianism swept the economic and then government hallways shortly after World War II. So, we may ask ourselves, just how does government stimulus spending work? Well, from what I can conclude, the government sells its debt to the Fed (called monetizing the debt, which increases the monetary base), spends it on all kinds of programs, some (but not all) of us get more money in our pockets and spend it. So, we can see that, from government's perspective, spending is the key. More spending MUST mean that the economy is doing better. Keynesian economists call this increasing aggregate demand, just a fancy name for more spending.
The implied mechanism is that more spending via money created out of thin air somehow draws more goods out of hiding. Why these goods were hiding is not quite clear, except that aggregate demand was deemed to be too low. On the face of it, it appears logical. Let's say that you are the surprise inheritor of a great deal of money from a distant relative. Your personal lifestyle certainly will be stimulated. But let's consider the source of this windfall—your distant relative. He certainly did not print buckets of money that he left you in his will. Either he earned the money himself or inherited it from someone who did. In other words, the source of your newfound wealth was previous production. You are the new owner of that wealth. Whether you produced it or someone else, you are the new owner of what Professor Frank Shostak calls "something for something." This is in contrast to receiving stimulus dollars printed by the government. Now you have received "something for nothing." It is pure monetary inflation without any previous production in exchange. Therefore, any stimulus in the form of increased spending is pure smoke and mirrors, masking capital decumulation. The result is rising prices, at a minimum, and possibly hyperinflation if carried too far.
But let me give you two thought experiments. For the first one, let's assume that you and some others are marooned on an uncharted island, similar to the plot of the hit TV comedy Gilligan's Island. The only resources you have are whatever washed ashore when your ship sank, whatever natural resources are at hand, and whatever survival skills you possess. Now let's suppose that some large boxes wash ashore later. You rush to open them and find that they contain millions and millions of dollars in paper Federal Reserve notes. Not knowing when, or even if, you will be found, what good are these millions to you and your fellows? Do you all cheer, because now you all are rich? Since your most urgently desired goods certainly are not paper dollars, I doubt it. You all are left with the original resources—natural resources at hand, whatever goods washed ashore earlier, and your survival skills. But, you may say, I do not live on an uncharted island. I certainly can spend the millions and enrich my life. OK, now let's assume that in the middle of the night Federal Reserve chairman Jerome Powell wakes you and slides a suitcase with a million dollars in Federal Reserve notes under your bed. Wow! What would you do? You might spend a little time thinking how to spend the money, but sooner or later you will take your suitcase of money and start to spend. Then you are shocked to find out that Mr. Powell, like a magical Santa Claus, visited every one of America's 300 million-plus citizens and gave everyone of them a suitcase with a million dollars in Federal Reserve notes, too. You find that all the luxury cars are gone from dealers' lots. When you enquire about ordering one, you find that the price has skyrocketed. When government engages in stimulus spending, the same thing happens, only on a smaller scale. A fortunate few, mostly bankers and bond dealers, get the newly printed money first. They buy current goods at current prices. Good for them! But subsequent receivers of the new money find that prices have gone up and their newly acquired money really doesn't do them that much good. Then people much further down the line as recipients of the new money find that prices have gone up and their incomes haven't gone up nearly as much or not at all (think of retirees on fixed pensions). Rather than enticing production out of hiding, government stimulus spending has caused a transfer of wealth from the later receivers of new money to the earlier receivers of new money. This is known in economic circles as the Cantillon effect.
A Four-Point Plan from Forty Years Ago
So, what can government do, if anything, to aid the economy? I have four main points, all from the Republican platform of 1980. (These four points were articulated by vice presidential candidate George Herbert Walker Bush on the steps of the capitol building in Springfield, Illinois, in the summer of 1980. I was in attendance.)
- Return to sound money by freezing the money supply. That requires two reforms. First, do not increase the monetary base by selling government debt to the central bank. Government must spend only what it raises in taxes or obtains through honest borrowing in the bond market. Secondly, forbid the ability of banks to engage in credit expansion through fractional reserve banking, whereby banks themselves create money out of thin air when they increase lending.
- Cut government spending. Of course, this is exactly opposite of what government does today, but government spending is parasitical on the real economy. Government does not create goods and services itself. It can only hand out what it has taken from others. It is the private economy that brings people what they most urgently want, not what government thinks they want or what government wants them to have.
- Number three, reduce regulations. The free market economy and the legal system are all that is needed to bring people what they most urgently want . Disputes are best resolved in the commercial and criminal justice systems.
- Number four, once the budget is balanced, finally goes into surplus, and the debt is slowly being reduced, government can begin to cut taxes. Tax reductions will take money from the destructive power of government spending and increase the capital accumulation power of the private sector. Since the money supply has remained the same, increased production will result in a slow and steady fall in prices, benefiting all levels of society. The cost of living will fall and the standard of living will rise.
The American people need to be told the truth. Government can help the economy only by protecting you and your property. A free market economy, limited government, and the rule of law are the keys to prosperity and peace.
Government Schooling vs. The Family
Supporters of the state often point to the idea that the "state is the oldest institution in human history" as a defense of the state’s existence. This is an insanely false claim debunked expertly by the Institute’s own Ryan McMaken at this year’s Mises University. The actual oldest institution in human history is the family unit. Even Neanderthals, the biological evolutionary predecessors to Humans, who lacked the complex civilization of us homo sapiens, had family units that were critical to their survival as a species. Even other apes that exist today, such as chimpanzees, have family units comparable to our own.
The family is an important part of the survival of humans and even remains a crucial part of human survival today. From the day we are born our parents, whether biological or adopted, are our caretakers and the primary influencers of our moral principles and outlook on life. This is the role they take on and their service to children as the main authority for guidance, punishment, and catalyst for success.
At least this is how it is meant to be in the natural world. With the advent of the modern state, the natural order has been upset by the appropriation of the purpose of parents. Thanks to the state’s alliance with the intellectual and academic class, as described by Murray Rothbard in Anatomy of the State, this is made possible as “intellectual” arguments are made for the state and taught to the public.
This alliance’s effects are seen through the public education system’s widespread and encroaching takeover of the narrative in the battle for the minds of our children through their pro-state narratives on history, economics, and politics. Our children are increasingly raised and taught by those outside the family unit. Kids, on average, start primary school as early as 6, but with the popularity of pre-School, the introduction of the state’s narrative is starting as early as 3 years old.
Children have begun spending more and more time in government schools than at home, interacting with their parents less and less. This has caused teachers and school staff, not parents, to become the ones instilling values and beliefs in children. Do you think any of those would be towards questioning or even opposing the state?
This trend is not only troublesome towards combating the state but the actual success of our children. Even academic literature admits that parents play a crucial role as children’s primary educators and catalysts for success. It is no wonder that our educational output has been getting worse as the state has grown as a part of children’s lives.
Yet state-funded education continues to move further and further towards policies that cut parents out of the picture. Contrary to Public Education advocates narrative, Education spending by the federal, state, and local governments has been increasing according to the numbers they provide on the issue. As previously established despite the constant increases in spending educational output still has been getting worse. This is exactly because the expansion of the Education system is not actually about facilitating success for students but further subverting the role of the family and further implanting the idea that the state is necessary and good in the minds of the public.
The greatest evidence for such lies in the emphasis placed on secondary education. More people than ever are attending college now, with attendance rates increasing every year despite continual price increases. Many educators will push this as the “only option” or the “only good option,” even integrating it into the curriculum through Senior college essays and other programs. The reality is that they are wrong about it being “the only option” as several others exist, such as trade jobs that can often yield higher incomes than jobs out of a college degree.
The system itself can be supplanted by putting students directly into the jobs of the desired career as Economist Bryan Caplan explains in his book The Case Against Education: Why the Education System is a Waste of Time and Money. He establishes that the main purpose of all schooling, especially Secondary Education, is to prepare individuals to be good employees by creating a signaling device, a degree, that says that person shows up, does what they are told, and shows some level of competence. What Caplan points out though is that jobs themselves are signaling devices that show this and are more efficient by actually creating goods and services and giving career-specific knowledge rather than generalities and theoretical ideas.
This inefficiency is not one of incompetency, but a purposeful one that directs the public away from private institutions, such as the family, to state institutions to do as Rothbard described “make the arguments for the state’s existence”. This is something that could not be accomplished if the family was not subverted from early on by funneling children into what can only be described as an “educational prison” that the intellectual and academic class use to disseminate pro-state arguments that make them valuable to the state.
This is the reality of the bloated education system which encourages dependence on the state. Something it has had immense success in as expansions of government authority has become increasingly popular among younger people in the form of socialism or progressivism. A purposeful tactic that is no better seen than a perfect representative of the state and Intellectual class’s relationship in Karl Marx who wrote on the need to “abolish the family” and how the state “did the job for them.” and is doing as we speak.
Get Radical on Privatization
The benefits of privatization are well documented by empirical studies, so they will not be rehashed in this piece. Yet many still assume that some commodities are beyond privatization. Too often proponents of privatization fail to appreciate that humans are sentimental characters, and as a result, they are unwilling to commodify resources deemed to be sacred. A leading advocate of radical privatization, Walter Block in an interview with this writer expressed the view that even natural resources like forests and rivers should be privatized to induce greater levels of efficiency. Walter Block may appear unsentimental, but I doubt that even those in agreement would recommend the privatization of citizenship.
Citizenship is the next major frontier in the privatization revolution. Currently, only the American government is allowed to grant citizenship to foreigners, but why should this be the case, when the lives of ordinary Americans are impacted by immigration? And contrary to what you think, privatization will improve the quality of immigrants. There is no guarantee that the loved ones of naturalized Americans who legally migrate to the US will become productive citizens. When choosing to sponsor family members, people rarely consider their productive potential; such decisions are inspired by love and loyalty.
In contrast, if professional associations were authorized to approve citizenship, then they would have an incentive to select the best candidates and engage in thorough research to eliminate unsavory characters. For example, accountants, chefs, and educators would relocate to America after being granted citizenship. Furthermore, indirectly, privatization might stimulate entrepreneurship by creating demand for companies specializing in providing these professional associations with intelligence on prospective citizens.
By now readers are obviously wondering how standards would be maintained in the absence of government regulations. This concern is understandable, but lacking directives from the government, private associations will orchestrate their own regulations. Reprobate member agencies who grant citizenship to dubious personalities will have their privileges rescinded. Because professional bodies want to preserve the integrity of the system, they will automatically institute mandatory requirements for all parties. A case in point is that one professional body could subject its members to annual audits. If we are being objective, then clearly privatizing citizenship has merits. When the government is the sole provider of citizenship there is no onus to ensure that prospective citizens will offer a positive contribution to society.
Since privatization is divorced from sentiment, it can attenuate some of the disadvantages associated with government provision of citizenship. On the other hand, neither will privatization marginalize people interested in sponsoring loved ones based on sentiment. Such individuals can always join a professional body to assist in securing employment for family members. Under the new dispensation, except for the elderly and children, all prospective citizens would have to apply for citizenship through a professional body. So even those sponsoring sentimental applications would have to demonstrate that their relatives will work upon arrival in America.
Immigrants can either enrich or degrade the quality of society; therefore, American citizens should be positioned to determine the quality of the people who acquire citizenship. And unfortunately, the current system of allotting citizenship does not cultivate accountability. Anti-immigration activists may contend that these proposals would flood the country with new immigrants; however, they are mistaken. On the contrary, the discriminatory nature of privatization actually limits immigration by selecting competitive candidates. Moreover, privatization is not an affirmation of open immigration; mechanisms can be designed to monitor the borders in order to stem the flow of illegal immigration. Privatization may not alleviate all problems, but at least it elevates the quality of immigrants.
Similarly, a new approach to drugs is also required. Instead of lobbying for the legalization of drugs, we should suggest a framework to manage the consequences of legalization. Liberals are quick to remind us that the war on drugs has been a failure, yet few ponder how drug dealers will manage their affairs in this environment. However, the problem is not complicated, because trading drugs is just another business. Like other professionals, druggists can institute regulations to determine the rules of the games, and agents who disregard these stipulations will be excommunicated.
In general, the success of an entrepreneur is based on his reputation. Hence, agents who engage in fraudulent activities or sell inferior drugs will be driven out of the market. Further, legalization will remove the stigma of drug dealing and consequently could discourage druggists from financing illicit activities, since the costs of penetrating legitimate financial systems will have been minimized. Presently, the proceeds of drugs are perceived as dark money, and as such, drug dealers are isolated in the financial community. But the normalization of drugs will unleash numerous opportunities for dealers to engage in legitimate commerce. By minimizing the cost of participating in the economy for dealers, legalization makes illicit transactions expensive. Clearly, if the proceeds of drugs are not seen as tainted, then a druggist will be motivated to engage the financial system, instead of aiming to increase his wealth through illegal means.
Although these suggestions will elicit criticism, the truth is that we cannot comment on the efficacy of policies without testing their utility. We have been relying on stale approaches to effect positive change to no avail. So, at this stage, policymakers must shed old biases and invest in innovative alternatives to yield new insights.
Government Schools Use Covid as an Excuse to Tighten Totalitarian Grip
While the recent clamp-down on power from public universities has mainly been in the realm of speech and expression, like almost every other government institution, they have used covid-19 as an opportunity to control students further. Much to my dismay, this week I learned that my alma mater, Indiana University, has instituted a “COVID-19 Vaccine Requirement,” their website stating:
With the ultimate goal of returning our campuses to normal operations, beginning with the fall 2021 semester, all Indiana University (including IUPUI) students, faculty and staff will be required to have a COVID-19 vaccine and be fully vaccinated before returning to campus.
I was shocked that this was mandatory, as opposed to a mere recommendation, but slightly further down the page, it is abundantly clear—comply or leave:
If you choose not to meet the requirement
IU has outlined strong consequences for those who choose not to meet the COVID-19 vaccine requirement and do not receive an exemption. Everyone is strongly encouraged to get the vaccine as soon as possible not only for your own health and safety but for those around you as well.
For students, they will see their class registration cancelled, CrimsonCard access terminated, access to IU systems (Canvas, email, etc.) terminated, and will not be allowed to participate in any on campus activity.
Faculty and staff who choose not to meet the requirement will no longer be able to be employed by Indiana University. Working remotely and not meeting the COVID-19 vaccine requirement is not an option.
While forced vaccination is completely totalitarian, the argument could be made that new students were made aware of the university’s vaccine requirements and could make a voluntary decision to attend or not, given the information. What really strikes me is the nerve the university has forcing the vaccine on students already attending.
Suppose a student has spent three years of his life working toward his degree. Entering his final year, he doesn’t wish to receive the vaccine. Then what? His choice is to get a vaccine he doesn’t want so that he can finish his degree, or leave. This violates fundamental concepts of contract law. When the student undertook the education at the university three years ago, he was not aware that a new vaccine would be imposed on him in the final year of his education. With this knowledge, he might have chosen to attend a different university, or none at all. Of course, he may have gone to the university anyway, but he would have had this knowledge beforehand, and voluntarily agreed to those terms. Enforcing a new requirement unilaterally upon these students is an audacious power grasp, even for these institutions. One would expect to see a plethora of lawsuits in the future, but we all know how well the court system has prioritized essential liberties during the covid era.
Further down the page, Indiana University makes the same sales pitch that the vaccine is “safe, effective, and free, as is seen in TV ads and elsewhere that we are endlessly bombarded by. It is downright creepy that they are trying to convince students of the veracity of something they don’t have a choice to get. Another Orwellian aspect of the policy is the “COVID-19 vaccine report form.” Through the porthole, students can apparently login through their account and submit documentation proving they’ve received the vaccine and complied with all university requirements.
Indiana University isn’t alone in these requirements; the Chronicle of Higher Education indicates that more than three hundred colleges will require a covid vaccine. More are expected to follow.
So Much for Informed Consent
The Nuremberg Code (1947) states that legal capacity to give consent involves the ability “to exercise free power of choice, without the intervention of any element of force, fraud, deceit, duress, overreaching, or other ulterior form of constraint or coercion.” Students are coerced with the threat of being dismissed from the universities if they do not receive the covid vaccine—a clear violation of the Nuremberg Code.
It is no surprise that government schools are such heavy proponents of the agenda promulgated by the federal government and the pharmaceutical industrial complex, using their authority to indoctrinate a generation to not question authority—even when it comes to some of the most personal decisions an individual makes, such as essential health decisions.
Hopefully, students will resist the tyranny of having personal health decisions dictated to them. If enough refuse, administrations will be forced to change their policies. Enrollment numbers decreasing in these indoctrination stations as a result would be even better yet. One thing is for certain, without a clear repudiation of measures like mandatory covid vaccination, government schools will continue to tighten their totalitarian grip on young minds, creating more easily controlled subjects of the state.
Government as the Ultimate Cause of the Tragedy of the Commons
A good definition of the tragedy of the commons is that "resources that are unowned and/or unownable will be plundered to extinction." Consider the fish in the seas, especially those that migrate, such as whales, or may be found beyond any nation's territorial waters. No one owns them and it may be impossible to own them. Therefore, fishermen are incentivized to take them before other fishermen take them. Overfishing results. Catches shrink. The size of the fish shrinks. Treaties among fishing nations may mitigate the problem, as long as all sign the treaty and poachers are controlled.
It has been estimated that in nineteenth-century America hunters killed 40 million buffalo and trappers took 200 million beaver. The buffalo were hunted almost to extinction, and some scientists claim that the water shortage and erosion problems of the American West are a result of the overtrapping of beaver, nature's premier water conservationist.
Privately Owned Resources Are Capitalized, Ending Their Plunder
A solution to the problem lies in private ownership of the resource. Private owners manage natural resources to maintain their capital value. Scientists and economists have pointed out that the annual and apparently never-ending forest fires of the American West are partly due to the fact that they occur on government-owned land. But government ownership is not the same as private ownership. Government has little incentive to protect the trees in order to harvest them over long periods of time. Governments' main objective seems to be simply fighting forest fires once they have begun, a policy that doesn't seem to have worked very well. Radical environmentalists would not tolerate selling the land and forests to private companies. A pity, because that is exactly what would stop their destruction.
Notice that the main problem that results from the tragedy of the commons is resource depletion. It is true that the first to grab the resource benefits, but this is a one-time grab. Privately owned forests, fisheries, oil wells, copper mines, fertile farmland, etc. will yield their bounty to perpetuity, whereas a plunderer leaves nothing for the future. In other words, plunderers eat the seed corn.
This describes the state of government today. Through its money-printing monopoly, government has the ability to plunder resources without limit, leaving nothing for future growth. Austrian economists call this high time preference, as opposed to low time preference. Those with high time preference prefer the satisfaction of short-term wants at the expense of long-term wants. The ant versus the grasshopper fable is the perfect illustration of the principle. The ant works hard to save for the future, while the grasshopper plays in the summer sun. But the ant has food and shelter through the coming winter, while the grasshopper freezes and starves. Politicians have high time preference, because they occupy their positions of power for a limited time. They have constituents and supporters to placate. They want action and they want it now. They want free fill in the blank.
The Soviet Union was the poster child of this syndrome. Prior to the Russian Revolution of 1917, Russia was a highly industrialized nation that was a worthy competitor in world markets. After the revolution, it embarked on a one-time grab of all the nation's resources as it attempted to impose a completely socialist, state-directed economic model. Within a few years the Russian people were starving. Only Western aid, the sale of its vast natural resources, and the plunder of Eastern European nations after the Second World War allowed the Soviet Union to survive as long as it did. When asked if the US would help restore the Russian economy after the fall of communism, President George H. W. Bush insightfully said that there was not enough capital in the entire world to do that.
The Solution Is Private Money, but the Temptation for Plunder Is Too Great
Under a gold standard, government cannot spend more than it taxes and borrows honestly in the bond market. Gold is a finite medium of exchange, perfectly suited for trading finite goods and services. But government can manufacture fiat money in unlimited amounts. So we have finite resources exchanged by fiat money with no limit. The temptation for government to use this power to accomplish its high–time preference goals is too great for the politician/grasshoppers to ignore. Thus, all economies are being plundered by the ultimate expression of the tragedy of the commons—fiat money in the hands of profligate governments. There seems to be nothing that can prevent the disaster, since every citizen benefits in some way from government spending and no one is willing to give up his handout. In fact, the demand for handouts keeps increasing.
Conclusion: Consumer Spending Consumes Capital
In conclusion, we may say that the real tragedy of the commons is not that the plundered resources are claimed by a minority, but that the resources can never be capitalized to provide benefits into perpetuity. Government may plunder an economy only once. Western economies have a lot of accumulated capital resources, so it may seem that multitrillion-dollar budgets and deficits are sustainable. But they are not. What Keynesians call a postcovid boom, due primarily to pent-up consumer spending fueled by helicopter money, probably is capital decumulation. We are eating our seed corn. Fun, fun, fun … while it lasts.
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