Monthly Archives: January 2010

Who Authorizes the Authorities? by Butler D. Shaffer

Who Authorizes the Authorities?
By Butler D. Shaffer

I began my class one day with an apparently simple question: Does the U.S. Constitution have legitimacy? As a follow-up question, I asked: By what right does one group of men get together and impose upon others a particular system of government?

These questions, of course, do not apply only to the American political system, but can be asked, with equal force, of every government that has ever existed. By what right did the Bolsheviks, or the Catholic Church, or William the Conqueror, or Genghis Khan, or any other group or individual, assume the authority to make and enforce laws upon other men and women?

Having been educated in traditional schools, most of my students answered with the kind of conditioned responses that it has been the purpose of traditional education to provide: “We all got together and agreed to this form of government,” they declared.

Even though the fallacy of such explanations of governmental origins were quickly dispelled by asking the students to tell me the place and date at which they attended this “meeting” with “everybody else” to establish a government, I have no doubt that all of them truly believed that the American government was formed out of the common consent of all Americans.

I forged ahead with my questions: “If we all have inalienable rights, how can some men vote to take away the rights of others?” “How does the fact that ten men may choose to join together for their common protection impose upon the eleventh man any obligation to go along with them?”

True to their public school upbringings, my students tried to take comfort in the process of voting.: “If they majority are in favor of something, that makes it right,” a number of them agreed.

“But what makes the will of the majority sacrosanct?” I asked.

I went on. “Suppose three muggers confront you on the street and say, ‘We want your money. But don’t worry — we’re going to let you vote on whether or not you should give it to us.’ If this group votes three-to-one in favor of taking your money, does this legitimize its actions?”

A few of my students saw the obvious analogy to government, but for others the characterization of government as nothing more than sanctified theft and violence was too unsettling. One student tried to rehabilitate the democratic process with the weak plea that “It has to involve more than just a few people,” while another felt obliged to defend democracy and voting at all costs, as something in the nature of an ultimate principle.

“Majority rule is just the way our government is set up,” he argued, not seeing that he had succeeded in arguing himself into one big circle.

“But that’s what I’m asking you to explain.” I went on: “ How does this — or any other — system of government acquire the legitimacy to impose such processes upon those who do not choose to be bound by it?”

The discussion ended with a number of my students resorting to the traditional method of all totalitarian systems and ideas: “If you don’t like it, you should leave the country,” they shouted.

When the discussion was over, one of my students stated that this had been a very “unsettling” and “uncomfortable” experience. “It was my purpose to make you uncomfortable,” I replied, “ for only in facing hard, uncomfortable questions will we be able to overcome the dependencies on authority that we have accepted for our lives.”

I remarked upon how institutions not only cause most of the social conflict in the world today, but absolutely require conflict in order to maintain their power over our lives. Government, in particular, generates and manages conflict and, in the process, solidifies its base of power over us.

“But what is the answer to this?” a number of them asked. “What alternatives are there for us?” I told them that since the problem of government involves our self-induced dependencies on authority figures, for me to give you my answer is simply to substitute me as your new authority.

The social problems of our world are occasioned by our consciousness. They are the problem of how we think — about ourselves, others, and our responsibilities for our own behavior and our own conclusions. “The answer,” I concluded, “ is that you must figure out your own answers.”

That has always been the source of the human dilemma. Because we have come to enjoy the luxury of having other people make judgments and decisions for us, we are terribly uncomfortable when someone comes along and challenges our complacency.

We enjoy triviality — a fact that has spawned mindless television programming, gossip magazines, and a general banality in what used to be the art of serious conversation — and eschew fundamental inquires. But if life is to have any meaning, if we are ever to overcome the viciousness and vulgarity that are destroying the quality of human life, we must get ourselves in the habit of asking the sorts of questions we have been trained not to ask.

Butler Shaffer teaches at Southwest University School of Law. He is the author of Calculated Chaos: Institutional Threats to Peace and Human Survival.

Dr. Richard Ebeling Interview on Platform TV Show

Excellent interview with Austrian Economist  Dr. Richard Ebeling.  Notice how the concept of “government (which is just people) knows everything” is so ingrained into the interviewers.  The only opinion I would add is that coercive government is not even needed for protection.  In continuing my opinion, the private sector can do anything the government does and it can do it better:

Part 1 below and here are links to Part 2, Part 3, Part 4, Part 5, Part 6

How To Fix the Jobs Problem – by Llewellyn H. Rockwell, Jr.

How To Fix the Jobs Problem
by Llewellyn H. Rockwell, Jr.

All this talk of unemployment is preposterous. Think of it. We live in a world with lots of imperfections, things that need to be done. It has always been so and always will be so. That means that there is work to be done, and therefore always jobs. The problem of unemployment is a problem of disconnect between those who would work and those who would hire.

What is the disconnect? It comes down to affordability. Businesses right now can’t afford to hire new workers. They keep letting them go. Therefore, unemployment is high, in the double-digits, approaching 17% or more. Among black men, it is 25%. Among the youth, it is 30% or higher. And the problem is spreading and will continue to spread so long as there are barriers to deal-making between hirers and workers.

Again, it is not a lack of work to be done. It is too expensive to pay for the work to be done. So ask yourself, what are those things that prevent deals from being made?

Let me list a few barriers:

* The high minimum wage that knocks out the first several rungs from the bottom of the ladder;
* The high payroll tax that robs employees and employers of resources;
* The laws that threaten firms with lawsuits should the employee be fired;
* The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;
* The unemployment subsidy in the form of phony insurance that pays people not to work;
* The high cost of business start-ups in the form of taxes and mandates;
* The mandated benefits that employers are forced to cough up for every new employee under certain conditions;
* The withholding tax that prevents employers and employees from making their own deals;
* The age restrictions that treat everyone under the age of 16 as useless;
* The social security and income taxes that together devour nearly half of contract income;
* The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.

Now, that’s just a few of the interventions. But if they were eliminated today, and it would only take one act of Congress to do so, the unemployment rate would collapse very quickly. Everyone who wanted a job would get one.

Depending on the credibility of the new approach, businesses would begin hiring immediately. It would be a spectacular thing to behold. However, the new approach would have to be certain and not something to be reversed in a couple of months. No one wants to invest in employees only to have their investment taken away. So there could be no expiration date on the new laissez-faire approach.

What is the objection to this approach? I seriously doubt that many people would dispute that it would work to end unemployment. But many people say, oh, this won’t do at all. It is not just jobs we want. It is good-paying jobs!

If that’s the case, you have to understand what is being claimed here. People are saying that it is better that people be unemployed rather than being exploited at low wages. If so, it all comes down to your definition of exploitation. If $10 per hour is exploitation, we should be creating even more unemployment by raising the minimum wage. We could dis-employ all but a few by raising the minimum wage to $1,000 per hour.

In a market-based labor contract, there is no exploitation. People come to agree based on their own perceptions of mutual benefit. A person who believes it is better to work for $1 an hour rather than sit at home doing nothing is free to make that contract. In fact, a person who works for a negative wage – who pays for an internship, for example – is free to make that deal too.

I propose to you, then, a definition of exploitation that comes from the writings of William H. Hutt: violence or threat of violence implied in the negotiation of anything affecting the life of a worker or employer. In that sense, the present system is exploitation. Workers are robbed of wages. Employers are robbed of profits. Poor people and young people especially are robbed of opportunity.

Read any account of economic history from the late middles ages through the 19th century and try to find any evidence of the existence of unemployment. You won’t find it. Why is that? Because long-term unemployment is a fixture of the modern world created by the interventionist state. “We” try to cure it and “we” ended up doing the opposite.

So it is hard for me to take seriously all the political plans for ramping up intervention in the name of curing unemployment. There is no voluntary unemployment in a free market, because there is always work to be done in this world. It is all a matter of making the deal.

All that stands between the present awful reality and 0% unemployment is a class of social managers unwilling to admit error. How much higher does the rate need to get before we admit the error of our ways?

January 29, 2010

Llewellyn H. Rockwell, Jr, former publications editor to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, literary executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. See his books.

Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

The Address Obama Should Have Given – For a Change to Freedom by Richard M. Ebeling

From Richard Ebeling at Northwood University site:

The Address Obama Should Have Given – For a Change to Freedom
by Richard M. Ebeling

President Barack Obama delivered his first State of the Union address before the Congress of the United States on January 27, and in essence called for more of the same policies that he has advocated during his first year in the White House.

The president proposed a new “stimulus” packaged to create “green” jobs in the small business and exporting sectors of the American economy; a continuing effort to implement some version of nationalized health care; the introduction of strangling environmental regulations over private enterprise; plus, additional and more intrusive government oversight of the finance and banking industry. He also proposed a partial “freeze” on some discretionary spending in the Federal government’s budget.

In other words, the president, in an often defiant tone, insisted that as far as he is concerned the era of “Big Government” is not only still here to stay, but needs to be dramatically expanded — even if some recent elections and public opinion polls suggest that a growing number of Americans are leery of moving further in this direction.

In the face of the President Obama’s determination to push for more “change” down the path of expanding political paternalism, one imagines what he might have said in the State of the Union address if he had chosen to propose the type of change that really would have meant greater freedom and opportunity for the American people.

What he could have said might have been something like the following:

“My fellow Americans, I come before you tonight to lay out a new agenda for change that will not only get our great nation out of our current and difficult economic times, but will put us on track for a bright and better future for ourselves and our children.

“Let me start out by saying that last month during my Christmas holiday vacation in Hawaii, I had the time to catch up on some reading. I found on the top shelf of a bookcase in the White House some books that I guess must have been left over from when Ronald Reagan was president more than twenty years ago.

“So I took with me some books I’ve never read before, indeed, that my “progressive” professors and mentors had never even mentioned during my college days. I read Henry Hazlitt’s Economics in One Lesson, Milton Friedman’s Free to Choose, Friedrich A. Hayek’s The Road to Serfdom, and Ayn Rand’s Capitalism: the Unknown Ideal.

“I stand before you tonight, my fellow Americans, and tell you that I now realize how misguided and wrong-headed were all the ideas that I learned and which molded by thinking as a young man, and which inspired by campaign when I ran for this high office in 2008.”

[Behind the president, frozen and confused looks on the faces of Vice-President Joe Biden and Speaker Nancy Pelosi.]

“I now appreciate that real “people power” does not come by giving more political power and control to politicians and bureaucrats over the lives of the citizenry. No, it can only come from reducing the size and scope of government, and giving people the freedom to plan and direct their own lives through the peaceful and productive avenues of the free market and entrepreneurial creativity.”

[Restive murmurs from the Democratic side of the House of Representatives.]

“Today, America still faces high unemployment and a sluggish business recovery. It is clear to me, now, that is was the “easy money” monetary policy of the Federal Reserve and government manipulation of the housing market through Fannie Mae and Freddie Mac during the Bush years that created the economic bubbles that burst before I took office.

“But after doing some follow-up reading while flying back to Washington right after the Detroit bomb-scare, I understand, now, that once the financial boom years had lead to the inescapable bust through which we are living, the policies that I advocated and pushed Congress to implement last year have only ended up making a bad situation even worse.

“I have instructed Treasury Secretary Tim Geithner to see to it that before the end of February every senior and middle level officer in his department will have read the works of Ludwig von Mises and Friedrich A. Hayek on the “Austrian” theory of the business cycle. They will be required to successfully pass a written test to demonstrate their understanding of this theory if they are to retain their positions in the Treasury Department”

[Secretary Geithner is seen on television text messaging on his Blackberry some of his Wall Street friends about possible job openings for someone with his background and experience.]

“I have also informed Ben Bernanke, that I am withdrawing my nomination for his reappointment for another term as chairman of the Federal Reserve System. I will immediately have my staff start vetting new candidates for that position who support transitioning the United States back to the gold standard.”

[Ben Bernanke is seen on camera muttering under his breathe, “In Keynes we trust, in Keynes we trust,” while making notes about courses he might teach back at Princeton University in the fall semester.]

“But the real change, my fellow Americans, will come from a radical reversal of the types of policies that our country has been following for far too long. To begin with, I will be presenting to the Congress an agenda to cut government spending across the board by 20 percent for each of the remaining three years of my term of office as your president. I am not only talking about cutting discretionary spending, which makes up a fraction of the Federal budget. No, I mean all programs, including what are called entitlement programs, as well. I will appoint a blue ribbon commission to devise a plan to completely end government involvement in and privatize social security and health care.

“The only way out of our current economic recession is to get out of the way of the private sector so it can the create new and sustainable jobs to replace those that were recently lost because of the disastrous policies of the past that produced the unsustainable employments and imbalances that now need to be set right through the free interplay of market supply and demand.

“This will not come through the smoke and mirror of supposed “stimulus” packages that only siphon off the wealth of you, the people, through taxes and borrowing, and which leave a huge debt that we and our children will have hanging over our heads for decades to come.

“I am determined to end all government regulatory, subsidy and redistributive programs that take the hard earned income and wealth out of your hands, the hardworking American citizenry, and return to you the financial ability and open and competitive opportunity to plan what is best for you and your family. “

[The cell phones start to vibrate in the pockets of every Senator and Congressmen on both sides of the aisle from lobbying representatives of special interest groups that have been feeding at the trough of government spending, and benefitting from regulatory favors and privileges.]

“Government cannot create wealth. It can only either redistribute it or destroy it. Wealth comes from free men applying their minds to creatively finding ways to improve life. This requires that each and every American know that their government will protect their life and property, and not plunder them for the benefit of privileged others who use the power of the state to gain what they cannot honestly earn in the free exchange of the market place.

“I would like to introduce Shalala Brown, sitting over there in the gallery next to my wife. Shalala is a heroic inner city young woman of seventeen who dropped out of high school to help support her family, but who cannot find a job because the minimum wage law has priced her modest labor skills out of the market.

“Sitting on the other side of my wife is Jenny Jones. Jenny is 93 this year. She worked hard, saved her money, and had been living all of her life in a modest, but well kept home that was taken away from her under eminent domain laws. A fat cat land developer with close ties to the mayor in the town where Jenny lived had her home condemned so a shopping mall could be built where Jenny’s house once stood.

“What kind of judicial decision would deprive an honest, hardworking American of their home to benefit a greedy special interest and a money-hungry local government?”

[The president glances over, with a stern look of disapproval, at the justices of the Supreme Court.]

“I now realize that it has been the most exaggerated arrogance by people like myself – before I did my Christmas holiday reading – to think that we have the knowledge, wisdom and ability to plan, direct, and manipulate the lives of others in society.

[Behind the president, Speaker Pelosi is seen hyperventilating and grasping her chest. Vice-President Biden has a look of bewilderment with his hands stiff in mid-clap.]

“The knowledge, wisdom and ability to solve any and all of our problems can be found. But they only can be found through energies and efforts of free men and women who work together in the market place.

“The profit motive and pressures of peaceful competition for excellence through free enterprise will be the ways we find solutions to health care, the environment, and a more prosperous life and future for all Americans in the twenty-first century.”

“My fellow Americans, thank you, and God bless America. Let the real changes for freedom begin.”

If only the President of the United States had the understanding and the courage to give such a State of the Union address!
Posted by Northwood University at 8:43 AM

Freddy’s Bar Fighting Eminent Domain in Brooklyn

Another example of people, using their collective gang called “government”, to steal private property. The only mistake in this commentary is the belief that the Constitution has legitimate authority (see No Treason VI: The Constitution of No Authority – by Lysander Spooner)

Anarchy and Haiti by Roberty P. Murphy

From Mises.org:

Anarchy and Haiti
Mises Daily: Tuesday, January 26, 2010 by Robert P. Murphy

Whenever a natural disaster or violent insurrection causes the downfall of a corrupt government, various commentators cannot resist labeling the result “anarchy” and then citing the chaotic situation as an apparently obvious refutation of the ideas of Murray Rothbard.Download PDF Critics of Rothbardian anarchocapitalism often point to mafia-infested Sicily, gangland Chicago, modern-day Colombia, Somalia, and of course now Haiti, as ostensible examples of a free market in police and law.

The week after the earthquake hit, commenter “Greg” posed this typical question on my blog: “How’s that anarchy thing working out in Haiti?”

Here is my response. When Rothbardians say that they favor anarchy, what we mean is that for any given society, with all else held equal, a government monopoly on legal rulings and police enforcement will make the society worse off. (I am here focusing on the pragmatic claims rather than ethical considerations.)

continue reading…

Is Milton Friedman a Keynesian?

From Mises.org:

Is Milton Friedman a Keynesian?
Wednesday, January 27, 2010 by Roger W. Garrison

[From Dissent on Keynes, edited by Mark Skousen, 1992]

He Isn’t but He Is

There is a story about a young job candidate interviewing for an entry-level position in the geography department of a state university. One senior faculty member, whose opinion of our modern educational system was not especially high, asked the simple question, “Which way does the Mississippi River run?” In ignorance of the biases of this particular geography department and in fear of jeopardizing his employment prospects, the candidate boldly replied, “I can teach it either way.”

When the question “Is Milton Friedman a Keynesian?” was first suggested to me as a topic, I couldn’t help but think of the uncommitted geographer. But in this case, opposing answers can be defended with no loss of academic respectability.

When teaching at the sophomore level to students who are hearing the names “Keynes” and “Friedman” for the first time, I provide the conventional contrast that emerges naturally out of the standard account of the “Keynesian Revolution” and the “Monetarist Counterrevolution.” In the context of this introductory treatment, monetarism is the antithesis of Keynesianism. To claim otherwise would come close to committing academic malpractice. Either a casual survey or a careful study of the writings of Keynes and Friedman reveals many issues on which these two theorists are poles apart.

Yet, one can make the claim that Friedman is a Keynesian and remain in good scholarly company. Both Don Patinkin (in R. Gordon 1974) and Harry Johnson (1971) see Friedman’s monetary theory as an extension of the ideas commonly associated with Keynes. Some of their arguments, however, run counter to those of the Austrian School, which serve as a basis for this chapter.

continue reading…