Comments (26)

• Barry Loberfeld

  Nothing about "modern" social democracy is new. From "What's Really Reactionary":

  As a counterpart to socialist dictatorship, the West had its own regressive revolt against laissez-faire liberalism: the "social-democratic" welfare-warfare state. One of the most prescient voices on this matter was nineteenth-century English polymath Herbert Spencer, a figure since inanely caricaturized as a dog-eat-dog, let-the-poor-starve "Social Darwinist" (in other words, a pseudo-scientist on par with Marx and Hitler). Spencer recognized that the "new" legislation was merely an excavation of the ancient statutes whose repeal had ushered in the liberal era. The employment restrictions of the Act of 1870? Not at all unlike those of Edward VI. The Seed Supply Act of 1880? Its purpose much the same as similar agrarian laws passed in 1597 and even 1533. The inspection regulations? No different than those under the "law of Edward III." Recent restrictions on alcohol? An echo of the fourteenth century, "when diet as well as dress was restricted." The latest prohibition of gambling? A reflection of "edicts issued by Henry VIII to prevent the lower classes from playing dice, cards, bowls, etc." And what was the "new" Poor Law but "identical in nature with the system of 'make-wages' under the old Poor Law"? Small wonder that Spencer characterized all this, not as a necessary next stage of liberalism, but as a "new form of Toryism."
  

  And yet liberalism was precisely the term that came to designate this reactionary regime. Here Spencer's insight was discounted just as it had been on all other aspects of the resurfacing statism. He believed, relates Roderick T. Long, that

  although militant [i.e., pre-liberal] society was destined to give way to industrial [i.e., liberal] society eventually, there would inevitably be temporary reverses and detours along the way. And Spencer believed that the modern world, after a long period of liberalization, was headed into just such a retrograde phase. Observing an increase in "imperialism, re-barbarization, and regimentation," he foresaw this trend's eventual culmination in a "lapse of self-ownership into ownership by the [State]." Like many classical-liberal thinkers at the end of the nineteenth century, Spencer prophetically predicted for the century to come a grim relapse into collectivism and war.

  It is nearly inexplicable how the "progressive" intelligentsia remain blind to the fulfillment of these predictions -- and to the errors of Marxism's "empirically false conclusions" (Sowell), excluding, that is, the realization of its militaristic and genocidal impulses (which is but the flip side to Spencer's analysis).
  

  The situation was paralleled across the Great Pond, where a nation virtually born of a revolution against mercantilism began to sire its own mercantilist enterprise. Mythologized as the "Progressive Era," when the Little Man and his (self-anointed) champions rose up to bridle the "economic power" of Big Business, this was actually -- in the phraseology of Gabriel Kolko -- a "triumph of conservatism," wherein the established "business and financial interests" sought to fend off upstart competitors by resorting to reactionary means: government intervention in the economy.
  

  The "departure from orthodox laissez faire" is by and large the only part of the myth that was true. Instead of a handful of cephalopod monopolies using their "economic power" to constrict competition, the "dominant tendency in the American economy at the beginning of [the twentieth] century was toward growing competition," which the older corporations could not stop -- without political favoritism, that is. So "it was not the existence of [free-market] monopoly that caused the federal government to intervene in the economy, but the lack of it." The new state regulatory bodies and their decisions were "invariably controlled by leaders of the regulated industry, and directed toward ends they deemed acceptable or desirable ... [mostly] because the regulatory movements were usually initiated by the dominant businesses to be regulated," e.g., the Interstate Commerce Commission and the railroad industry (and over the decades many others, such as the Food and Drug Administration and the pharmaceutical industry, the Securities Exchange Commission and the securities industry, the Federal Communications Commission and the various communication fields, the Civil Aeronautics Board and the airline industry, etc.). In addition, there were the huge subsidies, e.g., money and land to the railroads -- as well as the high protectionist tariffs, since, as the New York Times soon grasped,

  so-called Anti-Trust law was passed to deceive the people and to clear the way for the enactment of this ... law relating to the tariff. It was projected in order that the party organs might say to the opponents of tariff extortion and protected combinations, "Behold! We have attacked the Trusts. The Republican party is the enemy of all such rings."

  And the Progressive Era's patrimony to the present age? We can assign a contemporary "progressive" -- Ralph Nader -- the task of "restatement of the obvious":

  
  

  The arms-length relationship which must characterize any democratic government in its dealings with special interest groups has been replaced, and not just by ad hoc wheeling and dealing, which has been observed for generations. What is new is the institutionalized fusion of corporate desires with public bureaucracy -- where the national security is synonymous with the state of Lockheed and Litton, where career roles are interchangeable along the industry-to-government-to-industry shuttle, where corporate risks and losses become taxpayer obligations. For the most part, the large unions do not object to this situation, having become modest co-partners, seeking derivative benefits from the governmental patrons of industry.

  One cannot help but wonder if the learned Mr. Nader ever stumbled across Progressive stalwart John Dewey's definition of democracy: "[T]hat form of social organization, extending to all areas and ways of living, in which the powers of individuals shall ... [be] directed" -- by the State. In any case, "Progressivism was," concludes Kolko, "... a movement that operated on the assumption that the general welfare of the community could be best served by satisfying the concrete needs of business" -- a familiar Old World theme. Regress is Progress -- an Orwellianism for the New World in the new century.
  

  Business-government collusion wasn't the only European tradition reproduced by the American welfare-warfare state. Their sundry "poor laws" eventually became the basis of our welfare sector, while this former colony's warfare sector "began the twentieth century," states Sowell, "talking of [America's] 'manifest destiny' to be fulfilled by acquiring an empire, including the Philippines, Hawaii, and Puerto Rico" -- with the "son of a czarist official" soon building the Soviet Empire. If there truly ever was any element of "moral equivalence" between the US and the USSR, it was the anti-liberal reaction of neo-mercantilist America and neo-feudalist Russia.
  

  And there, to meet all the Left's theories (Marxist and variant) of history, is our theory of the history of the Left: Wherever a primordial darkness is at last breached by the torch of liberalism, the reactionary Left materializes to snuff that flame. In every incarnation, Leftism is a rejection of the individual and his inalienable rights, a return to tribalism and the club. But it is, as noted earlier, a return of the old in a superficially "new" form. It is a rejection of liberalism that often poses as an advance of liberalism....

  READ THE ENTIRE ARTICLE.

  Published: April 29, 2009 8:32 AM

• B. Ranson

  I think it might be more appropriate to compare John Law with Ben Bernanke or Alan Greenspan.

  Published: April 29, 2009 8:52 AM

• William H Stoddard

  Good comparison! I had occasion to read up on the French Regency in late 2007 and early 2008, including the deplorable episode of John Law, and I have been haunted more recently by the sense of how much our current situation imitates it. We are verging on an openly monarchic and mercantilistic societies without even the memory of "republican virtue." Obama had some occasional nice republican rhetoric about constitutional principles, but now that he is in power, he seems to be turning into a monarchist . . . much as FDR did, after a campaign of rhetorical attacks on Hoover's big government.

  Published: April 29, 2009 9:20 AM

• Franklin

  "Louis spent vast millions on his palaces and engaged poets and writers to write of his virtues, long before the days of CNN."

  It is gems like these, the parallels, the irony, the satire, which oftentimes exceed the brilliance of the article itself!

  Very nice article, as always. And what a quote.

  Cheers,
  F.

  
  

  Published: April 29, 2009 9:42 AM

• fundamentalist

  Good article! Thanks!

  Law may have learned fractional banking from the Bank of Holland, but the French historian Braudel has examples of it in Venice in the middle ages. Goldsmiths practiced it back then and it caused the same boom/bust cycles that it does today.

  Also, I have posted this before but I highly recommend Washington Irving's account of the Mississippi Bubble in his Crayon Papers written in 1819. Several internet sites have the papers.

  Published: April 29, 2009 9:52 AM

• Bennet Cecil

  It is unfortunate that the global crisis has caused capital to flow to the the US dollar, lowering interest rates and supporting the purchasing power of the dollar. It has allowed fiscal and monetary madness. Reality is coming but not for a few years.

  Published: April 29, 2009 9:57 AM

• Tim Kern

  "We can only hope that his career will be short and that the Fed's days are numbered."

  That wish has been valid for seventy years, but all we Americans do, and all we choose to see, prop up the reputations of generations of those like Law and Keynes -- and Hitler, for that matter. Aside from Hitler's being remembered for systematically killing innocent people, no one seems to challenge the means by which he came to power -- how he duped an industrialized, educated, Christian nation into becoming the National Socialist Wehrmacht that terrorized millions.

  Please remember that Hitler's political means are viable -- and are being copied -- today, because they work whenever the population becomes dependent on others (through de facto prohibition of capitalist activity and spreading the negative consequences of poor decisions among the general population).

  Whether you call them Brownshirts or ACORN organizers; Gestapo or IRS; SS or DHS; Gauliters or czars; the political motivation and effect are the same: confusion among the public and disdain among the rulers for the Constitution, and subsequent concentration of power in the hands of a charismatic leader.

  Published: April 29, 2009 10:58 AM

• Steven Graff

  Roosevelt, Hitler, and Mussolini in the same sentence and in turn equating them to a president that has a 100 days in office and a dozen policy responses to the "free-trade advocating" finance and auto industries lining up at congress' and his door for government protection and handouts. Really?

  John Law=FDR=Hitler=Mussolini=Obama. This may pass for intelligent discourse amongst certain readers. But in my eyes it is trolling for hate and does nothing to further your premiss.

  Published: April 29, 2009 11:07 AM

• Steven Graff

  Mr. Kern's post proves my point perfectly

  Published: April 29, 2009 11:11 AM

• Phaesed

  I apologize, but I detest the numerous attempts to compare Obama to John Law, Hitler, or any other communist/socialist out there. Obama did not read Keynes and then read Hayek, although I wish he would. The sad fact and truth of this entire situation is that the people advising him ARE BANKERS THEMSELVES. All of his senior advisors are part of the conspiracy, and when you are surrounded by parrots who proclaim themselves to be experts, even "Polly want a cracker" can sound like surefire gold. I admit and understand Obama's methods (rather the Fed's subversive methods) are deplorable, but I do understand that Bush's methods were even much more so. However since most only care about money rather than freedom (please note freedom > wealth), it's only the loss of the latter that has the public outraged, or rather the wealthy public. Compare Bernanke, Greenspan, Volker, or Summers to John Law, not Obama. And btw, who was the Fed Chief during FDR's tenure?

  Published: April 29, 2009 11:35 AM

• Inquisitor

  "John Law=FDR=Hitler=Mussolini=Obama. This may pass for intelligent discourse amongst certain readers. But in my eyes it is trolling for hate and does nothing to further your premiss. "

  So comparison to men who advocated/enacted policies similar in the concrete to Obama's is verboten? Why?

  Published: April 29, 2009 12:36 PM

• Matt R.

  Phaesed,

  Obama has shown himself to be nothing more than a statist throughout his short political career, so he doesn't get a pass. He's already passed Bush in spending in his first 100 days in office!

  Published: April 29, 2009 12:49 PM

• Phaesed

  Oh, he most definitely is a statist, but this about the economics, not the politics. Bush had no problem letting the Fed lower rates to 1%. I'm just saying, don't blame Obama, blame the Fed. You're blaming a symptom when you blame obama, not the cause.

  Published: April 29, 2009 12:53 PM

• Matt R.

  Then I agree with you.

  Published: April 29, 2009 1:14 PM

• Steven Graff

  @Inquisitor
  Telling you would use "verboten." It is because Hitler and Mussolini are directly associated with Genocide and some of the most heinous crimes against humanity. The author understands this and could have selected a half dozen others to illustrate his point but he deliberately chose Hitler and Mussolini and so deserves to be called as out inflammatory and hate bating.

  That you would fain this is not the case or that somehow Hitler is just another leader and the introduction of his name into any conversation does not taint the conversation is disingenuous. Few leaders fall to Hitler's depravity & despotism and the growing use of the meme Obama = Hitler plays to people's ignorance and debases any intelligent conversation.

  Published: April 29, 2009 1:24 PM

• matskralc

  It's not so much "Obama = Hitler" as it's "statists = Hitler".

  I agree it doesn't particularly help, rhetorically, in the Age of Godwin to bring up Hitler, but I also don't really think it detracts from the rest of the article.

  Published: April 29, 2009 1:30 PM

• phaesed

  I'd just like to continue to point out that as long as you blame the politicians, not the bankers, the politicians will ignore you and the bankers will continue to enjoy the privilege of robbing us of our freedom.

  Published: April 29, 2009 2:00 PM

• AV

  Stephen Graff, the interpretation of the artcile as meaning John Law=FDR=Hitler=Mussolini=Obama is yours alone.
  The discussion was on the means to obtain power via nation economic control.

  I hope you were as outraged (relatively so) when Harry Potter director Alphonso Cuaron equated the manifestation of pure evil to George Bush and Saddam Hussein, calling them both "the same."

  Published: April 29, 2009 2:33 PM

• Ebony Bandera

  @Graff - I wonder about how well you do with reading comprehension in other, non-knee-jerk topics.

  It is you who wrote "Law=FDR=Hitler=Mussolini=Obama" and thereby *equate* the five. Mr. French discusses similarities of economic policy and does not equate them as men.

  Furthermore, you seem to think Inquisitor's use of the word "verboten" is tantamount to saying "Hitler=Obama" again. Clearly, the word was chosen to depict your attitude and is not a slam on Obama.

  We should be alarmed if the policies currently in play with Obama's enthusiastic participation are the same or similar to policies that empowered murderous regimes in the past. That is not to say that Obama is or will become a Mussolini. It is to say that we may be seen as tossing loaded machine guns into the lunatic asylum housing the next Hitler.
  

  Published: April 29, 2009 2:52 PM

• phaesed

  Another thing to remember is this time there will be no "Master Race"

  Published: April 29, 2009 3:00 PM

• George

  Don't blame the Fed. They are doing what they were created to do (by Congress)...

  Published: April 29, 2009 5:19 PM

• Steven Graff

  @Bandera
  I think I will leave it to the Mr. to explain his decision to toss the socially loaded bombs of Hitler and Mussolini into his article asserting a link between John Law and Barack Obama. I would think that someone of his learning and office would be very aware of the power of the names he uses and understand the social and emotional weight they carry when introduced into any conversation or scholarly publication.

  I have asserted current President of the Mises Institute chose these men specifically because he wanted to associate their deeds with Obama, as there are certainly other leaders in history besides Hitler and Mussolini who are equally or more strongly linked to the policies of John Law.

  That you defend his decision, call my opinion knee-jerk and cast aspersions at my reading comprehension changes not the offensiveness of his writing or my opinion that Mr. French weakens his point by including these two when putting forth the argument that Obama can be linked to the policies of John Law.

  Published: April 29, 2009 11:52 PM

• Steven Graff

  @Bandera
  I think I will leave it to Mr. French to explain his decision to toss the socially loaded bombs of Hitler and Mussolini into his article asserting a link between John Law and Barack Obama. I would think that someone of his learning and office would be very aware of the power of the names he uses and understand the social and emotional weight they carry when introduced into any conversation or scholarly publication.

  I have asserted current President of the Mises Institute chose these men specifically because he wanted to associate their deeds with Obama, as there are certainly other leaders in history besides Hitler and Mussolini who are equally or more strongly linked to the policies of John Law.

  That you defend his decision, call my opinion knee-jerk and cast aspersions at my reading comprehension changes not the offensiveness of his writing or my opinion that Mr. French weakens his point by including these two when putting forth the argument that Obama can be linked to the policies of John Law.

  Published: April 29, 2009 11:54 PM

• Morgan W.

  @ Steven Graff- is it possible the author used these examples so people like myself with a limited education can understand what economic policies and tactics were being used, as Hitler and Mussolini are better known to most people when it comes to their rise, pre-murderous dictators of course.

  Not sure, but thats what I got from it (economic based site and articles 'n' such).

  Published: April 30, 2009 12:37 AM

• Inquisitor

  "Telling you would use "verboten." It is because Hitler and Mussolini are directly associated with Genocide and some of the most heinous crimes against humanity. The author understands this and could have selected a half dozen others to illustrate his point but he deliberately chose Hitler and Mussolini and so deserves to be called as out inflammatory and hate bating.

  That you would fain this is not the case or that somehow Hitler is just another leader and the introduction of his name into any conversation does not taint the conversation is disingenuous. Few leaders fall to Hitler's depravity & despotism and the growing use of the meme Obama = Hitler plays to people's ignorance and debases any intelligent conversation. "

  Actually trying to maintain that he is any different from Hitler or Mussolini as far as economics goes ALSO plays to their ignorance.

  Published: April 30, 2009 3:38 AM

• Vanmind

  I don't know, claiming that this is about economics and not politics -- and then emphasizing that Obama's pretense of rule will not be as bad as others because there will be no Master Race -- seems like intellectual dishonesty to me.

  Published: May 1, 2009 1:11 PM