Never-Ending Government Lies About Markets
The purpose of government is for those who run it to plunder those who do not. Throughout history, governments have used violence, intimidation, coercion, and mass murder to enforce this system. But governments' first line of "defense" is always a blizzard of lies -- about its own alleged benevolence, altruism, heroism, and greatness, along with equally big lies about the "evils" of the civil society, especially the free market. FULL ARTICLE
Comments (44)
Barry Loberfeld
From "The Meaning of 'Progressive' Politics":
If Big Business was the devil of Progressive rhetoric, it was nonetheless the beneficiary of Progressive policy. How did Progressivism's means lead to such a corrupt end? How did a movement that advocated greater democracy, that insisted that the "National Government must step in and discriminate ... on behalf of equality and the average man" (Croly), bring about the rise of bureaucracies that were removed from democratic review and "invariably controlled by leaders of the regulated industry" (Kolko)? Along with the chasm between the myth and the market, an illuminating answer can be found in Dewey's own definition of democracy: "that form of social organization, extending to all areas and ways of living, in which the powers of individuals shall ... [be] directed" -- by the State, which can justly be described as the god of Progressive belief.
In addition to Prohibition and segregation, the Progressives' anti-individualist idealism found yet another manifestation -- militarism. Under the Roosevelt Administration, the "spirit of imperialism was an exaltation of duty above rights, of collective welfare above individual self-interest ... [of] the heroic values as opposed to materialism, action instead of logic, the natural impulse rather than the pallid intellect" (Osgood) -- in short, an exaltation of every tenet of Progressive ideology above Enlightenment liberalism. This manifestation tumefied with the outbreak of war in Europe, with the Progressives clamoring for U.S. entry:
War opponent Ralph Bourne denounced Dewey and the other Progressives for allying
themselves with the "least democratic forces in American life." He openly mused
that there "seems to have been a peculiar congeniality between the war and these
men. It is as if the war and they had been waiting for each other." It is possible
to suggest that there was nothing at all "peculiar" about the congeniality between
the war and the ideas these men held.
READ THE ENTIRE ARTICLE.
Published: May 13, 2009 8:03 AM
David
DiLorenzo's work is awesome, but I wish he had references included in this article (did I miss them?) I want to send some Progressive friends over this way to expose the lies they've been taught, but they'd pick this apart without references.
(I realize the book has tons of references, but they're not going to buy the book. At least, I don't think they will.)
Published: May 13, 2009 8:40 AM
Mac
Thomas DiLorenzo writes in declarative sentences which are straightforward.
I think that would be too much for our progressive friends to accept.
Published: May 13, 2009 9:19 AM
greg
Since 1900, productivity has grown over 1000 times (thanks to the History Channel). So if we would not have had all the interventions, we could have grown 2000 times? Maybe, maybe not, I am content with the 1000.
Markets do need rules and regulations to protect the players. Without them, you can bring the system down from the actions of just a few players that defraud others for their personal gains. And self policing does not work unless you are operating within the Mafia.
Freedom is not absolute for any one individual. A persons freedom to act extends only as far as that individual does not infringe on another's freedom. That is where we need laws and enforcement of those laws to insure everyone's freedom is protected.
Published: May 13, 2009 9:47 AM
Barry Loberfeld
Of course, I meant RANDOLPH Bourne...
Published: May 13, 2009 10:20 AM
Magnus
Markets do need rules and regulations to protect the players. Without them, you can bring the system down from the actions of just a few players that defraud others for their personal gains. And self policing does not work unless you are operating within the Mafia.
You have been lied to your whole life, so you are likely unaware of the true history of law and government.
It's not your fault you were psychologically abused. You have probably been subjected to the government's forced schooling, like everyone else in America in the last 150 years, or at least to the nominally "private" school analogues that have grown to mimic the State's methods of schooling (which they have to in order to get State accreditation and the privilege of doing business).
The primary purpose and function of forced schooling is not education, but to instill in young people an instinctive, automatic assumption that a centralized, compulsory State is necessary for human life. The purpose of schooling is to install an instinctive submission to the authority of the State.
Markets had their own rules for hundreds of years, before the State co-opted them, and forced private dispute resolution systems to use the State's courts instead.
Also, the State is the mafia. It operates just like a mafia. We live under a mafiocracy. And its greatest strength is not in the brutes it employs, but in convincing its victims that it is not a mafia.
And, no, there is no such thing as a single market actor who has anywhere remotely near the power to bring the whole "system down" via fraud. The only organization that is capable of THAT kind of monolithic, consolidated power is ... you guessed it: the State.
Published: May 13, 2009 10:33 AM
David Spellman
greg,
I see your points, but I think you missed the part about the government being a gang of criminals who infringe on your freedom and do you harm. Your analogy to the Mafia is much closer than you would be willing to imagine.
If you feel the government really does protect you rather than rapaciously loot you, then continue to support it like tens of millions do. If you awaken to the reality that government is the agent for coercing your servitude, then feel free to oppose it.
Published: May 13, 2009 10:34 AM
Mike T
About 95% of the present US government is government of the US corporations, by the US corporations, and for the US corporations. Does the Mises Institute bloggers want the corporations to control the entire 100% of the government or the government to disappear so the corporations will control not only the markets but the legal force of the society also.
The US is so far behind other more enlightened countries in health services, the environment, communication and transportation technologies, and other marks of civilization that it is becoming a major embarassment on the world scene. We lead the world in weapons spending and the percentage of our citizens incarcerated. If the Mises Institute wants to complain about something significant there's a few places to start.
Didn't John Nash prove that the best result for the individual didn't necessarily mean the best result for the society or civilization as a whole? Selfishness isn't all its cranked up to be.
Published: May 13, 2009 10:51 AM
Franklin
Oh, my.... Mike T., now you've really stepped in it. Here it comes.....
And before I duck from the impending onslaught, I will simply offer that you spend some time in thoughtful analysis, relative to the nature and role of government in a free society, and its nature and role in present day society.
In addition, investigate the definition, evolution, and privlege of "corporation" and how this is an anathema to most libertarians.
Also, research the Mises blogs and essays surrounding the present day war machine.
I casually step aside now.
Cheers.
F.
Published: May 13, 2009 11:06 AM
David K, Meller
It is true that governments lie about markets.
They are, after all, monopolies of force and fraud who lie about EVERYTHING! It certainly should not be surprising that a government's accounts of market activities have a large component of falsehood in them, after all, fraud, misrepresentation and deception is as natural to government, and the "newsmedia" dependent upon it, as breathing is to human beings.
If governments ever told the truth, especially about themselves, they would all be out of business overnight! Their politicians, bureau(c)rats, and military and police goons would all be homeless on street corners with little tin cups and life would be vastly better for the rest of us.
Look on the bright side. We can tell the truth!Most of the government's lies are uttered by people who are so stupid and ignorant that refuting them is like shooting fish in a barrel.
PEACE AND FREEDOM!!
David K. Meller
Published: May 13, 2009 11:09 AM
Inquisitor
"About 95% of the present US government is government of the US corporations, by the US corporations, and for the US corporations. Does the Mises Institute bloggers want the corporations to control the entire 100% of the government or the government to disappear so the corporations will control not only the markets but the legal force of the society also."
A non sequitur. Nice beginning. Dunno what the rest of your comment has to do with anything... except to unwittingly profess your ignorance of what the institute does/believes in?
Published: May 13, 2009 11:32 AM
Barry Loberfeld
"About 95% of the present US government is government of the US corporations, by the US corporations, and for the US corporations. Does the Mises Institute bloggers want the corporations to control the entire 100% of the government ... ?"
The short answer: no.
From "Requiem for the Left":
While many adherents of the Left made their peace with the poverty and tyranny of the Communist bloc, some did not, which to this day poses the question: How can these people continue to believe socialism a corrective for all the wrongs they denounce -- we can recall Ralph Miliband's classic Marxoid list of exploitation, poverty, war, imperialism, and the "crimes of the ruling classes" -- when these always exist pervasively in those People's Republics where every drop of capitalism, their hypothesized source, has been wrung from the social fabric? It's not so much that they close their eyes as it is that they avert them -- towards a sight in which they believe they find confirmation: the presence of these wrongs in the "capitalist West."
And who can deny it? Who can deny, say, the West's imperialism? But with this and the other stated evils, we must ask: What element of the semi-capitalist West was responsible -- the free market or the coercive state? In Britain, who thundered the loudest against colonialism? The classical liberal advocates of laissez faire, who condemned imperialism long before the birth of the founder of the Soviet Empire. It was the "Tory socialism" of Disraeli, not the free market, that sent British troops overseas.
And the "crimes of the ruling classes"? What were these ever but the deeds, not of truly private businessmen, but of the State? What does Ralph Nader's denunciation of "corporate socialism" concede except that the corporations owe their current privileges, not to laissez faire, but to government intervention? Which leads us to now ask: What exactly is the "capitalism" of these anti-capitalists? Is it "Little England"-ism or mercantilist imperialism? Free trade or protectionism? Laissez faire or interventionism -- A or non-A? Just as theocracy cannot denote both the union and the separation of Church and State, so capitalism cannot be both the union and the separation of Firm and State.
Orthodox Marxism cynically -- amorally -- rejected the possibility of neutrality and equity in political matters. All government was the special interest of one "class" or another. Just as capitalism ushered in the rule of the bourgeoisie, so would socialism bring about the "dictatorship of the proletariat." But how does capitalism -- that is, the free market -- represent the special interest of "capitalists" (i.e., nonmanual laborers)? If respect for property rights favors "capitalists," then why do corporations seek subsidies (each for its own self, mind you, not for the entirety of its purported "class")? If unregulated commerce leads to monopolization by these "capitalists," then why do real-world businessmen turn to government to provide them with monopoly entitlements (optimally, only for their own company, not for all "capitalists" including their competitors)? And if free trade benefits this class and no other, then why do each country's business leaders -- and union members -- lobby for tariffs on imports? We seem to forget that the classical liberals formulated their principles of private property, laissez faire, and free trade -- rejected by the Left and Big Business alike -- not against the graspings of the have-nots, but in opposition to policies that favored the few over the common good. All of the classic Marxoid evils existed before the advent of liberal capitalism, which arose specifically to eliminate them -- and did so most impressively.
READ THE ENTIRE ARTICLE.
Published: May 13, 2009 11:56 AM
Michael A. Clem
About 95% of the present US government is government of the US corporations, by the US corporations, and for the US corporations.
Assuming that figure is true (and I'd have to see some serious documentation of it), the obvious solution to that problem is LESS government and government regulation, not more of it. Is that obvious connection so hard for people to see? Admittedly, reducing government power is problematic, but it would be that much easier if all these anti-corporation people got behind the idea of reducing government instead of expanding it.
Published: May 13, 2009 12:03 PM
Deefburger
@Mike T
Everything you name as a fear is a direct result of government regulation and interference. Do your homework my friend. Study up and think about what it is you see before you.
#1 - Corporations get involved in government, because government gets involved in corporations. The involvement is in the form of regulations and subsidies. Remove those two incentives and there is no reason for corporate involvement in government.
#2 - As far as being "behind more enlightened countries" in medicine etc. We are not behind, in fact in most instances we are ahead. But those companies that are ahead find it dificult to enter the market with their advances because of #1.
For instance, there are currently 28 car companies in the United States right now. But I bet you can name only the Big 3 and MAYBE one or two others.
The most efficient, advanced and affordable heath care system in the world today is a non-profit U.S. Corporation.
We lead the world in citizen incarceration because of government intervention in our freedoms. Most criminals incarcerated are for non-violent crimes that usually involve drugs, which are HIGHLY REGULATED.
The weapons technology is driven by the government's thirst for power, and their easy access to the REGULATED CENTRAL BANK, where they get to spend whatever they want, whenever they want, on whatever they want, and with whomever they want, which happens to be the corporations you mention that are in "control". Surprised?
Ayn Rand Proved that there are two kinds of "selfishness". Rational self interest, and irrational self interest. Before you use the word "selfish", define your terms. Irrational self interest is what Nash's proof deals with. Rational self interest is what we use every day, as decent and moral people, to conduct our daily affairs. You can't live without your reason or your self interest, except as an ant or a vegetable. It is what makes you human and sets you apart from the other intelligent creatures on this Earth.
Published: May 13, 2009 12:25 PM
Deefburger
@Barry Loberfeld - Beautiful! (Standing and Clapping)
Published: May 13, 2009 12:36 PM
Barry Loberfeld
Deefburger,
My compliments in return...
Published: May 13, 2009 1:02 PM
Eric
Government is good at one thing, it breaks your legs and then hands you a crutch and says, see - without us you'd never be able to walk.
-- Harry Browne
Harry was partially right. They are also good at lying. And if you don't fall for the lies, then they resort to method one above.
Sounds like the Mafia with Flags flying at their offices (another HB-ism).
Published: May 13, 2009 1:04 PM
eric
I love this guys work.
Published: May 13, 2009 1:08 PM
C
A nice discussion of how govt ignores the law to do as it pleases for whomever pays to play in Washington, in today's WSJ, by Zywicki: "Chrysler and the Rule of Law: The Founders put the contracts clause in the Constitution for a reason."
http://online.wsj.com/article/SB124217356836613091.html
It is very pertinent to DiLorenzo's themes, here and in his books.
I loved "Hamilton's Curse" -- where it all began going awry from our magnificent constitution.
Published: May 13, 2009 2:12 PM
Deefburger
Whenever I hear the argument for more regulation of the free market because of such and such, I can't help but think of this simple metaphore:
You have a property on the bank of a creek.
You decide, for whatever reason, that the creek is flowing too swiftly.
To remedy this situation, you drop a large boulder into the creek to slow it down.
The creek, in response to the "regulation" provided by the boulder, moves around the boulder in every direction it can, including the bank beside your property, washing it out and destroying your property.
Now the original problem is exacerbated by the regulation of the boulder, but, being convinced of the effectiveness of regulation, you blame the new damage on the creek, rather than the regulation, and decide MORE regulation is needed. So more boulders are dropped into the creek beside your property.
This continues, over and over again, with more and more homes receiving damage as time goes by, with more and more boulders, house lifting, reinforcements and buttresses, and on and on. Eventually, the creek is no longer a creek, but a pile of rocks.
Then, because the creek is gone, the property loses value and people move away. The source of the beauty, the reason for building there in the first place, has been regulated into non-existence.
Free markets flow. Regulations serve only to divert that flow, initially, and halt it entirely, eventually, if the assumption is that regulation itself has no fault and no blame for the consequences.
What we keep hearing, over and over again, when problems caused by regulation surface, is that the regulation was inadequate, or misplaced, not that it was unnecessary, or undesirable.
The problem is that we have grown up with so much regulation in our lives that we have come to expect it, and to turn to it for succor when we feel threatened or disappointed with a situation or outcome. We fail to recognize that unfortunate circumstances are temporary if we choose to deal with them openly ourselves, rather than pawn them off to some newly created regulatory authority.
Utopia is not an ideal reached through the creation of regulations. That path leads to a Utopia of stagnation and limitation. It leads to a world of "haves" and "have nots" that are those in power, and those who are not. This society requires force of arms to keep the "peace" of regulation.
Freedom is scarier to us, not being used to seeing it, but is much much much more livable as a human being. It too leads to "haves" and "have nots", but the path to change is wide open to all, and only requires the will of the individual, and the voluntary cooperation of his peers, to rectify the problems of the "have nots". This scociety needs only to recognize the rational need for charitable help of the "have nots" to solve the problem of the "have nots". Power rests in the individual to be good and charitable and productive, or not.
Freedom requires that the individual have faith and trust in others. Scocialistic Utopia requires nothing from individuals, except their cooperation at the point of a gun or the threat of starvation or ostracism.
I would urge you all to watch a film made in post war Japan by Akira Kirosawa called Ikaru. It is a good example of the evils of bureaucratic regulation, and the strength of the good will of the individual. You will cry.
Published: May 13, 2009 3:45 PM
Curt Howland
@Greg,
You are very close to the kernel of the issue, there very much is a need for regulation and correction. However, by its very nature, "government" cannot perform this function, because it is insulated from any feedback about the effectiveness or effects of those regulations.
I've been listening to "The Market For Liberty" in my car, and this explains the problems both you and I agree need to be solved.
http://freekeene.com/free-audiobook/
Published: May 13, 2009 4:10 PM
Corporations and the Free Market
The corporation--particularly its limited liability aspect--is a creature of legislation. Would corporations (or any other limited liability business association) exist in a free market? Or would something like "piercing the corporate veil" be required? I'm thinking more in terms of tort than contract, although the issue could arise in other areas of law as well.
Published: May 13, 2009 4:11 PM
Paul S. Nofs
Fraud is the crime or offense of deliberately deceiving another in order to damage them – usually, to obtain property or services unjustly.
If an individual or a group commits fraud what barrier keeps them from lying to government investigators?. If guns are regulated do criminals give up their guns?
Many regulations are supposed to work to prevent crimes that haven't even happened. So, it isn't even a crime except by government fiat. Most regulations seem to be un-Constitutional as they do not protect individual freedom, personal property or contracts.
But fraud is a well established principle of law. Reports are gathering (William Black for one) that many if not most of the toxic derivatives were based on fraud aided and abetted by government officials.
Where are the fraud investigations? Where are the prosecutors? Where are the courts? Enron was dealt with using fraud laws.
It is a government lie that we need regulations to prevent this from happening. This misdirection (thanks Penn and Teller) belies the fact that we can already prosecute the fraudsters and put them in jail for years of days. Maybe even recover lost personal property. Swift and even justice as best we can contrive, is what we badly need (and maybe tar and feathers). It may not deter but there can be no confidence in a financial system that is morally rotten at the top.
Talk about "shovel ready" jobs. Unlike the malinvestments this administration proposes, let's give lawyers and judges job experience in fraud prosecution. But where are the the private investigations and court claims?
Instead we hear another Jedi mind trick, "These aren't the frauds your looking for." But with new and improved regulations your government will find the right ones next time. So they say, yet again.
Published: May 13, 2009 5:20 PM
Timothy
Magnus, my hat's off for your comment above on schooling and the state. Every paragraph hits the mark. I wish everyone would read it. It is the antidote to an attitude I encounter almost every day.
I would only add Hannah Arendt's description of totalitarian schooling: the purpose is not to lead students to the wrong conclusions, but deprive them of the means of reaching any conclusions at all.
And how magnificently the schools have succeeded! Question the necessity of any state activity in the presence of a well-schooled American, and prepare to be accused of advocating tyranny.
The irony gives me the spins.
Published: May 13, 2009 6:45 PM
Bruce Koerber
Classical Liberalism Protection
Wednesday, May 13, 2009
Cheerios Fight As Mafia-like FDA Tries To Use Extortion!
Yes, there is definitely the extortion element. The mafia needs to find money somewhere (since our 'mafia-like government' has caused our nation to go bankrupt) so it resorts to extortion. General Mills is their newest victim.
Then we have the logical consequence of intervention: intervention-induced problems that require even more intervention; and then the viscious cycle expands like a cancer. The FDA is just a specific arm of interventionism and it creates definitions that the ego-driven interpreters use to justify more ego-driven interventionism.
Prescription: All human intervention into the economy lacks moral authority, therefore it is invalid and should be ignored by the masses. The unConstitutional coup and all of its agencies are in the minority and will find themselves powerless when the masses reject their economic terrorism.
Published: May 13, 2009 9:13 PM
Phaesed
"Oil company executives are never praised when gasoline prices fall, as they have in the past year from over $4/gallon to under $2/gallon in many parts of the United States."
I for the most part agree with the article and thank Mr. DiLorenzo for his work, but I must object to that quote. Because it is not the execs who lowered the price of gasoline, it was the free market, Say's Law, and the realization that it is becoming an increasingly inefficient method of energy due to the danger it presents to our country in dealing with the same exact people who would see our economy crushed.
This current market crash is merely another stage in the recession which has been plaguing our country for quite some time. It was the lowering of interest rates, imprudent lending and mathematical manipulation of credit derivatives that caused this crash. When the Fed increased their interest rates after promising to keep them low for as far as the eye can see. If the banks were truly "private" institutions, then they should have failed. It is the outflow of our future earnings to create their present earnings and salaries which has created the "need" for regulation. Glass-Steagall's repeal and broad based banking for an industry that will always turn to socialized risk was at the heart of this. I have no problem if a bank lends, I should just not have to pay if they lend POORLY.
Additionally it was the regulations that created a healthcare system without checks, something a free market would provide. Patent laws have gone a long way to prevent a free market in healthcare. Insurance industries which have services that are we are required to have by law do not help either. If a doctor wishes to practice, very well, but should he be required to pay a high percent of his profits to the company even if he commits no incompetent act?
There are many examples and many flaws in each argument provided, but I just dislike the agitation at the current administrations policies when the previous administration helped create the protections for the industries while maintaining a free market for the individual. If I go bankrupt, I do not have a government subsidy to make sure I am profitable again quickly. It has and always will be the Fed, criticize that institution rather than the Government. I believe that by directing our attacks at the government first and then the Fed, we lose the poignancy of our arguments, letting them fall upon deaf ears.
Published: May 13, 2009 9:29 PM
Jonathan Finegold Catalán
Just a comment about DiLorenzo's book How Capitalism Saved America, It is worth buying.
Published: May 13, 2009 10:29 PM
Gil
Marcus' comment was 'brilliant'? He's the one who sounds psychologically battered. Elsewhere Libertarians imagine that an idyllic anarcho-Capitalist world would be magically self-correcting and any aspiring mafia-gangs would be chased out of town, posthaste. Nor would they have problems with equivalent private prohitbitive regulations, e.g. speeding on a private road, not allowed to carry weapons (e.g. guns, knives, etc.) into a private business or residence, can't do drugs on private properties, etc., because "I'll take my business elsewhere" yet show they're pathetically helpless in the case of the government.
Besides, what's with the boringly stale concept of a government starting off as a mafia-like gang swaggering into a town and declaring themselves the new bosses by threat of force? History has shown that government has evolved from co-operative private concerns to becoming another entity with time. After all, the U.S. Government was created after the Revolution by the 'Founding Fathers'. The 'Founding Fathers' didn't say "there's going to be no governments and all the private landowners are going to figure things out via free market forces" only to have a separate group invade and decide "we're going to be the federal government and if anyone has a problem with that then they're in big trouble". Still, Libertarians might like to see the Founding Fathers as the council of the old Norse gods and Hamilton as Loki - he who'd ruin it for everyone else.
Published: May 14, 2009 1:08 AM
gernot
My best friend, who runs a company hmself, believes strongly that government intervention is critical---else no-one will invest the amount of money (given the risk) in order to develop new unknown technologies. My response that that means stealing from people to do what a few people want is "met" with his that we are all better off with the new technology when it is developed! Amazing... Not to mention that he believes that without a coercive state we would not have civilization. So many logical fallacies, but as he is a salesman through and through, I am not about to win any arguments.... too bad such people do not see the errors of their ways: their stubbornness is inbred and unlikely to change ever.
Published: May 14, 2009 2:18 AM
A.D.D. Poet
I remember learning this as a child the set up of goverment is put in our brain very young, the first I recall is the Pied Piper and today we are being led down the road the goverment chooses I only hope we wake up before we get to the lake, WE ARE NOt RATS. We have two ears as to hear it also makes it easy to release the bad right out the other as it enters we as one not in the goverment must be the control of the GOVERMENT and stop the chaos take control and make it work for all.
Published: May 14, 2009 8:16 AM
Magnus
Besides, what's with the boringly stale concept of a government starting off as a mafia-like gang swaggering into a town and declaring themselves the new bosses by threat of force? History has shown that government has evolved from co-operative private concerns to becoming another entity with time.
Governments don't "evolve."
What happens is that new scumbags replace the old scumbags. New scumbags are attracted to anything that offers them power and self-aggrandizement, and so they naturally gravitate toward government.
Over time, these scumbags take up ever-loftier positions in the pre-existing mafia-like organization, and then expand upon the power and precedent established by their scumbag predecessors.
The scumbags start to make REAL headway in their quest for power over others when they manage to delude a substantial percentage of their victims into believing that they are not, in fact, scumbag oppressors and slave-masters, but instead are some kind of legitimate authority. Ha!
Anyway, this process is precisely analogous to what I would describe as the mafia "swaggering" into town and setting themselves up as the new boss by threat of force.
The only difference is that the expansion of the power of the State from within, by its elected officials, typically happens in broad daylight, incrementally, with minimal or misplaced opposition, because they are assisted by collaborators among the so-called electorate -- people who are corrupt, brain-numbed sub-morons, clapping and smiling and cheering for their new slave-masters every step of the way.
Published: May 14, 2009 1:05 PM
Gil
Wow, Magnus you're style of reply makes it sound as though you're a helpless victim in a world of conspiring evils. To paint yourself as 'violated' as any African-slave of 200 years ago sounds as though you're the one who needs help.
Published: May 14, 2009 9:36 PM
Marcus
After suggesting that Communism and Socialism profit from the death of their citizens my friend disagreed, stating that a death would be a loss of productivity in a socialist society. After doing so I suggested he read the "Black Book of Communism" (I also Introduced the law of diminishing returns before he wrote me this and it obviously didn't pay off):
William Tomasello
May 14 at 11:56pm
So are you citing a book that describes the atrocities of communist inspired regimes? In that context it does make sense. But communism in its pure form wouldn’t necessarily see benefit from death. Depending on the infrastructure and base population of a country one could just as easily see increasing returns from population growth. Obviously I’m not defending Stalin’s Russia or Mao’s China. But to make such a broad statement regarding a school of economics will never be accurate. The only places where pure communism has existed has been in rural villages or small tribes. In these cases death can break the society’s economy. Furthermore Capitalist societies would see death as a surplus in almost the same exact way. People who are unemployed don't contribute to society's surplus as you've defined it. The death of the unemployed reduces their family's costs of keeping them alive. So a capitalist society would see death as profit until it reached the natural rate of unemployment. I guess it all comes down to context
Marcus Cimino
Today at 12:29am
Regardless of the "form" of communism a society inherits, power hungry individuals like Stalin, Mao and Kim Jong Il are all perfect examples of the dead end toward which a path of "good intentions" inevitably leads. In the freest form of society, the incentive for one to achieve the highest accumulation of wealth would likely result in them producing offspring. In regards to this, the inverse relationship would result in poverty stricken individuals possessing no incentive to reproduce, and therefore "population control" would be deemed unnecessary. I am not very well affiliated with the broader notion that communism maintained such a "social utopia" in rural villages throughout history, however, it has been proven that the exchange of goods or the "double coincidence of wants" has maintained the framework for civil society in early Greece, Iceland and many other more primitive societies. But lets take a very pinpointed example like health care (doctors). In a free society, a doctor has a level of demand based on his or her performance, in a socialist society, individuals do not get to choose which doctor treats them. In the free society, the death of a patient would inevitably result in less demand, and therefore less profit for that doctor; while in a socialist society, the doctor is backed up for months with patients and can can only save costs by permanently curing the patient, or even more so, by letting them die (a sick patient is A: Producing less for the state and B: costing the state more in health care based on his or her level of sickness.).
William Tomasello
Today at 12:46am
I'm can't really debate the pros and cons of communism compared to capitalism because I think it's too hard of a question. I just didn't agree with that statement because it was so absolute and I don't think anything in economics is that cut and dry. I'm not a fan of orthodox theory, and I haven't found a different one that answers all the questions that economics pretends to know. I don't know why I disagreed in an absolute way though. Kinda hypocritical.
Marcus Cimino
Today at 12:51am
Well a free market isn't an absolute, a state is a monopoly and therefore an absolute. Just get your literature from mises.org and take economics in a southern school or a more conservative private school. The liberal form of economics (Krugman/Keynes) hasn't been tried out on a second generation but it has failed in the first one.
Published: May 15, 2009 12:15 AM
Deefburger
Wow. Lots of conflict in these posts!
Sit back, crack a cold one, and think.
The U.S. was the first attempt, ever, to resolve the conflict within ourselves as individual Human Beings, for the freedoms our nature as rational thinking creatures and our desire for the safety of community. Government provides the structure of organization that we need to combat those threats, real or imagined, that we cannot deal with alone. The Rule of Law places limits on the scope and extent to which that structure can reach into our individual lives, thus preserving the freedoms needed by our rational minds. It is a conflict of Reason and Intelligence versus Fear and Ego driven irrationality.
We are social animals and as such we crave the safety of our numbers, and for that we need Government to structure the body of individuals into a cohesive and powerful force when needed for the "Common Defense".
We are also Rational and Independent Beings, who bite at the bit and jerk on the chains of bondage.
The Founding Fathers did their very best to frame a system of checks and balances to preserve BOTH the structure of Government for the needs of society, and the limits of that same structure to serve the needs of our rational individualistic minds.
All in all it was a pretty bold attempt, and it was largely successful. But our fears have little by little handed more and more of those precious freedoms over to the structured "safety" of the state. What we see in government today is the results of years of little steps away from the mature, self assured thinking of individualism, and toward the comfort of the mothers breast that the state represents to our fearful egos.
We all feel both needs. We all resolve the conflicts in our own ways, but we have forgotten how important it is, how powerful it is, to wean ourselves from the teat of state.
But when we are threatened as a nation, by nature or by enemy state, we turn toward the unity of purpose that government is for, and rightly so. What we fail to do, is let go of the comfort of the union with each other when the threat is gone. We stay close to that same comfort, the fear still coursing though our veins, and keep some of the union to ease our lingering fear.
Thus, we lose our freedom, a little bit of fear at a time, until we find we have no freedom left, and the state becomes the source of our fear, rather than the protection it was created to be.
The point of discussing it is to find our way back to a more rational and mature condition of real freedom, with the knowledge that should we need to form a union of individuals to protect our common selves, we can. We need to learn how, and when, we should be one, and how we should go back to being just ourselves again, and still feel the safety of our numbers.
It's tough to do. Live alone for a while and you find yourself seeking out the company of others, naturally. But immerse yourself in community for to long and you long for the solitude of a fishing pole and a six pack. We've all been there if we've lived at all.
This is the balancing act that the Founding Fathers tried to setup a solution for. Let's see if we can tilt this balance back to the freedom side a bit. Looking back, we can see what it was and where our forefathers screwed the pooch on the original plan. Let's sip a cold one together and figure out how we can fix it.
Published: May 15, 2009 12:56 AM
Gil
"Thus, we lose our freedom, a little bit of fear at a time, until we find we have no freedom left, and the state becomes the source of our fear . . ." - Deefburger.
How exactly are you fearful of the U.S. government as though you were a North Korean dissident? And what exactly is the solution to this fear? It sounds as though you're using stories of 'imaginary hobgoblins' just as any other politician would.
Published: May 15, 2009 1:07 AM
Nima
I think we do need more and better regulation. But regulation gets lost when the government gets involved. This is the big misunderstanding in this whole more/less regulation debate.
As I explain in http://www.economicsjunkie.com/we-need-more-regulation/:
"Maximum liberty and limited government lead to maximum regulation, order, stability, prosperity, and peace. Maximum government control inevitably leads to chaos, disorder, instability, poverty, and wars."
Published: May 15, 2009 2:06 AM
David Ch
On this antitrust point, I remember reading some years ago a quote of someone in the 1940s commenting on the intitrust law, but I can neither remember where I saw itr nor who said it. Can anyone here help me trak the exact quote down? the substance of the quote was along these lines, but I cant remember its exact formulation:
' This law makes it possible to prosecute a corporation for any of the following crimes:
- charging more than the competition, or gouging
- charging less than the competition, or dumping
-charging the same as the competition, or price-fixing, and
-having no competition.
In short, this law equips the government to take action against any corporation it pleases'.
DOes this ring any bells in this forum? thanks
Published: May 15, 2009 4:26 AM
ganpalou
DiLorenzo overstates his case in the first sentence, and it is offputting. The goal of government is the preservation of power, irrespective of the dimension(s) of its domain which are destroyed. Adam Smith and Karl Marx attempted to confine the definition of power to the economic dimension. There are clearly other dimensions, i.e. religion, militarism, castes, etc. Within this broader spectrum, I do appreciate capitalism, and free markets. Free markets are a challenge to the power of government, for markets assume a separation of the "guys with gold" from the "guys with guns." When the "guys with gold" are too closely aligned with the "guys with guns," we are repelled, and claim "corruption." That cannot be done with the other current "isms," communism, socialism, fascism, totalitarianism. The fathers of the American constitution clearly saw the need, not only for separation of church and state, but also for separation of guns and gold; hence the Second Amendment, and limitations clause. A basic political truth, which the U.S. has never seemed to learn, is that you cannot win a war by stopping one infantryman at a time. One would think we would have learned this in the Nam, or Baghdad, or Afghanistan, or from the "war on drugs" and that Bernanke would have learned this by witnessing the IMF, Mexico, or Zimbabwe, but alas, it is apparently not to be so. If the recognized markets are overly dominated, an underground economy will flower, and the state will find itself hard pressed to tax what it does not recognize.
Published: May 15, 2009 8:44 AM
Michael A. Clem
Government provides the structure of organization that we need to combat those threats, real or imagined, that we cannot deal with alone.
The mistake is in thinking that only government can provide this structure of organization, and thus, that government is a necessary evil. The other mistake is in thinking that this purpose is the essential raison d'etre, or reason for the existence of government. As others have pointed out, the essential purpose of government is in exercising power over other people. The idea that governments ought to exist to protect rights or take care of things that individuals can't handle by themselves are secondary justifications that have been tacked on over time, apparently to justify government as a necessary evil.
Clearly, governments do exist to exercise power over people, and in so doing, restrict our freedoms. Logically defined, governments cannot exist without exercising power over people--any organization that does not violate the rights of somebody, somewhere, cannot be defined as a government, regardless of the services such an organization provides, such as the handling of things that individuals cannot handle on their own: arbitration and mediation, rights protection, protection from military invasion, enforcement of contracts, etc.
It's true that the United States has been more explicit about the secondary purposes of government--the Declaration of Independence remains, in my mind, a most libertarian-oriented document--but the Founding Fathers couldn't do away with the essential feature of government: coercion. The Articles of Confederation were a decent attempt, but the libertarian values championed in the Declaration are largely absent from the U.S. Constitution. The next Great Experiment can only be anarchist in nature. Only anarchism can provide men with the freedom to socialize and organize with other men, and yet allow men the necessary independence and solitude our nature also requires.
Published: May 15, 2009 10:26 AM
Magnus
Wow, Magnus you're style of reply makes it sound as though you're a helpless victim in a world of conspiring evils. To paint yourself as 'violated' as any African-slave of 200 years ago sounds as though you're the one who needs help.
Helpless? No. I live relatively well, thank you. And my ancestors fought off people who were far worse than the scumbags we all deal with today, so I can't exactly lie down and give up, can I?
Of course, I would live better, and my children would live better, were it not for this institutional, systematic violence that people call "the state."
But getting rid of that cancer in the gut of humanity depends on people like you waking up to reality and understanding things that you do not want to face. It depends on you having more courage than you currently exhibit.
Here's the truth of the matter: there is no state. The "state" is just a claim to authority. It's a false claim. It's a lie. It doesn't exist. The "government" is just a bunch of flesh-and-blood people, running around pretending that they own the place and own you.
But their legitimacy is a mirage, an illusion, a kind of theatrical fantasy. There are no rulers. There are no masters. There never have been, and there never will be. There are no "founders" or "officials" or "presidents" or "senators" or "mayors" or "policemen" or "tax collectors." Their make-believe status as some kind of legitimate, official authority is an illusion. It's only real if you choose to believe the lie.
The state trains children from an early age to be obedient to so-called authority figures. The ones that submit get rewarded and the ones that don't get punished. That's the purpose of school bells and make-work assignments that teach nothing -- to condition children to perform otherwise-meaningless tasks on command. It's called "operant conditioning."
For the adults' benefit, the "state" dresses up its claim to authority in pageantry and ceremony and ridiculous pantomimes and silly rituals. They do this to get you to believe. They do this to get you to suspend disbelief, the way a good storyteller would.
This is the source of the lies that Dr. DiLorenzo describes in this article -- they all begins with the Original Lie: the idea that there is such a thing as a State with authority over you.
Published: May 15, 2009 10:41 AM
Deefburger
@Gil - My god the list of fears is so long that it would take too much space to enumerate them! But if you have none, great for you, but I would say that ignorance is bliss until you know better.
@Michael A. Clem - "The mistake is in thinking that only government can provide this structure of organization..."
I agree. Government is not the only way, yet it is the way most often used historically. The old Pirates of Carribean used a system of democratic election to band together, elect a captain and keep the peace on board ship. The majority of tribes within the American Indian Nation used a system based on free will, that was borrowed upon heavily to create the U.S.
"Clearly, governments do exist to exercise power over people, and in so doing, restrict our freedoms."
Only in cercumstances of countering use of force and coersion is this power justified. The problem is that we have, little by little, allowed this use of force to be used for situations that are preemtive, and thus we have lost our freedoms.
The government is justified in apprehending an individual who has already used force or fraud against another. The government is not justified in imposing it's will against someone who has yet to commit a violation of the rights of others, or is simply engaged in consensual interaction with another willing party. Yet we give up our freedom, or at least condone the removal, when we say, "There ought to ba a law against that.", no matter what that is. Those words, and that implied surrender of freedom, comes about because of our knee-jerk gravitation to the power of our numbers. We only take notice of the loss of the freedom when it is our own behaviour that is the subject of those words, or we ourselves become the target of the law's intent. By then it is too late to recant. Little by little our fears remove our freedoms in this way.
"The next Great Experiment can only be anarchist in nature. Only anarchism can provide men with the freedom to socialize and organize with other men, and yet allow men the necessary independence and solitude our nature also requires."
Quite possibly so. Or perhaps we need to go back to square one with what we started with here in the U.S. and make a few adjustments that reflect the Liberal intent voiced in the Declaration of Independence.
Either way, we are going to crash this socialist vehicle we're riding in now, first. The answer to all of the problems of state is to stoke the fires of the boiler, with the Politicians and Special Interests yelling, "MORE STEAM!" So long as the wheels are still on the tracks and the engine is running, there is no possibility of turning it around.
It's going to be a very exciting ride! I hope we find ourselves largely intact when it crashes.
Published: May 15, 2009 12:23 PM
Marcus
Just remember, those who argue against power being a corruptible force, all would agree Jefferson was the beacon of freedom during the forming years of our nations constitution. However, after Jefferson took power he kept slaves (even for himself) and took land from law abiding indigenous native Americans. The invasion of Tripoli served as the icing on Jefferson's tyrannical cake. This proves all of Jefferson's "limited government" speeches as a facade hiding the corruption power wielding drives an individual towards.
Published: May 15, 2009 12:38 PM
Chip Krakoff
One need not agree with Professor DiLorenzo's opening statement, that "the purpose of government is for those who run it to plunder those who do not," to agree with many of the valid points he makes. Those who blame the current economic crisis on an absence of regulation are wrong. Too much of the wrong kind of regulation, plus the Fed's irresponsibly loose monetary policy following the stock market crash of 2000, plus government intervention to push lenders to give mortgages to members of minority groups, who otherwise would not have qualified, are much likelier as the proximate causes.
It is important to take any government pronouncement with more than a few grains of salt, and to cast a jaundiced eye on any and all government programs intended to make us better off. But Professor DiLorenzo's unrelenting hostility to government is a bit much. It is true that an awful lot of government initiatives make us worse off, but it is something of a leap to say that government's purpose is to plunder us, bridges to nowhere notwithstanding.
DiLorenzo seems to believe that government has no legitimate function at all. With respect to road building, the United States no longer contains the uninhabited wilderness tracts that would allow private developers to build roads and canals wherever they choose. Private development by all means, but there is surely a role for the state to set and enforce the ground rules. Private schools and universities of course, and vouchers too, but there remains a case for public schools, and public libraries as well.
Prisons have been privatized with mixed results, and our armed forces have increasingly relied on civilian contractors for many of the jobs formerly done by Pfcs, but most of us would hesitate to contract out the actual fighting too. Mercenaries have their place, but consider how well the Hessians performed in service of the Crown in America's War of Independence.
Many contracts nowadays contain mediation and arbitration clauses, but without a system of laws and a functioning judiciary and capable enforcement, private dispute resolution quickly becomes a mafia-like affair.
I'm all for volunteer fire departments, but I don't think you could count on them to perform as New York's Fire Department did on September 11, 2001.
Perhaps Professor DiLorenzo would care to elucidate his view of the proper role and function of the State, if any. As suspicious as we should be of the motives and actions of governments, we should not fool ourselves into thinking that we can do without the State and, yes, its coercive power. One country has gone down that road fairly recently. It is called Somalia.
Published: May 15, 2009 5:03 PM
Jeremy
Chip,
You are presenting a false dichotomy as the basis of your argument for government (i.e. either roads and government or no government and no roads; either education and government or no government and no education; either firefighters and government or no government and only volunteer firefighters). You are also failing to mention all the pain and suffering that governments cause (millions upon millions of deaths in the 20th centry alone, business cycles, millions imprisoned for drug offences, etc.).
Also, with regards to Somalia, before your claim can have any relevance you must show that things are worse now than they were under Siad Barre. I’ve seen stats that suggest otherwise but since you made the positive claim (and since I’m lazy) you can look them up.
Published: May 15, 2009 6:46 PM