Mises Daily Articles
Our Kind of Central Planning
During the 1990s, many of us complained bitterly about rule by the Left. We were outraged at how the Clinton administration had so much faith in government's ability to bring about universal fairness and equality. Government, we were told, would make right all relations between groups, equalize access to health care, curb every corporate abuse, and stop all forms of exploitation of man against man, and man against nature.
Except that behind every regulation, every bill, and every central plan, no matter how humane it appeared on the outside, an informed person could discern the iron fist of the state, which the Clinton administration freely used against its enemies. Clinton himself was perhaps never as convinced of the cure of power as the worst Clintonites, but it remained and remains his default worldview.
What was wrong with the leftists' worldview in the 1990s and today? Essentially it is this: they see society as unworkable by itself. They believe it has fundamental flaws and deep-rooted conflicts that keep it in some sort of structural imbalance. All these conflicts and disequilibria cry out for government fixes, for leftists are certain that there is no social problem that a good dose of power can't solve.
If the conflicts they want are not there, they make them up. They look at what appears to be a happy suburban subdivision and see pathology. They see an apparently happy marriage and imagine that it is a mask for abuse. They see a thriving church and think the people inside are being manipulated by a cynical and corrupt pastor. Their view of the economic system is the same. They figure that prices don't reflect reality but instead are set by large players. There is a power imbalance at the heart of every exchange. The labor contract is a mere veneer that covers exploitation.
To the brooding leftist, it is inconceivable that people can work out their own problems, that trade can be to people's mutual advantage, that society can be essentially self managing, or that attempts to use government power to reshape and manage people might backfire. Their faith in government knows few limits; their faith in people is thin or nonexistent. This is why they are a danger to liberty. We knew this in the 1990s, and we know this today.
The remarkable fact about the conflict theory of society held by the Left is that it ends up creating more of the very pathology that they believe has been there from the beginning. The surest way to drive a wedge between labor and capital is to regulate the labor markets to the point that people cannot make voluntary trades. Both sides begin to fear each other. It is the same with relations between races, sexes, the abled and the physical and mentally challenged, and any other groups you can name. The best path to creating conflict where none need exist is to put a government bureaucracy in charge.
And yet, the Left is hardly alone in holding this essential assumption about the way the world works. We have lived through six years of a Republican president. The regime is dominated by a different philosophical orientation. And we have thereby been reminded that there are many flavors of tyranny. Bush's spending record is far worse than Clinton's. After promising a humble foreign policy, war and war spending define our era. We're told that every problem with war can be solved through more force; that there is nothing necessarily wrong with imprisoning people without cause and without legal representation; that torture can be a legitimate wartime tactic; that some countries have to be destroyed in order to be made free; and that we can have all the warfare and welfare we desire at virtually no cost, thanks to the miracle of debt-driven economic growth.
Traveling on airplanes reminds us how much freedom we've lost and how we have become accustomed to it. Government bureaucrats presume the right to search us and all our property. We are interrogated at every step. The slightest bit of resistance could lead to arrest. We mill around airports while the loudspeakers demand that we report all suspicious behavior. Sometimes it seems like we are living in a dystopian novel.
Some people say that the real problem with the Bush administration is that it is too far left, and that a genuine right-wing government would be better. I'm disinclined to believe that, for I detect in the Bush administration a particular philosophy of governance that departs from that of the Clinton regime in many ways, except in its unlimited faith in government, that is, force and the threat of force.
I would go so far as to say that the most imminent threat that we face is not from the Left but from the conservative Right. I would like to defend the idea that rule by the Right is as dangerous as rule by the Left. Elsewhere, I've referred to members of political groups that support the conservative Right as "red-state fascists," and I don't use that phrase merely for rhetorical purposes. There was and is such as thing as fascism as a non-leftist form of social theory that puts unlimited faith in the state to correct the flaws in society.
In the American postwar tradition, the political Right has been a mix of genuine libertarian elements together with some very dangerous tendencies. Mises wrote in Omnipotent Government that there is a breed of warmonger who sees war not as an evil to be avoided as much as possible, but rather a productive and wonderful event that gives life meaning. To these people — and Mises of course was speaking of Nazis — war and all its destruction is a high achievement, something necessary to bring out the best in man and society, something wonderful and necessary to push history and culture forward.
Reading Mises's claim in peacetime makes it seem implausible. Who could possibly believe such things about war? And yet I think we know now. There have been hundreds of articles in the conservative press in the last six years that have made the precise claims we see above. Even in the religious world, we see the shift taking place, with new emphasis on the God of War over the Prince of Peace.
During the New Deal and before the Cold War, the libertarian tendencies of the American Right prevailed. But after the Cold War began, the mix became unstable, with the militarists and statists gaining an upper hand. It was during this period that we first heard the term "conservative" applied to people who believe in free enterprise and human liberty — a ridiculous moniker if there ever was one. Frank Chodorov was so fed up with it that he once said: "anyone who calls me a conservative gets a punch in the nose." Neither did Hayek or Mises, much less Rothbard, permit that term to be applied to their worldview.
Nonetheless, it stuck, and the bad habits of mind along with it. It would be impossible to say what policy of the current-day Right constitutes the biggest danger to liberty. For now, I would like to leave aside the most commonly talked about issues of the Bush administration, such as its ahistorical view of the power of the executive branch and its post 9-11 violations of civil liberties, which are very real indeed. Instead, however, let's look at the grimmest aspect of the state: its enforcement arm.
Lock 'em up
The American Right has long held a casual view toward the police power, viewing it as the thin blue line that stands between freedom and chaos. And while it is true that law itself is critical to freedom, and police can defend rights of life and property, it does not follow that any tax-paid fellow bearing official arms and sporting jackboots is on the side of the good. Every government regulation and tax is ultimately backed by the police power, so free-market advocates have every reason to be as suspicious of socialist-style police power as anyone on the Left.
Uncritical attitudes toward the police lead, in the end, to the support of the police state. And to those who doubt that, I would invite a look at the US-backed regime in Iraq, which has been enforcing martial law since the invasion, even while most conservatives have been glad to believe that these methods constitute steps toward freedom.
The problem of police power is hitting Americans very close to home. It is the police, much militarized and federalized, that are charged with enforcing the on-again-off-again states of emergency that characterize American civilian life. It is the police that confiscated guns from New Orleans residents during the flood, kept residents away from their homes, refused to let the kids go home in the Alabama tornado last month, and will be the enforcers of the curfews, checkpoints, and speech controls that the politicians want during the next national emergency. If we want to see the way the police power could treat US citizens, look carefully at how the US troops in Iraq are treating the civilians there, or how prisoners in Guantanamo Bay are treated.
A related problem with the conservative view toward law and justice concerns the issue of prisons. The United States now incarcerates 730 people per 100,000, which means that the US leads the world in the number of people it keeps in jails. We have vaulted ahead of Russia in this regard. Building and maintaining jails is a leading expense by government at all levels. We lock up citizens at rates as high as eight times the rest of the industrialized world. Is it because we have more crime? No. You are more likely to be burglarized in London and Sydney than in New York or Los Angeles. Is this precisely because we jail so many people? Apparently not. Crime explains about 12% of the prison rise, while changes in sentencing practices, mostly for drug-related offenses, account for 88%.
Overall, spending on prisons, police, and other items related to justice is completely out of control. According to the Bureau of Justice Statistics, in the twenty years ending in 2003, prison spending has soared 423%, judicial spending is up 321%, and police spending shot up 241%. When current data become available, I think we will all be in for a shock, with total spending around a quarter of a trillion dollars per year. And what do we get for it? More justice, more safety, better protection? No, we are buying the chains of our own slavery.
We might think of prisons as miniature socialist societies, where government is in full control. For that reason, they are a complete failure for everyone but those who get the contracts to build the jails and those who work in them. Many inmates are there for drug offenses, supposedly being punished for their behavior, but meanwhile drug markets thrive in prison. If that isn't the very definition of failure, I don't know what is. In prison, nothing takes place outside the government's purview. The people therein are wholly and completely controlled by state managers, which means that they have no value. And yet it is a place of monstrous chaos, abuse, and corruption. Is it any wonder that people coming out of prison are no better off than before they went in, and are often worse, and scarred for life?
In the US prison and justice system, there is no emphasis at all on the idea of restitution, which is not only an important part of the idea of justice but, truly, its very essence. What justice is achieved by robbing the victim again to pay for the victimizer's total dehumanization? As Rothbard writes: "The victim not only loses his money, but pays more money besides for the dubious thrill of catching, convicting, and then supporting the criminal; and the criminal is still enslaved, but not to the good purpose of recompensing his victim."
Free-market advocates have long put up with jails on grounds that the state needs to maintain a monopoly on justice. But where in the world is the justice here? And how many jails are too many? How many prisoners must there be before the government has overreached? We hear virtually nothing about this problem from conservatives. Far from it, we hear only the celebration of the expansion of prison socialism, as if the application of ever more force were capable of solving any social problem.
Kill 'em All
This ideology of power is particularly clear when it comes to war. In the 1970s, there developed a myth on the Right that the real problem with Vietnam was not the intervention itself, but the failure to carry it out to a more grim and ruthless end. This seems to be the only lesson that the Bush administration garnered from the experience. So the solution to every problem in Iraq — at least, I can't think of an exception to the rule — has been to apply more force through more troops, more bombs, more tanks, more guns, more curfews, more patrols, more checkpoints, and more controls of all sorts. It's as if the administration were on an intellectual trajectory that it cannot escape.
Why the lack of any critical thinking here? How is it that the war planners and their vast numbers of supporters do not question the underlying assumption that government is capable of achieving all its aims, provided that it is given enough time and firepower? It's as if they are unable to apply the logic behind their support of free enterprise in any other area of politics.
What's more, it is not even clear that American conservatives are temperamentally inclined to support free enterprise. Let us never forget that it was the Nixon administration that finally destroyed the gold standard and gave us price and wage controls, and it was the Reagan administration that set the world record on government spending and debt, before it was broken by the current Republican administration. There is no doubt in my mind that under the right conditions, the Bush administration would institute wage and price controls in the same way that it has pursued an intermittently protectionist program, regulated business, erected new bureaucracies, and failed to seriously cut taxes.
Why is it the case that American conservatives cannot be trusted with the defense of liberty? Here is where we have to penetrate more deeply into the philosophical infrastructure of American conservatism. I wish I could say it is derived from the Republicanism of Madison, or the libertarianism of Jefferson, or the aristocratic old-style liberalism of Edmund Burke, or the rabble-rousing faith in freedom exhibited by that American original Patrick Henry. Sadly, this is not the case. Nor do the conservatives show evidence of having been influenced by the thinkers discussed in Russell Kirk's book The Conservative Mind, such as John C. Calhoun, John Randolph of Roanoke, John Adams, much less the eccentric Orestes Brownson.
Conservatives have become addicted to entertainment radio and television as the source of their news, and the underlying philosophy seems not to have any connection to history in any way. But because we are all intellectually indebted to some body of ideas, we have to ask: which one is it that informs modern-day conservatism?
What we have at work here is a crude form of Hobbesianism, the political philosophy hammered out by the 17th-century Englishman Thomas Hobbes. His book Leviathan was published in 1651 during the English Civil War in order to justify a tyrannical central government as the price of peace. The natural state of society, he said, was war of all against all. In this world, life is "solitary, poor, nasty, brutish, and short." Conflict was the way of human engagement. Society is rife with it, and it cannot be otherwise.
What is striking here is the context of this book. Conflict was indeed ubiquitous. But what was the conflict about? It was over who would control the state and how that state would operate. This was not a state of nature but a society under Leviathan's control. It was precisely the Leviathan that bred that very conflict that Hobbes was addressing, and he proposed a cure that was essentially identical to the disease.
In fact, the result of the Civil War was the brutal and ghastly dictatorship of Oliver Cromwell, who ruled under democratic slogans. This was a foreshadowing of some of the worst political violence of the 20th century. It was Nazism, Fascism, and Communism that transformed formerly peaceful societies into violent communities in which life did indeed become "solitary, poor, nasty, brutish, and short." Leviathan didn't fix the problem; it bred it — and fastened it on society as a permanent condition.
What is striking about Hobbes is that he thought not at all about economic problems. The problem of human material well-being was not part of his intellectual apparatus. He could not have imagined what England would become only a century to a century and a half later: a bastion of freedom and rising prosperity for everyone.
He wrote at the tail end of an epoch before the rise of old-style liberalism. At the time that Hobbes was writing, the liberal idea had not yet become part of public consciousness in England. In this respect, England was behind the Continent, where intellectuals in Spain and France had already come to understand the core insights of the liberal idea. But in England, John Locke's Two Treatises on Government would not be written for another thirty years, a book that would supply the essential framework of the Declaration of Independence and lead to the formation of the freest and most prosperous society in the history of the world.
Because Hobbes didn't think about economic issues, the essential liberal insight was not part of his thinking. And what is that insight? It is summed up in Frederic Bastiat's claim that "the great social tendencies are harmonious."
We Can Get Along
What he means by this is that society contains within itself the capacity to resolve conflicts and create and sustain institutions that further social cooperation. By pursuing their individual self-interest, people can come to mutual agreement and engage in exchange to their mutual benefit. A critical insight here, one that needs to be taught to every generation, relates to the law of association.
The law of association points out that people of radically different abilities, backgrounds, religions, races, and capacities can successfully cooperate to achieve ever higher levels of social welfare through negotiation and trade. The law of association is what explains the method by which humans were able to move out of caves, away from isolated production, beyond the hunter-gatherer stage, and into what we call civilization. This law makes it possible for people to stop stealing from each other, stop killing each other, and begin to cooperate. It is the basis of society.
Note that the law of association does not suppose that everyone in society is smart, enlightened, talented, or educated. It presumes radical inequality and points to the paradox that the world's smartest, most talented person still has every reason to trade with his polar opposite because scarcity requires that the tasks of production be divided between people. Under the division of labor, everyone plays an essential role. It is the basis of families, communities, firms, and international trade. Another fact that needs to be understood is this: the law of association is a fact of human existence whether or not there is a state. Indeed, the foundation of civilization itself precedes the existence of the state.
What the law of association addresses is the core problem of freedom itself. If all people were equal, if everyone had the same skill level, if there were racial, sexual, and religious homogeneity in society, if people did not have differences of opinion, there would be few if any problems in society to overcome because it would not be a human society. It would be an ant heap, or a series of machine parts that had no volition. The essential problem of social and economic organization, aside from scarcity, is precisely how to deal with the facts of inequality and free will. It is here that freedom excels.
Let us be clear. Bastiat was not saying that there are no such things as criminals. He was saying that society can deal with malevolence through the exchange economy, and in precisely the way we see today: private security companies, private production of locks and guns, private arbitration, and private insurance. The free market can organize protection better than the state. Private enterprise can and does provide the police function better than the state. As Hayek argued, the state is wildly overrated as a mechanism of order keeping. The state is and has been in history a source of disorder and chaos.
This essential insight of liberalism is what led the founding fathers to take such a radical step as throwing off the rule of Britain. They had to be firmly convinced that chaos would not ensue, that the American people could manage their own affairs without overarching leviathan control. They believed that the source of any conflict in their society was the central state, and that society itself could be self-regulating. In place of control by the king, they put the Articles of Confederation, which was a type of government that more closely approximated anarchy than any system in the modern period. The government was barely in existence, and had essentially no power.
Why did anyone believe it could work? It was the new science of liberty that led to this conviction. The American consensus was precisely that Hobbes was wrong. In the state of nature, life is not nasty and brutish, or, rather if it is, there is nothing that a nasty and brutish state can do to improve it. The only way a society can advance out of barbarism is from within by means of the division of labor.
This logic has been forgotten by the American Right. Instead they have bought into the view that society is fundamentally unstable and rife with a conflict that only the state can solve. That root conflict is between those who adhere to the law and those who are inclined to break it. These they define as good guys and bad guys, but it is not always true, since the law these days is not that written by God on our hearts, but rather the orders handed down by our political masters.
This seemingly important point is completely lost on the Republican mind, since they believe that without the state as lawmaker, all of society and all of the world would collapse into a muddle of chaos and darkness. Society, they believe, is a wreck without Leviathan. This is why they celebrate the police and the military more than merchants and entrepreneurs, and why they think that war deserves more credit than trade for world prosperity.
One Faith Per Society
The conviction that society, no matter how orderly it appears, is really nothing more than a gloss on deep-rooted conflict, expresses itself in the romantic attachment to the police power and war. But it also affects the Right's attitude toward religion. Many people are convinced that, in the end, it is not possible that society can be religiously heterogeneous. In particular, these days, most conservatives believe that the United States cannot abide the presence of Muslims and other religious minorities.
Now, on this question, we can grant that the existence of the universal franchise does create problems with religious heterogeneity. But this is a problem created by the state itself. In conditions of freedom, there is no reason why all religions cannot peacefully coexist.
The current-day view of conservatives that we are in an intractable war against Islam also stems from the conflict-based view of society. In the absence of the state, people find ways to get along, each preserving their own identities. Religious heterogeneity presents no problems that freedom cannot solve.
And yet conservatives today are disinclined to accept this view. They seem to have some intellectual need to identify huge struggles at work in history that give them a sense of meaning and purpose. Whereas the founding generation of old liberals was thrilled by the existence of peace and the slow and meticulous development of bourgeois civilization, the Right today is on the lookout for grand morality plays into which they can throw themselves as a means of making some mark in history. And somehow they have come to believe that the state is the right means to fight this battle.
In short, their meta-understanding of politics bypassed the liberal revolution of the 18th century and embraced the anti-liberal elements of the Enlightenment. Up with Hobbes, down with Locke: that is their implied creed. Liberty is fine but order, order, is much more important, and order comes from the state. They can't even fathom the truth that liberty is the mother, not the daughter, of order. That thought is too complex for the mind that believes that the law alone, legislated or by executive fiat, is what separates barbarism from civilization. Freedom, to them, is not a right but something conferred as a reward for good behavior. The absence of good behavior justifies any level of crackdown.
I once heard a leading Republican intellectual, a respected figure with lots of books on everyone's shelves, express profound regret when the Soviet Union was falling apart. The problem, from this person's perspective, is that this led to disorder, and order — meaning control even by the Soviet state — is the fundamental conservative value. That about sums it up. Even Communism is to be tolerated so long as it keeps away what they dread more than death: people within their rights doing whatever they want.
At the end of the Cold War, many conservatives panicked that there would be no more great causes into which the state could enlist itself. There were about 10 years of books that sought to demonize someone, somewhere, in the hope of creating a new enemy. Maybe it would be China. Maybe it would be the culture war. Maybe it should be drugs. At last, from their point of view, 9-11 presented the opportunity they needed, and thus began the newest unwinnable war in the tradition of LBJ: The War on Terror.
So must government rule every aspect of life until every last terrorist is wiped off the face of the earth? Must we surrender all our liberty and property to this cause, as the regime and its apologists suggest?
This view of society is certainly not sustainable in these times and in the future. Ever more of daily life consists in seceding from the state and its apparatus of edicts and regulations. In the online world, billions of deals are made every day that require virtually no government law to enforce. The technology that is pushing the world forward is not created by the state but by private enterprise. The places we shop and the communities in which we live are being created by private developers. Most businesses prefer to deal with private courts. We depend on insurance companies, not police, to reduce the risks in life. We secure our homes and workplaces through private firms.
What's more, these days we see all around us how liberty generates order and how this order is self-sustaining. We benefit daily, hourly, minute-by-minute, from an order that is not imposed from without but rather generated from within, by that remarkable capacity we have for pursuing self-interest while benefiting the whole. Here is the great mystery and majesty of social order, expressed so well in the act of economic exchange.
Many Republicans by contrast live intellectually in a world long past, a world of warring states and societies made up of fixed classes that fought over ever-dwindling resources, a world unleavened by enterprise and individual initiative. They imagine themselves to be the class of rulers, the aristocrats, the philosopher kings, the high clerics, the landowners, and to keep that power, they gladly fuel the basest of human instincts: nationalism, jingoism, and hate. Keeping them at bay means keeping the world of their imaginations at bay, and that is a very good and important thing for the sake of civilization.
The Rothbard Revival
Having said all of this about the modern-day Right, I do want to draw your attention again to the forgotten tradition of the Old Right of the 1930s and '40s. These were times when Garet Garrett was celebrating free enterprise against New Deal planning, John T. Flynn was exposing the warfare state as a tool of socialism, Albert Jay Nock was heralding the capacity of private education to create literacy and artistry, and when politicians on the Right were advocating peace and trade. This period came to an end in the 1950s with the emergence of the first neoconservatives attached to National Review.
Very few people today know anything about this aspect of American intellectual history. But in a few months, this period of ignorance is going to come to an end. The Mises Institute is publishing a remarkable document. It is Murray Rothbard's unpublished history of the postwar American Right. The name of the book is The Betrayal of the American Right. It chronicles both his life and the life and death of a movement. Ultimately his outlook is hopeful, just as mine is hopeful.
The manuscript has circulated privately for 30 years. It will soon see the light of day. He names names. He spares no enemy of freedom. Many people will cheer. Many others will weep. It will be a great day. If you would like to join in supporting this project please let us know. If you want to help in other ways, please talk to us. The Mises Institute is the powerhouse for publishing and educating in the libertarian tradition. The young are listening and we are having a great effect in bringing to life the vision of society that animated the American Revolution and, indeed, gave rise to civilization as we know it.
I've spoken about the problem of those who look at society and see nothing but conflict and no prospect for cooperation. It is a view shared by the Left and the Right. But truly there is an actual conflict at the root of history — but it is not the one most people understand or see. It is the great struggle between freedom and despotism, between the individual and the state, between the voluntary means and coercion. The party of freedom knows where it stands.
We do find ourselves not quite in a crowd in this struggle, indeed depending completely on your help. More than ever, both the Left and the Right are allied against us, and they are both in league with power. The forces of liberty have always been in the minority, and yet we can and do prevail. Thank you for your continued support in the great struggle between liberty and power.
[This talk was given at the Houston Mises Circle on April 14, 2007.]