Mises Daily Articles
Their Crisis, Our Leviathan
The circus is coming to your town soon. Maybe, I’m getting old, but I just can’t get very excited about the clowns anymore.
Yup, it’s political season again and those bothersome polls, still lusting for the votes that put or keep themselves and their pals in office, will be in our faces until the nonsense is over.
Time for the same tired two parties to trot out the same moronic messages that challenge the credulity of anyone with a healthy three figure IQ.
Time for the same politicos, with "solutions" to every problem under the sun, to promise endless new programs, the expansion of existing failed programs, yet also swear that tax cuts will also be on the way once they’re given more control over our lives.
Time for the professional political class—both the ruling Republicans and Democrats—to go through the idiocy of a so-called competitive campaign and the pretense of supposedly differing philosophies.
Time for those hopelessly inane tube "debates." Time for the republic’s fortunes to turn on such crucial points as how a candidate looks on the idiot box, which candidate shaved better1 or which slick candidate can come up with the best crackpot idea, an idea that later usually proves to be a figment of his imagination (the nonexistent missile gap flim flam of the 1960 Kennedy-Nixon presidential campaign is one example2).
Time for a presidential debate commission, stacked with only Republican and Democrat party hacks, to insist that debates cannot ever include any third parties anytime because it would be too dangerous for the average American to hear a different idea or a now radical viewpoint such as less government.
Time for John Kerry to promise to balance the budget, yet not propose one major cut in a federal program.
Time for George Bush to claim his opposition to big government, yet not mention how he made tens of millions of dollars in a shady deal that included government subsidized construction of a new stadium for the Texas Rangers baseball team, a sleazy transaction in which the powers of eminent domain were perverted to make Bush, then owner of the team, even richer.3
Time again for the pols—or least some of the smarter of these shysters—to include a Munich-like promise to "get Washington off our backs." Time for the weak-minded among the voters to play the role of Neville Chamberlain ("Here it is. Herr Hitler signed it," said Chamberlain of Hitler’s signed promise to leave everyone alone in 1938. That was a promise with all the credibility of Bill Clinton’s middle-class tax cut promise or Lying Baines Johnson’s 1964 promise not to send more troops to Vietnam or Ronald Reagan’s 1980 campaign promise to close down the departments of Energy and Education or. . . .).
Time for our masters to duck the question that most economically illiterate journalists aren’t inclined to ask: Who pays for government writ large and its endless expansions in peacetime, wartime, and anytime in the middle?
As one listens to the perpetual seekers of office, with their vows of delivering utopia on earth provided we give them our votes, remember this in case you become a bit wobbly and suspect that you’re ready to swallow one or more of their monkeyshines—Washington’s world saving doesn’t come cheap.
Never has. Never will.
Such is the nature of leviathan government. It is classical liberals such as Professor Robert Higgs (See his wonderful book4) and the mid-Victorian radical Richard 5Cobden who remind us that democratic governments follow predictable patterns.
They stumble or run into crisis after crisis. Then the government insists that this justifies it arrogating more power. That, of course, always must include a bigger bit of your property. The latter is accomplished through higher state, federal, or municipal taxes or the use of the stealth tax. The latter is the insidious inflation dodge, a piece of legerdemain that governments have been using over centuries to take bigger and bigger bites of your property.
Then these democratic nations—which, by the way, increasingly contain more and more people who want no part of the political process—later concede the crisis was nonexistent or overstated. One can cite many examples of bogeymen never materializing.
The Soviets, despite the plaudits of liberal/socialist economists in the West and the warnings of internationalist conservatives who said that they were ten feet tall, had a Potemkin Village economy. They were never going to overtake the United States in nuclear weapons or GDP. The world was not about to run out of oil in the 1970s. The Sandinistas never had the power to march into Texas. What ever happened to the global ice age that was supposed to be coming? Will it happen before or after global warming? Saddam Hussein, apparently, didn’t have weapons of mass destruction that he was about to fire at the United States. And if the corrupt House of Saud, an invention of the British Empire, is about to fall, how, exactly, does this square with sacrificing the lives of young Americans, whose Western values are hated by our Saudi allies?
Kerry and Bush are unlikely to address these "Crisis and Leviathan" scenarios. That’s because they both essentially believe that the United States government must continue to be a warfare/welfare state with its fingers in every domestic and foreign pie. Although they may disagree on some of the tactics of this America as a great interventionist power model, neither is ready to junk it and return to the traditional foreign policy of a George Washington.6
Washington advocated not "isolationism," but trade and good relations with all nations and no permanent military alliances. These enlightened policies of Washington, a man so unlike the career politicians who dominate our nation today, were once the bedrock of American policy and were also the bible of the radical little Englander movement of Richard Cobden of the mid-19th century.
Now these ideas seem like relics. They are ridiculed as outdated by the dominant media and their allies in government and the academy. That is, until the next Vietnam or Iraq or Somalia blows up in our faces.
How far we have come. Washington hated political parties and couldn’t wait to return to private life. He also kept the U.S. clear of major wars that would have likely wrecked our young republic. Our leaders today seem like a modern day Palmerston. He was the mid-Victorian British foreign minister and prime minister ever ready to plunge his nation into endless wars. Our Palmerstonian foreign policy today seems to generate "endless enemies."7
The rejection of Washington’s pacific, noninterventionist foreign policy is the tragedy of our nation. That’s because the mistakes are neither understood nor are the consequences appreciated. War is more than the health of the military industry complex. A huge welfare state usually goes along with an imperial foreign policy. Theodore Roosevelt and his Progressive allies of the early 20th century advocated both. They reversed the classical liberal/Jeffersonian foundations of our original constitution.
Even Roosevelt’s opponent in the presidential election of 1912, Woodrow Wilson, ended up adopting many of these nationalist ideas. The New Nationalism of Roosevelt ended up transforming Wilson’s New Freedom, which originally was supposed to be an attempt to restate Jeffersonian ideas. Despite the enmity between Roosevelt, the man who gloried in war, and Wilson, the differences between the men, in the end, were reduced to almost nothing. It was Wilson who gloried in American interventions around the globe, vowing to make the people of Latin America elect good men and who promised "to make the world safe for democracy."
How different is that from what FDR, Kennedy, and Johnson did and Nixon did? How different is that from what both Kerry and Bush now promise, although they might disagree on some of the methods of how to achieve these common goals? So our bipartisan policy now for over a century has been the policy of the so-called continual crisis of the leviathan, regardless of whether Democrats or Republicans ruled.
The rationale of this imperial republic justifies the expenditure of billions of dollars, the constant waging of misguided or tragic wars and the right to snoop further into the lives of average Americans. Wilson set up a special intelligence unit to spy on blacks during World War I, a war in which he tried to ride roughshod over dissent.8 FDR jailed thousands of loyal Japanese-Americans. Thousands of Americans were blacklisted during the Cold War. The National Security State, created after World War II, sanctioned illegal spying conducted by the Central Intelligence Agency, which was not supposed to conduct domestic spying, according to its charter.
What do Kerry and Bush have to say about this? What will they do to prevent a repeat of these injustices and tragedies? Their answers come with the incongruities of their actions. Kerry voted for the war resolution authorizing war against Iraq. Then he turned around and voted against funding. Bush, in the presidential election in 2000, said he feared that U.S. troops were engaged into too much nation building. Over the last four years, he has sent troops to many countries, not just to battle terrorism, but to "bring democracy" to various parts of the world that have never known democracy. Does Bush, never a student of history, realize how much he is aping Wilson?
I doubt it.
Will both Bush or Kerry be allowed to escape history? Will they even be asked to address the potential dangers of a huge state with almost unlimited powers, a state that is no less dangerous than any tyranny just because elections are held from time to time with pre-determined outcomes (We know either a Democrat or a Republican is going to win every significant office in this country. It has been set up that way and people who object are usually ostracized or ridiculed as hopeless9).
But, as these two bands of ruling parties do their best to avoid difficult issues. The average American asks very little even as he is mulcted every day of the week. Americans merely want to go about their business without the prying eyes of bureaucrats who can ruin their lives with one or more administrative rulings (See Joe Louis, various Indian nations, Abbott and Costello, Muhammad Ali, etc. . . .). The pattern is predictable. When we’re speaking of money and power, the crisis never ends as far as our rulers are concerned. That’s because they need the leviathan; it serves their interests.
For example, despite the end of the Soviet Union or the end of the Great Depression and similar crises, never ever does any government go back to the levels of spending and authority that preceded the mess. The costs of all this Perils of Pauline polity are incredible. They should cause outrage because we pay the piper, as will many generations unborn. The costs of government by world savers, human and economic, are always staggering once a Gibbon or a Mises or Robert Conquest or a Rothbard has totted up the bill.
Regardless of whether we’re speaking in terms of debased dollars or, more importantly, the loss of lives from perpetual Wilsonian military interventions, the tragic errors have been, and will continue to be, signed off on by both major parties. That’s the price of power that these folks, who think of power as the ultimate aphrodisiac, are more than willing to pay. After all, their children usually go to private schools and are unlikely to end up on the firing line in some place like Iraq.
Unfortunately, it is the average American who has been and will continue to be hurt in so many ways. This is thanks to the chicanery of a government he or she probably doesn’t support or votes for with a finger firmly held on el nariz.
From Iraq to prescription drug plans to sad sack Amtrak (the Acela is an expensive joke, which is anything but a high-speed train, yet charges premium fares for a railroad that continues to run in the red), to state education10 so bad that it would have surprised even socialists Bertrand Russell or John Stuart Mill11, the accumulation of power by our central government and the money it spends are mind boggling.
Shouldn’t some hardy soul, with an understanding that the original constitution was designed to give Americans limited government, ask Jorge II or the homeless Senator from Taxachusetts12 for an accounting of all this? And shouldn’t one of our rulers at least issue a perfunctionary promise that there will be limitations on Washington? Not that many people would actually believe such a promise of limitations. But we have traveled so far down "The Road to Serfdom" 13 that it is unlikely our would-be Caesars will even be going through the motions of pretending to be Jeffersonians?
Here’s the sorry truth that you will never hear over the next few months from most of the network nitwits and the other members of the elite Eastern media, who are a willing part of the charade of the election circus. The political carnival, which once entertained us when we were children the same as all clowns can win the favor of delighted little children, is now a tired, overpriced show. It should have been cancelled decades ago.
The circus does nothing but take our money and lots of it. It doesn’t even provide good entertainment. Political conventions decide nothing. The biggest decision is usually when to unleash the balloons. Even the tv networks, notorious for playing to the lowest common denominator, weary of the Big Top tonterias. Less frequently do they send their human blanks to gape at the spectacle of pols and their relatives baying for the cameras. Under our fraudulent two party system, two bands of pirates offer big or bigger government with no mention of how much this will cost us. We will pay, among other ways, through the hidden tax called inflation.
It is an insidious system. It gives us more by actually giving us less. That means we seem to have more money, the nominal amount of the money in our pockets or in the bank is larger. The economy seems to humming along. Stock prices and earnings seem to grow by huge amounts over the long term. But it is a trick.14 Our judgment has been distorted by the long-term effects of inflation and the destructive policies of the central bank.15
These devalued dollars actually can buy fewer things. And this cycle of spending and inflating will worsen unless there is a signal change among tens of millions of Americans who are disgusted, but feel compelled to vote for one of these two windjammers. They just want to go about their business, work harder and be left alone. This kind of person is the "forgotten man.16 " He has increasingly been pushed into the background by special interests and those forever demanding more of the welfare state.
Still, the apolitical forgotten man only wants to be left alone, much to the joy of the political junkies who really don’t care how illegitimate the system becomes or how few voters go to the polls. That’s provided that their boy and their party wins. And they get to carve up the biggest slice of the jobs, power and authority. Unfortunately, much as many of us would wish it, most of this Black Horse Cavalry will not go away.
We, and our children and their children, will pay through higher federal income tax rates and state taxes will rise too. That’s regardless of whether we end up with a "fiscal conservative" or a liberal Democrat in November. In fact, given the wild-eyed spending of the Republican administration of the last four years, the socialists of the Bubba administration actually now look relatively less inimical to liberty than George II’s crew of neocons. The more bookish of this Bush crowd—whose predecessors banished the so-called "isolationist" wing of the GOP in 195217—have imbibed too much of the bible of the Archangel Woodrow Wilson.
Here was the prototype for almost every modern president celebrated by mainstream historians as "great." Historians love Wilson, as do most modern presidents. But his legacy, as he left office in 1921, was a nation overtaxed, disappointed, in the middle of a depression and with civil liberties under attack by an attorney general run amuck.18 Sound familiar? Wilson left office as one of the more unpopular presidents in the republic’s history.19 Is the same fate awaiting a Bush or a Kerry in 2008?
Despite widespread suspicion of the men and women who lord over us today, all of our political ruling class obviously make a very good living from picking the pockets of average people who pay for the federal government’s endless failed experiments in foreign and domestic social engineering. But they couldn’t do it without help. Large elements of the major media are on board. And the hired help during this election season will have plenty of slaves in the media to remind us how lucky we are to be living under this regime or how lucky we will be if Kerry and his cutthroats replace Bush and his cutthroats. These trained seals of the media will implore us "to vote." They will also ridicule third parties.
Some of the slick ones on the network will goose step to the socialist line of government on top of government with more government to follow. They will point out that the United States, even with higher taxes, still has tax rates that are much lower than France, Canada and Germany.20 Of course, these nations are closer to a socialist model than we are and are also nations that have much higher unemployment rates and lower growth rates. But those are facts that are usually not mentioned or get sparse attention when the subject of taxes is discussed in most major media. And besides which, many of our taxes are now on the fast track. With a few more years of the leviathan, we can certainly catch up with our Western European and Canadian counterparts.
For example, let us not forget the ubiquitous social insurance tax. It is a wretched impost, especially for the lower-middle class, working poor and those who are self-employed (The latter have no employer to pay the employer’s half of FICA. So they get a double dose of payroll taxes).
Thanks to the Kerrys and the Bushes, the next generation of Americans—barring a miracle—will also pay higher payroll tax rates. These rates will go up and up as they have over the last 32 years at an accelerated pace. Republicans and Democrats have both signed off on a venal system in which the "trust fund" is used for anything and everything. But due to our flawed system of politics, the major candidates surely will not be forced to answer any substantial questions on this issue other than to say, "I support Social Security."
Neither will be required to explain why there have been dozens of payroll tax increases over the years or why the system runs into trouble every decade or so. Neither will have to field a question over how anyone in the private sector could legally run a trust fund the way the government pillages the Social Security trust fund and not end up in the slammer. And here’s another one that Teresa Heinz’s consort and George Herbert Walker Bush’s hijo should have to answer. How the hell did this payroll tax get so high? Let history answer.
It is because President Nixon and the Democratic Congress of 1972—both exhibiting the notorious trait of almost all politicos, the overwhelming desire to get re-elected no matter the long term consequences—approved big Social Security benefits increases along with ill-considered automatic cost of living adjustments (colas) back in the disco era. They sent out the notices of the benefits increases—you guessed it—just before the elections, which most incumbents won (Nixon was re-elected. Congress remained under the control of Democrats). The pols "gave us" (sic) these benefits hikes with little thought of how they would hurt Americans who had to pay for them in the 1980s and 1990s.21
This was the kind of Pavlovian action of all career politicos who subscribe to economist John Maynard Keynes. ("In the long run, we’re all dead.," Keynes was famously quoted as saying. Yes, and also much poorer, Mr. Keynes). Watch for a repeat of this Keynesian electioneering when the circus comes to your town.
This increase benefits you as much as it can in an election year, and forget about the bills has been a disastrous policy that has hurt generations and generations of Americans. Still, many Americans have no idea what a FICA is. But they understand that, whatever the hell a FICA is, it eats up a hell of a lot of their hard-earned dinero. This irresponsible philosophy has also meant that tens of millions of workers—many with rather modest incomes—are paying more in payroll taxes than they do in income taxes.
The payroll tax has become the de facto second income tax of millions of Americans. That’s unless, of course, one lives here in the Peoples Republic de Nueva York. In this "enlightened" place, we have both a city and state income tax. Here one can pay four income taxes! And neither of the major parties here in the Rancid Apple ever suggests that maybe four income taxes on top of everything else that one must pay to his masters are too much of a burden. Just as it ridiculous to expect Republicans to dismantle the leviathan on the Potomac—haven’t they been running things for the last four years?—so, too, it is silly to think that their counterparts in big cities are generally the enemies of paternal government.
So once again, the fraud of a two-party runaway democracy is about to be perpetuated with the connivance of most major media outlets. And who knows how much it will cost us and generations to come? Whatever it is, it will be a lot more than the estimates we get. The government, which often fudges numbers, doesn’t want you to know the truth, just as your parents shielded you from many of life’s unpleasantries.
But you’re not a child anymore, even though your government apparently treats you as though you are perpetually one.22
Time to put away childish things. It’s time to stop going to the circus.
- 1. This is not an exaggeration. It is widely conceded that Richard Nixon lost the televised presidential debate of 1960 because he had five o’clock shadow.
- 2. Arthur Schlesinger Jr., the great liberal historian and Kennedy aide, concedes that the campaign issue of the U.S falling behind the Russians in missile production was a canard. Once in office, "the issue finally withered away," Schlesinger writes in his book, "A Thousand Days," p. 499 (Houghton Mifflin Company, Boston, 1965). Yet Kennedy, ever the big government advocate, still went ahead with a nuclear arms buildup that was not needed!
- 3. The whole slimy story is available in "The Buying of the President 2004," by Charles Lewis, pp. 150–55 and pp. 168–69. (Harper Collins, New York, 2004).
- 4. See "Crisis and Leviathan," by Robert Higgs, (New York, Oxford University Press, 1987).
- 5. See "The Three Panics," a pamphlet from "The Political Writings of Richard Cobden," (New York: Garland Publishing, 1973).
- 6. "We ought to have commercial intercourse with all, but political ties with none," said Washington, a piece of advice that would have him branded "an isolationist" today. Washington also cautioned against almost all foreign alliances. "American has no motive for forming such connections and very powerful motives for avoiding them." See "John Marshall, Definer of a Nation," by Jean Edward Smith, p. 243, (New York, Henry Holt & Co., 1996) It all sounds radical now, but for a century America adhered to many of these common sense ideas.
- 7. See Jonathan Kwitny’s book, "Endless Enemies: The Making of an Unfriendly World." (New York: Congdon and Weed, 1984).
- 8. See "Free Speech in the United States," by Zechariah Chafee, Jr., p. 273, (Harvard University Press, Cambridge, Mass., 1967)
- 9. As I write this, word comes that Ralph Nader was denied credentials to attend the Democratic convention. Some democrats just can’t stop blaming him for Gore losing the 2000 presidential election. I doubt any of them were angry that Perot helped elect Clinton in 1992 or ask why Gore couldn’t carry his own state or West Virginia, traditional Democratic states that went for Bush.
- 10. "The truth is that schools don’t really teach anything except how to obey orders." So wrote John Taylor Gotto, who has been an award winning public school teacher. See his "Dumbing Us Down. The Hidden Curriculum of Compulsory School," p. 25, (New Society Publishers, Philadelphia, 1991).
- 11. Both Russell and Mill, socialists who hoped that society would evolve away from private property, nevertheless were fearful of state education, believing its dangers far outweighed any of its potential benefits. For example, Mill, in "On Liberty, warned that " a general state education is a mere contrivance for molding people to be exactly like one another; and as the mold in which it casts them is that which pleases the predominant power in the government, whether this be a monarch, a priesthood, an aristocracy, or the majority of the existing generation; in proportion as it is efficient and successful, it establishes a despotism over the mind, leading by natural tendency to one over the body." See "The Utilitarians, p. 587, (Doubleday & Co, Garden City, New York, 1961).
- 12. In his "gypsy years," before he married Teresa Heinz, John Kerry had no permanent address in the Bay State. Senators are supposed to have permanent addresses in the state they represent. But not John Kerry, who sometimes stayed rent-free in the condo of his chief fundraiser. See "John Kerry. The Complete Biography by The Boston Globe Reporters Who Know Him Best," by Michael Kranish, Brian C. Mooney and Nina J. Easton, p. 238, (Public Affairs, New York, 2004).
- 13. See F.A. Hayek’s "The Road to Serfdom." (The University of Chicago Press).. Here he warned, some 60 years ago, that," We are rapidly abandoning not the views merely of Cobden and Bright, of Adam Smith and Hume, or even of Locke and Milton, but one of the salient characteristics of Western civilization as it has grown from the foundations laid by the Christians and the Greeks and Romans." P. 17.
- 14. "Inflation from 1988 through the end of 2002 was 52%. What cost $100 in 1988 would cost $152.01 in 2002. If earnings only kept up with inflation, they would grow from $23.75 in 1988 to $36.10 in 2003. That means that earnings barely kept up with inflation, growing less than $1 ($.92) in real, inflation adjusted terms in 15 years! That is a total growth of less than four percent and clearly a compounded growth of less than 0.5%" From "Bull’s Eye Investing. Targeting Real Returns in a Smoke and Mirrors Market," by John Maudlin, p. 105, (John Wiley & Sons, New York, 2004).
- 15. "What makes us rich," writes Murray Rothbard, "is an abundance of goods, and what limits that abundance is a scarcity of resources: . . . Multiplying coin will not whisk these resources into being. We may feel twice as rich for the moment, but clearly all we are doing is diluting the money supply." P. 33. See Rothbard’s "What Has Government Done to Our Money?"
- 16. "Here," wrote William Graham Sumner about a century ago, " we have the Forgotten Man again, and once again we find him worthy of all respect and consideration, but passed by in favor of the noisy, pushing and incompetent." From "Social Darwinsim. Selected Essays of William Graham Sumner," p. 127, (Prentice-Hall, Englewood Cliffs, New Jersey, 1963).
- 17. The Republican Party, in 1952, turned away from "isolationism when it turned its back on Senator Robert Taft. He was "the Reluctant Dragon, unable to wage permanent war against the Soviet menace." The party, instead, turned to the "internationalist" Dwight Eisenhower. See "Prophets on the Right. Profiles of Conservative Critics of American Globalism," by Ronald Radosh, p. 192, (Simon and Shuster, New York, 1975).
- 18. See "The Politics of War. The Story of Two Wars which Altered Forever the Political Life of the American Republic (1890–1920)" by Walter Karp, Harper Row, New York, 1979).
- 19. Ibid.
- 20. Germany has "double" the unemployment rate of the United States. See the "Wall Street Journal" op-ed page of August 2, 2004,. "Auf Wiedersehen to the Leisure Economy, " p. A11.
- 21. See my The Social Security Deal of 1972 at mises.com or simply by doing on an on line search using my name.
- 22. See Alexis de Tocqueville’s "Democracy in America." Here De Tocqueville, over a century and a half ago, warned of the potential for an administrative despotism that would be unlike any other tyranny ever experienced in history. "It would resemble parental authority, if, fatherlike, it tried to prepare its charges for a man’s life, but on the contrary, it only tries to keep them in perpetual childhood." P. 692, Vol II, (Perrenial Classics, New York, 2000).