The Economics of Liberty
3. Unmasking the Bureaucrats
Why Bureaucracy Must Fail
Llewellyn H. Rockwell
Washington loves a scandal. Politicians can attack the other party, pretend they’re cleaning up the mess, and get lots of publicity.
All is great fun so long as the scandal can be contained, for no crime can be allowed to reflect on government itself. Any infamy, no matter how institutionalized, must be portrayed as an aberration.
That is the official line on the Department of Housing and Urban Development and its billions of dollars in graft. But despite the Democrats’ attempt to portray Samuel Pierce, James Watt, Deborah Dean, and all the other Republican officials and consultants as the source of the problems, they are not—as despicable as their actions were.
The real scandal is the continued existence of HUD, an unconstitutional Great Society relic that both Republicans and Democrats want to continue to fund. While damaging the poor with crime-infested government housing, HUD has enriched politically-connected builders with our tax money under every administration since LBJ’s.
Nor is HUD unique. Pick any government department that redistributes our hard-earned money to the politically powerful—Commerce, Education, Energy, HHS, Interior, Labor, Transportation, etc.—audit it rigorously, and we would find the same thing. Corruption, fraud, waste, and abuse are endemic to bureaucracy, and must be, since all spending decisions are made politically and not economically.
Mainstream economists have only recently and reluctantly begun to examine the inherent flaws of bureaucracy. As Keynesians and quasi-Keynesians, they see market failure everywhere, to be corrected by beneficent government with themselves in high-paying federal jobs doing the correcting.
The mainstream claim about “market failure” is nonsense, of course. It is government failure that plagues us. Yet there are relatively few mainstream economists who understand what Misesians have always known: it is economically impossible for bureaucracy to do the job assigned it.
Even before Mises, Lord Acton and Richard Simpson, in a prescient 1891 essay called “Bureaucracy,” wrote that in “all governments there may be odious tyranny, monopolies, exactions, and abominable abuses of nearly all kinds.” Yet “the idea of bureaucracy is not fulfilled till we add the pedantic element of a pretense to direct our life.” Bureaucrats claim “to know what is best for us, to measure out our labour, to superintend our studies, to prescribe our opinions, to make itself answerable for us, to put us to bed, tuck us in, put on our nightcap, and administer our gruel.”
On the eve of an Anglo-American explosion in the size of government, they warned that “a bureaucratic system” can “arise gradually under every form of policy, and it renders every form of government despotic.”
Anticipating an Austrian insight, Acton and Simpson discerned that “We shall never be safe from bureaucracy till we have exorcised from our public men” the philosophy of “positivism which treats man statistically and in the mass, not as individuals.” We must “be always suspicious of any school which treats men as so many ciphers to add up, subtract, divide, multiply, and reduce to vulgar fractions.”
German sociologist Franz Oppenheimer, writing in 1914, also attacked “officialdom.” Since the bureaucracy is “paid from the funds of the state,” it is supposed to be “removed from the economic fights of conflicting interests.” But the civil servant ideal is a myth. “The officials do not cease being real men” who are “subject to pressure by enormous economic interests.” Bureaucracies also have their own internal incentive structure, which has nothing to do with advancing the public good, but only the relative position of the bureaucracy.
Oppenheimer implies that we should be doubly suspicious when politicians claim to help the poor through bureaucracy. The poor haven’t the resources to advance themselves economically, much less secure a HUD grant for their neighborhood. The politically well connected will always reap the benefits.
Yet the perverse economic incentives of bureaucracy are only part of the problem, as Ludwig von Mises argued in his pioneering 1944 book Bureaucracy. In private markets, Mises said, prices tell us how acting individuals value competing goods and services. Using prices as a guide, market participants can direct goods and services to their most highly-valued uses. Free prices therefore make possible productivity, creativity, entrepreneurship, and efficiency. Without a market price mechanism, there must be irrationality and chaos.
As Mises was the first to show, socialism is doomed to fail because there are no market prices for the means of production. And that is also part of the reason bureaucracies can’t work. “People are sometimes shocked by the degree of maladminstration” but it isn’t due simply to “culpable negligence or lack of competence.” In government, he noted, the products can neither be bought nor sold. There is no free-market demand for bureaucratic services, or at least none that can be expressed, so bureaucrats cannot allocate resources rationally, even without the ever-present political pressure.
In a profit-driven business, the wages of each employee tend to reflect his contribution to total output. But incomes in a bureaucracy are based on a non-market, government-wide grading system. The only way for the bureaucrat to increase his income is through longevity and promotion, which come through passivity and obedience, not innovation or productivity.
Mises also explained that bureaucrats cannot rationally cut costs even if they want to. With the best intentions, a bureaucrat can’t know what is waste and what is not because he doesn’t know what’s economically desirable in the first place. Are salaries too high? Are there too many offices, publications, researchers, secretaries, copiers, file clerks? The government manager can’t know.
Furthermore, Mises points out, it is futile to recommend that a bureaucracy be run like a business. “No reform could transform a public office into a sort of private enterprise.”
Cost-benefit analyses are also pointless. There is no way to measure the “costs” because no one knows the potential alternative uses for the resources. Nor can the “benefits” be known, since there is no consumer market for the good or service in question. And since the bearers of the costs and the receivers of the benefits are not the same—unlike in the private sector—the process is morally flawed.
Despite Jack Kemp’s promises of HUD rehabilitation, the only effective reform is abolition. For the sake of the poor, the taxpayers, and the Constitution, we need to let one last HUD contract—to a demolition firm.
Your Visit to Our Nation’s Capital
Llewellyn H. Rockwell
On trips to Washington, most tourists visit only the government’s monuments to itself. Interesting as these are, it’s also instructive to see the memorials to your tax money: Congress and the federal bureaucracies.
Congress—as an elected body—is still accessible, but the federal agencies have recently been put off-limits to taxpayers, thanks to the alleged threat of terrorism. If some pathological enemy of the United States decided to bomb the Department of Health and Human Services, massive police protection will make sure he fails so the welfare checks can still go out. In case you were worried.
While in D.C., a city whose informal slogan is “A Work-Free Drug Place,” visit your Congressman and at least one of your Senators, and tell them what you think about the pay raise and other issues. Also ask one of them to arrange a visit to a bureaucracy.
I once walked the halls of the Department of Housing and Urban Development, years before the scandals, and found it outrageous and funny, predictable and chilling—a sort of cross between Eddie Murphy and the Hillside Strangler.
There were acre after acre of offices full of over-paid, shifty-eyed drones, filing their nails, reading novels (those who could), or chatting in the halls. In spooky corridor after corridor, there wasn’t one person you would want to leave alone with your wallet. And here they were with everybody’s wallet.
When the HUD scandal became public, I was surprised only that it had become public. Rest assured, what we heard is just the scum floating on top of the pond. And that stagnant water is mighty deep.
Such agencies do not exist for their stated purposes. LBJ erected HUD not to supply housing to the poor, but to funnel tax money to politically connected builders and power to the government. Who can be surprised that there is fraud and theft? Even the official purpose is unconstitutional and immoral.
Scandals serve a healthy purpose, however. HUD, the Keating Five, and Congressional sex crimes diminish Washington’s prestige, and therefore its ability to regulate, subsidize, tax, spend, and borrow.
Knowing this, and knowing there are other scandals yet to come, the Congress decided to deliver a sucker punch to the taxpayers, in hopes that we will have forgotten it by next November: they voted themselves a massive pay raise—more money, just for their raise, than the average non-government American earns in a year. And they snuck it through so fast that the opposition, led by Ralph Nader, couldn’t organize.
In case we hadn’t forgotten by November 1990, the Republicans and Democrats formed a cartel to punish any challenger who used the pay raise against an incumbent. Already, the Democrats have defunded a candidate who planned to attack Newt Gingrich (R-GA), one of the engineers of the pay raise, and they removed Gingrich from their list of targeted opponents, virtually ensuring his reelection. After all, some issues are too important to be made into political footballs.
Our answer must be to pretend that the Congressmen who voted for this outrage are political footballs, and kick them out of office.
Amidst all these scandals and fearing more, the Bush administration asked the inspectors general of various federal agencies to report on any little items that might embarrass the White House. Some of the results are in, and here are the lowlights:
The Department of Veteran’s Affairs, the new cabinet department created by the Reagan administration, says there is loads of fraud in the $150 billion home-loan guarantee program; hundreds have been indicted this year alone.
The Department of Agriculture reports the wrong group of exporters got $170 million in taxpayer-backed loans. The well-acronymed DOA says $66 million was handed out to farmers who beat the regulations. One farmer created 51 trusts so he could receive the maximum $50,000 payment per “person,” for a total of $2.55 million. Another did the same to get $1.69 million.
The Department of Education spends more than $10 billion a year on college loans, grants, and work-study programs fraught with abuse. Students get year-long scholarships for four-month courses and trade-school trainees stretch their programs out to ten years to stay at the federal trough.
At the Bureau of Indian Affairs, which a Senate panel recently said ought to be dismantled because of fraud, $17 million is missing.
And these are abuses that the bureaucrats report on themselves! Unmentioned are the S&L bailout, the coming bank bailout, the Pentagon, etc.
Under the best of conditions, bureaucracies are in disarray. As Ludwig von Mises demonstrated, bureaucracies must be inefficient. There is no consumer demand for their “services,” they have no profit and loss system to check efficiency, and there is no consuming public to hold them accountable.
In Washington, the “consumers” are Congressmen and pressure groups with their hands in our wallets. That’s why Mises argued, in the tradition of the Founding Fathers, that bureaucracy must be drastically limited.
Abolishing HUD and all the rest of Washington’s unconstitutional agencies, and trimming the rest to a proper level, would cut the federal budget by 75%. Sounds like a good start to me.
The Case against NASA
Sheldon L. Richman
The most sacred of cows in the federal government is the National Aeronautics and Space Administration. Since it was founded, after the Soviets burst into space with Sputnik and a manned mission, NASA has been the darling of nearly everyone. Criticizing it takes more audacity than criticizing the Brownies. How could anyone deny that it was America’s manifest destiny to conquer space?
Some of the sheen came off NASA in 1986 when the space shuttle Discovery crashed less than two minutes after it was launched. Suddenly people began to think the previously unthinkable: that NASA was inefficient and perhaps corrupt. For the first time, magazines, newspapers, and television anchormen suggested that it was a government bureaucracy like any other.
The skepticism did not last. Even at its height, the hard-boiled newsmen could hardly contain their grief at the interruption of the space program and fervently hoped for its resumption. When it was finally resumed, they did not try to hide their joy. “America is back,” they declared on the day the first post crash shuttle launched.
No one should have expected any real examination of NASA and its underlying premises in the wake of the disaster, because the problem with NASA is only indirectly related to shoddy engineering and rushed launch schedules. The problem goes to the very idea that government should be sponsoring the exploration and industrial development of space. The idea is taken for granted. To even question its validity is, in most circles, to reveal oneself as a boor. But as Will Rogers said, “it’s not what we don’t know that hurts us; it’s what we know that ain’t so.”
Government exploration of space is a bad idea. It is especially unsound economically. To see this, we must unravel the various justifications for the space program. Leaving aside military reasons, there are two broad justifications: national prestige and economic benefits, the spiritual and material.
Unfortunately, people are easily gulled into boondoggles on the grounds of national prestige. Throughout history the greatest waste of lives and treasure has been brought about for the glory of the nation or state. It shows no signs of abating. National glory (government glory) is a cheap substitute for freedom and prosperity, exactly the things sacrificed to achieve the junk-jewelry of prestige.
The economics of the state’s space program is no better. Yet many people who would reject national prestige as a reason for the program heartily embrace it for the material benefits. Think of the industrial, scientific, and medical potential, they exhort. Think of the benefits we’ve had so far: digital watches, pocket calculators, Tang!
But such appeals ignore economic basics. Before costs are incurred to achieve something, more must be demonstrated than the abstract desirability of the thing in question. To want something is to prefer it to something else. Acting man is always choosing A over B. To make a choice oblivious of the alternatives foregone is an absurdity. This is the concept of subjective opportunity cost.
In some general sense, exploration of space is desirable. But it is not a free good. To get it, someone has to give up something. The key questions are who is the someone, and what is the something. These are precisely the questions that the government would like us to forget with regard to the space program (and everything else it does).
The who are the coerced taxpayers, even those who don’t give a hoot for space. The what is their hard-earned money, which they have no choice but to turn over to the state. The amount is a politically determined matter that bears little relation to what it would be were space exploration left to the free market.
In the marketplace, entrepreneurs must keep their costs within the constraints set by consumers in their valuation of final products. If a businessman’s outlays are greater than he can recoup from customers, he eventually goes out of business. Because of this constant threat, businessmen are driven to minimize outlays through innovation. There is no one way to do anything, so entrepreneurs are always looking for the lowest-cost way of producing their products consistent with the interests of their customers.
The government faces a different constraint. It doesn’t go out of business when outlays exceed income (ain’t that the truth!). Its constraints are more elastic. They can be expanded (though not infinitely) by the right combination of public relations and political intrigue. Unlike the businessman, the bureaucrat doesn’t have to please customers by delivering a concrete product that they will use and reject if they don’t like it. The bureaucrat must merely persuade the citizens and members of Congress that space exploration is vaguely good.
Since the taxpayers pay for the program indirectly and along with the rest of their tax bill, they do not, and perhaps cannot, submit the space program to the kind of consumer test to which they put market products. In other words, most people don’t know what the space program costs them individually, and they don’t relate the costs to the “benefits.”
Because of this, the program is run in a way that would be entirely inappropriate in the market. That is, by definition, it is wasteful. A government program offering such abstract “benefits” constantly faces budget cuts or elimination if it doesn’t maintain a high profile and public excitement. The production method that achieves those ends, however, is not necessarily the economically rational method. For example, NASA from the beginning has committed itself to manned space missions. These are more expensive than unmanned missions, and much expert opinion, in and out of the government, believe that manned missions are an unnecessary extravagance.
Why does NASA persist in sending people into space? It’s simple and readily acknowledged by NASA people: unmanned missions are boring. No one watches them on television because when you’ve seen one rocket launched, you’ve seen them all. If all the launches are unmanned the public will stop caring about space. And when they stop caring, the congressmen on the budget committees will think that NASA’s money could be spent on things that taxpayers care more about. So an exclusively unmanned space program threatens the existence of the program.
That’s why we have manned missions. But that’s not the end of it. The public’s attention on any one thing is limited. The more that the manned missions go off without a hitch, the harder it is to keep public attention trained on them. After a few successful space shuttle launches, people lost interest. The program was a victim of its own success.
NASA had to find public-relations methods to regain attention. So NASA heralded a series of “firsts” in space: the first woman, the first black man, the first senator (Jake Garn), and, finally, the first public-school teacher. These firsts had no inherent relationship to the missions. They were cynical tricks designed to get people to tune in. They worked, but the Challenger explosion that killed Christa MacAuliff ended, for a long time, plans to send civilians into space. Ironically, it also did much to renew the attention that was waning.
The same kind of stupidity found in the shuttle program can be found in the $25 billion moon-landing program and will be found in the $30 billion space-station program. The upshot is the political management, as Mises points out in Bureaucracy, is inherently irrational because it has neither the necessity nor means to engage in market-style economic calculation.
Instead of seeking a product that people want and producing it at the lowest price, the bureaucratic managers are more interested in building their own power bases. (NASA’s budget is up to about $12 billion). Moreover, people in the nominally private sector get a whiff of the gravy train and go to great lengths to hop aboard. Not only do people seek employment with NASA, but diverse interests throughout the economy—in industry, science, and academia—turn their efforts toward getting government grants and contracts. This not only gives these people a vested interest in the problem, it also diverts scarce resources from serving consumers to serving the bureaucratic agenda.
It is likely that exploration of space would benefit society. But whether those benefits are greater than what it would cost to attain them is something that only the free market can determine. To put it another way, right now we cannot know if space exploration is a good thing because the government won’t let us find out.
Kemp at HUD: Should Free-Marketeers Be Optimistic?
Greg Kaza
The Department of Housing and Urban Development is a glaring example of government waste. It robs the taxpayer, promotes special interests, and hurts the poor. And despite his conservative reputation, Jack Kemp’s tenure as secretary of HUD has already increased, rather than decreased, HUD’s damaging role in the U.S. economy.
HUD was founded in 1965 as part of President Lyndon Johnson’s statist Great Society. Since then, more than $150 billion has disappeared down the HUD rat-hole. HUD bureaucrats have presided over the bulldozing of countless private buildings, while constructing expensive “model city” and “new community” public housing projects. Badly designed and poorly managed, they have quickly fallen into disrepair, acting as breeding grounds for crime and despair.
HUD spending has increased under both Democrats and Republicans. Budget outlays were $2.4 billion in 1970 under Richard Nixon, but had grown to $12.7 billion by the time Jimmy Carter left office in 1980. Under Ronald Reagan, HUD budget outlays increased from $14 billion in 1981 to $18.6 billion his last year. Even after all the scandals, George Bush gave HUD a 29% raise after his first year in office.
Typical of HUD waste are the Carter-created Community Development Block Grant (CDBG) and Urban Development Action Grant (UDAG) programs. Both programs resemble federal revenue sharing, launched as a pork-barrel project by Nixon but later abolished.
CDBGs and UDAGs were allegedly started to help the poor, but in fact exist to enrich politically powerful developers. HUD grants the money to community governments, whose officials steer it to pet builders of “infrastructure” projects and other boondoggles. Communities receiving CDBGs include some of the wealthiest in the nation, among them Beverly Hills and Palm Springs, California, Grosse Pointe Shores and Bloomfield Hills, Michigan, and Scarsdale, New York.
In another case, whistleblower David Stith, former manager of HUD’s Manpower Economic Development Program in Greensboro, North Carolina, told about bribes being exchanged for HUD grants. Stith’s charges were substantiated, but not before he was investigated and fired by his HUD superiors.
Jack Kemp is in charge of HUD, but don’t count on progress toward the free market. Rather than challenge the institution, Kemp has proposed only marginal changes, none of which show much promise. They include enterprise zones, housing vouchers, and tenant management.
Enterprise zones are supposed to reduce regulations, taxes, and other government burdens in depressed urban areas. But the real purpose could be more spending. Designation as an enterprise-zone means HUD will give special financial assistance “to the maximum extent possible” with “priority funding” and possible UDAG grants, set asides, and “technical assistance.”
Kemp also wants housing vouchers that poor and low-income families could spend on government-approved housing. This is hardly a free-market solution, since it would guarantee housing for some at the expense of others, and increase, not reduce, government involvement in the nation’s housing market.
Kemp also advocates “tenant management” in public housing. But the tenants would be under bureaucratic supervision, and the problem is not lack of management, but lack of ownership. A far better idea would be tenant ownership, as undertaken by Margaret Thatcher in England. That means the ability of the owners to buy and sell their homes at will, which Kemp’s reforms do not allow.
Gone are the days when conservatives criticized the waste, fraud, and corruption synonymous with HUD. Many seem to agree with Kemp’s statement to the Wall Street Journal: “I’ve never understood why conservatives positioned themselves against the government.”
Says Kemp: “I’m going to be an advocate” and will “throw out ideology.” As to budget cuts, “I can assure you that I am going to do everything I can to make sure that there is adequate funding.” And he has.
The National Taxpayers Union scores lawmakers on a spending scale of 0 to 100. For example, when the Mises Institute’s Distinguished Counsellor, Ron Paul (R-TX), was in office, he scored from 91 to 99. Wisconsin Democrat Bill Proxmire always scored in the low eighties. Yet in the last legislative session, Jack Kemp (R-NY) got only 44, while liberal Pat Schroeder (D-CO) beat him with a 47.
Appointing people who are associated, even wrongly, with free-market views quiets potential critics on the Right, but the ultimate effect is to discredit the free market.
The classic case is former Education Secretary William Bennett, appointed by a president who promised to abolish the department. Bennett presided over a 51% budget increase and a vast enlargement of federal involvement in education. The Washington Post and New York Times editorialized on his departure that even though they often disagreed with him, they approved the expanded federal role he engineered. Bureaucrat Lauro F. Cavazos heads the department, which is stronger and more supportive of the National Education Association than ever. Similarly, the effect of Kemp’s tenure will be to reform the image (but not the substance) of HUD, making it all the more powerful.
The Kemps and Bennetts help disguise the fact that with agencies like the Departments of Education, Energy, and Housing and Urban Development, there is no acceptable free-market solution short of abolition.
Government and Hurricane Hugo: A Deadly Combination
Murray N. Rothbard
Natural disasters, such as hurricanes, tornadoes, and volcanic eruptions, occur from time to time, and many victims of such disasters have an unfortunate tendency to seek out someone to blame. Or rather, to pay for their aid and rehabilitation. These days, Papa Government (a stand-in for the hapless taxpayer) is called on loudly to shell out. The latest incident followed the ravages of Hurricane Hugo, when many South Carolinians turned their wrath from the mischievous hurricane to the federal government and its FEMA (Federal Emergency Management Agency) for not sending far more aid more quickly.
But why must taxpayers A and B be forced to pay for natural disasters that strike C? Why can’t C—and his private insurance carriers—foot the bill? What is the ethical principle that insists that South Carolinians, whether insured or non-insured, poor or wealthy, must be subsidized at the expense of those of us, wealthy or poor, who don’t live on the southern Atlantic Coast, a notorious hurricane spot in the autumn? Indeed, the witty actor who regularly impersonates President Bush on Saturday Night Live was perhaps more correct than he realized when he pontificated: “Hurricane Hugo—not my fault.” But in that case, of course, the federal government should get out of the disaster aid business, and FEMA should be abolished forthwith.
If the federal government is not the culprit as portrayed, however, other government forces have actually weighed in on Hugo’s side, and have escalated the devastation that Hugo has wreaked. First, local government. When Hurricane Hugo arrived, government imposed compulsory evacuation upon many of the coastal areas of South Carolina. Then, for nearly a week after Hugo struck the coast, the mayor of one of the hardest-hit towns in South Carolina, the Isle of Palms near Charleston, used force to prevent residents from returning to their homes to assess and try to repair the damage.
How dare the mayor prevent people from returning to their own homes? When she finally relented, six days after Hugo, she continued to impose a 7:00 pm curfew in the town. The theory behind this outrage is that the local officials were “fearful for the homeowners’ safety and worried that there would be looting.” But the oppressed residents of Isle of Palms had a different reaction. Most of them were angered; typical was Mrs. Pauline Bennett, who lamented that “if we could have gotten here sooner, we could have saved more.”
But this was scarcely the only case of a “welfare state” intervening and making matters worse for the victims of Hugo. As a result of the devastation, the city of Charleston was of course short of many commodities. Responding to this sudden scarcity, the market acted quickly to clear supply and demand by raising prices accordingly: providing smooth, voluntary, and effective rationing of the suddenly scarce goods. The Charleston government, however, swiftly leaped in to prevent “gouging”—grotesquely passing emergency legislation making the charging of higher prices post-Hugo than pre-Hugo a crime, punishable by a fine up to $200 and/or 30 days in jail.
Unerringly, the Charleston welfare state converted higher prices into a crippling shortage of all the scarce goods. Resources were distorted and misallocated, long lines developed as in Eastern Europe, all so that the people of Charleston could have the warm glow of knowing that if they could ever find the goods in short supply, they could pay for them at pre-Hugo bargain rates.
Thus, the local authorities did the work of Hurricane Hugo—intensifying its destruction by preventing people from staying at or returning to their homes, and aggravating the shortages by rushing to impose maximum price control. But that was not all. Perhaps the worst blow to the coastal residents was the intervention of those professional foes of humanity—the environmentalists.
Last year, reacting to environmentalist complaints about development of beach property and worry about “beach erosion” (do beaches have “rights,” too?), South Carolina passed a law severely restricting any new construction on the beachfront, or any replacement of damaged buildings. Enter Hurricane Hugo, which apparently provided a heaven-sent opportunity for the South Carolina Coastal Council to sweep the beachfronts clear of any human beings. Geology professor Michael Katuna, a Coastal Council consultant, saw only poetic justice, smugly declaring that “Homes just shouldn’t be right on the beach where Mother Nature wants to bring a storm ashore.” And if Mother Nature wanted us to fly, She would have supplied us with wings?
Other environmentalists went so far as to praise Hurricane Hugo. Professor Orrin H. Pilkey, geologist at Duke who is one of the main theoreticians of the beach-suppression movement, had attacked development on Pawleys Island, northeast of Charleston, and its rebuilding after destruction by Hurricane Hazel in 1954. “The area is an example of a high-risk zone that should never have been developed, and certainly not redeveloped after the storm.” Pilkey now calls Hugo “a very timely hurricane,” demonstrating that beachfronts must return to Nature.
Gered Lennon, geologist with the Coastal Council, put it succinctly: “However disastrous the hurricane was, it may have had one healthy result. It hopefully will rein in some of the unwise development we have had along the coast.”
The Olympian attitude of the environmentalist rulers contrasted sharply with the views of the blown-out residents themselves. Mrs. Bennett expressed the views of the residents of the Isle of Palms. Determined to rebuild on the spot, she pointed out: “We have no choice. This is all we have. We have to stay here. Who is going to buy it?” Certainly not the South Carolina environmental elite. Tom Browne, of Folly Beach, S. C., found his house destroyed by Hurricane Hugo. “I don’t know whether I’ll be able to rebuild it or if the state would even let me,” complained Browne. The law, he pointed out, is taking property without compensation. “It’s got to be unconstitutional.”
Precisely. Just before Hugo hit, David Lucas, a property owner on the Isle of Palms, was awarded $1.2 million in a South Carolina court after he sued the state over the law. The court ruled that the state could not deprive him of his right to build on the land he owned without due compensation. And the South Carolina environmentalists are not going to be able to force the state’s taxpayers to pay the enormous compensation for not being allowed to rebuild all of the destruction wrought by Hurricane Hugo.
Skip Johnson, an environmental consultant in South Carolina, worries that “it’s just going to be a real nightmare. People are going to want to rebuild and get on with their lives.” The Coastal Council and its staff, Johnson lamented, “are going to have their hands full.” Let’s hope so.
Big Government: An Unnatural Disaster
Llewellyn H. Rockwell
The California earthquake should teach “individualistic Americans” that they are “utterly dependent on government,” says Washington columnist George Will. It proves that “big government is the solution, not the problem,” adds Christopher Matthews of the San Francisco Examiner.
As someone on the front line, I draw a different moral.
Most of the heroes were volunteers. Unlike the bureaucrats, they went to work immediately after the earthquake when people’s lives could be saved, and before the government lumbered in to shut off private rescue efforts and violate property rights.
Within an hour after the earthquake, thousands of individuals were directing traffic, rescuing the trapped, treating the injured, and trying to salvage property. Soon the St. Vincent de Paul Society, the Salvation Army, and the Red Cross had centers all across the Bay Area to aid the victims.
By the next day, thousands had called these three agencies to make donations. Contributions also poured into Church World Services, Direct Relief International, Feed the Children, Operation California, the Bishop’s Fund of the Episcopal Church, and World Relief. A man dropped by a local TV station and donated his lottery winnings of $10,000. Appeals for blood were so successful that the Red Cross had to turn people away.
Once again, Americans showed themselves a generous and courageous people—long before the Federal Emergency Management Agency (FEMA) was in operation, long before Transportation Secretary Skinner was dispatched, long before Vice President Quayle visited, and long before FEMA and local officials were blaming each other for any shortcomings.
As Nobel laureate F. A. Hayek pointed out in The Road to Serfdom, “the worst rise to the top” in government. Most officials fall into two categories: smart and despicable, and stupid and despicable. An emergency gives us the chance to pull back the curtain and see these Wizards of Ooze for what they really are.
In the Bay Area, we could turn on the TV and watch San Francisco’s frenetic Mayor Art Agnos and our other rulers hog the cameras and fight over the microphones. We could listen to them babble the obvious, issue irrelevant orders, and announce a Master Plan worthy of Moscow. It would have been funny if not for the suffering...and the spooky look in all those elected and appointed eyes. The little dictators were actually enjoying it.
After Hurricane Hugo, it took FEMA a week to open an office. Bothered by criticism that it acted too slowly, this time it moved more quickly. But to what end?
Grant Peterson, a top FEMA bureaucrat, said on NBC that the agency had “opened our crisis center in Washington to issue emergency guidelines according to official processes.” In other words, it was pushing paper. Days later, as after Hugo, FEMA snoozed while private agencies worked around the clock.
FEMA—described by Sen. Ernest Hollings (D-SC) as “bureaucratic jackasses”—was still looking for San Francisco office space, in suitable buildings of course, while private agencies were running hundreds of relief stations on the streets. But, claimed Peterson, FEMA had to find suitable temporary employees: “retired federal employees and public school teachers” who know how to deal with the public!
Government did move fast, however, to stop “unauthorized relief.” The night of the earthquake, volunteers pleaded to be allowed to keep rescuing people from the collapsed I-880 freeway. A concrete worker called the government “paralyzed”; why, he wanted to know, were they also “handcuffing volunteers?”
About the only thing unparalyzed was spending, as people from the rest of the country will be forced to bail out the politically connected in Northern California. (As with all welfare programs, the poor may be the justification, but never the prime recipients.)
Such redistributive spending is not only economically harmful, it strengthens the welfare state, chokes off real charity, and undermines the family and community; far from being kinder and gentler, it’s the tax man and the social worker writ large.
A century and a half ago, Congressman Davy Crockett argued against federal relief for a fire in Georgetown. The Constitution grants no such authority, he said. More to the point, he told his colleagues, the money “is not yours to give.” But he was making a contribution himself; why didn’t the others join him? Then as now, however, Congress was interested only in spending other people’s money.
In the less-severe Armenian earthquake, more than 25,000 people died in the collapse of socialist housing. In California, most of the deaths occurred when a government highway pancaked onto the road below, when a government bridge broke, and when government water pipes cracked, letting fires burn unchecked.
Then, in an act of mass victim abuse, officials denied people entry into their own damaged homes and businesses. Some San Franciscans were refused permission to recover their few possessions before the government bulldozed their houses. Adult property owners could not be allowed to make their own decisions. Government knows best.
It also knows a main chance. Like con men who target the bereft, politicians use adversity to increase taxes. Rep. Don Edwards (D-CA) wants California’s tax-limiting Prop 13 repealed and Republican Governor George Deukmejian is calling for higher state taxes. The President refused to rule out a tax increase.
Big government—arrogance and waste incarnate—should get more of our money because now we have less? Taxpayers, not to speak of the country, are far better off when they send their dollars to private agencies instead of do-nothing bureaucrats.
The earthquake does not teach us the lesson of Messrs. Will and Matthews, but rather the opposite: churches and charities succor; businesses rebuild; government botches.
The Northern California quake was over in 15 seconds, but the politicians will be exacerbating its effects for years. There’s no Richter for big government, but on the Rockwell Scale, it’s a constant 7.1.
In Defense of Congress
Llewellyn H. Rockwell
Many of my friends in the conservative movement are denouncing the “Imperial Congress” these days. Joining statist Republicans like Newt Gingrich, they seek to strengthen the Presidency as against the Congress. National Review, the Wall Street Journal, and other conservative publications cheer them on.
All over the Right, we hear worries about slipping Presidential prerogatives, or denunciations of Congress’s “meddling” in foreign policy, supposedly a Presidential preserve.
But this is exactly wrong. It is the Imperial Presidency—as the conservative heroes of my youth like National Review co-founder Frank Meyer knew—that threatens our freedom.
Too often. Congress simply lays down in front of the Executive steamroller. When it attempts to recover a crumb or two of its Constitutional prerogatives—with the Boland Amendment or the War Powers Act, for example—the Legislature is condemned for treading on alleged Presidential territory.
Some conservatives—who on other days pooh-pooh Republican budget deficits as meaningless—even make a cause out of the size of Congress’s budget, which totals .08% of federal outlays.
Given the gargantuan government we have—which also violates the Constitution, of course—it is in our interest for Congress to have sufficient staff, if only to throw a few roadblocks in the way of the Executive behemoth. We should also remember that all the congressional staffs put together don’t equal one bureau in HHS.
The Founders, steeped in the English parliamentary tradition, knew that liberty is threatened by kings and dictators, not legislators. They saw the progress of representative government as the wresting of power from the Executive. That’s why they wrote the Constitution as they did.
Article I vests “all [all] legislative power” in the preeminent branch of government: Congress. Congress alone has power to: raise and spend taxes; borrow; regulate commerce; coin money; declare war; create federal courts and determine their jurisdiction; and establish an army and navy.
Article II admonishes the president to carry out the laws passed by Congress. He may veto those laws, but his veto can be overridden by Congress, the final authority.
The president may also recommend legislation, but as Frank Meyer wrote in National Review in 1964, “Recommend means recommend, not demand, not pressure, not go to the people to arouse demagogic pressures against the Congress.” The president is also commander-in-chief of the armed forces; he may appoint ambassadors and judges, with the consent of the Senate; and he may negotiate treaties, with the consent of the Senate.
There is no mention of foreign policy as a presidential entitlement. And his role as head of the armed forces has a foreign policy dimension only when Congress has declared war (the Founders not having envisioned Uncle Sam as global gendarme).
Article III shows the Judiciary, despite Warren Court imperialism, as the “least-equal” branch. Not only does the Constitution mandate that Congress can establish (or abolish) all federal courts except the Supreme Court, Congress can also—except in certain narrow areas such as lawsuits between states—determine the jurisdiction of the Supreme Court and all other federal courts.
For example, Congress could, by simple majority vote, take abortion cases out of the hands of the Supreme Court and lower federal courts, and leave this question to the states. That such a simple and Constitutional solution to Roe v. Wade occurs to no one is ample proof of a shriveled Congress and a swollen Presidency and Judiciary.
To argue that the Framers intended Congress to be the paramount branch of government is not to defend our present Representatives and Senators, however. With very few exceptions, today’s Members of Congress represent a sort of reverse evolution from 1789. Men have turned into monkeys, albeit with law degrees.
Nonetheless, Congress remains the branch of government closest to the people. As their retreat on the pay raise showed, they can be influenced. A whiff of popular opposition makes them sit up and take notice. The merest hint of possible defeat can make them do anything, even the right thing.
The Armand Hammers of the world can sway the Presidency or the Judiciary. Working Americans cannot. That’s why believers in a limited constitutional republic must not join the anti-Congress bandwagon. Institutionally, Congress is the bulwark of our freedom. Its enemies would, in Frank Meyer’s words, “substitute the uncontrolled power of a President elected with a specious quadrennial ‘mandate.’”
If we want to recover our freedom—so diminished in this century by despotic Presidents, bureaucrats, and judges—we must curb the Executive and the Judiciary, and Congress is our only weapon. The Founders gave us that weapon in the Constitution. But it is up to us to use it.
Exxon: Biggest Victim of the Alaskan Oil Spill
Llewellyn H. Rockwell
From the hysteria, one would think that Exxon had deliberately spilled 180,000 barrels of oil off Prince William Sound, Alaska. In fact, Exxon is the biggest victim. Through apparent employee negligence, the company has lost valuable oil, a giant tanker, and hundreds of millions of dollars to compensate fishermen and clean up the mess.
Yet night after night on television, we were treated to maudlin coverage of oily water and animals, and fervid denunciations of Exxon and oil production in “environmentally sensitive” Alaska. Why is it more sensitive than, say, Texas? Because there are so few people in Valdez, Alaska, and that represents the radical environmentalists’ ideal.
From the snail darter to the furbish lousewort to billions of acres of wilderness—all supposedly need government protection from the production of goods and services for mankind.
Extreme environmentalism holds that nature was in perfect balance before the arrival of modern man, whose crime was economic progress through capitalism. “The only really good technology is no technology at all,” says the organization manual of Friends of the Earth. Economic development is “taxation without representation imposed by an elitist species [that’s us] upon the rest of the natural world.”
David Brower, former director of the Sierra Club, says: “We’ve got to march back to our last known safe landmark. I can’t say exactly where it is, but I think it’s...at the start of the Industrial Revolution.”
Ralph Nader told Rolling Stone that we ought to consider abolishing the entire petrochemical industry. Since he also believes in outlawing nuclear power, what would we use for energy? “Trees, cornhusks, manure, the sun, the wind.”
Trees? In the Pacific Northwest, terrorists drive long metal spikes into trees to splinter and kill any logger who tries to cut them down.
While I enjoy the image of Nader’s fireplace full of cornhusks and manure, how would the rest of us heat or cool our homes, fuel our cars and businesses, or create new jobs? The environmentalist ultras reject that question, however, because they seek the undoing of industrial civilization. “That this would mean the starvation of most of the human race seems not to figure in their calculations,” says Murray N. Rothbard.
When the nuclear fusion experiment was announced, top environmentalists Jeremy Rifkind and Paul Ehrlich told the Los Angeles Times that a cheap, nearly inexhaustible, non-polluting energy source would be a “disaster.” It would allow more economic development, and worst of all, make it possible for more people to live on the earth.
Pantheistic environmentalism holds that man is simply a part of nature—no more important than sticks or stones or rocks or trees. The Judeo-Christian tradition, on the other hand, teaches that God gave man dominion over the earth and all its resources. They exist for man, and not the reverse. And the free-market, private-property order imparts the same lesson.
It is anti-human to advocate more government intervention and less economic development, i.e., more poverty, as the rabid environmentalists do. It’s no coincidence that environmental activists tend to be high-income types who disdain the little guy striving to better himself. The socialized national parks transfer wealth from the majority who are made poorer to the minority who backpack. Public lands and resources also enable the government to hand out concessions to politically favored special interests, who form a wooden triangle with environmentalists and bureaucrats against the public.
There is, of course, nothing wrong with backpacking in the outdoors. I love it myself. But we the backpackers should pay for it. The federal government already owns more than a third of the United States, including most of Alaska. Selling these federal lands would pay off the national debt, end this gigantic misuse of resources, and raise the average American’s standard of living, which has been declining in real terms since 1973 thanks to big government.
I too love the New Hampshire forests, the Rocky Mountains, and the California desert. But I also remember that modern man cherishes wilderness only from the safe standpoint of industrial civilization. As Robert Tucker points out, before capitalism, the forest was feared as what the Pilgrims called a “desolation of wilderness” filled with “savage beasts and savage Indians.” A 15th-century travel writer called the Alps the place “where God had swept up all the debris of Europe to create the plains of Lombardy.”
Our view is what it is thanks only to capitalism, and before we allow ourselves to be pushed backwards, we ought to examine closely all the environmental crises promoted by federal scientists, politicians, and others with a vested interest in big government. Is there really too little ozone in the upper atmosphere or too much at street level? Should we really worry that the earth is supposedly a degree warmer—or cooler—than a hundred years ago? How do these people know the optimum temperature? Is it really so bad that Brazilian peasants cut down trees in the rain forests to engage in agriculture? Or should they be permanently sentenced to indentured mildewtude?
Any call to expand big government’s parasitical control over our lives has to be opposed, no matter what the alleged justification. The real danger is always and everywhere, Washington, D.C., not the fluorocarbons released by cans of hairspray.
Does that mean we should not be concerned about accidents like the one at Valdez? No, but we should not forget the 8,800 tankers that have safely negotiated those waters since 1977, bringing the world 6.8 billion barrels of oil. Nor should we forget that oil is, in the environmentalists’ lingo—natural, organic, and biodegradable. It will be gone in 12 to 18 months at the most.
When logging takes place in the so-called national forests, the trees are clearcut and the land erodes. When private timber companies harvest trees, they are careful to replant, to grow more trees and prevent erosion. But since no one owns the federal lands, no one cares for them. No private firm would have let Yellowstone Park burn because a forest fire is “natural.”
In England, there is no municipal or industrial pollution of rivers and streams because the common law correctly holds that someone dumping filth upstream of someone else’s land violates his property rights. In the United States, with nationalized waterways, no such prohibition holds, and water pollution is rampant.
As even Mikhail Gorbachev would admit, socialism is not an efficient method of economic organization. That’s true for the Soviet Union, it’s true for the U.S. Bureau of Land Management and Forest Service, and its true for the Mississippi River.
Now that socialism is intellectually dead, however, we can expect the special interests who want to control and live off the rest of us to dress up big government in different guises. One is environmentalism.
That—along with what one environmentalist gleefully told me was the “fantastic PR opportunity of the Exxon Valdez”—accounts for the hysteria directed at Exxon, including the claim that it used the oil spill to raise prices.
But prices are not set by the benevolence or malevolence of businessmen. They are set by supply and demand. And after the oil spill, market participants realized it would be used to further suppress energy production in Alaska, California, and other areas of the U.S., making all present resources instantly more valuable. An immediate price increase was the just and rational response.
Environmentalists are cutting up their Exxon credit cards and calling for a boycott of Exxon, itself the main victim of the oil spill. The boycott won’t affect Exxon much, but it has already harmed gas station owners and their employees. But then environmental extremists have never minded harming innocent people, especially working people.
Amidst what is essentially an anti-human crusade, I am going out of my way to buy Exxon products. If the radical environmentalists win, the rest of us will lose.
“Afraid to Trust the People With Arms”
Stephen P. Halbrook
On April 5, 1989, at the instigation of drug shah William Bennett, the Bush administration violated its campaign promise against further gun control by arbitrarily decreeing a ban on the importation of most semiautomatic rifles. The same day, the House of Representatives held hearings on the Stark bill, which would impose as much as 80 years imprisonment for mere possession, by a law-abiding citizen, of a semiautomatic firearm.
There are some 70 million gunowners in the United States, and roughly one-third of all new guns are semi-automatics. Semiautomatic firearms, which require a separate pull of the trigger for each shot fired, have been in common use for about a century. And despite media doubletalk, semiautomatic rifles are not “assault weapons,” a term exclusively reserved for machine guns.
The frenzy to ban semiautomatics began when Patrick Purdy gunned down elementary school children in Stockton, California. Yet this case better illustrates the failure of the criminal justice system. The only reason Purdy was roaming the schoolyard, instead of the penitentiary yard, was that prosecutors had allowed him to plea bargain away robberies and other felonies. A judge gave him a few days instead of a few years to serve in jail.
Politicians who favor no punishment for violent criminals saw the Purdy incident as a way to divert blame onto the millions of law-abiding gunowners of America.
The same politicians have also sought to blame gunowners for the violence between drug pushers. Yet this violence is the inevitable result of the New Prohibition on drugs. The same happened in the 1920s, when the Old Prohibition of alcohol led to wars between bootleggers fighting over turf. Then, the alcohol prohibitionists tried to blame the violence on law-abiding citizens who owned firearms.
FBI data show that semiautomatic rifles are only rarely used in crime and are used less frequently even than sporting shotguns. Yet firearm prohibitionists have initiated a Big Lie campaign depicting such rifles as the favorite tool of drug pushers.
Under the Gun Control Act of 1968, Congress severely restricted firearm imports. It was a protectionist measure sponsored by Senator Thomas Dodd of Connecticut—home of the domestic firearms industry. Even so, the Act required the federal Bureau of Alcohol, Tobacco, and Firearms (BATF) to authorize imports of firearms generally recognized as particularly suitable for sporting purposes.
Every one of the rifles banned from importation on April 5th had for several years been classified as sporting and the BATF allowed their importation. These rifles include the AKS, which has the cosmetic appearance of an AK-47 machine gun, but is redesigned internally so as not to be convertible to fully automatic. The Uzi, FN FAL, and AUG are similar examples of guns that have a military appearance, but which functionally are no different than typical hunting rifles.
Drug kingpins have no use for these sporting rifles, when they have their choice of millions of AK-47 and M-16 machine guns available on the black market from south of the border. Nor would a ban on rifles possessed by sportsmen affect successful narcotics smugglers.
Proponents of firearms bans—like King George III before the Revolution—simply do not trust the American people with arms. James Madison, arguing for adoption of the federal Constitution in The Federalist No. 46, spoke of “the advantage of being armed, which the Americans possess over the people of almost every other nation.... Notwithstanding military establishments in the several kingdoms of Europe..., the governments are afraid to trust the people with arms.” If the people were armed, “the throne of every tyranny in Europe would be speedily overturned in spite of the legions which surround it.”
Madison drafted what became the federal Bill of Rights, including the Second Amendment, which says that “the right of the people to keep and bear Arms, shall not be infringed.” Madison endorsed the widely published, contemporaneous, and uncontradicted explanation by federalist leader Tench Coxe. He stated that “civil rulers, not having their duty to the people duly before them, may attempt to tyrannize,” and “the military forces which must be occasionally raised to defend our country, might pervert their power to the injury of their fellow-citizens.” Therefore “the people are confirmed...in their right to keep and bear their private arms.”
Madison’s philosophy and the Second Amendment are vindicated by 20th-century European experiences. In particular, the clearest example of a society where firearms were limited to the police and military was Nazi Germany. A survey of Nazi statutes and decrees analyzed by the Library of Congress in a 1968 study concluded:
“This sampling of German statutes, decrees, and other documents concerning firearms indicated two points: First, the profound importance the German invaders attached to the possession of firearms. Second, the importance of these proclamations and decrees as a technique used by the Germans to obtain and limit weapons in the possession of the nationals of the invaded country. These proclamations were of course accompanied with searches and severe penalties.
“A totalitarian society, and particularly a totalitarian society occupying a country against its will, simply cannot permit the private possession of weapons to any great extent, except by those who have proven their loyalty.... These directives concerning firearms were consistently issued with varying degrees of penalties. For example during the occupation of Luxembourg, the unlawful possession of arms was punishable by fine, imprisonment, hard labor, or even death. If we take the regulations applicable to Poles and Jews in the Incorporated Eastern Territories of Poland, imprisonment or the death penalty applied not only to those actually possessing unlawful firearms, but also to those who had knowledge that certain people possessed those weapons and failed to inform the authorities.”
In 1941, Congress understood the difference between a republic and a police state. It passed a law declaring that property requisitioned for war use would not “authorize the requisitioning or require the registration of any firearms possessed by any individual for his personal protection or sport.” No law, Congress said, should be construed “to impair or infringe in any manner the right of any individual to keep and bear arms.”
Congressman Edwin Arthur Hall explained at the time: “Before the advent of Hitler or Stalin, who took power from the German and Russian people, measures were thrust upon the free legislatures of these countries to deprive the people of the possession and use of firearms, so that they could not resist the encroachments of such diabolical and vitriolic state police organizations as the Gestapo, the OGPU, and the Cheka.”
Even as late as 1986, in the preamble to the Firearms Owners’ Protection Act, Congress reasserted “the rights of citizens to keep and bear arms under the Second Amendment” and “to security against illegal and unreasonable searches and seizures under the fourth amendment.” Passage of the Protection Act was prompted by the lawless behavior of the Bureau of Alcohol, Tobacco, and Firearms against law-abiding gunowners. The abuses sparked Congressman John Dingell (D-MI.) in 1983 to call the BATF “a jack-booted group of fascists who are perhaps as large a danger to American society as I could pick today.”
Madison introduced the Second Amendment and the rest of the Bill of Rights to Congress on June 8, 1789. Yet today, at the bicentennial of this great event in the history of human rights, proposals are racing toward passage that will ban firearms and destroy privacy rights. These proposals are more characteristic of a police state than a republic. And the media frenzy generated by the Purdy incident and the drug crusade only serves to mask that fact. It is unclear how long the Bill of Rights will endure this unconstitutional assault on 70 million American citizens.
