The Economics of Liberty
4. The Government Mess
Back to First Principles
Joseph Sobran
When Ronald Reagan was elected to the presidency in 1980, many conservatives (myself among them) were euphoric. They expected a wholesale reform in American government; there was even talk of a “Reagan Revolution.” It seemed likely that there would be an early campaign to repeal the Great Society programs Reagan had always opposed, and, once that was accomplished, a repeal of the New Deal itself.
Liberals, meanwhile, nervously insisted that Reagan had “no mandate” for any such sweeping changes. Some of them predicted, with more hope than confidence, that “reality” would force Reagan to subordinate “ideology” to “pragmatism.”
When Reagan left office eight years later, it looked as if the liberals had been right. Not much had changed. The system remained what it had been in 1980; Reagan hadn’t even abolished the federal government’s commitment to “affirmative action,” which Lyndon Johnson had established by executive order, and which Reagan could have done away with by the same simple means—a stroke of the pen, requiring no legislative or judicial support.
Federal spending had doubled across the board. The federal government was committed to a budget of over a trillion dollars per year, or about $4,000 per U.S. citizen. Though nobody took a poll, it seems safe to say that few citizens felt they were getting $4,000 worth of government “services.”
For all that, Reagan left the stage bowing to wild applause, as if his two terms had been an era of heroic achievements. Both he and his Democratic opponents had a vested interest in the idea that he had made radical changes—he because he wanted credit, they because they needed a bogeyman.
No doubt Reagan had made a difference in the tone of American politics. He had made conservative and free-market rhetoric fashionable, and helped put liberalism in disrepute. Reagan’s presidency had also coincided with the collapse of socialism around the world, and may well have helped supply the impetus for it, though of course the ultimate cause of socialism’s collapse was socialism itself.
It isn’t easy to assign causes to historical processes. A great many things happen in any eight-year period, and Reagan was surely more symptom than motor of the decline of collectivism. It was part of his political and theatrical genius to personalize the process, modestly assuming the lion’s share of the credit for what was happening anyway.
He did give dozens of worthwhile initiatives more support and encouragement than they would have had under almost any other president. Conservatives in Washington are now keenly aware that they enjoy much less access to President Bush than they did to President Reagan, under whom they encountered frustration enough, and there seems to be a concerted effort to remove “Reaganites” from the bureaucracies.
The result is that the conservatives now feel bereft by Reagan’s absence. They regard his presidency as a lost opportunity, but at least while it lasted, it seemed an opportunity; now there is barely even the illusion of hope for real reform. George Bush is pretty clearly a status-quo man who wants more than anything to avoid conflict with Congress. He doesn’t even daydream of radical change. In fact his rhetoric often implies that he is offering relief from the highly-charged ideological confrontations of the Reagan years.
In his own way, Bush supports the myth that the Reagan years were years of a drastic unsettling of the American political system. His special angle is the suggestion that Reagan’s alleged achievements have been so fully realized that there is no need for him to disturb us further by adding anything significant to them.
Conservatives would be much happier, and better off, if they recognized frankly that Reagan was always primarily a politician and an insider, a loyal member of the establishment he seemed to challenge. He simply understood that the way to rise within the system was to make a special appeal to the voters who were dissatisfied with it from conservative motives—moral traditionalists and economic libertarians. He succeeded within that system by growling at it a little, enlisting popular discontent on his side. He was sincere enough. But he was also too prudent ever to enrage the establishment—including the pressure groups and tens of millions of voters who receive income and other special benefits from the federal government—by seriously threatening their interests. The main difference between Reagan and Bush is that Bush dropped his conservative campaign rhetoric almost as soon as he had won his election; Reagan kept speaking it while in office.
In short, Reagan posed as a right-wing outsider, while he was in fact not much more than the extreme right wing of the insiders. Maybe he couldn’t have succeeded any other way; but it was his own success, not that of conservative causes, that was always his real concern. In that sense, Bush was his appropriate successor. Bush is merely less skillful at persuading conservatives that he has their interests at heart.
This is all to the good. Conservatives spent eight years waiting for Ronald Reagan to start acting like the messiah they were hoping for. “Let Reagan be Reagan,” they said, unable to see that he was being Reagan by arousing their yearnings and enlisting their loyalties while letting them cool their heels. Now they may begin to understand that they are on their own.
During the Reagan years, conservative activists have developed a detailed agenda—securing government appointments for their own, implementing the Strategic Defense Initiative, aiding various insurgent forces around the world—that may or may not be defensible in piecemeal terms but is less and less clearly related to broadly shared principles of government.
This agenda has something baroque about it: more and more, it resembles the familiar menus of liberal causes and programs. In fact, most of its items can co-exist with the liberal programs that have already been installed, which conservatives have quietly stopped trying to repeal. Jack Kemp, the conservative activists’ favorite during the 1988 primaries, is the most conspicuous example of the conservative who has come to terms with the liberal programs that have been instituted since the New Deal; it’s appropriate that he is now Secretary of Housing and Urban Development. The career of William Bennett—first as Education Secretary and then as drug czar—also illustrates how readily some conservatives drop their objections to federal power when it is exercised in the name of their “values.”
Whatever may be said for fine-tuning liberal programs by adapting them to market incentives, this is not an approach that will make conservatism a powerful political force, because it does nothing to assert conservatism as an independent rival principle to collectivism. It merely tries to sell conservatism as a set of superior methods for achieving collectivist goals. This was also the weakness of supply-side economics: it offered to increase rather than cut federal revenues. It located itself in a marginal area of common interest between liberalism and conservatism.
Since Reagan, in other words, conservatives have lost their identity. Loyalty to Reagan himself has helped make them forget and abandon their traditional purpose of reducing the size of government, and, more fundamentally, of defining the role of government in strict and principled terms. If liberals have programs, conservatives now offer alternative programs. They seldom offer philosophical and constitutional objections to the goals of liberalism.
Among other things, this has relieved liberals of the necessity of having, or defending, a philosophy. As a practical matter, everyone seems to accept without discussion the crude assumption that government should solve whatever is presented as a political problem or redress whatever is asserted as a grievance. The result is an ever-growing accretion of State programs, enterprises, institutions, bureaucracies. These are usually failures or waste of money on their own terms, but since there are no firm criteria for success or failure except a literal-minded common sense that has no political purchase, it hardly matters; once established, they operate autonomously, their subsidization assured.
After all, Lyndon Johnson promised that the War on Poverty would attack the “root causes” of crime, as well as abolish poverty itself; he pledged that the programs would be dismantled if they didn’t achieve these ends. Poverty (variously defined) is still with us, and the crime rate is higher than ever; but nobody in politics proposes to do away with the programs, least of all Secretary Kemp.
Conservatives now do little more than add to the confusion of the current scene. They have given up on the kind of thorough reform they thought was at hand in 1980; they have ceased posing a threat to the status quo of pragmatic interventionist liberalism. Something vital has gone out of the movement, something to which it owed all its original energy and appeal.
People have debated the meaning of conservatism for more than a century, but in the American political context, I think it should be defined fairly simply: it’s an attachment to a classic Western understanding of the rule of law. It understands the role of the state to be that of umpire, custodian, and enforcer of some rather minimal rules of conduct, designed to allow citizens to pursue their own private purposes without coercion or violence or fraud.
In the Politics, Aristotle explains the character of law well. He recommends that there be as few laws as possible, and that they be altered as seldom as possible. The reason for this is that law should be an extension of our normal sense of right and wrong, so that people can observe it, for the most part, simply by living what they regard as morally upright lives. Law should seem to be impersonal, applying equally to all, rather than the expression of any special or partisan will or interest. The less frequently it changes and the more permanence it has, the more citizens will feel reverence for it.
When Jefferson says “that government is best which governs least,” he is saying something similar. He means not that the ideal would be no government at all, but that the law should be so much in accordance with the spontaneous behavior of decent people, so harmonious with the community’s moral consensus, that it requires a minimum of surveillance and enforcement. He would probably see the development of an entire “underground economy” as a sign that the state had grown far too powerful. A tax system in which cheating has become endemic among people who would never think of stealing from their neighbors is a sign of a state that takes far more from citizens than they instinctively feel to be fair.
The word “law” has become indiscriminately applied to two fundamentally different, incompatible, and even opposite sorts of things, which have in common only the fact that they may be imposed by the apparatus of the state. One is the genuine rule of conduct, usually negative (“Thou shalt not steal”), which limits rather than specifies behavior, and which requires people to behave as they might ideally behave anyway out of simple respect for their fellows. The other is the command, which is the imposition of the will of some upon others. (“And the King said, Bring me a sword.”)
C. S. Lewis notes that the decline of the idea of natural law, an eternal order of right and wrong to which positive law should conform, gave rise in early modernity to the idea that the source of law is the will, whether the king’s or the people’s. By now we have come to take it for granted that this is not only natural but inevitable. The concept of a law that transcends will has been lost, though it lurks in our moral habits, and we act as if it were perfectly proper, in a democracy, for the majority to impose its will on the minority. There should be limits, of course: we somewhat incoherently reserve little pockets of “minority rights,” without explaining to ourselves how these can fit in with the principle that the state is entitled to legislate as it pleases, and ought to be (in Lewis’s phrase) “incessantly engaged in legislation.”
Conservative and libertarian thinkers are converging on a common insight in this area. Both Michael Oakeshott and F. A. Hayek have distinguished sharply between “nomocracy,” or government according to impartial rules, and “teleocracy,” or government intended to achieve some substantive purpose of the state itself. Both feel that nomocracy is the true Western tradition, and that this tradition of rule has been unfortunately confused by recent ideologies that can only understand governing as the pursuit of substantive goals, e.g., “social justice.” Teleocracy, by its nature, demands that the individual subordinate his will and purposes to the state’s. Under Communism, the individual may be directly conscripted into the state’s enterprises. Modern democracies are less monolithic, combining a residue of nomocracy with various elements of teleocracy; taxation pays for both the services all receive (e.g., police protection) and for the appeasement of special interests through the redistribution of wealth.
Conservatives and libertarians have been widely dismissed by intellectuals as “reactionaries” defending what are essentially lost causes. On this view, history has passed them by. And those who felt that the Reagan era was their last chance are implicitly accepting this view. But if Oakeshott, Hayek, and Mises are right, the current despair of conservatives is groundless.
Reagan’s election in itself was a symptom of enormous popular discontent with the present system. So are the underground economy and tax cheating; many other examples might be cited. Even the special interests that compete for our wealth have to use various moral and political subterfuges to justify what Frederic Bastiat calls “organized plunder”: they don’t dare to assert simply that their fellow citizens have a duty to support them, but are forced to claim “need” and “victimhood,” implying that their demands are justified exceptions rather than direct rights to others’ wealth. A moral stigma is still attached to the idea of “welfare” and to the very concept of “special interests.” There is a widespread, probably ineradicable suspicion that special claims on the state’s favor are subversive of genuine equality before the law, no matter how such claims are advanced in the name of equality.
The multiplication of special laws, lacking the character of genuine law, has done nothing to improve the lot of the average American citizen. The net effect, in fact, has somehow been to leave him more exposed to criminal violence than ever. Anyone who is not receiving subventions from the federal government is now likely to be deeply suspicious of all its works and pomps. It was this skepticism that Reagan so effectively exploited.
That skepticism deserves to be more seriously exploited. At bottom it is Western man’s deep-seated resistance to teleocracy, to any state that pushes him around in the name of any cause, however high-sounding its pretensions.
Modern politics, in its corrupted versions, is a series of devices for obscuring lines of economic, moral, and even sexual responsibility. By directing its concern to alleged victims, while multiplying the categories of victimhood, it increases the number of its dependents and turns the productive into virtual defendants before the tax police. By depriving the earner of his reward, it destroys the ratio between act and consequence and renders constructive action futile and irrational. It systematically undermines not only property ownership but family relations. By pandering to man as victim of circumstance, it makes itself the enemy of man as responsible agent. And by the same token, its chief enemy is not the violent criminal, who after all poses no threat to the redistributive system, but the citizen who wants to keep his own money.
In the current political vocabulary, “need” means wanting to get someone else’s money. “Greed,” which used to mean what “need” now means, has come to mean wanting to keep your own. “Compassion” means the politician’s willingness to arrange the transfer.
If they could leave off the specialized commitments they burdened themselves with during the Reagan years, conservatives could address the clashing principles at stake in every new statist initiative. They might find, to their surprise, that when the issues are properly defined, they belong not to a reactionary minority but to the abiding mainstream of the West. And millions of Americans who feel vaguely oppressed by their own political system, but are not burning with enthusiasm to aid the Nicaraguan contras or install an anti-missile system, might discover that their discontents, far from being idiosyncratic, stem from the irrepressible desire to live as free human beings.
Why Government Grows
Llewellyn H. Rockwell
In the 1980s, political rhetoric helped hide a government that—far from getting off our backs and out of our wallets—is more oppressive and expensive than ever. Republicans or Democrats, conservatives or liberals, there seems to be no end to federal taxing, spending, borrowing, inflating, and intruding. None of this is foreordained, of course, no matter how much the politicians might want us to think so; only in understanding the reasons for government growth, do we have a chance of reversing it.
1. Interest groups. There are two ways of earning a living; voluntarily through the market process and coercively through the political process. Special interests that prefer the latter method cluster around Washington like flies around a garbage can. These muggers in three-piece suits raid the Treasury and manipulate the government’s regulatory apparatus to their own benefit. The politicians, with a very occasional exception, are happy to be their partners in return for power and money.
The most successful special interests have (1) a focused purpose and a coherent strategy; (2) a willingness to devote a lot of money to their efforts; (3) a heavy dependency on government intervention, where a slight change in regulations or subsidies can mean success or bankruptcy; (4) large and obvious benefits from the government, while the cost is hidden and spread throughout the economy; and (5) the ability to cover their depredations with a pretended concern for the general welfare.
Welfare spending, for example, doubled since 1980 in the name of helping the poor. But the cash flows to the interest groups that can bribe and lobby, not to the poor, who receive barely 8% of the total. The real money goes to poverty lawyers, consultants, public housing contractors, Medicaid doctors, hospitals, and other special interests, plus the bureaucrats themselves. The poor are intentionally turned into an enduring underclass, dependent on government, so that others may live well at the expense of the rest of us. Thanks to the welfare state, there is virtually no social mobility from the bottom. As Walter Williams notes, the bottom rungs of the ladder have been cut off—in the name of compassion.
2. Permanency. Thomas Jefferson wanted the entire government turned out of office at every election, to prevent individuals from entrenching themselves. Yet thanks to “civil service,” most government officials have become permanent. And most politicians are permanent too, with 98% percent of House incumbents reelected every two years. Congressional staffs are also permanent, drawn from a pool of present and former Capitol Hill aides. As Jefferson feared, this has meant that these people get better and better at looting us.
3. Bureaucracy. Bureaucracy is necessarily inefficient because it doesn’t operate on the basis of profit and loss. Without the pressure to economize resources, even well-intended bureaucrats typically overspend. And, of course, most bureaucrats are not well-intentioned. They are motivated only by increased power, income, and perks, which they get by increasing the number of bureaucrats under them on the all-important organization chart, and by spending every dime they’re allotted. If they underspend, their budget can be cut. So the checking accounts are emptied in a spending frenzy at the end of every fiscal year, and then the agency—with the help of its affiliated special interest groups, on whom the budget is spent—appeals to the White House and Congress for more money. The president and Congress, who are also in hock to the special interests themselves, then budget an increase for this important public service that was underfunded in the previous year.
4. Crisis. Government has grown fastest in this century during war and depression. A crisis is the perfect excuse for more power and money to “solve” the problem, while it paralyzes the opposition. One recent example is the stock market crash of 1987, which allowed the SEC to grab more power over the markets, and fueled the trend toward a European Central Bank and an eventual World Central Bank. Professor Robert Higgs, in his great book Crisis and Leviathan, shows that the public always loses, since it is saddled with a bigger government after the emergency is over.
5. The Media. We’re taught that the big media are antagonistic to the government—a useful myth for both. In fact, they are allies on all bedrock issues. To take just one area, the media encourage government growth by parroting the government economic line. Whether it’s the latest obfuscation from the Federal Reserve or White House claims about cutting the budget, the media are an echo chamber.
Government, as the dominant institution in our society, uses the media to define the proper bounds of opinion, bolstered by the special interests that control so much of the media’s advertising. Nothing would be better for America, or worse for Washington, D.C., than the undermining and eventual abolition of the Federal Reserve and the income tax. But such Jeffersonian ideas are branded as extremist and therefore unworthy of consideration, thanks to the government-media-special interest combine.
6. Interventionism. The free-market economy is an intricate and carefully balanced network of prices and exchange relationships. When government intervenes to fix a real or alleged problem, it upsets this balance, causing even more problems, which in turn give an excuse for more intervention. Ludwig von Mises called this the “logic of interventionism”; it’s why a mixed economy is so unstable. An interventionist system will always be moving in one direction or the other—towards socialism/fascism or towards liberty.
7. Ideas. A final reason for government growth is the lack of free-market understanding. Colleges and universities are dominated by leftists and other interventionists. Economics texts are improving, but they still preach that intervention is necessary. The public is often ignorant of the harm caused by government.
These are just some of the reasons government continues to grow. How do we counter it?
First, we should expose all government crimes, ripping away the cloak of lies hiding the real intentions of the special interests. Next time you hear someone call for more welfare spending, point out that welfare has destroyed the poor, while making the real welfare recipients—the special interests—rich at our expense through the gun of government. Real charity can only be private, as anyone who has ever dealt with church workers as versus government social workers knows.
Second, we should work for radical changes—for abolishing programs and bureaucracies, and not merely for ameliorating them (although we’ll take that too). If our side starts out compromising, we have even less chance of marginal improvements, while tacitly agreeing to the whole system, and to its moral (or rather, immoral) underpinnings of theft and fraud.
Third, we should ourselves refuse to believe government propaganda and undermine it with others, supporting alternative sources of news and information.
Fourth, we should seek to place free-market professors and students in the institutions of higher learning, and try to mobilize the people through appeals to justice as well as economic efficiency. There is nothing like the realization that you are being ripped off as a goad to action.
Theft is immoral, whether private or public. In spreading the ideas of the free market and sound money, and denouncing and working against the criminals, we have our only chance to succeed. The obstacles are, of course, immense. But we have a world to win.
Our Tentative Economic Freedoms
Llewellyn H. Rockwell
Despite the vast U.S. government intervention into our economy, which Ludwig von Mises called “a method of bringing about socialism by successive measures,” we are still relatively free. But this sort of system, as Mises also noted, is inherently unstable. It must always be moving either towards or away from omnipotent government. And the bipartisan ease with which U.S. government spending and regulating keep growing demonstrates where we’re moving, and why our remaining freedoms have an uncertain future.
As the Founders of our country knew, freedom can only be securely grounded on inalienable rights. At the very least, a free economy means the right to liberty and property—not as contingent or subject to government-defined duties or responsibilities—but as absolute. But since these rights are no longer secure in America, our economic freedom is tentative, subject to revocation at government caprice.
The institution of private property has been most subverted, beginning with the income-tax amendment of 1913, which contains no legal barrier to the government’s confiscating all American income. Only public opinion stands in the way.
The great libertarian Frank Chodorov called the income-tax amendment the “Revolution of 1913” that undid the “Revolution of 1789.” Said Chodorov: “No measure in the history of our country has caused a comparable disregard of principle in public affairs.” And indeed the amendment undermines our property rights, as does the power of local governments to seize homes, businesses, and farms for non-payment of property taxes.
Another culprit is the Federal Reserve System and its legal monopoly on counterfeiting. The Fed is empowered to inflate without limit, since the courts ignore the monetary clauses of the Constitution. When the Fed uses its inflationary power, it engages in mass thievery, which weakens private property and economic freedom. As Henry Hazlitt notes, “Inflation is an immoral act on the part of government.”
Yet despite its immorality, the Fed enjoys prestige and economic legitimacy. Thanks to decades of disinformation, most people believe that central banking is a barrier to inflation. Of course, as Hazlitt says, despite government’s attempt to portray inflation as “some evil visitation from without,” it is “the result of deliberate government policy.”
With the income tax and the Federal Reserve, the president and the Congress can seize enough of our money to finance socialized medicine, socialized day care, environmentalism, the drug war, or any other interventionist project.
So much for private property. But what about economic liberty?
In America, no private enterprise is free from bureaucratic coercion. To a shocking extent, our regulatory masters exercise unchecked and autonomous power. Under existing law, no industry is safe from nationalization by presidential edict. No piece of land is immune from the government’s power of eminent domain. The drug war and RICO have institutionalized the government’s power to seize any property it deems ill-gotten, not only before conviction in a court of law but even before an indictment. Our right to work is merely contingent, subject to revocation by the legislature and the courts.
Under this system, said Albert Jay Nock, “The individual has no rights that the State is bound to respect; no rights at all, in fact, except those which the State may choose to give him, subject to revocation at its own pleasure, with or without notice. There is no such thing as natural rights; the fundamental doctrine of the American Declaration of Independence, the doctrine underlying the Bill of Rights, is all moonshine.”
Moreover, the government immunizes itself from responsibility for its failures. For example, the Great Society—and its counterparts in the Nixon, Carter, Reagan, and Kinder-Gentler administrations—have created and sustained an urban underclass. In the name of helping that underclass, the government has destroyed the core values, families, and communities of two generations. The result, after piles of money spent on government and its friends to “fight poverty,” is a holocaust of no-go zones where drugs, child abuse, prostitution, and illegitimacy are the norm; government schools promote immorality; entrepreneurship is outlawed; and brute criminals run free.
But no one blames the bureaucrats. “Since the State creates all rights,” said Nock, “and since the only valid and authoritative ethics are State ethics, then by obvious inference the State can do no wrong.”
Despite the Constitution and the Declaration of Independence, let alone the traditions of Western civilization, the state does indeed view itself as the source of rights, only to be dribbled out if its subjects fulfill their alleged duties or responsibilities to society (by which is almost always meant the government). We have all been indoctrinated to accept this view, at least since Woodrow Wilson and the “Progressive” Era.
The correct view was stated by the great conservative libertarian Frank S. Meyer, co-founder of National Review: the rights of human beings “are not the gift of some Leviathan” and the duties of human beings are not “tribute owed to Leviathan.”
Only when the absolute rights of liberty and property are again recognized will our economic freedom be secure. That is why our energies must be focused not only on teaching economic truth, but also on fighting what Meyer called “the great enemy of our time, the Leviathan state.”
The Great Society and 25 Years of Decline
William Murchison
Failures of Soviet and Chinese communism are writ large in the eastern sky—and on the covers of the big news magazines. No serious political figure would today stand up for central planning. He would be hooted down.
All this being so, why can’t Americans own up to the failures of their own in the public policy sphere? Why can’t we even talk about these failures?
The 25th anniversary of Lyndon Johnson’s Great Society comes round. The magnitude of the occasion seems not to have sunk in: still less the frustrations, vexation, overheated hopes, and downright dangerous trends set off by a presidential speech that should live in infamy.
Said Lyndon Johnson to the graduating class of the University of Michigan, Ann Arbor, May 22, 1964: “For you in your time we have the opportunity to move not only toward the rich society and the powerful society, but upward to the Great Society.”
The Great Society raised democratic social engineering to its apogee. The New Deal, in which LBJ had participated as a young bureaucrat and, later, as a Democratic congressman, was a politically inspired scheme to redistribute wealth; the Great Society seemingly set out to change humanity. The intention bore fruit. The Great Society helped make Americans unhappier, less self-reliant, less moral, less connected to things permanent—even, in many cases, less prosperous, though this was the direct reverse of what the reformers had said they wanted.
Government was going to do everything. It would wipe out poverty; it would equalize opportunity; it would enrich the mind and the heart. Broadly speaking, government was going to make people satisfied, fulfilled, and happy. “The pursuit of happiness,” a phrase from the Declaration of Independence, became under Johnson’s prodigious prodding, an American entitlement.
It did not end as planned. The Great Society enjoyed two efflorescent years, 1964 and 1965, during which Congress passed the Economic Opportunity Act (War on Poverty), the Civil Rights Act, the Voting Rights Act, Medicare, Medicaid, the Appalachian Regional Development Act, the Elementary and Secondary Education Act, the Higher Education Act, and the legislation creating the National Foundation for the Arts and Humanities. What happened afterward to the Great Society is in some degree less interesting than what didn’t happen to public perceptions of it. The Great Society fell flat. Education declined instead of advancing; racial tensions rose instead of falling. The welfare culture of the ’60s created a whole new stratum of government dependents—the “underclass,” unmotivated, uneducated, ridden with AIDS and cocaine. Intact black families, as Charles Murray’s ground-breaking work has shown, sundered and shriveled, especially as moral forces. Yet the conventional wisdom still commends the Great Society for its idealism.
“Most of these things, most of these programs,” says Sargent Shriver, who once generaled the War on Poverty, “are a part of our lives today.” As are the 6,000 pages of federal rules and regulations governing welfare; as are 59 major poverty programs, with a 1985 cost of $132 billion, compared with $21 billion for all poverty programs in 1960. Poverty likewise still is with us.
What is the matter, that the Great Society’s failures go widely unrecognized and unremarked, even while failed central planners in the communist bloc cringe from the spotlight?
The reason is the vested interest of the intelligentsia, special interests, and bureaucracy in seeing the Great Society perpetuated. The jobs it dispenses, the prerequisites it affords, are many and lucrative. Washington, until the coming of the New Deal, was a cozy Southern community which slumbered much of the year. The Great Society, by enlarging the bureaucracy and beefing up its functions, made Washington, D.C., yet more central to the nation’s concerns. The first $100 billion budget, offered by Lyndon Johnson (with some creative arithmetic to hide its real dimensions), has increased more than twelvefold.
There is yet a second reason the Great Society does not take its fair share of lumps. It may be the most powerful; it is undeniably the saddest. We actually are not supposed to mention it in polite society, but I will take the chance anyway.
The Great Society achieves its real invulnerability from the perception that attacks upon it are racially motivated. Lyndon Johnson sought, so he said, to raise blacks from dependence and poverty to independence and affluence. The programs he persuaded Congress to pass could not have been better calculated to achieve the opposite. But a conspiracy of silence enshrouds this depressing datum. In effect we are invited not to judge programs by their consequences but by their intentions.
Charles Murray, in Losing Ground, writes that “social policy after the mid-1960s demanded an extraordinary range of transfers from the most capable poor to the least capable, from the most law-abiding to the least law-abiding, and from the most responsible to the least responsible.” The consequence among the intended beneficiaries was a sharp rise in illegitimacy, drug use, and general dependence.
A fully credentialed liberal like Bill Moyers can occasionally mention these matters on television, provided he consents not to dwell on them at unseemly length. However, no such mention can occur in the context of an attack on the ideological foundations of the Great Society, because As Is Well Known (to self-styled spokesmen for minorities), people who advocate less government are indifferent to the poor and downtrodden.
It is chiseled in the minds of these “spokesmen” that government, not the free marketplace, can best address and solve the problem of submerged minorities, racial or otherwise. Whoever wants less government is no friend of the poor—and let’s don’t, contrary to Al Smith, look at the record, because that would overthrow the whole argument. It would establish that poor people prosper most where the market is free and choices open; and that the Great Society, far from increasing economic opportunities, has foreclosed them for many who would otherwise have enjoyed them.
What hope, then? Are we to go on noting the failure of collectivism abroad but ignoring its baneful effects at home? All we can do is keep talking. Ludwig von Mises knew “the fulsome praise of the stationary economy” to be “the last remaining argument” of the statists. Today, such fulsome praise embarrasses even communists.
Facts are impossible to disguise after a period of time, which is why Comrade Gorbachev, far from lying about his country’s condition, openly laments it.
No fact bulks larger in American life than that the Great Society has not been built here; that the attempt to build it has sapped energies and incomes and impaired the well-being of almost the whole of society. We will persist in pointing to that fact. It should not be long before somebody notices.
Civil Rights and the Politics of Theft
Joseph Sobran
Proudhon’s famous maxim, “Property is theft,” seems to be the implicit credo of today’s politicians, for whom taking others’ property is always justifiable as a form of restitution. No specifiable act of theft has to be proved. It’s enough that some are “haves” and others are “have-nots.” That crude division places generic guilt, the presumption of tainted gain, on one side, and the presumption of both innocence and compelling need on the other. Let’s have no prattle of production, earning, ownership: such terms are masks for privilege. The state’s role is to shift possession from where it is to where it is not, with no apparent limit.
Consider the evolution—the dissolution, really—of the concept of “civil rights.” Once it meant the rights of the citizen against the state. Now it means a confused bundle of things that hardly leaves room for the former signification. The current meaning is in fact a near reversal of the old.
When you hear the phrase now, you immediately intuit several things never quite acknowledged by the partisans who invoke it. You know it means favored treatment for blacks (or some other minority) at the expense of everyone else. You know it means an increase in the scope of state power. You know it likewise means a diminution of private freedom, especially in the use of one’s own property. You know it’s likely to entail a forcible redistribution of wealth.
The first laws passed in the name of civil rights, right after the War Between the States, simply made former slaves full citizens, requiring the states to recognize and protect, among other things, their property rights. This legislation simplified older law, removing an anomaly. It abolished a privileged status for some along with the oppression of others. All in all, it was a civilized and civilizing refinement of what had been a grossly imperfect feature of our way of life. Later civil rights measures forbade states to assign some citizens to an inferior status.
All these things appealed strongly to the Western sense of elementary fairness. But because their actual purpose was to benefit blacks, the term “civil rights” has been retained for rhetorical purposes by those seeking favored treatment for blacks, and by those whose goal is the expansion of state power. So the term “means” blacks now, not by rational definition but by concrete association.
The truth is that every “civil rights measure” advanced since about 1964 has meant an actual reduction in civil rights (including the civil rights of blacks) in the old sense of the term. Whites, who gain nothing and lose much by these measures, sense this more keenly than blacks, who stand to gain materially by the new measures. But it’s hopeless to say so, because of the prevalence of usage and the confusion it has bred. Anyone who opposes the new state-sponsored privileges stands to be accused of being “against” civil rights.
Gone are the days when liberals spoke hopefully of a “color-blind society,” to be ushered in by civil rights acts. The tendentious twisting of civil rights rhetoric has made us a color-obsessed society. The only rule of the game is that no claim made in the name of civil rights is to be denied. We’ve long since forgotten the assurances of liberals like Senator Hubert Humphrey that the new civil rights laws would equally forbid discrimination against whites. Anti-white discrimination is what “civil rights” has come to signify. “Racial justice” means group claims, never mind what these do to more basic considerations of individual justice.
Consider “affirmative action,” which in practice amounts to compulsory discrimination in the name of civil rights. (Liberalism has only banned voluntary discrimination.) The argument for it is that it’s an attempt to right a historical wrong. We aren’t given a clue as to when the wrong will finally be righted, any more than we are told when the redistribution of wealth will finally achieve “fairness.” All we know is that the state has crudely awarded all blacks, as such, “accredited victim status” (we owe this fine formula to John Murray Cuddihy). In any contest of claims, the black enjoys automatic preference over the white. The burden of proof in discrimination cases has shifted from the prosecutor to the defendant, who has to establish his own good motives.
Categories of accredited victimhood have also expanded to embrace other racial minorities, all women, handicapped people, and in some cases homosexuals. This is the short list, but it’s enough to suggest that an organized lobby helps in acquiring accreditation among the officially oppressed. You have to have a lot of clout to be a victim.
When an act is wrong, the normal legislative response is to outlaw it, not to redirect its evil. We prohibit murder; we don’t stipulate that the descendants of murder victims may correct some abstract balance by killing the descendants of murderers, or those of the same general gene pool as murderers. Advocates of affirmative action imply by their position that they have no strong objection to racial discrimination as such. Their goal, is not justice but tribal revenge. Their campaign goes beyond ex post facto law, since it imposes penalties for actions, legal in their own time, on people who didn’t commit them, and hadn’t even been born when they were committed.
Liberals in Congress have recently acted to prevent the U.S. Civil Rights Commission from investigating police violence against anti-abortion protesters. This intervention shows that civil rights activists and their political patrons don’t even want their own laws applied impartially. Those laws are intended to serve as the proprietary weapons of a certain lobby, and the use of those weapons to protect others the law would seem to apply to is to be blocked.
The case also shows that politicians don’t see themselves as serving the general public, but a narrow clientele of special interests. But it wouldn’t do to put it so baldly, so the clients who seek privileged status can only do so by claiming a victim status that makes the bid for power appear as a mere plea for equality.
Such client groups are likely to be far better informed about a congressman’s doings than his own constituency, and they may provide him with generous support from outside his district, support which, combined with all the advantages of incumbency, many give him overwhelming strength at election time against any challenger, who would have a hard enough time winning if the race were conducted entirely within the district itself.
Politics is big business now, and a smart politician quickly learns which “victims” are worth cultivating. In the House of Representatives, incumbents are re-elected at a rate of about 98%. The pursuit of liberal causes also gives a Congressman moral immunity from hostile scrutiny by the press and electronic media, which see nothing amiss in special favors for accredited victimhood.
The politics of victimhood is only a new guise for the perennial politics of favoritism, with which it meshes conveniently. A number of liberal Congressman have turned up among those who were abetting the use of funds from the Department of Housing and Urban Development to feather some posh private nests. The two leading Democrats in the House, liberals both, have been forced to resign because of their unseemly closeness to Wall Street and the savings and loan industry.
Even the cynical observer of Congress may be surprised at how easily the sweeping powers of the humanitarian state may be diverted to the rescue of the needy banker. But compassion knows no bounds, not when it’s funded with other people’s money and armed with a mandate to spot-weld all the ills of society.
The power to tax and spend has no limit. All it needs is a respectable cover. This is what humanitarian rhetoric provides. “Civil rights” has created a bloc of interests that can be augmented indefinitely. By helping destroy constitutional and other principled limits on government action, it serves as an opening wedge for the formless, limitless power we know too well. Politics, you might say, is theft.
Triumph of Liberty? Not in the U.S.
Robert Higgs
If you have been spending your time in certain circles—among libertarians, classical liberals, or other pro-market people—you may well believe that the tide of history has turned in the United States decisively in favor of the free market and the social and political institutions that sustain such an economic order.
Many pro-market observers have exulted over the so-called Reagan Revolution. During the past decade, they believe, deregulation has swept away many of the governmental controls built up over the previous century. In their enthusiasm for the removal of regulatory fetters, supporters of the free market have tended to exaggerate what has actually been accomplished, and they have failed to notice that the political momentum for further deregulation evaporated years ago.
During the past decade, deregulation has been significant but far from revolutionary. Important deregulatory changes have occurred in only a few sectors, mainly transportation, communication, energy, and certain financial services. At the same time—and receiving far less notice—increased regulation or governmental manipulation of markets has occurred in other areas, including agriculture, international trade and finance, health care, the environment, safety, defense, and aerospace.
Moreover, one must take account of the enormous taxpayer-financed bailouts of the failing farm credit system and the bankrupt savings and loan institutions—bailouts that many eventually cost hundreds of billions. William Niskanen, a member of the Council of Economic Advisers in the early 1980s, recently concluded that “the net amount of regulations and trade restraints has increased” since 1980.
Paul Weaver has observed that the most one could say for Reagan is that “he kept the nation from reverting to liberalism.” I disagree. He could not keep the country from reverting to liberalism because in fact it had never departed from the liberalism that has characterized the political economy of the United States since the New Deal.
As a check, one can secure an organization chart of the federal government for, say, 1979 and a corresponding chart for 1989. Comparing the two, can one see any evidence that the government’s scope has been diminished? The Civil Aeronautics Board has disappeared, but the Department of Veterans Affairs has appeared. Bad test? Too simple? Then peruse the Federal Register for recent years to see whether the government has taken itself off someone’s back.
But surely the vaunted tax cuts signify a blow against big government? No. There has been no tax cut, properly speaking. The best simple measure of the nation’s tax rate is the proportion of the national product commanded by government spending. Total government expenditures for final goods and services (transfer payments are not included in this total) relative to gross national product averaged 29.9% for 1970–79 and 31.8% for 1980–88; the federal spending portion alone rose from 20.5 to 23.2% of GNP. No shrinking government here. Nor will any shrinkage be found when one examines the mushrooming totals from federal direct loan obligation or guaranteed loan commitments.
But even if the so-called Reagan Revolution stands revealed as almost entirely bogus, has there not been a dramatic shift of public opinion in favor of the market and against governmental intervention? James Buchanan recently observed that “the collectivist urge has surely lost some of its motive force.” I agree with Buchanan that “the grounds of debate in the academy and even in journalistic circles have shifted,” but again one must be careful not to exaggerate the changes that have taken place, even within the intelligentsia.
Liberals continue to dominate the establishments of journalism, academia, civic institutions, and politics. The New York Times recently reported that President Bush “faces growing Congressional and public pressure to revitalize the Federal regulatory machinery,” and many members of Congress “are now poised to push for new controls.” Almost simultaneously, the Wall Street Journal discerned the “government’s role may soon grow again” because of renewed pressures for intervention in financial markets and the airline and trucking industries as well as for more vigorous antitrust measures and restraints on international trade. The Bush administration seems to have little interest in pushing strongly for additional deregulation and in some areas, such as the environment, favors even greater regulation.
Whatever may be the prevailing opinion among elites, there is little doubt that the general public continues to give strong support to a plethora of statist policies. In 1985, on the heels of President Reagan’s reelection landslide, for example, 46% of those polled in a national survey either favored or expressed indifference toward “control of wages by legislation”; similarly, 59% for “control of prices by legislation”; similarly, 85% for “government financing of projects to create new jobs”; similarly, 90% for “support for industry to develop new products and technology”; similarly, 75% for “support for declining industries to protect jobs.”
Proportions ranging from 36% to 65% agreed that government should either own or control the prices and profits of the following industries: electric power, local mass transportation, steel, banking and insurance, and automobiles. At least 95% agreed that government has either some important, or essential responsibility for “looking after old people,” “seeing to it that everyone who wants a job can have one,” “providing good medical care,” and “providing adequate housing.” At least 73% wished to see government spend more or at least the same amount now being spent on the environment, health, education, retirement benefits, and unemployment benefits; 54% wanted the same or greater government spending for culture and arts; 72% of those polled agreed that taxes on business and industry are either about right or too low. (All data from Public Opinion Quarterly, Fall 1987).
We may all devoutly hope that these data are inaccurate measures of true public opinion, but they are consistent with the data obtained by many other such surveys. If these are the opinions of a nation that has turned away from collectivism, then I am undoubtedly the King of Albania.
In sum? We now live, as we have lived for over 50 years, in a nation deeply committed, in practice and in preference, to statist institutions.
Increasingly, during the past couple of decades, supporters of individual liberty and a free economy have emerged from the obscurity and intellectual contempt that had shadowed them for most of the 20th century, especially during the modern Dark Age from the early 1930s into the 1970s.
But let us not live in a fool’s paradise. In promoting the ideals and practices of a free society, the bulk of our work remains still to be done.
The Federal Agriculture Swamp
James Bovard
American agricultural policy offers many instructive lessons on how to cripple a major sector of the economy. For 60 years, the U.S. government has waged a war against the market. And for 60 years, American taxpayers and consumers have been the biggest losers.
Farm subsidies—roughly $20 billion a year in federal handouts and $10 billion more in higher food prices—are the equivalent of giving every full-time farmer two new Mercedes each year. Annual subsidies for each dairy cow in the United States exceed the per capita income of half the population of the world. With the $260 billion that government and consumers have spent on farm subsidies since 1980, the government could have bought every farm, barn, and tractor in 33 states. The average American head of household worked almost one week a year in 1986 and 1987 simply to pay for welfare for fewer than a million farmers.
The fundamental tool of agricultural policy is the price support. The government sets a price per bushel or pound it will pay for a commodity. Since the government guarantees to buy unlimited quantities of a crop at the price support level, farmers will not sell the crop on the market at a price lower than they can sell to the government, and the support price thereby becomes the minimum price for any sales of the crop in the United States.
These programs lead the government to pay farmers more than market value for their crops. Farmers respond by producing surpluses, which Congress then creates other programs to dump, distribute, or repress. This is American agricultural policy in a nutshell.
Federal farm policy is a maze of contradictions. By late 1985, the U.S. wheat surplus was large enough to provide 27 loaves of bread to every person in the world. Yet, in the 1985 five-year farm bill, Congress encouraged farmers to produce even larger wheat surpluses by promising farmers crop subsidies far higher than market prices. At the same time the U.S. Department of Agriculture (USDA) paid farmers in 1986–87 to kill almost two million cows to reduce milk supplies, Congress lavishly rewarded other farmers for producing more surplus milk. The result: no decrease in milk production and continued government purchases of over five billion pounds of surplus milk a year.
“Prosperity through organized scarcity” is the core of American farm policy. In 1933, USDA began a temporary emergency program of paying farmers to slash production in order to balance production. In 33 of the last 35 years, the government has paid farmers not to work. In 1988, USDA rewarded farmers for not planting on 78 million acres of farmland—equivalent to the entire states of Indiana, Ohio, and much of Illinois. Government shut down some of the best American farmland in an effort to drive up world wheat and corn prices. Set-asides—programs to pay farmers not to work by “setting aside” or idling their cropland—are the opium of American farm policymakers, the annual tribute to the bureaucratic and political delusion that America somehow controls world grain markets.
Supply controls are introduced only after politicians and bureaucrats have mismanaged price controls. Government first artificially raises the price and then artificially restricts production. The higher Congress drives up the price, the greater the need for government controls on the amount produced.
USDA marketing orders annually force farmers to abandon or squander roughly 50 million lemons, one billion oranges, 100 million pounds of raisins, 70 million pounds of almonds, 7 million pounds of filberts, millions of plums and nectarines, etc. USDA announces each season how much of certain fruits and nuts will be allowed to be sold and how much must be held off the market in order to boost prices. USDA endows cooperatives with the power to effectively outlaw competition and to force farmers to let much of their crop rot or be fed to animals. To preserve federal control of the lemon business, USDA effectively bans new technology that would boost fruit sales and benefit both growers and consumers.
Congress responded to the agricultural recession of the early 1980s with a flood of subsidized capital. In 1985 alone, the government loaned almost a billion dollars to farmers who were already technically bankrupt. The injection of capital into agriculture has aggravated the problem of surplus production and driven up rental costs and land values in many areas. When the government announced a major debt forgiveness program in 1988, there was a fierce backlash from unsubsidized farmers.
Robert A. Dreyep, a farmer in Fenton, Iowa, complained that the government was “rewarding the poor managers who are also very inefficient farmers.” Jerome Berg, another Iowa farmer, complained, “Many of those with debt write-downs are again buying more land and expensive equipment, cars, trucks, and living it up while the rest of us who paid our bills and lived within our means are now expected to help bail them out.” The General Accounting Office reported in late 1988 that the Farmers’ Home Administration, the agricultural credit agency, has lost $33 billion.
The federal government attempts to hide some of the damage with lavish export subsidies. In 1986, it paid four times the world price to dump sugar and rice on the world market, and three times the world price to dump butter. In 1987, the U.S. paid export subsidies equal to 150% of the cow’s value in order to dump American dairy cows on world markets. It would have been cheaper simply to shove the cows off the Brooklyn Bridge. The government paid farmers $4.35 a bushel for wheat in 1986 that was sold to the Soviets for less than $2 a bushel. In 1988, the U.S. provided almost a billion dollars in credit to Iraq, thereby making American taxpayers underwrite the Iraqi war machine.
Farm program costs routinely far exceed the farmers’ entire profits. For 1986 the wheat program and wheat export subsidies cost $4 billion; wheat producers’ total net cash income was only $2 billion. In 1986, the rice program cost taxpayers $2.7 billion while rice producers received only $236 million in income; the cotton program cost $2.1 billion while cotton producers net cash income was only $1.3 billion. The wool program cost taxpayers $99 million while sheep producers realized only $13 million in profits from their operations.
The clearest effect of the USDA in the 1980s is to decrease the productivity of American agriculture. USDA does not reward farmers for improving their efficiency but for playing by the government’s rules. Every farm bailout has discouraged farmers from maximizing their productivity and efficiency. Costs of production always tend to rise to the government guaranteed price, thereby making American agriculture appear less competitive internationally than it otherwise would be. And politicians respond with more subsidies and protective barriers.
The history of modern agricultural policy, both in the United States and elsewhere, is largely the history of a political struggle against changes in relative prices. Wheat, corn, oat, and cotton prices have been gradually declining in real terms for over 200 years, and have nosedived in comparison to units of labor required to purchase them. Prices have declined largely because of the invention of tractors, new seed varieties, powerful fertilizers, etc. Yet politicians perennially proclaim that because wheat prices are lower now than they were 10, 20, or 30 years ago, this proves that society is treating farmers unfairly and that farmers deserve recompense. Each decade, as prices trend downwards, politicians and farm lobbyists have warned that farm production is no longer profitable and that society will soon have a severe food shortage unless immediate action is taken to raise prices. Yet, in every decade farmers have produced more.
The key to understanding American agricultural policy is to realize that the vast majority of the 400 farm products produced in America receive no federal handouts. There is no fundamental difference between subsidized and unsubsidized crops—only a difference in campaign contributions to congressmen by different farm lobbies. (Not that congressmen are the only problem. President Reagan went from preaching about the “miracle of the marketplace” in 1981 to bragging in 1986 that his administration had given more handouts to farmers than any in history.)
The only solution to the “farm problem” is to abolish federal farm programs. It is a crime for government to provide any handout to any businessmen, and for politicians to molest the economy for their own personal profit.
Government Garbage
Llewellyn H. Rockwell
In the loony leftist town where I live, we’re ordered to separate our trash into seven neatly packaged piles: newspapers, tin cans (flattened with labels removed), aluminum cans (flattened), glass bottles (with labels removed), plastic soda pop bottles, lawn sweepings, and regular rubbish. And to pay high taxes to have it all taken away.
Because of my aversion to government orders, my distrust of government justifications, and my dislike of ecomania, I have always mixed all my trash together. If recycling made economic sense—and this is an economic question, not a dogma of the mythical earth goddess Gaia—we would be paid to do it.
For the same reason, I love to use plastic fast-food containers and non-returnable bottles. The whole recycling commotion, like the broader environmental movement, has always smelled of buncombe. So I have never felt guilty—just the opposite—nor have I yet been arrested by the garbage gendarmes. But I was glad to get some scientific support for my position in the December 1989 issue of The Atlantic Monthly.
Professor William L. Rathje, an urban archaeologist at the University of Arizona and head of its Garbage Project, has been studying rubbish for almost 20 years, and what he’s discovered contradicts almost everything we’re told.
When seen in perspective, our garbage problems are no worse than they have always been. The only difference is that today we have safe methods to deal with them, if the environmentalists will let us.
The environmentalists warn of a country covered by garbage because the average American generates eight pounds a day. In fact, we create less than three pounds each, which is a good deal less than people in the Third World today or Americans 100 years ago. Gone, for example, are the 1,200 lbs. of coal ash each American home used to generate, and our modern packaged foods mean less rubbish, not more.
But most landfills will be full in ten years or less, we’re told, and that’s true. But most landfills are designed to last ten years. The problem is not that they are filling up, but that we’re not allowed to create new ones, thanks to the environmental movement. Texas, for example, handed out 250 landfill permits a year in the mid-1970s, but fewer than 50 in 1988.
The environmentalists claim that disposable diapers and fast-food containers are the worst problems. To me, this has always revealed the anti-family and pro-elite biases common in any left-wing movement. But the left, as usual, has the facts wrong as well.
In two years of digging in seven landfills all across America, in which they sorted and weighed every item in 16,000 pounds of garbage, Rathje discovered that fast-food containers take up less than 1/10th of one percent of the space; less than 1% was disposable diapers. All plastics totalled less than 5%. The real culprit is paper—especially telephone books and newspapers. And there is little biodegradation. He found 1952 newspapers still fresh and readable.
Rather than biodegrade, most garbage mummifies. And this may be a blessing. If newspapers, for example, degraded rapidly, tons of ink would leach into the groundwater. And we should be glad that plastic doesn’t biodegrade. Being inert, it doesn’t introduce toxic chemicals into the environment.
We’re told we have a moral obligation to recycle, and most of us say we do so, but empirical studies show it isn’t so. In surveys, 78% of the respondents say they separate their garbage, but only 26% said they thought their neighbors separated theirs. To test that, for seven years the Garbage Project examined 9,000 loads of refuse in Tucson, Arizona, from a variety of neighborhoods. The results: most people do what they say their neighbors do: they don’t separate. No matter how high or low the income, or how liberal the neighborhood, or how much the respondents said they cared about the environment, only 26% actually separated their trash.
The only reliable predictor of when people separate and when they don’t is exactly the one an economist would predict: the price paid for the trash. When the prices of old newspaper rose, people carefully separated their newspapers. When the price of newspapers fell, people threw them out with the other garbage.
We’re all told to save our newspapers for recycling, and the idea seems to make sense. Old newspapers can be made into boxes, wallboard, and insulation, but the market is flooded with newsprint thanks to government programs. In New Jersey, for example, the price of used newspapers has plummeted from $40 a ton to minus $25 a ton. Trash entrepreneurs used to buy old newspaper. Now you have to pay someone to take it away.
If it is economically efficient to recycle—and we can’t know that so long as government is involved—trash will have a market price. It is only through a free price system, as Ludwig von Mises demonstrated 70 years ago, that we can know the value of goods and services.
Environmentalists don’t seem to understand this. They ask their adherents to ignore price signals and cut their consumption of everything from gasoline to paper towels. This one plank in the environmental platform I agree with, since it will make these goods cheaper for the rest of us. I’m happy to have my standard of living raised by voluntary poverty from what Ronald Reagan once called “the tree huggers.”
Some liberal economists claim prices can’t solve the garbage problem because of “external diseconomies.” Since greedy capitalists are out to make a fast buck, the theory goes, they produce goods that impose costs external to their businesses, i.e., trash. But all businesses have spill-over effects, good and bad, and in a free market, this creates opportunities for other entrepreneurs. The donut industry may help make people fat (an external diseconomy). Should it be forced to sponsor Weight Watchers? Or, more to the point, should the public be taxed for a new federal Department of Corpulent Affairs?
The cave men had garbage problems, and so will our progeny, probably for as long as human civilization exists. But government is no answer. A socialized garbage system works no better than the Bulgarian economy. Only the free market will solve the garbage problem, and that means abolishing not only socialism, but the somewhat more efficient municipal fascist systems where one politically favored contractor gets the job.
The answer is to privatize and deregulate everything, from trash pickup to landfills. That way, everyone pays an appropriate part of the costs. Some types of trash we would have to pay to be taken away, others would be picked up free, and still others might command a price. Recycling would be based on economic calculation, not bureaucratic fiat.
The choice is always the same, from Eastern Europe to my town: put consumers in charge through private property and a free price system, or create a fiasco through government. Under the right kind of system, even I might start separating my trash.
Artistic “Entitlements”
Doug Bandow
The summer of 1989 was not the first time that public funds have been used to underwrite sacrilegious and pornographic art, but the outcry has been significantly louder than before. Nevertheless, the House rejected an attempt by California Rep. Dana Rohrabacher to kill the National Endowment for the Arts (NEA) and Texas Rep. Dick Armey’s attempt to reduce the NEA’s budget by 10%. Instead, the House agreed to cut $45,000, the amount granted to two exhibits that inflated public anger against the NEA.
The first exhibit is a photograph, entitled “Piss Christ,” of a crucifix in a jar of urine, part of an Andres Serrano exhibit paid for by a $15,000 grant of which one-third came from the NEA. Had Serrano chosen to photograph a toy soldier submerged in urine one could still ask what Serrano had done to justify a $15,000 check, which comes to three-fourths of the average American’s income. But his decision to show contempt for the religious views of millions of Americans raises an even more important issue: why should people be forced to pay for “art” that is intended to insult them? The NEA has been deluged with letters from congressmen as well as angry voters; the sponsor of the exhibition in which the Serrano picture appeared, the Equitable Life Assurance Society, has also been inundated with mail.
Serrano’s photo, though blatantly offensive, at least can be shown in polite company. Gay photographer Robert Mapplethorpe’s work, however, does not even meet this test.
The NEA gave Philadelphia’s Institute of Contemporary Art $30,000 to organize a traveling exhibit of Mapplethorpe’s photos, called “The Perfect Moment.” Newspapers delicately described his work as “homo-erotic” and “sadomasochistic,” but that hardly conveys the full impact of some of Mapplethorpe’s photos. There are, for instance, pictures of Mapplethorpe with a whip handle stuck in his anus, two women engaging in lesbian acts, a man in a suit with his penis exposed, and a man urinating into the mouth of his bound lover.
Concern over political consequences caused the Corcoran Gallery of Art to cancel a scheduled showing, but the Washington Project for the Arts, which has received NEA grants in the past, subsequently announced that it would play host. “It’s a really beautiful exhibition, and the way the work is presented is done very sensitively,” explained WPA Director Jock Reynolds. Indeed.
Despite Congress’ timidity, it’s time to rethink public funding of the arts and other cultural activities. In 1989, the U.S. government provided $169 million to the NEA to fund what one official calls the “expression of America’s culture”—symphonies, dance companies, painters, and sculptors. Another $153 million goes to the National Endowment for the Humanities (NEH), which focuses on cultural research “to increase understanding and appreciation of the humanities,” explains the agency. Together these Washington bureaucracies constitute America’s de facto ministry of culture.
The United States survived for nearly two centuries without a federal cultural presence but the Johnson New Deal meant more than welfare for the poor. It also plowed new ground by providing handouts to the intelligentsia. In 1965 Congress created the NEH and gave it $2.5 million. During an era when there were no perceived spending constraints, cultural outlays increased rapidly: by 1980 the NEA’s budget was $152 million and the NEH’s expenditures were $157 million.
For a time Ronald Reagan’s appearance in Washington seemed to threaten the survival of the ministry of culture. Though the administration did not attempt to eliminate the two endowments, it did propose to cut both agencies’ budgets by roughly one-third in future years, arguing that “funding for artistic and cultural pursuits is a relatively low priority budget item.” But the administration never pushed its proposals very hard and the beneficiaries of the more than $300 million in largesse—artists, researchers, museums, universities, et al.—rallied to protect their grants. Congress enacted only minor reductions, and later raised spending for both endowments. Uncle Sam, having seized control of virtually every other form of human endeavor, was not interested in giving up his hold over the nation’s culture.
Ironically, many conservatives, while echoing Reagan’s criticism of big government, seemed more interested in controlling than in demolishing the NEH. Indeed, early in the administration, conservative activists bitterly battled over the endowment chairmanship, with neoconservative William Bennett beating out paleoconservative M.E. Bradford. Bennett and his successors then used the agency in part to fund neoconservative intellectuals and endeavors, and to push their agenda within the Reagan administration.
The NEA, in contrast, was largely ignored by the right, and the chairmanship went to a nonideological campaign aide, Frank Hodsoll. (The conservatives’ lack of interest would seem to be myopic. Though the NEA’s work is less overtly political than that of the NEH, the former remains an important banker for many activists who would dismantle our essentially individualist bourgeois culture.) However, in the Bush administration, where symbolism is so much more important than philosophy, it has been the fight for control of the NEA that turned into a royal slugfest. For the sort of ideological eunuchs attracted to the Bush administration the NEA chairmanship was a plum position, with the availability of millions of taxpayer funds automatically making the NEA head a BMOC in the art world.
What justification is there for a ministry of culture? There’s no public demand for the two endowments—a recent Newsweek poll found that 47% of the public oppose federal support for the arts, compared to only 35% in favor of subsidies. Instead, the federal programs reflect the influence of America’s cultural elite, both directly, through their ability to sway political leaders, and indirectly, through many people’s perception that the arts are a critical pillar of our civilization requiring government backing.
Indeed, no longer does America’s cultural industry have to justify its position at the federal trough. Politicians may argue over the size of the artists’ dole, but they don’t question its existence. This “ask no questions” dynamic extends to many states and cities. New York, for instance, is in the midst of a bitter political battle over proposals to cut subsidies. But no one is suggesting that culture should develop without tax dollars; the only issue is how large the checks should be. In short, artists’ subsidies have become just another entitlement, such as welfare, Social Security, and student loans. The social “safety net” has grown to underwrite farmers, businessmen, students, and old people irrespective of economic circumstance, so why not artists?
Now, however, there may be an opportunity to debate the fundamental issue again, for America’s ministry of culture has run afoul of public opinion by funding exhibitions designed to outrage the people paying for them. Not that the NEA has not previously funded curious projects, such as pornographic poetry. (The NEH’s grants have been largely noncontroversial, though the agency did spend $615,000 to underwrite the blatantly anti-Western, pro-statist The Africans TV special.) However, with the NEA up for reauthorization and no one yet appointed chairman to replace Hodsoll, that agency is unusually vulnerable. Even congressional allies of the arts industry, such as Illinois Rep. Sidney Yates are on the defensive. Says Livingston Biddle, chairman of the NEA during the Carter administration, “A confluence of factors has made this the worst firestorm for the endowment in the 25 years of its existence.”
Though the wave of protests against public funding of sacrilegious and pornographic exhibitions should have come as no surprise, the art world reacted as if the Gestapo had shot the artists and closed the organizations involved. “The question here is one of censorship,” said Harvey Lichtenstein, president of the Brooklyn Academy of Music. Serrano is just a pawn “to censor, to restrict cultural free expression,” wailed Ted Potter, executive director of the Southeastern Center for Contemporary Art. And so on, ad infinitum.
Now, whether Serrano’s and Mapplethorpe’s work can satisfy the dictionary definition of art—the realm of what is “beautiful, or of more than ordinary significance”—is debatable, but no one has suggested that they be suppressed. Even a vote-minded politico such as New York’s Sen. Alphonse D’Amato stated of Serrano’s photo that “I don’t care if this guy wants to produce a thousand of these things—just don’t do it with taxpayers’ money.” His argument is not only simple, but compelling: if you want to do something disgusting, vulgar, and offensive, don’t expect your neighbors to pay for it.
Yet virtually no political figures—Rohrabacher excepted—have suggested dismantling either of the endowments. Rep. Richard Armey, a free-market Texas Republican, initially only pushed for greater accountability to the public; only later did he propose a 10% budget cut. However, with the public against public funding, it’s time to ask the more fundamental question: why a ministry of culture at all?
Years ago the NEA and NEH became part of the bipartisan boondoggle that fills Washington. Liberals and conservatives, Democrats and Republicans, all support the continuation of federal support for the arts industry. But there’s no justification for taxing lower-income Americans to support glitzy art shows and theater productions frequented primarily by the wealthy. And there’s certainly no justification for funding artists who are dedicated to smearing the values held by those picking up the tab.
Government cannot be trusted to pick and choose acceptable art, and that’s merely one more reason to junk the two endowments. It’s time Congress and the administration promoted unlimited free expression by abolishing federal handouts to those doing the expressing.
What To Do About Traffic Congestion
Walter Block
Traffic congestion has to be one of the most annoying occurrences known to mankind. It limits vehicles capable of 150 miles per hour under specialized conditions, and 65 miles per hour under normal conditions, to crawling along, bumper-to-bumper, at five miles per hour.
Congestion is also a danger. Apart from psychological buffeting, frayed tempers undoubtedly create traffic accidents. The vehicles, too, deteriorate at a faster rate than they otherwise would, and overheated engines, etc., are the cause of even more highway injury.
The economic costs are monumental. Millions of productive workers are forced to sit idle for long periods in the morning, and another long period in the evening, while their vehicles use costly fuel.
In many large cities, almost anything out of the ordinary can trigger congestion, from the end of a ballgame to people returning from the beach. In New York and other major cities, the problem is reaching crisis proportions.
A crisis calls for urgent solutions, but almost no one is addressing the fundamental problem: the fact that the roads are owned and run by the government, therefore prohibiting the price system from solving congestion.
Traffic congestion is not unique. On the free market, people are continually choosing between lower-priced but more crowded conditions, and higher-priced but less congested alternatives. Should they patronize a crowded fast-food chain or a quiet, expensive restaurant? A discount department store or a full-price boutique? But with our roads, there is no market where consumers can make their preferences known; there are no congested but cheaper highways competing with more expensive but emptier ones.
There are plenty of “non-pricing” solutions to this problem. But because none rely on consumers expressing their wishes in a free market, all will fail.
A perennial government favorite is staggered work hours. The government need do nothing: instead the employer, and his recalcitrant employees, can be made scapegoats for congestion.
But restaurants are busiest during breakfast, lunch, and dinner time. Thus they too suffer from congested traffic. But were a restaurant owner to propose that customers stagger their meal times, he would be laughed out of business. Instead, he accommodates himself to the customers.
Many bowling alleys are open 24 hours a day, but “suffer” peak-load congestion in the late afternoon and early evening. They solve this cutting prices during the less busy hours. Customers are satisfied because they can coordinate their plans with the prices they choose to pay. But the exhortation to “stagger” travel times displays a typically callous government disregard for consumers.
Another strategy is the conversion of two-way streets into one-way ones, to align the direction of traffic in accord with the majority of motorists (outbound in the evening, inbound in the morning) and prohibit turns on and off these main thoroughfares, to keep traffic moving as quickly as possible.
This may sound like a panacea. But none of the cities implementing this plan have succeeded in ending rush hour congestion. There is simply too much traffic for the streets to handle. This policy also restricts motorists’ travel. Every time a two-way street is converted into a one-way, the driver must cover a greater amount of territory to get where he is going. For if the one-way streets follow an every-other-street-in-a-different-direction pattern, the motorist will have to go around the block in half the cases. And the greater the number of prohibited turns, the greater the difficulty in maneuvering. Many motorists will have to go several blocks out of their way to turn, which only adds to the congestion.
Other solutions involve the metering of entrances to highways with lights. But these schemes do not eliminate highway congestion. They merely transform it into a situation where cars travel at medium speeds and wait in long lines to get on. What’s worse: slow speeds and no lines, or long lines with medium speeds?
Some people in the “transportation community” say congestion cannot be solved by itself; instead we should have more public transportation and government planning: more buses, restrictive land-use controls, expensive subways, car pooling, “high-occupancy vehicles” lanes, etc. Since government control hasn’t worked, we therefore need more of it.
Governments have poured billions into public transit schemes, and the results have been disappointing to disastrous: taxes continually increased to pay for an unworkable and inconvenient systems, which are eventually taken over by society’s most destructive elements. These comprehensive plans are always based on bureaucratic estimates of “social”—as opposed to individual—costs and benefits; they treat consumers as if they were a homogeneous unit, whose individual needs do not matter.
The individual motorist vastly prefers his private mode of transportation to most conceivable mass transit alternatives. For planners, this is the ultimate frustration. So some planners have suggested the ultimate solution, therefore, is to ban cars.
All these “solutions” are bad substitutes for the price system. If congestion occurs on the free-market transportation network, where all roads are private, the response will resemble what accompanies “excess demand” for any other good or service: the businessman does not rest day or night till he provides the extra services the market is clamoring for.
The fast-food restaurant with long lines hires additional workers as soon as possible; the movie theater which must turn people away soon expands its facilities. That’s because in the private economy, “congestion” is a golden opportunity for expansion of output, sales, and profits. It is only when the government takes over that customers clamoring for additional services are denounced and thwarted.
As long as government owns the roads, we will see no real solution to traffic congestion. Only when we privatize our nation’s roads will we see the benefits of the price system inherent in the free market, and an end to the traffic jam as a daily feature of American life.
Time for An American Perestroika
Robert Higgs
The astonishing developments in the Soviet Union and Eastern Europe suggest that after more than 40 years, the Cold War may be about to end or at least to enter a less menacing phase. But not everyone is rejoicing at the turn of events. Many people have a strong vested interest in the continuation of a high level of military spending. The prospect of a more reliable peace scares them to death.
The reaction is described as “panic” as headlines proclaim “Arms Companies Fear Guns Will Turn to Butter.” Said one investment strategist, “we were all joyous at the scenes of people climbing on the Wall, but the problem is, how do you make money on this?” Is it gauche to suggest that superfluous military firms try to make money by producing goods consumers are willing to buy?
Of course, one should not expect to collect the peace dividend. The widely discussed “cuts” of $180 billion in military spending, which Defense Secretary Dick Cheney asked the armed services to consider, are not actually cuts from the present level of spending but cuts in the Pentagon’s desired spending increases over the next five years.
At present military spending is about $300 billion per year. So the U.S. military economy is roughly the same size as the entire economy of East Germany. And like that economy, it is centrally planned. Long ago Ludwig von Mises showed that the authorities in a planned economy cannot calculate to achieve an economically rational allocations of resources. Without prices ratified by consumer demands and without asset values established in open capital markets, a planned system must necessarily misallocate resources. By now everyone, including communists from Gorbachev on down, acknowledges that the planned economies of the Soviet bloc have been failures. The U.S. military economy also has been a failure, for the same reasons.
But if the military economy has been an economic failure, squandering resources right and left, it has been a political success—at least for those who command its heights or feed at its troughs.
Defense, of course, is often taken to be the classic “public good,” and it is true that virtually all Americans want the government to do whatever is necessary to deter attacks from abroad. But no one knows with any certainty what the relation is between military spending and national security. Obviously, vast sums can be, and have been, spent for worthless weapons. Other weapons work well enough but trigger offsetting reactions by adversaries, leaving the nation no more secure or even less secure, but assuredly poorer.
Further, no one knows how much of the military effort goes toward protecting the lives and property of U.S. citizens and how much goes toward advancing the interests of the U.S. government, which are by no means synonymous with the interest of the general public. But however problematical true national security may be, military spending undoubtedly generates private benefits in the form of jobs, incomes, votes, and power. For these prizes, there has been no shortage of seekers.
The military-industrial-congressional complex (hereafter the MICC) includes all those who have found a way to turn a bad public situation, the Cold War, into a good personal deal. Members of Congress, especially those who belong to the key military committees, milk the system to gain reelection. Arms contracting firms, many of which lack the ability to compete successfully in commercial markets, rake in large profits, often with little or no risk. The military services, with their bloated officer corps and labyrinthine bureaucracies, gain positions, pay, and perquisites, not to mention one of the cushiest retirement plans in the land. On the periphery of the MICC thrives congeries of military-oriented lobbyists, consultants, research institutions, academicians, and labor unions.
The companies that supply the Pentagon talk a good private-enterprise game, but in practice they are at best mutant and twisted actors in the market. They are subject to no genuine market discipline; the government is the sole buyer of the arms they produce. But the government purchasers are using other people’s money and have no bottom line of their own.
Small wonder if the big military companies all form political action committees to channel millions into the campaign coffers and personal accounts of many members of Congress. Hardly surprising if the firms hire thousands of retired military officers, former congressmen, and congressional staffers to help them acquire additional arms contracts. Big arms companies in trouble can confidently apply for a government bailout.
The whole business reeks of corruption, some of it illegal but much of it, like the blatant bribes (“honoraria”) paid to members of Congress, perfectly legal. The FBI, eavesdropping on a telephone conversation between two men engaged in a Pentagon procurement fraud, recorded one of them saying, “If the farmers in Indiana knew what you sons of bitches were doing with their money, they would come up there and kill you with their pitchforks.”
But despite the scandals that flare up every few years, the public either doesn’t know or feels powerless to do anything about the conduct of the MICC. Like the East Germans who toiled in poverty while their masters lived in luxury, the average citizen surrenders the funds to feed the gargantuan military economy year after year.
As William J. Stern recently wrote, the political insiders who flourish when the government maintains a vast military economy are “our version of the East bloc’s Nomenklatura and they have absolutely no wish to see anything change.” For a perfect example, read the history of Wedtech—it doesn’t get any sleazier.
Over the years, numerous real or pretended efforts to reform the system have been made. Three major studies by presidential blue-ribbon commissions, the latest being the Packard Commission of 1986; many acts passed by Congress; various in-house efforts at the Pentagon; scores of investigations by the General Accounting Office; countless proposals by scholars and private groups—all have come to naught.
Secretary Cheney took office pledging to carry out effective fundamental changes. But his actual plan, announced late in 1989, was correctly described as leaving “intact the structure and authority of the entrenched Pentagon procurement bureaucracy.” Cheney sought to avoid alienating the top civilian and military leadership of the armed services. The result: no substantive change.
Now, as the public sees less and less justification for the maintenance of an enormous military establishment, especially one designed for another world war in central Europe, the MICC will surely come under attack. But its political resources are enormous. Even if military spending is cut, it is unlikely to be cut very much very fast. Regardless of events in Eastern Europe and the Soviet Union, those whose positions and incomes derive from high levels of military spending will continue to resist the spending cuts.
They may also be tempted to stir up fears of new threats or to revive the Cold War—after all, the past 40 years are littered with weapons “gaps” and other forms of scare-mongering. The public would be well advised to anticipate such tactics.
As the welfare state has matured, people have come to appreciate better that groups seeking to redistribute income to themselves always present their plans wrapped in a claim to promote the public interest. Those who seek to feather their nests in the warfare state use the same tactic even more effectively.
Perhaps, if the Cold War really does end, the basis for this far-reaching redistributive activity will erode. Then perestroika may become possible in the United States, too.
Immigration and Private Property
Llewellyn H. Rockwell
Last year, 50,000 Haitian immigrants gathered in the streets of New York, angry at an FDA hint that they consider not giving blood. With the appalling AIDS rate among Haitians, and the ease with which some infected blood can pass the screening tests, it seemed an unobjectionable idea. But not in Manhattan, 1990.
You may think there’s no right to poison the American blood supply, but you’d be wrong. State-licensed victims have special rights, and for violating them, the FDA has done penance.
At the Haitian hate-o-rama, one speaker said that since AIDS was a white plot to wipe out blacks, Haitians should “turn it back on white folks,” presumably by further polluting the blood supply. Since Haitians take great pride in a revolution whose central act was the massacre of all the white men, women, and children in the country, perhaps the speaker was simply upholding his national tradition.
Such things make it difficult to be a libertarian on immigration these days. Until one realizes that many natives behave even worse, and that Haitians aren’t typical. There are also the north Asians, whose decent communities, strong families, rooted culture, and economic triumph seem to vindicate, all by themselves, the open borders that were the American tradition until 1921. Of course, most other immigrants fall somewhere between these two extremes.
A free market means free movement of goods, capital, and people. From an economic point of view, the borders of the U.S. ought to have no more significance than those of Illinois. But economics doesn’t tell us everything.
In the 19th century, our unregulated and therefore booming economy easily absorbed everyone who wanted to work. There was no welfare state, no ideology of victimhood, and no inferiority complex about our values. Far from being ashamed of “centuries of white, Western oppression,” our fathers knew that the Republic represented something uniquely good in history. It was—after all—why immigrants flocked here, and willingly conformed to a the norms of a self-confident culture.
Everyone became an American; everyone wanted to become an American. This didn’t, as it should not have, prevent German immigrants, for example, from wanting to preserve their language and culture in parochial schools, but there was no nonsense about bilingual public education to prevent assimilation. Nor were voo-doo cultures exalted at tax-payer expense over the West. And it would never have crossed anyone’s mind that English wasn’t the official language of the United States.
Progressivism perverted all this, of course. And now we have immigrants who use the welfare system, and the politics of ethnic victimology, to gain privileges at the expense of the rest of us.
But willing hands and minds are a valuable resource. Despite the bad apples, most immigrants come here to work. They do the work no one else wants to do, from running shops in black ghettos to punching cows in Wyoming. They supply the low-cost labor we need, but which our welfare system has exterminated, to the detriment even of the drones.
Immigration of all sorts is actually low: about 650,000 people a year, .25% of the total population. Illegal immigration is less than a third of that, and declining, which is too bad. Illegals are willing to work hard for low pay, and they shun government offices, including welfare. In the illegal market, with people anxious to work cheaply as seamstresses, maids, and yard boys, we get a glimpse of what immigration in an unregulated economy would be like, and how we would all benefit.
Should immigration be opposed because there are too many people? For 15 years, our fertility rates have been below replacement level. Do all immigrants go on welfare? Since they are a younger population than the natives, they tend to use less Social Security and Medicare welfare. And this is true for all “social services.” Do immigrants “take jobs” from Americans? The question is economically ignorant. It not only posits a static view of the economy, with X jobs to be divided, it is also an argument against college education and on-the-job training, both of which allow people to “take” jobs they would otherwise not have been able to get. In fact, most immigrants—because they are economically productive—help create jobs for others.
But the fear, in these interventionist days, of immigrants gaining privileges through political pressure is a legitimate one. To assuage it, and for reasons of simple justice, all immigrants should be in effect guest workers. There is no right to vote nor to go on the dole; both ought to be denied permanently to immigrants. (And while we’re at it, no American on welfare should be able to vote either.)
Under today’s egalitarian system, most immigrants come from culturally inharmonious places like Haiti and Iran instead of from Europe. That’s why we should eliminate the quotas on free businessmen to hire (and fire) without egalimania interfering. At present, businessmen can be fined for not hiring and for hiring Hispanics, by various federal civil rights and immigration enforcers.
Businessmen should also be free once again to do as they did in the 19th century: interview and hire contract workers in other countries. Labor unions lobbied to outlaw this practice, which insured that these immigrants—who came here as employees—would not become public charges.
But our ultimate goal should be to make our country a network of private neighborhoods. There is no right of public access on private property. If commercial districts were like malls, and communities had access restricted to the people the residents wanted—as some do today—we would not have to worry about bums and felons infesting our streets, nor about unwanted immigrants.
Then, if a community didn’t want 50,000 Haitian AIDSophiliacs on their streets, they wouldn’t be allowed there. That is the kind of society we ought to work for.
