History: The Struggle for Liberty

10. Classical Liberalism and the Welfare-Warfare State

History the Struggle for Liberty 2003
Tags: Philosophy and Methodology, Political Theory, War and Foreign Policy, World History
Ralph Raico

Germany surrendered conditionally in 1919 under the Treaty of Versailles. Everybody opposed the treaty, but it was forcibly implemented. Revisionism is necessary to combat state propaganda, e.g. the lie in WWII that FDR was surprised by Pearl Harbor.

The welfare state was actually begun by Bismarck in the 1880s. The welfare state that now exists will simply keep expanding in its agenda of rooting out older values and substituting others. As the crisis of the welfare state is approached, only newcomers from the third world can become taxpayers for retired elders. Identities of European peoples will be extinguished.

Constitutions and Bills of Rights will not be the protectors of our liberties. The liberals in classical liberalism had no answers because they still held to the power of the state. The centralized state must be broken down by means such as secession even to the level of the individual.

History shows the struggle for liberty. He who controls the present controls the interpretation of the past.

Lecture 10 of 10 from Ralph Raico’s History: The Struggle for Liberty.

[This transcript is edited for clarity and readability. The Q and A at the end of the lecture has been omitted. Annotations have been added by Ryan McMaken.]

Good afternoon, and welcome to our last lecture.

In January of 1919, the war was over and with Germany having surrendered conditionally—unlike in World War II—with the conditions pertaining to President Wilson’s “Fourteen Points” speech and other speeches emphasizing self-determination of all peoples, and other general provisions implying equal justice for victors and for the vanquished. That was the spirit that Wilson publicly proclaimed. It was on that basis that the Germans surrendered. But then in January of 1919, the leaders of the Entente get together in Paris. 

The Congress of Vienna in 1814 and 1815 was the last time there had been a general European conference to settle questions that remained at the end of a major war. In that case, the victorious powers in the French Revolutionary and Napoleonic Wars were there but, equally, the French were represented there by Tallyrand, who took part in the negotiations together with everyone else. The spirit in Vienna in 1814-1815 was the rational one. The victorious powers know they’re going to have to live with France on the same continent, so they can’t simply exclude France and create a dictated peace. So, that the French had to be let in the negotiations, and Tallyrand, as clever as he was, was able to manipulate things to the interests of his own country.

The New World After the Great War

In 1919 in Paris it was quite different. There were German representatives, but they were put up in a hotel and under guard and not permitted to take any part in the negotiations in the creation of the peace treaties. When the peace treaty with Germany was finally settled upon, the Germans were brought out to the Palace of Versailles under guard and told to sign the treaty, and that was it. They refused at first, but they were threatened with an invasion of Germany. The Germans had totally disarmed by that time, had no artillery, had no guns, had no planes, and the army was demobilized. The Entente allies still had their armies, so that the threat of invasion of Germany was a very real one and enough to force the German representatives to give in, regardless of their own personal feeling.

In Germany, everybody from the communists to the extreme nationalists—there aren’t exactly any Nazis at that time, but there are people on the extreme nationalist side—opposed the Treaty of Versailles. The Catholics, the socialists, the liberals, they were all against it. Nonetheless, it was implemented. The history of the Paris Peace Conference is of great interest, and it shows that time and time again, Wilson was surprised—he was astonished—that somehow his wartime allies seemed to be interested in acquisition of colonies and advantages over the defeated powers, rather than to welcome the new German democracy as a sister democracy.  He was very hurt. In the middle of the conference, he got a stroke, had to go back to America, then recovered a bit, and came back. But, time and time again, when he tried to set himself up against some position of the French or the British, they threatened not to go along with his baby—his dream, his vision of the League of Nations—and that was enough to have him cave in. So, the peace treaties were signed with the defeated powers with one treaty in each of the great palaces in the vicinity of Paris. The most important one—the one with Germany—was signed at the most important palace, the Palace of Versailles. The treaty with Germany included Article 231, unprecedented in the history of peace treaties, whereby the Germans acknowledged, on behalf of themselves and their allies, the sole responsibility to having started the war.1 Until then, it hadn’t been considered really a very gentlemanly thing to do—once you had defeated and knocked down an opponent—to force them to grovel further and admit that he was the one that started everything.

The most obvious thing about the new Europe is the creation of a series of successor states. There were successors in part to the old Tsarist empire, in part to Germany in the sense that a German section of Poland now became part of Great Poland, and mainly there were successors to the Austro-Hungarian Empire. Winston Churchill, to give him credit, lamented the end of Austria-Hungary. He said it could have been reformed and it provided a home for all of the small peoples of central Europe to live together and to lend each other moral support and, if necessary, military support belonging to the same empire. Instead what you had were small peoples—the Czechs, the Slovaks, Austrians and Hungarians divided. There was big Poland, it was still between Germany and Russia, and these small peoples in the interwar years and after the Second World War fell victim, for the most part, to Germany at first and then to Russia. By themselves, in other words, when Germany and Russia were interested in absorbing them, they simply couldn’t hold out.

Self-Determination Denied to Ethnic Germans

You can read in my essay about how some things particularly disturbed the Germans.2 This is true of many of the different parts of the Treaty of Versailles, but the Germans were disturbed most in regard to self-determination. The Polish Corridor did include many Germans, as did Upper Silesia. It would have been very difficult to cleanly divide off Germans from Poles there. However, there was a totally German territory called Danzig which is made by the treaty into a little country of its own—a free state under Polish control—the point of which was so Poland had a corridor to the sea. Poland needed a Baltic seaport they could depend on and that was Danzig. But, it was a totally German city and self-determination for the Germans apparently didn’t hold there. The more important cases of lack of self-determination for the Germans were in the Sudetenland, where there were about three and a half million Germans out of a total population of this new country, Czechoslovakia, of around 12 million. There were more Germans than Slovaks in Czechoslovakia. The Germans in the Sudetenland did not wish to be part of the Slavic state, which also included Hungarians and Lithuanians. The Germans did not want to be part of Czechoslovakia, but they were denied self-determination. 

Austria was prohibited from joining with Germany, although the Austrians said “What are we now? We’re some alpine provinces and a big city of Vienna. All the non-German territories are taken away. We want to be part of the Reich.” But, the treaties with Austria and the Treaty of Versailles with Germany prohibited that. In South Tyrol also, about a quarter of a million Germans were put under Italian control. These were blatant violations of the principle of self-determination. It seemed that virtually all Germans were divided between those who said “well, we have to live with it, we lost,” and those who said “we’re not going to live with it for very long. We’re going to change it as soon as we can.” 

Britain and France Create a New Middle East

The German colonies were divided up, as were the important Arab territories of the Ottoman Empire.  Turkey, as a Turkish land, comes into existence. The Arab lands of the empire come to be either directly or indirectly under British and French control. The French take over Syria. There’s a Christian minority in Syria at the time, so in order to create a Christian state in the Middle East, they carve out of Syria something that had not existed before. The new colony was Lebanon, with a Maronite Christian majority, created in order to have this kind of wedge in the Muslim-Arab world. The problems that Lebanon has experienced since then are traceable to this division. 

With oil having already been discovered at Mosul, the British create something called Iraq. In order that Iraq should be less potent than it might have been otherwise, the British arbitrarily create something called Kuwait out of a territory that had formerly been part of the same area as Iraq, when administered by the Turks. This Iraq that they create is a non-country with non-Arabs—Kurds—in the north. Iraq also has strongly divided Arab Muslims—Shiite and Sunni Muslims—in the center and in the south. Nonetheless, it’s made into a country, and a king is put in charge. Iraq has a very tortured history because how else do you keep together a non-country like this except through dictators who sometimes act extremely brutally? 

The House of Saud is given its reward for supporting the British against the Turks in the creation of something called Saudi Arabia. Most ominously, the Ottoman territory of Palestine is taken over as “a mandate”—a colony—by Britain. In the course of the war, the British, in order to gain all the support they could, promised, on the one hand, that the Arab states would be free and independent, so they would raise up the desert Arabs against the Turks. On the other hand, the British promised Zionists that Palestine would become a homeland for Jews, although not exclusively for Jews because the Balfour Declaration, where this was expressed, said that the rights of the present inhabitants of Palestine should be respected.3 Nonetheless, this was the first international recognition of the claims of the Zionists, and the beginning of the creation of a Zionist state in Palestine. The state is not going to be declared until 1948, but this gave an opening for increased Jewish immigration into this Arab country.

A League of Nations was set up, although the United States never joined. The story that you all heard is that it was a terrible tragedy that the United States did not join the League of Nations. But, the League was an instrument of Anglo-French world hegemony. The German colonies were gone. Austria-Hungary didn’t exist anymore. Germany was down, and the French and others hoped it was out permanently. Russia had been taken over by the Bolsheviks, so it was at least temporarily outside of the family of nations, anyway. The Bolsheviks, of course, were involved in their own civil war and their own civil disturbances. So, they were hardly a factor. For the British and the French, the new borders of the world were fine: this is the way it should be and this is the way it should stay. The League of Nations then, which established the principle that aggression meant crossing borders, was now this peacekeeping organization dedicated to preserving the borders of 1919. If the United States had joined the League, then the Americans would have been obliged to lend, when necessary, military support to the preservation of this Anglo-French world hegemony. That’s the fact of the matter, as many realists in the United States and elsewhere saw it.

The Need for Revisionist History

This is only one example of the burning need for what’s called historical revisionism. I’ve taken World War I because it’s a very well-known example. A lot is known about the war, and it’s very interesting on other grounds.  The war is very significant because of its consequences.

Revisionism as it pertains to historical interpretation is an absolute necessity. What’s the alternative to revisionism? The alternative to revisionism is simply to believe the victorious state’s story about how the war began, how it was conducted, and what the consequences of the war were. Without revisionism, we end up believing the propaganda that a state involved in a war always puts out, and always tries to spread. Unless that’s revised in some way, then what we’re left with is simply a tissue of very childish lies. 

So revisionism, to one degree or another, is absolutely called for and absolutely necessary in regard to every war. If we take the last “good war”—a war everybody likes, World War II—there’s been necessary revisionism in regards to that. Of course, there’s been revisionism of a school I agree with, but there’s been revisionism even among mainstream historians.

Nobody now believes the story that was told during the war, and right after the war, that Franklin Roosevelt worked tirelessly for peace, right until he was totally stunned and surprised by the Japanese attack on American forces in Pearl Harbor, the Philippines, and elsewhere. That was the American government’s story. Nobody believes that. As a matter of fact, the people who like Roosevelt say, “he did plan to get us into war with Germany and with Japan also. He had to do it very slowly because of the isolationist American public, but he did plan to do it, and he was right to do it.” We are told this was because Nazi Germany was such a threat, especially as it was perceived to be allied with Japan, so we had to get into that war. So, there’s been revisionism even in the mainstream story in regard to World War II, and in regard to many other wars. 

I don’t understand how anybody thinks that they can maintain the story of the Vietnam war, now that people like Robert McNamara say “well, we really had no idea why we went into Vietnam and it turned out really to be kind of a mistake, sorry.”4 This was the man who was the Secretary of Defense, and the chief impetus in favor of that war, in the Johnson administration. That revisionism, as I say, is necessary.

(I don’t know how much anybody would be willing to bet me, but I’d be willing to bet a lot—even more than the $250 I’m getting for these 10 lectures from the Mises Institute—that the President of the United States had never heard the word “revisionism” before he recently gave a speech saying that people who deny the administration’s position on why we got into war in Iraq are “guilty of revisionism.”5 I think that sounds more like Richard Perle, or Paul Wolfowitz, or maybe even Dick Cheney.)6

The state engages in propaganda constantly, especially in regard to war, and the reason for this is clear. The French philosopher Étienne de La Boétie wrote a tract about how the state depends totally on opinion.7 (La Boétie was a close friend of Montaigne—Montaigne actually wrote an essay on friendship in connection with La Boétie, who died fairly young.)8 

La Boétie explained that “the ruler” is just one person, or a small number of people. Even his supporters are a limited number of people. The ones who are ruled are the vast majority. How are they going to be ruled by a relatively small number except through opinion, through instilling in them, planting in their minds, the legitimacy of the state and the arguments for state control. This is done through glorifying the state’s wars.

Isn’t it funny how, with the possible exception of Vietnam, all of America’s wars have been justified, and have been right and good? I mean, what are the odds of something like that? A major power’s every war has been good, and the enemy has always been unbelievably horrible? Orwell’s 1984 is indispensable still for this in showing the way hate against the enemy is whipped up in the “five-minute hate.” (In the book, it’s easier for Oceania propagandists when Oceania is fighting East Asia because they’re Asians and they could be made into grotesque Mongol-type demons who are bloodthirsty and practically cannibals. But the propaganda tactics even work when Oceania is fighting Eurasia with the Slavic people and their supposed inveterate blood lust and traditional cannibalism.) Orwell showed in the novel that this is how the citizens of what used to be Britain and America are presented with: the enemy is bayonetting babies all the time, and so on. 

That started with the Belgian atrocity stories of 1914, which was maybe the first great propaganda success in modern times. At my apartment in Buffalo, I have a poster selling liberty bonds and it shows a burning village in the background and it shows a big, hulking German soldier with his helmet and he’s dragging along a 10- or 11-year-old girl into the bushes and it says “Remember Belgium. Buy Liberty Bonds.”This was part of the deliberate campaign of the British government. It was so brilliantly successful that Hitler talks about it in Mein Kampf.9 Goebbels says that he learned a tremendous amount about propaganda from the British.10 

The government keeps telling everybody how horrible, how demon-like the enemy is, and how totally virtuous we are. It’s good versus evil; the way we’re being told about it all the time now. The government has certain heroes who are set up as exemplary models of humanity. Monuments are set up to them. In Washington, DC you’re going to run out of room for all these monuments after a while. DC has a pretty limited area. Now, with what is seven-and-a-half acres in the Franklin Roosevelt Memorial, what happens when the Harry Truman Memorial comes, the George Bush Memorial, all of these other memorials? 

School children are brought to see these things and the state’s myth is carried on from one generation to another.

Freedom and the Welfare State

Now, I want to talk about something about the situation in regard to liberty in the present day. Hayek, I think, was quite right when he said in the last years of his life that socialism is essentially dead. He’s talking about the traditional standard socialist program—the nationalization of industry and central economic planning. Now we know—with the fall of communism in Russia and Eastern Europe, and what’s happening in China—that no serious person now defends the idea of central economic planning and nationalization of industry as the road to prosperity. 

So it is the case that traditional socialism has gone into oblivion. Hayek said, however, that socialism is being replaced by the welfare state and this certainly is the case.11 Discussing the welfare state brings us back to the discussion of the origins of liberalism, because liberalism, arising in the eighteenth century, faced, as we know, absolutism and mercantilism. But, it is not as well known that liberalism faced—especially on the continent of Europe—a welfare state in the version of that time. It was called, oddly enough, the, Polizeistaat, that is, “police state.” But, the term meant “police” in the sense of regulation by the government. There’s a great literature on the history of the welfare state: for example, a book by a man named Reinhold August Dorwart from Harvard University Press.12 Dorwart distinguishes three stages of the welfare state. The first was the welfare state that came into existence with so-called enlightened despotism of the early modern period. That existed in France, the German states, the Austrian states, and above all, Prussia. There were treatises written for the government bureaucrats who were going to be regulating agriculture industry, setting up hospitals, setting up educational institutions, insane asylums, operating the poor laws, and all the sort of things that were supposed to be helping people through the different welfare organizations. These treatises written for the bureaucrats—who studied in universities—and explained that the aim of the enlightened prince is the happiness and welfare of his people. It’s the government’s job to look after this and to do everything the state can to extend and expand the people’s happiness and their welfare.

The greatest book written in Germany on liberalism before the rise of the Austrian school is The Limits of State Action, by the great German philosopher Wilhelm von Humboldt.13 He has, as a quotation at the beginning of his book, something from one of the French physiocrats—the elder Mirabeau—who lashed out against “the rage to govern, which is the most disastrous disease of modern governments.”14 What was this rage to govern? It was the welfare state that was coming into existence. 

(One reason, by the way, why the philosopher Immanuel Kant says that happiness cannot be the aim of ethics and, by implication, of government action, is he was an opponent of the Prussian welfare state. As Kant put it, justice, not happiness, has to be the aim of policy.)15 

Dorwart then talks about a second stage of the welfare state which was the period of classical liberalism, the retreat of the state, and the introduction of laissez-faire. That lasted for a few decades in Europe. Then, finally the third stage begins in the 1880s in Germany, and it is the stage of the indefinitely expanding welfare state that we are privileged to experience today.

Some people might be surprised that the welfare state came into existence in Germany—i.e., Prussian-controlled Germany—under the aegis of Bismarck. Bismarck was no friend of freedom. He was, in a paternalistic way, a friend of common people and was looking out for their welfare. But, there were other reasons behind his introduction of welfare legislation into Germany in the 1880s. Odd as it may seem, we can pinpoint where the modern welfare state started, and it was there.

He introduced old age pensions, disability insurance, health insurance, and other welfare measures. The reason was, and his conservative advisors agreed with him, that people were becoming too independent. He lived in a monarchy and this was his whole life: service to the Hohenzollern kings, and now emperors of Germany. For Bismarck, the people were becoming too independent. The liberals, whom he considered his worst enemies—enemies worse than the socialists—were depending on gradual improvement in conditions for people becoming even more independent. As people became more independent, they took care of other things like their health insurance, provisions for old age, and so on. If this happens, what is going to happen to the people’s gut loyalty to the government?

Bismarck said he had noticed under Napoleon III in France—who started some of these welfare measures and pensions for certain categories of people—that people who look forward to a government pension tend to be much more amenable than people who are acting on their own, and looking to their own support in various ways, in the private sector. It was this political need to—as one of his advisors said—”bind the people to the throne with chains of gratitude,” that led to the introduction of these measures.16 

Bismarck was also clever enough to add to these welfare measures a kind of gimmick that is successful to this day: that is to talk about the employees’ and the employers’ contribution to old-age pensions.17 The idea is to divide it up so the workers knows he is giving something into the fund, but the workers also believes he is getting his boss to give something into the fund. Now, nothing is more certain than this: your boss doesn’t care how he divides up your salary. If you tell your employer to give 7.5 percent to Catholic charities, send 45 percent to the Mises Institute, or whatever way you want to divide it up, he’s willing to do it because he is going to be paying you a certain amount that he thinks you’re worth. So, if there were no employer’s contribution, there is no change to what a worker would be worth. But, this optical illusion of an “employer’s contribution” certainly helped Bismarck’s plans along politically.

Bismarck was opposed by the German liberals in these measures. I have a book on the German liberals in general that Guido Hülsmann translated into German for me,18 But, there’s also an article in the Review of Austrian Economics that you can look up. about, to my mind, the greatest of these German liberals, one of my real heroes: Eugen Richter..19 The authentic German liberals and the Manchester liberals opposed the welfare state, which is a major reason why German historians have total contempt for these nineteenth-century liberals. German historians ignore them, they misinterpret them, and they distort what they said because these are actual Germans who are against the welfare state.  The welfare state is enshrined in the constitution of the Federal Republic of Germany, which is a “social state,” as they say, given to “human dignity” in material terms of supporting welfare. So, these German liberals are not treated very well by historians, either here or abroad. But, these liberals came up with very good arguments against the welfare state. In particular, they pointed out, “what’s going to be the end of this?” People get the impression that the government has endless largesse to distribute. What’s going to stop the government from creating more and more programs, taking more and more of the people’s income through taxes, and then distributing it through alleged welfare measures? The German liberals, by the way, understood perfectly the mechanism that the school of public choice talks about: that is, how benefits are concentrated and costs are dispersed among the whole population, and how this works with modern electoral politics.

The Future of the Welfare State

My own view, since I want to talk about the prospects for freedom, is that this welfare state that exists now in Western countries is simply going to expand. There might be some setbacks from time to time. For instance, in America, the Clinton Health Program to immediately socialize 14 percent of the American economy, did not get through. On the other hand, what are we witnessing now? Prescription drugs for older people and anything that is for America’s kids.20 

I don’t know from where this concept of “America’s” kids. I don’t think it existed in our time, in earlier years. What do you mean “America’s” kids? You know, there’s Mrs. Marino’s kids and there’s Mrs. Fleishman’s kids and there are kids of different families and the kids are in that family. They don’t belong to some huge—over a quarter of a billion, practically 300 million strong—collective called “America.” But that argument of doing something for “America’s” kids is unanswerable. 

We should always keep in mind that half of the population, by definition, has an IQ of less than 100. So, in New York State—because the states are going at various speeds—there’s one aspect of socialized medicine after another that’s put in. Now, for instance, there’s state-funded insurance for all people who can’t afford it otherwise—who have children in their family—and that’s coming in a few years. The Republican governor boasts about that. So, it’s just a matter of time until something very like the original Clinton program comes into existence. It might not be the coercion that was originally proposed—or maybe if there’s a Democratic president, there will be such coercion—but the welfare state does experience defeats from time to time. But then it picks itself up and goes ahead to greater and greater victories.

This is what we have to worry about: I think in the modern world this welfare state has another aspect to it that Paul Gottfried talks about. (I mentioned Gottfried’s two books, After Liberalism and his more recent book Multiculturalism and the Politics of Guilt.)21 The welfare state is a managerial state, a therapeutic state, and a state that is concerned with a radical redo of the values and traditions of society. What’s more obvious than that, I don’t know. 

One small example: there was once on the Alabama license plates some phrase to the effect that Alabama was “the heart of Dixie.” Now it’s virtually disappeared. This is a very small example obviously, but why are they doing something like this? “Dixie” is now taboo because of a state diktat, and in years to come it’s going to get worse and worse. That’s one aspect of the state’s having an agenda to root out certain traditions and values in society: for instance, identification with the south, with southerners, and to substitute others. This is the managerial, bureaucratic, therapeutic state that Paul Gottfried talks about and that state lends itself legitimacy through the welfare state by buying off more and more constituencies.

You might say it started with the agricultural program that favored the South under Roosevelt. The program bought off the Southern cotton growers, and hog growers, and corn growers, in this way orienting them in the direction of Washington. Whereas these groups had been very suspicious of Washington before, now every group in America that’s worth pandering to gets benefits and feels that it has a stake in the modern welfare and warfare state.

What could possibly represent an end to this? How could this end? I don’t see that welfare state is going to come to an end by itself. What I see is this: it becomes more and more intractable as we approach the crisis of the welfare state. Then, the politicians, the people in control of the system, will do what has already been suggested by politicians in Europe, including in Germany. What is suggested is to bring in young taxpayers to support the old pensions and medical care for the retired older, retired nontaxpayers. Where are these young taxpayers to come from? The Europeans don’t seem to be—I don’t know if they’ve forgotten how to do it—very interested in having kids. (In America, the white population does not replace itself.) So, where are these new taxpayers to come from? 

The answer suggested by those who run the welfare state is in the Third World. That is, open up the borders to immigration so we can get these new workers, and we can tax them. Of course, they’re going to get old after a while and they’re probably going to have fewer kids, but that’s going to be way in the distance, and the politicians who are worried about it now will be long since gone. They don’t have to worry about what’s going to happen down the road. This is typical of politics, and implied necessarily in the logic of democratic politics. Today’s politicians don’t have to worry what happens down the road. 

What will have happened in the meantime is that they will have destroyed the identity, first of all, of the European nations. There’s no such thing, as far as I can see, as a France that’s one-third Muslim or an Italy that’s one-third Muslim. There’s a Italian state, but there’s no such thing as an Italian identity that is one-third Muslim or more, for that matter. So, they’ll destroy the identity of the European peoples. Eventually, also, this will happen to the American people, although we have some leeway in our country.) I don’t think anybody could have predicted that. That’s one thing the German liberals certainly never thought of, that it would come to that. That in order to salvage this never ending system of welfare—one welfare program after another, more and more debt, more and more taxes—they would have to simply destroy the historical identity of the countries.

Is this pessimistic? Well, it’s kind of pessimistic, you might say, but I’m not just pessimistic. By my contract with the Mises Institute, I cannot be just pessimistic, so there has to be hope. 

(By the way, before I forget, if you want to know what I really think is going to happen, there’s a novel by Ira Levin called This Perfect Day.22 There’s a rather brilliant review, as it happens, of this novel on Lew Rockwell’s website in the archives. It’s under my name.23 Ira Levin wrote Rosemary’s Baby, The Stepford Wives, The Boys from Brazil, A Kiss Before Dying, and Deathtrap. He wrote this This Perfect Day while he was attending Objectivist lectures in New York. This is really quite a libertarian work and it’s a futuristic work. It’s a glimpse into the future, and when it was in paperback and easily available, I gave out a lot of copies. I’ve never come across any libertarian who didn’t at least try to read it in one sitting. You know, maybe at three in the morning, it got too late and you had to finish it the next morning. But look at the book. It gives you an idea what I think eventually might happen.) 

The Failure of Constitutionalism

We’ve talked about classical liberalism in different respects this week. One thing certainly was clear, I imagine, and that was that the liberals aimed to limit government. Government was to be limited to certain functions. Things that the government had done historically, it was to leave alone. In many countries, the liberals thought that the means for doing this would be constitutionalism. A constitution is, by definition, something that limits the government. That is, it says what the government can do and by implication, what the government can’t do. In France, the great liberal I mentioned—maybe I wasn’t able to get into as much detail on his views as I had hoped—Benjamin Constant, spent a good deal of his life coming up with constitutional arrangements for France, after the Great Revolution. Liberal revolutions aimed very often principally at setting up a constitution. This was the case on the European continent, for instance, in the early nineteenth century, in Spain during liberal agitation there. In the different German states, up until Germany was unified, liberals tried setting up constitutions. 

The United States Constitution is probably the most famous example of these liberal constitutions. The aim was to limit the government. The drafters tried as much as possible to do that and just to nail it down, they added some amendments to the Constitution, the first ten of which become the Bill of Rights. (By the way, unlike—I think it’s about 25 or 30 percent of American students— I am sure that you are aware of the fact that the Bill of Rights does not include the phrase “to each according to his needs, and from each according to his abilities.”) 

We all know about the famous Article 1, “Congress shall make no law” respecting a series of rights such as freedom of religion, speech, assembly. And then—I don’t know how many people have ever put this together—right after the enumeration of these basic rights, the second amendment comes. As William Blackstone said in Commentaries on the Laws of England, this is one of the major ways of defending our basic liberties.24 The right of the people to keep and bear arms “shall not be infringed,” comes right after the first amendment.  

Let’s go onto the end of the Bill of Rights. Now, what more could you possibly put into writing that would guarantee a limited government—and would guarantee the freedom of the people—than this?: Article 9 reads “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” You’d suppose that would be enough. What does Article 9 mean? It says these are not the only rights people have. In fact, it’s the other way around. The government has just a few powers and the people are swimming in an ocean of rights. They have the right to have families, they have the right to travel, they have the right to educate their kids, they have one right after the other. 

And then, Article 10, the last of the Bill of Rights states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the people.” That nails it down, right? The federal government can only do precisely what it’s given authority to do in the body of the Constitution.

It was a heroic attempt to limit government, but very quickly the Hamiltonian and then the Whig tradition arose in America to expand the powers of the national government. Very quickly also, the national government’s own Supreme Court set itself up as the ultimate arbiter of the Constitution and interpreter of the Constitution. That’s very dangerous. What could be a protection against this? What could be a protection against a national government doing all kinds of things in the economy—protective tariffs, so-called internal improvements, pork for their contractor friends in the railroads, and printing money that it forces on the people? What could prevent the federal government from doing that? Well, the States. It’s a federal system and in critical times, some states even threatened secession when they thought that the federal government was going beyond its legitimate powers.

Famously in the 1830s, by South Carolina threatened to secede over the tariff—not over slavery, but over the tariff. But then there came to power in the United States a party that was perceived by a large part of the population, as aiming to implement, once and for all, the Hamiltonian and Whig program. Supporters of this program said they were going to be putting into effect a protective tariff, the consequence of which would be to fatally harm the interests of the South—and then secession came. 

There have been a number of interesting pieces written on the Constitution of the Confederate States of America. One of which is a 1992 article by a friend of the Institute, Randall Holcombe. Holcombe points out that the framers of the Southern Constitution very well understood principles of public choice, so that their legislature was prohibited from erecting protective tariffs and giving special favors, bounties and so on, to industry.25 Marshall DeRosa, who has spoken at the Mises Institute, has discussed the Confederate Constitution in a little book and come to similar conclusions, that is, that the Confederate Constitution because of the experience of the American people up until that time, was dedicated to preventing the Confederate government from acting the way the Federal government had acted.26 This was the last great attempt to thwart the will of Washington and it came down to a struggle of arms, as it had in England in the seventeenth century, as it had with the Italian city-states against the German Emperor in the twelfth century, as it had with people fighting for their freedom at different times in history.

(Before you bring in the question of slavery, I think maybe you might consider what a great lover of the slaves, like General Sherman had in mind, going from Atlanta to the sea, burning deliberately, consciously burning every possible means of subsistence in his way. What were the tens and tens of thousands of slaves on the plantation supposed to be living on when the Union soldiers killed all the chicken and livestock and burned all the corn fields and destroyed all the other means of subsistence? No concern for the slaves there, it seems.)

The South was defeated and as Lord Acton wrote to Robert E. Lee, that was the end, as far as he could see, of the limit to the sovereignty of the one power center in Washington.27 Acton supported the Southern cause not because he was a friend of slavery, but because he thought this was the one possible bulwark against federal tyranny, the right of secession of the states. Now there seems to be no limit, no institutional limit, no theoretical limit, to what the national government can do. You say, “well, we still have the Bill of Rights.” Well, we have the Bill of Rights, but the Bill of Rights has to be interpreted. It’s interpreted by the federal Supreme Court. Take the First Amendment—we now know that, according to the court, commercial speech is not privileged speech. Pornographic speech, of course, is not privileged speech. It’s not “privileged,” per se in that Congress may not infringe on it. So, what happens when five or six majority liberals, so-called, on the Supreme Court—maybe graduates of the law schools which are preaching this very point today—decide that hate speech is not privileged speech, that it doesn’t come under the protection of the First Amendment? Hate speech can include everything that you might think of including. Hate speech might very well include—it could be argued in court—doing away with welfare in New York City. One might say “well, that’s hate speech because the implication is clearly that we should do away with welfare for minority populations, which are the great bulk of the people who get welfare in New York City.” This seems strange to you? I would suggest that political correctness a few decades ago—and the extent to which it’s gone in America and Europe—would have seemed very strange. My point is that the Bill of Rights, per se, is not going to be a protection for all liberties.

Secession and Opposing the State

So what to do? Ever since I translated Mises’ Liberalism many years ago, and even before that, I’ve been interested in the history of classical liberalism, and most of my research has been concerned with that. I’m coming to a conclusion—which I held theoretically, but feel more strongly about and hold, you might say practically now—that there is no answer within classical liberalism. The liberals had no answer because they strove to preserve the state. I say held this view theoretically because I agree with Murray Rothbard, my old friend, that ultimately the kind of system we want is a system where individuals are empowered to select their own means of defense—their own, let’s say, defense agencies, and their own courts, just as they select any other service of theirs. So, I held that theoretical view for a long time, but now, what I’m telling you is that it’s very clear that there is no way of salvaging “limited government.” It’s simply going to be getting worse and worse, so our more direct and immediate aim has to be to destroy the centralized state, to do away with the centralized state in stages.

I’m not talking violent revolution. As a matter of fact, I hope that the leaders of the United States—President Bush, Ariel Sharon, and the other leaders of the United States—live forever, and I wish them well. Joking aside, obviously I’m not talking about violence. Start violence and see what happens. If we do that we’re going to be like the Branch Davidians all over again.28 So it has to be, of course, education and political action. But, the aim has to be to break down the central state. 

When I say by any means necessary, I mean, for instance, secession. The Mises Institute has a whole book of very interesting scholarly essays on the question of secession.29 Secession of provinces, as for instance, Lombardi in Italy. (If Lombardi is going to secede from Italy, I don’t understand why Verona has to be enslaved under the tyranny of Milan, so we want secession at that level also.) Let’s hope the Basques and the Catalans get their independence from Spain, and Corsica from France. The breakup of Belgium: the sooner it happens, the better. If that happens, I don’t know where the bureaucrats are going to escape to, but wherever they go, they take our best wishes with them. 

So, the goal is the breakup of states, down into provinces, into cities. Then, finally, we want secession down to the secession of any individual who wants to see to his own defense, and the defense of himself and his family. You don’t have to think in terms of some family in Idaho or something like that except, I wish all the best to them. All they want to do, as far as I can see, is live their own lives by themselves, as the Weaver family did at Ruby Ridge until the federal government got interested.30 But, I don’t mean necessarily that. I mean, for instance, proprietary communities. A company can get together, buy land in a certain area, and provide also for the security and the police of that area. If you rent or you buy some property from this company and they take care of your security interest, as they take care of the water interest, the electricity interest, whatever else might be involved. There you have an independent community. Those communities, by the way, can be on the basis of religious affiliation, or on the basis of other values of some kind.

This would be true diversity. When people talk about diversity, they don’t mean diversity. What they mean is, every place in the country having exactly the same composition. Real diversity would mean, if you have an area like Alabama, you have communities of blacks, and then you have communities of people who prefer to remain among themselves—whites or Scots-Irish or Italians or homosexuals or heterosexual families who want to keep homosexuals out. That would be a collection of diverse communities and it seems to me that this all has to be worked out. We’re not going to do it tomorrow, but it seems to me it would be very possible for these communities to see to their own self-defense, as well. As a matter of fact, in a community where people tend to be of one kind among their own kind it would be easier to see to the prevention of ordinary crime, I think, than in some Babylon like New York or Washington.

I think this is the only hope, unless you can suggest something else. I don’t think classical liberalism is possible anymore. What you have to read in connection with this, and really one of the finest books written in recent years, is a book by Hans-Hermann Hoppe called Democracy: The God that Failed.31 “The God that Failed,” refers to a famous book of the 1950s—a collection of essays by ex-Communists called The God that Failed about Communism.32 Hoppe outlines and backs up much of what I’ve said in the last few minutes with a panoply of arguments.

Final Comments

Finally, just to remind you of what we’ve done this week: basically we’ve gone into a study of history. History is a struggle of liberty. We’ve looked here at how liberty came out of Europe, how liberty developed in Europe, the history of classical liberalism, and how it was faced with various enemies. The basis of everything we’ve done, I think, is a feeling that I have and that the Mises Institute has, that history is a very important part of understanding the case for liberty and the possibilities of liberty.

It’s not an accident that George Orwell in 1984 talks about history and the rewriting of history—the constant rewriting of history by the men in power and the tyrants. There’s a mantra or a saying that goes throughout the book: “he who controls the past, controls the future and he who controls the present, controls the past.” He who controls the past controls the future because people make up their minds about what they want, what they will support, and what they will fight for very often on the basis of their understanding of history.  We talked about this in the context of the Industrial Revolution. He who controls the present controls the past because the past doesn’t exist by itself. Oh, there are written records, but in Orwell’s world, those records can simply be destroyed or obliterated and fabricated. There are gravestones, there are coins. There are residues, but basically, those who control the interpretation of the past, control the past. People of the present time who, because of their positions of power, control the understanding that people have of the past. They can control it, and in that way control the future. 

We don’t want to put ourselves in the position of having to accept their version of history.  As an Italian-American, I go back often to Machiavelli, who was not a nice man, but he was a very smart man, and a very sharp man. In The Prince, he talks about men who want power and gain power, what the nature of power is, and what the nature of politics is. He says he is writing for a few people and not for the mass of people. Machiavelli contends the mass of people prefer appearance to reality. They prefer their fantasy to what actually exists. If they knew what politics really was, they wouldn’t have a good night’s sleep for the rest of their lives.33

It really is scary and there are only some men of strength, some men of power, some men of force, who can deal with this. The average person is born to be a sheep, and as another Italian, Pareto, said, “He who plays the sheep will find the butcher.”34

I see some value—beyond simple interest, which is good enough—in historical studies. Thank you.

  • 1

    This is the infamous “War Guilt” clause.

  • 2

    Ralph Raico, “World War I: The Turning Point” in The Costs of War: America’s Pyrrhic Victories, ed., John V. Denson (Auburn, AL: Mises Institute, 1999) pp. 203-247. 

  • 3

    The declaration was part of a letter dated November 2, 1917, sent by Arthur Balfour, the Foreign Secretary of the United Kingdom, to Lord Rothschild. The text was published publicly on November 9, 1917.  

  • 4

    John Nichols, “McNamara Was ‘Wrong, Terribly Wrong’ About Vietnam,” The Nation, July 7, 2009, retrieved online: https://www.thenation.com/article/archive/mcnamara-was-wrong-terribly-wrong-about-vietnam/

  • 5

    Specifically, Bush accused those who claimed the administration used “selective use of intelligence to justify the war in Iraq” were guilty of “revisionist history.” See Joseph C. Wilson 4th, “What I Didn’t Find in Africa,” The New York Times, July 6, 2003. 

  • 6

    Cheney, in late 2005, mere months after Raico delivered this lecture, did personally accuse critics of “revisionism of the most corrupt and shameless variety.” See “Vice President’s Remarks on the War on Terror,” November 21, 2005. Retrieved July 2, 2024: https://georgewbush-whitehouse.archives.gov/news/releases/2005/11/20051121-2.html

  • 7

    Étienne de La Boétie, The Politics of Obedience: The Discourse of Voluntary Servitude (New York: Free Life Editions, 1975). The text was originally published in French in 1577.

  • 8

    Michel de Montaigne, On Friendship, trans., M.A. Screech(New York: Penguin, 1991). Originally published in 1580.

  • 9

    Adolf Hitler, Mein Kampf, trans. Ralph Manheim (Boston: Mariner, 1999) pp. 176-186.

  • 10

    Joseph Goebbels, “Die abgehackten Kinderhände,” in Die Zeit ohne Beispiel (Munich: Zentralverlag der NSDAP., 1941) pp. 181-187. 

  • 11

    Bruce Caldwell, “Hayek on Socialism and on the Welfare State,” Challenge 54, no. 1 (January-February 2011): 89-92.

  • 12

    Reinhold August Dorwart, The Prussian Welfare State before 1740 (Cambridge, MA: Harvard University Press, 1971).

  • 13

    Wilhelm von Humboldt, The Limits of State Action, ed. J.W. Burrow, trans. J.W. Burrow and Joseph Coulthard (London: Cambridge, 1968)

  • 14

    The full quotation, as it appears on page 1 of von Humboldt’ The Limits of State Action, is “Le difficile ... est de ne promulguer que des lois nécessaires, de rester à jamais fidèle à ce principe vraiment constitutionnel de la société, de se mettre en garde contre la fureur de gouverner, la plus funeste des maladies des gouvernements modernes.” which is found in Honoré-Gabriel Riqueti de Mirabeau, Oeuvres Oratoires de Mirabeau 2 (Paris: Librairie de Pierre Blanchard, 1819) 2: 494. Raico here says the original source of the quotation was “the elder Mirabeau,” which is a term generally applied to Victor de Riqueti, Marquis de Mirabeau. However, it appears the correct Mirabeau in this case is Victor’s son, Honoré-Gabriel Riqueti.

  • 15

    Thomas E. Hill, Jr., Human Welfare and Moral Worth: Kantian Perspectives (New York: Oxford University Press, 2002) p.178. See also Immanual Kant, Kant’s Principles of Politics, trans. W. Hastie (Edinburgh: T & T Clark, 1891) p. 48. Kant writes: “the idea of Happiness, taken by itself, is not available as a principle of legislation.”

  • 16

    The system of Sozialpolitik was not meant to create self-sufficient citizens, but “to ‘chain’ people to the community.” See Ralph Raico, Die Partei der Freiheit: Studien zur Geschichte des deutschen Liberalismus (Stuttgart: Lucius & Lucius, 1999) pp. 175-176.

  • 17

    Bismarck “wanted the German state to contribute to the cost of insurance along with employers and employees, so that the worker would feel a sense of gratitude to the state.” See Sidney B. Fay “Bismarck’s Welfare State,” Current History 18, no. 101 (January 1950): 3.  

  • 18

    Ralph Raico, Die Partei der Freiheit:  Studien zur Geschichte des deutschen Liberalismus (Stuttgart: Lucius & Lucius, 1999).

  • 19

    Ralph Raico, “Eugen Richter and Late German Manchester Liberalism: A Reevaluation,” The Review of Austrian Economics 4, (1990): 3-25.

  • 20

    At the time Raico is speaking, the US federal government was actively engaged in one of the largest expansions of the welfare state in decades: Medicare Part D. Raico also refers here to The Children’s Health Insurance Program (CHIP) which was rapidly expanding. 

  • 21

    Paul Gottfried, After Liberalism: Mass Democracy in the Managerial State (Princeton, NJ: Princeton University Press, 2001) and Paul Gottfried, Multiculturalism and the Politics of Guilt: Towards a Secular Theocracy (Columbia, MO: University of Missouri Press, 2005).

  • 22

    [1] Ira Levin, This Perfect Day (New York: Random House, 1970). 

  • 23

    Ralph Raico, “This Perfect Hell,” April 6, 2000. Accessed online, July 8, 2024: https://mises.org/mises-daily/perfect-hell.

  • 24

    William Blackstone, Commentaries on the Laws of England 1 (Oxford: Oxford University Press, 1768) p. 144. Blackstone writes: “[T]o vindicate these rights, when actually violated or attacked, the subjects of England are entitled, in the first place, to the regular administration and free course of justice in the courts of law; next to the right of petitioning the king and parliament for redress of grievances; and lastly to the right of having and using arms for self-preservation and defense.” 

  • 25

    Randall G. Holcombe, “The Distributive Model of Government: Evidence from the Constitution” Southern Economic Journal 58, no. 3 (January 1992): 762-769.

  • 26

    Marshall L. DeRosa, The Confederate Constitution of 1861: An Inquiry Into American Constitutionalism (Columbia, MO: University of Missouri Press, 1991).

  • 27

    Letter from John Dahlberg Acton to Robert E. Lee, November 4, 1866 in Selected Writings of Lord Acton 1: Essays in the History of Liberty, ed. J. Rufus Fears (Indianapolis, IN: Liberty Classics, 1986) pp. 362-364. 

  • 28

    This is a reference to the Waco Massacre in Waco, Texas where federal agents in 1993 attacked the so-called Branch Davidian compound leading to the deaths of 82 people inside, including 28 children. 

  • 29

    David Gordon, ed., Secession, State and Liberty (New Brunswick, NJ: Transaction, 1998). 

  • 30

    The home of the Weaver family, in Ruby Ridge, Idaho was the site of a 1992 attack by Federal Marshals which resulted in the deaths of Vicky Weaver, Samuel Weaver, and Deputy U.S. Marshal W. F. Degan. Federal agents had been attempting to arrest Randy Weaver for failure to appear in court on federal firearms charges. Weaver had been given an incorrect court date. 

  • 31

    Hans-Hermann Hoppe, Democracy: The God that Failed (New Brunswick, NJ: Transaction, 2001). 

  • 32

    Richard Crossman, ed., The God that Failed (New York: Harper and Brothers, 1949). 

  • 33

    Niccolò Machiavelli, The Prince, trans. Luigi Ricci(London: Oxford University Press, 1903) p. 60-61, 71

  • 34

    Another variation in English is “whoever becomes a lamb will find a wolf to eat him.” See Vildredo Pareto, The Other Pareto, ed. Placido Bucolo (London: Scolar Press, 1980) p. 122.