Power & Market

In an 1800 letter to Gideon Granger, Thomas Jefferson wrote: "The true theory of our constitution is surely the wisest and best, that the states are independent as to everything within themselves, and united as to everything respecting foreign nations. Let the general government be reduced to foreign concerns only..."

In other words, the only job of the federal government ought to be foreign affairs.

In expressing these sentiments, however, Jefferson was summing up a line of argument based on practical observations about the easy corruptibility of government power, the need for decentralization, and the benefits of government at the most local level.

One still hears calls for reducing the federal government to a foreign-affairs agency — more or less — but these calls are usually based on little more than a rank appeal to authority in the form of the "Founding Fathers" and their alleged original intent.

Appeals to the Founding Fathers, however, are usually unconvincing and unsatisfying. After all, not all the Founding Father even agreed as to the full extent of federal powers. Moreover, the constitution itself grants powers to the federal government beyond matters of foreign affairs, including, but not limited to, authorization for monstrous laws such as the fugitive slave acts.

And, the ink was barely dry on the constitution before George Washington decided he was perfectly fine with instituting a central bank, and with the use of federal troops to put down tax resisters. John Adams later signed off on the Alien and Sedition acts a gross abuse of the natural rights of peaceful Americans.

Needless to say, there were a great many early American founders and politicians who were quite at peace with expanding the domestic role of the federal government significantly.

Jefferson's position on the federal government as an external-relations agency only, however, is interesting today for reasons that have nothing to do with what is considered constitutional. Without resorting to any debates over what James Madison said about something 230 years ago, we can identify at least three good reasons why the US government — indeed any national government — ought to be reduced to an organization with authority only in matters of foreign affairs.

One: Foreign Relations Are the Only Area of Government in Which Physical Size Matters

When it comes to geopolitics, it's hard to deny that the ability of a nation-state to defend itself is often enhanced by physical size, and by the size of frontiers between itself and other competing nation-states. This does not trump everything else, of course. Wealthy nation-states have an advantage over poor states, even in cases where the poor nation-states are larger. Moreover, the advent of nuclear weapons has further diminished the importance of size in military defense, since a small nuclear-armed nation-state can wield truly threatening defensive power against even much physically larger nation-states.

Economic ties are also an important factor, as nearly every laissez-faire liberal in the past two centuries has understood. From Jefferson to Ludwig von Mises, liberals have noted that peaceful bonds between nation-states can be facilitated through free trade and exchange. Not only does this lead to greater peace among the nation-states involved, but a policy of free and open trade ensures a larger number of allies in case an outside aggressor state begins to make threats. The nation-states with strong trading ties will tend to stick together, thus further providing each other with greater access to resources for defense.

Size isn't as important as it used to be, but it continues to be a factor.  Thus it is easy to see why even Jefferson and other anti-Federalists recognized the advantages of forming the US into a confederation for purposes of military defense.

Two: Non-Military Function Are Best Kept Local

Other functions of government, however, have nothing to do with bigness, and are best limited to the most local level possible.

The welfare state — which is by far the largest single federal spending category outside military spending — is one such example. As I note in my article "Decentralize the Welfare State," every American state already enjoys a per capita GDP that's more than large enough to support its own European-style welfare state.

Some people may argue that welfare states are a bad thing, but the fact remains that the existence of well-heeled and functional welfare state hardly requires the presence of an federal government like that of the United States. After all, if Belgium, with a population of a mere 11.3 million people, can have a vast welfare state, it hardly stands to reason that the United States, with a population of 320 million requires one enormous national state to pull off the same thing. Moreover, the issue of whether or not a welfare state is a good thing is a separate question from whether or not it requires a vast national government to execute it.

And while Jefferson likely never envisioned anything approaching the size and scope of a modern welfare state, the basics of the idea were not unknown in his own time, when liberals like himself were known to support a variety of different domestic welfare-type programs from public schooling to poor laws. Jefferson, after all, had supported poverty relief programs at the county level.

As noted in his comments to Granger, however, handing over poverty relief functions to a far-off federal agency of distant bureaucrats would have seemed to him a ludicrous and thoroughly dangerous proposal.

Domestic law enforcement is another function of government that has never been shown to require a unified national government. After all, as I show in my articles on the need to abolish the FBI (see here and here), the states of Europe have been able to address law enforcement needs without any Europe-wide police force, and the American states could just as easily adopt an INTERPOL-type model without submitting to any national police force.

And then there is the issue of banking which has been continually federalized, centralized, and insulated from local and market control. Supporters of a huge federal financial and banking apparatus would have us believe that such centralization is necessary for economic prosperity. This, however, has never been demonstrated by the historical record. Some of the greatest strides in the American standard of living have taken place during periods of extreme decentralization in the American financial system — as during the nineteenth century's periods of huge gains in real income. And, of course, the experience of small wealthy European states such as Switzerland demonstrates that small states perform at least as well as large states when it comes to economic performance.

Three: Federal Domestic and Foreign Programs Work Together to Increase Federal Spending Overall

And finally, the mixing of domestic and foreign-policy duties at the federal level allows federal lawmakers to continually hoodwink the taxpayers into tolerating higher and higher levels of federal revenue and spending.

We see how this occurs every budget cycle: one political coalition (the right wing) favors growth in military spending, while another coalition (the left wing) favors growth in social spending. Neither, of course, strongly opposes the other. But in each case, both sides can count on increased federal spending overall so long as some of that spending goes to their pet projects. The end result is a relentlessly increasing federal budget, year after year. Sure, in some years, there is more growth in military spending. And in some other years, there is more growth in social spending. But there is always growth.

Meanwhile, if Americans ever get it into their minds that federal spending ought to be reigned in, federal policymakers trot out the same scare tactics. To the right ting they say "give us more money, or the US will be defenseless from the Chinese/Russians/Iraqis/Syrians, etc. To the left wing they say "give us more money, or people will starve in the streets!" Having convinced two major ideological groups that they must give more to the federal government to get what they want, a majority of voters thus caves and hands over the money. Once the federal government has the money, then it's a simple matter of having lobbyists and legislators divide it up in a way that benefits them politically. Without the inconvenience of any voter involvement.

By limiting federal prerogatives to foreign affairs only, any referendum on increased federal spending would necessarily be a referendum on military spending only. And this would be clear to everybody. This would then have the added benefit of depriving the federal government of one of its most reliable constituencies: leftists who want more social spending.

In practice, when it comes to increased spending, the federal government's only natural constituency should be those in favor of greater military spending — and it would then become more difficult to convince the majority to tolerate more federal spending.

The drive for more social spending would then be shifted to the state level. This by itself would not guarantee a lower tax burden for taxpayers overall. It's entirely possible that state governments would indulge in massive bloated welfare programs.  On the other hand, experience suggests that only some states would do this while others would not. In other words, there would be variety among the states, and residents could vote with their feet as to where they would live and pay taxes. The realities of tax competition — as we can witness in small states of Europe — would act to restrain the local governments in their tax-and-spending practices.

In any case, it would be preferable to be able to choose among states at various levels of profligacy than be stuck with one huge federal state indulging in ever higher levels of out-of-control spending.

A Few Caveats

None of what I've said here should be construed as an argument that the federal government, even if reduced to a foreign-affairs agency, would necessarily be justified in whatever it does. Even in such a reduced form, a government of that type would still be prone to abuse, bloat, and incompetence. But if we're going to be stuck with a US government, it's best to reduce it to a single function so as to politically isolate and restrain groups that favor increases in federal spending.

Nor do I wish to imply that the federal government ought to have a monopoly on military power within the United States itself. As both the legislative and social history of the US has shown, both an organized and unorganized militia — at both the state and local levels —  have long been important in acting as a counterweight to federal military power.

But, at the core of all of this is my long-standing assertion that the United States ought never have been anything more than a military-defense confederation and a customs union, and member states of the confederation should always have been free to leave. Jefferson, for one, would have agreed.

Elizabeth Warren’s 2020 presidential aspirations may have ended before they began this week thanks to her team’s bizarre decision to proudly broadcast the results of a DNA test that shows she may have had a relative 10 generations removed that was of indigenous American heritage. As Senator Warren was once promoted as “Harvard Law School's...first woman of color,” the results seem to only confirm that she misrepresented her ancestry in her past career as a law professor.

Not only has the decision been met with a blistering condemnation from the Cherokee Nation, but it has once again made her the butt of President Trump’s jokes.

Lost in the laughing at Warren’s expense however, is a larger issue exists over how American politicians continue to treat tribal sovereignty.

After all, if Warren had used her position as senator to serve as an advocate for the Cherokee Nation’s right to self-determination, her history of misrepresenting her genetic connection to the tribe would perhaps be more excusable. Say what you will about Rachel Dolezal, she at least cared enough to be an advocate for the African American community. Instead, Warren’s political record is one that has regularly promoted the continued imperial rule of Washington on land that is tribal in name only.

Though never officially serving as the head of the Consumer Financial Protection Bureau, Warren has been widely credited as being the guiding force behind the creation of the agency. The CFPB was created as part of the Obama Administration’s response to the financial crisis, a powerful financial regulator that lacks the traditional checks of other executive agencies. Under the lead of former director Richard Cordray, the CFPB went to work becoming a heavy handed regulator in its fight against "unfair, deceptive and abusive” practices.

Soon, various tribal financial services businesses found themselves in the cross hairs of the enthusiastic CFPB. The result is that the agency has been described by Dr. Gavin Clarkson, a tribal finance expert, as “the most hostile federal agency towards Indian tribes since Indian Affairs was in the War Department.”

One example is a variety of short-term lending operations that various tribes started up to try to capitalize on the growth of e-commerce. In theory, tribal sovereignty should have given these ventures a competitive advantage over other US lenders who had to deal with the Washington red tape. Unfortunately Obama’s Justice Department decided these operations represented a “national security risk” and worked with the CFPB to shut them down as part of Operation Choke Point – in spite of pleas from tribal advocates that doing so would be economically devastating.

While it would be unfair to blame Elizabeth Warren for any and all actions taken by the CFPB and DOJ, she served as a primary defender of Operation Choke Point when legislative pressure mounted to end it.

Similarly, she has been the chief voice in the Senate attacking the pay day lending industry, which became a point of particular emphasis under the Cordray CFPB. This has put the Warren-Cordray camp into ongoing legal conflict with various tribes over whether federal financial regulation should apply to tribal land, leading the CFPB to sue various tribal lenders.

While the Supreme Court refused to take up the case, which could have provided a legal precedent in favor of tribal sovereignty, the suit was eventually dropped earlier this year after Mick Mulvaney took over as the CFPB’s acting head. Warren wrote a letter to Mulvaney criticizing the decision.

Warren’s indifference to the cause of tribal sovereignty appeared again this year with a vote on the Tribal Labor Sovereignty Act.  

The issue here was whether tribal-owned businesses should be forced to follow federal labor laws on collective bargaining. The issue has been a major one for a number of American tribes, upset that tribal governments are subjected to labor laws that state and federal governments are exempt from.

As Jefferson Keel, the President of the National Congress of American Indians, wrote in The Hill:

Sovereignty means tribes should be allowed to make their own decisions about their own workforce policies. The truth is that many tribal nations openly welcome labor unions into the businesses that they own; others choose not to. And a growing number have designed and enforce their own labor regulations. But the NLRB ignores all of this and, instead, forces tribal governments to adhere to the NLRA. Just us. No one else. This is a plain violation of our inherent rights as sovereign nations and governments.

Unfortunately Senator Warren’s loyalty lay with labor unions over tribal sovereignty, and she joined with 41 other Senators to successfully kill a vote on the bill.

While Warren has made it easy to laugh at about “fauxocahontas” and 1/1024^th memes, her political contempt for tribal self-sovereignty is what should make her false claims to Cherokee heritage truly insulting.

Elizabeth Warren and her fellow progressives believe Native Americans are better off following her rules, rather than granting tribes the political self-determination to make such decisions for themselves. It’s a form of ideological imperialism, driven by their own belief in their moral superiority and the belief on “the right side of history.” The progressive person's burden is to use to the power of the state to impose social justice, regulate “fairness” in the market, and impose egalitarian social norms. 

This is precisely why it’s important for those who recognize the dangers of federal overreach and political centralization should take the issue of tribal sovereignty so seriously. The goal for a more civil and free society should not be the aim of some grand universal political order, but a respect for political self-determination. To that end, a respect for tribal rights is just as important as any other fight in favor of political decentralization.

Aram Roston reports on how Mideast dictatorships now hire former US military personnel to form what are essentially death squads designed to eliminate the regimes' enemies:

The revelations that a Middle East monarchy [UAE] hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of dissident journalist Jamal Khashoggi by Saudi Arabia, an autocratic regime that has close ties to both the US and the UAE. (The Saudi Embassy in the US did not respond to a request for comment. Riyadh has denied it killed Khashoggi, though news reports suggest it is considering blaming his death on a botched interrogation.)

Golan said that during his company’s months-long engagement in Yemen, his team was responsible for a number of the war’s high-profile assassinations, though he declined to specify which ones.

Where do these kill teams come from and where do they get their training and experience? They get it from the US military and the US taxpayer.

Last month, I wrote on how the US military is becoming increasingly reliant on mercenaries to staff military operations. This makes it easier for the Pentagon to ratchet up military conflicts while still claiming that it is reducing boots on the ground. It can do this because the Pentagon doesn't report details on how many mercenaries it's using or where they are. Essentially, mercenary forces are a sort of human slush fund which allows the Defense Department more leeway in doing whatever it wants, while sharing precious little information about it with Congress or the taxpayers.

Thus, the US treasury subsidizes the creation of these mercenary forces that then become adjuncts of foreign governments. Roston concludes:

The long US wars in Afghanistan and Iraq have relied heavily on elite special forces, producing tens of thousands of highly trained American commandos who can demand high private-sector salaries for defense contracting or outright mercenary work.

He's right about that, but then makes a rookie mistake: he refers to the movement toward mercenaries as a "privatization" of war, saying, "War has become increasingly privatized, with many nations outsourcing most military support services to private contractors, leaving frontline combat as virtually the only function that the US and many other militaries have not contracted out to for-profit ventures."

I see this mistake made over and over, and everyone needs to stop calling this sort of thing "privatization." When the government hires a construction firm to build a government highway, is that "privatization" of the highway system? No one thinks that, and for good reason. Similarly, it is not privatization when a state — whether its the US government or the UAE — hires a private firm to execute some aspects of the government's wars. These wars are state-on-state wars. There may be some truly private organization at play, but they're on the receiving end of the mercenaries' violence.

Historically, we call private military forces "irregulars" or "guerrilla" forces. There's gray area there, but, broadly speaking, truly private military forces don't have a legally enforceable contract with an officially-recognized regime. They're often not loyal to any extant state, and they often don't even get paid by any organization recognized as a state.  Clearly, this doesn't describe these American mercenaries who likely have a signed contract with the UAE dictators, and money is paid in return for certain killings.

This is government money, spend on a private firm to carry out a government agenda. This is not privatization.

As the number of experienced American mercenaries continues to grow — thanks to 18 years of non-stop American wars, it will be interesting to see how many Americans military contractors have their hands in various assassinations, bombings, and other killings carried out on enemies of far off regimes.