Power & Market
Value is subjective. Prices are objective. Subjective value comes from the mind of the consumer, and influences market prices. When an actor chooses, he must forgo other choices, and he is demonstrating a preference for something, revealing part of the rankings of his values. Since perceived value relative to the actor’s value scale influences prices, then all prices are a result of human actions and choices on the market, caused by the actors' values. Tracing back price changes to human actions on the market is part of what an entrepreneur must do in order to understand the market better. Value travels up the structure of production, from the consumer goods to the producer goods. Tracing the implications of prices changes is part of what an entrepreneur does to understand his market.
Hayek calls prices signals. They are signals that are generated by the market through the market process, which is the interaction between buyers and sellers through their transactions with each other (supply and demand). These signals, in the form of prices and their changes, inform entrepreneurs about what's going on, and guide their actions, and this coordination mechanism is scalable and connects everyone. The market and its prices are all that are needed to coordinate a vast number of people's actions with precision. The entrepreneur doesn't need statistics to make a decision on what to invest in. An entrepreneur that doesn't understand this system is missing out on what's really going on and would be at a disadvantage. Austrian Economics with its deductive method, reveals to us the workings of this price mechanism through its theories and its methodology.
Rothbard said in a lecture (paraphrasing), "An entrepreneur knows more about his specific market than any economist or expert. The reason is that he has skin in the game. A lousy entrepreneur would quickly be eliminated from the market. There is a self-selecting process. The economist or expert has no skin in the game and isn't risking anything when he's wrong about the market." The key insight here is that the entrepreneur knows more than any expert about his specific market and its actors. The entrepreneur gets his information from multiple sources, and forms an outlook on what will happen. The entrepreneur may talk to suppliers, customers, friends, he may hear rumors, read news, from these he would construct a narrative, on top of this can use prices, changes in prices and check it against economic theory to see what's true. From all of this the entrepreneur forms his understanding. This understanding plus other things like intuition, gut feeling, that help the entrepreneur form judgments about the future and judge the best course of action in the present. The entrepreneur has to filter out of the noise what information is the most significant, the factors that will influence the future the most.
In understanding prices and tracing the causes of their changes, an entrepreneur can understand his market better. Prices can inform an entrepreneur about what's happening before journalists and news outlets catch on to it. Prices contain within them information, they are the final outcome of a process of buying and selling by many actors, prices are a kind of average of what all the actors think the price should be. Each good has its own price behavior, which is influenced by the good's physical properties, and other properties such as scarcity, it's perceived value, and finally fluctuations in supply and demand, and the behavior of buyers and sellers. Austrian Economics gives the entrepreneur a correct theory that can help the entrepreneur narrow down on what's happening in the market and gain superior understanding of his market. Knowledge of economics can't guarantee success, but it can bring increased awareness of what's going on underneath the numbers and prices. Eventually helping the entrepreneur gain a better understanding of the market, which means the values of the consumers and the actions of the other actors in the market.
Mises says, "The only source from which an entrepreneur’s profits stem is his ability to anticipate better than other people the future demand of the consumers.” Correctly anticipating the actions of market actors and anticipating future prices and preparing for that future state is what generates entrepreneurial profit.
Mises says, "Monetary calculation is the guiding star of action under the social system of division of labor. It is the compass of the man embarking upon production." Prices determine costs, and not the other way around. Prices are determined in the market. All internal costs should be benchmarked to the market prices in order to have the most accurate cost calculation. Monetary calculation includes retrospective accounting of profit and loss, and prospective accounting with its anticipated costs and anticipated profits. If prices change in the market then not only do the present and future look different, but also the past accounts of profit and loss look different. What worked at one time in the past under the cost structure of that time may not work again with current prices. Accounts give a feeling of certainty in their numbers, but they are static. They are an oversimplified static representation of an inherently dynamic phenomenon.
Austrian Economics can help an entrepreneur have a deeper understanding of his market and of accounting. This can help the entrepreneur in making better decisions out of this better understanding. Here we narrowly focus on prices and costs, but there are many other areas of Austrian Economics that are applicable and will be covered in future articles.
In the age of Trump, many American conservatives are adopting populist positions. Policies that were once considered the right-wing status quo are being questioned and assailed, particularly when it comes to capitalism and markets.
Fox News personality Tucker Carlson is often on the front lines of this iconoclasm, with his regular diatribes against unfettered capitalism and financial elites. His voice is that of a growing traditionalist movement that has begun to vocalize their idealistic challenges to basic capitalist principles. These traditionalists want a larger role for religion in the public square. Unfortunately, they want the state to help facilitate this, and in seeking government’s help, they’re shooting themselves in the foot.
Recently, a great many traditionalists were up in arms over North Dakota’s repeal of its blue laws, which prohibited retail businesses from operating before noon on Sundays. Blue laws were once in place across the country and increasingly have been rolled back. Usually they take the form of bans on alcohol and retail sales, hunting, and certain other recreations.
In response to North Dakota’s repeal, Father Dominic Bouck, a Catholic priest in Bismarck, argued in First Things that the move will hurt the poor and even make the siren song of socialism more palatable to the tired and restless masses.
Without blue laws, Bouck contends that many workers “conscripted into hourly wage jobs” will be denied the ability to attend mass and enjoy holidays with their families. In Bouck’s words, “the legal protection of Sunday rest helps the individual worker and preserves the family from the arms race that is our consumer society.” He also cautions that the decline of blue laws has helped facilitate the rise of our hyper-consumerist culture and the tendency to view man as “the sum of his production and consumption.”
Bouck is onto something here. However, blue laws aren’t going to address his concerns.
Rest from work is crucial, and a person’s worth doesn’t stem from his ability to be a cog in the retail machine. This lack of regularized rest has doubtless contributed to the current increases in anxiety and depression. In 1843 Magazine, psychoanalyst Josh Cohen notes that “anxieties about burnout seem to be everywhere these days.” Coupled with this problem is a lack of togetherness and fellowship. Whereas Sundays have traditionally provided opportunities for families and friends to spend time together, Cigna reports that there’s currently an epidemic of loneliness in the United States.
There can be no doubt that most people would benefit from taking Sundays slowly and spending time with their friends, family, and God. However, reinstating blue laws won’t solve the problem. It’s completely off-base to attribute the dramatic decline in American churchgoing to the lack of legal prohibitions on Sunday work. According to Gallup, weekly religious attendance has been going down since the 1950s.
Ask a young person why he didn’t go to church last Sunday, and I doubt he’ll offer a work shift as the reason. More likely, you’ll hear that church isn’t relevant to his life.
As sociologist Robert Nisbet noted in his classic work The Quest for Community, the relevance of a social institution depends on its maintaining a function and fulfilling the needs of its members. As the centralized state has usurped more and more of the traditional functions of important mediating institutions such as the church and family, the relevance of those institutions has waned. Relying on the same state to rejuvenate church attendance would only further religion down the path of irrelevance and decay.
In his essay “The Balance of Power in Society,” sociologist Frank Tannenbaum discussed the importance of maintaining a balance in society between the various institutions that comprise it: the family, the church, the state, and the market. According to Tannenbaum, these institutions are frequently in conflict and constantly trying to encroach upon the territory of the others. This push and pull is natural, Tannenbaum says, and even healthy when it results in societal balance. Unfortunately, when one institution gains too much power, the result is usually chaos and disorder.
There’s no doubt that our society is woefully out of balance. Family and church are deprioritized in favor of the market and job concerns, and all three are dominated by the powerful centralized state. Many in our Western world see their primary value in their jobs to the neglect of other aspects of their lives. It’s this imbalance that traditionalists are getting at with their call for more blue laws. But legislation is a poor method of restoring balance and order to society because it fails to address the underlying issue: the values that motivate people’s actions.
In the long run, consumers determine the shape of the market, a concept known as consumer-sovereignty. As I’ve argued previously, it’s inaccurate to say that markets are responsible for the decay of community and family. Markets are merely a mirror of people’s values. Employers can’t actually force or “conscript” others into working for them, Father Bouck’s hyperbole notwithstanding. Although man must eat “by the sweat of his brow,” that does not mean he must let the world determine in what manner he will sweat. Employers only have as much power as their employees give them. It may be uncomfortable and inconvenient to resist, but no one is forced to worship mammon.
Blue laws are merely an attempt to make the already very low barriers to church attendance even lower—to match the low value people ascribe to it. That isn’t going to fix anything. Early Christians were martyred and fed to the Roman lions because they valued their beliefs even more than their lives, much like the merchant seeking the pearl of great price. Have contemporary Christians really fallen so far that they’re unable to organize their economic lives so they too can worship?
Republished with permission of the author
Consider what wealth is: it is to have the means to satisfy wants. Those means can be anything, including berries or fruits growing in the wild. But the vast majority of means are created. There are no hamburgers, iPhones, or houses growing on trees.
In other words, most means to satisfy wants were created. So wealth, generally speaking, is created.
Many appear confused by this rather obvious fact, or take offense by it being stated.
That is not only ignorant, but counter-productive: whoever does not believe that the means to satisfy wants (wealth) are created surely is not acting to create them. So we are missing out on a lot of wealth because of this ignorant view; our standard of living could be higher.
It should also be obvious that the creation of one means does not makes anyone poorer or, as some claim, that the creation of any means to satisfy a want "creates poverty."
Imagine two people living without any created means to satisfy wants: they are naked and without any wealth other than the occasional berry or fruit provided by nature. If Person One spends her day creating a shelter, this provides a means to satisfy a want. She is thus richer. Does that make Person Two poorer? No. That person's situation has not changed. If anything, there is now a shelter that could potentially be shared, and the knowledge of how to create one is now available. So if anything, Person Two is (slightly) richer too.
Sure, there is now inequality because person one has a shelter and person two does not. You may have the opinion that Person One must share this wealth or think it is okay for Person Two to use force to take that shelter away from Person One. But neither changes the fact that this wealth – the shelter – was created and that, as a result, there is now more wealth in the world.
More wealth means less poverty.
The distribution of wealth is an important issue that needs to be properly discussed, but it is separate from the fact that wealth is created. And it must be created before it can be "distributed." Anything else is nonsense.
Sure, critics may claim shelters are different from the things people want today. That, for example, iPhones etc. do not satisfy "real" wants. But that's also an issue that is separate from the creation of wealth, and it is not really for them to make such judgments. The only thing that matters is that people who use – and choose to use – those means do so because their use satisfy some want that they have. It thus creates value in their lives. Your opinion does change this fact; it does not decide the wealth or standard of living of someone else.
It's actually beautiful that we do want different things and have different skills, which means we can cooperate through specializing and exchanging and help everyone satisfy more wants than we would be able to on our own. So we're richer as a result (perhaps despite your opinion of people's choices).
Formatted from Twitter: @PerBylund.
- 1. Link added by the editor.
Private roads shine in their ability to smooth and reduce traffic, and as a result, save our time, save billions of dollars of labor and leisure hours, and reduce pollution from cars.1 Moreover, they would save the lives of a portion of the tens of thousands of annual victims of fatal crashes by making roads safer. This cornucopia of benefits is made possible by introducing currently government-run roads to market prices, allowing consumers to coordinate who drives when and how much, and signaling to entrepreneurs to enlarge road systems and design them to be smoother-flowing and safer to capture profits from consumers who demand these services. However, skeptics criticize the viability of private roads on the grounds, among others, that roads are natural monopolies. The might of the market overcomes this concern.
Natural monopolies in neoclassical economics are characterized by services with high fixed-costs and low additional marginal costs per customer once the expensive, fixed infrastructure is finished. Examples of alleged natural monopolies include electricity grids, telephone lines, gas pipelines, and roads. Given the high cost and inefficiency of having two competing roads that both go from A to B running parallel to one another, not enough of such competition will exist because roads are a natural monopoly, the argument goes. As a result, road owners can abuse their leverage as the owners of the only road from A to B to force consumers to pay high prices and offer low-quality roads, or even blockade individuals. There are several issues with this objection. First, we currently face not only supposed natural monopolies at the scale of individual roads, we face a legal monopoly on the highways from sea to sea, and municipal monopolies on all of the roads in entire cities. The state has immensely greater power to abuse than any private road owner would.
Returning now to private roads, the longer the distance one is traveling, the more possible routes there are to get to the destination. Even if Jones has no choice but to use road X to get to the local grocery store, because people traveling long distances do have a choice in whether they take road X as part of their longer trip or not, the owner of road X will face pressure to make road X more appealing in quality and price to long-distance travelers, benefiting local drivers as well.2
Even if Jones is forced to use road X when he drives to certain locations, he has flexibility in the upper bound of how often and to what extent he uses road X. If road X is high-quality and reasonably priced, Jones won’t just use it when he absolutely has to, but rather he will choose to go out more often and stay home less. When he does go out, he will be more willing to go to locations that require staying on road X for a greater distance, such as going to a far away movie theater rather than the nearby bowling alley, which is relevant if a road or highway charges by distance traveled. Thus, even when road X has no other roads to compete with, which it does indeed in the case of long-distance travelers, it competes against Jones’ phone, TV, computer, video game console, board games, books, etc.
Any road providers who make part or all of their income via billboards and other advertisements, vendor stands, stores, or pit stops on property on or adjacent to their roads have an incentive to maintain a smooth and constant flow of traffic to constantly draw new eyes and wallets, which would increase the amount they could charge for advertisement and vendor space.3
The question of an abusive proprietor of a road in a residential area would seldom even be raised, as networks of residential roads would be owned by the homeowner associations, covenant communities, or simply residents of the neighborhoods in which they are located, and have predetermined contracts guaranteeing road use to those buying homes in those neighborhoods. No one buys a house without also buying legal ownership of something as essential as the roof or driveway of the house. Likewise, in the future of more widespread privatized roads, road access rights will almost certainly be bundled into home purchases as much as the roofs or driveways of homes are now. As an example, a network of neighborhood streets with two hundred homes might be 1/200th owned by each homeowner, including a contract guaranteeing permanent road access to each homeowner.
Finally, with the matter of the roads immediately connected to people’s homes and in their neighborhoods solved, this provides breathing space (the longer the distance traveled, the more possible routes) such that this larger unit, the neighborhood, would likely possess multiple competing options for roads connecting it to the rest of the world from the north, south, east, and west.
Small is the gate and narrow the road that is centrally planned, but wide is the gate and broad is the road that is privately owned.
- 1. Robert P. Murphy, “A Gas Tax Hike is the Wrong Way to Fund Highways,” Mises Wire, 2018.
- 2. Price discrimination against local drivers could admittedly complicate this issue, but it would be costly to enforce and draw public contempt.
- 3. If road owners attempted to increase revenue the opposite way, by intentionally causing traffic jams to force drivers to view advertisements for longer periods of time, or purchase food from the road owners’ stores, this may work in the very short term until consumers learned of this tactic, and then ceased to patronize the road altogether. Only perpetual good service can secure perpetual profits.
Listen to the Audio Mises Wire version of this article.
Fox News host Tucker Carlson took to the airwaves of this popular show last night to lambaste Austrian economics and libertarianism, which he views as twin pillars of a failed ideology that doesn't protect American workers and their interests.
The GOP, he argues, is in thrall to free-market corporate interests and esoteric economic theories from dusty textbooks. Republicans remain wedded to unbridled libertarian political philosophy, tax cuts, deregulation, and unilateral free trade, all of which enrich elites but hurt average people. Meanwhile, presidential aspirants like Elizabeth Warren and Bernie Sanders offer the American electorate real-world solutions to economic insecurity, jobs, and healthcare.
It's a compelling story, but untrue. Does Carlson honestly think Republican members of Congress are overly theoretical and ideological? And here we thought they were a bunch of unprincipled and poorly-read hacks!1
Does he honestly think the budget-busting GOP of recent political memory, from Bush II (Iraq War, Medicare Part D, Department of Homeland Security, Patriot Act), John McCain, Mitt Romney are ideological libertarians? Why did Ron Paul and Rand Paul fare poorly among Republican primary voters, if in fact free-market ideology and its donor class dominate the party? And hasn't the party been overtaken by Trumpist protectionists?
Of course we're pleased when Right populists recognize the influence of the Austrian school, just as we're pleased when Left-liberals at the New Republic convince themselves that Misesean "neoliberalism" has taken over the world. We note that Mises and Rothbard continue to receive criticism decades after their respective deaths, a testament to their deep (and apparently nefarious!) influence and an honor given to few economists.
Carlson, a onetime Cato Institute staffer and Weekly Standard writer, understands both Republican politics and the DC world of think tanks and punditry. When he references the Austrian school or libertarianism, it's shorthand for "Koch money and influence" rather than any real ideology. It's his shorthand for the "self-interests of rich guys," interests given an intellectual veneer by academics and writers who are happy to accept billionaire crumbs in exchange for cozy non-profit sinecures. "Conservatism, Inc." (or "Libertarianism, Inc.") has become an self-serving industry unto itself, sclerotic and ripe for criticism.
There is truth to this. But it's not an ideological truth. Tucker Carlson knows better. He knows full well how tariffs make society overall worse off, how markets make poor Americans far better off than the poor in many countries, why government medicine doesn't work, and how minimum wage laws hurt the least-skilled workers. His argument is about priorities and strategy (and TV ratings), not ideology. And it accepts a fundamental tenet of the Left: self-interest for me is noble and warranted, self-interest for others (especially the rich) is suspicious if not sinister.
In other words, Carlson presents a fundamentally zero-sum perspective, which is to say a fundamentally political perspective.
That said, his populism—particularly his antiwar stance—should not be dismissed. Populism per se is not an ideology, but rather a strategy. It can be imbued with any political philosophy, and thus can be equally dangerous or beneficial. At its core populism questions not only the competence of elites, but also their worthiness. It asks whether elite interests comport with those of average people, and in most cases correctly concludes that political elites have interests at odds with those people.
When elites are state-connected or state-protected, i.e., when they maintain or even derive their wealth and influence through their relationship with the state, libertarians have every obligation to object. Elites in the West—from politicians and bureaucrats to central bankers and media figures to defense contractors and patent-coddled pharmaceutical execs—richly deserve our ire. They screwed things up, and ought to be held accountable.
Tucker Carlson is right about that.
Read more: Rothbard on Libertarian Populism
- 1. As I write this, I'm privileged to sit in a conference room at the epicenter of Austrian economics. A group of graduate students from around the world is in residence at the Mises Institute this summer, and this week they're discussing (chapter by chapter) Rothbard's Man, Economy, and State.Apparently the GOP forgot to send its congressional delegation to attend.
Governments have too much power over people. But most of us can’t truly grasp how deep this power goes until our lives are completely changed by a new policy.
Three years after President Obama lessened travel restraints to Cuba, the Trump administration imposed new restrictions for American tourists. This new policy impacts private and corporate planes and boats, cruise ship tours, and other group trips to the island nation.
In a statement to the press, Treasury Secretary Steven Mnuchin said that the travel ban was reinstated because of the “destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes.”
With the new restrictions, Mnuchin said, the administration hopes “to keep U.S. dollars out of the hands of Cuban military, intelligence, and security services.”
On Twitter, Cuba’s Minister of Foreign Affairs Bruno Eduardo Rodríguez Parrilla said the U.S. wants to “[suffocate] the economy & [harm] the living standards of Cubans in order to forcefully obtain political concessions.”
Bruno Eduardo Rodríguez Parrilla, Cuba’s Minister of Foreign Affairs, strongly criticized the new travel sanctions.
“I strongly reject new sanctions announced by #US vs. #Cuba which further restrict #US citizens’ travels to Cuba, aimed at suffocating the economy & harming the living standards of Cubans in order to forcefully obtain political concessions,” Parrilla wrote on Twitter. “Once again they will fail.”
Regardless of how he feels, the conflict between the U.S. government and the Cuban regime shouldn’t impact people who have nothing to do with it. Whether officials of both countries recognize this or not, they have no legitimate authority over people’s lives.
Government Shouldn’t Dictate Travel Policy
This new attack on Cuba, Mnuchin himself admitted in his statement, is due to Cuba’s close association with Venezuela. But because these restrictions impact Cuban citizens directly, as many are only able to make a living thanks to U.S. tourists , Trump’s move might as well be seen as an act of war.
Whether you support the oppressive regimes in both Venezuela and Cuba or not, the nature of the current administration’s policy can’t be ignored, as it puts America, once again, in the role of the world’s police. And as we’ve seen in the past, to play this role means to put innocent people’s lives in jeopardy.
While to some, it might seem OK to punish the entire country for its corrupt government, the reality is that Cubans aren’t in love with communism . Quite the contrary, many agree that their government doesn’t represent them. But when the United States imposes sanctions or travel bans, it ends up fueling Cuban state propaganda while restricting the individual’s right to do what he or she pleases with their own money. In the end, those who hurt the most are the Cuban people, many whose livelihood depend on exchange with foreigners.
Life in a startup is fast paced, varied and fun. But it is also a constant and chaotic struggle, a juggling of disparate issues that need attention and decisions to be made at a moment’s notice. There are employees who need directions, tensions that threaten to erupt into personal conflicts, the bank that keeps calling about refinancing the loan, the supplier who suddenly needs the blueprints earlier to be able to deliver on time, and, at the same time, an endless stream of prioritizations that need to be right.
How are entrepreneurs to make order of this chaos? They face a seemingly endless stream of decisions that need to be made.
There is, of course, no simple solution. But there is a way of thinking about all decisions in a startup that can help entrepreneurs quickly figure out what matters more and what matters less: focus on the forest, not the trees.
What I mean by that is not simply to take a holistic approach to decision-making, but to consider the startup’s position in the economy overall. In other words, what a business actually does in the market economy and what function entrepreneurs serve. Sound cryptic? It really isn’t.
Read the full article at Entrepreneur.
World War I is the gift that just keeps on giving. Although the U.S. government’s intervention into this senseless, immoral, and destructive war occurred 100 years ago, the adverse effects of the war continue to besiege our nation. Among the most notable examples is the Espionage Act, a tyrannical law that was enacted two months after the U.S. entered the war and which, unfortunately, remained on the books after the war came to an end. In fact, it is that World War I relic that U.S. officials are now relying on to secure the criminal indictment of Julian Assange, the WikiLeaks head who released a mountain of evidence disclosing the inner workings and grave wrongdoing on the part of the U.S. national-security establishment, especially with respect to the manner in which it has waged it undeclared forever wars in the Middle East and Afghanistan.
Some news media commentators are finally coming to the realization that if the Espionage Act can be enforced against Assange for what he did, it can be enforced against anyone in the press for revealing damaging inside information about the national-security establishment — i.e., the Pentagon, the CIA, and the NSA. Therefore, they are calling on the Justice Department to cease and desist from its prosecution of Assange.
Of course, they are right, but the problem is that they don’t go far enough. Their mindsets reflect the customary acceptance of the status quo. The mindset is that we Americans simply have to accept the way things are and plead with the government to go easy on us.
That’s just plain nonsense. It is incumbent on the American people to start thinking at a high level, one that doesn’t just accept the existence of tyrannical laws and instead calls for their repeal. After all, isn’t that what our Declaration of Independence says — that when government becomes destructive of the legitimate ends for which it was formed, it is the right of the people to alter or even abolish it and form new government?
What does that mean with respect to the Espionage Act? It means that the law should simply be repealed and that Americans need to start demanding repeal rather than simply pleading with the Justice Department to enforce it in a more judicious manner.
Let’s keep in mind that the law is the fruit of a rotten foreign intervention. Hardly anyone defends the U.S. intervention into World War I. That war was, quite simply, none of the U.S. government’s business. President Wilson, however, was hell-bent on embroiling the U.S. in the conflict. Wilson believed that if the force of the U.S. government could be used to totally defeat Germany, this would be the war to finally end all wars and to make the world safe for democracy.
Wilson’s mindset, of course, was lunacy. Sure enough, the U.S. intervention resulted in Germany’s total defeat, which was then followed by the vengeful Treaty of Versailles, which Adolf Hitler would use to justify his rise to power. Nazism and World War II soon followed. So much for the war to end all wars and to make the world safe for democracy. Tens of thousands of American men were sacrificed for nothing.
Moreover, Wilson had to force American men to fight in World War I. He conscripted them. Enslaved would be a better word. When a government has to force its citizens to fight a particular war, that’s a good sign that it’s a bad war, one that shouldn’t be waged.
In fact that was one of the reasons for the Espionage Act—not to punish people for spying but rather for criticizing the draft and the war. The law converted anyone who publicly criticized the draft or attempted to persuade American men to resist the draft into felons. And make no mistake about it: U.S. officials went after such people with a vengeance, doing their best to punish Americans for doing nothing more than speaking.
One example was Charles Schenck, who was prosecuted and convicted of violating the law after circulating a flier that opposed the draft. When the case reached the U.S. Supreme Court, the Court upheld the conviction, one of the earliest examples of judicial deferment to the military, a deference that would become virtually complete after the U.S. government was officially converted to a national-security state after World War II.
Another example was Eugen Debs, who got convicted for criticizing the war and for encouraging men to resist the draft. President Wilson called Debs “a traitor to his country.”
How in the world can such prosecutions and convictions possibly be reconciled with the principles of a free society? Freedom necessarily entails the right to criticize government for anything, including its wars, its enslavement of people, its tyranny, and anything else. Perhaps it is worth nothing that both Schenk and Debs were socialists, something that today’s crop of Democrat presidential candidates might want to take note of.
Longtime supporters of FFF know that one of my favorite stories in history is the one about the White Rose, a group of college students in Germany who, in the midst of World War II, began distributing pamphlets calling on Germans to resist their own government and to oppose the troops1.When they were caught and brought to trial, the members of the White Rose were berated by the presiding judge, who accused them of being bad German citizens and traitors, just as Wilson, the Justice Department, and the U.S. Supreme Court had said of Americans who were violating the Espionage Act.
Today, any U.S. official would praise the actions of the White Rose, but that’s just because it was foreign citizens opposing an official enemy of the U.S. government. The fact is that if the White Rose members had done the same thing they did in Germany here in the United States, U.S. officials would have gone after them with the same anger and vengeance as German officials did. And they would have used the Espionage Act to do it.
It’s time to acknowledge that the horror of U.S. intervention into World War I and the horrible consequences of that intervention. It’s also time to rid our nation of the horrific relic of that intervention, the Espionage Act. We need to continue demanding the dismissal of all charges against Assange. But let’s not stop there. Let’s repeal the tyrannical World War I-era Espionage Act under which he is being charged to ensure that this cannot happen to others.
Originally published at the Future of Freedom Foundation
Like no other international mass shooting in recent memory, the Christchurch Mosque massacre in New Zealand is having a resounding impact on gun control discussions in the United States.
In short order, politicians from Bernie Sanders to Alexandria Ocasio-Cortez praised New Zealand for its immediate decision to implement gun control. At the same time, they reiterated that the U.S. follow in New Zealand’s footsteps by passing so-called “assault weapons” bans.
In the American case, there were already several assault weapons ban bills filed in both the U.S. House and Senate before the Christchurch massacre. Although Republican control of the Senate will likely prevent the passage of these bills, these recent filings and the new outrage from the New Zealand tragedy have re-ignited discussions about gun control.
The Origins of the Assault Weapons Ban
AWBs have been a fetish of sorts for gun control proponents during the past three decades. California was one of the first states to pass this policy in 1989 with the Roberti-Roos Act, which banned the ownership and transfer of various brands of assault weapons. The weapons that fell under this ban consisted of rifles and even some pistols and shotguns. This became the inspiration for other assault weapons bans across the nation and eventually led to Bill Clinton’s signing of Federal Assault Weapons Bans of 1994 .
In 2004, the 1994 AWB expired under President George W. Bush’s administration. Many advocates for the AWB warned that expiration would lead to a sudden surge in crime. Not only did murder rates drop from 2003 to 2004, but they have continued falling into the present. Per capita, gun ownership increased by 56 percent from 1993 to 2013, while gun violence plummeted by 49 percent during the same period.
During the past 20 years, lax gun policies like Constitutional Carry, the ability to carry a firearm without a permit, have also become politically relevant. In 2019 alone, states like Kentucky , Oklahoma , and South Dakota embraced Constitutional Carry, which now brings the number of states with this policy to 16. Gun liberalization considered, crimes rates have continued to drop. In 2014, for example, homicide rates reached a 51-year low .
The Obsession over Assault Weapons: Much Ado About Nothing?
Indeed, “assault weapon” is a politically loaded term with no standard definition. They are often confused with assault rifles, weapons with single-shot, burst fire, and fully automatic fire settings, which are employed by militaries around the world. These weapons are not readily available to the civilian populace in America due to stringent regulations from the 1934 National Firearms Act (NFA)and the Hughes Amendment of the 1986 Firearm Owners Protection Act (FOPA). Firearms like the AR-15, a whipping boy for the gun control crowd, only has semi-automatic settings.
Despite these facts, the media have run with the assault weapon canard. Interestingly, research shows that weapons that fall under the arbitrary assault weapon label account for a small percentage of crime. According to Gary Kleck in Targeting Guns, assault weapons were only used in 1.4 percent of gun crimes before any national or state assault weapons bans were implemented in the 1990s. In 2001, the Bureau of Justice found that 8 percent of criminals used assault weapons in firearms-related crimes.
In 2017 alone, only 403 people were killed by all types of rifles. To put this in perspective, this was a year when there were nearly 15,000 total murders, which includes both firearms and non-firearms related deaths. From 2007 to 2017, the much-maligned AR-15 accounted for only 173 deaths in mass shootings.
Assault Weapons Bans Enhance the On-Going Trend of State Control
Crime statistics aside, there is another key reason to be worried about AWBs. These new laws involve conceding more government control over human behavior.
As Ryan McMaken notes , the past century has been one of federal consolidation of power, in which numerous Anglo-Saxon traditions have been subverted by the managerial state. This is most apparent when dealing with the issue of militias. The tradition of a decentralized militia goes back to the libertarian Levellers of 17th century England. This decentralized militia practice did not stay confined to the British Isles as it soon became a part of American colonial culture.
In the early days of the American Republic, Founders like Patrick Henry and George Mason continued that tradition by stressing the importance of the militia instead of centralized standing armies. With the codification of the Second Amendment, both the militia and private firearms ownership aspects became bedrocks of American civic culture up until the early 20th century.
A key component of militia units is their access to military-grade weaponry. However, the militia’s autonomy from the federal government and civilian access to military weapons has been significantly undermined during the past century. David Yassky explains how the Dick Act (the Militia Act) of 1903 and subsequent acts have put the National Guard increasingly under the federal government’s thumb. Yassky points out that “anyone enlisting in a National Guard unit is automatically also enlisted into a "reserve" unit of the U.S. Army (or Air Force), the federal government may use National Guard units for a variety of purposes, and the federal government appoints the commanding officers for these units.”
It also doesn’t help that the passage of the aforementioned 1934 NFA and Hughes Amendment of the 1986 FOPA make it prohibitively expensive for everyday gun owners to acquire military weapons such as machine guns. In the case of the 1986 FOPA, civilians were banned from purchasing machine guns manufactured after the date that this law was enacted.
Following the incredible success of Brexit in 2016, British politics has become a tragedy. Theresa May has been rightfully ridiculed for her remarkable incompetence in striking a Brexit deal, but her greatest sin was her ideological commitment to preserving and growing the very sort of government interventionism that has long hindered the UK.
As George Pickering noted earlier this year:
It would…be tempting for Brexiteers to place the blame entirely on policies inflicted by the EU bureaucracy, but the truth is that harmful post-Brexit policies are equally likely to be imposed by the UK’s own government. This is particularly true for the issue of ‘regulatory harmonization’. Although UK policymakers had initially been considering significant deregulation as a possibility in the case of a no-deal Brexit, this option was taken off the table due to Theresa May’s commitment to transpose the bulk of EU regulations into British law. This would mean that, even in the event of a no-deal Brexit, UK consumers would miss out on the economic boost and quality of life improvements that could otherwise have resulted from abandoning burdensome and unnecessary EU regulations. Again however, the key point is that the true culprit is the policy of regulation itself, not Brexit, and Brexiteers should be no less quick to point this out simply because the source of the harmful policy is the UK government, rather than the EU.
While a Prime Minister with the will to follow through on Brexit would itself be an important blow against political centralism, the UK needs a bold change in ideology to truly take full advantage of the opportunity breaking away from the EU offers its people. Luckily it seems that the Conservative Party will have the option to do just that.
Former Brexit Under-Secretary Steve Baker, a favorite of our friends at Mises UK, has publicly announced he’s considering jumping in to the race to replace May. Baker’s appointment at the time was particularly noteworthy as he was perhaps the strongest EU-skeptic in parliament. His support of Leave, for example, was not simply grounded in the name of British national sovereignty, but correctly identified the EU itself as a dangerous project that should be destroyed entirely.
I think Ukip and the Better Off Out campaign lack ambition. I think the European Union needs to be wholly torn down….It was meant to defeat economic nationalism, it is therefore a failure in its own terms. If we wish to devolve power to the lowest possible level, make it accountable and move on into a free society, then it’s clearly incompatible. What I want is free trade and peace among all the nations of Europe as well as the world and in my view the European Union is an obstacle to that.
While he lacks the same degree of name recognition that is enjoyed by others like former-London Mayor Boris Johnson, Baker has created a strong following of his own among Brexiteers due to his principled stand on Brexit. He has also argued that his distance from May’s past failed deals – which were backed by not just Johnson, but other potential rivals such as Domick Raab – gives him greater credibility.
While Baker’s principled stance on Brexit is itself deserving of praise, what truly makes Baker fascinating is his familiarity with Austrian economics. As I noted when he was originally named Under-Secretary, as a Member of Parliament Baker often referenced economists such as Ludwig von Mises, Jesús Huerta de Soto and F.A. Hayek in the House of Commons. A co-founder of the Cobden Centre (named after the great Richard Cobden), he has long been a vocal opponent of the “monetary socialism” of central banks and the IMF.
As is always the case with any decent politician, Baker remains a longshot in the race to replace May. Still, the fact that his name has emerged in the conversation is a strong sign for his political future. We shall see what emerges in the coming weeks, but if there is one thing we should learn from recent Tory history – one should never rule out an underdog.