Power & Market
Some of the French economists centered around the Journal des Economistes were elected officials. For example, Louis Wolowski was elected to the Assemblée Constitutionelle in 1848;1 so was juge de Paix Frédéric Bastiat. Decades earlier, Jean-Baptiste Say and Benjamin Constant were famously defending Classical Economics in the Tribunat where they opposed Napoleon Bonaparte. Bonaparte returned the favor and expelled both of them in 1804 and 1802 respectively.2
Unlike the aforementioned economists, Gustave De Molinari never was a politician himself. However, this does not mean that he never ran for office. He had briefly attempt to join the ranks of the liberal party in 1859.
Left or Right?
In his 1864 book review of De Molinari's Cours d'économie politique, Lord Acton points out the turbid relationship between the Liegeois-born economist and the Liberal Party: "[In] 1848, he returned to his own country, and finished his course of political economy at the Musée d'Industrie of Brussels, where, we believe, he has not been altogether well treated by the Liberal ministry. This gives a personal significance to his protest against the nomenclature of the two parties, which falsely implies that the one comprises all that is religious, and the other all that loves liberty, in Belgium".3
Indeed, De Molinari wasn't the keenest on political demarcations; in earlier writings, he had presented the fluidity between the nomenclature of liberal, religious, and even socialist party structures. Historian Roderick T. Long pointed out that De Molinari favored a collaboration with the French socialist party.4 According to him, both economists and socialists favored the same principles. In his Lettre aux socialistes (1848), the anonymous author (later identified as De Molinari) stressed that both economists and socialists favored a society in which justice was prevalent for every individual member. However, both groups used a different methodology. Economists thought of liberty and freedom as the necessary means to reach said goal, as history has shown them time and time again. Socialists, on the other hand, used statist recipes with taxes.
Blanc VS Coquelin
One place Molinari clashed with the socialists, however, and thus distinguished himself as a true supporter of laissez-faire, was in his opinions on banking.
While living in Paris, De Molinari must have read his friend Charles Coquelin's research on banks. Coquelin defended a free-market approach on banking; he preached the concept that the government should have no involvement in the role of banking. Rather, banks should be left alone. After empirical research on business cycles, Coquelin concluded that banking crises were the result of privileged monopolies and governmental regulation.5
Journalist and socialist Charles Potvin, however, opposed this vision: “Mr. De Molinari views align with the following principle. Legal persons should have the opportunity to gather themselves without governmental intervention. The role of the government should be limited to registration instead of active participation, isn’t it Mr. De Molinari? (Mr. De Molinari nods in agreement). If we follow Mr. De Molinari’s vision, wouldn’t priests and bankers run Belgium?6
Potvin’s opinion on banking changed over time — whilst always remaining in the realm of radical socialism. In his biography, historian Christophe De Spiegeleer argues that Potvin shows appreciation for the works of PJ Proudhon in his essays (Du Gouvernement de soi-même, La Banque Sociale).7 Proudhon proposes "la Banque du Peuple"; a company in which the people (ipse facto: the poorest individuals within a society) could borrow a lump sum of money without paying an extra fee. The poorest individuals were shareholders as well.8 Potvin praised these "mutualistic companies" in his magnum opus Du Gouvernement de Soi-Même (1877).
However, in his exchange with De Molinari, Charles Potvin outs himself as a disciple of socialist Louis Blanc. According to Blanc, the involvement of a government in the realm of banking was of the utmost importance. According to Potvin, spontaneous order and liberty would lead to anarchy in Belgium! For this particular reason, Louis Blanc claimed it necessary to seek government intervention and lift up the competition, in favor of a single, nationalized bank.9
"Pourquoi j’ai retiré ma candidature"
In a pamphlet (Pourquoi j'ai retiré ma candidature), written a couple of days after the fulminations of Potvin against Molinari, De Molinari announced the renunciation of his candidacy. In 1855, however, he had already predicted his fate within the party. In an article "Dialogue entre un électeur et un candidat," he criticized uninformed vocal minorities that forsake their own responsibilities. In the fictional dialogue, the voter expects politicians to take care of everything; protectionism, warfare, parish relief funds, subsidizing religion, ... To which the politician responds whether the voter would favor higher taxes. How would we fund these services? To which the voter responds: “How should I know? That’s up to you and that is why we elected you!”10
- 1. RAMBAUD, Jules, l’oeuvre économique de L. Wolowski, Paris, L. Larose & Forcel, 1882, 9-29.
- 2. MINART, Gérard, Entrepreneur et esprit d’entreprise. L’avant-gardisme de Jean-Baptiste SAY, Paris, l’Harmattan, 2013, 158-159.
- 3. ACTON, John Emerich Edward Dalberg, “Review of Gustave de Molinari’s Course of Political Economy (1855)”, The Home and Foreign Review, 4, 1864, 313.
- 4. LONG, Roderick T., “Rothbard’s “Left and Right”: Forty Years Later”, Mises Institute, 2006.
- 5. MALBRANQUE, Benoît, “Réformer les banques: les propositions originales de C. Coquelin”, Laissons Faire, 1, 2013, 20-24; DE NOUVION, Georges, Charles Coquelin. Sa vie et ses travaux, Paris, Institut Coppet, 2017 , 24-25.
- 6. "M[onsieur] De Molinari proclame ce principe: les personnes civiles ont le droit de se constituer sans l'intervention de l'Etat. [...] La personne civile vient au monde, et l'Etat enregistre [...], n'est ce pas M[onsieur de] Molinari? (De Molinari fait un signe d'approbation). La Belgique ne serait-il pas exposée à une double invasion de moines et des banquiers?"“Après l’autel le coffre-fort”, Le Bien Public, 6 juni 1859.
- 7. DE SPIEGELEER, Een blauwe progressist. Charles Potvin (1818-1902) en het liberaal-sociale denken van zijn generatie, Gand/Brussels, Liberaal Archief, 2011.
- 8. PROUDHON, Pierre-Joseph, “Banque du peuple: déclaration”, Le Peuple, 1849, 1-13.
- 9. CHARRUAUD, Benoît, Louis Blanc, la république au service du Socialisme, Unpublished PhD, Université Strasbourg III. Robert Schuman, 2008, 50.
- 10. Cela vous regarde. Nous ne vous nommons pas pour autre chose" DE MOLINARI, Gustave, “Dialogue entre un électeur et un candidat”, l’Economiste belge, 1855, 1.
I've been following Lew Rockwell's work pretty closely for more than 15 years, but there's a lot of good stuff I haven't heard before in this new interview between Tom Woods and Lew. He goes a little more deeply into some of his work with Ron Paul in Congress, and Lew apparently has a new book coming out soon, called Against the Left.
Mises Institute Associated Scholar has been named the BB&T Professor of Economic Freedom within the Johnson Center for Political Economy at Troy University. Dr. Manish, a former Mises Research Fellow, has been a member of the Troy faculty since 2012. His research focuses on Austrian economics, macroeconomic theory and development economics, and teaches a course on Advanced Austrian Economics for the university's Masters program.
His Mises Institute work can be found here.
Dr. Manish and his wife, Dr. Malavika Nair, are regular members of the Mises University faculty.
Donald Trump renewed his attacks on trade this week, announcing new tariffs with China and extending his steel and aluminum tariffs to previously exempted Europe. Since this is Trump, it’s certainly possible that this is another example of “maximum pressure” designed to get some sort of concession. Should this represent a genuine long-term embrace of protectionist trade policy though, American consumers will pay the price.
Of course none of this is surprising; it’s what he explicitly campaigned on. (Unfortunately he’s been more willing to deliver on these promises than his attacks on the Fed.) It’s worth pointing out, however, that Trump’s critics – though correct in their criticism of his tariffs – often over-romanticize the global view of free trade pre-Trump. Nothing illustrates this better than the reaction to Trump’s moves.
After all, for all the flowery talk of leaders like Xi and Merkel of their dedication to free trade, their reaction to Trump’s tariffs have been to push tariffs of their own. China has tailored their retaliation to impact Trump’s voter base, while European Commission President Jean-Claude Juncker has threatened to make American icons like blue jeans and bourbon victims in an escalating trade war. Their willingness, however, to respond to bad policy with more bad policy highlights the truly shallow grasp of the benefits of trade.
Just as it does not benefit a country to respond to a neighbor increasing its own taxes to follow suit, retaliating to a new US tariffs by implementing one of their own only serves to hurt their own citizens. This is why Austrians have long lauded the benefits of unilateral free trade, while acknowledging the long term goal is genuine global free trade among all. To quote Louis Rouanet:
Instead of a top-down promotion of “free trade” driven by supranational institutions, we should consider unilateral free trade as an important part of a liberal political agenda. Sir Robert Peel, when announcing the repeal of the Corn Laws in the House of Commons in 1846, brilliantly warned: “I trust the government ... will not resume the policy which they and we have found most inconvenient, namely the haggling with foreign countries about reciprocal concessions, instead of taking that independent course which we believe to be conducive to our own interests. ... Let, therefore, our commerce be as free as our institutions. Let us proclaim commerce free, and nation after nation will follow our example.”
Unilateral free trade is a boon for both parties involved in trade regardless of whether or not one of them continues to impose tariffs. For those engaged in unilateral free trade, free trade means they need to export less to import more. In other words, it makes the free traders richer.
Naturally the global reaction to Trump’s tariffs is as unsurprising as the tariffs themselves. After all, while Merkel may have saw herself as the defender of the “liberal world order,” what she and the “globalists” Trump loves to rail against was really a “neoliberal” status long departed from the ideas of true classical liberals like Ludwig von Mises. For them, and their preferred presidential candidate, the aim is not “free trade” but managed trade – and the differences there are significant.
Of course, that powerful governmental bodies are acting hypocritical to their stated values is the least surprising move of them all.
President Trump declared last week that the law enforcement should “take the guns first, go through due process second.” But the history of federal firearms enforcement shows that due process is often a mirage when federal bureaucrats drop their hammer. Before enacting sweeping new gun prohibitions, we should remember the collateral damage and constitutional absurdities from previous federal crackdowns.
Gun control advocates have called for prohibiting possession of AR-15 rifles — a ban that could create five million new felons overnight, since most owners would not meekly surrender their firearms at the nearest federal office. Others advocate outlawing all semi-automatic firearms — an edict first floated by the Clinton administration that would create tens of millions of new offenders.
But before vesting vast new power in federal enforcers, the record of the Alcohol, Tobacco and Firearms (ATF) agency must be considered. A 1982 Senate Subcommittee on the Constitution report on ATF concluded, "Enforcement tactics made possible by current firearms laws are constitutionally, legally, and practically reprehensible.” Outrageous abuses have continued to the present day. An analysis conducted for the University of Chicago found that ATF heavily targeted racial minorities in its entrapment operations. And across the nation, ATF has been caught using mentally handicapped individuals in sting operations.
Sweeping new firearms prohibitions would enable the feds to selectively target unpopular offenders. The biggest debacle resulting from prior such targeting occurred 25 years ago last week outside of Waco, Texas. The federal Alcohol Tobacco and Firearms (ATF) agency saw the Branch Davidians — a fringe Protestant group that quickly became maligned as a cult — as the perfect patsies for a high-profile raid that would make G-men look like heroes.
January 20 marks the first anniversary of Donald Trump’s swearing in as the 44th person to succeed George Washington as President. Looking back, we can see that not only were the principles of civility that animatedWashington as America’s “indispensable man,” in historian Forrest MacDonald’s words, missing from the electoral process, neither our President nor his often harsh critics (particularly those who have given rise to what is now called Trump derangement syndrome), has since reflected the demeanor that helped make Washington “first in war, first in peace, and first in the hearts of his countrymen.”
We see this in the tooth-and-nail verbal melee the beltway is today, where even basic civility is routinely violated between members of opposing factions. Given the importance of comity to every form of social cooperation (supposedly advanced by the gargantuan Washington apparatus), perhaps a somewhat different approach may help. The hordes of finger-pointers and rhetorical bomb-throwers there could all benefit from reading GeorgeWashington’s Rules of Civility and Decent Behavior in Company and Conversation. Written before Washington was 16, it summarized important facets of necessary for him to behave “according to the custom of the better bred.”
Consider some of George Washington’s advice to himself and its relevance today for our current President, his admirers, and his attackers.
- Every action...ought to be with some sign of respect to those that are present.
- Speak not when you should hold your peace.
- Show not yourself glad at the misfortune of another.
- Always submit your judgment to others with modesty.
- Undertake not to teach your equal in the art [he] professes; it savors of arrogance.
- In reproving, show no sign of choler but do it with all sweetness and mildness.
- Take all admonitions thankfully.
- Mock not nor jest at anything of importance.
- Wherein you reprove another be unblameable yourself.
- Neither curse nor revile.
- Let your conversation be without malice or envy...And in all causes of passion admit reason to govern.
- Utter not base and frivolous things amongst...very difficult questions or subjects.
- Speak not injurious words, neither in jest nor earnest.
- Detract not from others.
- Be not obstinate in your own opinion.
- Reprehend not the imperfections of others.
- Think before you speak.
- Undertake not what you cannot perform.
- In disputes, be not so desirous to overcome as not to give liberty to each one to deliver his opinion and submit to the judgment of the major part.
- Contradict not at every turn what others say.
- Be not tedious in discourse, make not many digressions, nor repeat often the same manner of discourse.
- Speak not evil of the absent, for it is unjust.
George Washington’s commitment to decorum has been thoroughly trampled in America’s ongoing political uncivil war whose post-inauguration phase is now celebrating (or, more frequently, denigrating) its first anniversary. Americans could benefit greatly from deflating the incivility that besets us, in his honor. However, even more important to our well-being would be once again looking to the principles Washington articulated for governing.
- The cause of America [is] liberty.
- Express your utmost horror and detestation of the Man who wishes, under any specious pretenses, to overturn the liberties of our Country.
- Liberty will find itself...where the Government...[will] maintain all in the secure and tranquil enjoyment of the rights of person and property.
- Under [government’s] protection; everyone will reap the fruit of his labors; everyone will enjoy his own acquisitions without molestation and without danger.
- [Government] has no more right to put their hands into my pockets, without my consent, than I have to put my hands into yours.
- Government is not reason. It is...a dangerous servant and a terrible master. Never for a moment should it be left to irresponsible action.
George Washington’s character was important to our founding, but even more so, his actions were essential to our revolution’s success and the creation of America as “this land of equal liberty.” Both helped provide America with what he celebrated as “the fairest prospect of happiness and prosperity that ever was presented to man.” His core principles would provide a far more useful model for the city named for him than what we are witnessing today.