U.S. History

Delivered at the Mises Institute on July 6, 2006.

The New York Times does not mention Independence Day on its editorial page on the 4th of July.

Walter Block and Tom DiLorenzo have looked at Constitutional Economics, and determined that politics are not just another market. There is only a curious analogy to the public choice approach. Social contract theory has been used as an excuse for all types of state intervention.

The interventionist myth is that Federal meddling in domestic or foreign economics can make anything better. Instead, meddling produced the American Great Depression. Doing nothing with a depression in 1920 produced resolution within eighteen months. Nobody hears of the depression of 1920-21.

There are labor market myths and there are labor union myths. The biggest myth is that capitalists always exploit the working class. Basic economics about marginal productivity theory contradicts this. Examples abound in all areas.

The myth of antitrust, the myth of the New Deal and labor union myths are three economic fallacies. All three declare that government must save capitalism from itself.

This second myth about market failure is again a call for interventionism and support for bigger government. Natural monopolies don’t exist. The theory was made up after the fact. The only monopolies existing are those propped up by government privilege.

States’ Rights have been ignored or misrepresented. Thomas Jefferson was an originator of States’ Rights. Citizens of a state ought to have sovereignty – dual sovereignty. Government was merely to protect the lives, liberty and property of citizens.

In 1913, economics and liberty collided when the Federal Reserve Bank was created, the 15th Amendment created the income tax, and the 17th Amendment instituted direct election of Senators.