Saturday, December 12, 2009

To disarm the people is the best and most effectual way to enslave them.

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To disarm the people is the best and most effectual way to enslave them. - George Mason

George Mason is known as the father of the Bill of Rights.
Because they failed to take away our guns, they're coming after our ammo
By John Silveira

It's called the Ammunition Accountability Act (AAA). You've got to love the name. It sounds so noble. But remember the great gun writer, Mel Tappan's, universal rule of law: "The nobler the language, the more nefarious the purpose of any legal instrument."

It's been proposed in 18 states and, with some minor difference among them, here's what it will do once enacted:

* Each box of ammo you buy will have a unique number.

* Each round in the box will have a laser-etched number on the base of the bullet and on the inside of the cartridge case that corresponds to the number on the box.

* Each time you buy ammo you will have to show ID with your name, date of birth, driver's license, etc., to be recorded so the box will be tied to you.

* There will be a 5¢ tax on each and every round in the box. This "tax" will be to support the database.

* You will have to maintain records if you give or sell ammo to relatives or friends. (And the above tax would be levied on each round, again, to maintain the database.)

* Anywhere from four months to three years after such bills are enacted, depending on the state, it will be illegal to own any uncoded ammo. There will be civil and criminal penalties if you possess any with fines of anywhere from $1,000 to $5,000 for each instance of violation. Ostensibly, this will mean $1,000 to $5,000 per round. Forgot you got an old box of .22 ammo on the back shelf of the closet? And the well-meaning but snoopy babysitter finds it...and turns you in...

* You're going to have to dump it or shoot it all up. And you'll get no compensation for any of the old ammo you have to dispose of.

* It will be illegal to reuse cartridge cases, so reloading will not be an option, and you're a criminal if you do.

What's AAA's intent? Ostensibly, crimes committed with a round of the imprinted ammo will be traceable back to the owner and crimes are solved just like that. But criminals already circumvent laws and have access to guns, drugs, and anything else we've tried to outlaw. If you think they won't be able to get untraceable ammo, think again. This law will create a black market for stolen and untraceable ammunition. The only people who are going to obey these Orwellian laws and me. Not surprisingly, most of those in law enforcement do not support this bizarre law.

What will happen to the cost of ammunition? The manufacturers and sellers say the cost of retooling and the ammo processing itself will make ammo prohibitively expensive and put it out of the reach of most citizens. One vendor I spoke with estimates it could raise the price of ammo by as much as 2000 percent. The criminals will not be disarmed by this, but you and I will be.

Who's behind it? Oddly enough, the usual suspects—Brady Center to Prevent Gun Violence, Mothers Against Guns, and others—are nowhere in sight. You'd think they would be. And with 70 to 80 million gun owners in this country, it should be a huge news story, but it's being ignored by the anti-gun media. But the fact is, the gun control people are keeping mum because they want AAA to look like a crime control bill, not the gun control bill it actually is. If you need more evidence consider a post to the ultra-liberal website that, a few months ago, warned, "All we need is for our three gun-grabber Dem senators to go on national TV demanding states pass this bill and we Dems can kiss the presidency good bye in the general election." They understand this is not something most Americans want, and they didn't want to be connected with it at election time.

And just how much support is AAA getting from the general public? If you google "encoded ammunition" you'll find that almost all of the comments are against it. This is not legislation the public is clamoring for, it's legislation the public is overwhelmingly against because it is transparently a sneaky backdoor attempt at gun control.

As of this writing, it's already died in 7 of the 18 state legislatures where it's been introduced, including New York, Rhode Island, and Indiana. They tried to pass this in California, the state that passed microstamping (where all new semiautomatic handguns sold have to microstamp spent cartridges). But it didn't make it out of the legislature. This law is too crazy even for Californians.

If, somehow, AAA passes anywhere, expect it to face constitutional challenges on several fronts, among which will be that it's an obvious effort to nullify the intent of the Second Amendment. It will also be challenged on the basis that it's an ex post facto law (essentially a retroactive law) since its provisions direct that ammunition legally obtained prior to the law would have to be "disposed" of—with no compensation to the owners. It is the danger of ex post facto challenges that have made it necessary for proposed gun-bans to "grandfather" previously owned firearms. But worse is that if it passes the "sniff-test" in any state, expect it to be introduced into the Democratic-controlled Congress.

Though it appears AAA is failing, in the future we have to remain ever-vigilant because the gun control crowd is going to come back again and again and again, like zombies in a grade B horror flick. Bet on it. And expect them to be even more creative the next time.

Wednesday, August 26, 2009

A frugal government shall leave [men] free to regulate their own pursuits.

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A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicity. - Thomas Jefferson

Did You Hear the One About...
by Floy Lilley

Did you hear the one about bobbing heads on Sunday agreeing that the cause of the Great Depression was the absence of government guidance? "The Great Depression would never have happened if there had been any economic regulations," agreed the policy wonks.

Oh, really?

So you think a free society generated that monstrosity?

It is accurate to say that in 1900 a free society did exist. The government still approximated a minimal state, exerting minimal guidance, and commanding minimal economic regulation. But, after 1900, virtually all public policy proposals called for more extensive governmental guidance.

Perhaps the television talksters could benefit from a bit of homeschooling. An excellent source of data is Crisis and Leviathan: Critical Episode in the Growth of American Government by Robert Higgs (1987). The time frame of the period up to and into the 1920s, in other words those years before the Great Depression, included WWI. That dramatic episode birthed government expansion and intervention, much of which remained in regulatory force after the generating crisis had past.

A partial list of interventions – those government economic regulations – would include:

* Bureau of Corporations (1903)
* Interstate Commerce Act major amendments (1903, 1906, 1910)
* Meat Inspection Act (1906)
* Pure Food and Drug Act (1906)
* Corporation Tax (1911)
* Sixteenth Amendment to the Constitution (1913) (Income Tax)
* Federal Reserve System (1913)
* Clayton Antitrust Act (1914)
* Federal Trade Commission (1914)
* U.S. Immigration (cut to a trickle during 1915–1920)
* Adamson Act (1916) (railroad labor wage rates)
* Shipping Act (1916)
* National Defense Act (1916)
* Army Appropriations Act (1916) (later took over railroads)
* Selective Service Act (1917)
* Espionage Act (1917)
* Lever Act (1917) (food and fuel) (prohibited alcohol)
* Overman Act (1918) (executive powers)
* War Finance Corporation Act (1918)
* President’s Mediation Commission (1917) (labor relations)
* Federal Control Act (1918)
* Sedition Act (1918)

Does this look like a laissez-faire list?

Higgs summarizes just exactly how guided and regulated all economic activities were:
The two years, 1916–1918, witnessed an enormous and wholly unprecedented intervention of the federal government in the nation’s economic affairs. By the time of the armistice, the government had taken over the ocean shipping, railroad, telephone, and telegraph industries; commandeered hundreds of manufacturing plants; entered into massive economic enterprises on its own account in such varied departments as shipbuilding, wheat trading, and building construction; undertaken to lend huge sums to businesses directly or indirectly and to regulate the private issuance of securities; established official priorities for the use of transportation facilities, food, fuel, and many raw materials; fixed the prices of dozens of important commodities; intervened in hundreds of labor disputes; and conscripted millions of men for service in the armed forces. It had, in short, extensively distorted or wholly displaced markets, creating what some contemporaries called war socialism.

Additionally, Higgs documented that,
The public debt, which had been slightly more than $1 billion before the war, was over $25 billion at the end of the war and remained almost $17 billion as late as 1929.

While their heads were bobbing, my head was shaking.

This all had to have been a joke. Right?

Thursday, August 13, 2009

A fool and his money are soon elected.

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A fool and his money are soon elected. - Will Rogers

Small Government Caused Our Current Problems?
by Robert Higgs

As soon as I saw the headline of an August 10 article by financial columnist Peter Cohan, I knew that something was terribly wrong. It reads: "How did the politics of small government lead to big government bailouts?" This is akin to asking, How did the extinction of the elephants lead to Barack Obama's election as president? If you make a claim of the form "A caused B," but A never happened, then you are wasting your time by delving into the historical details of this bogus relationship.

Yet we continue to see one example after another of what suspicious readers may be tempted to view as the Big Lie that deregulation or other obliging government measures caused the present economic mess. I won't go so far as to characterize this claim as a Big Lie. Although some its purveyors, acting out of partisan motives, surely know that they are blowing smoke, others may simply suffer from economic ignorance, analytical confusion, or loss of historical memory. In any event, the public is ill-served by commentators who purport to speak with authority about our current economic troubles and related government's policies, yet peddle this worse-than-sophomoric tale.

The Cohan article in question consists of so much nonsense that a full critique of it might be enough to compose a student's senior thesis, but the part that interests me right now is the claim that "the idea of small government . . . helped create the ineffective regulatory agencies which allowed all kinds of questionable practices to thrive in American business, especially in the world of finance. By helping create a record debt bubble, which thrived in an era of weak regulatory oversight, small government nearly ruined the global economy last fall."

So, there you have it in plain English. To repeat: "small government nearly ruined the global economy last fall." Cohan spares us any evidence that we actually had a small government at any time during the past twenty-five years. I would be especially interested in such evidence, inasmuch as I have written a number of articles and books brimming with evidence that in fact the governments of this country at every level were growing in size, scope, and power during those years.

Like Cohan, those who continually blame insufficient regulation for our present plight offer little or no evidence, relying instead on the implicit assumption that if only the regulations had been much stricter, the bankers and other business-sector malefactors never would have perpetrated their evil deeds. This faith in the regulators is touching, to be sure, but it is also extremely naïve. We now have – and long have had – miles of regulations on the books and legions of regulators at work in scores of government agencies. What specific power did they lack? And had they been given even greater powers, budgets, and staffs, what enchantment would have transformed these ostensible guardians into smart, dogged champions of the public interest, rather than the time-serving drones and co-conspirators with the regulated firms that they have always been?

Somehow, no matter how many regulations are created and how many regulators are put on the government payroll, when these rules and enforcement agents fail to prevent a disaster, many people's response is to propose that the government write more regulations and hire more regulators. If these advocates of expanded government intervention had been in New Orleans as it was being submerged under floodwaters in the wake of Hurricane Katrina, they no doubt would have proposed that the Corps of Engineers dynamite the remaining levies – to prove that they favored "doing something."

"Ironically," writes Cohan, "another Republican, Ben Bernanke . . . decided that in the midst of a catastrophic economic collapse . . . the prescription for the problem was the biggest government in American history." And thank goodness, too, he opines, because owing to all of the wonderful mitigation that the Fed's unprecedented actions have produced to soften and reverse this inexplicable, out-of-blue episode of financial panic and recession, "there is a good chance that historians will look back on Bernanke as the man who saved the world." I can't speak for all historians, of course, but speaking for one of them, I can guarantee that no such story will be disseminated under my name. On the contrary, by taking into account how the government and the Fed created necessary conditions for the financial bubble that burst last September – as many competent analysts have already shown, notwithstanding Cohan's disregard of their findings – we quickly appreciate that Bernanke's supposed world-saving would never have been deemed necessary had he and others in high government places not done so much to place the world in jeopardy in the first place.

Never one to linger over a single piece of nonsense when another beckons, Cohan proceeds without transition to the question, "How do we keep this from happening again?" To which his amazing answer is: "The most important way is to change how bankers get paid." Oh, sure, that will turn the trick. Never mind the government's countless measures from the 1930s onward to steer money into mortgage loans to borrowers with little likelihood of repaying them. Never mind the massive efforts of the government-sponsored giants Fannie Mae and Freddie Mac to create secondary markets for rotten mortgage-related IOUs galore. Never mind the Fed's pumping up of the real-estate bubble by rapidly expanding credit and holding interest rates at absurdly low levels for years on end. Never mind all of this and a great deal more. Simply change how bankers get paid, and the sun will shine on us again.

"We [by which Cohan seems to mean the government] need to change banker's pay so that they only get rewarded if their risks are profitable," he declares, "and punished if they lose money." Some readers might find this idea appealing, if they don't spend much time thinking it through. In truth, however, the government already plays too large a role: if the government and the Fed did not stand in the background, ready and willing to bail out reckless bankers, the bankers would act a great deal more prudently, as would their boards of directors when deciding how to compensate the managers. Moreover, I venture to remind our financial guru – who is described as the president of a consulting and venture-capital firm, a management teacher at Babson College and the author of eight books – that how bankers get paid lies properly within the domain of the banks' boards of directors. It's really none of my business, or his.

In contrast, how the government and the Fed act is my business because they purport to act on my behalf, and even if they didn't so purport, they still act in many ways that harm me. So I'm entitled to hold them to account for their actions. As long as the Cohans of this world continue to blame private actors and "the idea of small government" for the economic disasters that the government and the Fed produce, however, we have little chance to clarify what might – and should – be done to remedy our plight and preclude serial repetitions of such destructive actions.

Not content with having embraced several stupendously erroneous and misguided ideas, Cohan plows to an equally dim-witted conclusion by declaring that besides setting the compensation of bankers, the government should establish "an independent government agency to create financial statements for companies and money managers." Sure. Let the government keep the accounts. After all, the government has a flawless record of keeping honest accounts and scrupulously avoiding multi-trillion-dollar Ponzi schemes, such as Social Security, and pie-in-the-sky promises, such as Medicare that stretches to the limits of the known financial universe. The Department of Defense, which since 1994 has been required by law to perform an annual financial audit, has yet to perform one. Each year a DoD accounting functionary dutifully testifies before Congress that the department's accounts are in such a mess that its records cannot be audited. Is this the kind of financial-accounting proficiency we want to impose on the private sector? Cohan thinks so.

Got a problem? Just give the government a great deal more power, and our friendly, competent rulers will take care of everything. I shudder to think that columnists may actually get paid for spouting such childish twaddle.

Excessive dislike of [a foreign nation], causes [agitators] to see danger only on one side.

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Excessive partiality for one foreign nation, and excessive dislike of another, cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real Patriots, who may resist the intrigues of the favourite, are liable to become suspected and odious; while its tools and dupes usurp the applause and confidence of the people, to surrender their interests. - George Washington

Ron Pauls's statement before the US House of Representatives opposing resolution on Iran, June 19, 2009

I rise in reluctant opposition to H Res 560, which condemns the Iranian government for its recent actions during the unrest in that country. While I never condone violence, much less the violence that governments are only too willing to mete out to their own citizens, I am always very cautious about “condemning” the actions of governments overseas. As an elected member of the United States House of Representatives, I have always questioned our constitutional authority to sit in judgment of the actions of foreign governments of which we are not representatives. I have always hesitated when my colleagues rush to pronounce final judgment on events thousands of miles away about which we know very little. And we know very little beyond limited press reports about what is happening in Iran.

Of course I do not support attempts by foreign governments to suppress the democratic aspirations of their people, but when is the last time we condemned Saudi Arabia or Egypt or the many other countries where unlike in Iran there is no opportunity to exercise any substantial vote on political leadership? It seems our criticism is selective and applied when there are political points to be made. I have admired President Obama’s cautious approach to the situation in Iran and I would have preferred that we in the House had acted similarly.

I adhere to the foreign policy of our Founders, who advised that we not interfere in the internal affairs of countries overseas. I believe that is the best policy for the United States, for our national security and for our prosperity. I urge my colleagues to reject this and all similar meddling resolutions.

Tuesday, August 11, 2009

We cannot borrow our way into prosperity.

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We cannot borrow our way into prosperity. - Rand Paul

Saturday, August 8, 2009

The State moves slowly to any purpose that is to society’s advantage, but moves rapidly to one that is to its advantage.

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The State always moves slowly and grudgingly towards any purpose that accrues to society's advantage, but moves rapidly and with alacrity towards one that accrues to its own advantage; nor does it ever move towards social purposes on its own initiative, but only under heavy pressure, while its motion towards anti-social purposes is self-sprung. - Albert Jay Nock

Albert Jay Nock, Forgotten Man of the Old Right

by Jeffrey A. Tucker

For an earlier generation of American dissidents from the prevailing ideology of left-liberalism, a rite of passage was reading Albert Jay Nock's Memoirs of a Superfluous Man, which appeared in 1943. William F. Buckley was hardly alone in seeing it as a seminal text crucial to his personal formation.

Here it is in one package, an illustration of the level of learning that had been lost with mass education, a picture of the way a true political dissident from our collectivist period thinks about the modern world, and a comprehensive argument for the very meaning of freedom and civility – all from a man who helped shape the Right's intellectual response to the triumph of FDR's welfare-warfare State.

It was destined to be a classic, read by many generations to come. But then the official doctrine changed. Instead of seeing war as part of the problem, as a species of socialism, National Review led the American Right down a different path. Nock's book was quickly buried with the rise of the Cold War State, which required that conservatives reject anything like radical individualism – even of Nock's aristocratic sort – and instead embrace the Wilson-FDR values of nationalism and militarism.

Instead of Nock's Memoirs, young conservatives were encouraged to read personal accounts of communists who converted to backing the Cold War (e.g. Whittaker Chambers), as if warming up to the glories of nukes represents some sort of courageous intellectual step. To the extent that Nock (1870–1947) is known at all today, it is by libertarians, and for his classic essay Our Enemy, The State (1935), and his wonderful little biography, Mr. Jefferson (1926). Both are great works. He was also the founder of The Freeman in its first incarnation (1920–1924), which held to the highest literary standards and provoked unending controversy with its sheer radicalism.

However, it is with the Memoirs, this wonderful little treatise – part autobiography, part ideological instructional – that we are given the full Nockian worldview, not just his politics but his culture, his life, and his understanding of man and his place in the universe. The book makes a very bracing read today, if only because it proves how little today's "conservative movement" has to do with its mid-century ancestor in the Old Right. It is also instructive for libertarians to discover that there is more to anarchism than childish rantings against the police power.

The phrase Man of Letters is thrown around casually these days, but A.J. Nock was the real thing. Born in Scranton, Pennsylvania, he was homeschooled from the earliest age in Greek and Latin, unbelievably well read in every field, a natural aristocrat in the best sense of that term. He combined an old-world cultural sense (he despised popular culture) and a political anarchism which saw the State as the enemy of everything that is civilized, beautiful, and true. And he applied this principle consistently in opposition to welfare, government-managed economies, consolidation, and, above all else, war.

In the introduction to my edition, Hugh MacLennan compares the Memoirs to The Education of Henry Adams, and expresses the hope that it will "one day be recognized as the minor classic it really is." Well, I can predict that this time is not coming soon. Given its contents, consistency, relentless truth telling, and, above all, its sheer persuasive power, it is a wonder that the book is in print and that we are even allowed to read it.

To follow Nock, what traits must a man of the Right have? He must be both fiercely independent and believe in the power of social authority; he must love tradition but hate the State and everything it does; he must believe in radical freedom while never doubting the immutability of human nature and natural laws; he must be anti-materialist in his own life while defending economic freedom without compromise; he must be an elitist and anti-democrat yet despise elites who hold illicit power; and he must be realistic about the dim prospects for change while still retaining a strong sense of hope and enthusiasm for life.

I'm not sure I can think of anyone but Murray Rothbard who consistently upheld the Nockian position after Nock's death, and it is his Memoirs that provides a full immersion in his genius. Consider Nock's main literary device: to take a commonplace subject, make a casual and slightly quirky observation about it, one that wins your affections, and then surprise and shock by driving the point to score a deadly blow against some great evil that is widely taken for granted:

"Another neighbor, a patriarchal old Englishman with a white beard, kept a great stand of bees. I remember his incessant drumming on a tin pan to marshal them when they were swarming, and myself as idly wondering who first discovered that this was the thing to do, and why the bees should fall in with it. It struck me that if the bees were as intelligent as bees are cracked up to be, instead of mobilizing themselves for old Reynolds' benefit, they would sting him soundly and then fly off about their business. I always think of this when I see a file of soldiers, wondering why the sound of a drum does not incite them to shoot their officers, throw away their rifles, go home, and go to work."

In the course of his 325-page narrative, he employs this casual device again and again, until you begin to get the message that there is something profoundly wrong with the world, and the biggest thing of all is the State. In Nock's view, it is the State that crowds out all that is decent, lovely, civilized. He demonstrates this not through deduction but through calm and entertaining tales of how rich and varied and productive life can be when the State does not interfere.

In a society without the State, for example, the "court of tastes and manners" would be the thing that guides the operation of society, and this "court" would have a much larger role in society than law, legislation, or religion. If such a court were not in operation, because people are too uncivilized or too ill-educated to maintain it, there was nothing the State could do to uplift people. No matter how low a civilization is, it can only be made to go lower through State activity.

Though an old-school Yankee of the purest-bred sort, he completely rejected what came to be the defining trait of his class: the impulse to try to improve others through badgering and coercion:

"One of the most offensive things about the society in which I later found myself was its monstrous itch for changing people. It seemed to me a society made up of congenital missionaries, natural-born evangelists and propagandists, bent on re-shaping, re-forming and standardizing people according to a pattern of their own devising – and what a pattern it was, good heavens! When one came to examine it. It seems to me, in short, a society fundamentally and profoundly ill-bred. A very small experience of it was enough to convince me that Cain's heresy was not altogether without reason or without merit; and that conviction quickly ripened into a great horror of every attempt to change anybody; or I should rather say, every wish to change anybody, for that is the important thing. The attempt is relatively immaterial, perhaps, for it is usually its own undoing, but the moment one wishes to change anybody, one becomes like the socialists, vegetarians, prohibitionists; and this, as Rabelais, says, 'is a terrible thing to think upon.'"

Given such views, it is hardly surprising that he had nothing but contempt for politics, which then and now seeks not to only manage society but manage thought as well:

"My first impression of politics was unfavorable; and my disfavor was heightened by subsequently noticing that the people around me always spoke of politics and politicians in a tone of contempt. This was understandable. If all I had casually seen…was of the essence of politics, if it was part and parcel of carrying on the country's government, then obviously a decent person could find no place in politics, not even the place of a ordinary voter, for the forces of ignorance, brutality and indecency would outnumber him ten to one."

But, with Nock's infallible flair for radicalism, his logic takes him further down the anarchist road:

"Nevertheless there was an anomaly here. We were supposed to respect our government and its laws, yet by all accounts those who were charged with the conduct of government the making of its laws were most dreadful swine; indeed, the very conditions of their tenure precluded their being anything else."

Nock is capable of surprising readers who think they might be able to anticipate the biases of a traditionalist-anarchist. Sometimes old-style, rightist aristocrats who wax eloquent on the virtues of tradition fall into strange left-wing habits of extolling the environment as something glorious and virtuous on its own, and somehow deserving of being left alone. Nock had no interest in this strange deviation. Consider his experience with the woods and nature:

"In those years [living in rural areas] I undoubtedly built up and fortified the singular immunity to infirmity and disease which has lasted all my life; but in those years also my congenital indifference to nature in the wild, natural scenery, rocks, rills, woods and templed hills, hardened into permanent distaste. Like the Goncourts, I can see nature only as an enemy; a highly respected enemy, but an enemy. 'I am a lover of knowledge,' Socrates said, 'and the men who dwell in the city are my teachers, and not the trees or the country.'"

Nock was thus not an American Tory by any stretch, though his cultural outlook was as high-brow as any landed aristocrat's. What's more, unlike the socialist anarchists and most conservatives of today, Nock believed in and understood the crucial importance, even centrality, of economic liberty:

"If a regime of complete economic freedom be established, social and political freedom will follow automatically; and until it is established neither social nor political freedom can exist. Here one comes in sight of the reason why the State will never tolerate the establishment of economic freedom. In a spirit of sheer conscious fraud, the State will at any time offer its people 'four freedoms,' or six, or any number; but it will never let them have economic freedom. If it did, it would be signing its own death-warrant, for as Lenin pointed out, 'it is nonsense to make any pretence of reconciling the State and liberty.' Our economic system being what it is, and the State being what it is, all the mass verbiage about 'the free peoples' and 'the free democracies' is merely so much obscene buffoonery."

In fact, he understood even technical points of economics that are completely lost on most conservatives today. Here is Nock on the 1920s bubble economy:

"Many no doubt remember the 'new economics' hatched in the consulship of Mr. Coolidge, whereby it was demonstrated beyond question that credit could be pyramided on credit indefinitely, and all hands could become rich with no one doing any work. Then when this seductive theory blew up with a loud report in 1929, we began to hear of the economics of scarcity, the economics of plenty, and then appeared the devil-and-all of 'plans,' notions about pump-priming, and disquisitions on the practicability of a nation's spending itself rich…. Ever since 1918 people everywhere have been thinking in terms of money, not in terms of commodities; and this in spite of the most spectacular evidence that such thinking is sheer insanity. The only time I was ever a millionaire was when I spent a few weeks in Germany in 1923. I was the proud possessor of more money than one could shake a stick at, but I could buy hardly anything with it."

And on fiscal policy:

"Another strange notion pervading whole peoples is that the State has money of its own; and nowhere is this absurdity more firmly fixed than in America. The State has no money. It produces nothing. It existence is purely parasitic, maintained by taxation; that is to say, by forced levies on the production of others. 'Government money,' of which one hears so much nowadays, does not exist; there is no such thing. One is especially amused at seeing how largely a naïve ignorance of this fact underlies the pernicious measures of 'social security' which have been foisted on the American people. In various schemes of pensioning, of insurance against sickness, accident, unemployment and what-not, one notices that the government is supposed to pay so-much into the fund, the employer so-much, and the workman so-much…. But the government pays nothing, for it has nothing to pay with. What such schemes actually come to is that the workman pays his own share outright; he pays the employer's share in the enhanced price of commodities; and he pays the government's share in taxation. He pays the whole bill; and when one counts in the unconscionably swollen costs of bureaucratic brokerage and paperasserie, one sees that what the workman-beneficiary gets out the arrangement is about the most expensive form of insurance that could be devised consistently with keeping its promoters out of gaol."

A special contribution of Nock's book is his comprehensive critique of the pre-New Deal reform movements that culminated in the Progressive Era. Though he had once identified himself as a true liberal in the Jeffersonian sense, he was a close observer of the early stages of liberalism's corruption, when it came to mean not liberty but something else entirely. He saw the essential error that the liberal movement was making:

"Liberals generally – there may be have exceptions, but I do not know who they were – joined in the agitation for an income-tax, in utter disregard of the fact that it meant writing the principle of absolutism into the Constitution. Nor did they give a moment's thought to the appalling social effects of an income-tax; I never once heard this aspect of the matter discussed. Liberals were also active in promoting the 'democratic' movement for the popular election of senators. It certainly took no great perspicacity to see that these two measures would straightway ease our political systems into collectivism as soon as some Eubulus, some mass-man overgifted with sagacity, should maneuver himself into popular leadership; and in the nature of things, this would not be long."

In time, of course, the liberal reform movement began to adopt a mild version of the class-war rhetoric of the socialist left, and the longer this went on, the more the political process came to be a struggle not between liberty and power but between two versions of State domination:

"What I was looking at was simply a tussle between two groups of mass-men, one large and poor, the other small and rich, and as judged by the standards of civilized society, neither of them any more meritorious or promising than the other. The object of the tussle was the material gains accruing from control of the State's machinery. It is easier to seize wealth than to produce it; and as long as the State makes the seizure of wealth a matter of legalized privilege, so long will the squabble for that privilege go on."

From Nock's point of view, the Great Depression and the two world wars saddled America with a new faith in the State, and along with it came a shift in people's loyalties, from themselves, their families, and communities to the Grand National Project, whatever it may be. We see the same thing today on the right and left, when questioning any aspect of the war on terrorism gets you branded as a heretic to the national religion. Nock would have nothing to do with it:

"I am profoundly thankful that during my formative years I never had contact with any institution under State control; not in school, not in college, nor yet in my three years of irregular graduate study. No attempt was ever made by anyone to indoctrinate me with State-inspired views – or any views, for that matter – of patriotism or nationalism. I was never dragooned into flag-worship or hero-worship, never was caught in any spate of verbiage about duty to one's country, never debauched by any of the routine devices hatched by scoundrels for inducing a synthetic devotion to one's native land and loyalty to its jobholders. Therefore when later the various aspects of contemporary patriotism and nationalism appeared before me, my mind was wholly unprepossessed, and my view of them was unaffected by any emotional distortion."

What, then, is patriotism, if not faith in one's government? Can patriotism be considered a virtue at all to the civilized man, and, if so, in what does it consist. Consider this passage of immense power:

"What is patriotism? Is it loyalty to a spot on a map, marked off from others spots by blue or yellow lines, the spot where one was born? But birth is a pure accident; surely one is in no way responsible for having been born on this spot or on that. Flaubert had poured a stream of corrosive irony on this idea of patriotism. Is it loyalty to a set of political jobholders, a king and his court, a president and his bureaucracy, a parliament, a congress, a Duce or Fuhrer, a camorra of commissars? I should say it depends entirely on what the jobholders are like and what they do. Certainly I had never seen any who commanded my loyalty; I should feel utterly degraded if ever once I thought they could. Does patriotism mean loyalty to a political system and its institutions, constitutional, autocratic, republican, or what-not? But if history has made anything unmistakably clear, it is that from the standpoint of the individual and his welfare, these are no more than names. The reality which in the end they are found to cover is the same for all alike. If a tree be known by its fruits, which I believe is regarded as good sound doctrine, then the peculiar merit of a system, if it has any, ought to be reflected in the qualities and conditions of the people who live under it; and looking over the peoples and systems of the world, I found no reason in the nature of things why a person should be loyal to one system rather than another. One could see at a glance that there is no saving grace in any system. Whatever merit or demerit may attach to any of them lies in the way it is administered.

"So when people speak of loyalty to one's country, one must ask them what they mean by that. What is one's country? Mr. Jefferson said contemptuously that 'merchants have no country; the mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.' But one may ask, why should I? This motive of patriotism seems to me perfectly sound, and if it should be sound for merchants, why not for others who are not merchants? If it holds good in respect of material gains, why not of spiritual gains, cultural gains, intellectual and aesthetic gains? As a general principle, I should put it that a man's country is where the things he loves are most respected. Circumstances may have prevented his ever setting foot there, but it remains his country."

In the early years of the American republic, patriotism and loyalty were primarily directed toward one's town or county, because it was very likely the place that the things one loves are most respected. Something like national patriotism was unknown. It came to be imposed under consolidation. Under today's conservative view of patriotism, that our loves must be dictated by the State, there would be no argument against the idea that we ought to be patriotic toward Nato or the UN. Nock had this to say about global consolidation:

"Some of the more adventurous spirits, apparently under the effects of Mr. Wilson's inspiration, went so far as to propose educating all mankind into setting up a World State which should supersede the separatist nationalist State; on the principle, so it seemed, that if a spoonful of prussic acid will kill you, a bottleful is just what you need to do you a great deal of good."

Nock would also be dissident on the Right today concerning the freedom of association, which he saw as the very essence of freedom itself.

"I know, however, that the problem of no minority anywhere can be settled unless and until two preliminaries are established. First, that the principle of equality before the law be maintained without subterfuge and with the utmost vigor. Second, that this principle be definitively understood as carrying no social implications of any kind whatever. 'I will buy with you, sell with you, talk with you, walk with you, and so following,' said Shylock; 'but I will not eat with you, drink with you, nor pray with you.' These two preliminaries demand a much clearer conception of natural as well as legal rights than I think can ever prevail in America."

Nock is sometimes presented as a brooding man who despaired for his country. There seems to be truth in that, but what's most impressive is how he managed to keep his chin up and find personal joy in fighting evil, or at least exposing it as much as possible.

"All I have done towards the achievement of a happy life, has been to follow my nose…I learned early with Thoreau that a man is rich in proportion to the numbers of things he can afford to let alone; and in view of this I have always considered myself extremely well-to-do. All I ever asked of life was the freedom to think and say exactly what I pleased, when I pleased, and as I pleased. I have always had that freedom, with an immense amount of uncovenanted lagniappe thrown in; and having had it, I always felt I could well afford to let all else alone. It is true that one can never get something for nothing; it is true that in a society like ours one who takes the course which I have taken must reconcile himself to the status of a superfluous man; but the price seems to me by no means exorbitant and I have paid it gladly, without a shadow of doubt that I was getting all the best in the bargain."

There are aspects of Nock that call for correction. His views on marriage and the family are highly unconventional, for example, and he sometimes takes his notion of the "remnant" too far, appearing to endorse passivity in the face of rising despotism, for example. He refused to join any antiwar movements, not because he disagreed with their goal but because he didn't believe his participation would do any good.

But here is where his example is more instructive than his theory: Nock fought against the State with the most powerful weapons he had, his mind and his pen. Despite his claim, he was not superfluous at all, but essential, even indispensable, as are all great libertarian intellectuals.

Pass the Memoirs on to a twenty-year-old student and you stand a good chance of arming him against a lifetime of nonsense, whether it comes from the tedious Left that loves redistribution and collectivism or the fraudulent Right that is completely blind to the impossibility of reconciling war and nationalism with the true American spirit of freedom.

Tuesday, August 4, 2009

Leave no authority existing not responsible to the people. — Thomas Jefferson

Note! The Libertarian Quotes blog has moved to!

Leave no authority existing not responsible to the people. — Thomas Jefferson

Question Authority: Always and Forever Hereafter

By William Buppert

For some time, I have been trying to figure out why the nation and we as individuals are in the fix we are in now. Many reasons manifest themselves. We labor under a government of such monstrous reach and epic incompetence that it makes the Soviets now look like a paragon of efficiency and probity. We suffer under a ruling class that has not simply been a gangster government under Obamunism but has been this way since the defeat of the original Constitution in 1865. With each illegitimate war since 1898, the power of the Federal government has increased exponentially. With each manufactured crisis, liberties and freedoms have withered and died. This is simply the latest and greatest improvement in the ongoing process of our overseers to find emerging ways to increase the output of our slavery.

I have alluded before that we live in the country and have occasion to run across orphaned animals. We have horses and chickens and other assorted animals on the Circle A Ranch. My wife happens to be a fantastic gardener and the reincarnation of Dr. Doolittle. We discovered by following the horrid cacophony of rabbit screams three orphaned cottontails, two of which promptly died. My wife is now nursing the survivor and hoping to brighten his life expectancy in this mortal coil. As is her wont, she is an inveterate researcher and proceeded to go on the ’net and search out advice on care and feeding of a rabbit which is not one of our areas of husbandry expertise. What struck her were the countless admonitions to seek government assistance and report it to wildlife "authorities" or the zoo. I look around and converse with colleagues and associates to find my fellow Americans increasingly frightened or unfamiliar with doing anything without someone’s permission. Whether at work or play, we:

* obey speed limits that have nothing do with safety and simply provide revenue to our rulers
* pay property taxes which inevitably increase the yoke around our necks locally and pay for the intellectual suicide pact call government schooling
* pay extraordinary sales taxes on local and state purchases to subsidize the countless layers of bureaucracy that choke citizen and business productivity everyday
* stop locally at a US Border Patrol checkpoint nearly twenty miles north of the Mexican border to be asked if we are American citizens and a visual check of the interior of our vehicles
* sit idly by while the various levels of government erect observation devices at traffic intersections to increase revenue streams
* receive property tax bills on our real estate which increase in assessment while market prices decrease
* are required to have permission from the US Forest Circus or National Park Service to hunt, play or work on lands expropriated by our betters in government

I have discovered the silver bullet and it is from the University of the Intuitively Obvious: question authority and maintain a skeptical attitude about all facets of government and governance. That’s it…simple. Even those of us who have invested considerable intellectual heavy-lifting in discerning why the government in all its consistent brutality and blood-raged destruction commands such a loyal and slavish quality in men are baffled by the absence of this simple epistemological tool to ask why on a consistent basis from stem to stern. If enough vigilance is maintained at the outset and embryonic stages of so much government mischief, much of the madness could be strangled in its statist cradle through peaceful discourse, non-compliance, shunning and development of innovative strategies to sabotage the government’s machinations. Most government programs start out with promises of nirvana and positive outcomes but the history of man shows that this is essentially iatrogenic and hubristic. The state is a violent actor by necessity to preserve its power and expand it, so inevitably the promises dissolve into a nightmarish brew of incompetence, lethality and baleful societal consequences and we are stuck with the myriad Frankenstein monsters shambling about with the vague promises of eternal goodness and heaven on earth.

One may say that the horse is out of the barn and we are truly stuck with the state of affairs and no amount of reform will fix DC and its loyal minions at this stage of their maturation and dominance and you would be correct. The rub is this: the FEDGOD will fall and it will be in the next 12–24 months and much like the USSR, it will perish of its own internal Marxoid contradictions. Foreign wars, self-induced economic calamity and sheer naked arrogance will force it to fold and dissolve as a ruling elite. This is a window that rarely opens and the opportunities will be tremendous – for both sides. The furloughed politicos will spread their contagion when they flee the ruins of the DC power structure and seek to encourage the usual suspects among government workers and gullible subjects to help resurrect this monstrosity that has been astride our necks like a decomposing albatross. Truth serum will be necessary and that all starts with the kind of skepticism and incredulity that seems to characterize most everything we do except our attitude toward our rulers. Cross-examination is the engine of truth. Question every bit of alleged government authority which emerges from the ashes. This is one reason Thomas Jefferson was agitating for constant revolt for the tree of liberty. Government is a fungal growth that cannot be checked without constantly striking the root and taking whatever measures are necessary to curb its growth.

You won’t find this kind of critical thinking taught in the universities or any facet of the school systems because skepticism and clear thinking will be the end of them and the whole rotting mold growth choking American civilization called government. When was the last time you saw a government sponsored university study which called for the reduction and/or elimination of a statist rule or department? You don’t have to be a philosophy major or graduate to realize that Socratic drilling works. This is simply the process where you repeatedly ask why to a set of explanations until either you are satisfied the meritorious answer has been given or the shoddy intellectual construction is bared for all to see. It bears repeating: the entire artifice of the state is based on the threat or employment of violence to meet its ends, so it is morally illegitimate and reprehensible from the starting blocks. You have the moral high ground because all government for the most part is an elaborate shell game to develop proxy relationships with servant classes who obey at the urging of a lash or worse for the material and power benefit of the ruling class. Wake up, helots!

This is the chance we have. A dozen, fifty or hundreds of resistance and secessionist entities are going to move into the vacuum left by the great sucking abyss of the FEDGOD collapse. Hundreds of laboratories will emerge to test every variant of political collective and ordered enterprise imaginable. I have little hope for the subjects and somnambulant mental zombies that stumble around the cities of the Left Coast and the Northeast (Vermont and New Hampshire excepted) will do anymore other than instantly resurrect facsimiles of DC patterns of rule and other processes of national socialism but between the Marxist coastlines; the life and times of ordinary Americans will take extraordinary turns to develop from scratch freedom-oriented communities and spasms of spontaneous order. People may finally awaken and look at their neighbors and try to do the right thing. They may seek a system that asks, persuades and cooperates instead of bullies, collectivizes and forces through violent means the shape and texture of human relationships. They will be the vanguard of the men and women who finally awaken from the five millennia fever-dream of enabling various strangers the power of life and death over thousands and millions simply because they have surrendered the most basic right of all; leave us the hell alone.

Turn off the television, grab a book(s) and have conversations with family and like-minded friends. Go out and do things. Start a garden, fix your fencing, move to the country and reach out to the community you live in. Open your mind to the possibilities before us. Most of all, question every aspect of your relationship with authority. Does it derive from fear or respect? Does it emanate from first-hand experience or second-hand knowledge? How many times have you truly asked why a certain bureaucratic edict must be followed? More importantly, what is your line in the sand where your servitude stops and your resistance begins? Just say no to big government. Once a man establishes his limitations for tolerance of interference in his life and adopts a resolute stand against the forces buffeting him against his will, the world will change.

If you are still reading this, you are the Resistance.

Sunday, August 2, 2009

New Site for Libertarian Quotes!

Libertarian Quotes has a new home on the web! We now have a new website located at which is highly upgraded and should serve much better.

Please update your bookmarks, feed readers, and any other references you have to the site. Sorry for the inconvenience and please share your thoughts on the new site in the comments!

Friday, July 31, 2009

"The Nazi regime represented not a unique evil in history but rather a now-conventional combination we know all too well."

"The Nazi regime represented not a unique evil in history but rather a now-conventional combination of two dangerous ideological trends: nationalism and socialism. We know both all too well." — Llewellyn H. Rockwell, Jr.

It was common on the left to intimate that George W. Bush was like Hitler, a remark that would drive the National Review crowd through the roof but which I didn't find entirely outrageous. Bush's main method of governance was to stir up fear of foreign enemies and instigate a kind of nationalist hysteria about the need for waging war and giving up liberty through security.

Hitler is the most famous parallel here, but he is hardly the only one. Many statesmen in world history have used the same tactics, dating back to ancient times. Machiavelli wrote in his Art of War advice to the ruler: "To know how to recognize an opportunity in war, and take it, benefits you more than anything else."

But what's the point of studying Hitler's rise to power unless it is to learn from that history and apply the lessons? One lesson is to beware of leaders who come to power in troubled times, and then use foreign threats and economic crises to bolster their own power. Unless we can draw out lessons for our own times, history becomes nothing but a series of dry data points with no broader relevance.

Certainly Bush used 9-11 to consolidate his power and the neoconservative intellectuals who surrounded him adopted a deep cynicism concerning the manipulation of public opinion. Their governing style concerned the utility of public myth, which they found essential to wise rule. The main myth they promoted was that Bush was the Christian philosopher-king heading a new crusade against Islamic extremism. The very stupid among us believed it, and this served as a kind of ideological infrastructure of his tenure as president.

Then it collapsed when the economy went south and he was unable to sustain the absurd idea that he was protecting us from anyone. The result was disgrace, and the empowering of the political left and its socialistic ethos.

The talk of Hitler in the White House ended forthwith, as if the analogy extended only when nationalist ideology is ruling the day. What people don't remember is that Hitlerism was about more than just militarism, nationalism, and consolidation of identity politics. It also involved a substantial shift in German domestic politics away from free enterprise, or what remained of it under Weimar, toward collectivist economic planning.

Nazism was not only nationalism run amok. It was also socialism of a particular variety.

Let's turn to The Vampire Economy by Guenter Reimann (1939). He begins the story with the 1933 decree that all property must be subject to the collective will. It began with random audits and massive new bookkeeping regulations:

Manufacturers in Germany were panic-stricken when they heard of the experiences of some industrialists who were more or less expropriated by the State. These industrialists were visited by State auditors who had strict orders to "examine" the balance sheets and all bookkeeping entries of the company (or individual businessman) for the preceding two, three, or more years until some error or false entry was found. The slightest formal mistake was punished with tremendous penalties. A fine of millions of marks was imposed for a single bookkeeping error. Obviously, the examination of the books was simply a pretext for partial expropriation of the private capitalist with a view to complete expropriation and seizure of the desired property later. The owner of the property was helpless, since under fascism there is no longer an independent judiciary that protects the property rights of private citizens against the State. The authoritarian State has made it a principle that private property is no longer sacred.

The rules begin to change slowly so that enterprise could no longer make decisions in the interest of profitability. The banks were nationalized. The heads of major companies were changed. Hiring and firing became heavily politicized. The courts ruled not on justice but on political priorities. It was no longer enough merely to obey the laws. The national will must trump economic concerns:

The capitalist under fascism has to be not merely a law-abiding citizen, he must be servile to the representatives of the State. He must not insist on "rights" and must not behave as if his private property rights were still sacred. He should be grateful to the Fuehrer that he still has private property. This state of affairs must lead to the final collapse of business morale, and sound the death knell of the self-respect and self-reliance which marked the independent businessman under liberal capitalism.

Price controls were next, enforced intermittently and with them grew up a large gray economy, with businesspeople spending more time getting around the rules than producing wealth. "To increase his prices a dealer must have a special permit from the Price Commissar. A request for a price increase must first be certified to by the group leader; it must be accompanied by a detailed statement of necessity and other pertinent data, such as production and distribution costs."

State production mandates were next. Goods were to be produced according to political goals. "Backed by the General Staff of the army, Nazi bureaucrats have been able to embark upon schemes which compel the most powerful leaders of business and finance to undertake projects which they consider both risky and unprofitable."

Bankers were required to act as state actors. "Under fascism, big bankers, formerly independent – except, of course, ‘non-Aryans’ – have become State officials in everything but name. They are often in high and influential positions, but they are all members of the compact, centralized State machine. Their independence, their individual initiative, their free competitive position, all the principles for which they once fought fervently, are gone."

If you think that the parallels stopped after Bush left power, consider this passage from Reimann: "The totalitarian State reverses the former relationship between the State and the banks. Previously, their political influence increased when the State needed financial help. Now the opposite holds true. The more urgent the financial demands of the State become, the stricter measures are taken by the State in order to compel these institutions to invest their funds as the State may wish."

Once the banks were forced wholly under the control of the government, they became the means by which all property became subject to the state: "The totalitarian State will not have an empty treasury so long as private companies or individuals still have ample cash or liquid assets. For the State has the power to solve its financial difficulties at their expense. The private banks themselves, the financial institutions which previously dictated the terms on which they were willing to lend money, have built up the system of siphoning off liquid funds. This financial system is now utilized by the totalitarian State for its own purposes."

So it was for the stock market, which was regarded as a national asset. Speculation was forbidden. Public companies were entirely subject to bureaucratic rule. Order replaced the old spontaneity, while speculation of the old sort became an entirely underground activity. The largest companies didn't entirely mind the course of events. "The disappearance of small corporations gives rise to a tendency among small investors not to risk their capital in new competitive enterprises. The larger the big corporations grow and the closer they become connected with the State bureaucracy, the fewer chances there are for the rise of new competitors."

So too for insurance companies, which were compelled to buy government paper.

The tendency toward ever more economic regulation resulted not in socialism as such but fascist planning. "The fascist State does not merely grant the private entrepreneur the right to produce for the market, but insists on production as a duty which must be fulfilled even though there be no profit. The businessman cannot close down his factory or shop because he finds it unprofitable. To do this requires a special permit issued by the authorities."

The national demand for "stimulus" replaced private decision making entirely, as businessmen were required to produce and avoid any economic downturns that might embarrass the state. "The Nazi government has expressly threatened the private entrepreneur with increased State coercion and reduction of personal rights and liberties unless he fulfills adequately the 'duty to produce' according to the State's demands."

But stimulus could not and would not work, no matter how hard the party officials tried, because the very institutions of private property and competition and all market forces had been overwritten. "The totalitarian regime has annihilated the most important conservative force of capitalism, the belief that private property ought to be a sacred right of every citizen and that the private property of every citizen ought to be protected. Respect for private property has penetrated the spirit of the people in all capitalist countries. It is the strongest bulwark of capitalism. Fascism has succeeded in destroying this conservative force... People still have to work for money and have to live on money incomes. Possession of capital still provides income. But this income is largely at the mercy of State bureaucrats and Party officials."

Reimann sums up: "In Nazi Germany there is no field of business activity in which the State does not interfere. In more or less detailed form it prescribes how the businessman may use capital which is still presumably his private property. And because of this, the German businessman has become a fatalist; he does not believe that the new rules will work out well, yet he knows that he cannot alter the course of events. He has been made the tool of a gigantic machine which he cannot direct."

The regime also dramatically increased social and medical legislation, providing lifetime pensions to friends and conscripting doctors in the service of its dietary and medical goals.

Now, if any of this sounds familiar, it is because the principles of intervention are universal. The Nazi regime represented not a unique evil in history but rather a now-conventional combination of two dangerous ideological trends: nationalism and socialism. We know both all too well.

Thursday, July 30, 2009

"The proclivity of govts is to pursue policies which concentrate benefits on the well-organized and well-informed, and disperse the costs..."

"The natural proclivity of democratic governments is to pursue public policies which concentrate benefits on the well-organized and well-informed, and disperse the costs on the unorganized and ill-informed." - Peter Boettke

Government oppression, and how it makes me fear the future.

I was at my aunt’s with my parents for dinner last night, it being her 64th birthday. She’s a fantastic cook by the way, and if we weren’t family I’d gladly have payed for the meal. Towards the end of the main course, I got into a discussion with my other aunt’s husband and he told me it is illegal (and I wasn’t fully aware of this) to sell home-made food without government permission, meaning that even if she had wanted to, my aunt could not legally have asked payment for the meal. I gaped in awe at his words.

Apparently, this is to keep us safe. “What if your aunt accidentally poisons you!? What if the meat has salmonella?” So, to get this straight… She can invite me for dinner and offer me that food, but she’s not allowed to sell it to me? Talk about killing small business! Let’s say that an old woman loves to bake and needs some extra money, well, she’s not allowed to sell her pastries to me! I don’t feel safe. I feel sick. I feel as if I’m being told by my country that I’m incapable of taking care of myself, and that I need government to keep me safe and run my life.

I suppose I could have guessed it, but it still struck me as the most absurd thing. Sadly, America doesn’t seem much better. From what I gather, an American farmer isn’t allowed to sell his fresh milk without permission either. How can such basic freedoms have slipped away from us? This must be seen for what it is, and opposed. As I sat there listening to my uncle I remembered one of the reasons given for the secession of the colonies from Great Britain, as listed in the Declaration of Independence, and it sounds eerily reminiscent of our current situation.

“He [King George III] has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.” Indeed, people have rebelled for this.

Around half of Swedish GDP is tax revenue over here (pick your chin up from the floor). Our people is paying the second highest tax rate(second only to Denmark) in the world for bureaucrats, pencil-pushers and government inspectors going around making sure ol’ grandma has a permit to sell her pastries. This is not just morally questionable, it is unsound economics. It merely weakens the people, and perpetuates a cycle in which we are dependent on the government.

I can tell you I am afraid of growing up. I truly am. I am afraid of borrowing money from the government to pay for my education, pay enormous taxes on my income and everything I buy, because I know that with all this money they’re taking from me I won’t be able to afford an independent retirement. I’ll have to depend on the government for my living. Well, I never want to depend on government! Ron Paul has got it absolutely right; young people, wherever they may be, deserve to get out of crippling social security systems; they need to be given a chance to take care of themselves! This is my life we’re talking about!

I deserve to do what I want with my life. I am a strong, independent young man and I am not afraid to take care of myself! I want to keep what I earn! I want to be able to buy ol grandma’s cakes and the farmers fresh milk without being a criminal! I want to save for my retirement, take care of my own health- and dental care. I know I can do it! I just need to get that chance!

Won’t somebody please give me that chance!?

In liberty (I wish…),

//Mikael S, 16 years, Sweden

Saturday, July 25, 2009

"By a continuing process of inflation, governments can [secretly] confiscate the wealth of their citizens."

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes

The Inflation Tax

by Ron Paul

All government spending represents a tax. The inflation tax, while largely ignored, hurts middle-class and low-income Americans the most. Simply put, printing money to pay for federal spending dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real – the individuals who suffer most from cost of living increases certainly pay a “tax.”

Unfortunately no one in Washington, especially those who defend the poor and the middle class, cares about this subject. Instead, all we hear is that tax cuts for the rich are the source of every economic ill in the country. Anyone truly concerned about the middle class suffering from falling real wages, under-employment, a rising cost of living, and a decreasing standard of living should pay a lot more attention to monetary policy. Federal spending, deficits, and Federal Reserve mischief hurt the poor while transferring wealth to the already rich. This is the real problem, and raising taxes on those who produce wealth will only make conditions worse.

Borrowing money to cut the deficit is only marginally better than raising taxes. It may delay the pain for a while, but the cost of government eventually must be paid. Federal borrowing means the cost of interest is added, shifting the burden to a different group than those who benefited and possibly even to another generation. Eventually borrowing is always paid for through taxation.

The third option is for the Federal Reserve to create credit to pay the bills Congress runs up. Nobody objects, and most Members hope that deficits don’t really matter if the Fed accommodates Congress by creating more money. Besides, interest payments to the Fed are lower than they would be if funds were borrowed from the public, and payments can be delayed indefinitely merely by creating more credit out of thin air to buy U.S. treasuries. No need to soak the rich. A good deal, it seems, for everyone. But is it?

The “tax” is paid when prices rise as the result of a depreciating dollar. Savers and those living on fixed or low incomes are hardest hit as the cost of living rises. Low- and middle-incomes families suffer the most as they struggle to make ends meet while wealth is literally transferred from the middle class to the wealthy. Government officials stick to their claim that no significant inflation exists, even as certain necessary costs are skyrocketing and incomes are stagnating.

The transfer of wealth comes as savers and fixed-income families lose purchasing power, large banks benefit, and corporations receive plush contracts from the government – as is the case with military contractors. These companies use the newly printed money before it circulates, while the middle class is forced to accept it at face value later on. This becomes a huge hidden tax on the middle class, many of whom never object to government spending in hopes that the political promises will be fulfilled and they will receive some of the goodies. But surprise – it doesn’t happen. The result instead is higher prices for prescription drugs, energy, and other necessities. The freebies never come.

The moral of the story is that spending is always a tax. The inflation tax, though hidden, only makes things worse. Taxing, borrowing, and inflating to satisfy wealth transfers from the middle class to the rich in an effort to pay for profligate government spending, can never make a nation wealthier. But it certainly can make it poorer.

Wednesday, July 22, 2009

"Bureaucracy, the rule of no one, has become the modern form of despotism."

"Bureaucracy, the rule of no one, has become the modern form of despotism." - Mary McCarthy

The Bureaucracy Problem

Mises Daily by | Posted on 7/16/2009 12:00:00 AM

It is commonly held that the unplanned "anarchic" nature of capitalist production necessitates bureaucratic regulation to prevent economic chaos. Thus the prominent Hungarian Marxist, Andras Hegedus, argues that bureaucracy is merely "the by-product of an administrative structure" that separates the workers from the actual management of the economy. Since the owners make the decisions, all others must ultimately take their orders from this small group. Since that would be impracticable in an industrial economy, the problem must be handled by a division of responsibility which in turn entails layers of bureaucracy. The capitalists make the decisions which are then filtered down the bureaucratic pyramid. This means that the workers must wait to be told what to do by their immediate superiors, who in turn must wait for instructions from their superiors, and so on.

It is important to realize that Hegedus believes that these bureaucratic features are a product of capitalism itself, rather than the nature of large-scale production. "Where capitalist property relations prevail," he says, "it is futile to fight against bureaucracy…. To change the situation it is necessary first of all to eliminate private ownership of the means of production." Bureaucracy, he continues, was the

inevitable consequence of the development of property relations at a given stage in the division of labor and in economic integration. Consequently, it is also inevitable … that at some point there will be no further need for an administrative apparatus separated from society, because subjective and objective conditions will be ripe for direct self-administration.

In plain English, Hegedus is saying that, because capitalism separates the worker from the control of industry, production would be uncoordinated and chaotic were there not some agency for the transmission of knowledge. This is the function performed by bureaucracy under capitalism. Since under socialism the workers will make all of the industrial decisions, there will be no coordination problem in such a society. Bureaucracy will no longer be necessary and will be discarded. But, other than mere appeals to "democratize the administrative apparatus" and calls for a "healthy mobility in all areas of administration," he is vague on just how socialism will accomplish this.[1] Since Hegedus' views, particularly regarding the bureaucratic nature of capitalism, are not uncommon, it is time they be critically examined.

Three Problems of Coordination

Israel Kirzner notes that there are three problems of coordination that must be solved in any socioeconomic system:

  1. the problem of priorities, i.e., what goods and services should be produced;
  2. the problem of efficiency, i.e., what combination of resources used in the production of a given commodity will leave the largest bundle of resources left over for the production of other goods and services; and
  3. the problem of distribution, i.e., how to compensate each participant in the system for his contribution to the productive process.[2]

The role of bureaucratic management can best be analyzed by seeing how both capitalism and socialism approach these problems as well as how well they can solve them.

I. The Problem of Priorities

Within a market system priorities are set by the consumers' buying and abstention from buying. Entrepreneurs, anxious to maximize their profits, will tend to produce those goods with the greatest discrepancy between price and cost. Since the consumers are willing to pay more for goods they desire most intensely, the prices of these goods, other things being equal, tend to be higher than those of the less intensely desired goods. Thus the goods that the members of society deem most important are the ones that, without the need for any conscious bureaucratic direction, are first and most plentifully produced in a capitalist system.

A common criticism of this type of reasoning is that there are many examples where the market cannot be said to reflect the priorities of the consumers. It is assumed, for example, that bread is more important than diamonds while it is noted that the price of diamonds is much greater than that of bread. The error in this criticism is that individuals are never confronted with a choice between diamonds in the abstract, and bread in the abstract. Instead, they choose between individual units of bread and diamonds.

Since under normal conditions the quantity of bread greatly exceeds that of diamonds, the satisfaction or dissatisfaction caused by the addition or loss of any particular unit of bread, i.e., its marginal utility, is relatively low compared with that of any unit of diamonds. Were, by some quirk of fate, the quantity of bread greatly reduced or that of diamonds significantly increased, the marginal utility of the units of bread and diamonds would be altered causing the price of bread to rise and that of diamonds to fall. It can therefore be seen that the market does indeed reflect the priorities of the consumers and does so without the need for any bureaucratic direction. In fact, bureaucracy could only impede consumer satisfaction for, as Kirzner points out, "any non-market obstacles placed in the way of the pricing process thus necessarily interfere with the priority system that consumers have set up."[3]

Since socialism entails the elimination of the market, there is no mechanism by which priorities are established without conscious direction and control. Thus it is precisely socialism that cannot function without a burgeoning bureaucracy. A quick look at the planning process in the Soviet Union will clearly highlight the bureaucratic labyrinth endemic to even a moderately socialist economy.

Planning in the Soviet Union

In order to construct the plan for the coming year the planners must have as much data as possible on the state of the economy for the current year. This job is handled by the Central Statistical Administration, which alone employs several million people. This information is then conveyed to the State Planning Committee, or Gosplan. Priorities for the coming year are established by the Council of Ministers in conjunction with several other political agencies and communicated to Gosplan, which attempts to coordinate all of the priorities as well as balance the output targets for every industry in the economy with its estimate of the inputs required to produce them.

The plan then travels down the planning hierarchy going first to the industrial ministries, then to the subministries, and so on down to the individual enterprises. In this way each firm is informed of the output levels that have been set for it, and the plan begins to ascend the planning hierarchy with each enterprise now in a position to calculate for itself the inputs necessary to produce the given level of output.

As the plan travels upward, both the input and output levels are adjusted according to a bargaining process between the enterprise manager and the central planners. The former attempts to underestimate his productive capacity and overestimate his resource requirements to make fulfillment of his part of the plan easier, while the latter does just the reverse.

After finally reaching Gosplan the plan is surveyed in its entirety and the necessary corrections and adjustments are made. The plan is then sent back down the planning hierarchy with each enterprise being informed of its final production goals. And beyond this, of course, lie a host of government agencies required to insure compliance with the plan.[4]

Just what is this bureaucracy, which numbers into the tens of millions, able to accomplish? The first thing to notice is that despite the scientific jargon, its plans are in fact only guesses about what each individual consumer will want during the coming year. The estimates of the entrepreneur also are guesses; however, there is a crucial difference: his are based on market data while those of the socialist planners, at least under pure socialism, are not.

This means that the entrepreneur is not only in a better position to estimate consumer demand but, just as important, a wrong guess is immediately reflected on the market by a decline in sales. Since the loss of revenue prompts quick adjustments, any incorrect guess tends to be self-correcting. But under socialism, the plant manager need not worry about selling his product but only fulfilling his production quota. Consequently,

  1. quality tends to suffer since managers try to find the easiest and quickest way to fulfill their quotas, and
  2. production continues, regardless of whether anyone wants the products, until the plan is altered by Gosplan.

But if production of unneeded goods takes place in some areas, needs in others must remain unfulfilled. It is not surprising, therefore, that the Soviet Union is regularly plagued by gluts of some items and acute shortages of others. When quotas for the shoe and nail industries were set according to quantity, for example, production managers in the nail industry found that it was easiest to meet their quotas by producing only small nails, while those in the shoe industry made only small shoes. This meant gluts of small nails and children's shoes and shortages of large nails and adults' shoes. But setting quotas by weight meant the opposite: gluts of large fat nails and adults' shoes. Similarly, since dress-makers don't have to sell their products they don't have to worry about style preferences. The result is periodic warehouses full of unwanted dresses. And at another time the Soviet Union found itself in the embarrassing position of having only one size of men's underwear and that only in blue.[5]

Thus it is not surprising that the quality of consumer goods in the Soviet Union is notoriously low, the average standard of living is about one-quarter to one-third that of the United States, and so many goods are in short supply that one must stand in line three to four hours each day just to get the basic necessities.[6] While capitalism can function with a minimum of bureaucracy, we have seen that socialism, far from eliminating it, requires a host of bureaucratic agencies. These are necessary in order to (1) collect the data for the construction of the plan, (2) formulate the plan, and (3) inspect the plants to insure that the plan is being carried out.

II. The Problem of Efficiency

Turning to production we find the same results. Under capitalism, the problem of the efficient allocation of resources is solved in the same way that the problem of priorities was solved: the price system. To produce their goods, the entrepreneurs must bid for the needed resources. They therefore stand in the same relation to the sellers of resources as the consumers do to the sellers of final goods. Thus prices for the various factors of production tend to reflect the demand for them by the entrepreneurs. Since what the entrepreneur is able to offer is limited by his expected yield on the final sale of his product, the factors of production are thereby channeled into the production of the most intensely desired goods. Those who best serve the consumers earn the greatest profits and, hence, can offer the highest bids for the resources they need.

In short, the market is a highly interdependent mechanism that, without any bureaucratic direction, is able to achieve exactly what Hegedus thought impossible: the transmission of knowledge to the relevant individuals. If, for example, steel should become more scarce, either because part of its supply has been depleted or a new use for it opened up, its price would rise. This would both (1) force the users of steel to cut back on the purchases, and (2) encourage the suppliers to increase their production.

Not only are the actions of all market participants automatically coordinated by these price fluctuations, but the individuals involved do not even have to know why prices rise or fall. They need only observe the price fluctuations and act accordingly. As F. A. Hayek states, "The most significant fact about this system is the economy of knowledge with which it operates…. The marvel is that without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to … move in the right direction."[7]

It is also important to point out that even within an enterprise bureaucracy is kept to a minimum. First, if a firm becomes bureaucratically top-heavy it will be undersold and, if reforms are not made, put out of business by less bureaucratically structured enterprises. And second, as Ludwig von Mises notes, "There is no need for the general manager to bother about the minor details of each section's management…. The only directive that the general manager gives to the men whom he entrusts with the management of the various sections, departments, and branches is: Make as much profit as possible. And an examination of the accounts shows him how successful or unsuccessful they were in executing the directive."[8]

Another Soviet Dilemma

But in a pure socialist economy the entire apparatus of the market would be absent. All decisions regarding the allocation of resources and economic coordination would have to be made manually by the planning board. In an economy like that of the Soviet Union, which has over 200,000 industrial enterprises, this means that the number of decisions that the planning board would have to make each year would number into the billions. This already Herculean task would be made infinitely more difficult by the fact that in the absence of market data they would have no basis to guide their decisions. This problem became evident in the only attempt to establish a pure socialist, Le., non-market, economy: The "War Communism" period in the Soviet Union from 1917 to 1921. By 1920, average productivity was only ten percent of the 1914 volume with that of iron ore and cast iron falling to 1.9 and 2.4 percent of their 1914 totals. In the early 1920s "War Communism" was abandoned and since that time production has been guided by means of restricted domestic markets and by co-opting the methods determined in the foreign Western markets.

The task of the Soviet planners is greatly simplified by the existence of the limited markets, but the fact that they are so limited means that the economy still operates inefficiently and suffers from two problems inherent in bureaucratic management: incessant bottlenecks and industrial autarky.

Incessant Bottlenecks

Since it is simply impossible for one agency to be able to familiarize itself with every nuance and peculiarity of every plant in the entire economy, much less to be able to plan for every possible contingency for a year in advance, the planners are forced to make decisions based on summary reports. Further, they must establish broad categories of classes which necessarily gloss over countless differences between firms. Consequently, every plan contains numerous imbalances which surface only while the plan is being implemented.

Since there is no market, these surpluses and shortages cannot work themselves out automatically but can only be altered by plan adjustments made by Gosplan. Thus, a shortage of good A cannot be rectified unless or until so ordered by the planning board. But plan adjustment in one area will have ramifications throughout the economy. To alleviate the shortage of good A, resources will have to be transferred from the production of good B. Since this will reduce the planned-for output of B, the output of those industries dependent upon B will likewise have to be re-evaluated, and so on, in ever widening circles.

Empirical evidence bears out the economic theory. Paul Craig Roberts notes that what goes under the pretentious claim of planning in the Soviet Union is merely "the forecasting of a target for a forthcoming few months by adding to the results of the previous months a percentage increase." Yet, even this "plan" is "changed so often that it is not congruous to say that it controls the development of events in the economy." The planning bureaucracy, he goes on to say, simply functions as "supply agents for enterprises in order to avoid free price formation and exchange on the market…." While this appearance of central planning "satisfies the ideology," the "result has been irrational signals for managerial interpretation, and the irrationality of production in the Soviet Union has been the consequence."[9]

Thus the evidence indicates that the perennially disappointing Soviet grain harvests are far more a result of the system than the weather, for even in "peak planting and harvest seasons as many as one third of all machines in a district may be standing idle because there are no spare parts. Central planners are acutely aware of the need for spares … yet the management system seems unable to match up parts with machines that need them."[10]

The problem of bottlenecks is nothing new, as indicated by a report of some time ago: "the Byelorussian Tractor Factory, which has 227 suppliers, had its production line stopped 19 times in 1962 because of a lack of rubber parts, 18 times because of ball bearings, and eight. times because of transmission components." The same writer notes that "the pattern of breakdowns continued in 1963."[11]

Perhaps the absurd lengths to which attempts at central planning can be carried is illustrated in an incident reported by Joseph Berliner. A plant inspector, with the job of seeing why a plant had fallen behind on its delivery of mining machines, found that the "machines were piled up all over the place." When he asked the manager why he didn't ship them out he was told that according to the plan the machines were to be painted with red paint but the manager only had green and was afraid to alter the plan. Permission was granted to use green, but only after considerable delay since each layer of the bureaucracy was also afraid to authorize a plan change on its own and so sent the request to the next highest agency. Meanwhile, the mines had to shut down while the machines piled up in the warehouses.[12]

Industrial Autarky

The problem of bottlenecks is closely connected with that of organizational autarky. Plant managers are rewarded according to whether or not they have fulfilled their production quotas. To avoid becoming a victim of a bottleneck, and thus not fulfilling the quota, the tendency emerged for each industry to control receipt of its own resources by producing them itself. "Each industry," says David Granick, "was quite willing to pay the price of high-cost production in order to achieve independence." In 1951 only 47 percent of all brick production was carried out under the Ministry of the Industry of Construction Materials. And, by 1957, 116 of the 171 machine-tool plants were outside the appropriate industry, despite the fact that their production costs were in some cases up to 100 percent greater.[13]

To combat this tendency Nikita Khrushchev reorganized the economy in 1957 by setting up 105 Regional Economic Councils to replace the industrial ministries. In the absence of other reforms, however, he merely succeeded in substituting "localism" for "departmentalism," as each economic region endeavored to become self-sufficient. To counter this the economy was further centralized in 1963 but this only increased inefficiency by further rigidifying an already inflexible economy. Unable to find the key to efficient planning, 1965 marked yet another significant step toward a return to a market economy. These reforms not only introduced a limited profit system but also called for a "high degree of local autonomy for producers and suppliers. Detailed planning of every important aspect of production would disappear, to be replaced by minimal direct guidance from above."[14]

Marx postulated the withering away of the state. It is at least as significant as it is ironic that the continued shift of the socialist countries from bureaucratic planning to the market — what William Grampp terms the "new directions in the communist economies" — indicates a "withering away" of the sort never envisioned by Marx.[15]

III. The Problem of Distribution

When considering the problem of distribution, we again find that capitalism is the enemy of bureaucracy. Under capitalism, production is for profit. Capital and labor constantly flow to where they can obtain the greatest return. As can be seen, there can be no separation between production and distribution; for those individuals who, in the eyes of the consumers, render the greatest services to "society" are precisely the ones who reap the greatest rewards.

Turning to socialism, it is difficult to say much in theoretical terms about the way in which wealth is distributed since there are a number of conceivable bases for distribution: equality, need, merit, and services rendered to society. It should be obvious, however, that the implementation of any of these would require conscious bureaucratic direction. It should also be pointed out in this context that the attempts to establish strict equality have never been successful and probably never will be. This is so for two reasons.

First, to spur output the Soviet Union, for example, has always had to rely heavily on the bonus system for its plant managers and the piece-rate system for workers. The increasing centrality of the bonus system is indicated by the fact that while in 1934 bonuses equaled about four percent of a manager's salary, today it often reaches one half, with bonuses for some industries comprising as much as eighty percent of income.[16]

Second, in any society where the state controls all the essential facets of the economy there is a natural temptation for those in control of the government to use their political power to obtain economic privileges. Thus it is not surprising that the 1917 revolution, regardless of intentions, only resulted in the replacement of one privileged elite by another.[17]

One example will illustrate this point. There are a host of "special shops" in the Soviet Union selling everything from food to jewelry. These stores, which are allegedly for the benefit of foreign tourists, have high quality merchandise at below cost prices in order to compensate the tourist for the government's artificially high exchange rate for rubles. However, James Wallace points out that "high-ranking government officials, senior military officials and upper ranks in the Communist Party are all privileged to shop in these stores as a fringe benefit of their jobs." They are therefore able to buy "hard-to-get goods for a fraction of the prices their neighbors pay for often-lower-quality merchandise."[18]

It is a revealing sidelight, and one that should be especially noted by those who condemn capitalism for its unequal "distribution" of wealth, that there is greater inequality of wealth in the more socialist countries like the Soviet Union than in the relatively more market-oriented economies such as the United States. This moreover, is not a historical accident but in conformity with economic theory. For under capitalism there is a natural tendency for capitalists to invest in areas with a low wage level, thereby forcing those rates up to a level commensurate with that of other areas doing the same work, while workers in low paying jobs tend to migrate to areas where pay is higher. Similarly, entrepreneurs invest in areas manifesting high profits. But the increased output forces prices and profits in those areas to fall. In short, while capitalism will never eliminate inequality, it does tend to reduce extremes of wealth and poverty.


Under capitalism the price system performs the crucial function of transmitting knowledge throughout the society and thereby eliminates the need for bureaucracy. But precisely because it eliminates the market, bureaucratic management is indispensable for a socialist economy. Furthermore, since there is an inverse relationship between central planning and the market, bureaucratic management is inherently contradictory. Its dilemma can best be summarized, perhaps, in the form of two planning paradoxes:

Paradox One: For central planning to be viable it needs market data to guide its decisions. But the greater the role of the markets the less that of central planning. Conversely, the more extensive the area of central planning the more limited the market data, and hence the more inefficient must be the operation of the economy.

Paradox Two: If the planning board endeavors to maximize consumer satisfaction it merely does manually what the market does automatically. It is then just a wasteful, redundant entity. But if the planning agency plans operations that would not have been undertaken on the market, then that is an indication that the priorities set by the agency are in conflict with those of the consumers. It is clear that, regardless of the course adopted by the agency, the position of the consumers must be worse off than it would have been under a market economy.


[1] Andras Hegedus, "Marxist Theories of Leadership and Bureaucracy: A Marxist Analysis," Political Leadership in Eastern Europe and the Soviet Union, Ed.: R. B. Farrell (Chicago, 1970), pp. 53–54.

[2] Israel Kirzner, Market Theory and the Price System (Princeton, 1963), pp. 36–38.

[3] Ibid., p. 39.

[4] For a good. summary of this process see Herbert Levine, "Input-Output Analysis and Soviet Planning," American Economic Review (May, 1962), pp. 128–31.

[5] See William Loucks and William Whitney, Comparative Economic Systems (New York, 1973), pp. 302–4; and Marshall Goldman, The Soviet Economy (Englewood Cliffs, 1968), pp. 92–4.

[6] Loucks and Whitney, pp. 322–26; and James Wallace, "In Classless Russia 'Some Are More Equal Than Others,'" U.S. News and World Report (August 4, 1975), p. 35.

[7] F.A. Hayek, Individualism and Economic Order (Chicago, 1972), pp. 86–7.

[8] Ludwig von Mises, Bureaucracy (New Rochelle, 1961), p. 33.

[9] Paul Craig Roberts, Alienation and the Soviet Economy (Albuquerque, 1971), pp. 78–85.

[10] James Wallace, "Communist System's Toll on Farms," U.S. News and World Report (August 18, 1975), pp. 16–7.

[11] C.R. McConnell, "Some Fundamentals of Economic Planning in the Soviet Command Economy," The Soviet Economy Ed.: Harry Shaffer (New York, 1968), p. 32.

[12] In David Granick, The Red Executive (New York, 1961), pp. 133–34.

[13] Ibid., p. 135. Industrial autarky is, of course, nothing more nor less than a monopoly. It is interesting to note that this has become such a serious problem for many socialist economies that Yugoslavia, for example, has been forced to adopt antitrust laws to deal with it. See William D. Grampp, "New Directions in the Communist Economies," Business Horizons (Fall, 1963), p. 34.

[14] J.P. Hardt, et al., "Institutional Stagnation and Changing Economic Strategy in the Soviet Union," Man, State and Society in the Soviet Union, Ed.: Joseph Nogee (New York, 1972), p. 183. Also see the special, "Socialism," in Time (March 13, 1978), pp. 24–41. See especially p. 26: The socialist economies, it notes, are characterized by "heavy overstaffing (of) every office and factories with workers who seldom can be fired for failing to produce. Bureaucratic controls further cripple efficiency and managers have little leeway for innovations. Consumer goods are still shoddy and chronically scarce…. Yugoslavia seems to have the fewest economic problems among Marxist-Leninist states. It also has the least rigidly controlled economy in Eastern Europe."

[15] Grampp, pp. 29–36.

[16] Granick, p. 111.

[17] See Milovan Djilas, The New Class (New York, 1968). Also see the interesting comments on the Bolshevik Revolution by a Russian anarcho-syndicalist and contemporary of the Revolution, "M. Sergven," in "The Paths of Revolution," reprinted in Libertarian Analysis (Winter, 1970), pp. 9–12.

[18] Wallace, "Classless Russia," p. 35. The recent scandals in the U.S. Government Services Administration — scandals which Newsweek referred to as "the biggest money scandal in the history of the Federal government" (September 11, 1978, p. 29) — only further demonstrate how easily bureaucratic planning lends itself to exploitation. Also see the brilliant article on the Washington bureaucracy by Tom Bethell, "The Wealth of Washington," Harper's (June, 1978), pp. 41–59. Especially see page 43: "The laws of supply and demand not only do not apply to Washington, they are turned inside out. Problems elsewhere in the country merely contribute to the wealth of Washington. The fuel crisis takes the shape of a new Department of energy, where 19,000 bureaucrats under Dr. James Schlesinger's command will have $10 billion to play with roughly equal to the total profits of all the oil companies."