Video: Mises on Liberty and Economics

For the weekend edition: a lengthy and worthwhile video on Mises and the vital connection between freedom and economics.  This is adds to the subject of the last Chalk Talk nicely:

Video: Hope in What?

I found this interview very interesting.  What is striking is the first cartoon, a map of America filled in with hundreds of the word, "Hope."

In what, exactly, did so many Americans place their hope?  Was it Obama himself?  Was it a set of ideas and principles he articulated in the campaign?

Few will forget the tremendous lack of anything Obama offered in the way of ideas, principles, or even a voting record in the US and Illinois senate.  He simply threw out there a vacuous notion of "Hope" and "Change," and the public voraciously ate it up.  We placed all our hope in one charming, articulate, well-groomed person who could swoon masses with speeches about nothing, who offered few hints as to the policies he would pursue, and about whom we knew very little.

We placed our hope, not in ourselves as a free people, but in a finely-marketed set of non-ideas articulately refracted back upon us from two teleprompters.  We bought it, hook, line, and sinker.  

Contrariwise, it is fascinating to retrace the grassroots explosion of the Ron Paul Republican primary campaign of 2008.  What was the attraction?  Why all the buzz?  How did Paul's campaign raise $4 million dollars in one day, uncoordinated by the campaign itself?

Is Paul a smoothly packaged, charming speaker?  Hardly.  I've seen him speak twice.  He rambles around at times, has an irregular voice, lacks the rhythm and cadence needed to effectively drive home a point, and seems greatly out of place behind the microphone he often grasps out of nervousness.   By his own admission he has a difficult time in debates because of the time restraints.  He does has an avuncular aspect to him, but sweet older uncles are not known to draw the raucous admiration of thronging crowds.

So why all the enthusiastic followers, a good portion of which are under the age of thirty?  What's the attraction?

People gravitate to the message, not the messenger.  Ron Paul articulates a consistent and clear message of liberty and constitutional government. His book, The Revolution: A Manifesto, could not be more to the point and principled.  Americans are hard-wired for such a messaged---it is part of who we are.  Being we have been starved, for so long, not only of politicians who mean what they say and say what they mean, but politicians that say a lot about freedom and how far we have drifted from living within the constitutional restraints required to preserve that freedom.

And because Ron Paul is the messenger and not the message, it does not matter if he will run for president in 2012. The freedom movement is about freedom, not about blindly following some charismatic speaker into the misty future of his making.  Dr. Paul, I think, would say so much.

We seem poised to again put our hope in freedom, constitutionally-restrained government, and fiscal sanity.

Maybe soon cartoonists will fill up an outline of America with "Freedom."

Socialism, The Welfare State, and "Social Justice"

"[M]any of the old socialists have discovered that we have already drifted so far in the direcetion of a redistributive state that it now appears much easier to push further in that direction than to press for the somewhat discredited socialization of the means of production.  They seem to have recognized that by increasing governmental control of what nominally remains private industry, they can more easily achieve that redistribution of incomes that had been the real aim of the more spectacular policy of expropriation." F.A. Hayek, The Constitution of Liberty (1960)

Since the 2008 election the words "socialism" and "socialist" have been tossed around somewhat regularly.  The more ardent opponents of President Obama and the Democrat Congress contend that a socialist agenda is being heaved upon us.  Supporters and apologists of the president agenda respond there is no such agenda to be founds.

I think F.A. Hayek would say both parties are wrong, and both are correct.

In "The Decline of Socialism and The Rise of The Welfare State" (chapter 17 of of The Constitution of Liberty and the origin of the above quote), Hayek strikes out an important difference between the original aim of socialism and the means by which socialists sought to secure that goal.

"The common aim of all socialist movements was the nationalization of the 'means of production, distribution, and exchange,' so that all economic activity might be directed according to a comprehensive plan toward some ideal of social justice." [Emphasis added.]

One will not hear many public advocates for the outright state ownership of industry, and even the more noted progressive apologists dismiss such calls.   Cries for "social justice," however, can be heard not infrequently, both in churches and in public policy circles:


Like other illusive terms, "social justice" can mean a host of things.  Listening closely to the Left, however, betrays that "social justice" is the newest catchphrase for the old aim of socialism: the arbitrary redistribution of wealth in pursuit of a progressive vision of a more just society.

Back to Hayek for a moment.

As Hayek goes on to explain, the Soviet totalitarian style of the outright state ownership of production and arbitrary distribution of welfare disillusioned and even alarmed Western socialist intellectuals.  The socialist George Orwell, for example, went to great literary lengths to awaken society to the dangers of unlimited state authority in his classic work, 1984, arming opponents of big government with the powerful image of Big Brother watching and directing the every move of citizens.

The freedom-crushing, authoritarian means of pursuing some notion of "social justice" was discredited, but the end of redistribution of wealth and creating society in the image of some new progressive order did not go away with it.   Enter "social justice." Rather, the ongoing, peaceful increase in government control of marginally free market enterprise seemed the best new means to the old ends of socialism.

In 1960, when Hayek made these observations, the old socialist ends seemed achievable within the web of FDR-style centralized bureaucratic control of the economy that did not disappear after the Great Depression was ushered into the history books.

Ever since then, we've witnessed an ongoing quasi-central planning of the economy through government regulation of the market.  After all, why go through the ugly mess of taking over industries and entire markets when you're in a position to dictate the direction and, in many cases, the outcome of market activity through the regulatory apparatus of government?

With the GM bailout making the government its majority share holder, the current administration has come close to the old socialist means of taking over the production and direction of a significant part of our economy.  But remember it was Bush II that initiated the bailout before he left office.

What the current administration is certainly poised to do is achieve the old socialist aim of redistributing wealth in service of progressive visions of social justice through simply increasing the regulation of our economy and lives.  We cannot blame Obama for the bureaucratic network that was in place before he ever took office.  Republican and Democrat presidents and congresses of the past seventy years are to blame for that.

So, yes and no.  The current party in power is pursuing socialist goals.  But they are not employing the old socialist methods of doing so.   Proposing the state ownership of all the economy would be too hard a sale to the American public.

What the American public would find equally unattractive is the end result of incrementally wedding our economic futures to the size, scope, and discretion of a government that has a hand in most all of our lives.  With government control of the housing market through Fannie and Freddie and health care  control through the maze of new Obamacare regulations, we are on our way to some wider and deeper progressive vision of social justice.  Cap and Trade would push us further down that path.

We need to put politicians in a place to make that socialist sales pitch openly.  Then we need to keep on shopping.

Video: Free Market v/s Political Distribution

In this video clip from Freedom Watch, Judge Napolitano and Walter E. Williams discuss how the free market provides for the needs of society versus how government distributes provisions to society.



At the 5:18 mark the Judge summarizes the fundamental difference in how the market produces wealth and how government consumes wealth; how producers seeking profit must please the wants of the voluntarily consuming public and how government needs not care about the wishes of the public as it has the "bottomless pit" of tax payer funds at its disposal.

We would hasten to add that profits, in a free market uncorrupted by government-enforced monopolies formed through subsidies and burdensome regulations, are secured by pleasing consumers through voluntary cooperation and free exchange.  Government distribution of property occurs without the consent of the taxpayer.

Williams calls this the "morality of the market."

These points are also detailed in Ludwig von Mises' book The Anticapitalistic Mentality, wherein he explains that free market exchange (what we call capitalism) turned masses of serfs and slaves into the buying public for whom profit-seeking businesses seek to please.

Williams comments on the concept of one dollar one vote.  Mises calls the serfs-turned-consumers through freedom in the market the "sovereign consumer."  When the market is free to provide for the wants and needs of public, consumers vote every day millions of times a day with their dollars.

As opposed to politicians, profit seekers must be reelected every day.  With every transaction,the market pleases every consumer; every vote cast with a dollar brings to the consumer what the consumer desires.  Political elections yield to the general desires of the majority, leaving the minority's wishes unfulfilled.

Reducing freedom in the market equals disenfranchising the consumer.