"Planning For Freedom"--A Book Recommendation

"The alternative is not plan or no plan.  The question is: whose planning?  Should each member of society plan for himself or should the paternal government alone plan for all?" Ludwig von Mises, Laissez Faire or Dictatorship, an essay in Planning for Freedom

I just received Planning for Freedom, a collection of essays and addresses by Ludwig von Mises, and delved into the first essay for which the book is titled, Planning for Freedom.  The subject matter is a good one for the weekend's Chalk Talk.

Although I have not read all of Planning, I see it would be a valuable resource for anyone generally interested in the virtues of freedom in the market, and for those particularly interested in Mises' penetrating intellect and writing style on the matter. 

The collection is broken into four sections: 1) The Free Market Economy versus Government Planning; 2) Money, Inflation, and Government; 3) Mises: Critic of Inflationism and Socialism; and, 4) Ideas.  This is a resource, then, that can be consumed and enjoyed piecemeal and topically, not requiring a cover-to-cover reading.  

Onto Chalk Talk: "Planning For Freedom"

Historically there have been two diametrically opposed views of how to deal with the organization of society and its material welfare.  On the one hand there are the proponents of free market enterprise and private property, with markets of free individuals determining the organization and direction of human affairs.  This we know as capitalism, or classical liberalism.  On the other hand there are the socialists who decry inequality, depressions, and unemployment as necessary outcomes of capitalism.  They insist on government ownership of the means of production of material goods, and the concomitant direction of all economic activity through central bureaucratic planning, not the capricious will of free and uninhibited consumers.

Mises, in Planning for Freedom, addresses not the socialist dogmas and their historic failings as a system of social organization, but rather the "third way" thinking of progressives.  Such "progressives" seek not the paths of outright Soviet-style socialism, nor the uninhibited free market enterprise system of classical liberalism; they believe in and argue for a "third way" in which freedom is preserved by a series of moderate government interventions in the otherwise free market, thus preserving the freedom of the market while avoiding the excesses of totalitarian socialism on the one hand and the perceived excesses of unrestrained capitalism on the other.

Enter Mises' paradoxical title, planning for freedom.  "They declare they are planning for a free society."  How, from a practical or philosophical view, can it be said that by controlling the market through government planning that the resulting market would be free?  This is simply illogical.

Semantics aside, Mises moves on to reveal that this "third way" between socialism and capitalism is nothing more or less than interventionism.  This idea was nothing new at the time progressives pushed for confiscatory income taxation, minimum wage laws, old age pension (Social Security), and union compulsion on wage rates.  Bismark in the late 1800s set up the first old age pension scheme, for example.  (This is good to remember the next time you hear classical liberalism and freedom apologists dismissed as "old fashioned" reactionaries!)

Ultimately, interventionism leads to the very deleterious social and economic situations that are blamed on free market capitalism:

"I contend...that such measures must needs bring about results which from the point of view of their supporters are more undesirable than the previous state of affairs they wanted to alter."

Examples? 

"Depression is the aftermath of credit expansion; mass unemployment prolonged year after year is the inextricable effect of attempts to keep wage rates about the lever which the unhampered market would have fixed.  All those evils which the progressives interpret as evidence of the failure of capitalism are the necessary outcome of allegedly social interference with the market."

There is no third way, "moderate" policy between socialism and freedom.  Attempting to do so leads to the very problems that becomes the pretense for more and more government intervention in freedom.  We've seen it with the Great Depression, the stagflation of the 1970s, the recession of the early 1980s, the internet bubble of the late 1990s, and now with the housing market crash and resulting current recession.  

We needed more freedom then, and we need more freedom now.

Regressive, Not Progressive

"We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive."
C. S. Lewis 

I've been thinking about MSNBC's new tag line, "Lean Forward" with its progressive political implications and was reminded of a past post here.  Progressive policies and moving forward as a society are antithetical, not complimentary.  Delving into the topic is a wonderful opportunity to rediscover both the principled and utilitarian reasons for embracing freedom.  Below is a Chalk Talk post from July: 

Regressive, Not Progressive
Progress is the act of moving forward toward good things. Regress is the act of sliding backwards away from good things already enjoyed.

With this understanding of progress in mind, turn the clock back to 1700. Turn it back further, to the Middle Ages. Keep going backward.

Do we see anywhere in the world economic prosperity, affluent societies, and high standards of living? Do we see sustainable and forward-looking economies? Do we see the flowering of the sciences, arts, and learning?

No, we don’t.

When did social progress begin? Where in history do we see the liberation of millions from hand-to-mouth existences, poverty, and static societies?

Societies progressed by embracing freedom. Progress began wherever there were free markets, free trade, and government policies that allowed for the unplanned progress of society. Regress occurs every time governments suppress freedom and seek to turn the clock back to the mercantile-style government planning of economies, and attempt to shape societies into the image of their choosing.

Back to historical examples.

Prior to the expansion of free market capitalism in19th century Europe, economic activity was dictated by the mercantile policies of a handful of people in governments. In Liberalism, The Classical Tradition, Ludwig von Mises reminds us that for western Europeans in the period between the end of the Napoleonic Wars (1815) and the beginning of the first World War (1914) an unprecedented improvement in the standard of living took place alongside a quickly rising population.

Mises explains that, because of free market capitalism, millions of would-be serfs became the consumers businesses sought to please. Because people wanted a higher standard of living and because other people were free to provide so much for them, society progressed. This “democracy of the market” unleashed the creative and productive power of societies: "By the time of the start of the Great War, the average industrial worker in England and the U.S. lived better and more graciously than the nobleman of not too long before.”

In Basic Economics, Thomas Sowell highlights the rapid progress countries experience when they loosen government restrictions on trade and price controls. India, New Zealand, Sri Lanka, South Korea, and China all experienced progress by permitting more freedom, not less, in their economies. In 1978, for example, “less than 10 percent of China’s agricultural output was sold in open markets, but, by 1990, 80 percent was.”

This increase in output and resulting boon to the living conditions of everyday Chinese citizens was the result of more freedom, not less. From 1978 to 1995 China experienced an annual economic growth rate of 9 percent.

As for aversion to freedom and regressive policies think of the living conditions in Cuba, North Korea, the former eastern European communist countries, and third world countries ruled by authoritarian governments. The contrast could not be sharper. These examples mark a regression to precapitalistic times, that is, before freedom in the market place was tried and embraced.

Listen to Milton Friedman’s summation of the issue:




It is interesting, if not befuddling, then, that the economic and social policies of self-described “progressives” (or, generically, “liberals”) point us backward to the kinds of mercantilistic, central planning authority in governments that predates any real progress in the world.  Viewed in light of human progress, their economic solutions and initiatives are regressive.

Returning to Friedman, he bemoans a similar frustration with the term “liberal”:

“In the name of welfare and equality, the twentieth-century liberal has come to favor a revival of the very policies of state intervention and paternalism against which classical liberalism fought. In the very act of turning the clock back to seventeenth-century mercantilism, he is fond of castigating true liberals as reactionary!”

Liberal has come to mean illiberal, and progressive has come to mean regressive.

The more Americans understand that freedom is not an abstraction but at the heart of the only real progress in the world, the closer we’ll come to approximating a reinvigorated belief in freedom into real policy. We still live in a constitutional republic, and when the voice of the people is consistent enough and clear enough, public opinion will echo in the halls of legislatures.

A belief in freedom is a belief in the resourceful, creative, and productive powers of Americans themselves. Insisting on a policy of freedom is our best way of progressing forward.

Otherwise, we have no where to go but backward.

"I, Pencil"

I am happy to report that The Ludwig von Mises Institute has posted the complete version of Leonard Read's classic I, Pencil.

Read manages to artfully compress in to a short essay a tremendous lesson about the workings of the free market, its wondrous diversity, and the unfathomable presumption of believing governments can centrally plan markets at all, let alone more efficiently than the free individuals that compose markets.

Read's classic essay is as timeless and as instructive today as it was when he composed it in 1964.  (Freedom has no expiration date.)  

One section of I, Pencil is titled, "No One Knows".  That reminded me of a past Freedom Lessons post about Barney Frank.


Click here for I, Pencil.

A Warning From A Friend. Spot-On

A NRO interview with Brit Daniel Hannan is well worth reading.  Click here for full article.

The interview covers his new book, The New Road to Serfdom: A Letter of Warning to America.  Hannon is a friend of freedom with the experience and perspective of a Brit.  His historical knowledge of America and limited government lend much credence to his words. 

His warning is one we should heed.

Here are a few samples from the interview:

"In the mid-1990s, Republicans reintroduced Americans to an idea that had been almost totally forgotten, namely that politicians can keep their promises. "

"In all but one of these countries, people wanted spending cuts rather than tax rises. In other words, the desire for tax cuts is not peculiar to the U.S. But the belief that you can do something about it through your democratic mechanisms is a fairly unusual one."

"I had also become disillusioned with the GOP. The longer the Republicans stayed in office, the less Republican they seemed."

"Most of you [Americans] have no idea of how lucky you are."

Here is Mr. Hannan with The Judge:

Wanting To Cheer For Government

What does the Red Stripe beer man and Ludwig von Mises have in common?



Freedom movements, their proponents, and many of their adherents are often labeled "anti-government," as if liberty-minded folks only want to boooo everything government does.  Sometimes all the rhetorical stops are pulled and the "anarchy" word appears, implying people interested in freedom want no government at all.

True, pro-freedom reformers are against the activities of government that exceed its properly-restrained and legitimate role in society.  But this is not an aversion against government as a whole; it could more properly be called "anti-illegitimate government" or "anti-big government."

A serious discussion is evaded if the context of the debate remains merely negative.  That is, we are not simply "anti" fill-in-the-blank; we are for the right kind of government.  By objecting to excessive and unconstitutional government we are of necessity arguing for returning government to its proper role.  We want a government that focuses on the activities that benefit freedom, property, and prosperity.

So, yes, Booooo to creepy excessive burdensome government.  But, Hooooray! to good government.

Mises analogizes the classical liberal view like this:

"If I am of the opinion that it is inexpedient to assign to the government the task of operating railroads, hotels, or mines, I am not an 'enemy of the state' any more than I can be called an enemy of sulphuric acid because I am of the opinion that, useful though it may be for many purposes, it is not suitable either for drinking or for washing one's hands."  From Liberalism: The Classical Tradition [Emphasis added.] 

We should look for every opportunity to stress the very important roles for government, roles indispensable to the preservation of freedom and prosperity.  Doing so highlights the ways in which government has far exceeded its proper place and threatens liberty, illustrates the reforms that are needed, and diffuses the silly notion that if one stands for liberty one necessarily opposes all government.

Protection of life, property, and property rights are actions only government can perform.  Free civilized society unquestionably require these protections.

What's more, a free competitive market cannot operate without certain functions of government.  No market can provide for itself the enforcement of liability laws and legal contracts.  Deterrence and punishment of force and fraud of are vital to allowing markets to remain free and competitive, and only government has the lawful coercive authority to exercise these protections.

And proper regulation of the market is a very good thing, so long as it does not exceed regulation and creep into the murky socialist realms of indirectly planning and directing economies, or protect failing companies from competition through bailouts, or establish monopolies through tariffs and by onerous regulations that stamp out pesky little competitors---all subjects of future Chalk Talks.

A desire and public demonstration for freedom, then, requires a healthy balance of opposing bad government and supporting good government.  We're boooooing but really want to hooooray!

The Dead Guys Are Alive And Well

The New York Times is curious what Tea Party folks are reading.  In a recent article they report the movement has provoked a renewed interest in some classic works on freedom such as works by Hayek, Mises, and Bastiat.   (Click here for full article.)

Two things in this article are striking:

1) The writer opens by emphasizing the "canon" of the Tea Party is composed of "resurrected" texts written by "dead writers" and "long-dormant ideas." (What would a Hayek or Mises zombie look like, anyway?  Would they garble incoherently through Austrian accents while feasting on the flesh of bureaucrats and Keynesian professors?) 
2) The not-so subtle conclusion provided for the reader: "The works are more suited to protest than to policy making..."

Sandwiched between the opening and conclusion are tidbit samplings minus context constructed toward the quietly dismissive statement, "Neither Hayek nor Bastiat were writing with the United States in mind."

So there you go.  The intellectual "fodder" of the Tea Party is founded on old, dusty texts whose authors are dead (Do ideas die, too?), who were never thinking of the United States (Really? Hayek wrote Serfdom for proponents of freedom in all free societies, specifically citing the United States several times), suitable only for the rabble-roused hoi-paloi Tea Party masses, not to be taken seriously for substantive policy changes.

If the mere age of texts and their authors is the benchmark for what is to be taken seriously, how new is socialism?  Hayek and Mises came along after Marx, Lenin, and Engels.  True, classical liberalism, founded on the idea of freedom, is older than socialism, the idea that societies can be planned and perfected through coercion.  But if the mere age of ideas sets the bar of legitimacy we would need to re-institute human slavery: that institution predates all written history.  Free societies came about much later in the time line of human ideas.

As for serious policy proposals, at the heart of classical liberalism and the economics that emanate from it is the acknowledgment that voluntary exchange between free individuals and the creative and productive capacities of free societies are responsible for lifting the masses out of hand-to-mouth existences.  Conversely, attempting to plan and coerce society against the free development of its people leads to the arbitrary ordering of people's lives found in authoritarian regimes. Here you will find the miserable living standards one can expect from the denial of the dignity of the individual and his and her freedom.

Enter Hayek's Road to Serfdom.   If his historical presentation is too "dusty" to be relevant, have a look-see at contemporary Cuba, North Korea, and the former Soviet Union.

Given our unsustainable debt and the ongoing growth of government intervention in our lives from everything from our incomes to our shower heads, a reinvigorated love of liberty founded on a sure intellectual footing seems very well suited for our times.  It even seems like something free people would want to do for themselves, as opposed for waiting subserviently for their governing authorities to do for them.

So long live the dead guys and whatever grassroots movement that embraces liberty.  The ideas they champion certainly do.

When Weird is Good: Returning to The Constitution

In his most recent article, Jonah Goldberg highlights the progressive vision of what the Constitution means to members of Congress and the president.  That vision?  Nothing.

Goldberg cites the reaction to Christine O'Donnell's insistence that she would, if elected to the U.S. Senate, support legislation only if it is constitutional.  The progressive reaction is very revealing.

Posting good articles for review on a blog puts one in the uncomfortable position of adding commentary to what is essentially good commentary.  (How presumptuous.)  There is not much that can, or should, be added to Goldberg's piece.  Nonetheless, I cannot help commenting on this quotation from a progressive "expert" on the Supreme Court, included in the article:

"How weird is that, I thought. Isn't it a court's job to determine whether or not something is, in fact, constitutional? And isn't that sort of provided for in, well, the Constitution?"

What is provided for in the Constitution is a set of clearly defined, limited legislative and executive powers in Article 1 and 2, respectively.   What is also included is an oath to uphold and defend said Constitution, required of all federal and state elected and appointed officials, found in Article 6.  Oh, and this little ditty is also right there in Article 6, juuuust before that whole oath to support and defend the Constitution thingy:

 "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land..."[Emphasis weirdly added.]

Hmmmm.  Let's think about this.  If all elected officials (like what O'Donnell aspires to be) are required to "uphold and protect" the Constitution, by the Constitution itself, and they hold up their hands and (presumably) solemnly swear to do so as a prerequisite to holding office, how is it "weird" for a senator to, well, acknowledge she will do what her oath entails?

As Goldberg points out, the idea there is no, or should not be, constitutional limits on legislation is a new one, relatively speaking.  Progressive era intellectuals introduced the idea of delimiting the power of government and its regulatory agencies in order to pursue the demands of nebulous notion of social justice.  Woodrow Wilson's "New Freedom" and FDR's "New Deal" were just that, new to the American political conscious.  A very big sell had to be made to Americans, what, with their historically-unique and inherent suspicion of big government with less limits on its power in their lives.

Now, for over sixty years we have been living in the not-totally-socialist-nor-completely-free society that Hayek rightly labels the "welfare state."  We now see the staggering fiscal costs of having both political parties acknowledge this welfare state as the almighty epicenter of politics from which all policies emanate.

On the same hand we are young enough as a country to still recall, and hence know the virtue of, the constitutionally limited government of the Founding. 

Enter the weirdness progressives and much of the public see in the idea of actually respecting the Constitution and returning it to its rightful place in legislative politics.  It follows quite reasonably that, for many, using the Constitution and not the entitlement-obsessed doctrine of the welfare state as the epicenter of legislative and executive action is downright weird.

But, as in many cycles of history, what was old is suddenly new again, and what is new is viewed as weird.  The Constitution is older than the progressive assault on it, so any call to bring back a constitutionally limited government, although not new, will be new (and weird) to anyone who assumes the role of government is to morph into the all-encompassing nanny state.

The Tea Party, with all its clamoring for fiscal responsibility and individual freedom, bases its arguments and hope in a return to limiting the power of the federal government.  What is the most effective and principled way to do this?  A return to the Constitution.  Its already been there for a long time.  It simply needs re-embraced. 

There is nothing magical about what's in the Constitution, even though it is an extraordinary document, written and adopted out of "reflection and choice" as The Federalist Papers remind us, unlike the beginning of any other country on earth.  Its primary virtue is it limits the power of the government and allows for a society in which individuals may live freely and prosper.  Progressives have long rejected this notion and believe the Constitution and a respectful adherence to it is a roadblock to the social justice that can only be provide by the benevolent and unrestricted hand of government. 

It is good this notion of a constitutionally-centered government is new to a lot of people and weird to others.  Many, after some understandable reticence, might just show an interest in learning about the weird new thing.  (Kind of like poking a dead exotic animal with a stick.)  And just as important, the weirdness of it all reminds everyone how far we've drifted from the Constitution---and it forces us to make the case whether or not returning to its limited form of government is a good thing or a bad thing. 

Ignoring the issue and kicking the political and fiscal can down the road would just be, well, weird.