Libertarian Populism

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Remarks at the Founding Meeting of Primary Challenge

by James Ostrowski by James Ostrowski

"I, James Ostrowski, do solemnly swear that I will tell you the truth today." So, to paraphrase Bette Davis, fasten your seatbelts; it’s going to be a bumpy ride.

But first, I want to congratulate Leonard Roberto for having the courage and insight to start this new and badly needed organization. And I want to thank him for allowing me to be part of it all.

I look forward to working with Primary Challenge to put together a legal team to guide newcomers through the tangle of obstacles the politicians have put in their path.

I know something about primary challenges. I ran against an incumbent state legislator when I was 20 years old and almost beat him. "Almost" is the operative word as beating an incumbent is almost impossible. It’s very difficult for volunteers to beat paid hacks. But you shouldn’t let that stop you. Beating the British Army in 1776 was also considered nearly impossible. Patriots can beat mercenaries, a lesson that perhaps we can repeat. As military historian William Lind writes: "people who believe in something will always defeat people who believe in nothing at all."

This meeting is further evidence of a political truth I have been pondering in recent months: the only hope for Western New York is for the independent business class to slough off their normal and understandable political apathy; take charge and lead a populist revolt of the outsiders against the insiders.

Why small business? Who else feels the full effects of taxes and regulations? Government employees? Obviously not. Employees of any kind? No. They don’t feel the true impact of taxes because, by virtue of the magic of withholding, they never had that money in their pockets in the first place. It’s like it never existed. If their job consists of complying with government regulations, then that’s their livelihood. But if you are an owner, you have to write those checks to the taxman and you know that every dollar you spend complying with government regulations is a dollar that comes out of your profits.

What about big business? Why are they hopeless? Merely because it’s their system we are living under. It’s their system we are fighting. We have met the enemy and it is the alliance of big government and big business. If I am wrong, please tell me why there aren’t any corporate fat cats here today. Why do they do so little to change things around here? Because they like the way things are. Where else can fifty guys call the shots in a large metropolitan area: pick the mayor, the county executive, the judges, the prosecutors. Life is good!

But what about all those high taxes and suffocating regulations? Don’t they hurt big business also? Not quite. First, big business uses corporate welfare to get special tax breaks and regulatory leniency. Warren Buffett was able to get a special exemption for Geico employees who are selling car insurance. Second, it’s not a level playing field. Regulations favor larger firms which can spread the costs around better. Further, many big businesses are joined at the hip with the government: the banks who get to borrow the Fed’s freshly printed money at rates denied to regular folk; the defense contractors; and all the hospitals and the Buffalo Medical Campus which are mostly funded by the government.

So, you are our only hope. You have many advantages in this battle. You have some spare change. You have brains, a work ethic and organizational skills. You are leaders. You have the respect of your communities, families and friends. You are independent. The powers that be can’t fire you for taking a stand.

And you are going to need all those resources and more and some luck. You are up against a ruthless, entrenched multi-billion dollar political machine with thousands of soldiers whose jobs depend on beating you. Don’t have any illusions about going into this battle. Just think of Pickett’s Charge but imagine a different outcome.

Here are some pitfalls to avoid at the outset. The natural tendency of many business people who enter politics is to propose that government should be run like a business. This is a bad idea and bad ideas are dead ends.

Government can’t be run like a business because it’s not a business. A business is a private, voluntary entity whose capital value is the property of the owners. Government is a coercive monopoly that raises funds by threatening to throw people in jail if they don’t pay up. It matters not that the people may not approve of how their funds are spent, or in fact that they strongly disapprove.

Business gets its funds through voluntary free market transactions. If a business loses money, it comes out of the owner’s pocket. If government loses money, it comes out of the taxpayer’s pocket; the politicians just retire to Florida with big fat pensions. So government can’t be run like a business.

Politicians are not business owners. They do not own the capital value of their enterprises; they merely control the levers of power for a time. Therefore, they tend to exploit that power to maximize their short-term self-interest and that of their allies. This is why governments almost always under-invest in capital and infrastructure. The politicians won’t be around when those bridges crumble. They care more about spending money on their soldiers’ salaries. Since government is inherently inefficient, our goal should be to make it as small as possible.

Let me go out on another limb and warn against the fallacy of reformism. Those who think we can reform our way out of this mess don’t realize the danger we face. If the Buffalo area doesn’t get its act together in this new era of global competition, we are facing oblivion — oblivion. Let me spell out and be very specific about what I mean by oblivion. This land will always be here. And, since this is good land, and there are six billion people on earth, there will always be people here. But, if we continue to tolerate unsustainable political institutions and an inefficient and unworkable economy, we won’t be here.

Like old Europe, we are depopulating. Young people are leaving; the population is aging rapidly and the young people who remain simply can’t afford to have children. The people of Erie County need to wake up; we are becoming extinct! The situation is dire and calls for dire, radical solutions. We can’t be afraid to offend people with our proposals because the very people we offend are the same people whose lives and families and communities and institutions we will be saving in the long run. They’ll hate us now, but thank us later.

If we don’t get our act together fast, the people, the ethnic and racial groups, religions, traditions and cultures — the fabric of life — that make up this area will gradually cease to exist, sooner rather than later. Don’t misunderstand me. I have nothing against whichever groups and people might replace us; I just don’t understand why the good people of Western New York are committing slow suicide by politics. Don’t we have a right to exist in the place we were born?

So mere reform won’t do. It’s too late for that. One such current reformist fallacy is consolidation or metro government. Another fallacy is campaign finance reform. Sure, government can be reformed on paper, but my point is that, in the long run, the reforms will fail to cure what is wrong with government. What is wrong with government is its government-ness. Government is a coercive monopoly and all of its failures and deficiencies arise out of this primordial and inescapable fact. No reform of government can alter its status as a coercive monopoly. Thus, no reform can "strike at the root" in Henry David Thoreau’s wonderful metaphor.

As a coercive monopoly, government gets its money by threatening to imprison those who don’t pay up. Your consent is not required as the geniuses who thought up this system believed that individuals are too stupid to decide what to spend their money on, but are smart enough to elect those who are smart enough to decide. As I explain in my new book, Political Class Dismissed, once that tax dollar leaves your pocket, you lose any significant control over how it is spent. That’s the whole point of taxation: you lose control over the money. So the continual surprise and shock of taxpayers about how poorly their money is spent, is, upon reflection, quite absurd.

Once you accept the premise that civilization requires some people to use force, including the implicit threat of deadly force, to extract funds from other people, you have thereby guaranteed that a whole class of people — net taxpayers, will be perpetually dissatisfied with how their money is spent. Duh, if they were going to spend your money the way you wanted, why would they have to get you to pay up by threatening to throw you into a dungeon if you don’t?

There are other intractable and insoluble problems with the coercive monopoly of government. First, since it’s a monopoly, as we used to say in South Buffalo, "If you don’t like it, lump it." You simply have no choice but to put up with whatever shenanigans, machinations and horrors the government is perpetrating at any given moment because they are the only game in town; they have no competitors.

Competition and choice explain why the free market has allowed the human race to rise up from hunting-gathering, subsistence farming and cave-dwelling to the incredible standard of living available to many today. The lack of competition and choice, however, explains why, throughout history and continuing, governments have been able to get away with everything from mass murder to the legalized graft and corruption of our local political machine.

The final problem with government is intimately related to the first two, but deserves special mention. Why can’t government officials act responsibly, you ask? I answer that question explicitly in my book. The rocket scientists who created this system gave the politicians and the bureaucrats power over us, because we are "too stupid to make our own decisions." As I write in the book:

Statists assure us that irresponsible people will act responsibly. That is, state officials, who are given power over us, and who therefore are not responsible to us, will act responsibly. All logic and experience tell us this is false.

Since the problem with government is its government-ness, the only solution to the problem of government corruption and incompetence, or any other problem with government, is to reduce the size, scope or power of government. Government cannot misuse funds that remain in our pockets and government cannot abuse powers it was never given in the first place.

The founders, particularly Jefferson, knew this well. We moderns are largely ignorant of this truth, even after witnessing numerous government atrocities that the founders could never have imagined. They tried to shrink government and, taking dead aim at government’s monopoly power, they created ingenious mechanisms which diffused that power among the people. These included juries that could override judges’ views on the law, militias instead of standing armies and the related right of the people to bear arms.

They also tried to divide government power among levels and branches of government. This latter tactic admittedly failed when Robert E. Lee surrendered in 1865, ushering in the era of federal supremacy and presidential supremacy that plagues us to this day. That the founders’ experiment in federalism and the separation of powers utterly failed to halt the growth of big government is still more proof that government cannot be reformed. The greatest reformers in history failed to tame it!

With the steady decline of Greater Buffalo being obvious to all for many years, the power elite needed a public relations gimmick to con the people into thinking that something was being done about it. This gimmick was regionalization, also known as metropolitan government, regionalism, or consolidation. All would be well if we just got rid of all the little local governments and combined them all into one big county government. Now that a recent grand jury report has exposed county government as corrupt and incompetent, I wonder what gimmick they will think of next.

I feel for the Buffalo Niagara Partnership and the rest of the power elite who invested so much time, money, energy, and credibility in regionalism. Their dream is now gone with the grand jury report [detailing systematic corruption and incompetence in county government]. Centralizing power merely increases the opportunities for abusing that power, as this recent scandal shows.

The truth is, though, it was a canard all along. As I explain in my book, the decline of Buffalo, by which I mean the Buffalo area, is the result of the huge amount of wealth siphoned off by the political class. Creating a metro government will do nothing to solve the problem.

The main costs of state and local government are transfer payments: payments for being poor, needing medical care, and being a public school teacher or administrator. Consolidation does very little to reduce these costs. Centralization will, on the other hand, reduce competition between local governments to keep taxes low. Centralization will also remove power ever further from the people.

Democracy, as originally pertaining to Athens, with a small population, only works at the neighborhood or village level. Larger governmental units tend to be swallowed up by political machines and special interests.

If we look at two governments that are already centralized — and "streamlined" — the State and the Feds, what do you see? Huge, distant, unresponsive and corrupt monsters that consume far greater tax receipts per capita than the worst local government — Buffalo’s. Thus, regionalism as a solution has no basis in theory, fact, or history.

The truth is, we need to decentralize. Bring political power back to the organic communities in which we live. The most perfect form of decentralization, of course, is individual freedom.

Centralization or regionalization or consolidation is exactly wrong. A good barometer for judging ideas is: "Is the local power elite for it?" They’re almost always wrong. They support centralization of power; theirs!

Superficial reforms, consolidation and running government like a business won’t work. What will work is drastically reducing government size, scope and power and decentralizing political power. I am in the process of forming Buffalo’s first independent think tank — Free Buffalo — to pursue this agenda. If it all works out well, Free Buffalo can provide tomorrow’s primary challengers with the intellectual ammunition they need to take on the incumbents and whip ‘em.

We have to get over our "modern" notion that government can be reformed and return to the founders’ classical notion that government is a monster to be caged in. We know, however, by virtue of historical knowledge they necessarily lacked, that the founders were wrong about how to do that. Federalism and the separation of powers have not contained the beast.

The Civil War destroyed federalism. The separation of powers failed among other reasons because these days all offices in all branches of government are filled by the same political machines. The parties do disagree on occasion, but they have more in common with each other than they do with the rest of us. There is really only one party, the Power Party, which has numerous different factions, including the Republican Party and the various factions of the Democratic Party. The Power Party’s platform is power over the people. Most of its factional disputes focus on who gets to exercise power over what and whom.

Within levels of government, the executive branch usually dominates because of the logic of patronage politics: the executives control more jobs and contracts and other goodies. History shows that the political class uses its power to continually expand government.

The founders were also wrong in thinking that we could give the government the power to tax because its purposes were limited to keeping the peace and defending the country and taxes would remain low. They navely thought that citizens could exercise control over spending through the political process. They were wrong. Modern political science tells us, as I explain in my book, that politics will tend to be dominated by those who have the greatest financial stake in the outcome of elections: the political class.

Cognizant that government is a beast to be tamed and that the founders’ means failed, we need to modify their vision for our own times in two critical ways. First, since "the power to tax involves the power to destroy," we need to destroy the power to tax!

Fund a much smaller government with user fees and voluntary contributions. If the people don’t want to pay, the politicians will have to like it or lump it! Welcome to the real world. Methods of funding the government other than by taxation should be explored and encouraged. These include: user fees, fines, filing fees, bequests and endowments, voluntary check-offs, advertising, and lotteries. Experience shows that the power to tax allows politicians to misspend funds in ways not approved of by the taxpayers they allegedly represent.

Since there is no known means of ensuring that taxes are spent wisely, alternatives to taxation must be explored. It is true that only taxes can fund today’s gargantuan budgets. However, if the size and scope of government are drastically reduced, and a predictable economic boom follows, funding government without taxes becomes more plausible.

Second, we need to radically decentralize power. Devolve decision-making to the level of organic communities where people are bound together by social and economic bonds that will deter the impulse to cast votes based solely on which politicians will steal the most money from net taxpayers and give it to them. People will be much less likely to vote on the basis of a greed calculus if they know their victims will be their former classmate who got that medical practice by working hard for twenty years, or the hard-working businessman who lives down the street who became a success by working 15-hour days while others were on vacation or watching television.

Let’s bring government down to the community level where it can be watched and controlled. And let communities decide if they wish to join forces with other communities or secede from them. Secession is the ultimate check on big government that allows exploited communities to escape from larger governmental units that have been hijacked by corrupt political machines. Far from being a crackpot 19th Century doctrine, secession turns out to be a sophisticated modern theory vindicated by a large body of contemporary scholarship.

This new model of politics is neither left nor right, neither liberal nor conservative, neither Democratic nor Republican. It transcends such failed dichotomies by providing all persons — rich or poor — with the maximum possible opportunity to improve themselves and their communities.

A good term for this approach is libertarian populism. It is based on individual freedom but also has a strong egalitarian element. The sad truth is that a top-heavy political regime tends to favor the well-educated and well-connected elites who control it. It disadvantages the masses of poor and working class people who lack the skill or the inclination to manipulate the system.

A lot of people are hurting out there. The median household income in Erie County for a family of 2.5 people is a pathetic $38,000 per year. But that’s misleading. If you aren’t on the government payroll and aren’t in a union, that number is closer to $20,000! That’s dirt poor. Those people are desperate. Let’s go find them and join forces with them and save this county from extinction!

Let’s make history. For the first time in modern American politics, let’s form a populist alliance with the young, saddled with huge federal debts when they were born; with the poor and powerless shut out of the system, with the working class struggling to survive in a declining economy, and with the independent business class being driven to extinction, to take this community back from the politicians and the power elite who have ruined a once-great community while lining their own pockets.

Radical ideas? Yes, as radical today as when the great Jefferson explained on July 4, 1776 that "to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

So — ax the taxes, decentralize power, and respect freedom of political association. This proudly radical agenda will not only cure what is wrong with Erie County but will allow Greater Buffalo to leap ahead of all competitors in mankind’s age-old and worldwide race to establish a truly rational, civilized and peaceful form of government.

January 24, 2005

James Ostrowski is an attorney in Buffalo, New York and author of Political Class Dismissed: Essays Against Politics, Including "What’s Wrong With Buffalo." See his website at http://jimostrowski.com.

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