The Rush Towards Socialism – and How To Stop It

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by Thomas J. DiLorenzo by Thomas J. DiLorenzo

It only took the Obama administration a couple of weeks to prove that the national leadership of the Democratic Party is guided by totalitarian-minded socialists who seek to create an omnipotent government. The U.S. government is now controlled by people who have been dreaming of living out their utopian socialist fantasies ever since the fantasies were brought to their attention in college decades ago by their Mao/Castro/Che Guevara poster-hanging, capitalism-hating, communistic professors.

The administration's main agenda is an explosion of federal spending and debt so large and outrageous that America will soon exceed Sweden in the proportion of the economy that is controlled by government — if it hasn't already. That's just for starters. They also want to sharply increase taxes on the most productive and hardest-working people in society; increase the capital gains tax to deter private investment; expand the welfare state; spend trillions on pure, pork barrel spending in a massive vote-buying spree; set all corporate compensation levels by governmental fiat; tax away the wealth of unpopular business people (only starting with those AIG executives); regulate and control all risk taking by private entrepreneurs; enforce a civilian draft to create a modern-day, American version of the Hitler Youth (See Rahm Emanuel's creepy, Stalinist-sounding book entitled The Plan); nationalize entire industries, starting with the capital markets (they understand that there can be no capitalism without private capital markets); and double, triple, and quadruple the number of "regulators" who already regulate all aspects of human life in America.

At the recent G-20 meeting Obama even signed off on the creation of an international regulatory "authority" that could set compensation policies in American corporations. On top of this, there is a never-ending drumbeat of anti-capitalist propaganda coming from the administration and its worshipful mouthpieces in the "mainstream media."

What can be done? How can this rush toward totalitarian socialism be stopped? Will the Republicans find another old, angry geezer to appeal to the angry white male vote? How about another mumbling and incompetent Bush family heir? Will there be another Reagan who will talk libertarian while governing more like a European Social Democrat? Will they trot out another old "war hero" who will plunge us into war with Iran, North Korea, China, or whomever, to divert our attention away from the economic mess government has placed us in? These are the likely alternatives if we cling to the fantasy that "throwing the bums out" at election time leads to something other than another group of slightly different bums.

The fact is that the American people have been servants or slaves to their government for generations. It wasn't always that way. When the Adams administration enforced the Sedition Act that made criticism of the federal government illegal, Jefferson and Madison responded with the Virginia and Kentucky Resolves of 1798 that clearly stated that the people did not intend to allow the enforcement of this unconstitutional law within those two states. Section One of Jefferson's Kentucky Resolve stated, for example, that "the several States composing the United States of America, are not united on the principles of unlimited submission to their General Government . . ." Other states supported Jefferson and Madison in their defense of free speech.

When President Thomas Jefferson imposed a national trade embargo and consummated the Louisiana Purchase, New Englanders, led by George Washington's Secretary of State, Timothy Pickering, loudly threatened to secede. They decided against it (for practical economic and political reasons) at the Hartford Secession Convention of 1814, but their actions sent a clear message to national politicians.

Outraged by the embargo, the Massachusetts legislature used the language of Jefferson's own Kentucky Resolve to proclaim that the embargo "was not legally binding on the citizens of the state" while denouncing the federal law as "unjust, oppressive, and unconstitutional" and reminding President Jefferson that "this state maintains its sovereignty and independence . . ." All the New England states, plus Delaware, did the exact same thing and nullified the embargo.

When Alexander Hamilton's Bank of the United States, a precursor to the Fed, created 72 percent inflation in the first five years of its existence and corrupted politics with its politicized spending policies, citizens all over the country assisted President Andrew Jackson in eventually destroying the institution. The heroic Ohio legislature slapped a $50,000/year tax on each branch of the BUS, attempting to drive it out of business. "The states have an equal right to interpret the Constitution for themselves," announced the Ohio legislature, and it decided that the BUS was not constitutional. Kentucky, Tennessee, Connecticut, South Carolina, New York, and New Hampshire followed suit.

When the War of 1812 broke out the New England states effectively seceded from the union by refusing to participate. A proclamation by the Connecticut legislature was representative of the opinions of New Englanders: "[I]t must not be forgotten that the state of Connecticut is a FREE SOVEREIGN and INDEPENDENT State; that the United States are a confederated and not a consolidated Republic," and that it was refusing to support the war.

When the 1828 "Tariff of Abominations" created an average tariff rate of 45%, applying mostly to Northern manufactured goods, South Carolinians clearly understood that this was a pure act of political plunder at their expense. They convened a political convention to utilize the Jeffersonian idea of nullification and refused to collect the tariff. They even got the South Carolina legislature to allocate $160,000 for the purchase of firearms with which to fend off any would-be federal tax collectors. The result was that they forced the federal government to lower the tariff rate.

During the 1850s the "middle states" of New York, Pennsylvania, Delaware, Maryland, and New Jersey developed a very active secession movement that sought to either join a Southern confederacy, form a middle-states confederacy, or support Southern secession. (See The Secession Movement in the Middle States by William C. Wright). Their overriding desire was to separate themselves from the imperious New England Yankees.

When the Southern states seceded in 1860–61, Abraham Lincoln pledged his everlasting support for Southern slavery in his first inaugural address, an address in which he endorsed a constitutional amendment (the "Corwin Amendment") that would have forbidden the federal government from ever interfering with slavery. In the same speech he promised a military invasion and "bloodshed" in any Southern state that ceased paying his beloved tariff on imports which, at the time, accounted for more than 90% of federal tax revenue. The average tariff rate and had just been doubled by the Republican-controlled Congress.

The Southern states, along with most people in the North, still held the Jeffersonian belief that governments derive their just powers from the consent of the governed, and when that consent is withdrawn the citizens have a duty to abolish the existing government and form a new one. Jefferson never wrote in the Declaration of Independence that the citizens have a duty to abolish the government and form a new one "as long as the other states all agree that you may do so." If the right of secession depends on someone else's permission, then one does not have a right of secession. That was a fantasy invented by Lincoln, which he used to "justify" waging total war on his own country, murdering some 350,000 American citizens, including some 50,000 civilians. From that time on, government in America was no longer "for the people, by the people, of the people," as Chief Justice John Marshal once said in a phrase that was later plagiarized by Lincoln. From that time on the purpose of government has been for those who run it to plunder those who do not. Nullification and secession were no longer tools with which the citizens could control their own government.

The final nails in the coffin of government by consent were pounded in during the year 1913 with the advent of the federal income tax, the creation of the Fed, and the Seventeenth Amendment calling for the direct election of U.S. senators. The income tax and the Fed gave the federal government the ability to do whatever it wanted to do regardless of the Constitution — even to wage "undeclared" wars. These vast "riches" were used to make millions of Americans totally subservient to the state lest they lose their tiny government subsidies, and to bribe or threaten state governments to do whatever our masters in Washington, D.C. decree, lest they lose their cherished federal highway grants. The ability of the citizens to oppose the federal Leviathan by organizing political communities at the state and local levels was finally destroyed and the centralized, monopolistic bureaucracy that rules America and much of the rest of the world today was created.

The direct election of U.S. senators, as opposed to the original system of having them appointed by state legislature, ended popular control of the federal government. Today, candidates for the senate go to New York, California, China, or wherever the big money is that can be raised as "campaign contributions" to finance their political careers. The interests of such "contributors" are not necessarily congruent with those of the folks back home.

If American citizens are to resist the rush to Obammunism they must first give up on the fantasy that the Republican Party is anything but another cabal of crooks, conmen and clowns, just like the Democratic Party. The only realistic route to freedom, including a restoration of genuine free enterprise, is through the devolution of power away from Washington, D.C. via peaceful secession and nullification, the original American ideals.

Thomas Jefferson understood that democracy could never work in a country as large as the U.S., let alone one with more than 300 million people. In a January 29, 1804 letter to Dr. Joseph Priestly he wrote: "Whether we remain one confederacy, or form into Atlantic and Mississippi confederacies, I believe not very important to the happiness of either part. Those of the western confederacy will be as much our children & descendants as those of the eastern." On the topic of secession, Jefferson continued: "[D]id I now foresee a separation at some future day, yet I should feel the duty & the desire to promote the western interests as zealously as the eastern, doing all the good for both portions of our future family which should fall within my power." When the New England Federalists were threatening secession, Jefferson wrote to his friend John C. Breckinridge on August 12, 1803 that if New England seceded and created a second confederacy, "God bless them both if it be for their good, but separate them, if it is better."

Unlike Lincoln, Jefferson did not believe in threatening "bloodshed" in the case of a "separation" or secession. He understood that such behavior would be a moral abomination and an unimaginable act of barbarianism. A civilized society does not wage total war on "our children," as Jefferson described the future citizens of a new state formed by an act of secession. Yet it is Lincoln, not Jefferson, who is portrayed by American court historians as a kindly, benevolent, and charitable angel.

The Constitution long ago ceased placing any meaningful limits on governmental power. This social contract between the American people and their government was destroyed long ago by Hamiltonian nationalists. Americans now live under a series of dictators (called "presidents") who all believe that they are essentially dictators of the world, capable of ordering the bombing of any place on earth without anyone's approval. (Within weeks, Obama dipped his hands in blood by ordering a few bombs to be dropped in Pakistan).

As of this writing, several dozen states have reportedly issued resolutions in support of the Jeffersonian principle of nullification. These will all be completely meaningless unless the American public has the fortitude to actually enforce the resolutions and begin ignoring any and all federal government actions that they interpret as unconstitutional and illegitimate. In addition, citizens of every state should learn about the Second Vermont Republic which, for several years now, has been laying the groundwork for Vermont to secede and once again become an free and independent republic, just as all the states thought of themselves as being prior to 1865.

Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution — And What It Means for America Today.

Thomas DiLorenzo Archives at LRC

Thomas DiLorenzo Archives at Mises.org

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