ROCKWELL: Well, good morning. This is the Lew Rockwell Show. And how great to have as our guest this morning, Dr. Joseph Salerno. Joe is the academic vice president of the Mises Institute. He’s editor of the Quarterly Journal of Austrian Economics. His most recent book is Money, Sound and Unsound. He’s also head of the graduate program and professor of economics at Pace University in New York.
So, Joe, I’m inspired by a recent article of yours about the state and war. You seem to be demonstrating in this article that imperialist war is sort of an unnecessary outgrowth, or a logical outgrowth maybe is a better way to put it, of a big state.
SALERNO: Yes, I think it’s —
ROCKWELL: Or maybe the state itself.
SALERNO: Yeah. I think it’s an unnecessary implication of the state. What I tried to do is to look at it from a praxeological point of view, that is, from a theory of action, the logic of action. And once you look at the fact that everyone has comparative advantage in society — you and Murray Rothbard recognized this first, I think — that there’s going to be some people that are better at wielding power than others, just as there are better people who have a comparative advantage, for example, playing basketball, football, or being a financial planner. You can have people that are great at wielding power, using it in ways that — for self aggrandizement and so on. Those people will tend to take over the state. So that’s sort of one law of praxeology.
And then the other one is sort of the logical implication of the fact that human beings are different also. And that is that, in order to have production, you have to have most of the people carrying on production in society and there can only be a small ruling elite. The ruling elite always has to be a minority of the population because they siphon off what is produced. So imagine if 70% of the people were in the ruling elite and not working and siphoning off the resources of the 30%. Pretty soon that would collapse. The economy would collapse. So as Hume and la Boetie have pointed out — these political philosophers — the state is always a minority but the majority has to accept the state through various — through propaganda and parasitical intellectual manipulations by either a priesthood or the intelligentsia, the media, and so on. So those are the two rules, that is, that you’re — whether it’s a democracy, kingdom, or any other sort of state, it is always going to be a minority ruling the majority. Which brings us to the tax. The rulers are the ones that siphon off the resources. They are the tax consumers. And the majority of the population is always the taxpayers.
ROCKWELL: Although, as Hoppe points out, democracy has helped disguise this, hasn’t it, to a certain extent, and may be the greatest invention ever, from the standpoint of state power, democracy, that it makes people feel like we’re all the state, we’re all the government, we are the government, and disguises the fact that there is a power elite?
SALERNO: Right. By giving access to everyone to the state, to become part of the state, they take the illogical leap and say, well, therefore, we are the state, just because everyone has a chance to be, in some sense, part of the ruling class. But, of course, that’s just a disguise because, at any given moment, there is a minority that is benefiting from the state.
ROCKWELL: And, of course, as Hayek’s chapter in the Road to Serfdom on how the worst rise to the top — I mean, these are — as you say, these are the people who are the best at demagoguery, the best at lying, the best at fooling people, are the ones who have the comparative advantage. And so once being in that position, why are they not satisfied to simply rip off their domestic? But why do they want to conquer? Why do they want war?
SALERNO: Well, that’s a very good point. And the reason, of course, is that, at some point, the population becomes very, very — some of the population — dissidents, the Libertarians, the anarchists — notice that this is a big con game and they begin to spread, disseminate these ideas to the rest of the population.
The way to keep the population in line is always to have a tiger, a figure of a tiger at the gates. So you always want a foreign enemy. And so that is the reason why we’ll always have wars, the state will always engage in wars. So imperialism, in a sense, is a logical implication of having a state, and the fact that the state has to lie to cover the fact that it’s just a minority and it’s benefiting itself and not providing any sort of public goods or collective goods.
ROCKWELL: I noticed this morning there was a report that the vast intelligence apparatus of the Boston Police Department, who was spending most of its time doing very, very detailed surveillance of peaceful peace groups, Veterans for Peace and similar groups that are all nonviolent but just people who are advocating anti-war ideas, are seen by the state as, in some sense, its greatest enemies, along with, of course, regular anarchists and Libertarians.
SALERNO: That’s a good point. I mean, it happened during the Vietnam War. We saw the police surveillance of peace groups —
SALERNO: — and now it’s coming back. And it really is a scary thing. We’ve heard now that the federal government is subsidizing police, domestic police to have drones, to purchase drones, and that we’re going to have thousands of drones in the air over the U.S. in the next five years.
ROCKWELL: Yes. And, of course, they’re also going to be armed. Initially, they said, well, they’re going to be just surveillance drones, which, of course, is bad enough, but then it turns out that all these surveillance drones are capable of being all armed, having missiles on them. Even the real little tiny ones that they’re talking about that are the size of the dragonfly —
SALERNO: I wasn’t aware of that.
ROCKWELL: — could actually kill somebody. This is what they want. Of course, it’s what Orwell talked about in 1984. It’s not going to be that sort of technology, but advanced technology. But this is what they want to keep — keep their eyes on everybody in case they are spreading bad ideas.
SALERNO: Right. Right, because ideas are what kills the state. And the state could only respond with repression and, of course, with fabricating foreign enemies, which is what Rome, for example — a great example is Rome. Joseph Schumpeter, in his great article on imperialism, wrote about Rome fabricating endless enemies that were always violating the rights of Romans, and this is what we see in the United States.
But the U.S. has gone further than Rome, because now we have an incorporeal enemy, a disembodied enemy — terror — right?
SALERNO: So this is the perfect the enemy.
SALERNO: Because you can never win against terror. It’s unseen. It’s invisible. So I think now we have permanent war, and I think it’s going to go on until something changes.
ROCKWELL: They thought they had that with the Cold War. They loved the Cold War because they had, again, an enemy that could go on forever. And they were very disappointed. I can remember seeing George H.W. Bush and James Baker being interviewed on television when the Berlin Wall was coming down, and one might think, if just by going by the civics classes, these guys would be having a party. They were just visibly horrified and shocked. I mean, the blood drained out of their faces.
They were two very unhappy guys.
SALERNO: Well, they knew they had a fabricated — a new enemy. I mean, there has to be an enemy.
ROCKWELL: Yeah. It took them a while.
SALERNO: Yeah, it did. It did. Absolutely.
ROCKWELL: So now it’s Islam and terror —
ROCKWELL: — and Muslims and —
SALERNO: Right. And that’s going — there is no foreseeable end to that type of war, so that’s why I think society now has to, in some sense, strike back in a peaceful sense. So I think there are peaceful ways of doing that. Vladimir Lenin was a murderous Communist dictator but had some good insights into strategy, who said that all imperialist wars have to be converted into civil wars. And by that, he actually meant that there has to be a recognition of the class struggle. And in Libertarian class theory, the class struggle is between not gays and straights, blacks and whites, men and women; the class struggle is always between the rulers, the tax consumers, and the ruled or the taxpayers. So I think that as war becomes more and more expensive, as debt piles up, as the middle class gets crushed more and more, at that point, the veil drops or the curtain is drawn back and you see the wizard there, which is the state, and people recognize the state as the exploiter. And so I think at that — the state, of course, is not just going to give up when it is recognized.
ROCKWELL: Well, maybe they will turn it into a civil war. You know, there have been all kinds of interesting reports about FEMA camps, and they are — the government is building big camps —
SALERNO: Right. Right.
ROCKWELL: — but they claim it’s for illegal aliens. And it recently came out that there was a plan for — in South Carolina — this is a Federal plan, of course —
SALERNO: Right. Right.
ROCKWELL: — to use a sports stadium to put dissidents in, similar to what Latin America dictatorships have sometimes done. But of course, they would — it would make all the sense in the world for them, from a financial standpoint, to turn on the internal enemy, to turn on the subversives, the — and, in fact, the Boston police —
ROCKWELL: — were calling these peaceful — again, like groups like Veterans for Peace, who have had — these guys have had enough of fighting.
SALERNO: Yes, yes. Exactly.
ROCKWELL: They don’t — they’re —
ROCKWELL: But they’re labeling them as potential terrorists, as threats to the homeland, two of the phrases that were used in the Boston police’s — things that came out in a Freedom of Information Act that — I guess the ACLU had a suit brought against them. But this is the way they see us.
SALERNO: Right. Exactly.
ROCKWELL: Recently now, they’re using the no-fly business against people who are dissidents. There was a man who had flown to Hawaii, they wouldn’t let him back on the plane because they said that he was now — he was on the no-fly list. And they, of course, don’t give you any reason. He’s a guy who is a dissident and an anti-war guy.
ROCKWELL: But now he’s going to have to catch a ship or whatever, right?
SALERNO: Right. Right.
ROCKWELL: I mean, of course, it’s a huge inconvenience. And they haven’t put him in jail yet. But if they put you on the no-fly list and say — and, again, there is no appeal from this.
ROCKWELL: And they don’t have to tell you why you’re on it.
SALERNO: That’s what’s so scary about it.
ROCKWELL: So really, if you’re interested in peace, if you’re interested in a peaceful civilization and you want human civilization to advance, you want the arts of peace rather than the arts of war — Jefferson put it — you have to be an anarchist.
SALERNO: Absolutely. But I think that that is more of a reason to have any response to the state, once it’s recognize what the state really is, to be peaceful. General strikes were one way of doing that, where people would accumulate savings in kind and then somehow coordinate, as the movement spreads, just staying home from work, and that would interrupt tax payments to the state. And it would also — the state is not a monolith. You have corporations — some corporations — they’re all competing. Many of them, not all of them, are competing for favors and subsidies from the state. And those corporations that are hurt in war by these tactics will soon turn against their confederates in the state. So in other words, you could fracture the state by sort of this uneven general strike, which will affect some companies more than other companies. Of course, you would also want a mass boycott of any corporations that were directly tied into the welfare/warfare state that were benefiting from it.
And then, of course, you would have companies, like McDonald’s and Best Buy, companies that aren’t really in that part of the Military-Industrial Complex, they would be hurt by a general strike so they would also turn against the state. So my speculation is that, at some point, you would have sort of an anti-state corporate alliance and that would be a shield to the individual dissidents and anarchists and Libertarians. Because then you would have, say, certain corporations and then the state rulers themselves on one side, and then society, including some corporations that are renegades now because they’ve been hurt by the general strike, on the other side. So I think, in this sense, you have a civil war. It’s peaceful. And you never know how the state is going to react, you know, with these camps that you’re talking about potentially in South Carolina and so on. But it’s imperative to have them make the first move, to make the first violent move. And then, at that point, we see, everyone sees what they are.
ROCKWELL: It’s so important that — I’ve always made this point, and you, too, that we never use the language of violence. I mean, violence, in fact, is the apparatus of the state. I mean, they are the killers. They are the jailers. They are the beaters and hangers. But for us — not only do I think it’s wrong to attempt to use violence —
ROCKWELL: — but it’s also against your own self interest to do so.
SALERNO: And it’s counterproductive.
ROCKWELL: That’s what the state wants. They’re always talking about, oh, there’s militias out there. There are people with guns —
ROCKWELL: — people with bombs. We had this recent thing yesterday about some poor schnook from Bangladesh who FBI and the New York Police Department — of course, this typically happens. They recruit the kid to be a terrorist.
SALERNO: Of course.
ROCKWELL: They train him to be a terrorist. They give him the target, which this time was the New York Fed, I found, very interestingly. Then they give him of phony bomb. He goes to plant, at their instructions, the phony bomb, then they arrest him for terrorism. But I thought it was interesting that they’re alleging that the terrorists, quote, unquote, “would be against the New York Fed.”
So I wonder if that was actually an attempt to smear all of us who are, of course, opposed to the Fed and the whole banking system as it currently exists, which is, of course, such a pillar of the state.
SALERNO: Yes. I would’ve thought that was farfetched five years ago, but I don’t today. More and more people are recognizing what the Fed is and what it does and how it prints money out of thin air and finances the welfare/warfare state. I believe that that’s probably the case. They want to sort of tar the anti Fed types —
SALERNO: — with this terrorist sort of veneer.
ROCKWELL: Even though, of course, who were the actual bombers in this world? How many bombs has the U.S. government, in its history of killing, dropped on people or blown up buildings?
SALERNO: Yes, of course.
ROCKWELL: The biggest terrorist apparatus in the world today is the U.S. government.
SALERNO: Of course. We have 9,600 warheads, 5,000 of which are operational. China has 240. Russian has a big stock. But the point is that you can probably kill the world with about 1,000 warheads. We have 5,000 that are active. By dropping 300, you would kill maybe one-third or two-thirds of the people. The rest would just die of disease and hunger and so on. So we can kill the world multiple times over. I mean, it’s a terror state, the U.S. state.
ROCKWELL: Even without nuclear weapons, although, of course, they keep threatening to use nuclear weapons against Iran.
SALERNO: Against Iran, absolutely.
ROCKWELL: This is when they say everything is on the table.
ROCKWELL: That’s what they mean. They mean atomic weapons.
SALERNO: Of course, they do. Yeah.
ROCKWELL: And they were just heralding themselves yesterday for having this new Bunker Buster bomb that can allegedly go through 200 feet of hardened concrete and then blow up —
ROCKWELL: — blow up whatever is underneath that. And, of course, they’re threatening and, of course, wanting to destroy Iran, who they have always disliked, ever sense they threw out the Shah —
SALERNO: Yes, basically, the U.S. —
ROCKWELL: — who was the U.S. —
SALERNO: — puppet.
ROCKWELL: — the U.S. puppet.
SALERNO: The dictator, too.
SALERNO: And was it the SAVAK, the secret police?
SALERNO: Notoriously, brutal. And they were trained by the U.S.
ROCKWELL: One of the things that most drove everybody crazy in Iran was, under the U.S.’s aegis, the Shah had, first of all, tremendous money printing going on and price and wage controls. And they used violence to enforce the price and wage controls. And what they would do is, if you were — of course, this didn’t happen to the big businessmen in cahoots with the government.
ROCKWELL: But small business people who were caught charging more than the government said they should charge, they would take them out into the middle of the bizarre, the business area —
ROCKWELL: — and beat the soles of their feet off with bamboo poles, in other words crippling them.
SALERNO: Yes. Yes.
ROCKWELL: This is never discussed. But one of the things the Ayatollah Khomeini promised when he came back, he was going to get rid of the price and wage controls, stop the inflation, and stop any of the murderous and vicious punishments against a businessman. I mean, he was far more free market —
ROCKWELL: — then the Shah.
SALERNO: The parallel with the Chinese Communists. Chiang Kai-shek was destroying the currency and rigorously enforcing wage and price controls to the point of actually hanging people. And the Communists came in and promised to stop it, and they did stop it.
SALERNO: And we were, of course, supporting Kai-shek.
ROCKWELL: Yeah. And so this is, you know —
— who are interested in opposing the violent state, I always liked your proposal about use the banks as little as possible.
SALERNO: Yeah, yeah. My last point would be to just take the cash out of the bank. The state hates cash. They’re trying to get — completely get rid of it in some of the Scandinavian countries. In Italy, you can’t have any transaction, I think, for more than $200, or whatever it is, total transaction in cash. So they’re phasing out — under the guise of cracking down on tax evaders, they’re phasing out cash. And that’s happening in the U.S.
Think about it. The biggest denomination we have now is the $100 bill, which is worth about $20.00 in 1970 dollars.
ROCKWELL: Yeah. They also say, of course, the terrorist use cash.
SALERNO: Of course. Right. Right. So, yeah, you’re almost — if you use cash in a transaction, you’re almost a suspected terrorist.
ROCKWELL: Of course, terrorists do everything. I remember a few years ago when they were — they claimed that cigarette smugglers who were buying cigarettes in North Carolina where the state taxes are low, and bringing them to New York —
ROCKWELL: — were terrorists.
So anything can mean — terrorism means something the state doesn’t like.
SALERNO: Yes. That’s what it’s come to mean now. But, unfortunately, you have the association of 9/11 behind it, right?
ROCKWELL: Yeah. Yeah. Yeah, that’s why they had to have been so happy about 9/11.
ROCKWELL: I mean, it should be their holiday. It gave them the ability to expand so much. And, of course, we’ve seen the state has been expanding, maybe ever since 1776, with a few push backs. But since 9/11, the thing has just grown at a humongous rate.
SALERNO: I mean, 9/11 is almost a holiday now, just like Labor Day, which is really Trade Union Day, and Memorial Day, which is really War Day. So the state has a third major holiday that celebrates itself and its murdering and so on.
ROCKWELL: It’s always so interesting. Ron Paul, I remember, was criticized for this: You can’t discuss motives with 9/11. In every other kind of crime, we always want to know, what’s the motive of the person?
ROCKWELL: Why did they do this?
SALERNO: That’s right.
ROCKWELL: But you’re not allowed to look into the motive of 9/11. You’re just supposed to believe that they hated us because we’re free and rich and wonderful and sweet.
SALERNO: Yeah, which is the most ridiculous thing for an — an intellectual would subject that to critical rationality. But, I mean, there’s — how can anyone accept that at face value? I mean, obviously, they have some sort of grievance. Whether it’s justified or not is another question. Let’s look at it. And that’s what Ron Paul wanted to do, and what the state doesn’t want anybody to do.
ROCKWELL: Because, of course, then it questions foreign policy.
SALERNO: Yeah. Yeah. Absolutely. It brings foreign policy up.
ROCKWELL: These are important days for Libertarians. I feel like we’re actually making progress, especially among young people, that young people, smart kids, idealistic kids know they’re being lied to in the classroom, they know they’re being lied to by the media, and they’re looking for the truth; and maybe in the rest of society. I think, if we think of 9/11 as sort of the low point in recent years of opposition to the state, it seems to me we’ve grown mightily. This is why they’re worried. This is why they’re bringing in the drones. This is why they want to spy on everybody. They are worried.
ROCKWELL: They’re constantly concerned. I always think of them as a bunch of fleas controlling a big dog. They’re always afraid they’re going to get scratched off.
ROCKWELL: So it seems to me more and more young people — and everything that we should add — I mean, everything is done by minorities.
SALERNO: Yes. Of course.
ROCKWELL: You don’t actually need half the population plus one to do things.
SALERNO: No, of course not.
ROCKWELL: Minorities, for either good or ill, bring about everything.
SALERNO: Everything, right.
ROCKWELL: So we only need a minority, and the intellectual minority for freedom. But I feel like it’s happening. Not that this is not a horrendous task ahead of us, because it is, but it seems to me we’ve got a lot more people on our side than was true, say, 10 years ago.
SALERNO: Oh, absolutely. I mean, you can just see it. You can see — Ron Paul was one of the biggest influences on expanding the liberty movement and getting it across in a way that made people want to look more at — and educate themselves more, to look to the intellectual side of liberty. I think that was what was so important about the Ron Paul movement.
ROCKWELL: Recently, Norm Singleton —
ROCKWELL: — who is one of Ron’s aides, sent me an article where Murray, back around the time of Ron’s running for the Libertarian Party nomination in ’87 and ’88, it had predicted exactly this, that Ron Paul would be the guy to bring about a mass movement for liberty, the first one, certainly, since the 19th century, maybe even earlier, that he was actually going to be able to mobilize young people and mobilize people all over the world! So Murray saw it.
SALERNO: He saw it.
ROCKWELL: That’s just typical, right?
SALERNO: As he saw so many things.
ROCKWELL: Yeah. And so, it’s true, he has millions of followers. I mean, all in foreign countries as well as this country.
SALERNO: Foreign countries, absolutely. In Turkey, I mean, there were people from all over Europe that were asking me about Ron Paul, and how involved I was with him, and had I met him and so on. It’s just wonderful to behold.
ROCKWELL: I remember Bob Higgs, who was at a previous Turkish conference, talked about driving around after the conference, he and his wife, and they came to this little town and there was Ron Paul signs in it.
Ron Paul for president. So he started asking about it. As soon as they found out that he knew Ron Paul, he said he was like king of the village.
I mean, he was like —
— that everybody was thrilled. And Helio Beltrao and the guys in Brazil —
SALERNO: Yeah, in Brazil.
ROCKWELL: — say the same thing, that Ron could practically be elected president of Brazil. I mean, he’s got a huge — (laughing) — a huge following of young people there.
SALERNO: It’s wonderful. It’s wonderful.
ROCKWELL: All over Latin America and Asia and Europe. So these ideas are becoming more and more potent. Well, they’re already potent —
SALERNO: Yes. Yeah.
ROCKWELL: — but, I mean, more and more popular. So I think we’ve got some good times ahead of us. Not that we don’t need to do a lot of work to spread these ideas. But because they’re true, they have power. Whereas, the government’s ideas are all, of course, a pack of lies.
SALERNO: Right. Exactly. And then the truth will out. I mean, over time, the truth will out.
ROCKWELL: Well, Joe, thanks so much for coming on the show today. And we’ll link to your great article about war and praxeology, also your last podcast you gave about sticking it to the bank by —
SALERNO: OK, yes.
ROCKWELL: — by using cash to the extent you can.
SALERNO: Right. That’s right.
ROCKWELL: And just one point about how they hate it — and I’m a Salerno-ian, and this is another thing — but when you go to the bank and you get a significant amount of cash out, $1000 or $2000, they hate your guts. I mean, you would think —
— that they wouldn’t care. But even tellers are, “zzz,” you know, giving you the evil eye. So it’s so important to do it and to use your cash —
ROCKWELL: — when you go to the grocery store or buy gasoline or all your daily transactions. It really bothers them.
SALERNO: Yes, it does. It does, because that is the one thing that could bring the banks down because they’re fractional-reserve institutions, as we know. And it would take days and days and days and months for the Fed — if the banking system collapsed — to print up the cash and then to distribute it. And it would be phenomenally costly. So they don’t — they want to suppress cash for that reason also.
ROCKWELL: I remember back when all the hysteria about 2000, the year 2000 and whether all the computers and everything were to stop working in the year 2000 —
ROCKWELL: — Y2K, that it came out that the Fed had printed up an extra $50 billion in cash — (laughing) — so they could distribute it to the ATMs.
ROCKWELL: An additional $50 billion in cash. It was all over the country. And then they, I guess, extinguished it or something afterwards. But it was very, very funny — (laughing).
So use cash.
ROCKWELL: Undermine the banks. Tell the truth about the government. Tell the truth about war. Tell the truth about the fact that they’re parasites and they’re living on — and that we’re the host.
ROCKWELL: This is our weapon. And, of course, any police state, like the U.S., employs a vast number of agent provocateurs. This is true. This is not invented by the U.S. Ancient Rome had them.
SALERNO: Yeah, right.
ROCKWELL: And I’m sure ancient Babylon or whatever did, too. So if you’re ever in any kind of a group, any kind of a Libertarian group — this happens even in reading groups — and there’s somebody coming in there advocating violence, toss him out.
SALERNO: Yes, exactly. Right.
ROCKWELL: Because even if he’s not an agent of the state, he’s evil. But you want nothing to do with him. But typically, these people are agents of the state. They’re paid to go in and try to smear people by getting them to start talking about acts of violence. So these things are wrong. And, again, the state is the locus of violence in society, not private crime. And so we should just not have anything to do with anybody who advocates that kind of thing. But use the truth. Get everybody to read Rothbard —
SALERNO: Yes, right.
ROCKWELL: — Salerno.
SALERNO: Yeah. Thanks.
ROCKWELL: And this is the way that we have a chance to win against this apparatus.
I also think that there’s never been a bureaucracy the size of the U.S. government in the history of the world. I mean, this thing is the biggest, richest —
SALERNO: Oh, absolutely.
ROCKWELL: — bureaucracy ever to exist. So maybe we’ll find out more about what Mises and Rothbard had to say about bureaucracy as we —
ROCKWELL: — see the state be unable to do things.
SALERNO: Right. The bigger the bureaucracy, the more inefficient it is. The more activities that it takes under its purview, it can’t calculate, so it introduces greater and greater chaos into society. Of course, that impoverishes us.
ROCKWELL: Intellectually, these are interesting days. Morally, they’re very, very important days to be working for freedom, and writing about freedom, talking about freedom. The bad guys won’t like us for that. All the more important to do it.
SALERNO: Yes, absolutely. Of course.
ROCKWELL: Joe, thanks for all the work you do.
SALERNO: Thank you.
ROCKWELL: It’s great.
Well, thanks so much for listening to the Lew Rockwell Show today. Take a look at all the podcasts. There have been hundreds of them. There’s a link on the upper right-hand corner of the LRC front page. Thank you.
Podcast date, October 19, 2012