People label a policy as a failure because it does not bring about its declared objective. For example, drug policies do not reduce drug use; educational policies do not educate children better; national-security policies do not make Americans more secure; and so forth. The mistake is to take seriously the announced policy objectives, to forget that virtually everything the government does is a fraud. The best way to document the government’s nearly unblemished record of policy success is to follow the money. With very little trouble, you will be able to follow the trail to the individuals and groups who benefit from the policy. Occasionally the true beneficiaries do not benefit in the form of augmented income or wealth, but in other forms of reward, yet the principle remains the same.

When I first studied economics and began to practice as an economist, back in the sixties and seventies, I learned how markets and the market system as a whole operate. With this understanding in mind, I was able to identify a number of reasons why a particular policy might fail: it might be based on insufficient or incorrect information; it might give rise to unintended consequences; it might receive inadequate funding for its implementation; it might be based on unsound theory or mistaken interpretation of historical experience; and so forth.

Analysts who approach the question of failed policies along these avenues can rest assured that they will never lack for new studies to perform and new measures to propose to legislators, regulators, administrators, and judges. For example, if government fiscal or monetary policy fails to stabilize the economy’s growth because it derives from unsound macroeconomic theory, then the analyst attempts to identify the ways in which the received theory is unsound and to formulate a sounder theory, on the basis of which a more successful policy may be carried out. This sort of back and forth between theoretical tinkering and policy appraisal fills many pages in mainstream economics journals.

But it’s all a waste of time insofar as the attainment of the ostensible policy objectives is concerned, because these objectives are not the policy-makers’ real objectives, but only the public rationales they use to disguise their true objective, which invariably is to bring about the enrichment, aggrandizement, and other benefit of the politically potent individuals and interest groups that pack the decisive punch in the policy-making process—for example, those who can most effectively threaten legislators with affirmative punishments or the withdrawal of financial support for the legislators’ reelection if the string pullers’ interests are not served.

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In The Federalist No. 51, arguably the most important one of all, James Madison wrote in defense of a proposed national constitution that would establish a structure of “checks and balances between the different departments” of the government and, as a result, constrain the government’s oppression of the public. In making his argument, Madison penned the following paragraph, which comes close to being a short course in political science:

The great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. The provision for defense must in this, as in all other cases, be made commensurate to the danger of attack. Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.[1]

The passage that refers to the angels is a rhetorical masterpiece, so memorable that it has become almost a cliché. In Madison’s argument, however, it does more than emphasize that human nature is something less than angelic. It also serves as a springboard that propels Madison directly into a consideration of “framing a government which is to be administered by men over men,” which is “but the greatest of all reflections on human nature.”

In short, it moves Madison directly to a consideration of government as we have known it for the past several thousand years — a monopoly operating ultimately by threat or actual use of violence, making rules for and extracting tribute from the residents of the territory it controls. Henceforth, for clarity, I refer to this all-too-familiar type of organization as “the state.”

Perhaps everyone will agree that if we were all angels, no state would be necessary, and if angels were the governors, they would require neither internal nor external constraints to ensure that they governed justly. In terms of Table 1, we would be indifferent between the two cells in the first row.

Table 1 — Madison’s Model

In Madison’s mind, the no-state option was inconceivable, for reasons he expressed obliquely when he wrote:

In a society under the forms of which the stronger faction can readily unite and oppress the weaker, anarchy may as truly be said to reign as in a state of nature, where the weaker individual is not secured against the violence of the stronger; and as, in the latter state, even the stronger individuals are prompted, by the uncertainty of their condition, to submit to a government which may protect the weak as well as themselves; so, in the former state, will the more powerful factions or parties be gradually induced, by a like motive, to wish for a government which will protect all parties, the weaker as well as the more powerful.[2]

Thus, Madison, apparently following Locke, believed that individuals would not choose to remain in a stateless condition and would submit to the authority of a state in order to attain greater security of person and property. Countless other thinkers over the years have reasoned likewise, as Mancur Olson did in his final book when he concluded, “If a population acts to serve its common interest, it will never choose anarchy.”[3]

Disorder, Liberty, and the State

Nothing is more common than the assumption that without a state, a society will fall necessarily and immediately into violent disorder; indeed, anarchy and chaos are often used as synonyms. TheRandom House Dictionary gives the following four definitions for anarchy:

1. a state of society without government or law
2. political and social disorder due to absence of governmental control
3. a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society
4. confusion; chaos; disorder

Suppose, however, that the situation described by the third definition were not merely an ideal, but a genuine possibility, perhaps even a historically instantiated condition.

Locke, Madison, Olson, and nearly everybody else, of course, have concluded from their theoretical deliberations that the stateless option cannot exist — at least, not for long — because its deficiencies make it so manifestly inferior to life in a society under a state. The alleged absence of significant historical examples of large, stateless societies during the past several thousand years buttresses these theory-based conclusions: just as “the poor we have always with us,” so except among primitive peoples, society and the state are taken to have always coexisted.

One need not spend much time, however, to find theoretical arguments — some of them worked out in great detail and at considerable length[4] — about why and how a stateless society could work successfully. Moreover, researchers have adduced historical examples of large stateless societies, ranging from the ancient Harappan civilization of the Indus Valley[5] to Somalia during the greater part of the past decade and a half.[6] Given the enormous literature that has accumulated on stateless societies in theory and in actual operation, we may conclude that, if nothing else, such societies are conceivable.[7]

In this light, both cells in the second row of Madison’s model must be seen as live options, whose most likely outcomes are, I suggest, as indicated in the More Realistic Model shown in Table 2:

Table 2 — More Realistic Model

Although I admit that the outcome in a stateless society will be bad, because not only are people not angels, but many of them are irredeemably vicious in the extreme, I conjecture that the outcome in a society under a state will be worse, indeed much worse, because, first, the most vicious people in society will tend to gain control of the state[8] and, second, by virtue of this control over the state’s powerful engines of death and destruction, they will wreak vastly more harm than they ever could have caused outside the state.[9] It is unfortunate that some individuals commit crimes, but it is stunningly worse when such criminally inclined individuals wield state powers.

Lest anyone protest that the state’s true “function” or “duty” or “end” is, as Locke, Madison, and countless others have argued, to protect individuals’ rights to life, liberty, and property, the evidence of history clearly shows that, as a rule, real states do not behave accordingly. The idea that states actually function along such lines or that they strive to carry out such a duty or to achieve such an end resides in the realm of wishful thinking.

Although some states in their own self-interest may at sometimes protect some residents of their territories (other than the state’s own functionaries), such protection is at best highly unreliable and all too often nothing but a solemn farce. Moreover, it is invariably mixed with crimes against the very people the state purports to protect, because the state cannot even exist without committing the crimes of extortion and robbery, which states call taxation;[10] and as a rule, this existential state crime is but the merest beginning of its assaults on the lives, liberties, and property of its resident population.

In the United States, for example, the state at one time or another during recent decades has confined millions of persons in dreadful steel cages because they had the temerity to engage in the wholly voluntary buying and selling or the mere possession of officially disapproved products. Compounding these state crimes (of kidnapping and unjust confinement) with impudence, state officials brazenly claim credit for their assaults on the victims of their so-called War on Drugs.

State functionaries have yet to explain how their rampant unprovoked crimes comport with the archetype described and justified in Locke’s Second Treatise of Government. In vain do many of us yearn for relief from the state’s duplicitous cruelty: Where is the state of nature when we really need it?

An Application of the Precautionary Principle

In pondering the suitability of the More Realistic Model, we might well apply the precautionary principle, which has been much discussed (and nearly always misapplied) in recent years in relation to environmental policy. This principle holds that if an action or policy might cause great, irreparable harm, then, notwithstanding a lack of scientific consensus, those who support the action or policy should shoulder the burden of proof. In applying this principle to the state’s establishment and operation, the state’s supporters would appear to stagger under a burden of proof they cannot support with either logic or evidence.

Everyone can see the immense harm the state causes day in and day out, not to mention its periodic orgies of mass death and destruction. In the past century alone, states caused hundreds of millions of deaths, not to the combatants on both sides of the many wars they launched, whose casualties loom large enough, but to “their own” populations, whom they have chosen to shoot, bomb, shell, hack, stab, beat, gas, starve, work to death, and otherwise obliterate in ways too grotesque to contemplate calmly.[11]

Yet, almost incomprehensibly, people fear that without the state’s supposedly all-important protection, society will lapse into disorder and people will suffer grave harm. Even an analyst so astute as Olson, who speaks frankly of “governments and all the good and bad things they do,” proceeds immediately to contrast “the horrible anarchies that emerge in their absence,”[12] although he gives no examples or citations to support his characterization of anarchy. But the state’s harms — “the bad things they do” — are here and now, undeniable, immense, and horrifying, whereas the harms allegedly to be suffered without the state are specters of the mind and almost entirely conjectural.

This debate would not appear to be evenly matched. Defending the continued existence of the state, despite having absolute certainty of a corresponding continuation of its intrinsic engagement in robbery, destruction, murder, and countless other crimes, requires that one imagine nonstate chaos, disorder, and death on a scale that nonstate actors seem incapable of causing. Nor, to my knowledge, does any historical example attest to such large-scale nonstate mayhem. With regard to large-scale death and destruction, no person, group, or private organization can even begin to compare to the state, which is easily the greatest instrument of destruction known to man.

All nonstate threats to life, liberty, and property appear to be relatively petty and therefore can be dealt with. Only states can pose truly massive threats, and sooner or later the horrors with which they menace mankind invariably come to pass.

The lesson of the precautionary principle is plain: Because people are vile and corruptible, the state, which holds by far the greatest potential for harm and tends to be captured by the worst of the worst, is much too risky for anyone to justify its continuation. To tolerate it is not simply to play with fire, but to chance the total destruction of the human race.

The absence of a great outpouring of opposition amounts to a very bad sign. It indicates that few people regard the government’s actions as egregious or as portending great harm to the general public. I strongly believe that they are both, and unless many more Americans rouse themselves to oppose these invasions of privacy and to demand that they be terminated, the people will have stood by quietly while the state captured all the ground it needs to reduce them to utter subservience to their political masters.

We have now reached a condition in which state authorities know an immense amount about the personal lives of virtually everyone in the United States and many foreigners, as well. Do people suppose that this access to personal information will be used only for the pursuit of terrorists? Anyone who has looked even superficially into previous government information-collection programs knows better. State authorities will, at minimum, employ the communications data and other personal information now at their fingertips to pursue various sorts of criminals, especially persons suspected of tax evasion. Moreover, they will almost certainly use the information for partisan political purposes. These gratuitous extensions of the use of information they ought never to have collected in the first place—information that mocks the Fourth Amendment’s guarantees in the most serious way imaginable—will, however, almost certainly be only the beginnings of the state’s use of the new power it now holds over the general public.

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There is something monstrously out of whack about going to war for a large nation state.

I can understand why a man might take up arms in defense of himself, his family, his friends, perhaps even his neighborhood or his town. But once we get past the lived-in milieu, a man’s risking his life, limbs, health, and mental composure to fight for a large politically defined unit makes less and less sense, the larger the unit. Why, for example, should a man from Arizona go to war on behalf of people from New Jersey, people with whom he is not acquainted, people about whom he knows little or nothing. The man from Arizona might well have more in common with and greater concern for a typical “enemy” soldier than he has for the people of New Jersey. He might even dislike people from New Jersey and like the enemy people.

I do not care much for many Americans. I find their apparent values and modes of life offensive or worse, although I am personally acquainted with only a handful of them and so I may be doing a disservice to many of those with whom I am not personally acquainted. But in view of the constraints everyone faces, no one can really know, much less like, more than, say, a few hundred other people. What am I to make of a demand that I bear great personal risks in defense of hundreds of millions of complete strangers – for all I know, these people don’t even exist, and the Census Bureau has perpetrated a gigantic fraud in its declarations that they do.

On the opposite side of the ledger, I do know and like – indeed greatly admire and esteem – scores of people in other countries. I cannot imagine going to war against them; I’d sooner go to prison than harm them. So, if the U.S. government went to war against Guatemala, for example, it would have to count me out; I’ve far too many dear friends there even to consider joining in such violence. I wonder sometimes how many of the U.S. soldiers who went to Iraq to kill people there had ever seen, much less been acquainted with, an Iraqi previously. What impels a man to kill perfect strangers, especially perfect strangers who pose no threat to him or to those he cares about at home? To me, it defies basic elements of humanity. One might say that such killers are responding more to their allegiance to their own government’s leaders, but why should they have such a loyalty in the first place? Not one soldier in a thousand has ever personally encountered a top American political leader. Unless the soldier is extraordinarily dense, he understands vaguely that such people are all liars and crooks. Why should he kill other people and risk being killed himself merely because these political kingpins want him to do so? Does he fail completely to see the government’s propaganda for what it is?

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The Best of Robert Higgs

From the Beacon blog of the Independent Institute (2010).

On July 19, 2010, the Washington Post published the first of three large reports by Dana Priest and William M. Arkin on the dimensions of the gigantic US apparatus of “intelligence” activities being undertaken to combat terrorist acts against the United States, such as the 9/11 attacks. To say that this activity amounts to mobilizing every police officer in the country to stop street fights in Camden only begins to suggest its almost-unbelievable disproportion to the alleged threat.

Among Priest and Arkin’s findings from a two-year study are the following:

The top-secret world the government created in response to the terrorist attacks of September 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.

[We] discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.

Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

According to retired admiral Dennis C. Blair, formerly the director of national intelligence, after 9/11 “the attitude was, if it’s worth doing, it’s probably worth overdoing.” I submit that this explanation does not cut to the heart of the matter. As it stands, it suggests a sort of mindless desire to pile mountains of money, technology, and personnel on top of an already-enormous mountain of money, technology, and personnel for no reason other than the vague notion that more must be better. In my view, national politics does not work in that way.

As Priest and Arkin report, “The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 2½ times the size it was on September 10, 2001. But the figure doesn’t include many military activities or domestic counterterrorism programs.” Virtually everyone the reporters consulted told them in effect that “the Bush administration and Congress gave agencies more money than they were capable of responsibly spending.” To be sure, they received more than they could spend responsibly, but not more than they were eager to spend irresponsibly. After all, it’s not as if they were spending their own money.

Why would these hundreds of organizations and contracting companies be willing to take gigantic amounts of the taxpayers’ money when everyone agrees that the money cannot be spent sensibly and that the system already in place cannot function effectively or efficiently to attain its ostensible purpose? The question answers itself. It’s loot for the taking, and there has been no shortage of takers. Indeed, these stationary bandits continue to demand more money each year.

And for what? The announced goal is to identify terrorists and eliminate them or prevent them from carrying out their nefarious acts. This is simultaneously a small task and an impossible one.

It is small because the number of persons seeking to carry out a terrorist act of substantial consequence against the United States and in a position to do so cannot be more than a handful. If the number were greater, we would have seen many more attacks or attempted attacks during the past decade – after all, the number of possible targets is virtually unlimited, and the attackers might cause some form of damage in countless ways. The most plausible reason why so few attacks or attempted attacks have occurred is that very few persons have been trying to carry them out. (I refer to genuine attempts, not to the phony-baloney schemes planted in the minds of simpletons by government undercover agents and then trumpeted to the heavens when the FBI “captures” the unfortunate victims of the government’s entrapment.)

So the true dimension of the terrorism problem that forms the excuse for these hundreds of programs of official predation against the taxpayers is small – not even in the same class with, say, reducing automobile-accident or household-accident deaths by 20 percent.

Yet, at the same time, the antiterrorism task is impossible because terrorism is a simple act available in some form to practically any determined adult with access to Americans and their property at home or abroad. It is simply not possible to stop all acts of terrorism if potential terrorists have been given a sufficient grievance to motivate their wreaking some form of havoc against Americans. However, it is silly to make the prevention of all terrorist acts the goal. What can’t be done won’t be done, regardless of how many people and how much money one devotes to doing it. We can, though, endure some losses from terrorism in the same way that we routinely endure some losses from accidents, diseases, and ordinary crime.

The sheer idiocy of paying legions of twenty-something grads of Harvard and Yale – youngsters who cannot speak Arabic, Farsi, Pashtun, or any of the other languages of the areas they purport to be analyzing and who know practically nothing of the history, customs, folkways, and traditions of these places – indicates that no one seriously expects the promised payoff in intelligence to emerge from the effort. The whole business is akin to sending a blind person to find a needle inside a maze buried somewhere in a hillside.

That the massive effort is utterly uncoordinated and scarcely able to communicate one part’s “findings” to another only strengthens the conclusion that the goal is not stopping terrorism, but getting the taxpayers’ money and putting it into privileged pockets. Even if the expected damage from acts of terrorism against the United States were $10 billion per year, which seems much too high a guess, it makes no sense to spend more than $75 billion every year to prevent it – and it certainly makes no sense to spend any money only pretending to prevent it.

What we see here is not really an “intelligence” or counterterrorism operation at all. It’s a rip-off, plain and simple, fed by irrational fear and continually stoked by the government plunderers who are exercising the power and raking in the booty to “fight terrorism.”

The Best of Robert Higgs

In recent years, I have noticed that many – seemingly a great majority – of my libertarian friends express an optimistic outlook that sooner or later freedom will triumph against tyranny, even in the United States of America, because of technological developments, especially the development of the Internet and the World Wide Web, along with all the hardware and software that facilitate these means of communication and expand their reach. The idea seems to be, at bottom, that technology in general and these technologies in particular are intrinsically anti-state and pro-freedom. Some people regard them as decisive factors in the struggle for liberty. I have never been persuaded.

The Internet and the Web are obviously employed to some extent for anti-state and pro-freedom purposes. Probably their most important effect is to loosen the state’s hold on information about its leaders, their motives, and their actions, and thereby to speed the spread of truth to greater numbers of people who might otherwise have been taken in by the rulers’ habitual resort to distortions, evasions, cover-ups, and outright lies. Such fabrications have always proved most useful to the U.S. state in its foreign relations and imperial actions, where the matters at issue are out of sight of the great mass of Americans. Because the new technologies of communication are not only powerful – allowing the instant transmission of photos, audio recordings, and video recordings, as well as written texts – but also available worldwide, they have the power to prick the state’s balloons of misrepresentation about events abroad in short order.

Despite these anti-state effects, one must recognize that the state itself has hardly remained mired in ancient technologies while the public embraced the new ones. Drive from Dulles International Airport to Washington, D.C., and peer out at the huge office buildings inhabited in many cases by information technology companies that have put themselves – for a handsome reward, of course – at the disposal of the U.S. government. The rulers have in the past decade added to their longstanding military-industrial-congressional complex (MICC) a comparably vast security-industrial-congressional complex (SICC). Perhaps the individual and small-scale tech wizards working their magic in the non-state backwoods will always remain a step or two ahead of the CSCs, Microsofts, and Oracles; I don’t know enough about technology to speculate on this “IT arms race” in an informed way. I do know, however, that the state is not standing helplessly in place while the pro-freedom people innovate so as to render it toothless.

Much more important, however, is that whereas the new information technologies can spread information in the raw, as it were, they cannot so readily alter the mental filters – essentially the ideological screening and focusing – that the public uses to interpret and evaluate the information it receives. Consider, for example, the public’s reaction to the recent disclosures about the state’s all-encompassing spying on the American people’s electronic communications, whether by ordinary telephone calls, e-mails, or other means. At this point, the situation appears to be that the rulers have unashamedly excused their unconstitutional conduct and painted the bearer of the bad news, Edward Snowden, as a traitor for exposing their secret snooping on one and all without warrant or any plausible reason, aside from technological overkill in the alleged search for terrorists; and the public appears to be more approving than condemning. Revealing the state’s crimes serves no purpose in preserving or reestablishing liberty if the public receives such revelations with a yawn or, worse, with enthusiastic approval.

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The Best of Robert Higgs

State power is the most dangerous force in modern life. State rulers, seeking their own aggrandizement and enrichment, employ this power systematically to plunder and abuse their subjects. Of course, they cannot act in this way without the assistance of many others, among whom some assist willingly, some in return for adequate compensation, and many only under duress.

To maintain their grip on power, state rulers (1) bamboozle as many subjects as possible; (2) co-opt those whose cooperation or support is essential by bribing them with various sorts of payoffs; (3) intimidate those who are not essential and not fooled by threatening them with fines, imprisonment, and other punishments; and (4) kill those who are not essential, are not fooled, and will not bend to intimidation.

Anyone who seeks to stymie or overturn state power must block these state actions or render them less effective. Resisters therefore have many options.

First, they may work to reduce the number of people who succumb to the rulers’ bamboozlement by exposing the rulers’ lies, spreading truthful information, and revealing the rulers’ venality and cynical disregard of the people’s natural rights and the general public interest. People may withdraw their children from government schools and teach them at home; they may spread truthful information about the horrors of the state and the glories of freedom by means of the Internet and the World Wide Web. In short, people may use the word processor that is mightier than the Predator drone (formerly the pen that is mightier than the sword) as well as face-to-face communication to reeducate those who have been taught, conditioned, and forced to drink’s the rulers’ Kool-Aid.

Second, resisters may alter the incentives of those who cooperate or support the state in return for various payoffs. For example, companies that seek contracts with the government or privileges gained via regulation, tariff protection, or other anti-social means might be boycotted. If this effort caught on, companies would be put in a position of having to choose between the profits to be gained by serving the state and the profits to be gained by serving consumers in a free market. Just as today many sellers certify that their produce is organic and thereby gain sales at the expense of sellers who cannot make this claim, sellers might certify, via independent third-party certification agencies in the free market, that they are free of government contamination – that is, that they have neither sought nor accepted any contract or privilege from the government.

Those who are currently co-opted by the state might also be subjected to public condemnation, denunciation, and shunning, not only commercially but socially. If a company works with the government’s armed forces or its spy agencies, for example, people might treat its owners, executives, and workers as the untouchables were treated in the classic Indian caste system. No matter how much the government offered in pay and perks, some people might be unwilling to invest in or work for companies if such an association would make them social pariahs.

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The Best of Robert Higgs

The Wall Street Journal

To the editor:

Bob
Davis and Gref Jaffe’s article (Feb. 4) on the
likely economic consequences of a U.S. war against Iraq errs
by giving past wars credit for creating positive economic effects.
This hoary fallacy, it seems, just can’t
be killed.

The strongest case for it has long been World War II, which
Davis and Jaffe claim u201Cclearly was a boon for the U.S. economy.u201D But a boon
in what sense? Unemployment fell during the war entirely because of the buildup
of the armed forces. In 1940, some 4.62 million persons were actually unemployed
(the official count of 7.45 million included 2.83 million employed on various
government work projects). During the war, the government, by conscription
for
the most part, drew some 16 million persons into the armed forces at some time;
the active-duty force in mid-1945 numbered in excess of 12 million. Voila,
civilian unemployment nearly disappeared. But herding the equivalent of 22
percent of
the prewar labor force into the armed forces (to eliminate 9.5 percent unemployment)
scarcely produced what we are properly entitled to call
prosperity.

Yes, officially measured GDP soared during the war. Examination of that increased
output shows, however, that it consisted entirely of military goods and services.
Real civilian consumption and private investment both fell after 1941, and
they did not recover fully until 1946. The privately owned capital stock actually
shrank during the war. Some prosperity. (My article
in the peer-reviewed Journal of Economic History,
March
1992, presents many of the relevant details.)

It is high time that we come to appreciate the distinction between the government
spending, especially the war spending, that bulks up official GDP figures and
the kinds of production
that create genuine economic prosperity. As Ludwig von Mises wrote in the aftermath
of World War I, u201Cwar
prosperity is like the prosperity that an earthquake or a plague brings.u201D

Robert
Higgs [send him
mail] is
senior fellow in political economy at the Independent
Institute, editor of The
Independent Review,
and author of Crisis
and Leviathan and
the editor of Arms,
Politics, and the Economy.

Robert Higgs Archives

DIGG THIS

On June 6, 2008, Robert Higgs gave the following speech at the Future of Freedom Foundation‘s conference Restoring the Republic 2008: Foreign Policy and Civil Liberties. The speech can viewed below in its entirety.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

Robert Higgs Archives

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ROCKWELL: Well, good morning. This is the Lew Rockwell Show, and how great to have as our guest this morning, Professor Robert Higgs. Dr. Bob Higgs is a senior fellow in political economy at the Independent Institute. He’s editor of their Independent Review. He’s an associated scholar of the Mises Institute. He received our highest award, the Schlarbaum Prize for Lifetime Achievement in Liberty in the tradition of Ludwig von Mises. He’s a columnist for LewRockwell.com and he’s the author of many books – Opposing the Crusader State; Crisis and Leviathan; Against Leviathan; Resurgence of the Warfare State; Depression, War, and Cold War; Neither Liberty Nor Safety. And his latest book is Delusions of Power: New Explorations of the State, War, and Economy.

And, Bob, just before I let you get started, I just want to mention what a hit you were at the Mises University with your opening talk on warfare, welfare and the state. The kids were just wide-eyed, paying attention to every word. And, of course, we had the same reaction to all the people who were watching it on YouTube. So thanks for being a faculty member again this year and for all the work you’re doing. And tell us about this latest book.

HIGGS: Well, this one is a collection of some things I’ve written in the last few years, Lew. That’s been the general rule of my books for some time now. And because of the way my professional life is set up, I don’t have an opportunity to write ordinary books, which are sort of coherent, beginning-to-end treatises. But I am able to continue writing essays and articles, and so every once in a while I have the feeling that some of them have had enough substance that they deserve to be collected. And so I try to find those that bear on a common theme and put them between covers in a way that will have some coherence. And I hope that these trees add up to some kind of forest. But at all events, that’s the nature of this book. And some of the chapters in it should have been familiar to you because they were originally published in one form or another by the Mises Institute. So it was an opportunity for me to take some fragments that have appeared in many different places, and might not have been noticed by any particular reader, and pull them together.

ROCKWELL: Well, it’s wonderful. And, of course, obviously, there’s no hotter topic or more relevant topic than the warfare state and what it’s doing to the world and to us and what it’s doing to our economy. This is the right book for the right time, isn’t it?

HIGGS: Well, unfortunately, Lew, the state, war and economy are perpetually of great interest, or should be of great interest to everybody. And certainly, right now, we are in the thick of crises. Certainly, the economic debacle that came to a head in 2008 is far from over. And the United States continues to project its armed forces and other influences all over the world and to just get Americans into trouble without any relief at all. And right now, of course, it’s trying to displace the regime in Syria and replace it with what it thinks will be a superior one, from its point of view. But as usual, of course, it looks as if the US decision makers are clueless about the people they’re supporting in this civil war in Syria. So once again, we’ve got the blind leading us into more of these endless swamps of imperialism around the world. And so these sorts of things are topics for my latest book here and I’ve tried in various ways to open new windows on how to understand them.

ROCKWELL: Bob, how much of a role does just the old divide-and-conquer apply? I mean, is it possible that they’re just seeking to destroy Syria for purposes of easier ruling and then to bring down other areas?

HIGGS: I think one of the more plausible hypotheses that’s being advanced actually originates with a prominent Israeli official, and that is the idea of simply destabilizing and more or less throwing into chaos all of the countries that are major enemies of Israel. So, you know, regardless of who wins, if Syria can be turned into enough of a mess, then that benefits the Israeli government, or at least the Israeli government thinks it does. So I wouldn’t rule out that kind of thinking.

But I also am more or less convinced that the people who make decisions in the office of the president and the State Department and the Pentagon actually have persuaded themselves that they can change the world in a way that’s beneficial to the United States and very often to the world. Some of them might genuinely believe that they’re going to go out into places they know practically nothing about and make them better places for the people who live there. And this kind of pretense of knowledge has just led them, of course, from one disaster to another from the standpoint of the American people and the people that are directly involved at the end of the bayonet.

ROCKWELL: And, of course, it is the bayonet that they’re seeking to use to make them better.

HIGGS: Of course. It’s always that. You know, they’re willing to use non-military means if they’ll work. But, of course, they always keep, as the saying goes, “on the table” the option of using what Madam Albright once called “those wonderful armed forces,” the ones that she didn’t think got used enough.

ROCKWELL: Do you think that – I remember Roger Garrison saying once that, “Sooner or later, every president makes you nostalgic for his predecessor.”

(Laughter)

So if Romney gets in, is it possible that he’s even more war-like than Obama?

HIGGS: Oh, I think it’s possible. Yes, I do. I think it’s possible. I mean, right now, it’s difficult to see a great difference between the two in foreign policy views or, for that matter, in much of anything else. But I think it’s certainly possible that Romney could be worse. We don’t have anything to my knowledge in his record or his views or the people who are advising him to suggest that he’s certainly going to be better as a foreign policy and defense decision maker.

ROCKWELL: And we see, of course, what the Republican has done to Ron Paul. They definitely don’t want to hear another view.

But what about the American people? Are you, amongst students and so forth, are you feeling any optimism about people starting to dissent, starting to question all that the regime is doing overseas and, for that matter, to us here at home?

HIGGS: I see some upwelling, Lew, but, at the moment, I just don’t see its sufficient penetration of the influential circles of society. You know, lots of people obviously are upset. And Ron Paul has done a great deal to mobilize millions of people. But, you know, in a country of 315 million and maybe a few thousand of them who actually have influence at the top levels of politics – you can mobilize millions of people and still not have much effect on the outcome of political events. So, yes, I’m pleased by what seems to have begun in the last few years but unless it becomes much bigger and more powerful, penetrates the consciousness of more people, I can’t see that it will have much effect on the course of events.

ROCKWELL: So is the US, after all, no better than the Assyrians or the Babylonians or the British –

(Laughter)

– or the Romans or the Egyptians or the Persians and the Medes and so forth?

(Laughter)

It’s just another predatory empire?

HIGGS: You give me a hard choice, Lew.

(Laughter)

ROCKWELL: With atomic bombs, of course, in its fists.

(Laughter)

HIGGS: Each one of those –

(Laughter)

– particular regimes had its own special ugliness and – (laughing) – and we can certainly find things that make the US empire the ugliest if only because it had the means to be that ugly. I don’t know whether the Assyrians of old would have used nuclear weapons on civilians or not. But when the United States had those weapons in its hands, we know that it went ahead and used them to slaughter hundreds of thousands of men, women and children, totally indefensibly. So that kind of action has no real parallel in previous empires but that may simply be because the technology was not available to the fiends of old.

ROCKWELL: Bob, the US/Israeli continuing verbal and covert assault on Iran, which, of course, I guess, if Romney gets his way, and maybe Obama, too, will become an invasion or a massive bombing. Both the Israeli and the Americans are always careful to say, “Nothing is off the table.”

HIGGS: Right.

ROCKWELL: Which I take to mean atomic weapons. And –

HIGGS: I think that’s the way to decipher the code. You know, I think it’s pretty clear that the US and Israel, at least the people who make decisions for those states, do not want to allow Iran to have a nuclear weapon of any kind. And, you know, there’s just so many questions that one would ask to follow up on that matter. But, you know, if you just take that as a point of departure, it seems to be the basis on which they’ve decided that if Iran appears to be close to obtaining a nuclear weapon, then they will use whatever it takes to destroy that capacity.

I suspect – I’m not a military technologist – but I suspect that they would probably begin with a kind of massive bombing using these so-called bunker-buster bombs that have been developed. And if the non-nuclear ones didn’t get the job done, they might decide to follow up with nuclear weapons. Now, I don’t put anything past these people. They have nuclear weapons. They talk about using them. They’re equipped to use them. There’s no reason whatever to think that they simply would shrink from using them. I don’t give them any points for moral scruples. And so if it comes to that, it will be horrible, but I don’t think the probability is zero.

ROCKWELL: I remember one of the early Neo-Cons, Herman Khan, wrote a book called Defending the Undefendable in which he talked about not only should nuclear weapons be used by the US against its enemies but it would be a wonderful thing. It would be a wonderful thing for the world and –

HIGGS: Oh, yes.

ROCKWELL: – it should be just a normal resort for anybody who questions US hegemony. Nuke them!

HIGGS: Well, this was actually expressed in the film Dr. Strangelove in one of the speeches by General Buck Turgidson where, you know, he assured the president that if we went ahead and attacked the Russians first, then our losses would be “only 20, 30 millions, tops”!

(Laughter)

And he’s bragging about that.

ROCKWELL: Yes.

HIGGS: But, although that was kind of darkly funny in the film, that was entirely based on the thinking of people working for RAND and working for the Air Force and people working in the Pentagon in the 1950s and ’60s. These people actually were madmen, in my judgment. The kinds of strategies, even tactics that they planned for using were the sorts of things that only lunatics would even consider using. And yet, this was all in a day’s work for these people.

ROCKWELL: And the level of insanity, has it diminished? I mean, it seems to me we still have crazy people perhaps making these decisions, certainly contributing to these decisions.

HIGGS: I actually think there has been some diminution of that level of madness from the peak years of the Cold War. I don’t at all think that sane people are in charge at the Pentagon and the intelligence apparatus and in the office of president. But nonetheless, I think some of the usual topics of discussion like from the days of mutually assured destruction and massive nuclear retaliation, I think those things are a little farther down the list of priority topics now than they were in the ’50s and ’60s.

ROCKWELL: Yes. At least they don’t teach children, as they did you and I when we were in school, to get under the desk to protect yourself from a nuclear blast.

(Laughter)

HIGGS: Yes. You know, I don’t think I’ve mentioned to you, but when I was a kid growing up in the ’50s, I used to actually have nightmares about a nuclear war because they showed films at school of hydrogen bombs exploding. And the images in my mind of those films were horrible, and I couldn’t get them out for years, and they terrified me. And I rather suspect – (laughing) – a great many children growing up in the 1950s suffered the same kinds of terrors.

ROCKWELL: And we were told that Boston and Cambridge, where my school was, would be targets.

HIGGS: Yes, Ground Zero – (laughing).

ROCKWELL: I mean, we definitely – but get under the desk.

HIGGS: Yes.

(Laughter)

ROCKWELL: Tell us what you think is going to happen about Iran. I mean, what’s your – I know, you know, nobody can know for sure, but you know as much as anyone. What’s your guess as to what’s – are they going to go to war against Iran or will it continue to be these horrendous sanctions and threats of war and, of course, covert operations? There are all kinds of covert troops in there now.

HIGGS: In my best guess – and that’s all it is, Lew – is that they’re going to continue to maneuver around this, at least in the short term. I think, you know, prior to the election, Obama probably very much does not want this kind of bad news to hit the fan. Because I don’t know how stupid they are among the people advising him on these matters right now, but you don’t have to be a rocket scientist to understand that if there’s a big attack by Israel or the United States on Iran, the consequences for the world economy will be horrendous. And it’s going to destabilize the entire Middle East and the entire world financial system, which is in none too good of shape already. And it’s just going to be awful. It won’t be, in my judgment, at all comparable to the US attack on Iraq for a variety of reasons. And so if they have a clue about just how horrible the consequences will be of such an attack, then I think that that appreciation will give them pause. It certainly ought to because – (laughing) – even if they wait until Obama is reelected and then decide to carry out the attack, hell is going to break lose. And that is not the way for Obama to accomplish any of his objectives in his second term.

So I hope that there’s enough sense among these people to deter them from this kind of precipitous madness. But, again, I really don’t know how sane they are.

ROCKWELL: Yes. Take a guy like Netanyahu, he’s like an attack dog and he’s saying, “Let me go, let me go, let me go,” but really saying, “Don’t let me go. Don’t’ take me off the leash.”

(Laughter)

Or does he really want the war? I mean, does he actually think it’s even good for Israel or, let alone, anybody else?

HIGGS: It’s very difficult to know what’s going on, Lew, because the Israeli leadership and the US leadership are both playing to domestic audiences and they’re also playing against one another, and there’s all kinds of gaming going go on and rhetoric that is false or insincere. And so it’s just a mess for someone who is trying to figure out, where does anybody stand on this matter. It’s clear that some people have an interest in making certain kinds of noises about it. That’s why I think all serious candidates for the presidency in the US insist that all options are on the table, and, you know, in no event will the US fail to stand with Israel, blah, blah, blah. That’s domestically in their interest because if a candidate for the presidency did not make those noises, he would suffer a drastic reduction in funds. And that’s what it boils down to. And so, no serious candidate is willing to pay that price.

But at the same time, we can’t be sure how these governments, once they have the power, once someone’s been elected or reelected will size up the situation at that point because then their political strategy will have to take into account other things, whereas, right now, it takes into account mainly the coming election.

ROCKWELL: That’s actually an optimistic –

(Laugher)

That’s actually an optimistic view of things, isn’t it?

HIGGS: Well, you can always come to me for –

(Laughter)

– optimism, Lew.

(Laughter)

ROCKWELL: Well, Bob Higgs, thanks a million for all you do, all your great work for peace and freedom, which, of course, are issues that are joined at the hip, as much as some people might like to separate them. And congratulations on your new book, Delusions of Power. We’ll link to that, to all your other books, your YouTube channel and your Facebook page and so forth. And great to have you on the show.

HIGGS: Oh, it’s great to talk to you, Lew.

ROCKWELL: And congratulations on your new Dachshund puppy.

HIGGS: Oh – (laughing) – thank you very much – (laughing).

ROCKWELL: Bye-bye, Bob.

HIGGS: Bye.

ROCKWELL: 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, August 28, 2012

Recently by Robert Higgs: How U.S. Economic Warfare Provoked Japan’s Attack on PearlHarbor

Listen to the podcast

ROCKWELL: Well, good morning. This is the Lew Rockwell Show, and how great to have as our guest this morning, Professor Robert Higgs. Dr. Bob Higgs is a senior fellow in political economy at the Independent Institute. He’s editor of their Independent Review. He’s an associated scholar of the Mises Institute. He received our highest award, the Schlarbaum Prize for Lifetime Achievement in Liberty in the tradition of Ludwig von Mises. He’s a columnist for LewRockwell.com and he’s the author of many books — Opposing the Crusader State; Crisis and Leviathan; Against Leviathan; Resurgence of the Warfare State; Depression, War, and Cold War; Neither Liberty Nor Safety. And his latest book is Delusions of Power: New Explorations of the State, War, and Economy.

And, Bob, just before I let you get started, I just want to mention what a hit you were at the Mises University with your opening talk on warfare, welfare and the state. The kids were just wide-eyed, paying attention to every word. And, of course, we had the same reaction to all the people who were watching it on YouTube. So thanks for being a faculty member again this year and for all the work you’re doing. And tell us about this latest book.

HIGGS: Well, this one is a collection of some things I’ve written in the last few years, Lew. That’s been the general rule of my books for some time now. And because of the way my professional life is set up, I don’t have an opportunity to write ordinary books, which are sort of coherent, beginning-to-end treatises. But I am able to continue writing essays and articles, and so every once in a while I have the feeling that some of them have had enough substance that they deserve to be collected. And so I try to find those that bear on a common theme and put them between covers in a way that will have some coherence. And I hope that these trees add up to some kind of forest. But at all events, that’s the nature of this book. And some of the chapters in it should have been familiar to you because they were originally published in one form or another by the Mises Institute. So it was an opportunity for me to take some fragments that have appeared in many different places, and might not have been noticed by any particular reader, and pull them together.

ROCKWELL: Well, it’s wonderful. And, of course, obviously, there’s no hotter topic or more relevant topic than the warfare state and what it’s doing to the world and to us and what it’s doing to our economy. This is the right book for the right time, isn’t it?

HIGGS: Well, unfortunately, Lew, the state, war and economy are perpetually of great interest, or should be of great interest to everybody. And certainly, right now, we are in the thick of crises. Certainly, the economic debacle that came to a head in 2008 is far from over. And the United States continues to project its armed forces and other influences all over the world and to just get Americans into trouble without any relief at all. And right now, of course, it’s trying to displace the regime in Syria and replace it with what it thinks will be a superior one, from its point of view. But as usual, of course, it looks as if the US decision makers are clueless about the people they’re supporting in this civil war in Syria. So once again, we’ve got the blind leading us into more of these endless swamps of imperialism around the world. And so these sorts of things are topics for my latest book here and I’ve tried in various ways to open new windows on how to understand them.

ROCKWELL: Bob, how much of a role does just the old divide-and-conquer apply? I mean, is it possible that they’re just seeking to destroy Syria for purposes of easier ruling and then to bring down other areas?

HIGGS: I think one of the more plausible hypotheses that’s being advanced actually originates with a prominent Israeli official, and that is the idea of simply destabilizing and more or less throwing into chaos all of the countries that are major enemies of Israel. So, you know, regardless of who wins, if Syria can be turned into enough of a mess, then that benefits the Israeli government, or at least the Israeli government thinks it does. So I wouldn’t rule out that kind of thinking.

But I also am more or less convinced that the people who make decisions in the office of the president and the State Department and the Pentagon actually have persuaded themselves that they can change the world in a way that’s beneficial to the United States and very often to the world. Some of them might genuinely believe that they’re going to go out into places they know practically nothing about and make them better places for the people who live there. And this kind of pretense of knowledge has just led them, of course, from one disaster to another from the standpoint of the American people and the people that are directly involved at the end of the bayonet.

ROCKWELL: And, of course, it is the bayonet that they’re seeking to use to make them better.

HIGGS: Of course. It’s always that. You know, they’re willing to use non-military means if they’ll work. But, of course, they always keep, as the saying goes, “on the table” the option of using what Madam Albright once called “those wonderful armed forces,” the ones that she didn’t think got used enough.

ROCKWELL: Do you think that — I remember Roger Garrison saying once that, “Sooner or later, every president makes you nostalgic for his predecessor.”

(Laughter)

So if Romney gets in, is it possible that he’s even more war-like than Obama?

HIGGS: Oh, I think it’s possible. Yes, I do. I think it’s possible. I mean, right now, it’s difficult to see a great difference between the two in foreign policy views or, for that matter, in much of anything else. But I think it’s certainly possible that Romney could be worse. We don’t have anything to my knowledge in his record or his views or the people who are advising him to suggest that he’s certainly going to be better as a foreign policy and defense decision maker.

ROCKWELL: And we see, of course, what the Republican has done to Ron Paul. They definitely don’t want to hear another view.

But what about the American people? Are you, amongst students and so forth, are you feeling any optimism about people starting to dissent, starting to question all that the regime is doing overseas and, for that matter, to us here at home?

HIGGS: I see some upwelling, Lew, but, at the moment, I just don’t see its sufficient penetration of the influential circles of society. You know, lots of people obviously are upset. And Ron Paul has done a great deal to mobilize millions of people. But, you know, in a country of 315 million and maybe a few thousand of them who actually have influence at the top levels of politics — you can mobilize millions of people and still not have much effect on the outcome of political events. So, yes, I’m pleased by what seems to have begun in the last few years but unless it becomes much bigger and more powerful, penetrates the consciousness of more people, I can’t see that it will have much effect on the course of events.

ROCKWELL: So is the US, after all, no better than the Assyrians or the Babylonians or the British —

(Laughter)

— or the Romans or the Egyptians or the Persians and the Medes and so forth?

(Laughter)

It’s just another predatory empire?

HIGGS: You give me a hard choice, Lew.

(Laughter)

ROCKWELL: With atomic bombs, of course, in its fists.

(Laughter)

HIGGS: Each one of those —

(Laughter)

— particular regimes had its own special ugliness and — (laughing) — and we can certainly find things that make the US empire the ugliest if only because it had the means to be that ugly. I don’t know whether the Assyrians of old would have used nuclear weapons on civilians or not. But when the United States had those weapons in its hands, we know that it went ahead and used them to slaughter hundreds of thousands of men, women and children, totally indefensibly. So that kind of action has no real parallel in previous empires but that may simply be because the technology was not available to the fiends of old.

ROCKWELL: Bob, the US/Israeli continuing verbal and covert assault on Iran, which, of course, I guess, if Romney gets his way, and maybe Obama, too, will become an invasion or a massive bombing. Both the Israeli and the Americans are always careful to say, “Nothing is off the table.”

HIGGS: Right.

ROCKWELL: Which I take to mean atomic weapons. And —

HIGGS: I think that’s the way to decipher the code. You know, I think it’s pretty clear that the US and Israel, at least the people who make decisions for those states, do not want to allow Iran to have a nuclear weapon of any kind. And, you know, there’s just so many questions that one would ask to follow up on that matter. But, you know, if you just take that as a point of departure, it seems to be the basis on which they’ve decided that if Iran appears to be close to obtaining a nuclear weapon, then they will use whatever it takes to destroy that capacity.

I suspect — I’m not a military technologist — but I suspect that they would probably begin with a kind of massive bombing using these so-called bunker-buster bombs that have been developed. And if the non-nuclear ones didn’t get the job done, they might decide to follow up with nuclear weapons. Now, I don’t put anything past these people. They have nuclear weapons. They talk about using them. They’re equipped to use them. There’s no reason whatever to think that they simply would shrink from using them. I don’t give them any points for moral scruples. And so if it comes to that, it will be horrible, but I don’t think the probability is zero.

ROCKWELL: I remember one of the early Neo-Cons, Herman Khan, wrote a book called Defending the Undefendable in which he talked about not only should nuclear weapons be used by the US against its enemies but it would be a wonderful thing. It would be a wonderful thing for the world and —

HIGGS: Oh, yes.

ROCKWELL: — it should be just a normal resort for anybody who questions US hegemony. Nuke them!

HIGGS: Well, this was actually expressed in the film Dr. Strangelove in one of the speeches by General Buck Turgidson where, you know, he assured the president that if we went ahead and attacked the Russians first, then our losses would be “only 20, 30 millions, tops”!

(Laughter)

And he’s bragging about that.

ROCKWELL: Yes.

HIGGS: But, although that was kind of darkly funny in the film, that was entirely based on the thinking of people working for RAND and working for the Air Force and people working in the Pentagon in the 1950s and ’60s. These people actually were madmen, in my judgment. The kinds of strategies, even tactics that they planned for using were the sorts of things that only lunatics would even consider using. And yet, this was all in a day’s work for these people.

ROCKWELL: And the level of insanity, has it diminished? I mean, it seems to me we still have crazy people perhaps making these decisions, certainly contributing to these decisions.

HIGGS: I actually think there has been some diminution of that level of madness from the peak years of the Cold War. I don’t at all think that sane people are in charge at the Pentagon and the intelligence apparatus and in the office of president. But nonetheless, I think some of the usual topics of discussion like from the days of mutually assured destruction and massive nuclear retaliation, I think those things are a little farther down the list of priority topics now than they were in the ’50s and ’60s.

ROCKWELL: Yes. At least they don’t teach children, as they did you and I when we were in school, to get under the desk to protect yourself from a nuclear blast.

(Laughter)

HIGGS: Yes. You know, I don’t think I’ve mentioned to you, but when I was a kid growing up in the ’50s, I used to actually have nightmares about a nuclear war because they showed films at school of hydrogen bombs exploding. And the images in my mind of those films were horrible, and I couldn’t get them out for years, and they terrified me. And I rather suspect — (laughing) — a great many children growing up in the 1950s suffered the same kinds of terrors.

ROCKWELL: And we were told that Boston and Cambridge, where my school was, would be targets.

HIGGS: Yes, Ground Zero — (laughing).

ROCKWELL: I mean, we definitely — but get under the desk.

HIGGS: Yes.

(Laughter)

ROCKWELL: Tell us what you think is going to happen about Iran. I mean, what’s your — I know, you know, nobody can know for sure, but you know as much as anyone. What’s your guess as to what’s — are they going to go to war against Iran or will it continue to be these horrendous sanctions and threats of war and, of course, covert operations? There are all kinds of covert troops in there now.

HIGGS: In my best guess — and that’s all it is, Lew — is that they’re going to continue to maneuver around this, at least in the short term. I think, you know, prior to the election, Obama probably very much does not want this kind of bad news to hit the fan. Because I don’t know how stupid they are among the people advising him on these matters right now, but you don’t have to be a rocket scientist to understand that if there’s a big attack by Israel or the United States on Iran, the consequences for the world economy will be horrendous. And it’s going to destabilize the entire Middle East and the entire world financial system, which is in none too good of shape already. And it’s just going to be awful. It won’t be, in my judgment, at all comparable to the US attack on Iraq for a variety of reasons. And so if they have a clue about just how horrible the consequences will be of such an attack, then I think that that appreciation will give them pause. It certainly ought to because — (laughing) — even if they wait until Obama is reelected and then decide to carry out the attack, hell is going to break lose. And that is not the way for Obama to accomplish any of his objectives in his second term.

So I hope that there’s enough sense among these people to deter them from this kind of precipitous madness. But, again, I really don’t know how sane they are.

ROCKWELL: Yes. Take a guy like Netanyahu, he’s like an attack dog and he’s saying, “Let me go, let me go, let me go,” but really saying, “Don’t let me go. Don't’ take me off the leash.”

(Laughter)

Or does he really want the war? I mean, does he actually think it’s even good for Israel or, let alone, anybody else?

HIGGS: It’s very difficult to know what’s going on, Lew, because the Israeli leadership and the US leadership are both playing to domestic audiences and they’re also playing against one another, and there’s all kinds of gaming going go on and rhetoric that is false or insincere. And so it’s just a mess for someone who is trying to figure out, where does anybody stand on this matter. It’s clear that some people have an interest in making certain kinds of noises about it. That’s why I think all serious candidates for the presidency in the US insist that all options are on the table, and, you know, in no event will the US fail to stand with Israel, blah, blah, blah. That’s domestically in their interest because if a candidate for the presidency did not make those noises, he would suffer a drastic reduction in funds. And that’s what it boils down to. And so, no serious candidate is willing to pay that price.

But at the same time, we can’t be sure how these governments, once they have the power, once someone’s been elected or reelected will size up the situation at that point because then their political strategy will have to take into account other things, whereas, right now, it takes into account mainly the coming election.

ROCKWELL: That’s actually an optimistic —

(Laugher)

That’s actually an optimistic view of things, isn’t it?

HIGGS: Well, you can always come to me for —

(Laughter)

— optimism, Lew.

(Laughter)

ROCKWELL: Well, Bob Higgs, thanks a million for all you do, all your great work for peace and freedom, which, of course, are issues that are joined at the hip, as much as some people might like to separate them. And congratulations on your new book, Delusions of Power. We’ll link to that, to all your other books, your YouTube channel and your Facebook page and so forth. And great to have you on the show.

HIGGS: Oh, it’s great to talk to you, Lew.

ROCKWELL: And congratulations on your new Dachshund puppy.

HIGGS: Oh — (laughing) — thank you very much — (laughing).

ROCKWELL: Bye-bye, Bob.

HIGGS: Bye.

ROCKWELL: 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, August 28, 2012

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Delusions of Power: New Explorations of the State, War, and Economy, Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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Recently by Robert Higgs: Regime Uncertainty: SomeClarifications

This talk was delivered at the 30th Anniversary Supporters Summit of the Ludwig von Mises Institute, Callaway Gardens, Georgia, on October 26, 2012. Click here to watch the video of this talk.

Many people are misled by formalities. They assume, for example, that the United States went to war against Germany and Japan only after its declarations of war against these nations in December 1941. In truth, the United States had been at war for a long time before making these declarations. Its war making took a variety of forms. For example, the U.S. navy conducted “shoot [Germans] on sight” convoys – convoys that might include British ships – in the North Atlantic along the greater part the shipping route from the United States to Great Britain, even though German U-boats had orders to refrain (and did refrain) from initiating attacks on U.S. shipping. The United States and Great Britain entered into arrangements to pool intelligence, combine weapons development, test military equipment jointly, and undertake other forms of war-related cooperation. The U.S. military actively cooperated with the British military in combat operations against the Germans, for example, by alerting the British navy of aerial or marine sightings of German submarines, which the British then attacked. The U.S. government undertook in countless ways to provide military and other supplies and assistance to the British, the French, and the Soviets, who were fighting the Germans. The U.S. government also provided military and other supplies and assistance, including warplanes and pilots, to the Chinese, who were at war with Japan.[1] The U.S. military actively engaged in planning with the British, the British Commonwealth countries, and the Dutch East Indies for future combined combat operations against Japan. Most important, the U.S. government engaged in a series of increasingly stringent economic warfare measures that pushed the Japanese into a predicament that U.S. authorities well understood would probably provoke them to attack U.S. territories and forces in the Pacific region in a quest to secure essential raw materials that the Americans, British, and Dutch (government in exile) had embargoed. [2]

Consider these summary statements by George Victor, by no means a Roosevelt basher, in his well documented book The Pearl Harbor Myth.

Roosevelt had already led the United States into war with Germany in the spring of 1941 – into a shooting war on a small scale. From then on, he gradually increased U.S. military participation. Japan’s attack on December 7 enabled him to increase it further and to obtain a war declaration. Pearl Harbor is more fully accounted for as the end of a long chain of events, with the U.S. contribution reflecting a strategy formulated after France fell. . . . In the eyes of Roosevelt and his advisers, the measures taken early in 1941 justified a German declaration of war on the United States – a declaration that did not come, to their disappointment. . . . Roosevelt told his ambassador to France, William Bullitt, that U.S. entry into war against Germany was certain but must wait for an “incident,” which he was “confident that the Germans would give us.” . . . Establishing a record in which the enemy fired the first shot was a theme that ran through Roosevelt’s tactics. . . . He seems [eventually] to have concluded – correctly as it turned out – that Japan would be easier to provoke into a major attack on the Unites States than Germany would be. [3]

The claim that Japan attacked the United States without provocation was . . . typical rhetoric. It worked because the public did not know that the administration had expected Japan to respond with war to anti-Japanese measures it had taken in July 1941. . . . Expecting to lose a war with the United States – and lose it disastrously – Japan’s leaders had tried with growing desperation to negotiate. On this point, most historians have long agreed. Meanwhile, evidence has come out that Roosevelt and Hull persistently refused to negotiate. . . . Japan . . . offered compromises and concessions, which the United States countered with increasing demands. . . . It was after learning of Japan’s decision to go to war with the United States if the talks “break down” that Roosevelt decided to break them off. . . . According to Attorney General Francis Biddle, Roosevelt said he hoped for an “incident” in the Pacific to bring the United States into the European war.[4]

These facts and numerous others that point in the same direction are for the most part anything but new; many of them have been available to the public since the 1940s. As early as 1953, anyone might have read a collection of heavily documented essays on various aspects of U.S. foreign policy in the late 1930s and early 1940s, edited by Harry Elmer Barnes, that showed the numerous ways in which the U.S. government bore responsibility for the country’s eventual engagement in World War II – showed, in short, that the Roosevelt administration wanted to get the country into the war and worked craftily along various avenues to ensure that, sooner or later, it would get in, preferably in a way that would unite public opinion behind the war by making the United States appear to have been the victim of an aggressor’s unprovoked attack.[5] As Secretary of War Henry Stimson testified after the war, “we needed the Japanese to commit the first overt act.” [6]

At present, however, seventy years after these events, probably not one American in 1,000 – nay, not one in 10,000 – has an inkling of any of this history. So effective has been the pro-Roosevelt, pro-American, pro-World War II faction that in this country it has utterly dominated teaching and popular writing about U.S. engagement in the “Good War.”

In the late nineteenth century, Japan’s economy began to grow and to industrialize rapidly. Because Japan has few natural resources, many of its burgeoning industries had to rely on imported raw materials, such as coal, iron ore or steel scrap, tin, copper, bauxite, rubber, and petroleum. Without access to such imports, many of which came from the United States or from European colonies in Southeast Asia, Japan’s industrial economy would have ground to a halt. By engaging in international trade, however, the Japanese had built a moderately advanced industrial economy by 1941.

At the same time, they also built a military-industrial complex to support an increasingly powerful army and navy. These armed forces allowed Japan to project its power into various places in the Pacific and East Asia, including Korea and northern China, much as the United States used its growing industrial might to equip armed forces that projected U.S. power into the Caribbean, Latin America, and even as far away as the Philippine Islands.

When Franklin D. Roosevelt became president in 1933, the U.S. government fell under the control of a man who disliked the Japanese and harbored a romantic affection for the Chinese because, some writers have speculated, Roosevelt’s ancestors had made money in the China trade. [7] Roosevelt also disliked the Germans in general and Adolf Hitler in particular, and he tended to favor the British in his personal relations and in world affairs. He did not pay much attention to foreign policy, however, until his New Deal began to peter out in 1937. Thereafter he relied heavily on foreign policy to fulfill his political ambitions, including his desire for reelection to an unprecedented third term.

When Germany began to rearm and to seek Lebensraum aggressively in the late 1930s, the Roosevelt administration cooperated closely with the British and the French in measures to oppose German expansion. After World War II commenced in 1939, this U.S. assistance grew ever greater and included such measures as the so-called destroyer deal and the deceptively named Lend-Lease program. In anticipation of U.S. entry into the war, British and U.S. military staffs secretly formulated plans for joint operations. U.S. forces sought to create a war-justifying incident by cooperating with the British navy in attacks on German U-boats in the northern Atlantic, but Hitler refused to take the bait, thus denying Roosevelt the pretext he craved for making the United States a full-fledged, declared belligerent – a belligerence that the great majority of Americans opposed.

In June 1940, Henry L. Stimson, who had been secretary of war under William Howard Taft and secretary of state under Herbert Hoover, became secretary of war again. Stimson was a lion of the Anglophile, northeastern upper crust and no friend of the Japanese. In support of the so-called Open Door Policy for China, Stimson favored the use of economic sanctions to obstruct Japan’s advance in Asia. Treasury Secretary Henry Morgenthau and Interior Secretary Harold Ickes vigorously endorsed this policy. Roosevelt hoped that such sanctions would goad the Japanese into making a rash mistake by launching a war against the United States, which would bring in Germany because Japan and Germany were allied.

The Roosevelt administration, while curtly dismissing Japanese diplomatic overtures to harmonize relations, accordingly imposed a series of increasingly stringent economic sanctions on Japan. In 1939, the United States terminated the 1911 commercial treaty with Japan. “On July 2, 1940, Roosevelt signed the Export Control Act, authorizing the President to license or prohibit the export of essential defense materials.” Under this authority, “[o]n July 31, exports of aviation motor fuels and lubricants and No. 1 heavy melting iron and steel scrap were restricted.” Next, in a move aimed at Japan, Roosevelt slapped an embargo, effective October 16, “on all exports of scrap iron and steel to destinations other than Britain and the nations of the Western Hemisphere.” Finally, on July 26, 1941, Roosevelt “froze Japanese assets in the United States, thus bringing commercial relations between the nations to an effective end. One week later Roosevelt embargoed the export of such grades of oil as still were in commercial flow to Japan.” [8] The British and the Dutch followed suit, embargoing exports to Japan from their colonies in Southeast Asia.

Roosevelt and his subordinates knew they were putting Japan in an untenable position and that the Japanese government might well try to escape the stranglehold by going to war. Having broken the Japanese diplomatic code, the American leaders knew, among many other things, what Foreign Minister Teijiro Toyoda had communicated to Ambassador Kichisaburo Nomura on July 31: “Commercial and economic relations between Japan and third countries, led by England and the United States, are gradually becoming so horribly strained that we cannot endure it much longer. Consequently, our Empire, to save its very life, must take measures to secure the raw materials of the South Seas.”[9]

Because American cryptographers had also broken the Japanese naval code, the leaders in Washington also knew that Japan’s “measures” would include an attack on Pearl Harbor.[10] Yet they withheld this critical information from the commanders in Hawaii, who might have headed off the attack or prepared themselves to defend against it. That Roosevelt and his chieftains did not ring the tocsin makes perfect sense: after all, the impending attack constituted precisely what they had been seeking for a long time. As Stimson confided to his diary after a meeting of the War Cabinet on November 25, “The question was how we should maneuver them [the Japanese] into firing the first shot without allowing too much danger to ourselves.” After the attack, Stimson confessed that “my first feeling was of relief . . . that a crisis had come in a way which would unite all our people.”[11]

Notes

[1] See “Flying Tigers,” Wikipedia.

[2] Robert Higgs, “How U.S. Economic Warfare Provoked Japan’s Attack on Pearl Harbor,” The Freeman 56 (May 2006): 36-37.

[3] George Victor, The Pearl Harbor Myth: Rethinking the Unthinkable (Dulles, Va.: Potomac Books, 2007), pp. 179-80, 184, 185, emphasis added.

[4] Ibid ., pp. 15, 202, 240.

[5] See Perpetual War for Perpetual Peace: A Critical Examination of the Foreign Policy of Franklin Delano Roosevelt and Its Aftermath, edited by Harry Elmer Barnes (Caldwell, Id.: Caxton Printers, 1953).

[6] Stimson as quoted in Victor, Pearl Harbor Myth, p. 105.

[7] Harry Elmer Barnes, “Summary and Conclusions,” in Perpetual War for Perpetual Peace: A Critical Examination of the Foreign Policy of Franklin Delano Roosevelt and Its Aftermath, edited by Harry Elmer Barnes (Caldwell, Idaho: Caxton Printers, 1953), 682-83.

[8] All quotations in this paragraph are from George Morgenstern, “The Actual Road to Pearl Harbor,” in Barnes, ed., Perpetual War for Perpetual Peace, 322-23, 327-28.

[9] Quoted in Morgenstern, “The Actual Road to Pearl Harbor,” 329.

[10] Robert B. Stinnett, Day of Deceit: The Truth About FDR and Pearl Harbor (New York: Free Press, 2000).

[11] Quoted in Morgenstern, “The Actual Road to Pearl Harbor,” 343, 384.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Delusions of Power: New Explorations of the State, War, and Economy, Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

Recently by Robert Higgs: ‘War Is Horrible, but . . .’

Private investment is the most important driver of economic progress. Entrepreneurs need new structures, equipment, and software to produce new products, to produce existing products at lower cost, and to make use of new technology that requires embodiment in machinery, plant layouts, and other aspects of the existing capital stock. When the rate of private investment declines, the rate of growth of real income per capita slackens, and if private investment drops quickly and substantially, a recession or depression occurs.

Such recession or depression is likely to persist until private investment makes a fairly full recovery. In US history, such recovery usually has occurred within a year or two after the trough. Only twice in the past century has a fairly prompt and full recovery of private investment failed to occur – during the Great Depression and during the past five years.

In analyzing data on investment, we must distinguish gross and net investment: the former includes all spending for new structures, equipment, software, and inventory, including the large part aimed at compensating for the wear, tear, and obsolescence of the existing capital stock; the latter includes the gross expenditure in excess of that required simply to maintain the existing stock. Therefore, net investment is the best measure of the private investment expenditure that contributes to economic growth.

As the figure shows, net private domestic fixed investment (a measure that excludes investment in inventories) reached a peak in 2006–2007, declined somewhat in 2008, then plunged in 2009 before reaching a trough in 2010. Although it recovered slightly in 2011, it remained 20 percent below the previous peak, and the pace of its recovery to date implies that another three or four years will be required merely to bring it back to where it was in 2007. With adjustments for changes in the price level, the projected recovery period would be slightly longer. (Using the price index for gross private domestic investment to obtain real values, we find that real net private domestic fixed investment is now at approximately the same level it had attained in the late 1990s.) To understand why the current overall economic recovery has been so anemic, we must understand why net private investment has not recovered more quickly.

In a 1997 article in the Independent Review (“Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed After the War“) I argued that a major reason for the incomplete recovery of private investment during the latter half of the 1930s was “regime uncertainty.” By this, I mean a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights. In the original article and in many follow-up articles, I documented that between 1935 and 1940, many investors feared that the government might transform the very nature of the existing economic order, replacing the primarily market-oriented economy with fascism, socialism, or some other government-controlled arrangement in which private-property rights would be greatly curtailed, if they survived at all. Given such fears, many investors regarded new investment projects as too risky to justify their current costs.

During the past several years, I have argued that a similar, if somewhat less extreme fear now pervades the business community, which explains at least in part the sluggish pace of the current economic recovery. Other exponents of this view include such prominent economists as Gary Becker, Allan Meltzer, John Taylor, and Alan Greenspan. (Until recently, Austrian economists were more receptive than mainstream economists to the idea of regime uncertainty; see, for example, the recent Mises Daily by John P. Cochran.) In addition, economists Scott Baker and Nicholas Bloom at Stanford and Steven J. Davis at the University of Chicago have devised an empirical index of policy uncertainty that has remained at extraordinarily high levels since September 2008. However, what most other economists – and all of those in the professional mainstream – have noted is not exactly the same as what I call regime uncertainty, but rather a related, somewhat narrower phenomenon.

Over the years, some economists have urged me to forsake the term “regime uncertainty” and to use instead an expression such as policy uncertainty, rule uncertainty, or regime worsening. I have rejected these suggestions because the idea I seek to convey encompasses more than simply policies or rules. Moreover, regime uncertainly does not necessarily signify only apprehension about potential worsening as a central tendency.

Regime uncertainty pertains to more than the government’s laws, regulations, and administrative decisions. For one thing, as the saying goes, “personnel is policy.” Two administrations may administer or enforce identical statutes and regulations quite differently. A business-hostile administration such as Franklin D. Roosevelt’s or Barack Obama’s will provoke more apprehension among investors than a business-friendlier administration such as Dwight D. Eisenhower’s or Ronald Reagan’s, even if the underlying “rules of the game” are identical on paper. Similar differences between judiciaries create uncertainties about how the courts will rule on contested laws and government actions.

For another thing, seemingly neutral changes in policies or personnel may have major implications for specific types of investment. Even when government changes the rules in a way that seemingly strengthens private-property rights overall, the action’s specific form may jeopardize particular types of investment, and apprehension about such a threat may paralyze investors in these areas. Moreover, it may also give pause to investors in other areas, who fear that what the government has done to harm others today, it may do to them tomorrow. In sum, heightened uncertainty in general – a perceived increase in the potential variance of all sorts of relevant government action – may deter investment even if the mean value of expectations shifts toward more secure private-property rights.

Regime uncertainly is a complex matter. No empirical index can capture it fully; some indexes may actually misrepresent it. Only the actors on the scene can appraise it, and their appraisals are intrinsically subjective. However, by assessing a variety of direct and indirect evidence, analysts can better appreciate its contours, direction, and impact on private investment decisions.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Delusions of Power: New Explorations of the State, War, and Economy, Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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Anyone who has done even a little reading about the theory and practice of war – whether in political theory, international relations, theology, history, or common journalistic commentary – has encountered a sentence of the form “War is horrible, but . . . .” In this construction, the phrase that follows the conjunction explains why a certain war was (or now is or someday will be) an action that ought to have been (or still ought to be) undertaken, notwithstanding its admitted horrors. The frequent, virtually formulaic use of this expression attests that nobody cares to argue, say, that war is a beautiful, humane, uplifting, or altogether splendid course of action and therefore the more often people fight, the better.

Some time ago – in the late nineteenth and early twentieth century, for example – one might have encountered a writer such as Theodore Roosevelt who forthrightly affirmed that war is manly and invigorating for the nation and the soldiers who engage in it: war keeps a nation from “getting soft” (Morris 1979). Although this opinion is no longer expressed openly with great frequency, something akin to it may yet survive, as Chris Hedges has argued in War Is a Force That Gives Us Meaning (2002). Nowadays, however, even those who find meaning for their lives by involvement in war, perhaps even only marginal or symbolic involvement, do not often extol war as such.

They are likely instead to justify a nation’s engagement in war by calling attention to alternative and even more horrible outcomes that, retrospectively, would have occurred if the nation had not gone to war or, prospectively, will occur if it does not go to war. This seemingly reasonable “balancing” form of argument often sounds stronger than it really is, especially when it is made more or less in passing. People may easily be swayed by a weak argument, however, if they fail to appreciate the defects of the typically expressed “horrible, but” apology for war.

Rather than plow through various sources on my bookshelves to compile examples, I have availed myself of modern technology. A Google search for the exact phrase “war is horrible but” on May 21, 2012, identified 58,100 instances of it. Rest assured that this number is smaller than the entire universe of such usage – some instances most likely have yet to be captured electronically. Among the examples I drew from the World Wide Web are the following fourteen statements. I identify the person who made the statement only when he is well known.

1. “War is horrible. But no one wants to see a world in which a regime with no regard whatsoever for international law – for the welfare of its own people – or for the will of the United Nations – has weapons of mass destruction.” (U.S. deputy secretary of state Richard Armitage [2003])

This statement was part of a speech Richard Armitage gave on January 21, 2003, shortly before the U.S. government unleashed its armed forces to inflict “shock and awe” on the nearly defenseless people of Iraq. The speech repeated the Bush administration’s standard prewar litany of accusations, including several claims later revealed to be false, so it cannot be viewed as anything but bellicose propaganda. Yet it does not differ much from what many others were saying at the time.

On its own terms, the statement scarcely serves to justify a war. The conditions outlined – a regime’s disregard of international law, its own people’s well-being, and the will of the United Nations, combined with possession of weapons of mass destruction – apply to several nations. They no more justified a military attack on Iraq than they justified an attack on Pakistan, France, India, Russia, China, the United Kingdom, Israel, or the United States itself.

2. “War is terrible, war is horrible, but war is also at times necessary and the only means of stopping evil.”

The only means of stopping evil? How can such singularity exist? Has evil conduct never been stopped except by war? For example, has shunning – exclusion from commerce, financial systems, communications, transportation systems, and other means of international cooperation – never served to discipline an evil nationstate? Might it do so if seriously tried? (If these questions give the impression that I am suggesting the possibility of resort to embargo or blockade, that perception is not exactly correct. Although I support various forms of voluntary, peaceful withdrawal of cooperation with evil-doing states, I do not endorse state-enforced – that is, violent or potentially violent – embargoes and blockades.) Why must we leap to the conclusion that only war will serve, when other measures have scarcely even been considered, much less seriously attempted? If war is really as horrible as everyone says, it would seem that we have a moral obligation to try very hard to achieve the desired suppression of evil doing by means other than resort to warfare, which is itself always a manifest evil, even when it is seemingly the lesser one.

3. “No news shows [during World War II] were showing German civilians getting fried and saying how sad it was. It was war against butchers and war is horrible, but it’s war, and to defend human decency, sometimes war is necessary.” (Ben Stein [2006])

Ben Stein is a knowledgeable man. He surely knows that the U.S. government imposed draconian censorship of war news during World War II. Perhaps the censors had their reasons for keeping scenes of incinerated German civilians away from the U.S. public. After all, even if Americans in general had extraordinarily cruel and callous attitudes toward German civilians during the war, many of them had relatives and friends in Germany.

Stein appears to lump all Germans into the class of “butchers” against whom he claims the war was being waged. He certainly must understand, however, that many persons in Germany – children, for example – were not butchers and bore absolutely no responsibility for the actions of the government officials who were. Yet these innocents, too, suffered the dire effects of, among other things, the terror bombing that the U.S. and British air forces inflicted on many German cities (“Strategic Bombing” n.d.).

To say, as Stein and many others have said, that “war is war” gets us nowhere; in a moral sense, this tautology warrants nothing. Many people, however, evidently consider all moral questions about the conduct of war to have been settled simply by their having labeled or by their having accepted someone else’s labeling of certain actions as “war.” Having chanted this exculpatory incantation over the state’s organized violence, they believe that all transgressions associated with that violence are automatically absolved – as the saying goes, “all’s fair in love and war.” It does not help matters that regimes treat some of the most egregious transgressors as heroes.

Finally, Stein’s claim that “to defend human decency, sometimes war is necessary” is at best paradoxical because it says in effect that human indecency, which war itself surely exemplifies, is sometimes necessary to defend human decency. Perhaps he had in mind the backfires that firefighters sometimes set to help them extinguish fires. This metaphor, however, seems farfetched in connection with war. It is difficult to think of anything that consists of as many different forms of indecency as war does. Not only is war’s essence the large-scale wreaking of death and destruction, but its side effects and its consequences in the aftermath run a wide range of evils as well. Whatever else war may be, it surely qualifies as the most indecent type of action people can take: it reduces them to the level of the most ferocious beasts and often accomplishes little more than setting the stage for the next, reactive round of such savagery. In any event, considered strictly as a way of sustaining human decency, it gets a failing grade every time because it invariably magnifies the malignity that it purports to resist.

4. “War is horrible, but slavery is worse.” (Winston Churchill as quoted in Dear and Foote 1995, xv)

Maybe slavery is worse, but maybe it’s not; it depends on the conditions of the war and the conditions of the slavery. Moreover, if one seeks to justify a war on the strength of this statement, one had best be completely certain that but for war, slavery will be the outcome. In many wars, however, slavery was never a possibility because neither side sought to enslave its enemy. Many wars have been fought for limited objectives, if only because more ambitious objectives appeared unattainable or not worth their cost. No war in U.S. history may be accurately described as having been waged to prevent the enslavement of the American people. Some people talk that way about World War II or the Cold War, if it be counted as a war, but such talk has no firm foundation in facts.

Some may object that the War Between the States was fought to prevent the ongoing slavery of the blacks then held in thrall. But however deeply this view may be embedded in American mythology, it is contrary to fact. As Abraham Lincoln made crystal clear in his letter of August 22, 1862, to New York Tribune editor Horace Greeley, he had not mobilized the armed forces to free the slaves, but only to prevent the seceding states from leaving the union: “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that.”[1] When Lincoln brought forth the Emancipation Proclamation – a document carefully drawn so that at the time of its promulgation it freed not a single slave – he issued it only because at that time it seemed to be a useful means for the attainment of his “paramount object,” preserving the union. The slaves, including those in states that had not seceded, were ultimately freed for good by ratification (at gunpoint in the former Confederate states) of the Thirteenth Amendment in 1865, which is to say as a ramification of the war, which itself had not been undertaken in 1861 in pursuit of this then-unforeseen outcome.

5. “You may think that the Iraq War is horrible, but there may be some times when you can justify [going to war].”

Perhaps war can be justified at “some times,” but this statement itself in no way shows that the IraqWar can be justified, and it seems all too obvious that it cannot be. If it could have been justified, the government that launched it would not have had to resort to a succession of weak excuses for waging it, each such excuse being manifestly inadequate or simply false. The obvious insufficiency of any of the reasons put forward explains why so many of us put so much time and effort into trying to divine exactly what did impel the Bush administration’s rush to war.

6. “War is horrible, but sometimes we need to fight.”

Need to fight for what? The objective dictates whether war is a necessary means for its attainment. If the objective was to preserve Americans’ freedoms and “way of life,” the U.S. government certainly did not need to fight most of the enemies against whom it waged war historically. Oddly enough, the only time the enemy actually posed such a threat, during the Cold War, the United States did not go to war against that enemy directly, although it did fight (unnecessarily) the enemy’s less-menacing allies – North Korea, China, and North Vietnam. In the other wars the United States has fought, it might well have remained at peace had U.S. leaders been sincerely interested in peace rather than committed to warfare.

7. “Of course war is horrible, but it will always exist, and I’m sick of these pacifist [expletive deleted] ruining any shred of political decency that they can manage.”

Many people have observed that wars have recurred for thousands of years and therefore will probably continue to occur from time to time. The unstated insinuation seems to be that in view of war’s long-running recurrence, nothing can be done about it, so we should all grow up and admit that war is as natural and hence as unalterable as the sun’s rising in the east each morning. Warfare is an inescapable aspect of “how the world works.”

This outlook contains at least two difficulties. First, many other conditions also have had long-running histories: for example, reliance on astrologers as experts in foretelling the future; affliction with cancers; submission to rulers who claim to dominate their subjects by virtue of divine descent or appointment; and many others. People eventually overcame or continue to work to overcome each of these longestablished conditions. Science revealed that astrology is nothing more than an elaborate body of superstition; scientists and doctors have discovered how to control or cure certain forms of cancer and are attempting to do the same for other forms; and citizens learned to laugh at the pretensions of rulers who claim divine descent or appointment (at least, they had learned to do so until George W. Bush successfully revived this doctrine among the benighted rubes who form the Republican base). Because wars spring in large part from people’s stupidity, ignorance, and gullibility, it is conceivable that alleviation of these conditions might have the effect of diminishing the frequency of warfare, if not of eliminating it altogether.

Second, even if nothing can be done to stop the periodic outbreak of war, it does not follow that we ought to shut up and accept every war without complaint. No serious person expects, say, that evil can be eliminated from the human condition, yet we condemn it and struggle against its realization in human affairs.We strive to divert potential evildoers from their malevolent course of action. Scientists and doctors continue to seek cures for cancers that have afflicted humanity for millennia. Even conditions that cannot be wholly eliminated can sometimes be mitigated, but only if someone tries to mitigate them. War should belong to this class of events.

Finally, whatever else might be said about the pacifists, one may surely assert that if everyone were a pacifist, no wars would occur. Pacifism may be criticized on various grounds, as it always has been and still is, but to say that pacifists “lack any shred of political decency” seems itself to be an indecent description. Remember: war is horrible, as everybody now concedes but many immediately put out of mind.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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In the following video, Dr. Higgs addresses the participants at the Mises University session in Jul 2012. In this talk, which is entitled: ‘Warfare, Welfare and the State’, he demonstrates how the state undertakes to interfere in the market process and sometimes displace it entirely. For a greater understanding of the issues, he suggests the following books which provide background and reference material. (51.00)

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

In college in the 1960s I was not a political person. Although I took a keen interest in politics, especially in the war that was raging in Vietnam, I concentrated on my studies, earning a living, and chasing women. After I began work as a professor, in 1968, I gravitated quickly from my collegiate New Leftism toward classical liberalism. As I learned more about Austrian economics, political economy, public choice, and history, I became increasingly libertarian (minarchist variety). My views continued to evolve, however, and by the time the 21st century arrived, if not sooner, I had finally reached my destination as a libertarian anarchist.

Although I make no apology whatever for this ideological identity, I do not share the seeming expectation of some of my fellow libertarian anarchists that a revolution is now, or soon will be, occurring in the direction of my preferred political ideals. Indeed, my expectation is, if anything, the reverse: it seems to me much more likely that the USA will continue to drift and lurch toward totalitarianism, though this system will surely have a unique red, white, and blue coloration to suit the American people’s history, culture, and tastes. I do not expect a dictator with a funny little mustache and a horde of brown-shirted thugs to take power after smashing heads in the streets. I expect instead an elected dictator who looks like George W. Bush or Barack Obama and a horde of police dressed in riot-suppression gear to turn the trick, though most people will not need to have their heads smashed and will go along gladly.

If I comprehend the world in this way, what, some people wonder, am I doing by embracing libertarian anarchism? Well, I am obviously not taking this position in order to come out on the winning side. If that were my goal, I would already have found a way to make myself useful in the military-industrial-congressional complex. No, I have put myself where I am now somewhat as Martin Luther did when he announced: “Here I stand. I can do no other.”

In my case, this declaration means most of all that I am simply doing what seems to me the decent thing; that taking any other ideological position would entangle me in evils of which I want no part. Although I sincerely believe that a stateless world would be better than the present world in countless ways, such as better health, greater wealth, and enhanced material well-being, I am not a libertarian anarchist primarily on consequentialist grounds, but instead primarily because I believe it is wrong for anyone – including those designated the rulers and their functionaries – to engage in fraud, extortion, robbery, torture, and murder. I do not believe that I have a defensible right to engage in such acts; nor do I believe that I, or anyone else, may delegate to government officials a just right to do what it is wrong for me – or you or anyone – to do as a private person.

Still, one might ask, if I do not expect that my vision of a just world can ever be realized, why do I persist in evaluating the events of the nasty “real world” by the standards realizable only in my ideal world? The answer is that everyone must have an ideal; without one, there is no standard against which one may assess the imperfect actions and events of the actual world. Without a standard, one may only shrug his shoulders, like a character in an existentialist novel, in nonchalant indifference to the political wickedness raging on all sides. Just as a devout Christian seeks to live a Christ-like life, knowing full well that no one can live up to the standard set by Jesus, so I aim to live and to make my judgments of the events I hear about in the light of the nonaggression axiom. The initiation of violence or the threat of violence against innocent others is wrong, regardless of the noble ends that one might cite to justify such violence or threat. It is wrong for me, wrong for you, and wrong for the president of the USA and his flunkies.

Like the Christian who inevitably falls into sin, I may fall short of my ideal. I may act or speak inconsistently with it. Many public issues are complicated, and in regard to them I may fail to discern the best way to act in accordance with my ideological ideal. If you let me know about my inconsistency, I can attempt to set aside my pride, admit my error, and correct it. As new issues arise, the task of sorting out the best way to deal with the most pressing problems will present itself repeatedly. Perhaps, like St. Paul in his letters to the new churches of the ancient world, we can strive to instruct one another in the most defensible understanding and practice of libertarian anarchism. Merely shouting that the existing order is rotten, is on the verge of collapse and, once it has collapsed, will be replaced by libertarian anarchism, however, seems to me so hopelessly naïve that I am inclined to urge my ideological comrades who do such shouting to get a firmer grip on themselves. One needs to combine his moral uprightness with a solidly founded understanding of the social, political, and economic world and how it works. Otherwise, our statements and actions become hopelessly quixotic.

I do not expect to live to see a world that even approximates my ideal. In fact, I greatly fear that I shall instead live long enough to see the most obscene species of police state in the saddle in the USA – after all, there is now only a short distance to go to reach this horrible destination, and many Americans seem eager to get to it as soon as possible. Nevertheless, I am comfortable with my ideological convictions. To have embraced anything else would have been a great mistake for me. I took almost a lifetime to reach my current position; I did not come to it lightly or without extended study and thought. Of course, I may still be wrong in every regard; I am a human being, and as such I am certainly subject to running off the moral and intellectual rails. I do not propose to be paralyzed by this universal human susceptibility to error, however. Feeling the need to take a stand of some kind as a participant in the events of my time and place, I have put myself firmly where I now stand. By the light I have been given to see the right, I can do no other.

Reprinted with permission from BadQuaker.com.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

Over the years, especially in writing for the general public, as opposed to my professional peers, I have been struck repeatedly by the frequency with which certain conclusions or even entire classes of conclusions elicit not merely skepticism, but angry denunciation. Again and again, I have been called a fool, a traitor, or an America-hater because of my commentaries on history and public affairs. Although I take no pleasure in these denunciations, I find myself not so much depressed by them as curious about them. I wonder why people react as they do, especially when my commentary rests – as I hope it generally does – on well-documented facts and correct logic.

I surely do not consider myself immune to errors, of course. But if my facts are incorrect, the critic has an obligation to say why my facts are incorrect and to state, or at least to point toward, the correct facts. If my logic has run off the rails, the critic has an obligation to state how I fell into fallacious reasoning. More often than not, however, the critic resorts immediately to name-calling and to wild characterizations of my statements and my person. Thus, I have often been called a socialist, a Marxist, a conservative, an apologist for corporations or the rich, a (modern left) liberal, or something else that by no stretch of the imagination properly describes me or my intellectual or ideological position.

Certain topics are virtually guaranteed to elicit such reactions. When I write about the welfare state and especially about government programs ostensibly aimed at helping the least-well-off members of society, I confidently expect that critics will assail me as a fascist or as an ivory-tower dweller who has no understanding of how poor people really live and no compassion for them. When I write about the Japanese attack on Pearl Harbor in relation to U.S. economic warfare in 1939-41, I invariably attract angry personal abuse from people of delicate nationalistic sensibilities, from those chronically on the look-out for traitors, and from those who cannot imagine that the nation’s leaders, in general, and President Franklin D. Roosevelt, in particular, might have deliberately provoked a Japanese attack or refrained from warning U.S. commanders in Hawaii that an attack was coming.

When people are offended or otherwise greatly displeased by historical analysis, they often employ the term “historical revisionism” as a synonym for falsified, distorted, or doctored accounts that fly in the face of what they, their history teachers, and perhaps even the most respected university historians believe to have been the case.

The irony of such use of the term “historical revision,” which makes it practically a swear word, is that revisionism is and always has been an integral part of historical research and writing. As a rule, professional historians do not seek simply to pile up more and more evidence for what historians already generally believe. Historians who proceed in this way cannot expect to make much of a name for themselves. Instead, historians try to find new evidence and new ways of interpreting old evidence that change the currently accepted view. That is, they seek to revise the current orthodoxy. In doing so, they need not be ideological mavericks, although those who are may have an additional reason for their revisionist efforts. In short, revisionism is an unremarkable aspect of workaday historical research and writing. Why then do so many readers go ballistic about it?

One reason why revisionists are sometimes seen as subversives stems from the tendency of historians in general to accept the most fundamental aspects of their own society as right and desirable. So, however much political historians may dispute the details of particular campaigns, elections, and policy-making by elected officials – and such disputation runs rampant, to be sure – one hardly expects these historians to conclude that the democratic process itself is little more than a snare and a delusion, a vast apparatus for fooling the masses into believing that they have genuine control over how they are ruled. And however much military and foreign-policy historians may argue with one another about how various wars were entered into and conducted, one hardly expects these historians to conclude that wars almost invariably hurt the mass of the people and benefit, if anyone at all, only the national leadership, its supporting elite, and a ragtag band of hangers-on (which includes, we might note, the “court historians”).

When a historian strays outside the 40-yard lines within which the bulk of the historical writing and teaching takes place, however, he is likely to be met with the dreaded accusation that he is not an honest, competent, or “respected” historian, but a revisionist – a writer who seeks to propagate socially destructive and utterly unfounded ideas in order to rend the fabric of national unity and undermine the nation’s virtues. Thus, one who challenges the standard account of Pearl Harbor can expect not simply to be disbelieved, but also to be personally condemned and vilified. Readers will say that he dishonors the brave men who gave their lives to preserve our freedoms, and so forth. Many people possess a loaded ideological gun with a hair trigger, and the slightest shake suffices to cause them to fire away. Moreover, they shoot first and reserve their fact-checking and more careful thought for later, if indeed they ever reach that stage.

One is tempted to suspect that such quick-draw reactions reveal an underlying lack of confidence in their own beliefs. If my views are so manifestly stupid and anti-social, why respond to them at all? Is it not more sensible to ignore them than to spend time in lavishing calumny on their author? In the age of the Internet, however, many people seem to get their kicks by denouncing and insulting anyone who offends their own sensibilities and their own cherished beliefs. Anyone who seeks examples of ad hominem arguments may easily collect them by the thousands and perhaps by the millions at the websites that feature news and commentary on public affairs. Every other species of logical fallacy may be found there in abundance as well, but my guess is that the ad hominem fallacy occurs more often than any other. Moreover, few people – even seemingly well-educated people – seem to be able to stay on point. So if a revisionist’s argument cannot be refuted, his critics freely set up and knock down straw men that they represent as the offender himself. Careful reading is not the most notable activity of those who engage in such flailing away. Many attackers do not even complete their reading, but begin their assault on an author immediately, after having read only a few sentences or paragraphs, as they sometimes admit.

Well, nobody ever promised the revisionist a bed of roses, especially if he challenges ideas that are widely accepted and valued. Americans want to believe that their nation is the greatest that ever was, that they themselves are better than other people in almost every way, including morally. They want to believe that at least some of their government leaders were virtuous and heroic, that their soldiers sacrificed more nobly than the enemy’s did, that their country is the last, best hope of humanity, blah, blah, blah. Much of this catalogue of taken-for-granted outlooks and beliefs is ludicrous, but woe unto the writer who laughs out loud at it. “Revisionist, revisionist!” the mobs will cry, expressing the demand that he “get out of the country” and the hope that every species of bad luck and personal misfortune will befall him. If I were one of those social psychologists who enjoy labeling any ideological trait they dislike as a form of mental illness, I might declare that the hair-trigger enemies of historical revisionism are a gaggle of sickos.

Reprinted from the History News Network.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

Sixty-nine
years ago, Japanese forces attacked the U.S. naval base at Pearl
Harbor, Hawaii, provoking the United States to declare war against
Japan. When Japan’s ally Germany declared war on the United
States on December 11, 1941, the United States immediately reciprocated.
These actions brought the United States into open warfare against
the Axis powers and made it a full-fledged participant in the
greatest war ever fought. For most Americans, this story is simple:
they attacked us; we fought back and defeated them.

Historians
have always known, however, that the true story was nothing like
this patriotic fable dispensed each year on December 7 for popular
consumption. Not long ago, I briefly reviewed
some of the elements of this history, linking my statements to
some of the most reliable histories publicly available to one
and all. (See also my account of how U.S.
economic warfare provoked the Japanese attack.) It behooves
every educated American to learn this honest history and to pass
it along to others when an opportunity arises, because the myth
has long contributed, and continues to contribute, to a false
view of the U.S. place in the world and to a grave misunderstanding
of U.S. foreign policy. Ceaseless dissemination and widespread
acceptance of this view is the very model of how the U.S. government
tends to do foreign policy: provoke foreigners to attack Americans,
then tell the American people that foreigners have attacked us
for no reason and therefore we must strike back to defeat them
or at least to teach them a lesson about treating the United States
with deference.

Along with
the myth
of Munich, the myth of the Pearl Harbor attack has performed
magnificently in keeping Americans dumb and belligerent and in
preparing them to sacrifice their children’s lives in the
service of the ruling oligarchy. Unless the American people can
rise above these historical myths, they stand little chance of
freeing themselves from those who would make them the living,
breathing but unthinking means for the attainment of their masters’
ends.

Reprinted
from the Independent
Institute.

December
10, 2010

Robert
Higgs [send him mail] is
senior fellow in political economy at the Independent
Institute and editor of The
Independent Review. He
is also a columnist for LewRockwell.com. His
most recent book is Neither
Liberty Nor Safety: Fear, Ideology, and the Growth of Government.
He is also the author of Depression,
War, and Cold War: Studies in Political Economy, Resurgence
of the Warfare State: The Crisis Since 9/11 and Against
Leviathan: Government Power and a Free Society.

The
Best of Robert Higgs

Foreword
to Great
Wars and Great Leaders by Ralph Raico (2010)

For many years,
I have described Ralph Raico as "my favorite historian."
When David Theroux and I were making our plans in 1995 for the publication
of a new scholarly quarterly, The Independent Review, and
selecting the scholars we would ask to serve as associate editors,
I knew that I would want one of them to be an excellent historian,
and I knew also that the person I wanted most was Raico. I had complete
confidence that he would bring to our project precisely the combination
of personal integrity, scholarly mastery, and sound judgment I needed
in an associate. In the 15 years since then, I have never regretted
that I prevailed on Ralph to serve in this capacity and that he
graciously accepted my invitation. Three of the marvelous review
essays that appear here were first published in TIR.

Much earlier
I had developed a deep respect for Raico as a scholar and as a person.
I insist that these two qualities cannot be separated without dire
consequences. Some scholars have energy, brilliance, and mastery
of their fields, but they lack personal integrity; hence they bend
easily before the winds of professional fashion and social pressure.
I have always admired Ralph’s amazing command of the wide-ranging
literature related to the topics about which he lectures and writes.
But I have admired even more his courageous capacity for frankly
evaluating the actors and the actions in question, not to mention
the clarity and wit of his humane, levelheaded judgments.

Academic historians,
who long ago came to dominate the writing of serious history in
the United States, have not distinguished themselves as independent
thinkers. All too often, especially in the past 30 or 40 years,
they have surrendered their judgments and even their attention spans
to a combination of hypersensitive multiculturalism and power worship.
They tend to see society as divided between a small group of oppressors
(nearly all of whom are, not coincidentally, straight white males
engaged in or closely associated with corporate business) and a
conglomeration of oppressed groups, among whom nonwhites, women,
homosexuals, and low-wage workers receive prominent attention and
solicitude.

When the historians
write about the economy, they usually view it through quasi-Marxist
lenses, perceiving that investors and employers have been (and remain)
the natural enemies of the workers, who would never have escaped
destitution except for the heroic struggles waged on their behalf
by labor unions and progressive politicians. When they write about
international affairs, they elevate the "democratic" wartime
leaders to godlike status, especially so for Abraham Lincoln, Woodrow
Wilson, Winston Churchill, and Franklin D. Roosevelt – politicians
whose public declarations of noble intentions the historians tend
to accept at face value.

Raico, in contrast,
steadfastly refuses to be sucked into this ideological mire. Having
attended Ludwig von Mises’s famous seminar at New York University
and having completed his PhD dissertation at the University of Chicago
under F.A. Hayek’s supervision, he understands classical liberalism
as well as anyone, and his historical judgments reflect this more
solid and humane grounding. For Ralph, it would be not only unseemly
but foolish to quiver obsequiously in the historical presence of
a Churchill, a Roosevelt, or a Truman.

He knows when
he has encountered a politician who lusted after power and public
adulation, and he describes the man accordingly. He does not sweep
under the rug the crimes committed by the most publicly revered
Western political leaders. If they ordered or acceded to the commission
of mass murder, he tells us, without mincing words, that they did
so. The idea that the United States has invariably played the role
of savior or "good guy" in its international relations
Raico recognizes as state propaganda rather than honest history.

Thus, in these
pages, you will find descriptions and accounts of World War I, of
the lead-up to formal US belligerence in World War II, and of Churchill,
Roosevelt, and Truman, among others, that bear little resemblance
to what you were taught in school. Here you will encounter, perhaps
for the first time, compelling evidence of how the British maneuvered
US leaders and tricked the American people prior to the US declarations
of war in 1917 and 1941. You will read about how the British undertook
to starve the Germans – men, women, and children alike –
not only during World War I, but for the greater part of a year
after the armistice. You will be presented with descriptions of
how the communists were deified and the German people demonized
by historians and others who ought to have known better. You will
see painted in truer shades a portrait of the epic confrontation
between the great majority of Americans, who wished to keep their
country at peace in 1939, 1940, and 1941, and the well-placed, unscrupulous
minority who sought to plunge the United States into the European
maelstrom.

Raico’s historical
essays are not for the faint of heart nor for those whose loyalty
to the US or British state outweighs their devotion to truth and
humanity. Yet Ralph did not invent the ugly facts he recounts here,
as his ample documentation attests. Indeed, many historians have
known these facts, but few have been willing to step forward and
defy politically popular and professionally fashionable views in
the forthright, pull-no-punches way that Raico does.

The historians’
principal defect for the most part has not been a failure or refusal
to dig out the relevant facts but rather a tendency to go along
to get along in academia and "respectable" society, a
sphere in which individual honesty and courage generally count against
a writer or teacher, whereas capitulation to trendy nonsense often
brings great rewards and professional acclaim.

Those who have
not read Raico’s essays or listened to his lectures have a feast
in store here. Those who have read some, but not all, of the essays
in this collection may rest assured that the quality remains high
throughout the volume. Any one of the main essays well justifies
the price of the book, and each of the review essays is a jewel
of solid scholarship and excellent judgment. Moreover, in contrast
to the bland, uninspired writing that most academic historians dish
out, Ralph’s clear, vigorous prose serves as a tasty spice for the
meaty substance. Bon appétit.

Reprinted
from Mises.org.

December
9, 2010

Robert
Higgs [send him mail] is
senior fellow in political economy at the Independent
Institute and editor of The
Independent Review. He
is also a columnist for LewRockwell.com. His
most recent book is Neither
Liberty Nor Safety: Fear, Ideology, and the Growth of Government.
He is also the author of Depression,
War, and Cold War: Studies in Political Economy, Resurgence
of the Warfare State: The Crisis Since 9/11 and Against
Leviathan: Government Power and a Free Society.

The
Best of Robert Higgs

Young people
and foreigners who are unfamiliar with the conduct of public affairs
in the United States sometimes have difficulty in decoding the
rhetoric used to describe government actions in this country.
As a public service to such political novices, I have drawn up
a brief guide whose entries match a particular government action,
objective, or condition with the terms commonly used to describe
it in the news media and in polite conversation. Simply apply
the rule: If the government does X, it is called Y.

X = extortion;
Y = taxation

X = robbery;
Y = taxation

X = unjust
(and often pointless or destructive) compulsion of innocent persons;
Y = regulation

X = kidnapping;
Y = imprisonment of persons convicted of [victimless] crimes

X = torture;
Y = enhanced interrogation techniques

X = imperialism;
Y = global peacekeeping operations

X = spying
on citizens without cause; Y = homeland security operations

X = sexually
assaulting and battering airline passengers – men, women,
and children alike; Y = airline security operations

X = herding,
stripping, and irradiating airline passengers – men, women,
and children alike; Y = airline security operations

X = accepting
bribes; Y = accepting campaign contributions

X = propagandizing
the general public; Y = holding official press conferences

X = indoctrination
in servility and loyalty to the state; Y = public education

X = savage,
pointless massacre of foreigners; Y = national defense

X = unjust
enrichment of private individuals and corporations; Y = subsidies

X = beating,
tasing, and shooting innocuous persons; Y = making arrests

X = debasement
of the currency; Y = quantitative easing

X = fostering
systemic economic booms and busts; Y = monetary policy

X = fostering
systemic economic booms and busts; Y = fiscal policy

X = wasting
and destroying natural resources; Y = implementing conservation
policies

X = suppressing
liberties on unjust and baseless grounds; Y = implementing environmental
policies

X = serving
the interests of the Israeli state; Y = carrying out Middle East
policies

X = maintaining
a police state; Y = maintaining law and order, public health,
and national security

X = lying
about everything of consequence; Y = keeping the public informed

X = robbing
productive Peter to pay unproductive Paul; Y = maintaining the
safety net

X = murderous,
blundering, destructive global intervention; Y = U.S. foreign
policy

X = suffering
blowback; Y = being attacked because foreigners hate us for our
freedoms

X = unjustly
enriching Goldman Sachs et alia; Y = preventing another Great
Depression

X = deferring
and worsening the inevitable day of reckoning; Y = stabilizing
financial and housing markets

X = rigging
the game to ensue the reelection of incumbent members of Congress;
Y = democracy in action

X = bribing
or intimidating foreign governments to assist big multinational
corporations; Y = U.S. foreign policy

X = gratifying
one’s megalomania and feathering one’s nest at public
expense; Y = public service

X = war;
Y = peace

X = slavery;
Y = freedom

X = ignorance;
Y = strength

Reprinted
from the Independent
Institute.

November
29, 2010

Robert
Higgs [send him mail] is
senior fellow in political economy at the Independent
Institute and editor of The
Independent Review. He
is also a columnist for LewRockwell.com. His
most recent book is Neither
Liberty Nor Safety: Fear, Ideology, and the Growth of Government.
He is also the author of Depression,
War, and Cold War: Studies in Political Economy, Resurgence
of the Warfare State: The Crisis Since 9/11 and Against
Leviathan: Government Power and a Free Society.

The
Best of Robert Higgs

Two years have passed since the worst financial crisis since the 1930s dealt a body blow to the world economy. Working with policymakers at home and abroad, the Federal Reserve responded with strong and creative measures to help stabilize the financial system and the economy. Among the Fed’s responses was a dramatic easing of monetary policy — reducing short-term interest rates nearly to zero. The Fed also purchased more than a trillion dollars’ worth of Treasury securities and U.S.-backed mortgage-related securities, which helped reduce longer-term interest rates, such as those for mortgages and corporate bonds. These steps helped end the economic free fall and set the stage for a resumption of economic growth in mid-2009.

This capsule account of the financial debacle, the recession, and the Fed’s related actions strikes me as an exercise in mythmaking — and not simply because it conveniently ignores everything the Fed itself did to cause the debacle and the recession. For one thing, there was no economic “free fall.” Between the fourth quarter of 2007 and the second quarter of 2009, real GDP fell by about 4 percent. This drop is scarcely a free fall. The Fed needs to stop congratulating itself for pulling the economy away from the brink of an apocalypse.

Bernanke describes the Fed’s frantic, flailing, near-panicked actions, especially from September 2008 through the early months of 2009, in calm, measured terms, as “strong and creative measures to help stabilize the financial system and the economy.” This begs the question of whether the Fed’s actions actually did “stabilize the financial system and the economy.”

A strong argument can be made that, instead, the Fed’s actions created immense uncertainty and confusion about which commercial banks, investment banks, and other big firms would be bailed out and, if they were to be bailed out, how they would be bailed out. This uncertainty deterred private parties from undertaking the necessary revaluation of assets and from devising new arrangements, including reorganized post-bankruptcy firms, that would be able proceed on a sounder basis, as a rule under new, more prudent managements. In short, many mortally wounded firms were kept on life support by the Fed, and others clung to the hope that with some creative accounting to carry them for a while, they might ultimately secure a bailout. Think of it as the zombification of High Finance.

Even if I have misinterpreted these actions and reactions, however, we know for certain that what the Fed actually did was to acquire a variety of financial assets of questionable worth (“toxic assets”) in exchange for checks drawn on itself. That is, it engaged in a massive storm of inflation — or at least potential inflation, given that the banks and their customers have been so paralyzed by fear and regime uncertainty that the volume of credit transactions has contracted and the banks have simply accumulated vast excess reserves at the Fed, for which the Fed compensates them by paying a barely-positive rate of interest. Whether this situation can be managed without its breaking loose into inflationary disaster is anyone’s guess at this point.

Notwithstanding the progress that has been made, when the Fed’s monetary policymaking committee — the Federal Open Market Committee (FOMC) — met this week to review the economic situation, we could hardly be satisfied. The Federal Reserve’s objectives — its dual mandate, set by Congress — are to promote a high level of employment and low, stable inflation. Unfortunately, the job market remains quite weak; the national unemployment rate is nearly 10 percent, a large number of people can find only part-time work, and a substantial fraction of the unemployed have been out of work six months or longer. The heavy costs of unemployment include intense strains on family finances, more foreclosures and the loss of job skills.

This reference to the Fed’s congressional mandate shifts the blame for the Fed’s discretionary actions onto what it represents to be a sort of legal requirement. But, in fact, the Fed has tremendous scope for a variety of actions, as well as for sheer inaction. Yes, it feels political pressures, to be sure. Yet it retains the capacity to undertake a panoply of policies — more now than ever, given its recent emergence as the nation’s financial central planner for credit allocation in general — and the ability to spin its decisions as wholly consistent with its so-called mandate. Bernanke’s crying crocodile tears for the unemployed looks like posturing to me.

Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy — especially when the economy is struggling. In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which can contribute to long periods of economic stagnation.

Bernanke’s obsession with deflation is wholly misplaced. He has drawn the wrong lesson from the early 1930s, when, in addition to deflation, a host of counterproductive government actions helped to plunge the economy into an unprecedented stretch of subpar performance and mass unemployment. The idea that positive inflation may still be “too low” for the economy’s good is one of the many bad ideas that have been fostered by Keynesian and New Keynesian thinking during the past sixty years. The period of fastest economic growth in U.S. economic history, from the War Between the States to the late 1890s, was a period of secular deflation. Indeed, for centuries, in many countries, deflation, not inflation, was the rule in combination with economic growth. Bernanke has become fixated on a misinterpretation of the early 1930s, and, whether his interpretation is mistaken or not, he has accepted that exception as the rule.

Even absent such risks, low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating.

Like nearly all modern macroeconomists, Bernanke’s focus on aggregates alone prevents him from asking, “spare capacity” for what? He sees unemployed labor and capital, and he concludes that overall monetary stimulus will remedy these apparent wastes. But the effects of expansionary monetary policy will not be felt equally in every part of the economy, nor should they be. He fails to see that the unemployed labor and capital are concentrated in places to which they were drawn as a result of malinvestments made during the (Fed-fueled) boom, especially in housing construction and finance and related industries. When the Fed now creates new bank reserves via QE2, the banks, if they increase their lending at all, may simply finance — directly or indirectly — investments in commodity speculation, stock speculation, or other expenditures that only inflate new asset bubbles.

The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed.

This policy-making on the basis of the latest observations of inflation and unemployment not only demonstrates a supremely unjustified faith in the Fed’s ability to micromanage the macroeconomy, but also betrays an obtuseness to one of Milton Friedman’s best-known empirical claims, namely, that between changes in money and changes in macroeconomic aggregates such as output and inflation lie long and variable lags. So, even if the latest observations of aggregate variables were accurate and were all the information that matters, the Fed’s belief in its ability to make successful policy on that basis would be utterly unfounded. When the Fed throws a rock into the lake, the ripples keep spreading, and future changes in winds and water currents affect precisely where and how quickly those ripples spread.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

I can still remember,
Mainstream theory used to make me smile.
And I knew if I had my chance
That I could make equations dance
And, maybe, they’d be happy for a while.

But Joseph Stiglitz made me shiver
With every paper he’d deliver.
Bad news in the journals;
I flung them in the urinals.

I can’t remember if I sighed
When I heard the link to gold decried,
But something touched me deep inside
The day the dollar died.

So bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

Did you write the macro book,
And do you have faith in gobbledegook,
If professors say it’s true?
And do you believe in risk alone,
Does uncertainty chill you to the bone,
And can you teach investors what to do?

Well, I know that you’re in love with math
’cause I saw you dancin’ down that path.
Your Hessions were well bordered,
And your preferences well ordered.

I’d been a lonely teenage undergrad
With a K&E slide rule and a yellow pad,
But I knew I had just been had
The day the dollar died.

I started singin’,
Bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

Well, since Nixon, we’ve been on our own,
And fiat grows on a rollin’ stone,
But that’s not how it used to be.
Till Bill Phillips sang for the president,
‘bout a curve that he had just invent-
ed to fine-tune where the gods thought we should be.
-
Oh, but while old Bill was looking down,
Uncle Milton stole his laurel crown.
The profession was confounded;
Friedman’s doctrines were propounded.
And while Lucas read a book on math,
The real world’s business took a bath,
We wrote the Phillips Curve’s epitaph,
The day the dollar died.

We were singin’,
Bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

Helter skelter in a summer swelter,
Inflation blew up our fallout shelter,
Eight, ten percent and risin’ still.
It led to strikes and social unrest,
For politicians it became such a test
That Paul Volcker was brought in to close the till.

Now the half-time air was sweet perfume
While Reagan played a marching tune.
We all got up to dance,
Oh, but we never got the chance!
‘cause the lobbyists swarmed on the field;
The marching band was quick to yield.
Do you recall what was revealed
The day the dollar died?

We started singin’,
Bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

Oh, then we became confused and leery,
With no firm ground of econ theory
And bad ideas ‘bout what was wrong.
So come on: Fed be nimble, Fed show verve!
Maestro fooled with the bank reserves
‘cause fiat is the devil’s only song.

Oh, and as I watched him play that game
My hands were folded in professional shame.
No angel born in hell
Could break that satan’s spell.
And as the flames climbed high into the night
To light the sacrificial rite,
I saw Wall Street laughing with delight
The day the dollar died.

They were singin’,
Bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

I met a man who sang the blues
And I asked him for some happy news,
But he just smiled and said you’re toast.
I went down to the sacred store
Where I’d bought some Hayek years before,
But the man there said the Austrians were just ghosts.

And in the streets: the children screamed,
The lovers cried, and the poets dreamed.
But not a word was spoken;
The mainstream’s bells were broken.
And the three men needed in this flurry:
Ludwig, Fritz, and my old friend Murray,
Were laughed out of court by the mainstream jury
The day the dollar died.

And they were singin’,
Bye-bye, Miss American Pie.
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin’ whiskey and rye
Singin’, “this’ll be the day that I die;
This’ll be the day that I die.”

(With my apologies to Don McLean)

Reprinted from the Independent Institute blog.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

In The Federalist No. 51, arguably the most important one of all, James Madison wrote in defense of a proposed national constitution that would establish a structure of "checks and balances between the different departments" of the government and, as a result, constrain the government’s oppression of the public. In making his argument, Madison penned the following paragraph, which comes close to being a short course in political science:

The great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. The provision for defense must in this, as in all other cases, be made commensurate to the danger of attack. Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.[1]

The passage that refers to the angels is a rhetorical masterpiece, so memorable that it has become almost a cliché. In Madison’s argument, however, it does more than emphasize that human nature is something less than angelic. It also serves as a springboard that propels Madison directly into a consideration of "framing a government which is to be administered by men over men," which is "but the greatest of all reflections on human nature."

In short, it moves Madison directly to a consideration of government as we have known it for the past several thousand years — a monopoly operating ultimately by threat or actual use of violence, making rules for and extracting tribute from the residents of the territory it controls. Henceforth, for clarity, I refer to this all-too-familiar type of organization as "the state."

Perhaps everyone will agree that if we were all angels, no state would be necessary, and if angels were the governors, they would require neither internal nor external constraints to ensure that they governed justly. In terms of Table 1, we would be indifferent between the two cells in the first row.

Table 1 — Madison’s Model

`

No state

State

Men are angels

OK

OK

Men are not angels

Not conceivable

Best conceivable

In Madison’s mind, the no-state option was inconceivable, for reasons he expressed obliquely when he wrote:

In a society under the forms of which the stronger faction can readily unite and oppress the weaker, anarchy may as truly be said to reign as in a state of nature, where the weaker individual is not secured against the violence of the stronger; and as, in the latter state, even the stronger individuals are prompted, by the uncertainty of their condition, to submit to a government which may protect the weak as well as themselves; so, in the former state, will the more powerful factions or parties be gradually induced, by a like motive, to wish for a government which will protect all parties, the weaker as well as the more powerful.[2]

Thus, Madison, apparently following Locke, believed that individuals would not choose to remain in a stateless condition and would submit to the authority of a state in order to attain greater security of person and property. Countless other thinkers over the years have reasoned likewise, as Mancur Olson did in his final book when he concluded, "If a population acts to serve its common interest, it will never choose anarchy."[3]

Disorder, Liberty, and the State

Nothing is more common than the assumption that without a state, a society will fall necessarily and immediately into violent disorder; indeed, anarchy and chaos are often used as synonyms. The Random House Dictionary gives the following four definitions for anarchy:

1. a state of society without government or law
2. political and social disorder due to absence of governmental control
3. a theory that regards the absence of all direct or coercive government as a political ideal and that proposes the cooperative and voluntary association of individuals and groups as the principal mode of organized society
4. confusion; chaos; disorder

Suppose, however, that the situation described by the third definition were not merely an ideal, but a genuine possibility, perhaps even a historically instantiated condition.

Locke, Madison, Olson, and nearly everybody else, of course, have concluded from their theoretical deliberations that the stateless option cannot exist — at least, not for long — because its deficiencies make it so manifestly inferior to life in a society under a state. The alleged absence of significant historical examples of large, stateless societies during the past several thousand years buttresses these theory-based conclusions: just as "the poor we have always with us," so except among primitive peoples, society and the state are taken to have always coexisted.

One need not spend much time, however, to find theoretical arguments — some of them worked out in great detail and at considerable length[4] — about why and how a stateless society could work successfully. Moreover, researchers have adduced historical examples of large stateless societies, ranging from the ancient Harappan civilization of the Indus Valley[5] to Somalia during the greater part of the past decade and a half.[6] Given the enormous literature that has accumulated on stateless societies in theory and in actual operation, we may conclude that, if nothing else, such societies are conceivable.[7]

In this light, both cells in the second row of Madison’s model must be seen as live options, whose most likely outcomes are, I suggest, as indicated in the More Realistic Model shown in Table 2:

Table 2 — More Realistic Model

`

No state

State

Men are angels

OK

OK

Men are not angels

Bad situation

Worse situation

Although I admit that the outcome in a stateless society will be bad, because not only are people not angels, but many of them are irredeemably vicious in the extreme, I conjecture that the outcome in a society under a state will be worse, indeed much worse, because, first, the most vicious people in society will tend to gain control of the state[8] and, second, by virtue of this control over the state’s powerful engines of death and destruction, they will wreak vastly more harm than they ever could have caused outside the state.[9] It is unfortunate that some individuals commit crimes, but it is stunningly worse when such criminally inclined individuals wield state powers.

Lest anyone protest that the state’s true "function" or "duty" or "end" is, as Locke, Madison, and countless others have argued, to protect individuals’ rights to life, liberty, and property, the evidence of history clearly shows that, as a rule, real states do not behave accordingly. The idea that states actually function along such lines or that they strive to carry out such a duty or to achieve such an end resides in the realm of wishful thinking.

Although some states in their own self-interest may at some times protect some residents of their territories (other than the state’s own functionaries), such protection is at best highly unreliable and all too often nothing but a solemn farce. Moreover, it is invariably mixed with crimes against the very people the state purports to protect, because the state cannot even exist without committing the crimes of extortion and robbery, which states call taxation;[10] and as a rule, this existential state crime is but the merest beginning of its assaults on the lives, liberties, and property of its resident population.

In the United States, for example, the state at one time or another during recent decades has confined millions of persons in dreadful steel cages because they had the temerity to engage in the wholly voluntary buying and selling or the mere possession of officially disapproved products. Compounding these state crimes (of kidnapping and unjust confinement) with impudence, state officials brazenly claim credit for their assaults on the victims of their so-called War on Drugs.

State functionaries have yet to explain how their rampant unprovoked crimes comport with the archetype described and justified in Locke’s Second Treatise of Government. In vain do many of us yearn for relief from the state’s duplicitous cruelty: Where is the state of nature when we really need it?

An Application of the Precautionary Principle

In pondering the suitability of the More Realistic Model, we might well apply the precautionary principle, which has been much discussed (and nearly always misapplied) in recent years in relation to environmental policy. This principle holds that if an action or policy might cause great, irreparable harm, then, notwithstanding a lack of scientific consensus, those who support the action or policy should shoulder the burden of proof. In applying this principle to the state’s establishment and operation, the state’s supporters would appear to stagger under a burden of proof they cannot support with either logic or evidence.

Everyone can see the immense harm the state causes day in and day out, not to mention its periodic orgies of mass death and destruction. In the past century alone, states caused hundreds of millions of deaths, not to the combatants on both sides of the many wars they launched, whose casualties loom large enough, but to "their own" populations, whom they have chosen to shoot, bomb, shell, hack, stab, beat, gas, starve, work to death, and otherwise obliterate in ways too grotesque to contemplate calmly.[11]

Yet, almost incomprehensibly, people fear that without the state’s supposedly all-important protection, society will lapse into disorder and people will suffer grave harm. Even an analyst so astute as Olson, who speaks frankly of "governments and all the good and bad things they do," proceeds immediately to contrast "the horrible anarchies that emerge in their absence,"[12] although he gives no examples or citations to support his characterization of anarchy. But the state’s harms — "the bad things they do" — are here and now, undeniable, immense, and horrifying, whereas the harms allegedly to be suffered without the state are specters of the mind and almost entirely conjectural.

This debate would not appear to be evenly matched. Defending the continued existence of the state, despite having absolute certainty of a corresponding continuation of its intrinsic engagement in robbery, destruction, murder, and countless other crimes, requires that one imagine nonstate chaos, disorder, and death on a scale that nonstate actors seem incapable of causing. Nor, to my knowledge, does any historical example attest to such large-scale nonstate mayhem. With regard to large-scale death and destruction, no person, group, or private organization can even begin to compare to the state, which is easily the greatest instrument of destruction known to man.

All nonstate threats to life, liberty, and property appear to be relatively petty and therefore can be dealt with. Only states can pose truly massive threats, and sooner or later the horrors with which they menace mankind invariably come to pass.

The lesson of the precautionary principle is plain: Because people are vile and corruptible, the state, which holds by far the greatest potential for harm and tends to be captured by the worst of the worst, is much too risky for anyone to justify its continuation. To tolerate it is not simply to play with fire, but to chance the total destruction of the human race.

Notes

[1] James Madison, "The Federalist No. 51," The Federalist (New York: Modern Library), p. 337.

[2] Ibid., p. 340.

[3] Mancur Olson, Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships (New York: Basic Books, 2000), p. 65.

[4] See, e.g., Murray N. Rothbard, For a New Liberty: The Libertarian Manifesto, rev. ed. (New York: Collier Books, 1978); and David Friedman, The Machinery of Freedom: Guide to a Radical Capitalism, 2nd ed. (LaSalle, IL: Open Court, 1989).

[5] Thomas J. Thompson, "An Ancient Stateless Civilization: Bronze Age India and the State in History," Independent Review, vol. 10 (Winter 2006), pp. 365—384.

[6] Robert Higgs, Against Leviathan: Government Power and a Free Society, (Oakland, CA: The Independent Institute, 2004), pp. 374, 376; Yummi Kim, "Stateless in Somalia and Loving It," Mises Daily, February 21, 2006.

[7] For a far-reaching compendium on the entire subject, see Edward P. Stringham, Anarchy and the Law: The Political Economy of Choice (Oakland, CA: The Independent Institute, 2007).

[8] Friedrich A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944), pp. 134—152; F.G. Bailey, Humbuggery and Manipulation: The Art of Leadership (Ithaca, NY: Cornell University Press, 1988); and Higgs, Against Leviathan, pp. 33—56.

[9] Higgs, Against Leviathan, pp. 101—105.

[10] Albert Nock, "The Criminality of the State," American Mercury (March 1939).

[11] R.J. Rummel’s latest estimate of twentieth-century democide stands at 262 million persons; the details are available at his Web site.

[12] Olson, Power and Prosperity, p. 66 (emphasis added).

Reprinted from Mises.org.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

For most of his life, Joe was one of those rare conservatives who actually had and lived by sincere conservative values, rather than merely mouthing the usual banal conservative views and readily throwing principles overboard whenever an opportunity to influence or wield state power presented itself. Late in life, he embraced philosophical anarchism, having given up all hope that the state would ever do anything decent.

I met Joe about twenty years ago, and I was privileged to spend considerable time with him over the years. A gentle, learned, witty, and courageous man, Joe was one of the most beautiful writers I have encountered among commentators on public affairs. I keep a collection of quotations that express important ideas in an especially pithy, penetrating, arresting, or graceful way. Joe’s declarations are well represented in my collection. In virtually every column of his that I read, at least once I would stop, reread a sentence or a paragraph, and mutter to myself, “How I would love to be able to write such prose!”

When a man dies, it is common for friends and admirers to say that the he will be missed, but in truth, except by a handful of close friends and relatives, he really will not be missed. In Joe’s case, however, I believe that many people really will miss him. I certainly will. He wrote in a unique voice, in sentences crafted with simplicity, grace, and precision, expressing ideas that all of us might profitably ponder.

Joe was a devout Catholic. Let us hope that in this regard, too, he charted a course to a safe harbor, and that he now resides in a better place.

Reprinted from the Independent Institute blog The Beacon.

Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

The present recession starkly displays this characteristic crisis-related abatement of the economy’s investment process. Indeed, the decline of private investment during recent years has been much greater than most observers realize. Consider the following data, taken or derived from the most recently revised National Economic Accounts prepared by the Commerce Department’s Bureau of Economic Analysis (Tables 1.1.5, 1.1.6, and 5.2.6).

In 2006, gross private domestic investment reached its most recent peak, at $2.33 trillion (in constant 2005 dollars), or 17.4 percent of GDP. After remaining almost at this level in 2007, this measure of investment fell substantially during each of the next two years, reaching $1.59 trillion, or 11.3 percent of GDP, in 2009. This decline is severe enough, but it does not give us all the information we need to gauge the extent of the investment bust.

The greater part of gross investment consists of what the statisticians call the capital consumption allowance, an estimate of the amount of money that must be spent simply to offset wear and tear and obsolescence of the existing capital stock. In a country such as the United States, with an enormous fixed capital stock built up over the centuries, a great amount of funds must be allocated simply to maintain that stock. In recent years, the private capital consumption allowance has ranged from $1.29 trillion in 2005 to $1.46 trillion (in constant 2005 dollars) in 2009. Thus, even in the boom year 2006, about 60 percent of gross private domestic investment was required merely to maintain the economy’s productive capacity, leaving just 40 percent, or $889 billion in net private domestic investment, to augment that capacity.

From that level, net private domestic investment plunged during each of the following three years, taking the greatest dive between 2008 and 2009, when it fell to only $54 billion (in constant 2005 dollars), having declined altogether by 94 percent from its 2006 peak! Last year only 3.5 percent of all private investment spending went toward building up the capital stock. Thus, net private investment did not simply fall during the recession; it virtually disappeared.

Unless this drastic decline is reversed soon, the future will be bleak for the U.S. economy. Without substantial net private investment, brisk economic growth is unthinkable beyond the very short run. Although private investment spending has recovered somewhat since it reached its trough in the third quarter of 2009, gross private domestic investment in the most recent quarter (April to June) of 2010 remained 21 percent below its peak in the first quarter of 2006, and net private domestic investment remained about 64 percent below its previous peak.

While this private-sector disaster was occurring, however, the government sector of the economy was booming. The ratio of all federal government spending — purchases of goods and services plus transfer payments — to GDP increased from 20.6 percent in the fourth (October to December) quarter of 2007 to 25.4 percent in the most recent (April to June) quarter of 2010.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

“They saw the United States in a long-term slow growth environment with the near-term risk of recession quite real,” said Wien, in a commentary to Blackstone clients. “The Obama administration was viewed as hostile to business and that discouraged both hiring and investment. Companies and entrepreneurs were reluctant to add workers because they didn’t know what their healthcare costs or taxes were going to be.”

Add this report to the many similar ones to which my colleagues and I have called attention over the past two years.

Of course, for mainstream macroeconomists, such evidence means nothing. In fact, they hold it in complete contempt because (1) their formal mathematical models do not have a variable called “regime uncertainty,” and (2) even if they could be persuaded to take this factor into account, the canned data on which they rely — the product of the Commerce Department’s Bureau of Economic Analysis, for the most part — do not supply them with an “official” data set for their analysis. What you can’t measure, according to their “scientific” credo, does not exist. Their de facto motto (of which I have more than once been on the receiving end) is: you’ve got no formal model; you’ve got nothing.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

As Andrew Ross Sorkin has written recently in the New York Times:

Mr. Obama was viewed as a member of the elite, an Ivy League graduate (Columbia, class of ’83 . . .), president of The Harvard Law Review — he was supposed to be just like them. President Obama was the “intelligent” choice, the same way they felt about themselves. They say that they knew he would seek higher taxes and tighter regulation; that was O.K. What they say they did not realize was that they were going to be painted as villains.

So, once again, Barack Obama’s presidency reflects that of Franklin Delano Roosevelt, the well-heeled playboy-politician who ascended the political ladder while living very comfortably, owing to his forebears’ accumulation of wealth, and circulated with complete ease among the “best people.” (Note: In FDR’s case, the credentials were the reverse of Obama’s — Harvard College, graduated 1904; Columbia Law School, attended but dropped out in 1907, having already passed the New York State bar exam.) After Roosevelt became president, however, especially from 1935 onward, he was reviled as a “traitor to his class” because of his attacks on “economic royalists,” whom he blamed for the Depression and for the New Deal’s failure to restore prosperity. Perhaps before long the contemporary moguls will revive the American Liberty League.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

At first glance, this journalistic commonplace appears to make sense. Anyone can understand that, say, a store at the mall will not hire additional employees unless its sales increase enough to justify the additional expense. Hence, would-be employees will remain unemployed; they will purchase fewer consumption goods than they would have purchased if they had jobs; and therefore the stores will not hire more workers; and so forth. The circle of a theory of income and employment seems to be closed, and thus an explanation provided for the lingering recession: consumers are not spending enough.

One does not need a Ph.D. in economics, however, to discover that something must be wrong with this way of thinking about prosperity and recession. Checking the national economic accounts produced by the Commerce Department’s Bureau of Economic Analysis (Table l.l.6), one finds, for example, that the most recent quarterly peak in real personal consumption expenditure occurred in the fourth quarter of 2007. This spending ($9,244 billion at an annual rate) equaled 69.2 percent of contemporary GDP ($13,364 billion at an annual rate) — where the data are expressed in dollars of 2005 purchasing power. Real GDP did not fall significantly until the third quarter of 2008. When it reached its trough in the second quarter of 2009, it had fallen to $12,810 billion, down about 4 percent. At that time, real personal consumption spending was $9,117 billion, down only 1.4 percent, and equal to about 71 percent of GDP. Thus, as usual over the course of a boom and bust, consumption spending varied proportionately less than GDP as a whole.

As every student of the business cycle learns early on, the most variable part of aggregate expenditure is private investment. When real gross private domestic investment peaked, in the first quarter of 2006, it was $2,265 billion, or 17.5 percent of GDP. When it hit bottom in the second quarter of 2009, it had fallen by 36 percent to $1,453 billion, or 11.3 percent of GDP. (Deducting investment expenditures aimed at compensating for depreciation of the private capital stock [Table 1.7.6], we find that real net private investment — the part that contributes to economic growth — in the most recent quarter was only one-third as great as it was at its peak in early 2006.) The ups and downs of the business cycle are obviously driven not by consumption spending, but by investment spending.

In the second quarter of 2010, real personal consumption was $9,270 billion, or slightly above its previous peak, at an all-time high. If stimulating consumption spending were the key to an economic revival, we would have achieved one already. And if we accepted real GDP as an adequate index of the economy’s health, we might affirm that conclusion, given that in the most recent quarter, real GDP was only 1.3 percent below its previous peak. With the official unemployment rate stuck near 10 percent and millions of people having left the labor force or having settled for part-time work, however, that conclusion is hard to swallow.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

The Best of Robert Higgs

the likelihood that investors’ private property rights in their capital and the income it yields will be attenuated further by government action. Such attenuations can arise from many sources, ranging from simple tax-rate increases, to the imposition of new kinds of taxes, to outright confiscation of private property. Many intermediate threats can arise from various sorts of regulation, for instance, of securities markets, labor markets, and product markets. In any event, the security of private property rights rests not so much on the letter of the law as on the character of the government that enforces, or threatens, presumptive rights.

In the latter half of the 1930s, many investors feared that the government would destroy the private enterprise system and replace it with fascism, socialism, or some other extreme transformation of the existing economic order.

In testing my hypothesis, I marshaled three distinct types of evidence: historical documentation of government actions and public reactions; findings of public opinion surveys, especially surveys of businessmen; and evidence from financial markets. The latter seems to some observers, especially to economists, to be the most telling because it is relatively “hard” and quantitative. In any event, it is the sort of evidence economists are accustomed to analyzing.

My most striking financial evidence for the New Deal episode pertains to the yield curve for corporate bonds, that is, to the spreads between the effective yields on high-grade corporate bonds with various terms to maturity. I found that this yield curve became suddenly much steeper sometime between the first quarter of 1934 and the first quarter of 1935 (a period when the New Deal lurched from its first, or business tolerant, phase to its second, or business hostile, phase) and remained very steep until sometime between the first quarter of 1941 and the first quarter of 1942 (a period when the New Deal handed over the reins to the military and the big businessmen who, along with the president himself, ran the war-command economy for the duration). I interpreted these extreme spreads as risk premiums on longer-term investments caused by regime uncertainty.

Given the extraordinary scale and scope of the actions the government has taken since mid-2008 and the many expressions of uncertainty (and hence of unwillingness to undertake long-term investments) voiced by businessmen and others as a result of this flurry — bailouts, unprecedented monetary policies, surges in government spending, and tremendous regulatory undertakings in health care and financial markets, among other things — one wonders whether the corporate bond yield curve shows the same kind of movement it displayed in the face of the regime uncertainty that prevailed from 1935 to 1941.

To pursue this matter, I have examined a number of series on corporate bond yields, by term to maturity, that I constructed from data available at Bondsonline.com. (Normally, when economists analyze “the yield curve,” they use data on U.S. Treasury securities. I caution against using such data for the purpose under discussion here. To analyze risks to private property rights as manifested by the risk premiums in bond yields, one must use private bonds, not government bonds.)

I find that back in 2008, before the onset of the financial panic in September, the corporate bond yield curve was rather flat — that is, the yields increased only slightly with term to maturity. At the lower end of the yield curve, yield spreads were tending to narrow slightly until late September. When the panic hit, yields became extremely volatile, especially for the bonds with 2 years to maturity (the shortest term in the data), and remained volatile for almost a year. After mid-2009, the volatility diminished greatly.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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Codevilla cuts immediately to the core: the United States today is divided into (a) a ruling class, which dominates the government at every level, the schools and universities, the mainstream media, Hollywood, and a great deal else, and (b) all of the rest of us, a heterogeneous agglomeration that Codevilla dubs the country class. The ruling class holds the lion’s share of the institutional power, but the country class encompasses perhaps two-thirds of the people.

Members of the two classes do not like one another. In particular, the ruling class views the rest of the population as composed of ignoramuses who are vicious, violent, racist, religious, irrational, unscientific, backward, generally ill-behaved, and incapable of living well without constant, detailed direction by our betters; and it views itself as perfectly qualified and entitled to pound us into better shape by the generous application of laws, taxes, subsidies, regulations, and unceasing declarations of its dedication to bringing the country — and indeed the entire world — out of its present darkness and into the light of the Brave New World it is busily engineering.

This class divide has little to do with rich versus poor or Democrat versus Republican. At its core, it has to do with the division between, on the one hand, those whose attitudes are attuned to the views endorsed by the ruling class (especially “political correctness”) and whose fortunes are linked directly or indirectly with government programs and, on the other hand, those whose outlooks and interests derive from and focus on private affairs, especially the traditional family, religion, and genuine private enterprise. Above all, as Codevilla makes plain, “for our ruling class, identity always trumps.” These people know they are superior in every way, and they are not shy about letting us know that they are. Arrogance might as well be their middle name.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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