Getting From Here To There

by Michael S. Rozeff
by Michael S. Rozeff

A few people have asked me to produce my plan for downsizing and/or eliminating the state. Thanks for the easy assignment. Where’s my magic wand?

Make a list of all government programs. Then repeal them, all of them. Any order will do.

Why are these programs on the books now? Answer that and you have found the lever to tilt society. My answer is this. We (the people at large) have absorbed false beliefs. We think freedom, private property, self-interest, rights, and capitalism are bad; and we think equality, government, force, and socialism are good. Our thinking about economic, political, ethical, legal, and social realities is thoroughly wrongheaded and unsophisticated. We do not even realize that we are forever shooting ourselves in our feet. We often do wrong and do not even know we are doing wrong.

Assume that you have been mis-educated. Most people have been. In the field of economics, there has been vast mis-education. Generations have been taught by Paul Samuelson rather than Ludwig von Mises. The same is true of other important areas. Therefore, re-educate yourself, your children, and others in true beliefs, not false beliefs. I do this constantly. I am constantly trying to understand that which is true in a number of areas. Economics is one of them. If I knew the subject as thoroughly as I would like to, and I do not, I’d be writing more frequently in explanation of it.

Not only are we mis-educated, but most of us specialize in what we do to make a living and we let slide our knowledge of things that matter a great deal. We are also immersed in communications media that constantly perpetuate false beliefs and theories. We all need to take some time to learn. At the von Mises web site are many free materials to get you started. I am fond of such web sites as The Online Library of Liberty, The Library of Economics and Liberty, and The Molinari Institute. All it takes is your time and concentration. Be patient and persistent. And after that, be patient again. Rome was not destroyed in a day.

When asked my plan to downsize the state, I have to smile. That smile means "I don’t know. Why are you asking me? You know as well as I do." Not knowing what to respond, I become a bit irritated. My reaction is: "How am I supposed to know what to do?" Then: "Decide for yourself." And: "Do it yourself in whatever small or big ways you can think of."

Consider one small way. I have come to realize the value of a classic education. I have come to realize the value of learning several foreign languages. I studied Latin (4 years) and French (3 years) in a tiny public high school due to the dedication of one teacher who taught me during lunch hours. I studied German (3 years) in college. Languages are hard for me, and I’ve forgotten most of them. But I can come up to reading speed with some investment of time. Why should I want to do this? Because there are as yet untranslated gems that I’d like to read. They may help me to understand better. I believe that there is nothing more powerful than the truth, but it has to be understood and communicated. More generally, if younger people want to contribute to the effort for liberty, then they can do a lot of good by learning enough to translate important works into English.

We are talking major social change here, involving many millions of people. I believe that change is best done in a decentralized and multi-pronged manner. I am well aware that the situation is social and broad in scope. We are in fact linked together via the state’s laws. Yet I believe that whatever coordination needs to occur to deconstruct the state will occur without heavy-handed central planning or force. One does not make a people free or force a people to be free. Two advocates of decentralized change are Gary North and Samuel Konkin III. North’s large body of works, among other things, advocates voluntarily withdrawing from the state’s embraces while building up alternative private and church-based institutions that rebuild civil society and wealth. Konkin advocated "agorism," basically withdrawing one’s consent from the state’s activities and moving wherever possible into untaxed, unregulated, and grey markets. These are but two approaches to the problem.

Having been a professor, I tend to stress the educational preconditions for long-lasting actions to succeed.

Standard political revolutions are not the answer. Perhaps at the end of a transformative process, a revolution will occur or crystallize matters; but a great deal of work has to precede it.

The state was built up one law at a time. The false beliefs we held worked like a leaven in bread. They worked on and within very large loopholes in the initial Constitution. We have experienced subsequent changes in that Constitution and new interpretations of it. False beliefs drove those changes. Changing the Constitution does not per se change false beliefs. Changing false beliefs leads to changes in the Constitution.

To get to point A from point S, we have to know what points S and A are. Not all of us need to know in order to effect major social change. But a critical mass needs to know. I’d say 10 percent of the population will make a difference, and 20 percent will make a big difference.

It doesn’t matter whether this critical mass is outside government or inside. Either way, it can make a big difference for two reasons. First, elections and legislative votes are often decided by margins less than this. Therefore a group this large that votes in one direction will have a heavy influence. Second, a fraction this large can outweigh the narrow special interest groups that dominate lawmaking.

Ludwig von Mises by himself was enough to start a ball rolling or at least to keep a ball rolling whose momentum had drastically slowed down and to give it fresh energy. We surely can add new energy.

There is absolutely no need for pessimism. There are always alternatives. There will be change in our political situation. It is only a matter of what that change shall be. We are not powerless to influence it whatsoever. Patient and steady effort is required.

There are many correct and simultaneous modes of attack on the problem of the state. They involve decisions and knowledge at many levels and encompassing many individuals and social groups. In other words, no one of us knows "The Answer."

Although I mentioned decentralization, that does not mean there is no leadership. I think of the downsizing problem like that of a company producing a product. We are talking about doing social change. That’s the product. It is a cooperative endeavor. We are talking about making a transition. It’s like producing a complex product.

There are production technologies for making products. In the same way, there are technologies for making social change. The Fabian socialists knew this. They created socialism stepwise. They permeated the intellectual apparatus of society with their ideas. They sold their ideas. They led, and society followed. They used the market for ideas.

Markets do these things best. Markets are decentralized. That suggests that lasting and effective social change should be decentralized.

There are costs of making the transition to a smaller state, and there are benefits from making the change. The overall social benefits will be very large, but most people do not believe that. Although no one of us knows how to produce the change, we collectively have enough knowledge to accomplish the task. No one person knows how to make a pencil, but it gets made.

When a company produces a pencil, there is entrepreneurial leadership to coordinate the endeavor. When people ask me for my plan, they may really be asking me: "Who’s going to lead this transition?" How do we coordinate the effort and combine the individual knowledge that many people possess?

It is already happening. Institutions like the Ludwig von Mises Institute, the Independent Institute, the Foundation for Economic Education, the Institute for Humane Studies, the Molinari Institute, and the Acton Institute for the Study of Religion and Liberty, are leading. Web sites, groups, societies, and individuals are leading. They are at work at every level of society: local, state, and national.

At some point and in some manner that no one can predict, our society will reach a tipping point. It may already have. In the stock market, important market tops and bottoms take many months to form and they are not evident to most people as they form. Tops are hard to call. The state may be nearing an important top (in its size and scope) now, and it may not be yet visible to most of us. Ridiculous, excessive, and nonsensical laws are analogous to the speculative froth and inane stock market valuations that occur as one approaches a high point. So are the obvious grasping for power that we are seeing and the pervasive corruption. Yet I do not rest comfortable at all. Stock market prices can go to levels whose heights are amazing, and the state’s size and scope can do the same. The social process can take many, many years.

Where and in what way this tipping point occurs, whether due to one man or one locality or one state or one national event, cannot be foretold. But it will happen, and when it does the state will start to disintegrate like a dam bursting or a building collapsing. Once there is a critical mass that prevents one piece of special interest legislation or repeals another, the entire structure will be called into question. Once there is one locality that resists a state or one state that resists the national government, the state’s power will break. There will not be a second civil war. People will not stand for it. If the previous educational process has done its work, then these concrete signals of the state’s shrinkage, these victories for freedom, will encourage more and more people to the task.

There exists a major goad or incentive to the process of change for the better, that is, toward true beliefs and away from false beliefs. That goad is the competition of other peoples in the rest of the world. As and if they work from sound beliefs, the same beliefs that we used to have but discarded, they will outcompete us. We will fall behind. That will cause us to question and re-evaluate our ways.

If we train too many people with useless or subpar training for useless or marginal occupations, as we are doing, living standards will decline. We will not be producing goods that people want. There will be discontent. If it becomes mass discontent or even if it does not, it becomes very important to focus that discontent on the appropriate solutions. Otherwise, if we turn to the same sorts of demagogues and false beliefs as in the past, we will go down further before finally recovering.

I hope we have enough sense left to see the light without having to go through a lengthy process of muddling through with deteriorating standards of living. That is what is occurring now. It can become much worse. We are lucky that there is enough freedom and vitality left at present to exploit new technologies and prevent a sharp drop in living standards. But such a drop has already occurred and more will occur as our past sins catch up with us. There is no way to prevent such declines when one messes up, as we have, with education, health care, energy, money, taxes, the military sector, and countless regulations. Coercive centralization and nationalization of human activity takes a heavy toll.

I cannot function without optimism, but it is within a realistic framework of facing the problems and issues. They are not trivial.

Think of the U.S.A. as a kind of criminal company. It extracts taxes forcibly and spends the proceeds as fast as it comes in and faster. On the basis of its proven record of using force to get resources, lenders have lent money to it which it has spent. In addition to these debts, the U.S.A. is a conduit for debt-like promises. It has promised large payments to retirees. It cannot pay them without extracting further taxes. The U.S.A. also owns assets that it has expropriated illegally in the form of lands and such. We wish to liquidate this concern. The debtholders and retirees will be clamoring to be paid off. There is not enough to go around. We face a kind of bankruptcy or liquidation scenario in which the obligations may exceed the value of the assets. There is no known bankruptcy court to oversee the proceedings and make the hard decisions and allocations. But we need what is called a workout and reorganization procedure.

The debtholders are also wondering what the transition will mean for them. They want to know the final product. No one wants to end up worse off than he is now, but that happy outcome is not possible. No one can say now what sort of transition will occur or what the ending situation will look like. There is definitely risk here.

Some parts of our national government are easier to rein in than others. As suggested earlier, I myself do not think in terms of making Constitutional changes as a way of solving anything. I think in terms of repealing those laws that are easiest to repeal once there is a critical mass and interest in doing so. The true Constitution is in the hearts and minds of the people and what they countenance. But if the Constitution could be changed – for the better – I surely would not be unhappy over it.

There are countless other political changes that will downsize the state. We might begin by repealing laws that regulate industry and favor special interests. Chief among these interests are the military (usually called defense, but really offense). Releasing our economy from its unnecessary military burdens and reducing taxes accordingly will allow greater economic growth, making it easier when other matters are taken up. This also makes it far more difficult for our leaders to engineer their further power-seeking and suppression of our rights. Stopping the involvement of the U.S. overseas has a high priority.

Other obvious areas of importance are education, health care, and the monetary system. The health care system is still moving in the wrong direction. Surveys always show the public interested in universal health care financed by higher taxes. Clearly people are letting their emotions and hopes speak. They do not understand the economics of ill-health that they are supporting. Re-education on this subject is very important. Similarly, people are still wedded to the public schools, despite their abysmal performance. The monetary system hasn’t been right for a very long time. The state simply has no business being in the money business. Other serious problem areas are energy and the environment, where myths abound and dangerous wedges into central socialist planning and regulation exist.

These are tough areas to change because the special interest groups have succeeded in spreading their views to the general public and gotten their approval for their harmful policies. In fact, attacks on any interest group, even rich agricultural interests, elicit a chorus of propaganda to defend the subsidies and regulations. We simply need to keep going after these interests tooth and nail. They are selfish and greedy sleaze balls who have no compunctions about robbing through the public treasuries. Their rationales for public aid are lies and fabrications. They should be held up to scorn and ridicule at every turn.

Social Security is a tough nut to crack, but it can be cracked. Other countries have done it. We should pay out those who want to be paid out through the system and release from taxes anyone else who wants to opt out. To ease the transition, the future benefit increases should be stopped. For example, we should stop the cost of living adjustments at a given future date, say one year from now. This means no one will face immediate hurt, but their future benefits will probably decline in real terms. Retirees will bear some burden, but it will be diffused over time. In this way, we can legislate the definite and clear end of the system while funding the payments through general revenues and borrowing. Anyone who wants to opt out of the system should be allowed to while getting back what they have paid in. Many will choose this deal in return for having to pay no more Social Security taxes. If the military were cut back and if the economy were deregulated, general taxes and borrowings might not have to rise very much to pay off the claimants. The claimants have been defrauded by their own government. The fraud is so massive and pervasive that we cannot leave the victims holding the bag.

We do not need a national government. We could live quite well with 50 states and no national government. If that occurred, then people would start looking more closely at their state constitutions. They would see how grossly socialistic and counterproductive they are. They would see all manner of special interest groups, misspent money, and restraining regulations occurring at the state level. The work of cutting back the state could continue at the state level. Minarchists might like to try an ironclad national Constitution with only the defense function funded by the states; or the 50 states could make a defense agreement which would amount to almost the same thing. The defense function would have to be clearly delimited if this were done.

Free market anarchists like me want to go all the way to no formal state functions at all. I believe that if minarchists could see their watchman (defense) state in operation for awhile, with most everything else reduced to a local level or a free market level, they would come around to the view that free market anarchism is feasible and superior. Even objectivists might be convinced, but, as I say, I am an optimist.

There are many possibilities. My thinking is flexible on these matters, subject to my habit of analyzing critically any proposals that come up. I know rather little about how to bring about major social change. I expect to learn from others.

March 30, 2007

Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York.

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