Category Archives: Property Rights

Hate the Game, Not the Players

In his 1973 book, For a New Liberty: A Libertarian Manifesto, Murray Rothbard rejoiced at the momentum that libertarianism had achieved within just a few short years. After almost a century of dominance by the “progressive” movement (both conservative and liberal), Rothbard sensed that the moment had arrived for a rapid and dramatic sea change in American political thought. As he wrote,

“In particular, we must examine the firm and growing conviction of the present author not only that libertarianism will triumph eventually and in the long run, but also that it will emerge victorious in a remarkably short period of time. For I am convinced that the dark night of tyranny is ending, and that a new dawn of liberty is now at hand.”[1]

By 1989, Rothbard had left the Libertarian Party and sought other vehicles for his ideas. While never one to despair, he certainly must have adjusted his expectations of an imminent “Libertarian Spring” by the time of his death. Despite its repeated failures, the state had managed to maintain its legitimacy in the minds of the people. During the apparently prosperous 1990’s, the widespread belief that government no longer worked had subsided. Electoral success for libertarians had plateaued. The name “libertarian” was no longer in the forefront of popular consciousness and rarely, if ever, mentioned in the mainstream media.

Today, all of that has changed. Beginning with Ron Paul’s 2008 presidential campaign, the word “libertarian” can now be heard over the mainstream airwaves again. As the present presidential primary contest gets underway, not only Paul but former New Mexico governor Gary Johnson are openly referred to as “libertarian candidates,” despite the fact that they are seeking the Republican nomination for president. Mainstream media pundits now routinely refer to a significant minority of Republican legislators as “libertarian-leaning.” The “L-word” has been de-stigmatized. Over the next several years, it seems likely that libertarianism is going to get another hearing.

While all of this is great news, it does beg some very important questions. What was the reason for the stigmatization in the first place? More importantly, why has the libertarian movement failed to get off the launch pad after such an auspicious start in the 1970’s?

Certainly the biggest hurdle for libertarianism has been its difficulty for most people to accept. With true liberty comes an enormous amount of personal responsibility. As W. Somerset Maugham wrote, “the path to salvation is narrow, and as difficult to walk as on a razor’s edge.” For an American electorate that has come to expect government to “take care of” so many things for them, rolling back what to libertarians are merely incursions into their liberty seems unworkable. Most people have been taught since childhood that government intervention is necessary and that the slightest reduction in any of it will result in unspeakable horrors.

However, while the task of persuading our fellow citizens to adopt libertarian ideas is difficult, it is apparent that libertarians often compound the difficulty with their approach. Let’s face it, we’re an unforgiving crowd, ready to pounce upon the slightest mistake of logic or deviation from principle with a ferocity that rivals the National Park Police at a Saturday afternoon dance party. Indeed, the most vitriolic attacks made by libertarians are upon other libertarians – for not being libertarian enough.

Yet, we still have plenty left over for those we deem “the usual suspects,” namely government employees, the beneficiaries of government programs, and the military (and this is by no means an exhaustive list). Certainly, there are a plethora of reasons that libertarians might cite to take issue with people in any of these groups. After all, they are actively participating in those activities that are destroying civilized society and robbing us of rights that we are entitled to enjoy. Even those who do not actively participate but who support these institutions with their votes are subject to our unrelenting scorn, typically punctuated by the damning rejoinder “statist.”

Now, these criticisms are almost always well-deserved. In supporting government intervention into our lives here at home and in the affairs of other nations, our opponents are claiming the right to initiate the use of force. Even on domestic issues, these interventions amount to acts of war against us as individuals, for an act of war is nothing other than the initiation of force by one party against another, whether the parties are nations or individuals. It is hard not to respond with sarcasm and contempt when proponents of intervention argue that their opinion is just as valid as ours – the opinion that they have a right to invade the life and property of other people.

Although we have been right on every single issue since the modern libertarian movement was born, it is apparent that our approach hasn’t worked. In terms of national politics, the high-water mark for libertarianism was Harry Browne’s 2000 presidential campaign, which netted less than 1% of the vote. Since then, libertarian candidates have not even done as well.

To use a well-worn cliché of the punditry, much of hardcore libertarians’ rhetoric isn’t resonating. When talking to those just hearing libertarian ideas for the first time, one must be very careful with words like parasite, thief, or murderer. Make no mistake, there is a time and place for calling a spade a spade and there is never an appropriate time to back up on a principle. However, there is an important distinction between vehemently opposing the violation of our rights and denouncing those who (for the most part) unknowingly do so as defective people. The natural reaction of anyone made to feel this way is to reaffirm their self-worth and find any justification – however illogical – for the interventions in question.

This is especially important in dealing with those programs that purport to help the poor. While libertarians should never compromise the principle that money should not be forcibly stolen from taxpayers even for this purpose, we should focus on the theft itself, rather than on those who reap its pitiable rewards. Remember that the perceived necessity for these programs is mostly caused by the myriad other government economic interventions, without which the vast majority of welfare recipients would be gainfully employed. Liberals taking an interest in libertarianism might be open to opposition to these programs based upon the non-aggression principle or the welfare system’s obvious failure. However, they will shut down completely if the argument sounds like the conservative one, which places the blame for the programs on the recipients and their supposed shortcomings.

In addition to eliciting a defensive reaction from those who support government intervention, libertarians have also inspired genuine dislike towards themselves. People who are open to libertarian ideas often conclude, quite understandably, that libertarians themselves are not likeable people. Part of this is rooted in the refusal of libertarians to compromise on their principles, prompting accusations of “extremism.” That is unavoidable without actually compromising – which we shouldn’t do. However, at least some part of this is due to the passion with which libertarians argue their points. When directed at ideas, it is admirable. When directed at people, it can be downright ugly.

As we enter a new era in which libertarianism is again on the table in the mainstream, we should learn from the mistakes we’ve made in the past. There is a time for throwing bombs (in the philosophical/literary sense), and no one does that better than my two favorite libertarian columnists, Will Grigg and Karen De Coster. However, there is also a time, when our friends, neighbors, readers, or audiences have expressed an interest in hearing our ideas, to persuade rather than to attack (something Grigg and De Coster also know and practice). It is important to remember that most of the people, most of the time, want to do what is right. However, they have been taught bad ideas about what is right for their entire lives, reinforced ad nauseum by politicians, media, and popular culture. We are fighting deep emotional attachments to many of these ideas, rather than conclusions arrived at through reason. It is crucial to remember this when trying to persuade those who are genuinely interested.

As the Age of Government draws to its inevitable end, libertarianism has another chance to fill the void. Let us never stop opposing the state at every turn. Let us never compromise that great law of nature, the non-aggression principle. However, let us also recognize that our brothers and sisters in this great family called humanity have not been taught this principle – that it has in fact been purposefully kept from them – and tailor our approach accordingly. When we achieve acceptance of some of our ideas, let us be as quick to praise those who have made that great leap as we are to attack those who advocate for the state. And when those same people take a step backwards on another issue, however illogical and inconsistent that step may be, let us remember the words of that great teacher, “Forgive them father, for they know not what they do.”

If that sounds too religious for your tastes, then Chris Rock put it another way: Hate the game, not the players.

Check out Tom Mullen’s book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

[1] Rothbard, Murray For a New Liberty pg. 321

Rights and Responsibilities

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There is an old argument about rights that has enjoyed resurgent popularity in these days of “spreading the wealth around.” It says that while human beings undoubtedly have rights, they also have responsibilities. In fact, for every right there is a corresponding responsibility that is its complement. One should not be surprised that this line of reasoning appeals to statists of all varieties, because they see in it a way to undercut rights and dress up their schemes of plunder and domination as “responsibilities.”

What are the characteristics of a right? A right is an absolute and exclusive claim to something. “Absolute” because you cannot partially have a right to something. You either have a right to it wholly or not at all. “Exclusive” because that which you have a right to no one else can claim a right to.

A right defines something that you are entitled to (there really is a proper use of that word). You do not need anyone’s permission to exercise a right. No one can charge you a fee for exercising it. No government can regulate it. You are entitled to exercise rights without interference by or permission from anyone.

Consider the right to life. Is it absolute or do you have a right to live merely under certain conditions? Is the right to life exclusive or do others have some partial right to your life? Are you entitled to live, or can other people charge you a fee in return for allowing you to live? Can a government pass a law or regulation qualifying your right to life?

There are different kinds of rights, based upon their origins. Legal rights derive from a contract. While these rights originate with the consent of others, such as your right to a house that you have purchased, that right nevertheless takes on all of the characteristics described above once you have acquired it. The corresponding responsibility to the right of ownership of the house is the obligation to pay for the house. Your responsibility to pay derives from the contract you entered into. You are obliged to pay the seller because you have consented to do so in exchange for the house.

Natural rights are inherent in each person. These are part of and inseparable from our humanity. They cannot be taken away. Even if they are violated, they nevertheless remain. When we recognize something to be “wrong,” it is usually the violation of a right. When we recognize something as “evil,” it is invariably the violation of a natural, inalienable right.

Now, let us consider “responsibilities.” A responsibility is something that you are obliged to do. It is an obligation that you must fulfill in order to comply with a moral or legal code. Responsibilities do not always conform to our wishes. We may prefer to do one thing, but have the responsibility to do another. Like rights, there are different types of responsibilities.

When politicians talk about responsibilities, they mean those that can be enforced by violence, as all laws are ultimately enforced. That raises an important question: When is the use of violence justified in compelling someone to fulfill their responsibilities? Can violence or the threat of violence be used in enforcing all responsibilities? Obviously not. There are some responsibilities that cannot be enforced by other people at all.

Those who believe in God feel a responsibility to worship or to pray. That perceived responsibility is certainly not enforceable by other people. If there is an absolute, inalienable right of conscience, then no human may use violence against another for failing to fulfill the responsibility of praying. Certainly, God may claim a right to punish someone who has shirked this responsibility, but other people cannot. That is because the obligation related to the responsibility for praying is to oneself and to God, not to anyone else.

Put another way, you have a right of conscience and a corresponding responsibility to act according to the dictates of your conscience. To act against the dictates of your conscience may have negative consequences, but violence inflicted upon you by other people cannot be one of them. Otherwise, you must conclude that it is possible for a right to be destroyed by its corresponding responsibility.

So what responsibilities can be enforced with violence or the threat of violence by other people ? Since violence is only justified in defense, the only responsibility that can be enforced with violence is the responsibility to refrain from violating the property rights of others, “property” being defined as one’s life, liberty and justly acquired possessions. It is only when one person has failed to fulfill this responsibility that others are justified in using violence. When other people use violence or the threat of violence under any other circumstances, they are failing to fulfill their own responsibility not to violate the property rights of others.

Consider the natural and inalienable right to liberty. Is this a right? Yes. Does it have a corresponding responsibility? Yes, the responsibility to not violate the liberty of others. Can others use violence or the threat of violence to enforce this responsibility? Yes, because doing so defends the property rights of an innocent person.

Most often, It is not the rights to life, liberty, or conscience the statist has in mind when he begins his sermon about responsibilities. While he may be willing to violate all of these rights as his means, it is rarely his end. No, the statist’s primary object is not your life or liberty, but your possessions, meaning your money, land or “stuff.” It is here the statist will stand up to say, “Yes, you have a right to acquire and own possessions, but you have a corresponding responsibility to pay your ‘fair share’ to society.” Of course, the statist claims the right to use the threat of violence – the government – to compel you to fulfill this responsibility. But where does this responsibility come from? And is acquiring possessions a natural and inalienable right?

There are only three ways to justly acquire possessions. One must either take them directly out of nature, create them with materials taken directly out of nature, or take possession of someone else’s possessions by agreement. This last means of acquisition may be the result of a gift or a trade. It is not important whether the previous owner was compensated; only that he voluntarily consented to the transfer.

Most people acquire possessions by exchanging their labor for the possessions of others. In other words, they are employed by others to perform a certain type of work. In exchange for the work, they are given possessions in the form of money, with which they can acquire still other possessions. Depending upon the scarcity of the skills and experience they offer to purchasers of their services (employers), they may be able to sell their services for larger or smaller wages.

Whether an individual sells it for $20 thousand, $200 thousand, or $20 million dollars, no one would deny that his labor itself is his property. He has a right to this property, meaning his claim upon it is absolute and exclusive. He is entitled to own his labor and to dispose of it as he sees fit. Those are the bases of his right to sell it.

It must follow that he also has an absolute and exclusive right to those wages. After all, he has just exchanged part of his life for them. Who else could claim any right to part of his life? The wage earner will invariably exchange most of his wages for other goods, but his right to whatever he acquires with his wages is identical to his right to his labor itself, which is merely a portion of his life. Denying this right necessarily supposes other people have a right to part or all of his labor, and therefore part of his life.

There was once an institution wherein one group of people claimed a right to the labor of others. It was quite rightly abolished.

The statist will answer that the wages were a “blessing of society” for which the wage earner owes some portion back. If that were true, one would have to question the rationality and efficiency of this mysterious entity called “society,” which chooses to bestow blessings upon people, only to immediately demand part of those blessings back. Why not simply bless the individual less, leaving both parties square?

In reality, the wage earner has already paid his “fair share” to society. For the $20 thousand or $20 million he has earned, he has provided exactly $20 thousand or $20 million worth of labor. How do we know his labor was worth that amount? The same way that we know the market value of anything. It is the price others are willing to pay for it.

Perhaps our wage earner is a painter. In that case, he has exchanged exactly $20 thousand in painting services for $20 thousand in cash. Nothing was given to him by any nebulous entity called “society.” He created that wealth himself with his own labor. He has an undeniable right to keep it and dispose of it as he sees fit. The corresponding responsibility is to respect the property rights of others, meaning to not appropriate or transfer their property against their will.

If there is any justification for a corresponding responsibility to “society,” it can only be the responsibility to pay for some service he has agreed to purchase from society. As we have discussed, the obligation associated with a responsibility to pay for something derives from a contract. If one agrees to purchase something, one has the responsibility to pay the previous owner the agreed upon price. This responsibility corresponds to the right of ownership of the purchased property.

So what has our wage earner purchased from society? What has he consented to buy? Accepting the extremely elastic definition of “consent” employed by proponents of constitutional government, he has consented to purchase protection of his life, liberty, and possessions. As Thomas Paine put it, his responsibility is to “surrender up a part of his property to furnish means for the protection of the rest.”[1] If there is any responsibility incumbent upon him, it is to pay for these services rendered and no more. Even taxation for this purpose has a dubious moral foundation, as our wage earner has never really consented to purchase even this protection. That is why Paine also referred to government as “a necessary evil.”[2]

But let us assume that somehow this consent is real. Like the purchaser of the house, the citizen has entered into a contract. His responsibility to pay for protection of his property corresponds to his right to demand that the protection he has purchased be provided.

For the statist, this logical connection between rights and responsibilities does not exist. He asserts that the corresponding responsibility destroys the right. For him, the citizen has a responsibility to suffer the very crime he established government to protect him from in the first place – the invasion of his property. He is not entitled to the protection he has purchased, but instead has a responsibility to tolerate its antithesis – for his property to be invaded by the entity he has hired to protect it. As John Locke wrote, “the preservation of property being the end of government, and that for which men enter into society, it necessarily supposes and requires, that the people should have property, without which they must be supposed to lose that, by entering into society, which was the end for which they entered into it; too gross an absurdity for any man to own.”[3]

Absurdity is at the root of all statist thinking, producing bizarre and disastrous results. The statist seeks to grant some people rights to the labor of others, such as healthcare, education, or housing, while placing the responsibility to pay for these services on others, under the threat of violence if they don’t. Neither these rights nor these responsibilities can possibly exist, for many reasons, one being the supposed rights are claimed by one person and the corresponding responsibilities placed upon another. If one wonders how a government can get so out of control that it spends all it can possibly tax from its citizens and all it can possibly borrow, yet still seems to need more, false rights and responsibilities are a good place to start.

[1] Paine, Thomas Common Sense from Paine: Collected Writings Literary Classics of the United States, Inc. New York, NY 1955 pg. 7

[2] Paine, pg. 6

[3] Locke, John Essay Concerning the True Original Extent and End of Civil Government from Two Treatises of Government and A Letter Concerning Toleration Digireads.com Publishing Stillwell, KS 2005 pg. 113

Photo by Arvind Balaraman

Tom Mullen is the author of It’s the Fed, S tupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Why Progressives Will Enjoy Atlas Shrugged, Part I

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I had the opportunity to see Atlas Shrugged, Part I on Saturday in the only theater in which it is being shown in Tampa, FL. It is running at Cinebistro, a specialty theater where you can enjoy a high-end meal and fine wine served at your seat, which is very similar to a first class airline seat. Admittedly, it is just the kind of venue that progressives might associate with an elitist gathering of selfish capitalists. However, the movie itself tells quite a different story than they might expect if their understanding of Rand is limited to her interviews with Phil Donahue or Mike Wallace.

Like libertarians, Rand’s Objectivist economic theory was rooted in what we today call “the non-aggression axiom,” which Thomas Jefferson and the liberal faction of America’s founders called “the law of nature.” According to this philosophy, each individual has an inalienable right to keep the product of his labor and to dispose of it as he sees fit. The non-aggression axiom forbids any individual or group from using force to take away the justly acquired property of another. Neither does it allow for anyone to interfere with voluntary contracts, as long as those contracts do not involve the initiation of force against anyone else.

This prohibits the government, which is by definition the societal use of force, from redistributing wealth or enacting laws which go beyond prohibiting aggression. Establishment media figures who interviewed Rand immediately focused on the implications of her philosophy for social safety net programs, charging that Rand’s philosophy would not allow for programs for the poor or handicapped. While this is true, it obscures the most important implications of Rand’s philosophy for economic policy in the United States.

What would likely startle progressives watching the film is its emphasis on the evils of what free market proponents would call “crony capitalism.” This is completely consistent with the novel, which demonstrates that the beneficiaries of government regulation supposedly enacted for “the common good” or “the benefit of society” are really the super-rich. Indeed, the film never criticizes the beneficiaries of social programs. Instead, it spends all of its time demonstrating the difference between those “capitalists” who acquire their wealth through government privileges and those true capitalists who acquire their wealth by producing products that consumers voluntarily buy.

This is a crucial distinction that has eluded progressives from Woodrow Wilson to Michael Moore. After seeing Moore’s film, Capitalism: A Love Story, I pointed out in my review of that film that there was very little that libertarians would disagree with. All of Moore’s criticisms of what he calls capitalism are really the result of crony capitalism. The biggest culprit in the economic collapse of the last decade was the Federal Reserve, a central planning/wealth redistribution institution that Rand explicitly condemns in her novel. Unfortunately, Moore incorrectly concludes that the economic distortions, inequitable distribution of wealth, and widespread harm to middle and lower income Americans were the result of a free market.

Rand would agree completely with progressives on the injustice of today’s American corporate state. That might also surprise progressives who probably assume that Rand would have supported the mainstream Republican policies of George W. Bush. Not only would Rand have condemned Bush’s version of state capitalism, but she was openly critical of Republican hero Ronald Reagan. When asked by Phil Donahue about Reagan during his administration, Rand said in so many words that he should have stuck to acting.

The only opportunity that progressives might have to disagree with anything in the film is the portrayal of the labor union official who tries to sabotage Dagny Taggarts launch of a new railroad line. This encounter takes all of about 3 minutes of the 113 minute film and is not a condemnation of labor unions in principle, but rather the illegitimate power that corrupt union officials can wield because of government privileges.

However, the true villains in the film are not union officials, beneficiaries of entitlement programs, or any other group associated with progressive philosophy. The villains are exclusively corporate executives and the government officials they get in bed with to illegitimately acquire wealth. The heroes are those who acquire their wealth by productive achievement and voluntary exchange. If one had to sum the film up in one sentence, it is an effective demonstration of the evils of crony capitalism and its difference from a truly free market.

I encourage progressives to see this film and to read Rand’s novel. If there is one thing that I hope they take away, it is that even great wealth can be acquired legitimately, when it is the result of human beings trading the products of their labor with the mutual, voluntary consent of all parties. Once progressives begin making the distinction between legitimately acquired wealth and wealth acquired because of government privilege, they will find libertarians and all other proponents of truly free markets standing by their side, fighting the evil corporate state.

Eliminate Non-Essential Government Now

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In Friday’s last hour, a federal government “shutdown” was averted by a last-minute deal struck by House Democrats and Republicans to approve a federal budget for the remainder of the fiscal year. According to the Los Angeles Times, the Republicans achieved $39 billion in spending cuts out of a federal budget that will run an approximately $1,600 billion deficit this year alone. The Democrats were able to prevent defunding of Planned Parenthood and minor curbs on the power of the Environmental Protection Agency (EPA). As a result of the compromise, the 800,000 “non-essential” government employees that would have been laid off will be back at work on Monday, providing their non-essential services without interruption.

Politicians and media pundits ranged from frightened to hysterical at the prospect of this so-called shutdown lasting even a day, as if some epic blight would have consumed the land, marked by cars turned over and burning, wells dried up, and livestock lying dead at the side of the road.

Of course, no reduction in government spending can be discussed without the usual round of Keynesian economic gibberish. So, we also had to hear about how the economy would be devastated due to those 800,000 lost jobs, resulting in the loss of their own spending and the elimination of all of the money those employees help the government spend into the economy. Among the burning cars and dead livestock we would find shanty towns full of former Wall Street billionaires, wiped out by the sudden and devastating drop in demand for their products.

While even less exaggerated claims about the harm that would be caused if the shutdown had occurred are meritless, there is a much more important question to be asked that virtually every media outlet has been silent on. This is not surprising. Like all other political and economic debate in America today, the discussion is completely focused on results. To ask the most important question, we have to shift the discussion from results to rights. On that basis, the distinction made here in terms of essential vs. non-essential services provides a unique opportunity.

The shutdown would not affect the military, any core law enforcement functions, or any other federal government activity deemed “defense of life and property.” This assumes that our present bombing of Libyans is “defense of life and property,” although whose lives or properties are being defended while Libyan lives and property are being destroyed is an inquiry for another day.

The shutdown would not affect entitlement spending, which together with military spending makes up almost three quarters of the present $3.7 trillion budget. Social Security checks would still go out, Medicare and Medicaid claims would still be paid, and HUD landlords would still get their rent checks.

While the most important questions of rights actually revolve around this “welfare-warfare state,” it is not at issue in the so-called shutdown. Only those services deemed by the government itself as “non-essential” would cease. That begs the question:

Can even a democratically-elected government force its citizens to pay for services that everyone acknowledges are not needed?

One must remember that every dollar that the government spends, whether it is bombing some far-off nation, paying medical claims, or investigating the mating rituals of the Namibian Tiger Beetle, has been collected from taxpayers under the threat of violence if they do not pay. If you doubt this, just ask Wesley Snipes. There is a process that you can go through to get approved to visit him where he currently resides. All manner of propaganda is employed to distract the victims of taxation from this basic reality. However, any government, whether elected by the people or autocratically maintained by a military dictator, is invested with the power to force people to pay taxes.

It is this reality that inspires the occasional clear-thinking individual to suggest that there be some limit to what individuals can be forced to pay for, regardless of how their government is constituted. In other words, one must define what government spending is necessary and what is not. Proponents of different political philosophies define “necessary” in terms of government activity in different ways.

For founding fathers in Thomas Jefferson’s camp, individuals could only be forced to pay for the protection of their own life and property, which translates to national defense for the federal government. Their opponents, led by Alexander Hamilton, argued that individuals can and should be taxed for other activities that contributed to “national greatness,” including the building of infrastructure, the maintenance of a large military establishment, and the protection and subsidization of government-connected corporations.

Modern liberals or progressives go a step further, saying that in addition to Hamilton’s program, the government has the legitimate authority to tax individuals for the purposes of providing needed benefits to others, such as retirement benefits, medical care, housing, food, and clothing. Some conservatives argue that this is merely legitimized theft, as the government here is not providing services equally accessible to the whole tax base, but rather transferring wealth from some individuals to others.

In any case, none of those debates were in play in regards to the recently-avoided shutdown. Assuming that the arguments made by both conservatives and liberals are valid, and that all of the above services are necessary for a peaceful and just society, neither conservatives nor liberals would give up anything in a government shutdown. The only services that would be interrupted would be those that both conservatives and liberals agree are non-essential, i.e., UNECESSARY services.

Under what theory of government can individuals be forced to pay for unnecessary government services? They are not needed for individual or national security. They are not needed to ensure “social justice.” By the government’s own admission, they are not needed at all. If individuals can be taxed to underwrite even these services, is there anything at all that they cannot be forced to pay for?

There is a further philosophical question to be answered here in terms of the huge federal deficits that these unneeded services contribute to, which have resulted over the years in a $14 trillion national debt. It is not only present taxpayers’ rights that are in question, but the rights of people who are not even born yet. Even if you believe that the United States government is one “of the people, by the people, and for the people,” do “the people” have the right to force future American citizens to pay for unnecessary services provided to taxpayers today? Won’t those future taxpayers be people? Don’t they have any rights at all?

Looking at the founders again, Thomas Jefferson argued that future generations could not be legitimately forced to pay for any services provided to present taxpayers, not even “essential” services like national defense. His opponent Hamilton made no such philosophical distinction. In fact, he argued that the national debt would be a national blessing, as it would tie the corporate creditors to the government. His only qualification was that the debt not be “excessive.” Hamilton, the original American conservative, believed as conservatives do today that the greatness of the empire (the collective) outweighed the rights of the individual, even those individuals not yet born and therefore unable to give their “consent” via participation in the election process. Who was right, Jefferson or Hamilton?

Sooner or later, anyone truly interested in liberty has to come to the grips with the fact that any taxation, even taxation to provide defense of life and property, violates that natural law that no one should be forced to do anything or deprived of his property to pay for anything, as long as he is not harming others. Once this natural boundary is crossed, the limit of what one person or group can force another to do or pay for must be set artificially by men. Certainly, the most liberal limit on what citizens can be forced to pay for by their government is what the government itself deems as necessary. If government spending cannot be limited even to its own expansive definition of “essential services,” then what right is left to anyone to keep any of their own money? Why not just turn it all over to the government to spend as the government sees fit?

Obviously, if you believe that individuals have any rights at all, you must call for an immediate and permanent government shutdown of all “non-essential services.” This should be the bare minimum limit on government spending even if the government wasn’t running a deficit that represents theft from future generations.

But what of results? Fortunately, the idea that there is a choice to be made between individual rights and the “needs of society” is just another myth propagated by those who wish to extort your money for their own ends. There is no compromise or “balance” needed between individual rights and the benefits of these non-essential government services, because there are no benefits. The quality of life for Americans would be immediately and dramatically improved if they were eliminated.

Primarily, the present roster of 2.1 million federal employees, even in terms of percentage of population, is orders of magnitude larger than the “swarms of officers to harass the people and eat out their substance” sent by King George in the 18^th century. Reducing this modern swarm of federal employees by roughly 40% would significantly reduce the amount of government meddling in Americans’ lives and overriding of their otherwise sound decisions about what to spend their money on, how to conduct their business, what to eat, what medical services to purchase, etc.

Assuming that this subset of federal government employees earns the overall average of approximately $100,000 in salary and benefits, this also would be an immediate reduction of $80 billion in government spending, twice the amount cut in the compromise between Republicans and Democrats to pass this year’s budget. That doesn’t count all of the spending associated with these people doing their jobs, which could be as much as $500 billion.

The somewhat popular services provided such as national parks would not cease to exist without the government providing them. In fact, there could be a two-fold benefit in eliminating these particular government services. First, the land and assets associated with them could be sold at public auction, enabling the government to make a huge payment on the existing national debt. Second, these services could be taken over by more competent private enterprises which would risk their own money to provide them. As they would be competing for customers with other amusements such as Disney World or Carribean cruises, they would provide these services with higher quality and at a lower overall cost than the government does. In addition, that cost would be paid voluntarily by those who actually use the services, rather than involuntarily by everyone.

Finally, there would be no loss of demand in the economy due to the wages of those 800,000 employees no longer being spent into the economy. Remember, those wages all represented demand that was forcefully taken away from taxpayers and paid out to those employees. Should those government jobs be eliminated, the money would merely be spent by its rightful owners on whatever they chose to spend it on, rather than spent by other people. Wealth created by productive activity is not increased when forcefully extorted from its rightful owners, and therefore does not decrease when returned to them.

In conclusion, Americans should not be apprehensive about the prospect of a “government shutdown” as defined in the recent budget crisis. They should demand it. Neither conservatives nor liberals would be compromising any of their values. Under even the most “extreme” interpretations of conservative or liberal philosophy, there is no legitimate authority for the government to tax individuals to pay for these services. Eliminating them would provide an immediate fiscal, economic, and social benefit to American society, and Americans would regain a tiny smattering of that liberty we all claim to cherish. New national elections are coming next year. Solving our biggest problems, like entitlement and military spending, will not be on the table. So, let’s set a more achievable goal and at least make this demand: No Non-Essential Government.

But I Paid Into It…

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The left criticizes Tea Party activists who oppose President Obama’s “socialism” as hypocritical because they do not oppose Social Security for themselves. The most common rebuttal is something along the lines of Social Security being fundamentally different because the recipients pay into it. This is no different than arguing for a right to steal your younger neighbor’s car because an older neighbor stole yours.

Most people are aware Social Security has begun paying out more in benefits than it collects in payroll taxes. However, it had run surpluses for decades that most beneficiaries honestly believe is funding the shortfall until the demographic imbalance caused by the baby boom evens out. Since they “paid into it all of their lives,” supporters of Social Security distinguish it from Aid to Dependent Children or other wealth transfer programs. Inherent in this thinking is both factual inaccuracy and flawed logic.

First, even if those surpluses had gone into a “trust fund,” no one disputes Social Security has always been a predominantly “pay-as-you-go” program. The overwhelming majority of the money collected from payroll taxes went to fund benefits for current beneficiaries. Thus, payroll taxes were taken from one group of people and paid out to another, just like public welfare.

One might argue the surpluses generated previously mean at least part of the money being paid to current beneficiaries is their own money, held in trust for their retirement. This is also completely untrue. The surpluses have not been held in cash since 1939. Instead, when the program runs a surplus, the government is legally obligated to use the money to purchase U.S. Treasury bonds, which are securities documenting you have loaned the federal government money. So, by law, any surplus collected in payroll taxes for Social Security must be lent to the federal government, which immediately spends it on operating expenses. In return, Treasury Bonds are put into the trust fund.

For those who decry this 1939 change as a betrayal, remember the FDR administration had also taken the U.S. off the gold standard (domestically). Had the government continued to merely hold reserves in cash, those reserves would have been outstripped by inflation by the time the benefits were payable to most beneficiaries.

Most people think of the treasury bond arrangement as the government putting their money into a “secure investment” which will pay them interest with very little risk. This is absurd. Treasury bonds are not “an investment.” An investment is a loan or advance of capital made in the hopes of earning interest from a producer of goods or services. The fundamental question anyone asks before risking their money with a bond issued by a private business is “How are you going to pay me back?”

The private sector business answer would be, “By using the capital you have loaned us, we are going to expand our productive capacity. With the new products we will produce and sell, we will be able to pay back your investment with interest and still make a profit.” Thus, if you purchase a bond issued by a computer manufacturer (i.e. lend it money), then the computer manufacturer repays you with interest from sales of the new computers it produced using the money borrowed from you.

But the federal government doesn’t produce computers. The federal government doesn’t produce anything. How does it answer the question, “How will you pay me back?” There is only one possible answer: “We will tax people in the future to pay back your loan principle and interest.”

Thus, even the so-called “trust fund” does not represent a store of your own money, held in trust for your retirement. 100% of your money was spent the moment the government received it. Most went to underwrite current beneficiaries’ benefits. The rest was spent on other government boondoggles and replaced by promises to repay you by taxing other people. Not one dime of current benefits represents a “payback” of one’s own money. Social Security is every bit as “socialist” as Aid to Dependent Children, Medicaid, Medicare, or any other government transfer of wealth. Where do you think it got its name?

There is a bit of irony here that probably also escapes most Americans. While the federal government’s modus operandi for many years now has been to merely pay off the interest on its debt and issue new debt to cover the principal as bonds come due, let’s consider what would happen if they actually started repaying the principal on their bonds.

The longest term bond is a 30-year Treasury note, which means you loan the government the money for 30 years. Suppose that in 1970, you were a 34-year-old, dutifully paying your Social Security taxes. Most of your money went to pay current beneficiaries, but a small portion (your share of the surplus) went into 30-year Treasury notes. In 2010, you are one year from retirement and ask the government, “Where are you going to get the money to pay back the principal and interest on that 30-year Treasury bond?” As bizarre as the answer might seem, the answer would be, “Why, from you, of course.”

However, the most socialist aspect of Social Security is not that it represents a transfer of wealth. It is that the program is mandatory. The only way for the government to accomplish a transfer of wealth from one party to another is to force people to participate. This is why George W. Bush’s proposal to “privatize” Social Security would not have made it any less “socialist.” People would still have been forced to participate; only they would now have the option of handing their money over to W’s tax-subsidized buddies on Wall Street rather than to the federal government. Imagine if he had been successful in implementing this in 2004.

Free market capitalism and socialism truly are opposites, but the fundamental difference is one of rights, not economics. True free market capitalism recognizes every individual’s right to keep the product of his labor and dispose of it as he sees fit. Social Security denies this right. It should be responsibly phased out and replaced with nothing. That prospect should scare no one at this point. With a government $14 trillion in debt and planning to borrow more every year for the foreseeable future, I would trust the most irresponsible individual I know before the federal government – with his retirement money and mine.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Progressives Should Target the Real Robber Barons

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The political winds have shifted wildly over the past four years. After decisive defeats in both the 2006 and 2008 elections, the Republican Party’s prospects seemed dreary. There was widespread talk of how the party needed to “remake itself.” There was even speculation from some quarters that it would fade from influence permanently, as had its predecessors, the Whigs and Federalists. Certainly, the conservative movement needed a rallying point in order to regain a foothold upon public sentiment.

That rallying point was public aversion to the radically socialist agenda of Barack Obama and the Pelosi Congress. Regardless of whether the Republicans had any new ideas to offer, they were able to remake their image quickly by jumping aboard and partially co-opting the Tea Party phenomenon. Somehow, they have again established themselves in the minds of most Americans as the party of small government, free markets, and individual liberty, their consistent behavior while in power notwithstanding.

Now, it is the Democrats who find themselves on the wrong end of a one-sided mid-term election defeat, with more of the same looming over the 2012 presidential elections. As much as the 2008 elections were a repudiation of George W. Bush and all associated with his philosophy, 2012 will be a repudiation of Obama and all associated with his. If the modern “conservative” philosophy had been thoroughly discredited two years ago, the modern “liberal” philosophy has been annihilated this year. Nothing that Democrats won on in 2006 and 2008 is going to fly with voters right now. The left needs a rallying point that will resonate with voters and make them forget why they voted them out of office just two years earlier, just as those same voters forgot why they had voted the Republicans out merely two years before the 2010 mid-terms.

If they are not to completely abandon their image as champions of the poor, disadvantaged, and working class against the power of the wealthy elite, they must find a way to restore that perception in the minds of voters without associating themselves at all with socialism, which average Americans have quite obviously choked on and spit out over the past two years. They need their own avenue to tap into the Tea Party phenomenon, or a grass roots movement like it, and appear as the party fighting for the people against a federal government run amok. Their traditional anti-corporate, pro-welfare platform won’t work. For better or worse, Americans right now associate corporatism with the free market and aversion to welfare programs has never been more ascendant. However, there is a rallying point available to the left that is completely consistent with the modern progressive philosophy and which conservatives are completely ignoring.

The left’s political dominance during the 20th century all began with the early progressive movement, which was given its first life under Republican presidents Teddy Roosevelt and William Howard Taft. However, it was the “new freedom” promised by Woodrow Wilson which established and defined the progressive platform, subsequently advanced in great strides by FDR and Lyndon B. Johnson. A core tenet of this philosophy was the need to protect “the little guy” against the robber barons of capitalism – which the progressives successfully defined in the minds of voters as anyone of great wealth, whether they have achieved that wealth legitimately or not.

Indeed, the tragic aspect of the early progressive movement was that they lumped together all successful business people as plunderers and exploiters of the working class, thus discrediting free market capitalism along with the crony capitalism that was as rampant at the time as it is now. Along with corrupt railroad companies that soaked the people for corporate welfare, only to deliver shoddily constructed railroads that all went bankrupt, the early progressives also targeted companies whose success was due to superior products and lower prices, with their profits earned from consumers voluntarily choosing to buy their products.

John D. Rockerfeller’s Standard Oil was one such example. His company was dismantled by the government after more than two decades of offering the public higher quality oil at lower and lower prices. Instead of holding him up as an example of what a truly free market could achieve for the common man, the left attacked Rockerfeller as the definitive robber baron, regardless of facts to the contrary. With his company dismantled by the government, Rockerfeller abandoned the free market and became the robber baron he was wrongly accused of being. He decided to get into banking.

This is not to repeat the mistake of early progressives. All bankers in the 19th and early 20th century were not robber barons, nor is banking a de facto dishonest profession. Like any other business, it offers a service of great value to the public when that service is voluntarily purchased by consumers. When consumers choose to store their savings in a bank or allow the bank to invest their savings by loaning it out at interest, the banks that most conscientiously and wisely protect their depositors’ interests will prosper the most. Those that make good loan decisions will be able to pay higher interest rates to depositors and provide more stability. In a truly free market, they will win, because they benefit average Americans – the political base of the progressives – the most.

However, this is not the banking model that John D. Rockerfeller helped found in 1913. Rockerfeller was no longer interested in competing on a level playing field and relying on talent and hard work to make his fortune. He had already done that successfully and had been plundered by the government for his trouble. He was not interested in being victimized again. This time, he would be the plunderer. Along with J.P. Morgan, Rockerfeller sent a delegation of men to Jekyll Island in 1913 to devise the mother of all robber baron schemes – the Federal Reserve System.

The Federal Reserve System is the most ingenious fraud in human history. It appeals to the right because it is seen as an institution of capitalism. It appeals to the left because it is seen as a regulator of the financial system that protects the little guy from the supposedly violent machinations of unregulated capitalism. In the meantime, it funnels trillions of dollars of plundered wealth to politically-connected corporations at the expense of average Americans and those corporations which still actually prosper because they offer superior benefits to the public.

Without getting into what really goes on behind the scenes at the Fed, let us consider what the Fed purports to try to do. Ninety-seven years of results notwithstanding, the Fed supposedly regulates the market by maintaining both full employment and price stability. The left supports this agenda because its constituency depends upon jobs and affordable consumer goods in order to survive. They never stop to think about how the Fed attempts to accomplish these goals.

The Fed attempts to maintain full employment through inflation. Inflation is properly defined as an increase in the supply of money and credit, not an increase in consumer prices (more on that in a moment). During periods when unemployment is higher and overall economic growth is lower, the Fed attempts to stimulate investment in new business ventures or expansion of existing ventures by “lowering interest rates.”

However, Mr. Bernanke cannot lower interest rates with a fiat command. Instead, the Fed manipulates the interest rate by buying large quantities of U.S. Treasury bonds from its member banks. This artificially increases the demand and lowers the supply of U.S. Treasuries. It also artificially increases the supply of money available to be lent in the market. With more money available to be lent, banks offer loans at lower rates than they would if money were in shorter supply. With lower rates, more businesses take out loans with which to expand or start new ventures. At the end of this chain of events, more average Americans supposedly get hired in order to support the new business activity that has been “stimulated” by the Fed’s monetary expansion.

Taking the Fed at its word, there is still a rub to this story. The magic described above and in the Fed’s press releases does not come without a cost. The money and credit infused into the economy during this process does not come from any “reserve” that is held by the public or by the privately-owned Federal Reserve. It is created out of thin air by the Fed, which enjoys this privilege as a result of legal tender laws and the Federal Reserve Act. By increasing the overall supply of dollars in the economy, this monetary inflation drives up the price of consumer goods.

It also causes capital to be misallocated, meaning that working people are hired for projects that are not ultimately going to succeed. This inevitably happens much more frequently when banks are able to loan “free money.” When they must convince depositors to invest their own money in loans the bank wishes to make, they are forced to make much wiser choices with that capital than when the money is simply created out of thin air and handed to them, with more fiat money forthcoming if they should make a mistake. In fact, a true understanding of the economics behind monetary inflation reveals that misallocation – economic booms and busts – are inevitable when monetary inflation is allowed to take place.

Progressives should automatically be suspicious of this whole charade simply because Wall Street loves it. Whenever the Fed makes an announcement that it will attempt to lower interest rates, the stock market immediately goes up. Of course it does. Cheap money hitting the market allows investors to get in on ground floor companies and pump up their stock value with newly-created money, subsequently bailing out long before the bust occurs. When the reality hits the market that half of these new companies had no viable business plan, the stock prices collapse and the ventures go out of business and lay off their employees. This is a recession. Average Americans are unemployed while the sharks who gobbled up the cheap money to pump and dump the stocks are sitting on a beach, enjoying the fruits of their heist.

Furthermore, while monetary inflation causes prices of consumer goods to rise for everyone, it is really average Americans and the poor who are most affected by it. When the price of gasoline rises to seven dollars per gallon, the Wall Street elite have lost purchasing power in terms of the dollars they hold, but they more than make up for it during the economic booms. Millionaires become billionaires, negating the effects of a further devalued money supply, while average Americans living paycheck-to-paycheck start looking for second jobs just to pay their rent and fill up their gas tanks to get to work.

However, the most compelling reason for progressives to oppose the Federal Reserve System is because of what it openly admits it represents. Taking the Fed and its supporters at their word, the Fed is nothing more than a subtler, more devious version of “trickle-down economics,” whereby large corporations receive huge sums of money in the hopes that they will then create jobs for the little guys. There is absolutely no difference between this argument and the “Reaganomics” of the 1980’s. Any self-respecting progressive who opposed Reaganomics must oppose the Federal Reserve System. If they are not strictly opposed to government redistribution of wealth, they certainly are opposed to redistributing from the middle class and poor to Wall Street. That was the whole principle upon which the movement was founded.

There is no reason that the left should concede the Tea Party movement to conservatives. It is not fundamentally a Republican phenomenon. It is just that the Republicans are the only party that has been able to adapt their rhetoric to what the Tea Party demands to hear. The Tea Party is rediscovering America’s founding principles. However, their perceptions are being skewed toward the conservative founding philosophy that advocated corporate welfare, a large military establishment, and a central bank to provide the necessary capital – plundered from average Americans. They quote Jefferson but are deceived into supporting policies consistent with his political arch-enemy, Hamilton. They need to hear from the left on what they are missing, instead of being vilified by the left as kooks.

The true American philosophy of free enterprise as expressed by the liberal Jefferson was completely opposed to the central bank of the time, recognizing it as incompatible with the free market and wholly a vehicle for big business to plunder the people. These ideas have been dead and buried for an entire century while the Fed has been allowed to wreak its havoc with impunity. They are ripe for rebirth within the Tea Party, which would embrace Jefferson’s ideas about the dangers of central banking as readily as they do his warnings about big government. There is a strong populist undercurrent in the Tea Party. Progressives are ignoring it at their peril.

Never in its existence has the Fed been under such scrutiny in the media as it is now, nor the subject of so much public opposition. It is a grassroots fire smoldering beneath the surface, waiting for someone to strike a match. To liberals and progressives everywhere, don’t let the conservatives snatch this opportunity out from under your noses. Take up your fight against the real robber barons – the Federal Reserve System and all of its beneficiaries.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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The Three P’s: Things Government Cannot and Should Not Do

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In this late stage of America’s devolution from constitutional republic to social democracy, one is hard pressed to find meaningful debate about the role of government. Despite a 24/7 news cycle and endless political commentary on talk radio, most Americans have not once in their lives heard the question, “What is the purpose of government?” Certainly, we hear that “the government should do this” or “the government should not do that” in regard to particular issues, but nowhere will you hear a meaningful discussion about the overall mission of government. Indeed, answering this question might not be all that beneficial to our chattering classes, because once it is answered, there is little need for hours and hours of more talk. Clarifying the role of government makes the answers to most political questions rather simple and unambiguous. It is hard not to suspect that many of our politicians avoid this subject intentionally.

If America is truly the “land of the free,” then there can be only one answer to this question. The purpose of government is to defend its constituents against aggression. Period. Since “liberty” and “the non-aggression principle” are one and the same, it is impossible for government to have any other purpose, or any additional role.

As government is by definition the societal use of force, any action of government other than defense against aggression must itself be aggression. To induce human action through aggression is coercion. When coercion is practiced by government, it is called tyranny.

Freedom is the ability to exercise one’s will in the absence of coercion. Therefore, freedom is impossible once government is allowed to perform any function other than defense. If freedom is exercising one’s will in the absence of coercion, one cannot be free while being coerced. Two plus two cannot equal five.

That leaves a multitude of actions that government must be prohibited from engaging in. They generally fall into three categories, which I like to call “the Three P’s.” The Three P’s are to prevent, to promote, and to provide. There is no way for government to engage in any of these three activities without destroying the liberty that it supposedly exists to defend. Yet, this is 99 percent of what government in modern America does.

Most Americans look to government to prevent crime. Once a particularly heinous crime is reported in the media, there are universal outcries about the failure of government to prevent it. Almost no one stops to think about what it really means for government to “prevent crime.” By definition, to prevent something is to act before it happens. Since all government action represents the use of force, government can only prevent crime by initiating force against people who have committed no crime. Force must always be initiated by someone. The initiating party is the aggressor. There is no other possibility.

This is not merely a theoretical or academic argument. Think for a moment about the results of government’s various “crime prevention” efforts. Gun control disarms the victims of crimes while empowering violent criminals who don’t care about gun control laws. Economic regulations which attempt to prevent fraud insulate protected corporations from competition, emboldening them to commit more fraud. Worst of all, the War on Terror, the ultimate government crime prevention program, has harassed millions of American citizens while allowing terrorists to walk onto planes with explosives in their shoes, underwear (and who knows where else), and has laid waste to an entire nation in order to determine that the “weapons of mass destruction” it supposedly possessed did not in fact exist.

In addition to preventing crime (including terrorism), that war also claims to undertake another of the Three P’s: to “promote.” Once it became clear that there were no weapons of mass destruction in Iraq, a new rationalization was needed for our brutal invasion of that country. That new reason turned out to be our missionary desire to “promote democracy.” Without getting into the erroneous perception that “democracy” and “freedom” are synonymous, it should be quite clear after seven years of uninterrupted martial law in Iraq that our government has failed to achieve either democracy or freedom. Only government can be capable of missing the irony of ordering people at gunpoint to be free. While it might play for some good laughs in a Peter Sellers or Monty Python movie, it is really quite horrifying when one considers that our government takes this position in all seriousness.

It is not only in foreign policy that government reaps disastrous results when trying to “promote.” Consider its attempts to promote “clean energy.” One need look no farther than the ethanol fiasco or “Climategate” to see the results government gets in promoting respect for the environment.

The same underlying reason accounts for the similarity of results when government tries to “promote” or to “prevent.” In both cases, force is initiated against individuals who have committed no aggression themselves. In order for government to “promote” anything, it must act. When government acts in the absence of aggression, it commits aggression. By committing aggression against and therefore overriding the decisions of millions of individuals, government causes innumerable unintended consequences. All of them can be traced to the initiation of force.

The third of the Three P’s is by far the most destructive when undertaken by government: to provide. The illusion that government can “provide” anything springs from a loss of recognition of what government is. Government is the use of force, not by an individual, but by all of society. As it is a destructive force, rather than a creative one, it can produce nothing. Therefore, it can only provide something to one citizen that it has forcefully seized from another. This holds true whether it is attempting to provide healthcare, education, housing, or any other form of property.

The fact that human beings spend the majority of their time on earth laboring to fulfill their wants or needs makes this the most costly of the Three P’s. While warfare represents violent aggression against millions of people, government’s usurpation of human labor initiates violence against everyone. While the cost of warfare in human lives cannot be expressed in dollars and cents, there is at least a limit to the amount of lives it can affect and the length of time it will go on (despite government’s best efforts to make it universal and indefinite). However, once government has claimed a right to the labor of its constituents, no one is spared and the subjugation never ends.

While the active wars in Iraq and Afghanistan amount to less than $200 billion per year (as if those amounts were not staggering themselves), the U.S. government spends trillions of dollars each year attempting to provide its citizens with healthcare, retirement benefits, education, housing, and other necessities. Government’s results in all of these areas are the same: disastrous. The healthcare, education, and housing provided by government are more expensive, of lower quality, and in shorter supply than would be the case if government did not attempt to provide them. Aggression cannot create prosperity any more than it can create freedom.

Thomas Paine wrote that “government is at best a necessary evil.” He understood clearly what government is: an institution of violence. As individuals, we understand that the need may arise to commit violence against another human being, but only justifiably for one reason: to defend our lives against aggression. Should we be faced with that unfortunate choice, we may be justified in resorting to violence but afterwards regret that the need to do so arose. Most importantly, no sane person claims a right to initiate violence under any other circumstances. As we do not possess this power as individuals, we cannot delegate this power to government. Any legitimate power possessed by government must derive from the individuals who constitute it.

To put it most succinctly, government must always be limited to a negative power. It is the societal extension of the individual right of self defense. As individuals cannot use force to prevent, promote, or provide, government cannot either. Individuals have no right to force one another to do anything, even if they believe that it is in the victims’ best interests. So, whenever the question arises of whether government should involve itself in some new aspect of its citizens’ lives, remember the Three P’s. If the new program represents any of them, it is time for each individual to exercise his most basic right in respect to his government: the Fourth P, to prohibit.

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The Constitution Does Not Protect Our Property

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>The U.S. Constitution is widely believed to have been written to limit the powers of the federal government and protect the rights of its citizens. Inexplicably, this belief is held even by those who acknowledge that the constitutional convention was called for the express purpose of expanding the powers of the federal government, supposedly because the government under the Articles of Confederation was too weak. That this was the purpose of the convention is not a disputed fact. Nevertheless, most people who care at all about the Constitution continue to believe and promote the “Constitution as protector of rights” myth.

To the extent that the Constitution enumerates certain powers for the federal government, with all other powers assumed to be excluded, it does set some limits on government. When one includes the first ten amendments of the Constitution, it also protects certain rights. Indeed, the ninth amendment makes the very important point that the specific protections of certain rights does not in any way deny the existence of others, while the tenth amendment makes explicit the implied limitation to enumerated powers in the Constitution itself. At first glance, the so-called “Bill of Rights” seems to confine government power within an airtight bottle, rendering it incapable of becoming a violator of rights instead of protector of them.

However, this theory does not hold up well under closer examination. To begin with, the Constitution itself does not protect a single right other than habeas corpus, and that comes with a built-in exception. What the Constitution does do is grant powers, and not just to a representative body, as the Articles of Confederation did, but to three separate branches. That leaves it up to the Bill of Rights to serve the purpose of protecting our rights. Generally, those ten amendments protect our rights under extraordinary circumstances, but not under ordinary circumstances. More specifically, the Bill of Rights provides protections for the individual during situations of direct conflict with the federal government, such as when one is accused or convicted of a crime, when one is sued, on the occasion of troops being stationed in residential areas, or when one speaks out against the government or petitions it for redress of grievances.

Make no mistake, these protections are vital and have provided protections for the people against government abuse of power many times in U.S. history. However, they have proven ineffective against the slow, deliberate growth of government power under ordinary circumstances, when the specific conditions described in those amendments do not exist. This is primarily due to the absence of protection, either in the Constitution or in any subsequent amendment, of the most important right of all: property.

By “property,” I do not mean exclusively or even primarily land ownership, although land ownership is one form of property. By “property,” I mean all that an individual rightfully owns, including his mind, body, labor, and the fruits of his labor. It is specifically the right to the fruits of one’s labor that the Constitution fails entirely to protect. In fact, it makes no attempt to do so whatsoever.

In the Constitution itself, the word “property” appears only once, and that is in reference to property owned by the federal government (an inauspicious start). Nowhere does it make any mention of property owned by the citizens.

The document does grant the federal government the power to tax “to pay the Debts and provide for the common defense and the general welfare of the United States.” This is a strikingly unlimited scope for which the federal government may tax its citizens. Arguments that taxes may only be collected to underwrite the subsequently enumerated powers have been struck down. Sadly, those decisions have probably been correct. While the power of the Congress to pass laws is explicitly limited to those “necessary and proper for carrying into Execution the foregoing Powers,” no such language binds the power to tax. The fact that the explicit limitation exists for lawmaking (which Congress ignores anyway) but not for taxation lends further weight to the argument that the Constitution grants Congress unlimited power to tax its citizens.

One can certainly make the argument that in 1789, the term “general welfare” would have been interpreted much differently than it is today. Indeed, one might assume that the term “general welfare” meant the general protection of each individual’s rights. Perhaps that is what many of the founders believed at the convention. However, it is clear that Alexander Hamilton and his Federalists, the driving force behind calling the convention, had far different ideas about what the term “general welfare” meant. Remember that for Hamilton, the purpose of government was not the protection of rights, but the realization of “national greatness.” This could only be achieved at the expense of individual rights, primarily property rights.

So, the Constitution itself grants Congress unlimited power to tax and does not even mention, much less protect, the individual right to keep the fruits of one’s labor. Certainly the Bill of Rights addresses this deficiency, doesn’t it?

It does not. Like the Constitution itself, the Bill of Rights is virtually silent on the central right of property. Out of all ten amendments, the word “property” appears in only one of them:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

Unlike the congressional power to tax granted in the Constitution, the constitutional protections codified in the Fifth Amendment are severely limited to specific, extraordinary circumstances. The entire Fifth Amendment is set in the context of criminal law, granting certain protections to the accused and/or convicted. The phrase “due process of law” is a specific legal term that refers to those accused of a crime being given notice of the charges, opportunity to face their accusers, call witnesses in their defense, etc. This was obviously the intent of this protection of property, rather than a general protection of property rights against taxation.

Even if one discards the clear intention of this clause of the Fifth Amendment and interprets “due process of law” more broadly, the amendment offers no more protection of property than if one interprets the clause narrowly. Since the power to tax is an enumerated power, Congress would be following due process of law simply by levying the tax in the first place.

The last clause of the Fifth Amendment, regarding property taken “for public use,” is similarly limited to extraordinary circumstances. This clause undoubtedly refers to eminent domain, which is a grievous abuse of property rights, but certainly not one that affects a large percentage of the population. Even here, no right is protected. The clause merely requires the government to give the victim “just compensation.” There is no mention of the primary component of the right of property, consent.

Furthermore, there is no mention of how “just compensation” is to be determined, although history has shown that the government itself determines what compensation is just arbitrarily. In a free society, the value of property is determined by the price at which the owner is willing to exchange it. However, since there is no requirement here of the owner’s consent, no such price determination can occur.

As for the remaining protections of property in the Constitution and Bill of Rights, there are none. These two phrases, protecting property under only the most extraordinary circumstances are the length and breadth of the Constitution’s involvement with this most fundamental right. It is this deficiency that has allowed the federal government to grow into the monster that it is, concerned with virtually nothing but the redistribution of wealth.

If you believe the official myth about the Constitution, this might seem shocking. After all, the document was drafted by the same people that had seceded from their nation and fought a long and bloody war primarily to defend their right to keep the fruits of their labor. How could they draft a document to recreate their government, which they said only existed to secure their rights, and not only fail to secure the most important right, but actually empower their government to violate it with impunity? Certainly this was history’s most colossal error.

However, when you consider the political platform of the Federalists, which included corporate welfare, monetary inflation, deficit spending, government debt, and militarism, all designed to maintain the wealth and power of a privileged elite at the expense of the rest of the citizenry, the unlimited power to tax and lack of protection of property seem less like error and more like deliberate intention.

Whenever the subject of “constitutional rights” (a problematic term itself) comes up, people reflexively refer to the right of free speech. This is an important right, and one defended across the political spectrum. However, free speech, freedom of the press, and the other rights protected by the Bill of Rights, without property rights, are inconsequential – the mere window dressing of liberty. It is property that enables one to determine the course of one’s own life. Without it, the right to life is no right at all, but rather a privilege granted by those who own your labor.

George W. Bush was an enthusiastic supporter of the right of “free speech.” During a town hall meeting, an average American who opposed Bush’s policies rose and began hurling insults at the president, eliciting boos from the Bush-friendly audience. Bush reprimanded the crowd, reminding them that this man had a right to speak his mind, even if they did not like what he had to say. It was not the only time that he stood up for free speech. This was no accident. A government that has the unlimited power to seize the property of its citizens can afford to be magnanimous when it comes to free speech. Yet, for the citizen who no longer owns the fruits of his own labor, the right to complain makes him no less a slave.

The True State of the Union: We Have No Rights Whatsoever

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2010_State_of_the_Union It has been almost a week since President Obama gave his first State of the Union address, and it has been analyzed from the left, right, center, front, and back. Of course, the speech is really about the performance of the federal government, particularly its wonderful accomplishments under the leadership of the sitting president. This is not peculiar to the Obama presidency. As far back as Jefferson, presidents have used the Constitutionally-mandated stump speech to do a little self-promotion, although what they promote has certainly changed quite dramatically.

However, if the speech is supposed to reflect the accomplishments of the federal government, then we should expect that it will contain specifics about how that government has fulfilled its purpose, which is, as we all know, to secure our rights. At least that’s what our founding document tells us. Therefore, if a president is going to do a little bragging about what a great job he has done, it would be logical to assume that we would hear particulars about the way in which he has secured our rights. Logic, however, has little to do with the machinations of leviathan.

In fairness, President Obama did begin his speech with a few remarks about the actual state of our country – a state of economic devastation and unending war. The fact that both of these afflictions have been caused wholly by our federal government is something that seems to have gone right by him, although he is not unique in that respect, either. Having reminded us about how bad things are, he dutifully lays as much blame as possible on the president that preceded him (another time-honored tradition when succeeding a president of the opposing party). He then moves right into trumpeting his accomplishments.

The president explains how he hit the ground running after taking over during the financial crisis, which began during the last year of the Bush administration. He takes pride in the fact that he supported the bank bailouts over the wishes of the American people, because when he ran for president, he “promised he wouldn’t just do what was popular,” he would do “what was necessary.” I don’t remember that particular campaign promise, although I do remember him promising to “preserve, protect, and defend the Constitution of the United States” or something to that effect. I suppose you can’t expect him to keep them all.

President Obama justifies his first initiative as president as follows:

“And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.”

Perhaps the president is correct on this. Perhaps he is not. However, there is one consideration that seems wholly missing from his thought process. Do the people whose money was taken to “stabilize the financial system” have any rights? By what authority was their money confiscated, even if it were for “the good of all?” Majority vote?

The president next goes on to extol the virtues of the first policy that was wholly his own. He says that his administration “extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts… As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime.”

This seems to be a mixed message. The part about extending unemployment benefits and making health insurance cheaper seems like more wealth redistribution. However, he also mentions tax cuts that saved jobs and let people keep more of their own money. One might have been led to believe that he actually secured the right to property here, at least for some of his constituents. Then came the punch line.

“The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That’s right -– the Recovery Act, also known as the stimulus bill. Economists on the left and the right say this bill has helped save jobs and avert disaster. But you don’t have to take their word for it. Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act. Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created. Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn’t be laid off after all.”

It is ironic that one of the examples that the president cites is a window manufacturer. Those few lucid economists who are not among those “on the left and the right” who agree wholeheartedly with the stimulus bill certainly would have been unable to avoid recalling Frederic Bastiat’s “broken window fallacy.” It is the absurd reasoning that Bastiat exposes in his famous essay, “What is Seen and What is Not Seen,” that underlies the entire “stimulus” strategy. Occasionally, this has been pointed out in public debates over these programs. However, there is one question that has not even been asked by President Obama’s most vitriolic Republican opponents. Do the people who were forced to fund the Recovery Act have rights?

President Obama implies that his wonderful largesse was accomplished without taxing anyone, but this is absurd. It may be true that he has not had a tax increase passed in the Congress, but the funding for the Recovery Act can only come from one place. For the portion that was borrowed by the U.S. government from other nations, that money will eventually have to be paid back. The government only has one official source of revenue – taxation. The fact that those who will pay the taxes to underwrite the Recovery Act may not be born yet (although I don’t personally believe that Washington has that much time left) doesn’t change the fact that they will be forced to pay it back.

There is also an “unofficial” source of revenue for the government, and that is inflation. For the portion of the Recovery Act debt that the Federal Reserve merely monetizes, it is no less taxation than is an appropriation from the Treasury. It is merely a more insidious form of taxation, one that does not look its victim in the eye, but rather steals from him silently through depreciation of a currency that he is forced to use by the government. Whether by official or unofficial means, there are individuals whose money will be confiscated by the government so that others may keep their jobs. Again, I ask, do those individuals have rights?

It should not go without mention exactly who these people are whose jobs have been saved by the Recovery Act. According to the president, “there are about two million Americans working right now who would otherwise be unemployed. Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. And we’re on track to add another one and a half million jobs to this total by the end of the year.”

Is there anyone among these two million that are not government employees? Perhaps the construction workers, although I’d bet they are working solely on government contracts. In any case, they are all on the receiving end of the taxation, necessitating that others must be taken from in order for them to receive.

The whole concept of the government “saving or creating jobs” is one whose injustice seems to elude everyone. That is probably because a century of “progressive” ideas has completely befuddled us about what a job really is. A job is a contract between a buyer and a seller. The employee is the seller, who sells his services to an employer for a mutually agreed upon price – his wages. This contract is one that both parties enter into voluntarily. The employer purchases the services because he is willing and able to do so. The employee sells for precisely the same reasons. Each has a right not to enter into the agreement, or to terminate it anytime he wishes.

However, when the government “saves or creates jobs,” it completely overrides the voluntary nature of this arrangement. If an employer is no longer willing or able to continue to purchase the services of an employee, the government has only one means at its disposal to change that outcome: brute force. It uses this force to confiscate the property of other people and thereby force them to purchase the services of the employee, since the employer is no longer willing or able to do so himself. The government claims it has saved a job, but it certainly has not secured any rights. In fact, it has acted counter to its purpose. It has destroyed the rights that it exists to protect.

It is the same evil at work in the president’s call for “health care reform.” As part of his plans to “improve the system,” the government will not only annihilate the right of property but liberty as well. While taxing some in order to pay the doctor bills of others, the federal government will ensure that no one can even conscientiously object. Every American will be required to purchase insurance from one of the government’s pet corporations, regardless of whether they want to or not. This amounts to a mandatory fee paid to the government merely for the privilege of being alive. Once the right to property is destroyed, the rights to liberty and even to life are destroyed with them.

Without repeating the analysis for every program that the president described, they all rest upon the same logic. There is some mysterious entity called “society” whose needs outweigh the rights of every individual that comprises it. In fact, it is apparent from the president’s speech (and those of most of his predecessors) that the federal government recognizes no rights of any individual whatsoever. Sadly, there are not many among the citizenry who think any differently. So long as representatives have been democratically elected, their power knows no bounds and recognizes no rights.

America was founded upon exactly the opposite idea. The reason that the U.S Constitution guarantees every American “a Republican form of government,” rather than a democratic one, is precisely because its framers believed that individual rights cannot be voted away. We cannot vote ourselves a right to other people’s property, not even to save millions of jobs (although it is really not possible to do so anyway). We cannot vote away another’s liberty, not even to lower health care costs for those who cannot afford it (although this will not work either). This was the central principle upon which our nation was founded – that we are endowed by our creator with unalienable rights. A pure democracy does not recognize these rights.

Progressives promote the idea that “taxation without representation” was the chief injustice that led to the American Revolution. This is convenient to their agenda, because they go on to justify any tax levied by a democratically-elected body on the grounds that those being taxed were represented in that body.

Of course, this begs the question, “Why did the founders specifically instruct Benjamin Franklin not to under any circumstances accept an offer of representation for the colonies in the British parliament?” Perhaps we should be so wise. Secession anyone?

>Central Banking Doesn’t Work – Just Ask the Fed!

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>It is still a tiny minority who understand that central banking is a collectivist institution that is completely hostile to liberty. It is, by definition, an instrument of theft that purports to stabilize economic conditions for the collective by controlling the supply of money and credit. The fact that its only means to do so is to steal from savers to finance well-connected borrowers is a seldom-mentioned detail. That people only use the central bank’s currency because they are forced to do so by legal tender laws is spoken of even less. In this late stage of the Age of Government, the rights to liberty and property are expendable as our rulers “get the work of the American people done.”

Hopefully, the question of whether there should be a Federal Reserve will be on the table soon. However, once one concedes the existence of the Fed, there is a further question to ask: Can it do what it purports to do?

According to the Federal Reserve’s website, its mission is as follows:

Today, the Federal Reserve’s duties fall into four general areas:

• conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates

• supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers

• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets

• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system[1]

Of these four stated goals, the first is the most expansive in its scope. Let us leave it until last. The second, to ensure the soundness of the banking system, seems to have been answered by history. Since the Fed’s launch in 1914, the nation has suffered banking crises in every generation that have dwarfed the Panic of 1907 or any of its predecessors. In addressing the Great Depression, the Savings and Loan Crisis, and the 2008 Meltdown, the Federal Reserve’s only answer has been, “Without the Fed, it would have been much worse.” History is not on the Fed’s side. Only a general ignorance of the facts allows the Fed to keep fooling most of the people most of the time.

Refuting the third stated goal is so easy it’s almost embarrassing. For those not trying to regain their seats after falling on the floor laughing, I need only to point out 30-1 leveraging, $60 trillion (or more?) in derivatives [2], or the subprime mortgage disaster. I believe that to go any farther would be, to borrow a football analogy, “piling on.”

In fact, Alan Greesnpan’s now famous (or infamous) mea culpa on the “flaw” in his beliefs about the self-regulating nature of financial markets effectively amounts to the Fed admitting that it has failed in goals two and three. If the “Maestro” himself doesn’t speak for the Federal Reserve, then who does?

Regarding that fourth goal, one is tempted to give this one to the Fed. The important objection would be of the “should they” rather than of the “can they” variety. The fact that the Fed provides these services with an exclusive monopoly and claims only that it will play a “major role,” rather than a positive one, makes this the least significant of the four.

That leaves the first goal, which is stable prices, full employment, and moderate long term interest rates. There can be no doubt that the promises of stable prices and full employment in particular are now the principle justifications for the existence of the Federal Reserve. Almost exclusively, when the subject of the Fed comes up, these two goals are discussed. Even the Fed chairmen themselves, when testifying before Congress, often state these two goals exclusively in describing the Fed’s overall mission.

It should not be forgotten that until the late 1970’s, full employment was not part of the Fed’s mandate. Even using the logic of central banking proponents, these two goals are mutually exclusive of one another. Since the only means the Fed has at its disposal to try to achieve full employment is expansion of the supply of money and credit, which puts upward pressure on prices, the Fed must balance these two goals to try to find the optimum level of money and credit where everyone is employed but prices remain stable.

Ironically, the best source of information on the Fed’s performance in terms of its principle goal for the first sixty years of its existence (price stability) is the Fed itself. Among the collections of historical data on the Federal Reserve of Minneapolis website, there can be found a table documenting price inflation rates for every year since 1800 (Appendix A of this article). There, one can see for oneself whether or not the Fed provided price stability during any period in its existence.

The first fact that jumps off of the page is the stark difference in the trends before and after the creation of the Fed. For the period from 1800-1913, the general price level (a statistic that Austrian economists object to) was cut almost in half. In other words, products that on average cost $100.00 in 1800 would only cost $58.10 in 1913 (Appendix A). While there were some years where prices rose, prices generally fell overall during the entire 19th century.

This would probably be a startling revelation to most modern Americans. There isn’t an American alive whose parents or grandparents haven’t remarked at current price levels and gone on to say, “When I was your age, I only paid a dime for that.” As unbelievable as it might seem, that conversation would have been exactly the opposite in 1890. Grandpa would instead be saying, “When I was your age, I had to pay a lot more for that.” Today, Americans resign themselves to constantly rising prices as a fact of life. However, that is a phenomenon that has only occurred since the creation of the Fed.

In contrast to the century preceding the Fed, the century following has seen exactly the opposite result. Those same products whose average price had fallen from $100.00 in 1800 to $58.10 in 1913 rose to $1,265.14 in 2008. That is an increase of over 2,000%!

Without addressing the subject of which result is “better for society,” inflation or deflation, the data speak directly to the question of “price stability.” From 1800-1913, the average annual fluctuation in price was 3.4%. From 1914-2008, the average annual fluctuation in price was 4.5%, a 33% increase over the previous period. In fact, the numbers for the Fed would be far worse if the same methods used to calculate the price inflation rate were used for the entire period from 1914-2008. In the 1990’s, several changes were made to the methodology used to calculate the Consumer Price Index. They all have the effect of lowering the price inflation rate given a particular set of price data.

Regarding the goal of “full employment,” the Fed’s results are also poor. Similar to that of the CPI, the methodology for calculating the unemployment rate was also changed in the 1990’s. These changes in methodology, which include no longer counting “discouraged workers,” lower the unemployment rate from what it would be for the same data if calculated using the old methodology. Despite this handicap, the Fed still fails to achieve positive results. The average annual unemployment rate in the U.S. between 1948 and 1978 was 5.1% (see Appendix B). Even without compensating for the changes in methodology during the 1990’s, the average annual unemployment rate in the U.S. between 1979 and 2009 was 6.1%. So, unemployment was almost 20% higher during the period that the Fed actively tried to manage it than it was during the prior 30 years.

Once you undo the methodological changes in calculating price inflation and unemployment that were put in place in the 1990’s, the Fed’s results on price stability and unemployment get much uglier. Nevertheless, even after the Fed fudges its own numbers it still comes out a failure. Everyone can remember the ne’er-do-well from school that cheated on tests and still couldn’t pass. Would we want that kid managing the entire economy?

The arguments that the Fed makes to justify its existence are fraught with false assumptions. One is that “stable prices” are a good thing. Remember, the industrial revolution occurred amidst steadily falling prices. It was this period of steady deflation (gasp!) that saw the common people become the prime market for society’s output – for the first time in human history. It was this period that saw the United States transform itself in a matter of decades from an indebted hodgepodge of former colonies to a world economic power. The natural result of economic progress and increased productivity is falling prices. That is what raises the standard of living for the great majority of society.

However, the most absurd assumption underlying the arguments for the Fed is one common to all collectivist arguments: that there is some strange entity called “society” whose needs outweigh the rights of every individual that comprises it. Every citizen surrenders his right to liberty to legal tender laws because being forced to use the Fed’s worthless notes as currency supposedly benefits “society.” He surrenders his right to property in letting the Fed steal his savings through inflation for the same reason. In the end, however, the Fed fails to achieve its “societal” goals of full employment and stable prices, so he gives up his rights for nothing. Isn’t time he took them back? There is a way: End the Fed.

Appendix A – Price Inflation Rates 1800-2008 (Federal Reserve Bank of Minneapolis)

Appendix B – Unemployment Rate (Monthly) 1948-2009 (Bureau of Labor Statistics)

[1] https://www.federalreserve.gov/aboutthefed/mission.htm

[2] https://www.newsweek.com/id/164591

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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