Category Archives: Liberalism

Ron Paul’s caucus strategy is authentic republicanism

TAMPA, March 19, 2012 – Give yourself a test. Without doing a web search or whipping out that pocket U.S. Constitution that a wild-eyed Tea Partier handed you, fill in the blank in the following sentence: The U.S. Constitution guarantees to every state in the union a _____form of government.

If you are like ninety percent of the American electorate, you answered “democratic” and you were wrong. The answer is “a republican form of government.” There is an important difference between the two and one would think that the Republican Party would know it. Instead, they are identical to their rivals in not only ignoring the distinction but promoting democracy instead.

In a democracy, the will of the majority is the law. Fifty-one percent of the vote empowers the winners to exercise any power they wish. Not so in a republic. The reason that the founders constructed a constitutional republic was to protect Americans from democracy.

That may sound like sacrilege to most 21st century Americans, but it’s true. Benjamin Franklin mused that democracy was like “two wolves and a sheep voting on what’s for dinner.” Thomas Jefferson said that when majorities oppress an individual they “break up the foundations of society.”

Republicanism is the logical form of government for conservatives. Conservatism at its best protects property rights from an unchecked majority plundering the individual. Liberalism at its best protects property rights from the wealthy conspiring with the government to plunder the masses. At their worst, both conservatism and liberalism legitimize plunder; the former for the few, the latter for the many.

Ron Paul’s presidential campaign strategy is rooted in republicanism. He has deliberately focused his efforts on the states that hold caucuses instead of primaries because caucuses do not let the majority rule unchecked. Instead of merely pulling a few levers behind a curtain, caucus participants must complete a multi-tiered process that occurs for months after the popular vote before being chosen for the national convention. Who can doubt that these delegates are more informed than the typical primary voter? The essence of republicanism is for reason to triumph over the transient passion of the majority.

Paul’s platform likewise represents what is best about conservatism. Without exception, it protects the individual from oppression by the majority. He is the only Republican presidential candidate that has actually said the words “role of government” during any debate. That’s because he is the only candidate that seems to recognize that the government’s role is limited; that even a majority vote cannot sanction it to exercise power beyond those limits. Throughout all of human history, conservatives have defended this principle against the ungoverned passion of the majority.

Yet, conservatives today sound just like liberals when they decry Paul’s supporters using the republican nature of the caucuses to overturn the decisions of uninformed majorities. Their opposition to both Paul’s platform and his political strategy begs the question: Does the Republican Party still believe in a republican form of government? Do they still believe that the power of the majority has limits? Or are they just Democrats with a different supporter base?

George W. Bush never once referred to the United States of America as “a republic.” He consistently referred to it as “a democracy” and like Woodrow Wilson claimed to be defending democracy all over the world. If he was representative of what the Republican Party now stands for, then how is it substantively different from the Democratic Party?

These same questions apply to the issues. If the Republican Party truly favors the big government alternatives to Ron Paul, candidates who all supported the expansion of the federal government in the past and who refuse to commit to any meaningful cuts now, then what is the debate about?

The federal government doesn’t need a manicure. It needs reconstructive surgery. Make that deconstructive surgery. You don’t turn $1.5 trillion deficits into surpluses by tweaking the way that federal departments are managed. You do so by completely eliminating departments and redefining the role of government. Only Ron Paul is proposing to do so. If there is anything left of what made the Republican Party different from the Democrats, they should support both Ron Paul’s platform and his political strategy.

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.

How the Fed Steals for the 1% (Tom Mullen on the Huffington Post)

It is ironic that Occupy Wall Street is reportedly very low on cash. This is something that Wall Street itself never has to worry about. They have ready access at all times to as much cash as they need. The Occupiers mistakenly blame capitalism, but it is not capitalism that is behind this inequity. It is the completely anti-capitalist Federal Reserve System.

The Fed purports to stimulate economic growth by expanding the volume of money and credit. This forces down interest rates and makes more money available to start new businesses or expand existing ones. However, while the currency units are created out of thin air, the purchasing power is not. The purchasing power has to come from somewhere.

As I’ve explained before, the expansion of money and credit really redistributes wealth from the holders of existing currency units to whoever receives the new money. When an individual “redistributes wealth” without the consent of its current owner, most people call it “stealing.” Now, the Occupy movement may not have a problem with that if it results in less disparity between rich and poor. However, that’s not what the Federal Reserve System is all about. The Fed steals for the 1%.

Read the rest of the article at The Huffington Post…

Government Cannot Be Run Like a Business

Despite his big-government record as a governor, Mitt Romney has run for president as a conservative who would allow the free market to work. To bolster his credibility, he points to his success as CEO of Bain Capital. Romney led that company to become one of the largest and most successful private equity investment firms in the nation.

Many of his supporters have been able to look past the fact that he consistently raised taxes and pioneered Obamacare in Massachusetts because of this private sector success. They echo Romney’s argument that “the government should be run like a business” and believe that only a proven, successful businessman can do the job.

There are two problems here. The first is that history has already shown that successful businessmen are terrible for the free market whenever they get anywhere near government power. The second is that government cannot ever be run like a business. Its very nature makes that utterly impossible.

Regarding the first problem, one need only study the 19th century. If you don’t like the progressive movement, you can thank the 19th century Republican Party for creating the conditions that led to its birth.

The entire period is a record of big business getting together with government to intervene into the free market. Always under the pretense of protecting consumers, the true purpose of these interventions was limiting or eliminating competition for connected companies.

For example, Republicans wrote and passed the Sherman Anti—Trust Act. Standard Oil’s competitors were unable to deliver similar quality oil at the same price, so they went to the government for help. They successfully broke up a company that at the time the Act was passed had over 300 competitors and had lowered its prices for decades. Why? So that they could survive selling their oil at higher prices.

John D. Rockefeller, founder and chairman of Standard Oil, learned from this experience. Contrary to popular myth, Rockefeller was not a robber baron in the oil business. Like Romney, he had achieved his success honestly in the market through reinvestment, voluntary contracts, and his commitment that ““we are refining oil for the poor man and he must have it cheap and good.”[1]

However, when he got into banking, his strategy was different. Having seen the advantages of having government as a partner, Rockefeller made sure that he was well-represented at the secret meetings held on Jekyll Island to create the Federal Reserve System.

Pitched as a consumer protection against bank instability, it set up a government cartel that controls the money supply, interest rates, and most banking activity in general. Free market economists cite the Federal Reserve System as the chief cause of economic booms and busts, including those that led to the Great Depression and the 2008 housing crisis.

Railroads provide another example. 19th century government-subsidized railroads were plagued by fraud, waste, and recurring bankruptcies, while James J. Hill’s non-subsidized Great Northern Railroad operated profitably. Unable to compete, his subsidized competitors persuaded the government to pass the Interstate Commerce Act of 1887 and the Hepburn Act of 1906. As Thomas Dilorenzo observes, “What these two federal laws did was to outlaw Hill’s price cutting by forcing railroads to charge everyone the same high rates. This was all done in the name of consumer protection, giving it an Orwellian aura.”[2]

Romney’s economic policy as laid out on his issues page continues in the interventionist tradition. According to Romney, “History shows that the United States has moved forward in astonishing ways thanks to national investment in basic research and advanced technology.” He must read the same history books as Barack Obama. True proponents of free markets argue that entrepreneurs have moved the United States forward despite government intervention, not because of it.

Romney makes the distinction of “investing” in basic research rather than “politically favored approaches” to energy solutions. However, basic research is just another investment that should be made by private capital in the hope 0f profits, not by government for “the common good.” The latter is just more of Barack Obama’s collectivism repackaged. It will yield similar results: more bridges to nowhere, bankruptcies, and waste.

Despite the popular conservative misconception, government cannot be run like a business. Government simply does not exist under the same conditions as private firms. It does not receive its money voluntarily from its “customers.” The ability of customers to choose not to buy is the driving force behind all market innovation and efficiency. Private companies are not owned and run by more noble creatures. They are simply under conditions that force them to innovate and control costs in order to survive.

Contrary to the arguments made by Romney, Santorum, and Gingrich, there is only one role for government in a free market economy: to protect private property rights and enforce contracts. Regardless of good intentions, anything else the government does destroys the market. Only Ron Paul understands this. If you truly believe in free markets, he is your choice for president.

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


[1] Folsom, Burton, Jr. John D. Rockefeller and His Enemies from The Freeman https://www.fee.org/pdf/the-freeman/0805FreemanFolsom.pdf.

[2] Dilorenzo, Thomas How Capitalism Saved America Three Rivers Press New York 2004 pg. 120

To the People of Texas: Concerning the Republican Presidential Primary

It is no accident that so many of the books and movies about the Old West are set in Texas. There is something about Texas that stirs the soul. It is the yearning for freedom.

From before its birth as a republic or a state within this union, Texas has been a place where people have gone to be free. As an isolated state in the Mexican republic, Texas provided a sanctuary for all who wished to live their lives without interference from a distant capital. When the Mexican government attempted to exert centralized, despotic power over your ancestors, they fought with Santa Anna and the federalists. When that general later repudiated liberty and betrayed the Texans, they stood against him and won their freedom again.

Americans have always thought of Texas as an independent state that only reluctantly joined the union, with one foot out the door ever since. It is not that Texans are unpatriotic. On the contrary, Texas is the last place in America where the principle of federalism still seems to live. None doubt that Texas will support and defend her fellow states. However, Americans have always fondly imagined Texas’ stance towards the federal government to be, “Don’t push us too far or we’ll leave. We’re quite capable of taking care of ourselves.”

In an age where centralized power has reached into every aspect of our lives, only Texas exudes a spirit of resistance. When Americans think of a well-armed, independent populace, they invariably think of Texans. If the federal juggernaut is ever to be checked, who better to lead?

The limits on government power have been under attack since the birth of the republic. Now they are all but gone. The government no longer protects your life. It claims the power to kill you without trial. It no longer protects your property, but loots it to fund its failed social programs and foreign adventures. Worst of all, it no longer recognizes your God-given right to liberty. It believes that it can tell Texans what they can eat, what they can drink, how they must run their businesses, what they can and cannot do on their own property, and even what they can think.

Sadly, most Americans have forgotten how abhorrent these ideas are. Many of us like to think that Texans have not forgotten. Have you? You have an opportunity to answer that question during this election year. There is one man running for president that opposes everything that is wrong with America. It is no mistake that he comes from Texas.

For Texas Republicans, every election must bring back the sting of Santa Anna’s betrayal. Republican politicians are elected specifically to cut the size and scope of government. They never do. The Democratic Party openly admits that it seeks to expand government at all levels. At least they are honest. The Republicans claim to oppose that agenda, but have expanded government whenever they have been in power.

This election year is no different. Certainly, Barack Obama makes no promises to shrink the government. He believes that all economic growth originates from some sort of government intervention. He believes that the purpose of government is to redistribute wealth. He opposes the basic ideals that made America great. He makes no secret of this. At least we know where he stands.

It is the Republican candidates that represent the potential for another betrayal. As usual, they say that they intend to cut federal spending and power, but they will not name one specific program that they will cut. None of them, that is, except Ron Paul.

Congressman Paul has stood alone for decades against the unchecked growth of government and is the only candidate committing to cut it. He has already published a budget that cuts $1 trillion from the federal budget during his first year as president. It eliminates five federal departments, not only saving money, but reestablishing the principle that the federal government has no business regulating education, housing, commerce, energy, or “the interior.” These are all powers properly left to the states or to the people. His opponents do not make similar promises because they do not truly believe in these principles.

You may have been told that Ron Paul is “unelectable” because of his foreign policy. What is that policy? It is that only the American people may decide to go to war, through their elected representatives in Congress. Ron Paul insists that no president or general may usurp that power. If war is truly necessary, then there should be a debate in the Congress and a declaration of war. When America followed this constitutional process, we won wars. Since America has abandoned it, we have never really won a war.

We instead send our soldiers to far-off lands with no definition of victory. Their hands are tied with confusing rules of engagement that prevent them from winning and allow the wars to drag on. This benefits those who profit from war, but not those who give their lives or are forced to pay. How much longer will we go on like this? Sixty years later, what is the U.S. military’s mission in Korea and when will it end? Germany? Japan?

Ron Paul will end those missions now and recommit our military to defending this country. Most importantly, if war should comes during his presidency, he will have it properly declared by Congress and will allow our military to win it. Do you truly believe that any of the other candidates will do likewise? Make no mistake, Ron Paul is the only president that will win the next war.

Our nation is on the verge of socio-economic collapse. Every reasonable person recognizes that the federal government is the root of the problem. Who will stand up and oppose it? Every media outlet is arranged against Ron Paul and anyone else that suggests pushing back. Americans are bombarded daily with propaganda supporting the status quo. The Republican Party leadership doesn’t oppose it at all.

Ron Paul is our last hope. A vote for anyone else is a vote for more of what has led us here. Time is running out on the option to reverse course. Courageous people in many states have already cast their votes for liberty in large numbers, but they have not yet given Ron Paul a victory.

You can change that when you hold the Texas Republican Primary. You will have an opportunity to strike a blow for freedom. Texas commands 155 delegates. A Ron Paul win in Texas can prevent another big government elitist from clinching the Republican nomination. Most importantly, it sends a message that a large and prominent state has rejected the unnatural form of government that we have adopted. It says to the federal government what our forefathers once famously said to the British, “This far shall you go and no farther.”

It is the responsibility of every individual to defend his or her own liberty. It is the responsibility of every state government to defend the limits on federal power. Texas cannot do it for the other states, but she can lead by example. The stand against tyranny must begin somewhere. If not in Texas, where else? If even Texas does not resist, who will?

There is a yearning for freedom within every American heart. Ron Paul has reawakened it in millions. The forces of tyranny recognize this and are uniformly aligned against him. They despise freedom and independence. They thrive on dependence and control. One side is going to win. Freedom can only prevail with Texas leading the way. Do not let us down. Give Ron Paul a victory in the Texas Republican primary.

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

 

What is Your Fair Share?

“For were the impulses of conscience clear, uniform, and irresistibly obeyed, man would need no other lawgiver; but that not being the case, he finds it necessary to surrender up a part of his property to furnish means for the protection of the rest…”

– Thomas Paine, Common Sense (1776)

There were not many surprises in President Obama’s 2012 state of the union address on Tuesday. He touted what he claims are the accomplishments of his administration and pushed his left-leaning economic agenda. For the president, all economic growth has its roots in some sort of government intervention, including “help financing a new plant, equipment, or training for new workers,” giving “community colleges the resources they need to become community career centers,” or trying to “spur energy innovation with new incentives.” Of course, further expanding a government that already spends about 50% more than it collects in taxes can only be accomplished one way – by collecting a lot more taxes.

To this end, the president resorted to the perennial liberal/progressive mantra that everyone “pay their fair share.” Obama used this term three times during the speech in regard to taxes. As even many of the Republican presidential candidates seem to buy into it, the president was also unable to resist the urge to promote the latest left-wing myth that millionaires like Mitt Romney pay less in taxes than their secretaries. This is complete nonsense, of course, but it is effective in eliciting the appropriate outrage from people who don’t stop to do either some simple math or even a little critical thinking.

For the president, there doesn’t seem to be a ceiling on what anyone’s fair share might be. However, he does have a clearly defined floor. “If you make more than $1 million a year, you should not pay less than 30 percent in taxes.” Exactly why that number is “fair” or even the millionaire’s “share” is somewhat difficult to determine. Neither does Obama answer the question that should logically follow. If you make under $1 million per year, what is your fair share in taxes?

Now, in any other situation where a group of people agrees to pool its money to buy something, this is a very easy question to answer. If you and three friends decide to go in on a large pizza, each of you will pay 1/4 of the cost. Assuming it is a typical pie, it will be cut into eight pieces and each of you will eat two. Thus, everyone has received an equal amount of the pizza and each has paid his fair share of the cost.

Of course, before anyone determines your fair share of the cost, you would be asked if you want pizza in the first place. In all such arrangements between human beings, other than government, you have a choice of whether you want to buy or not. Perhaps you’d like to eat something else. Perhaps you’re not hungry. You can always allow the other three to buy pizza and provide for your own meal yourself.

Not so with government. Not only can the other three take a vote and force you to buy part of this pizza, but they add insult to injury by proclaiming that their vote represented your consent to buy it. With this dubious consent in hand, they then decide what your fair share of the cost of the pizza will be, regardless of how the slices are distributed. If you have acquired too much wealth, even honestly, then you might find yourself paying for 3/4 of the pizza and only getting one slice in return. Once voluntary consent is eliminated and force is put in its place, it becomes difficult to use words like “fair” and “equitable” without committing grave offenses against the language.

Putting that aside for the moment, let’s assume that 315 million people have actually all agreed to constitute a government and pool their money to pay for its services. Before determining what anyone’s fair share of the cost would be, we first have to determine what services the government can offer. It would not make any sense for the government to offer services that only benefit one or two people, because all 315 million are paying. No, the only legitimate services that the government could offer would be those that contributed to the “general welfare.”

This widely abused term is not anywhere near as mysterious as it is made out to be. Promoting the general welfare is offering only those services that benefit every member of society equally. For example, if the government devotes resources to a military establishment to protect the nation’s borders, it is promoting the general welfare. Regardless of how effective the service might be, every member of society within the borders is benefitting equally from it. From the Wall Street financier to the general contractor to the grocery clerk to the homeless man, all are receiving equal protection from foreign invaders. Thus, a defensive military establishment is a service that promotes the general welfare and therefore could be offered fairly under such an arrangement.

Similarly, a system of law enforcement and courts would also promote the general welfare. If the person or property of one member of society were invaded by another, then employees of this agency would investigate the incident, determine if a tort or crime had been committed, and make a determination on what penalty or restitution should be paid by the defendant. This, too, would benefit all members of the society equally. Whether you were a Wall Street financier whose partner had embezzled millions or a taxi driver whose modest home had been burglarized, you are equally protected by laws against theft.

Notice also that the cost of providing these services is the same for each member of society. Obviously, it costs no more for an army to defend the financier from an invading army than it does to defend the taxi driver. The army defends against the invader for all within the borders at one cost. Similarly, it costs no more to provide a police officer, a judge, a jury, etc. for the financier than it does for the taxi driver. The only exception is defense attorney, which is provided for a defendant who cannot afford one, but this is a minute percentage of the entire cost.

In short, any defense of life, liberty, and property, whether from foreign invasion or aggression by another member of society, is a service that benefits the general welfare. It benefits all members of society equally and costs relatively the same to provide to all members of society.

Let us now consider some services that the government offers that do not promote the general welfare. Healthcare is obviously one. First, all members of society do not benefit equally when the govenrment provides healthcare. For example, Medicare only benefits people over 65 yeras of age and disabled people under 65. Not only does the program not benefit all members of society equally, but it actually does not benefit those paying for it at all, while those receiving the benefits (those over 65 and the disabled) do not pay at all. Recall the pizza example. Imagine if you had to pay for a whole pizza that your three friends ate, and then had to pay additional monies to provide for your own meal. Medicare, Medicaid, or other government programs for specific groups are really no different.

In addition, government medical care can never cost the same to provide to all members of society, as security services do. Some people will be sicker than others, either through misfortune or their own lifestyle choices. Some will need surgeries or chemotherapy or other expensive care. Some will need relatively little care. It is not an exaggeration to say that there may be 315 million different costs to provide healthcare to 315 million different people.

Education is another service that does not promote the general welfare. When the govenrment provides education, it is of absolutely no benefit to anyone that is not in school or does not have children in school. Neither does it benefit parents who homeschool their children or enroll them in private schools or childless adults who all must pay for government education. Some of the people who benefit do pay part of the expense, but obviously this does not constitute “fairness.” It is no different than if four friends all paid for 1/4 of the pizza, but two of them ate it all. Certainly, the other two had no “fair share” for any of the pizza at all. As with healthcare, the cost of education is also going to be different for different people. An education in medicine has a different cost than an education in engineering or art.

In looking at the federal government’s budget, one can see that the overwhelming majority of the money spent is not spent for the general welfare. Almost all of it is collected from one group of people and spent for the benefit of others. The only services provided by the federal government that truly promote the general welfare are those that concern defense of the borders and defense of person and property related to interstate commerce. At the state level, only defense of person and property within the state promotes the general welfare. All other services represent a forced redistribution of wealth from one person or group to another. When anyone other than the government engages in a “forced redistribution of wealth,” we call it “armed robbery.”

It should also be noted that even the “Defense” portion of the federal budget largely does not promote the general welfare. Only that portion necessary to defend U.S. citizens from aggression by foreign nations does. Those expenditures related to defending people in other countries or which are unnecessary for security not only do not promote the general welfare, they do not benefit anyone within the United States at all – except for those military contractors and financiers that are fortunate enough to profit from these activities.

There is also frequent confusion about government services commonly referred to as “infrastructure.” It is argued by some that if the government builds a road that is accessible to everyone, it promotes the general welfare. However, this argument does not hold up to scrutiny. If federal money is used to build a light rail system in Florida, it is going to benefit people who live or travel frequently in Florida much more than people who do not. Certainly, a citizen in California or Montana is unlikely to ever even see that railroad, much less benefit from it equally. Who would not agree that his fair share of this railroad is zero?

Even at the local level, a road or a bridge does not benefit every member of society equally. The local businessman whose products are more cheaply transported is going to benefit far more than the occasional traveler that might use the road for convenience. Yet, when the government builds the road, both are forced to pay equally. Furthermore, since the businessman is running heavier vehicles over the road with much greater frequency than the occasional traveler, it costs more in maintenance to provide this service to the businessman than to others. Obviously, the road or bridge does not promote the general welfare even at the local level.

So, what is your fair share in taxes? The answer is that you owe an equal share of those services provided by the government that promote the general welfare. Those services benefit you and everyone else equally. However, examination of any government budget, at the federal, state, or local level demonstrates that these services are now a tiny fraction of overall spending. A quick look at Florida’s budget summary reveals that about 8.7% of government spending promotes the general welfare. That $4.9 million in expense should be born by every citizen of Florida equally. The other $51.4 million does not promote the general welfare and should not be provided by the government at all.

An examination of the federal government’s budget for 2012 yields similar results. Once you subtract services that do no promote the general welfare, like education, healthcare, social security, and that part of the defense budget that is devoted to purposes other than protecting U.S. citizens from foreign aggression, you are left with a tiny fraction of overall spending.

For services that promote the general welfare, there is a finite cost. It does not vary depending upon how productive you are, so your fair share of that cost certainly can’t be a percentage of your income. Logically, the way to determine your fair share is to divide the total cost of services that promote the general welfare by the total population. If you have no dependents, then the quotient is your fair share. If you have dependents, then you simply multiply that quotient by the sum of your dependents and you. When you do the math, you’ll find that your fair share in taxes is a very small amount. As Thomas Paine pointed out, it is that tiny portion of your property necessary “to furnish means for the protection of the rest.” It would be easily paid by even a person of modest income. It would not require an income tax, as history before 1913 demonstrates.

For those services that the government provides to other people, your fair share is zero. However, the government routinely forces some people to pay more than their fair share and allows others to pay nothing at all. It generally collects the most in taxes from people who receive the least in benefits, which is the predictable result of offering services that do not promote the general welfare. Now, President Obama wants some people to pay even more. He and the Congress have the power, but that does not make it right. And please, President Obama, don’t insult our intelligence by calling it “fair.”

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

Free Excerpt – A Return to Common Sense: Reawakening Liberty in the Inhabitants of America

Kindle edition now available here!

Paperback here!

Hello friends,

Americans are waking up to the reality that our once free republic is in serious trouble. They are searching for answers to what seem like unsolvable problems: economic depression, unending war, political corruption, and vanishing liberties. What if there were just one answer – freedom? The American republic was founded upon that principle, yet few suggest it is the solution to any of our problems,  much less all of them. But if freedom is the answer, we first must know what it is. Sadly, most Americans do not. That is why I wrote this book.

I hope you enjoy the Introduction and Chapter One: What is Freedom?, which I am making available for free below. The subsequent chapters discuss how freedom can solve the many challenges we face.

To read the rest of this book, you can get the Kindle Edition here.

I look forward to fighting with you to restore our liberty.  – Tom Mullen

Reviews

“Thomas Mullen is a knowledgeable and passionate libertarian and A Return to Common Sense is a valuable addition to the libertarian literature. Those new to the freedom movement will benefit from Tom’s introduction to both the practical and moral arguments for freedom. Long-time activists will benefit from Tom’s explanation of why strict adherence to principle is vital to the future success of the liberty movement.”

Representative Ron Paul (TX-14)

Congressman and author of The Revolution: A Manifesto and End the Fed.

“A well written primer on economics, liberty, and government that even avid Austrians will enjoy. If you have been blinded by government and Wall Street propaganda, A Return to Common Sense will help open your eyes. I not only recommend that you add this book to your freedom library, but that you buy a few copies for your friends.”

Peter Schiff, President of Euro Pacific Capital, Inc and author of Crash Proof: How to Profit from the Coming Economic Collapse.

Tom Mullen has written a thorough and useful book. Those for whom a discussion of liberty is a new experience will discover in A Return to Common Sense a clear, easy to understand guide to the nature of freedom, and why it is essential to our fondest hopes for a civil society of opportunity, peace, and prosperity. For those who already share these values, it’s a welcome resource for perfecting our own knowledge and advancing our cause.

– Charles Goyette, author of THE DOLLAR MELTDOWN: Surviving the Impending Currency Crisis with Gold, Oil, and Other Unconventional Investments and RED AND BLUE AND BROKE ALL OVER: Restoring America’s Free Economy

Chapter 1

What is Freedom?

And what is this liberty, whose very name makes the heart beat faster and shakes the world?”

 – Frederic Bastiat1 (1850)

If there is one thing uniquely associated with America, it is freedom.  From the moment Cornwallis surrendered to Washington at Yorktown, America has been a symbol of liberty to the entire world.  Since the end of World War II, when the United States assumed a worldwide leadership role, it has been the leader of the “free world.”  At sporting events, standing crowds begin their ovation when the vocalist singing the national anthem gets to the words, “O’er the land of the free.”  Even in everyday conversations, scarcely a day goes by that one does not hear someone say, “Do what you like, it’s a free country.”

Although we all agree that America is the “land of the free,” there are questions about freedom that might be more difficult to answer.  What is freedom?  How is it defined?  What makes America the land of the free?  How would we know if we were to lose our freedom?  What is it that our soldiers die for and our politicians swear to defend?

We have been told a lot of things about what freedom is not.  From the end of World War II until 1991, most Americans understood that freedom was not communism.  For almost three generations, Americans lived in the “free world” during its cold war with the communist Eastern Bloc.  Without further thought or instruction, many children of the 20th century think of freedom merely as the antithesis of communism.  In some ways, this is not completely untrue, although it hardly provides a complete answer to our question.

Certainly, the mere absence of communism doesn’t necessarily guarantee freedom.  The 18th century British monarchy wasn’t communist, but the American colonists nevertheless considered it tyrannical enough to rebel against.  Likewise, the Royal House of Saud may be an ally of the U.S. government, but most Americans would not regard Saudi Arabia as a “free country.”

In addition to monarchies, there are plenty of dictatorships around the world that don’t enforce a communist system but are nevertheless oppressive.  While they also may be allies of the U.S. government, they certainly aren’t free countries, either.  So, a society is not free merely because it is not communist.

On the other hand, monarchy doesn’t seem to necessarily preclude freedom, either. Great Britain has been a relatively free country throughout much of its history, even when the monarchy was much more than a figurehead.  The American Revolution notwithstanding, Great Britain was at that time one of the freest societies in the world.  Therefore, rather than conclude that no freedom is possible under a monarchy, one might instead conclude that monarchies neither guarantee nor necessarily exclude freedom. Freedom or tyranny seems possible under almost any system of government.

Perhaps we can define freedom more easily by looking at its antithesis.  Merriam-Webster Dictionary lists slavery among antonyms for freedom.  Surely, we have found a start here.  Most people would agree that slavery is the complete absence of freedom.  Who can we imagine that is less free than the slave?  This is helpful in beginning to try to frame an answer, but freedom cannot be merely the absence of slavery.  Surely our founding fathers bled to give us a higher standard than this!

If we are told anything about what freedom is, it is that freedom is democracy.  If you ask most Americans, this is the answer you will get.  This is reinforced ad nauseum by politicians, media, and teachers in our public schools.  When Iraq held its first elections after the overthrow of Saddam Hussein, politicians and journalists universally celebrated the Iraqis’ “first taste of freedom.”

Certainly, democracy is a vast improvement over the autocratic rule of a dictator. But does democracy automatically mean freedom?  If democracy is rule by the majority, what about the minority?  What if 51 % of the people voted to oppress the other 49%?  Would that society truly be free?

Most Americans would be quite surprised to learn what our founding fathers thought about democracy.  Any objective analysis would conclude that their feelings lay somewhere between suspicion and contempt.

James Madison said, “Democracy is the most vile form of government … democracies have ever been spectacles of turbulence and contention: have ever been found incompatible with personal security or the rights of property: and have in general been as short in their lives as they have been violent in their deaths,”2

In a letter to James Monroe, he also said,

“There is no maxim, in my opinion, which is more liable to be misapplied, and which, therefore, more needs elucidation, than the current one, that the interest of the majority is the political standard of right and wrong.”3

While often extolling the virtue of majority rule, Thomas Jefferson nevertheless wrote,

“…that the majority, oppressing an individual, is guilty of a crime, abuses its strength, and by acting on the law of the strongest breaks up the foundations of society.”4

Can this be true?  The founding fathers were ambivalent about democracy?  For many people, this is tantamount to sacrilege.  More shocking still is what the Declaration of Independence and the U.S. Constitution say about democracy: nothing.  Nowhere in our founding documents will you find the word “democracy” or the assertion, implicit or explicit, that our government is a democracy.  How can this be?

Despite what we are taught virtually from birth, the United States of America has never been a democracy.  As only contrarians point out these days, it is a constitutional republic.  We choose our leaders using the democratic process of majority vote, but that is the extent to which the United States involves itself with democracy.

Like monarchy, democracy neither guarantees nor necessarily prohibits freedom.  Our founders actually feared that democracy poses a danger to freedom.  Apart from the pure heresy of the idea, it leaves us with a problem.  We are no closer to defining freedom.  If even democracy is not freedom, perhaps freedom doesn’t really exist!  If we are not to find freedom in democracy, where else can we look?

We certainly won’t learn what freedom is from our politicians.  While terrorism, healthcare, unemployment, gay marriage, and a host of other “major issues” dominate public debate, freedom is just too quaint, too academic, or too forgotten to get any airplay.  Yet, as we shall see as we explore the different subjects of this book, freedom is the fundamental issue.  In fact, despite what we perceive as a myriad of different problems facing the United States of America today, freedom is actually the only issue.  That may be hard to accept, given the decades of shoddy history, obfuscation, and plain old bad ideas we’ve been bombarded with.  Nevertheless, our greatest challenges and their solutions revolve around freedom.  If freedom is really that important, we’d better be absolutely sure we know what it is.

In order to answer the question posed by Bastiat at the beginning of this chapter, we will have to go back to the beginning.  Our founding fathers faced no such quandary about the definition of freedom. They knew exactly what it was.  They were children of the Enlightenment, and derived their ideas about freedom directly from its philosophers, especially John Locke.  While these philosophers were powerful thinkers and their ideas were (no pun intended) revolutionary at the time, the principles of liberty are relatively simple.  They are, as the namesake of this book concluded, common sense.  It was an understanding of these revolutionary ideas by average American colonists that inspired the revolution that gave birth to a nation.

The idea that opens the door to the true meaning of freedom is individual rights.  Despite the emphasis today on the “general welfare” and the “common good,” the American tradition of liberty has nothing to do with either.  Instead, the founders believed each individual was born with natural, inalienable rights.  The Declaration of Independence states,

“We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights,” 5

This passage is quoted widely in popular culture.  Invariably, the words emphasized are “that all men are created equal.”  Certainly, these are fine words and worthy of veneration.  However, the rest of this passage is equally important.  Every human being, because of his equality with all other human beings, has rights no earthly power can take away.  These rights are “unalienable,” so that governments, even democratically elected governments, have no power to revoke them.  To the founding fathers this was self-evident.  It was true based purely upon man’s existence itself.

This idea is drawn directly from the philosophy of John Locke, who wrote,

“A state also of equality, wherein all the power and jurisdiction is reciprocal, no one having more than another; there being nothing more evident, than that creatures of the same species and rank, promiscuously born to all the same advantages of nature, and the use of the same faculties, should also be equal one amongst another without subordination or subjection,”6

While these rights are endowed by a Creator, the founders did not specify who the Creator was.  Too often, those arguing for the ideals of our republic make the fatal mistake of basing the natural rights upon belief not only in God, but specifically upon the Christian God.  While the founders were by no means opposed to Christianity, belief in it or even in God is not a prerequisite for the existence of the natural rights.  The beauty of this idea is that it transcends religion and thus welcomes members of all religions, and those with no religious beliefs at all.  Therefore, the first building block of freedom, individual, inalienable rights, can be claimed by Christians, Muslims, Jews, Buddhists, Hindus, atheists, by every person on earth.

So what are these inalienable rights, which cannot be taken away?  The Declaration goes on to say, “That among these are Life, Liberty, and the Pursuit of Happiness.”7

At first glance, this statement might be a bit deceiving, maybe even a little disappointing.  Life, Liberty, and the Pursuit of Happiness?  Is that all?  Surely we have more rights than these!  Of course, the Declaration says “among these,” so it does not limit the natural rights to these three.  But these three are important.  It is worthwhile to determine the meaning of each.

The right to life is pretty easy to understand.  Most civilized societies have laws against murder.  Each individual has a right not to be killed by another human being, except in self-defense.  So far, so good.  What about the other two?  We are in the midst of trying to define liberty, or freedom, so let us put that aside for the moment.  The third right listed is “the pursuit of happiness.”  What does that mean?  Does it mean nothing?  Or does it mean everything?  What if it makes me happy to steal cars or blow up buildings?  Surely, I don’t have a right to pursue happiness like that!

No. There is a natural limit on liberty and the pursuit of happiness. Again, we can find the answer in Locke,

“To understand political power right, and derive it from its original, we must consider, what state all men are naturally in, and that is, a state of perfect freedom to order their actions, and dispose of their possessions and persons, as they think fit, within the bounds of the law of nature, without asking leave, or depending upon the will of any other man.” 8

While people are free to do what they want, they must do so “within the bounds of the law of nature.”  What is the law of nature?  Locke goes on to tell us,

“The state of nature has a law of nature to govern it, which obliges every one: and Reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions…” 9

Finally, we have some indication of what freedom is, rather than what it is not.  Liberty is not the unlimited ability to do whatever you want, nor is it confined to the arbitrary limits placed upon people by governments.  Contrary to the spurious argument that unfettered liberty would result in chaos, we see that the law of nature, Reason, very clearly and unambiguously prohibits some actions, even for people in a state of absolute liberty.  They are:

1.   Initiating the use of force or violence

2.   Infringing upon another person’s liberty

3.   Harming them in their possessions.

This last limit upon the actions of free individuals is important.  Locke spends an entire chapter of his Second Treatise talking about it.  It is related to property, which is arguably the most important right, while at the same time the least understood.  Property is important enough that we will spend the next chapter examining the subject.  To do this we will have to come to a clear definition of property, including how it is acquired, how it is exchanged, and what right the owner has to it.

More importantly, we have arrived at a definition of liberty.  It is the right of any person to do as they please, as long as they do not violate the equal rights of anyone else.  The latter half of this definition is generally referred to as the “non-aggression principle.”  Political activists associate this principle with libertarians, while intellectuals associate it with Ayn Rand’s philosophy of Objectivism.  Certainly both movements recognize and venerate it, but it is important to realize that neither is its source.  In fact, the non-aggression principle has been articulated with very little variation by all writers in the liberal tradition, including Locke, Jefferson, Paine, Bastiat, Mill, and later Rand and other 20th century writers and thinkers.

By applying this principle, the most complicated societal issues become astoundingly simple.  The ambiguous becomes unambiguous.  The answers become clear.  Virtually every problem facing America today can be solved by applying the principle of freedom.

There are a few points we should review for emphasis.  First, the rights mentioned in the Declaration of Independence and drawn out of Locke’s philosophy are inalienable.  They cannot be taken away by any power on earth, including a majority vote.  The reason the founders were suspicious of democracy was because of their fear that the majority would oppress the individual by voting away the individual’s rights, especially property rights.  This was the reason for the separation of powers and the limits on government authority.  Even a majority vote can be a threat to freedom.

The difference between a right and a privilege is a vital concept to understand.  A right is something you are born with, that you possess merely because you exist.  A privilege is something that is granted by another person, group, or a government.  Our country was founded upon the principle that all people have inalienable rights that cannot be taken away, not privileges granted by their government.  As John Adams so eloquently put it,

“I say RIGHTS, for such they have, undoubtedly, antecedent to all earthly government, — Rights, that cannot be repealed or restrained by human laws — Rights, derived from the great Legislator of the universe.”10

There is no need to be “thankful for the rights we have in America.”  All people have those rights and gratitude is neither necessary nor appropriate.  Rather, people are justified in demanding their rights, and any violation of them should be recognized as an act of aggression.

Second, in any conflict between individual liberty and the will of the majority, individual liberty prevails without compromise.  The majority has no right to violate the rights of the individual.   This is to some extent merely making the first point in reverse, but it is important enough to say in more than one way.  Society doesn’t have rights; individuals do.  Society is nothing more than a collection of individuals, so protecting each individual in society protects society.

Despite these seemingly undeniable truths, individual liberty is today under constant attack because of its perceived conflict with the common good or “the needs of society.”  While living together and agreeing not to initiate aggression against each other seems astoundingly simple, our politicians would have us believe there is something incredibly complicated about it.  They create a world in which civil society is a maze of moral dilemmas that only their astute guidance can lead us safely through.  Once liberty is properly understood and applied, all of these supposed dilemmas disappear.

End Notes

Introduction: The American Crisis

1 Paine, Thomas The American Crisis “The Crisis No. 1” December 19, 1776 from Paine Collected Writings edited by Eric Foner Literary Classics of the United States, Inc. New York, NY 1955 pg. 91

Chapter 1: What is Freedom?

1 Bastiat, Frederic The Law 1850 from The Bastiat Collection 2 Volumes Vol. 1 Ludwig Von Mises Institute Auburn, AL 2007 pg. 79

2 Madison,James Federalist #10    https://www.foundingfathers.info/federalistpapers/fedi.htm https://www.foundingfathers.info/federalistpapers/fed10.htm

3 Madison, James Letter to James Monroe October 5th, 1786 James Madison Center, The https://www.jmu.edu/madison/center/home.htm Phillip Bigler, Director, James Madison University Harrisonburg, VA https://www.jmu.edu/madison/center/main_pages/madison_archives/quotes/supremacy.htm

4 Jefferson, Thomas To Dupont de Nemours from Jefferson Writings edited by Merrill D. Peterson New York, NY: Literary Classics of the United States, 1984 pg. 1387

5 Declaration of Independence, United States 1776 National Archives and Records (website) https://www.archives.gov/exhibits/charters/declaration_transcript.html

6 John Locke Second Treatise on Civil Government from Two Treatises of Government C. and J. Rivington, 1824 (Harvard University Library Copy) pg. 132

7 Declaration of Independence, United States 1776 National Archives…

8 Locke Second Treatise pgs. 131-32

9 Locke Second Treatise pg. 133

10 Adams, John A Dissertation on the Canon and Feudal Law 1765 Ashland Center for Public Affairs (website) Ashland University  https://www.ashbrook.org/library/18/adams/canonlaw.html

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OWS and the Tea Party: In the Ball Park But Haven’t Found Their Seats

As the 2012 elections approach, there is now a left wing protest movement to mirror the right wing Tea Party. Occupy Wall Street (OWS) and its many offshoots claims to represent “the 99%” of Americans who are not among the richest 1%. Like the Tea Party, OWS sees economic catastrophe ahead if America’s economic system is not fundamentally changed. Unlike the Tea Party, which places the blame for America’s economic woes on the doorstep of politicians, OWS points the finger squarely at Wall Street – and anyone else who makes enough money to qualify for a “1%” membership card.

It is actually refreshing to see Americans from both sides of the political spectrum interested enough to actually object to something. Whether marching around and carrying signs actually accomplishes anything is debatable. However, the Tea Party has already shown that political careers can be made or ended when enough people get both fed up and organized. While OWS is not as politically organized as the Tea Party was at this point in 2009, it has already made it over the toughest hurdle – getting a critical mass of people off the couch and out into the streets. As labor unions and other left wing special interests get more involved, it is likely that a bona fide political movement will emerge from the present confusion. Like the Tea Party, OWS might even change a few seats on their side of the aisle. But what then?

If the results of the Tea Party Congress are any indication, the answer to that question is “nothing.” Yes, the new Congress made some symbolic statements, like requiring the members to read the Constitution aloud during the opening session. But when it came to actually advancing their supposed agenda in a substantive way – cutting the size of the federal government and reigning in deficits – not much happened. A proposal emerged to cut $100 billion out of the $1.6 trillion deficit, which would have been meaningless even if it passed. Beyond that, it’s been business as usual inside  the Capitol, with Congressmen from both sides of the aisle continuing to spend money the federal government doesn’t have and kicking the can a  little further down the road.

Left wing Americans should already know the electoral process is unlikely to produce substantive change. As the third year of Obama’s presidency draws to a close, there is almost nothing of substance either his supporters or his critics can point to that differentiates his presidency from that of George W. Bush. Both championed and got passed an expansion of government involvement in the health care system that costs taxpayers about $100 billion per year directly and likely causes distoritions in the health care market that are far more costly than that. Both started a few new wars in the Middle East. Both expanded the federal government’s power to spy on its own citizens. Both passed “sweeping regulatory reforms” that further crippled America’s already weak economy. Both expanded executive power unconstitutionally. Both set new precedents in attacking the Bill of Rights.

But the similarity between the two that should resonate most  with OWS supporters is this: both filled their cabinets with Wall Street and corporate insiders and never made a move those special interests didn’t like. Sure, Obama made some populist, anti-business statements early in his presidency, but when it came to “Change” in the healthcare system, his program turned out to be a half trillion pear year handout to the health insurance industry. That wasn’t exactly what the true believers had in mind, but it was business as usual for corporate-owned Washington.

In short, two hugely trumpeted “revolutions” in American politics – a leftwing  one in 2008 and a right-wing one in 2010 – have failed to move the needle one degree in Washinton, D.C. A lot of articles were written and a lot of television talk shows were provided with material about both, but absolutely nothing has changed. Sooner or later, one has to answer the question: Why not?

The answer is even the genuine grassroots members from both the left and the right don’t understand what is ailing America. They know something is wrong, but decades of government propaganda bolstered by shoddy education have left most Americans unequipped to figureout what it is. In fact, both the Tea Party and OWS share the same fundamental misconceptions about The Problem.

Both the Tea Party and OWS believe Republican presidents, especially Ronald Reagan, had somehow created a laissez faire capitalist economy during their presidencies. The Tea Partiers believe America must get back to Reaganomics, while OWS believes it was the root cause of today’s problems. Both of them are wrong. Neither Ronald Reagan nor George W. Bush signed one bill that substantively made the American economy more laissez faire. In fact, Bush actually signed Sarbanes-Oxley, which he himself called “the most sweeping regulatory reform since the New Deal.” Even what the media called “deregulation” during the Reagan years was mostly regulatory tweaks that were passed under Carter. Tom Woods covers this in detail in Rollback, so I won’t attempt to reconstruct the whole argument here. In short, “deregulation” never happened. It was just one huge, Jedi mind trick, similar to “hope and change.”

That brings us to misconception number two: regulation itself. Both movements misunderstand the relationship between our present corporate economy and government regulation. The Tea Party believes getting rid of regulations as Reagan supposedly did would “get the government out of the way” of America’s corporations, resulting in huge gains in productivity and employment. OWS believes more regulations will reign in “corporate greed” and protect the little guy from those same rapacious corporations. Again, both of them are wrong.

A truly unregulated free market would not result in a few, large corporations controlling every economic sector. Nor would it result in most of society’s wealth being concentrated within a small percentage of the population. While no one alive has ever lived under such a system in terms of the entire economy, we have seen it in a particular sector within the last two decades. As Bill Bonner pointed out, the high tech industry existed for a time as an unregulated free market. Did this result in entrenched corporations getting bigger and concentrating even more wealth in the hands of a few? Absolutely not. As Bonner reminds us, “They created an entirely new industry…with new companies nobody had ever heard of. And then, they destroyed some of the biggest businesses in America.”

Government regulation creates barriers to entry for new firms and dampens innovation. In other words, it insulates entrenched corporations from competition, causing the very consolidation and concentration of wealth OWS objects to. That’s why established corporations never object to new regulations. Why should they? They end up writing the regulations themselves with one thing in mind – protect their position from the competition that would occur in a free market. That’s what makes left wing support for increased government regulation so tragically ironic. It’s like they are rushing to the scene of a fire with a sistern full of gasoline.

The Tea Party purports to favor less government regulation, but they have no idea what the results would be. They, too, do not understand the difference between our present corporatist system and a free market. Were the economy truly deregulated, most of the corporate giants they hold up as symbolic of the free market would be gone. Only those which could deliver better products at lower prices in the face of unrelenting competition would survive – and only for as long as they could continue to do so. Upward mobility would return. Large fortunes would again be made by “college drop-outs, computer nerds, products of teenage mothers and broken marriages” (Bonner again), just as the misnamed “robber barons” largely came from the ranks of the poor. Conservatives didn’t like that in the 19th century – and they might not like it now, either. But that’s what the free market does. It rewards innovation, productivity, and achievement, regardless of the social pedigree of the innovator.

Neither OWS nor the Tea Party recognizes how economically destructive the gargantuan U.S. military establishment is. There were some left wing protests against the Iraq War during the Bush years, but that is a non-issue for OWS. Now that there is a Democrat running the empire, the left seems to have made its peace with war. The left never objected to the continuation of the decades-long occupations of Europe, Japan, Korea, or the 130 or so other countries the U.S. government currently has troops in. In purely economic terms, those programs dwarf the active wars.

Of course, support for this trillion-dollar-a-year abomination is a key plank of the Tea Party movement, which is against taking money from one American and using it to buy healthcare for another American, but has no problem taking money from one American and using to (supposedly) buy “freedom” for people in other countries. Not only is this direct transfer of wealth draining America of scarce resources, but it has completely skewed what’s left of American manufacturing towards producing products that don’t increase wealth. Wealth is only increased when products are produced that people voluntarily buy. No one voluntarily buys weapons or the services of military personnel. And those resources in turn don’t produce anything at all.

Both the left and the right view imperialism as somehow part and parcel of laissez faire capitalism. Nothing could be further from the truth. The foundation of capitalism is voluntary exchange. There is nothing a military force can do under the guise of “protecting America’s vital interests” or “opening up markets for American companies” that has anything to do with capitalism or voluntary exchange. Even if an army really did influence people in other countries to trade with American companies, that would not be capitalism any more than Fannie Mae or Freddie Mac influencing people to take out loans was capitalism. When it’s not voluntary, it’s not a free market. Whatever its true purpose is (and there are a lot of theories), the U.S. government’s massive military establishment is just another large, bankrupt government program.

However, the most harmful misconception OWS and the Tea Party share is not really a misconception at all. It is the failure to recognize the most destructive element in the American economy – the Federal Reserve. The failure of either movement to make the Federal Reserve a priority or even acknowledge its existence explains many of the other misconceptions. Both the artificial booms each attribute to their presidents of choice – Clinton for liberals, Reagan for conservatives- and the inevitable busts each blame on  presidents of the other party- Carter and Obama for conservatives, Bush 1 and Bush 2 for liberals – can all be traced back to the predicable results of Federal Reserve monetary policy. Even if all of the other economic interventions were eliminated and this one intervention were left in place, most of the economic problem would still exist.

The Tea Party claims to oppose Obama’s “socialism,” but fails to see the Federal Reserve as a fundamentally socialist institution. Its stated purpose is to transfer wealth from one individual or group to another at the direction of central economic planners. It doesn’t get much more socialist than that. A few conservatives might object to the way a particular Fed chairman conducts the business of the Fed, but almost none object to the Fed itself. Yet compared to the transfer of wealth that occurs when the Fed inflates the currency, all of the U.S. government’s welfare programs combined pale in comparison. Since the Fed transfers wealth to Wall Street and corporate America, one might understand their reluctance to oppose that aspect of it. But what about a small group of government hacks attempting to direct the entire economy? If that’s not “socialism,” then what is?

OWS is similarly disinterested in the Federal Reserve, even though it exists to transfer wealth from the 99% to the 1%. For both groups, ignorance is probably the majority of the problem. The Fed has managed to stay out of the spotlight for most of the past century, taking the credit for supposed recoveries and avoiding all blame for the business cycle itself. Yet, even if it did what it purported to do, it should still be Public Enemy No. 1 to both OWS and the Tea Party. Until most Americans understand how destructive this institution is, no amount of “reform” is going to make our economic problems go away.

So, the next election will be influenced by two grassroots movements committed to solving America’s problems. One says the problem is government. They are right. The other says it is corporations and the financial elite. They are also right. As a friend of mine likes to say, both groups “are in the ball park, but they haven’t found their seat.” One can only hope for a moment of clarity on both sides. If they could only see things as they really are, they’d be marching side by side.

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.

Perry vs. Romney? What Do Conservatives Really Want?

According to the left-leaning media and punditry, the race for the Republican nomination for president is dominated by right wing extremism. Positions as frightening as phasing out Medicare and getting rid of the Department of Education are being bandied about, with the only solace for liberals being the knowledge that those positions will moderate once the primaries are over and the Republican candidate tries to appeal to voters beyond the Republican base.

Supposedly, Rick Perry and Mitt Romney represent this “hard shift to the right” within the Republican Party, which is why they are in first and second place, respectively, in national polls. However, given the histories of these two men and their present stand on the issues, that narrative just doesn’t jibe with reality. In fact, if average conservative Americans really believe what they say they believe, it is difficult to figure out how any of them could cast a vote for Perry or Romney.

By “average conservative Americans,” I mean those people not in public office and unconnected to the political machine who vote in polls this early in the election cycle. Everyone knows these people. We work with them, socialize with them, live with them. Unlike most people we know, they feel strongly about politics and identify themselves as conservatives. They care enough to follow the nomination races over a year before the general election and can articulate an opinion, as opposed to the majority of Americans who will say something like “I haven’t made up my mind yet” to cover for the fact that they have no idea what any of the candidates in either party stand for.

I think that most would agree that this group of people generally say they believe in small government, free enterprise, traditional family and religious values, and (let’s face it) unqualified worship of the U.S. military, no matter how it is employed. These are the things that conservatives say that they are for.

It is not so much what they are for as what they are against that brought the Republican Party back from the brink in 2010. The Tea-powered victory in 2010 rode a wave of conservative backlash against Barack Obama and his socialist agenda of big government healthcare, environmentalism, and wealth redistribution. More than anything else, it was Obamacare that served as the rallying point. Anyone who attended a Tea Party event can attest to the fact that the overwhelming majority of the signs and speeches (when not glorifying the military) represented opposition to this evil, Marxist scheme. If only Obamacare could be repealed, America would return to the capitalist paradise
that it was under George W. Bush.

With that in mind, one has to ask how Mitt Romney is even in the race. After all, it was the Massachusetts healthcare plan supported and signed into law by Governor Romney that inspired Obamacare in the first place. Despite Romney’s insistence that there are “major differences” between the Massachusetts plan and Obama’s, the only tangible difference that he has been able to cite is that his plan was run at the state level and not forced on every American citizen as a “one-size fits all solution.” Other than that, I don’t believe that Romney or anyone else has been able to point out a fundamental difference between Romneycare and Obamacare.

So that’s what all of the noise was about in 2010? The Tea Party rallies, the signs, the angry town hall meetings? I thought that conservatives objected to the fundamental socialist principles embodied in Obamacare: the central economic planning, the government-enforced mandate, and the wealth redistribution. I don’t remember signs saying “let the states run Obamacare.” It was get rid of government-run healthcare (except for Medicare) or we’ll be living in the 1960’s-era Soviet Union before the next election.

“People can change,” some supporters might tell you, and that is certainly true. But has Romney really changed? As of this writing, the issues page on his website says, “States and private markets, not the federal government, hold the key to improving our health care system.”

Not just “private markets,” but “states and private markets” hold the key. It would seem that Romney hasn’t changed his mind at all about his state-run, big government socialist healthcare program. If Romney’s only defense of his plan is that it was run at the state level rather than the national level, then average American conservatives should be automatically vetoing his candidacy on Romneycare alone. Yet Romney led the race until Rick Perry entered, and is still a solid second.

That brings us to Rick Perry. He has also convinced his conservative supporters that he has changed his views since previously being a Democrat. That is certainly not unprecedented. Conservative icon Ronald Reagan was once a Democrat before becoming what most conservatives perceive as the quintessential conservative president. However, Perry wasn’t just a Democrat.

If there is any one person in second place to Obama as the arch-villain in conservative mythology, it is Al Gore, (or Algore as Rush Limbaugh refers to him). Gore is the undisputed leader of the liberal environmentalist movement, which lays the blame for the global warming that conservatives don’t even believe exists at the feet of free enterprise. If Obamacare was the peanut butter of the present administration’s  platform in 2008, then Cap and Trade was the jelly. Conservatives wanted no part of either, and see Gore as every bit the evil Marxist that Obama is because of his leadership on this issue.

Believe it or not, it was this Conservative Public Enemy No. 2 that Perry supported as a Democrat in the 1988 primaries. He not only supported Gore, but actually chaired his campaign in Texas. He could have supported the eventual Democratic nominee, Michael Dukakis, whose most striking difference to Gore was his refusal to bow to environmental interests at the expense of economic development, as documented in the New York Times. In other words, even as a Democrat, Perry backed a radical environmentalist extremist instead of a somewhat more moderate centrist.

Again, people can change their minds, but has Perry changed his? Does he oppose Cap and Trade on principle, as most conservatives say they do? Apparently he does not, according to his actions as governor. As with Romney on healthcare, Perry is completely supportive of a policy that conservatives say they are fundamentally opposed to, as long as the evil is perpetrated by the state governments rather than the feds. The chief difference between the Cap and Trade imposed on Texans and that imposed by the federal government seems to be that Texas measures emissions limits on the whole facility while the EPA measures it on every smokestack. Is that the sole objection that average conservatives have to Al Gore and his global warming (excuse me, climate change) agenda?

As with Romney, Perry’s support for a key plank in the socialist-liberal agenda should be a deal killer for anyone remotely describing themselves as conservative. Yet not only has Perry been able to sidestep any criticism on this position, he’s currently leading the nomination race by a comfortable margin.

So, what do conservatives really want? If these polls are any indication, they want a good-looking former governor with a suspiciously liberal background who is good at spouting hardcore conservative rhetoric and then doing exactly the opposite once he gets into office. In other words, they want Ronald Reagan, the former New Deal Democrat who suddenly became a libertarian-leaning ultra-conservative and rode that rhetoric into the White House, where he promptly doubled the size and power of the federal government, raising taxes six times and further empowering the Department of Education that he promised to abolish.

It’s not as if there are not alternatives. Ron Paul, currently running third, actually believes in the principles conservatives say they hold dear and has voted consistently according to them as a 12-term Congressman. He is on the record vowing to get rid of the Department of Education, along with Energy, Commerce, and most of the others. You won’t hear anything like that from Romney or Perry, yet it’s an uphill battle for Paul, supposedly because of his foreign policy positions.

But what about Herman Cain and Gary Johnson? As a libertarian, I don’t buy into the “government should be run like a business” philosophy, but most conservatives do. Both Cain and Johnson take this approach, with Johnson promising to deliver a balanced budget proposal in his first year, including abolishing the Department of Education. Yet these two candidates aren’t even on the map with conservative voters.

With several nationally-televised debates completed and plenty more coming, conservative voters have plenty of alternatives in selecting a candidate. According to their most fiercely-held beliefs, conservatives should be voting “anybody but Perry or Romney,” yet those two lead the race. One has to wonder where all of these supposed “right wing extremists” are hiding.

Contrary to the liberal media narrative that the Republican Party has shifted hard to the right and is fielding “extremist” candidates to run against Obama, the primary race looks more like business as usual. Former liberals and big government conservatives are railing against government to energize their conservative supporters, while at the same time openly supporting cornerstones of the liberal agenda. If Perry and Romney are an indication of where conservative voters are headed in 2012, then the Democrats have nothing to worry about, even if Obama loses.

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

© Thomas Mullen 2011

What’s So Hard to Understand About Ron Paul?

Ron-PaulThis time things are going to be different for Ron Paul’s presidential run. After correctly predicting the collapse of the housing bubble and the resulting financial and economic crisis, Paul has become a mainstay on business talk shows, especially on the conservatively-oriented Fox News. One can almost sense the resignation in the voices of talk show hosts and reporters as they acknowledge that Paul will not be ignored by the media this time around – which is ironic because it is these same people who ignored him in 2008.

However, while supporters will rejoice at the increased quantity of coverage of Paul’s campaign, they should be realistic about the quality of the coverage. Namely, supporters should expect that conservatives will agree with him on most of his economic positions, including cutting down the welfare state and rolling back government regulations, but disagree with him on foreign policy.

Similarly, supporters should expect that liberals will agree with Paul on foreign policy (although somewhat reservedly while there is a Democrat running the empire) and civil liberties, but disagree with him on economic policy, especially when it comes to Paul’s positions on responsibly ending Social Security and Medicare.

Watching Paul’s appearance on The View, one could already see this dynamic in action. While the ladies on the show were very gracious to the congressman, Whoopi Goldberg took the lead in asking some policy questions and demonstrated the liberal take on Paul perfectly. She first stated that she agreed that she would like to see the wars end, but wanted to know how Paul could get us out of them (a concern that never would have arisen with a Republican running the empire). After Paul gave his customary answer, “we marched right in there, we can march right out,” Goldberg then challenged Paul on his position that healthcare is not a right. She truly looked baffled that any politician could be both anti-war and anti-entitlement.

On the conservative side, media figures have been doing the opposite routine with Ron Paul for years. Glenn Beck (pre-blackboard) routinely had Paul on during the economic crisis and always emphasized his agreement with Ron Paul’s economic positions and  his disagreement on foreign policy. Ann Coulter has also weighed in on Paul in this way, as have countless other media figures.

Neither conservatives nor liberals agree with Ron Paul that the Federal Reserve should be abolished.

Conservatives believe that along with what they would call “free market capitalism” (their version including privileges and subsidies for big business), one must support a large military establishment and an aggressive foreign policy. For conservatives, it is just inconceivable that anyone could support one and not the other. This is not a position that can be supported by reason. Rather, it is closer to an article of faith to which conservatives have developed a deep emotional attachment. The conservative philosophy still has its roots in the “ancien regime,” whereby the king/executive and a wealthy elite control commerce and support a large, active military establishment, both for the aggrandizement of the empire.

Liberals believe this, too. They share the mistaken perception of conservatives that free market capitalism is dependent upon an imperialistic foreign policy. However, instead of wholly supporting it, they wholly oppose it, confusing the state capitalism supported by conservatives with a truly free market.  Therefore, liberals oppose imperialism and free markets as if one cannot exist without the other and cannot conceive of anyone who could disagree. As with conservatives, their positions are not reasonable. They are likewise articles of faith, rooted in the ideals of ancient democracies in which the majority had unlimited power over the life and property of individuals, taken to new extremes by Marx and other socialists in the modern era.

Ron Paul’s positions do not fit into either one of these belief systems, nor does he seem to “compromise” between the two. Conservatives accuse him of being too liberal. Liberals accuse him of being too conservative. For both groups, many of his positions seem completely unexplainable.

To his supporters, Paul’s positions are so obviously consistent that they often attribute genuine confusion about them to some sort of media conspiracy. Paul bases all of his positions on what we today call “the non-aggression axiom,” which Thomas Jefferson and his supporters called “the law of nature.” This is a very simple principle which states that because we are all created equal, no one individual or group has the right to initiate force against another. Consistently applied, this principle prohibits the government from running welfare programs, regulating commerce beyond prohibiting aggression, or waging war unless the nation is actually attacked.

Paul insists that the military only be used after a declaration of war because in order for Congress to issue this declaration, the president has to cite the overt acts of war committed by the other nation against the United States. The Congress then deliberates and votes to determine whether or not a state of war already exists. That process binds the government’s use of the military to the law of nature. That is the way the declaration of war power has been exercised in every case in American history.

The main reason that conservatives and liberals do not understand Paul’s reasoning is that they have never heard of the non-aggression axiom. Despite the fact that it was the founding principle of the United States, it is not taught in schools. It is not discussed in the media. Instead, 100% of political debate revolves around results. “If the government does A, will B or C be the result?” Conservatives argue B, liberals C. Neither discusses the rights of the parties involved. Paul bases all of his positions upon these rights, which is how all political decisions should be made.

On May 5, Paul will participate in the first debate among candidates seeking the Republican nomination for president. One should not expect the objections to his positions to be substantively different than they were in 2008. While he may get more respect and stage time from the media, conservatives will still try to attack Paul’s foreign policy positions. The most that supporters should expect is the grudging admission that he may be right on economic policy, but that his foreign policy would be some sort of disaster. This follows logically from the fact that conservatives apply the tenets of their political faith and Paul follows the law of nature. He may be right, but don’t expect most conservatives or liberals to have caught up with him yet.

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

>The Bursting of the Socialism Bubble

>In the midst of what “debate” there has been about the eventual bailout of the financial sector, it is clear that even most of those opposed to the bailout do not understand what is happening. The unfortunate aspect of some of the commentary is that there is a faction arguing that without the bailout, the stock market will not crash. Thus, the debate is shifted to “which course of action can best protect stock market values?” They cannot be protected. The government argues that the credit squeeze could result in unemployment, while the other side argues that unemployment will not necessarily result if the bailout is not passed. Another position blames the crisis on too little regulation. All of these positions are wrong. There will be a painful adjustment in the stock market and massive unemployment, whether the government bails out the financials or not. The only question is how long it will last. That is reality when any bubble deflates.

The most unfortunate result of all of this misunderstanding would be for the American people to reverse their position and support the bailout just because there are severe market losses if it does not pass. Their initial instinct was correct, whether for the right reasons or not. The losses that these companies suffered due to massive malinvestment are real, and that must eventually be reflected in the value of their stocks.

Similarly, it will be unfortunate if the American people are convinced that more regulation is needed to prevent this from happening again. More regulation will not prevent a problem that was in part caused by too much regulation.

We have heard about the “tech bubble,” the “housing bubble,” and even the “dollar bubble.” All of these are real. The dollar bubble is about to burst, with global catastrophic consequences, but even that is not the biggest bubble that is out there. The biggest bubble, which has been building literally for the past century, is what I will call “the socialism bubble.”

What is the socialism bubble? Let’s define “bubble” first. The term “bubble” is used in economics to describe a large misallocation of resources (malinvestment). Anyone with even a passing familiarity with economics knows the basics: the central bank artificially infuses money and credit into the economy, that money flows toward projects that appear to be profitable under the artificially created conditions, but aren’t, and those projects ultimately fail, causing the bursting of the bubble. The worst part of the bursting of a bubble is that the greatest misallocation of resources has been human resources, and those people now have to find new jobs. They have to be reemployed elsewhere, in more profitable ventures, just like the capital goods that were misallocated to the projects. That is why unemployment accompanies recessions.

Like any other bubble, the socialism bubble is also a misallocation of resources. It has just taken longer to form and is much huger in scope. The principles behind it are the same, however. It represents government intervening into the economy to create artificial conditions that misallocate resources. Under these artificial conditions, the entire economy appears to be profitable, but isn’t. When the inevitable bubble bursts, all of the resources, including human resources, that were misallocated, become unemployed. We are about to experience the massive correction following this socialism bubble.

How did it happen? One must look back to before it started to understand it completely. It started at the turn of the last century. The United States of the 19th century had the closest thing to laissez faire capitalism ever achieved in history, arguably followed next by Great Britain. The defining principle of laissez faire capitalism is VOLUNTARY EXCHANGE. With everyone acting in their rational self interest, the minds of all participants were leveraged by the system to consistently produce optimal results.

In the laissez faire marketplace of the 19th century, wages generally declined over time. A pitiable lack of understanding of economics caused social reformers to condemn the free market for this.[1] They ignored the fact that the general price level fell faster than wages, making workers richer in real terms. They attempted to improve on the results that laissez faire capitalism had produced with government policy.

However, there is only one alternative to voluntary exchange: INVOLUNTARY EXCHANGE. Government economic policies FORCE economic agents to make choices that they otherwise would not make. No matter how one tries to euphemize socialism, that is what it is. By attacking voluntary exchange, socialism attacks the mechanism that creates wealth. That is the true root of the problem.

One way in which this manifests itself is in the cost of production. Government cannot come to a company that makes automobiles and force them to pay their employees more, provide them healthcare or pensions, pile one regulation on top of the next in terms of how the company operates its business, and then expect the company’s cost of making that automobile not to rise. As the cost of production rises, the company must find a way to keep the cost of producing their product below the market retail price. They might decide to manufacture SUV’s, which have larger margins, even though a spike in gasoline prices could put them out of business. See General Motors. The truth is that none of the American auto manufacturers are able to produce an automobile that is competitive in the market. Government will come up with a host of villains to blame for this, but look at the balance sheets of the Big Three and you will see why they are not viable. Concessions to labor unions (mandated by government) have made it too expensive for them to operate.

Similar government intervention is behind virtually all of America’s loss of manufacturing infrastructure. It is simply not economically viable to manufacture anything in the United States anymore. This is not a natural result of free markets. As previously noted, wages and other costs of production fell under the laissez faire system. Falling prices are a natural result of economic growth and innovation. Only the artificial conditions created by government intervention – the use of force to coerce economic agents – have made it more expensive to make things in America.

The cost of production is not the only pressure that socialism has put on the American economy. The welfare programs currently consume 11% of GDP. Keynesians would say that this is ok, because the recipients spend that money and increase demand. Hopefully, the coming calamity will discredit this economic school of charlatans once and for all. Wealth is created by production, not consumption. This redistribution destroys voluntary savings and ultimately capital. It also eliminates the other conditions that accompany a period of voluntary savings that facilitate natural expansion of the productive structure.

In any case, increasing socialism has put artificial pressures on the American economy for almost a century, and those pressures have accumulated to make America profoundly less productive. Like the communist countries, we have lived in a dream world in which government could use coercion to change economic reality. We have pretended that a business venture can spend more than it takes in and continue to survive. For a time, the free market aspects of America’s “mixed economy” allowed her to overcome these negative pressures, but that time has passed. Economic reality is about to assert itself in devastating fashion.

For at least two decades now, America has been producing far less than she consumes. All things being equal, this would not have gone on for long. However, all things have not been equal. The United States has a central bank, and the privilege of printing the world’s reserve currency. This is why the socialism bubble has been become so enormous.

Instead of a drop in consumption and a rise in unemployment[2] as its manufacturing sector migrated overseas, America went right on consuming, and those employees found new jobs in the “service economy.” With the Federal Reserve providing an unlimited supply of fiat currency, and with the ability to ultimately export that inflation overseas by importing foreign goods in exchange for U.S. dollars, America has been able to maintain the same standard of living as it enjoyed in its productive days. As long as foreigners accepted U.S. dollars, the dream world could persist. The bubble continued to inflate.

The ominous part of this is that today a large percentage of the American labor force is now misallocated by this bubble. There are tens of millions of American workers that are employed in ventures that will cease to exist once the socialism bubble bursts. We have seen the beginning of this with the failures of large retailers and restaurant chains, but that is only the tip of the iceberg. Worse yet, unlike previous recessions, there are no manufacturing jobs for these displaced workers to redeploy to. The productive structure must be rebuilt, and that doesn’t happen overnight.

Therefore, Americans must realize that a stock market crash[3] and mass unemployment are inevitable, whether government intervenes or not. The only question now is how long those undesirable conditions will last. There is no “solution,” government or otherwise, that will allow us to avoid this correction. If the government does not intervene, the stock markets will crash faster and the layoffs will begin sooner, but the total period of adjustment will be far shorter. If the government intervenes, no matter how they do it (including by allowing the Federal Reserve to massively inflate the currency), the adjustment period will be stretched out, with continued new malinvestment even as liquidation of current malinvestment occurs. That was the story of the Great Depression.

The only course of action that can speed up the recovery is a return to the laissez faire capitalism that made America great in the first place. This would include eliminating unnecessary regulation, abolishing the central bank and restoring sound money, eliminating minimum wages and other artificial price controls, capping and eventually phasing out the entitlement programs, eliminating other massive government spending like military welfare for other countries and unnecessary war, and restoring protections of property rights. In other words, Freedom. Don’t you think it’s time we tried it again?

[1] The lack of understanding of “real wages” was certainly not the only misconception of the social reformers, but it was a major misconception and representative of others.
[2] The European mixed economies have already experienced this adjustment, debased their currencies, regrouped under the European Union and an new currency, and are presently pursuing the same failed ideology to destroy this new economy as well.
[3] It is conceivable that the Federal Reserve could inflate the currency so much that the stock market remains at $11,000. However, if $11,000 only buys 10 loaves of bread at that point, it would still represent the same devaluation as a crash.

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