Tag Archives: corporatism

What is Greed?

Whether you are liberal, conservative, libertarian, or none of the above, it is hard not to feel some sympathy for the “Occupiers.” Even if do not agree with them on every issue, there is something very American about a grassroots movement to “fight the man” and protest the existing order. After all, that is how the united States of America were born. As with the Tea Party, it is refreshing to see a group of Americans objecting to something about the sad state of our republic, rather than indifferently accepting each new depridation like sheep awaiting the slaughter.

It is in this spirit that I take issue with one of the central themes of the OWS movement: the fight against “greed.” Here is one area where I believe that the Occupiers are chasing a phantom. Greed is the government’s favorite hobgoblin. Any politician with a bad record, skeleton’s in his closet, or some other threat to his phoney baloney job can invoke this loosely defined vice and count on some level of support in his time of need (for votes). But what is greed and how can one fight it?

That is two questions and one cannot answer the second before resolving the first. I believe that if you asked any 10 people at random for their definition of greed, you would get 10 different answers. The first answer is usually “a desire to have more than one needs.” However, this doesn’t hold up very well. It is obvious that all people desire more than they need. Without accumulating more wealth than what is minimally needed for survival, no human being can read or write a book, create a work of art, or perform an act of charity. In fact, none of what we commonly call “culture” would be possible if human beings did not accumulate the excess wealth that affords them the leisure time to create art, literature, charitable organizations, or the other blessings of society.

To this objection, proponents of the “more than one needs” definition will immediately clarify. “No, I meant desiring far more than one needs.” This clarification is just as problematic. How much is too much? Who sets the limit? At what point has one changed from being a hard worker to being “greedy?” Does that limit change from person to person? Is there a greed-o-meter out there that can set a dollar amount?

If one accepts this definition of greed, the solution to the problem is even murkier than the definition itself. Exactly what is to be done about the fact that “the 1% cares only about profits and not about the rest of society?” Should businesses take specific actions to cut their profits? What are those actions? The great majority of all new businesses fail within their first year, even when their sole motivation is profit. How is an entrepreneur to know for sure that his business will succeed at all, much less make “excessive” profits? What action can he take to counteract this? Should he cease to innovate, improve efficiencies, lower costs for consumers, improve the quality and features of his products, or employ people? These are the things that entrepreneurs do to make profits. Specifically which one is “bad” for the 99%?

To be fair, many of the comments on the OWS Demands page are more specific. As I’ve said before, they are definitely in the ball park when they finger the financial sector. However, comments like this one indicate that they haven’t yet found their seats:

“The moneyed elite of our society has changed from being apart of the team that built an economy that raised the lives of all men with ample profits for themselves to a Gambler, who only wants to keep score through the accumulation of money, ever screaming for more profits for themselves at the expense of the people they pretend to serve.”

This is a popular theme and not just among OWS supporters. The accusation that economic players in the financial sector took excessive risks that harmed people other than themselves is almost universally accepted, even by conservatives. Remember George W. Bush’s famous pronouncement, “Wall Street got drunk.”

However, the statement that the “gamblers” make “profits for themselves at the expense of the people they pretend to serve” just doesn’t compute. Wall Street did take excessive risks during the boom that predeceded the bust. They did indeed take those risks in the hope of making greater profits. However, those profits would not have been made at the expense of the people they serve. The people they serve would have made those profits, too, on their own money. They voluntarily gave their money to the financial sector in the hopes that the “gamblers” would win them a return on their investment. Had all gone well, the 99% would have realized a huge return. It is fashionable to claim that financiers make money for producing nothing, but this isn’t true. They make money from their ability to make sound investments and the willingness of other people to pay them to do if for them.

So what can be done about this problem? How do politicians or their constituents, who know nothing about investing (which is the whole reason that they give their money to financiers in the first place), make rules for how much risk investors are allowed to take? Do those rules apply to their own investments? Without some risk, there are no new businesses, no new jobs, no economic growth. How much risk is too much and who decides? The investors themselves or people who know nothing about investing? If investors are not allowed to take whatever risks they deem prudent and the result is that the economy in America dies, will the 99% take responsibility for that? We know that the politicians won’t.

All of these seemingly insoluble dilemmas spring from the initial premise about greed. As long as greed is defined in terms of how much wealth one desires to accumulate, the conclusions that one draws from that premise will always be absurd. The amount of wealth one accumulates or desires to accumulate is immaterial. Instead, it is the means by which one wishes to acquire it that is vital.

If you change your definition of greed from “desiring more than one needs” to “desiring more than one has earned,” then all of the contradictions and ambiguities disappear. Of course, we are immediately begging the question of how to define “earned,” but that is a simple matter. One has earned wealth if one has acquired it without initiating the use of force against anyone else. Under this definition, money given to someone as a charitable contribution qualifies as earned just as profits made from selling products do. In this scenario, the amount of wealth one is able to accumulate has a natural limit – the amount that others are willing to pay for one’s goods or services. This eliminates those troublesome questions about how much is too much in terms of profit.

To be greedy, then, is not the desire to accumulate more wealth than one needs, but the desire to accumulate more than others are willing to pay you for your services. For in order to do that, you must forcibly take the money that they would not willingly give. There is only one institution in all of society that can facilitate this legally: government.

Thus, if Person A accumulates $1 million by selling 100,000 units of his product at $10 per unit, he is not being greedy. He has made an equitable exchange with his fellow human beings: $1 million in products for $1 million in money. In this scenario, he and the 99% are square. Each has benefitted equally from the exchange. We know that he has earned his $1 million because the consumers set the price of his products with their voluntary decision to buy.

Now consider Person B, who wishes to accumulate that same $1 million through government employment, subsidies or privileges. No one voluntarily buys his product. The fact that the government has to either subsidize Person B or protect him from competition means that he is trying to sell something that people would not otherwise buy at his asking price. At best, Person B has sold something at a higher price than people are willing to pay. At worst he has sold something that his fellow humans don’t want at all, but are forced to purchase by the government.

Either way, Person B is greedy – he wishes to accumulate wealth beyond what people are willing to pay him voluntarily. In other words, he is willing to commit armed theft against his neighbors. As you can see, Person B may be far more greedy in his desire for even $50,000 than Person A is in his desire for $100 million, if Person B plans to obtain it by force and Person A means to obtain it through voluntary exchange.

OWS is right to want to stamp out greed, but they aren’t defining it correctly. Since Woodrow Wilson, progressives have been making the same fundamental error in failing to distinguish between legitimately acquired wealth and wealth acquired through government force. It is the latter that OWS should look to stamp out, rather than indiscriminately condemning anyone who becomes wealthy. The most effective way to fight greed by its true definition is to take the Occupation to Washington, D.C., where the power that the greedy utilize resides.

Imagine a world in which every individual has an equal chance to be a millionaire, but only if he offers his fellow individuals $1 million in benefits, with the 99% deciding for themselves how much they are willing to pay. That is a world without greed. That is what we used to call “freedom.”

Corporations and Labor Unions: Great Ideas Corrupted By Government

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There are no two institutions in American society more associated with the struggle between right and left than corporations and labor unions. Outside of foreign policy, there is nothing liberals are more hostile towards than corporations, nor anything conservatives are more hostile towards than labor unions. For most Americans, corporations and labor unions lie at opposite ends of the socio-economic spectrum. Corporations are “conservative and capitalist,” while labor unions are “liberal and socialist.”

This is an illusion. In all but the most superficial respects, corporations and labor unions are virtually identical to each other. They are both voluntary associations formed by individuals to achieve an economic goal. They would both provide enormous economic benefits to society if they were not completely corrupted by government.

A corporation is a group of people agreeing to pool their capital to create a larger venture than any of them could launch individually. The stockholders agree that none of their personal assets will be put at risk if the venture fails – only the assets of the corporation.

The stockholders also make these terms with the corporation’s creditors, customers, and other parties. In this way, the stockholders can cooperatively take more risk than they would if their personal assets were at stake. With greater risk comes greater reward. Thus corporations are able to innovate, produce, and expand more rapidly than smaller partnerships or sole-owner proprietorships. This benefits consumers by offering them more choice and higher quality products at lower prices.

The benefits of corporations are derived from the voluntary nature of every transaction. The stockholders, creditors, and customers all consent to doing business with the corporation, knowing the risks and the limited liability of the stockholders. All parties are exercising a natural right to associate and exchange their property as they see fit. One can never harm another merely by exercising one’s natural rights.

The prospect of the corporation becoming “too large” or dominant in a particular industry is countered by the equal right of all other members of society to form their own corporations and compete with the dominant one. In fact, it is this natural market occurrence – new competitors entering the market when there is an opportunity to offer consumers the same or better products at lower prices – that drives explosive innovation and growth and confers enormous benefits on the rest of society.

All of the associations necessary to realize these benefits can be achieved by voluntary contract. There is no reason that a government must enact a body of laws indicating how these corporations should be formed or how they should operate. Neither is there any reason why the government must create an “artificial legal person” in order to insulate stockholders from liability. That can be achieved by voluntary contract as well. All that is necessary is that the various contracts made between parties be enforced. However, voluntary association is not the government’s purpose in enacting corporate laws. [i]

The government corrupts the entire nature of corporations in virtually every way. First, it grants the corporation limited liability that applies not only to those who have consented to it, but to everyone. This completely skews a natural risk/reward balance and enables the corporation to commit torts against third parties without consequences to the stockholders. It overrides the right of individuals who did not voluntarily release the corporation from liability to pursue compensation for damages. It also has the effect of encouraging corporations to take more risk than they would if the stockholders’ personal assets were at risk with respect to these third parties.

Second, the enormous body of regulations constructed around corporations harms both the stockholders and the rest of society. The stockholders have the right to form and operate their corporation any way they see fit, as long as they do not invade the life or property of non-contracted parties. Regulations override their decisions and force them to operate the way the government tells them to, regardless of whether it is the best way or not. This adds tremendous costs to operating the corporation, which is then passed on to consumers.

Worst of all, these unnaturally high operating costs create impediments to the rest of society in exercising its most important right in this area: to form new corporations and compete with existing firms. This inevitably results in a few companies dominating each sector of the economy. Not only are consumers punished with higher prices and less choice than they could expect in a free market, but when these government-protected corporations get into financial trouble, those same consumers are often punished again when the government bails the corporations out with taxpayer funds. Without easy entry into the market for competitors, any corporation providing a service for which there is high demand becomes “too big to fail.”

Thanks to the corrupting hand of government, corporations are motivated to do exactly the opposite of what they would do if that artificial force were absent. Instead of trying to produce better products at lower prices, the corporation has an incentive to lobby the government for higher tariffs which keep out foreign competition. This allows them to keep operating inefficiently and charging higher prices than they could if they had to compete with the true market prices offered by those competing firms.

They also benefit by lobbying for more regulations that drive up their own operating costs. Why would they do something so illogical? They do it because those higher costs provide an entry barrier to new competitors. The established firm can pass those higher costs on to consumers, while the new competitor is either unable to start-up at all or unable to compete until it can match the established firms’ economies of scale. In the long run, government involvement with corporations results in lower quality, higher prices, and less choice for consumers than would occur in a free market.

The dynamics at play in regard to labor unions are virtually identical. Just like the stockholders of a corporation, the members of a labor union are exercising a natural right to enter into agreements with each other in order to achieve results that they would not be able to achieve individually. They form a partnership wherein all members agree not to accept compensation below a certain agreed upon amount. Compensation can take the form of any combination of wages, benefits, or working conditions.

It is important to recognize that the relationship between employee and employer is a buyer/seller relationship, with the employer being the buyer who purchases services from the employee. Like all buyer/seller relationships, both parties benefit when the transaction is voluntary. The seller benefits by getting the very highest price for his product that the market will bear. The buyer benefits by getting the highest quality product that he is able to obtain for the money he is willing and able to spend. If either party in any buyer/seller transaction does not believe that he is benefitting from the transaction, he can refuse to go through with it.

In the case of labor unions and employers, the union members benefit by higher compensation for their services. By bargaining collectively, they can control the supply of a particular type of labor demanded by employers and thus drive up the price. However, the employers actually benefit as well. As they are free to choose to hire people outside the union, the union must ensure that their product (labor) is superior enough in quality to persuade the employer to pay more for union employees than for cheaper, non-union employees. Such are the incentives in a free market, where all transactions are voluntary.

Under these conditions, labor unions would have an incentive to offer continuing education or training courses, to monitor the productivity of their members, to set minimum standards for entry into the union and to establish criteria for expelling non-productive employees. All of this would drive up quality, productivity, and profitability, further encouraging employers to pay more for union employees as a wise investment in more profitable products.

As with corporations, the benefits conferred upon society by labor unions depends upon contracts being enforced and all transactions between parties being voluntary. However, just as it does with corporations, government completely corrupts the nature of labor unions, eliminating many of the benefits they would otherwise provide. With interventions like the National Labor Relations Act of 1935 and subsequent legislation, the government destroys the voluntary nature of the employment contract, in many cases forcing employers to hire union workers. This violates the rights of employers to purchase services from whomever they wish and eliminates competition for the labor unions, encouraging them to behave in a manner completely contrary to how they would behave in a free market.

Instead of encouraging their members to be more productive, labor unions actually encourage lower productivity from their members. It is not uncommon for a union member to be threatened by his coworkers for working too fast or being too productive and skewing the lower expectations negotiated by the union in the interest of employing more dues-paying members to accomplish the same work. Instead of setting higher standards for entry into the union, the union actually forces new employees to join as a condition of taking the job.

Finally, with competition from non-union employees eliminated, the union has no incentive to control the price they are charging for their services. In a free market, there would be a price point at which the presumably lower-skilled non-union workers would be a more profitable buy for employers than the presumably higher-skilled union workers. However, once the government removes the ability of the employer to make this choice, there is no longer any control on the price of union labor. This is why unions played such a large role in the demise of the American auto industry and American manufacturing in general.

Despite the unnatural, corruptive influence of government, corporations and labor unions still manage to provide many benefits to society. Often overlooked is that all of the benefits they provide derive from the extent to which they are voluntary associations entering into consensual agreements with other parties. Conversely, all of the harm they cause and all of the animosity they and their supporters have for each other are the result of the coercive interference of government.

Instead of appealing to the government to assist them in invading each other’s rights, they should recognize that the government is their common enemy, preventing each from benefitting themselves and each other. If they wish to secure their rights and achieve positive results for themselves and society, they should kick the government out of their affairs and follow the law of nature.

[i] Special thanks to libertarian thinker and activist Steve LaBianca for his help in developing this analysis of the nature of corporations.

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.

Conservatism Is Not What We Need

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conservative-liberal-road-sign-cropped-proto-custom_28 If you are going to listen to Washington politicians at all, it is always best to listen to the party that is currently out of power. After each election, it is the job of the losers to try to attack the winners in any way they can. Often, they inadvertently advocate genuine principles of liberty in the process.

During the 8-year nightmare that was the Bush administration, it was the Democrats who stumbled upon these principles in their efforts to regain the throne. It was they who pointed out that the government should not be spying on its own citizens, that the president was assuming un-delegated powers through executive order, and that it was neither morally justified nor prudent to invade a third world nation that had committed no acts of aggression against the United States and lacked any reasonable means to do so. Their hysterical mouthpiece, Keith Olbermann, even went so far as to cite a long-forgotten document, the U.S. Constitution.

Of course, it is now abundantly clear that these arguments were made simply out of expediency. With the Democrats in power, it is now the Republicans’ turn to “fight City Hall,” and they have rolled out their usual rhetoric about small government, free markets, and traditional family values. Moreover, they, too, have rolled out the U.S. Constitution and waived it around in opposition to the Democrats’ plans to “spread the wealth around.”

Let’s take note that the Republicans are now correct in opposing the main tenets of the Democratic agenda, including expansion of government involvement in health care, “Cap and Trade,” and other wealth redistribution schemes. Amidst all of the usual noise coming from Washington and its media pundit class, it is only the Republicans that are making any sense at all.

Unfortunately, this is shaping up to produce familiar results. There is a growing movement for “change” that promises to “throw the bums out” in the next two elections. However, those who are part of this movement do not stop to consider what the Republicans’ true agenda will be once they regain power. As they have for over 100 years now, Americans are dashing to the other side in their perennial political game of “pickle in the middle.” They still haven’t learned that the pickle never wins.

The Republicans are having remarkable success in painting President Obama’s agenda as socialist and their “conservatism” as its antithesis. Most average Americans who identify themselves as conservatives accept this argument. If socialism redistributes wealth through the force of government, then conservatism, being its opposite, must oppose such redistribution of wealth. If socialism means that the economy will be centrally planned by government “experts,” then conservatism, being its opposite, must leave those decisions with private citizens. If socialism results in big government, conservatism, being its opposite, must result in small government. These are the assumptions that inform the political decisions of most conservative American voters.

There is only one problem. None of them are true.

The conservative-liberal dichotomy is as old as politics itself. It was present at the founding of the American republic. However, despite the Republicans’ claim to represent America’s founding principles, America was actually founded upon radically liberal ideas. The secession from the British Empire was in essence a complete rejection of conservatism.

Most Americans today believe the primary motivation for the American Revolution was a separation from the British government. However, the revolutionaries only acquiesced to the necessity of complete separation as a last resort. Even after Lexington, Concord, and Bunker Hill, the colonists were still making attempts to settle their differences with the British king and remain in the British Empire. The primary objection of the colonists was not the British king being their executive, but the conservative, mercantilist economic system that the British government enforced. The colonists objected to the policies of corporate welfare, protectionist tariffs, a central bank, militarism, and the taxes levied upon them to support these and other aspects of the worldwide British Empire. Had the British not imposed this system upon them, they would have been content to remain British citizens.

As soon as the Revolutionary War was won, the exact same debate erupted within the new American political system. Alexander Hamilton and his Federalists wished to replicate the British mercantilist system under an American government that would closely mirror the constitutional monarchy of Great Britain. The Federalists were the party of big government, national debt, corporate welfare, militarism, and central bank inflation.[1]

They wished to preserve the status quo insofar as the role of government and the nature of civil society was concerned, which benefitted a privileged, wealthy elite. They were the conservatives.

Socially, this party was the less tolerant of dissenters and tended to promote religion as useful in informing public policy. During Adams’ presidency and with the Federalists in control of Congress, the Alien and Sedition Acts were passed, making it illegal to criticize the government. These also are core conservative principles.

Their opponents, Thomas Jefferson and his Democratic-Republicans, promoted exactly the opposite ideas. They wished to radically change the role of government in society to one that was strictly limited to enforcing the non-aggression principle of liberty, most importantly economic liberty. They were opposed to corporate welfare or any other government redistribution of wealth, railed against the dangers and injustice of standing armies and the national debt, and opposed the central bank. Over and over, when asked about the role of government, Jefferson applied the non-aggression principle to arrive at an unambiguous answer. Always his answer supported each individual’s right to do as he pleased as long as he did not violate the rights of others, and to keep the fruits of his labor.

Jefferson and his followers insisted upon a “wall of separation” between church and state and denounced the Alien and Sedition Acts. They advocated free speech, civil liberties, and tolerance. These are core liberal principles.

While the conservatives gained the early lead due to George Washington’s election as president and subsequent appointment of Hamilton as treasury secretary, it was not a decisive victory. Washington, who along with Vice President John Adams was certainly a more moderate Federalist, also appointed Jefferson to his cabinet as secretary of state. This set the stage for an epic battle between the two ideologies after Washington departed from politics. Adams eventually broke with Hamilton and his party, costing him the 1800 election, and resulting in a decisive liberal victory by Jefferson and his Democratic-Republicans. For the next 60 years, it was the liberal ideology of individual liberty, limited government, and economic freedom that dominated federal politics.

During this time, the conservatives constantly fought to establish bigger government, the central bank, and the other tenets of mercantilism that defined American conservatism. After the Federalist Party disbanded, they were replaced by the Whigs, a party made up of the same people and advocating the same principles as the Federalists. By this time, Jefferson’s Democratic-Republicans had also had a split, and had emerged as the Democrats.

The Whigs were never successful in achieving their goals, and eventually disbanded. However, as before, the same people and the same principles of big government were back again in 1860, this time calling themselves “Republicans.” They finally won a decisive victory in electing Abraham Lincoln to the presidency and a majority in Congress. Immediately, the Republicans began implementing their agenda of corporate welfare, protectionist tariffs, and higher taxes. Contrary to conventional wisdom, it was this economic agenda (particularly the tariff) that motivated the southern states’ secession from the Union, not merely a disagreement over slavery.

It is vital to understand that the Republican Party was born as the party of big government, inheriting traditional, conservative big government principles from its conservative philosophical ancestors, the Whigs and Federalists. For most of its history, it has remained true to these principles, up to and including the Bush II administration. Barry Goldwater’s more libertarian platform during the 1960’s was a divisive anomaly in the conservative movement. Its popularity was later exploited by Ronald Reagan’s administration to implement the usual conservative philosophy of bigger government, militarism, and debt.

The problem for Americans today is that there is no longer an opposition party that represents a true antithesis of these principles. By the dawn of the 20th century, the Democrats had completely abandoned their platform of individual liberty and economic freedom and adopted a socialist, democratic ideology of popular wealth redistribution.

Where the Republicans continued to promote a system which plundered the many for the benefit of the privileged few, the Democrats no longer objected to government as an instrument of plunder and now merely fought to divide up the loot differently. They were no longer truly liberal, although they perverted that word in popular culture to mean exactly the opposite of what it really means. Since then, Americans have had to choose between two parties whose ideologies are fundamentally hostile to liberty.

One week ago, Congressman Ron Paul gave a speech at the Conservative Political Action Conference (CPAC) that both mainstream Republicans and Democrats disagree with. Of course they do. It was an eloquent articulation of America’s founding principles of individual liberty and limited government. Like Jefferson, Paul consistently applied the non-aggression principle of liberty to every aspect of government, concluding that we must end our worldwide military empire, end the welfare state (both corporate and popular), and get rid of the plundering Federal Reserve.

Socially, he advocated tolerance, civil liberties, and the right of every American to express his or her opinion, even if those opinions contradicted Paul’s own most preciously-held beliefs. Despite being likely the most truly Christian person in any branch of the federal government, he never once made any allusion to religion during his entire speech, except for a purely academic reference to Thomas Aquinas’ principle of the just war (he alluded to this as part of his anti-war argument). Young Americans for Liberty, an affiliate of Paul’s Campaign for Liberty, invited a gay pride group to the conference, invoking a bigoted outburst from one of the younger conservative speakers just before Paul took the stage. Paul’s followers roundly booed him out of the auditorium.

Ron Paul pitched his ideas as “conservative,” but they are not. During one point in the speech, libertarian radio commentator and publisher of Liberty Pulse, Kurt Wallace, turned to me and exclaimed delightedly, “Ron Paul is a radical!” He is. Like Thomas Jefferson, Patrick Henry, and the rest of the most pro-liberty founders of the United States, Ron Paul is a radical liberal (in the true sense of the word “liberal”). He is also an extremist, in the true sense of that word. He refuses to compromise his principles regardless of the political consequences.

Average Americans elect Republicans because they believe that Republicans will give them small government, low taxes, and economic freedom. They are mistaken. What they are yearning for has nothing to do with the Republican Party or the more general ideology called “conservatism.” What they really want is radical change. They demonstrated this in giving Ron Paul a victory in the CPAC straw poll. They also proved once again that they are wiser than the political class in Washington. At this critical juncture in American history, there is only one thing that can bring America back from the brink of social, economic, and political collapse: radical, anti-conservative change from leviathan government to extreme liberty.

[1] Thomas Dilorenzo’s books, Hamilton’s Curse and The Real Lincoln document the true roots and history of American conservatism superbly.

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?

>What Do Oranges, Furnaces, and Your IRA Have in Common?

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>On Friday, an average American spent the entire day with the federal government without ever leaving his home. No, there was no knock on his door by some plain-clothes Gestapo. Neither was he treated to one of those infamous “no-knock raids” where a small army of thugs with various acronyms spelled out on their backs burst into the homes of the innocent and terrorize whomever happens to cross their paths. Nothing so dramatic happened that day. However, the long arm of the federal government made itself equally palpable nonetheless.

The first thing that he tried to do that day seemed innocuous enough. Being a native of Western New York and now living in Florida, he attempted to schedule a pick-up to ship some freshly-picked Florida oranges to a friend back home. He had purchased the oranges from a local orchard a day earlier, putting aside about two dozen for his friend in the wintry north. Anyone who has eaten oranges fresh from the tree here in Florida can tell you what a difference there is in freshness and taste from those purchased in grocery stores in the north when they are several days or weeks older. There is also a significant difference in price, especially this time of year. Oranges in Florida cost about $.40 per orange, while those same oranges cost about $1.50 each when purchased in Western New York.

For all of these reasons, our average American decided to do something nice and send a couple of dozen freshly picked oranges up north. That’s when he had his first encounter with the federal government. It turns out that what he was attempting to do was extremely dangerous and therefore prohibited by USDA regulations. According to the USDA website,

Under current federal regulations, all shipments of fresh citrus are prohibited from leaving Florida unless they meet certain requirements, including:

• Inspection of the grove within 30 days of harvest;

• Treatment of the fresh fruit with a special decontaminant;

• Issuance of a federal limited permit that must accompany the fruit. The limited permit confirms that the inspection and treatment have been carried out; and

• Clear marking on the packages to indicate the fruit is prohibited from being delivered to other citrus-producing states.

The reason given for these regulations is that they are “designed to prevent the spread of citrus canker to other citrus-producing states while preserving Florida’s fresh fruit citrus market.” Surely the reader is familiar with citrus canker – that pandemic scourge that rivals swine flu in its danger to all of humanity if not for the federal government and its regulations.

There are a few consequences of this legislation that the government would have us believe are purely coincidental. The first is that the federal government is now authorized to collect a tax, which is all the fee for the “limited license” really is. The second is that citrus growers are effectively insulated by law from any out-of-state competition. Ironically, the federal government supposedly derives its authority to impose such a regulation from the commerce clause of the Constitution – which was written to prevent protectionism by the states!

The effect of these regulations is that consumers everywhere – in citrus producing and non-citrus producing states – pay higher prices for oranges. For those states without citrus growers, the licensing costs and higher costs due to limited shipping options are passed on to consumers. This is what explains Western New Yorkers paying $1.50 per orange. Even in citrus producing states, consumers pay a higher price than they otherwise would if their in-state growers had to compete with out-of-state growers freely shipping their products into the market. Of course, the government and its “progressive” supporters would have us believe that these are merely necessary costs of public safety. It couldn’t be that large, corporate citrus producers had anything to do with lobbying for and perhaps even writing these regulations, could it? Surely, the additional profits and insulation from competition are purely coincidental, aren’t they?

Having resigned himself that he could not ship the oranges himself without the federal license, which was not cost-effective for two dozen oranges, our subject acquiesced to send the oranges directly from an orchard licensed to ship out of state (at a premium price) and moved on to his next order of business. He needed a furnace for one of his rental properties. Being a small businessman who owned or managed approximately 100 properties, it was his responsibility to repair or replace any home appliances that ceased functioning. As a furnace is a significant cost for a small business, he consulted a well-known internet resource to see if he could get a deal on purchase and installation. He found several vendors advertising low-cost installations for home furnaces.

The cost of the home furnace that he selected was about $800. The cost to have a licensed HVAC contractor install the appliance was approximately $1,700 (remember this is New York), for a grand total of $2,500. The vendor on the internet worked for one of the established HVAC contractors that sell and install these appliances. He was offering to sell the furnace at the advertised price of $800 and install it for $300. This represented a savings of $1,400 – significant for a small property management company. When the small businessman offered to accept the offer and pay by credit card, the internet vendor educated him on what was going on. The transaction would have to be executed in cash, because it would be in violation of federal regulations. Not wishing to run afoul of the law, the small businessman declined and acquiesced to pay the $2,500.

It should be remembered that the vendor was not offering to sell stolen goods. He was selling the actual furnace at the same price that the HVAC contractor was selling it at. The internet vendor was merely offering to do the installation labor at what amounted to a real market cost of about $300. Why can the HVAC contractor charge $1,700 to send the exact same technician to install the exact same furnace? Only because it belongs to a cartel that is created by federal regulation and licensing requirements. Again, the reason given is public safety. We can’t have just anyone installing HVAC equipment or we would all be blown up within a week. It couldn’t be that large, corporate manufacturers and HVAC contractors associations lobby the government to pass these competition-stifling regulations, could it?

What did our average American businessman do next to garner the attention of the federal government? Nothing. Frustrated and having spent an inordinate amount of time on two seemingly simple activities, he decided to call it a day. However, the fact that he was sitting in his home doing nothing does not necessarily mean that he was free from federal intrusion. While reading some personal e-mails, one popped into his inbox from his financial advisor. It concerned his IRA.

A few years earlier, he had decided to take a portion of his retirement savings out of his traditional 401K and put it into an IRA with a company that specialized in foreign stocks. His strategy was to protect his savings from the ongoing depreciation of the U.S. dollar and the structural weakness of the U.S. economy in general, which was and is based almost purely on consumption and borrowing. The firm with which he opened his account invested his retirement money in foreign companies with strong balance sheets that were paying dividends. Overall, the investment strategy was sound and relatively conservative. In any case, it was his money to do with as he saw fit. Or so he thought.

It seems that since “the crisis,” the federal government had taken an interest in him in this respect as well – as always for his “protection.” His broker informed him that a “Client Profile” that he had been required by federal law to fill out upon opening his account had to be filled out again. However, since the company that he opened the IRA with specialized in foreign stocks, he now had to mark “Speculation” on his risk profile. The company had to have this signed affidavit on file in order to legally continue to manage his account. This was all designed to protect him from unscrupulous fund managers who might buy foreign stocks with his retirement money without telling him how risky said foreign investments might be.

Absurdity abounds in this regulation. The stocks in our subject’s portfolio all had strong balance sheets (modest debt-to-equity ratios) and were paying dividends. To invest in these, according to our government, is “speculation.” However, to invest in U.S. Treasury bonds – the bonds of an enterprise that is currently losing $1.6 trillion per year, has over $12 trillion in debt, and over $60 trillion in unfunded liabilities – would qualify as “low risk.” However, there is more to this story than pure government incompetence.

Consider the effects of a regulation such as this. There is some percentage of people who wisely got out of U.S. stocks and U.S. dollar-denominated assets in general over the past several years. However, after the misinformed propaganda campaign by our government against speculators as the cause of the recent financial and economic crises, there are a number of reasons that those people might not want to be labeled as “speculators” themselves. They might erroneously perceive speculation as unpatriotic or even evil, given what they have heard. The less gullible might fear more onerous federal actions against them once they are officially identified as speculators. In any case, this regulation is going to cause some people to close their accounts with companies that deal in foreign stocks or at least shift their assets back to U.S. stocks.

This is going to have the effect of raising the price of those U.S. stocks that these “speculators” decide to buy. That price increase does not represent real market forces at work, because without the regulation, the investors would have left their money in the foreign companies. Again, this is supposedly the unintended consequence of a regulation that is nevertheless necessary to protect the public. Who just happens to benefit? As usual, it is the large corporations whose stock prices will appreciate and who also just happen to fund the campaigns of the people who passed the regulation in the first place. Doesn’t anyone see a pattern here?

None of these regulations actually benefit the public. The citrus and furnace consumers pay exorbitantly higher prices and are certainly no safer from danger because the corporate cartel member filled out a government form and paid a licensing fee. How many people have to die from FDA-approved drugs (or from the unavailability of unapproved drugs) before this is sufficiently clear to average Americans? In the case of the foreign stock investor, he is actually harmed by the regulation if as a result of it he takes his money out of safe, foreign investments in viable companies and puts it into shaky U.S. corporations or soon-to-be-downgraded U.S. Treasury debt.

Progressives supposedly support these regulations in order to protect average Americans from the large corporations that they vilify at every opportunity. As we have seen ever since their hero, FDR, instituted this fascist regulatory structure in the 1930’s, they achieve exactly the opposite result. With each new set of regulations, large corporations grow richer, more influential, and more insulated from competition – all at the expense of the “little guy” that the regulations supposedly protect. To quote another progressive hero from the 1960’s, “When will they ever learn?”

>The Democrats Privatize Wealth Redistribution

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>George W. Bush redistributed more wealth during his presidency than any president had since Lyndon Johnson. Republicans really have never had any problem with redistributing wealth as long as the proceeds go to the right people. Since Medicare benefits senior citizens, a constituency that no election can be won without in the baby boomer retirement era, Republicans had no problem using the force of government to take money from one individual and use it to buy “healthcare” for another – as they did with their Medicare prescription drug benefit. Neither do they hesitate to redistribute to bankers, under the cover of “saving the financial system.” God help us if there is ever a constituency of senior citizen bankers.

In fact, if one looks at the federal budget as it existed before the massive bailouts started – pre-TARP – at least 80% of the almost $3 trillion budget amounted to wealth redistribution. Always there was some rationalization for why this or that group must receive federal funds “for the good of all.” The farmers must be subsidized because there is absolutely no way to sustain farming in a market economy. If large farming corporations weren’t subsidized, we would all starve. Medical research must be subsidized because we will eventually all die of cancer, AIDS, and other horrific diseases if the government doesn’t subsidize medical research. Corporations in general must be subsidized because if one were to go out of business, everyone would be unemployed.

The Democrats typically attempt to characterize the Republicans as racist or elitist because the Republicans have traditionally resisted wealth redistribution for the poor or minorities. However, the reality is that Republicans do this for the same reasons that Democrats resist redistribution to bankers and corporations (or at least they used to). The poor and minorities don’t vote Republican. That is the only reason that Republicans attempt to leave them out.

No one in America seems to know any American history. Following the American Civil War, when black voters universally supported the Republicans due to their perception that the “party of Lincoln” had set them free, it was the Republicans who promised “40 acres and a mule” to blacks and the Democrats who proclaimed themselves “the party of white men.” Enslaved by their former ruling class and now used as pawns in a political power game by the new one, the freed black voters of post-Civil War America serve as a perfect metaphor for the supposed “beneficiaries” of all government redistribution schemes. Whether it is elderly people trying to scrape by on a Social Security Check, poor people trying not to starve on public welfare, or Iraqi citizens enjoying their newly provided “freedom,” the so-called beneficiaries of government wealth redistribution are never the winners. It takes an alarming lack of skepticism not to ask who the real winners are.

As this new century has “progressed” (pun intended), even the blurry lines separating the two parties have begun to melt away. Remember that George Bush’s redistribution schemes also included stimulus “tax refunds” to everyone, whether they actually paid taxes in the first place or not. “Compassionate conservatism” was nothing more than a euphemism for attempting to blend traditional Republican rhetoric about “free markets” and “limited government” with thinly-veiled redistribution schemes. By doing so, Bush’s Republicans hoped to hold onto their own base while chipping away at the Democratic voting blocks by promising them other people’s money, just as the Democrats do.

Throughout the 20th century, the two parties employed this strategy of “borrowing a page from the other’s playbook” over and over, always hoping to win voters away from the opposition while retaining the loyalty of their own traditional supporters. It was this that caused many liberals to criticize Bill Clinton for being “too much like a Republican.” Why George Bush has managed to hold on to his image as an “extreme conservative” defies explanation.

Until now, there has always been at least one thing to say in favor of the Democrats. They have been honest about their intentions. They have come right out and said that their intention was to redistribute wealth in order to achieve “equality” or “social justice” or some other utopian goal. Certainly, no lucid American can deny that the Democratic platform has been a socialist one for at least the last century. It has been the Republicans who have deceived their followers to a much greater extent by promising them liberty and property rights and then redistributing almost as egregiously as the Democrats.

One hallmark redistribution strategy used by the Republicans was “privatization.” Somehow, they managed to successfully characterize forcibly extracting money in taxes from their citizens and redistributing it to private corporations as “free enterprise,” as if “private” and “free” were synonymous. Alexander Hamilton must have smiled in his grave.

However, the Democrats have truly broken new ground during this presidential administration. Not only have they managed to outspend the voracious Bush administration in just ten short months, but they have taken a page from the Republican playbook and actually privatized wealth redistribution. Formerly, however transparent the scheme, the money at least made it into the federal treasury for a moment before being paid out to the special interest that had bought it with votes. However, H.R. 3962, the so-called “Affordable Health Care for America Act,” dispenses with this formality. Now, using the coercive power of government, private citizens will be forced to pay their money directly to government supported health insurers whether they wish to or not. The veneer that this is “public money” being spent for the “public good” has been completely stripped away. There is now simply a government pointing a gun at its citizens and forcing them to pay directly to the special interest that has successfully lobbied for their money. Even King John of the Robin Hood tales did not extort for his friends this overtly.

A more perverse merger of left and right political corruption is unimaginable. Using the government’s numbers, this will provided coverage for 36 million uninsured Americans at a minimum of $15,000 per covered life. Assuming these numbers to be at least “in the ball park,” President Obama and his so-called liberals have just handed over a half a trillion dollars a year to corporate America (the health insurance companies). What true progressive could possibly support this?

The price of this corporate welfare, of course, is that any remaining vestiges of voluntary contracts between insurer and insured that health insurance still retained has been eliminated. Insurers are no longer allowed to determine rates demographically and based upon a real risk model. They are no longer allowed to offer diverse coverage packages to compete with one another for different customer groups. They now must offer low rates and uniform benefits to everyone as entitlements. Like individual welfare recipients, they have surrendered all of their liberty and property rights in return for other people’s money. They are now just one more arm of the state bureaucracy.

The worst aspect of this great fraud is the implications it has for the liberty of every American. The closest parallel to this heretofore has been automobile insurance. Americans have been forced to buy auto insurance directly from an auto insurer in order to exercise the “privilege” of driving on the government’s roads. This was of course enacted for the public good, to ensure that poor drivers could not bankrupt the innocent by demolishing their cars or saddling them with exorbitant hospital bills. However, as hostile to liberty as these laws are, they still leave the driver a choice. He can choose not to drive, however impractical or unrealistic that choice might be.

However, with this new bill, even that smattering of liberty is ripped away. Americans are now forced to purchase insurance from a government-protected and subsidized health insurance company merely because they are alive. Worse yet, they are not merely forced to make a single payment of tribute to satisfy their “individual responsibility.” They must go on paying, year in and year out, for as long as they live. They cannot decline. They cannot conscientiously object. There is no escape from this tyranny save one: death. For those individuals that can demonstrate that they are completely incapable of paying, someone else will be forced to pay for them. No matter what, the government’s corporation will be paid. Even life is no longer a right, but a privilege that the government extends to its subjects for a fee.

From 2001-2006, the Republicans controlled all branches of government. It was an horrific period of utter destruction of American liberty. The Democrats have now been given their chance and in ten short months they have far outdone the Bush Republicans for this dubious distinction. Make no mistake. If the Republicans regain power, they will be worse still. Americans should understand that they will affect no “change” in their government by electing either of these two parties. The federal government is a monster that has taken on a life of its own. Both parties are now its minions and are indistinguishable from one another.

Our Declaration of Independence says that “mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

Are we there yet?

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

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>A Familiar Strategy?

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>Where the people fear the government you have tyranny. Where the government fears the people you have liberty. [1]

– John Basil Barnhill (1914)

Americans should be experiencing “déjà vu all over again” as Congress prepares for another weekend incursion into their rights via another two-thousand page bill that must be voted on before anyone has had a chance to read it. This time, it is H.R. 3962 “To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.” The next law that should be passed is that legislators and bureaucrats shall not be allowed to work on weekends.

That working Americans will rise early on Monday to begin another week with less protections of their rights and more of their property stolen is not all that should seem familiar. If anyone can remember as far back as the Bush administration (this new regime has been so bad that I am afraid people have forgotten most of the outrages of the last), a very similar dynamic played out. The very first bailout – of the banking industry – met with resistance similar to that against the proposed government takeover of the health care industry. The first attempt to pass the TARP bill failed.

For those watching the statements made by their representatives while opposing that bill, one thing should have been obvious. Those representatives feared their constituents. It was in their eyes and in their voices as they explained their opposition. I do not mean that they feared violence. They feared for their jobs and they feared whatever other consequences there might have been if they deliberately defied the wishes of those thousands of voters who had angrily called their offices. For a moment, our government worked as it was designed to work. The people spoke and their representatives heeded their wishes, however reluctantly.

Then, the uproar died down. President Bush emerged from his long, unnatural silence during the financial crisis and gave a speech designed to put that fear back into the hearts of the citizens, where our government prefers that it permanently reside. If the banking bailout wasn’t passed, Americans could lose their homes, their jobs, or their retirement savings. Financial Armageddon awaited if the bankers were not saved – for it is really the bankers that provide those things to everyone. Henry Paulson and Ben Bernanke joined the chorus to help paint the terrifying picture of unspeakable horrors that awaited us if we did not give almost $800 billion to the Treasury Secretary to be redistributed to his friends on Wall Street.

It is unclear if Americans really believed the government or if they just ran out of energy to protest. Either way, the bill passed the second time it came up for a vote. Those same representatives who only days before were too afraid to pass it were now somehow emboldened and it sailed through with barely a whimper from the victims. What was different the second time around?

Hopefully, Americans took notice of the fact that their representatives do not possess the courage to pass a bill that they actively oppose, even if that opposition amounts to nothing more than angry phone calls. It is difficult to ascertain what reassured those congressmen enough to vote for the bill the second time. Perhaps the calls to their offices changed after the government’s scare campaign intensified. Perhaps some of the people who had called before the first vote called back and told those congressmen that they had changed their minds.

However, there is another possibility that is infinitely more disturbing. Perhaps by the time of the second vote, the pressure had died down out of sheer inertia. After all, there is probably some limit to just how long Americans can make calls, march in protests, or write letters while trying to do their jobs, raise their families, and live their lives. If I were trying to develop a strategy to pass a bill that most Americans oppose, I would consciously plan for exactly what happened during the banking bailout bill in 2008. I would let them scream, let them march, let them carry signs and write letters, and even let the bill fail to pass. And once the citizenry was sufficiently exhausted or had turned their attention to something else, I would put it up for another vote.

Personally, I would be surprised if this were truly a conscious strategy by most of our representatives, although I am sure that the dynamic has not escaped the notice of the most devious of the professional political crowd. However, whether intentional or not, this is exactly what happened with the banking bailout and it is exactly what is about to happen with so-called “health care reform.” All summer long, Americans called their representatives, marched in the streets, and even showed up in the capitol city itself in numbers far too large to support the claim that it was some sort of Republican PR campaign. At one point, the idea of a government-run public option was all but pronounced dead on non-arrival by media outlets, whether conservative or liberal in their bias. It has found new life.

The American Revolutiony War was by no means encouraging for the Americans for the great majority of the time that it was being fought. The Americans lost almost every battle, constantly outclassed by the greatest military force in the history of the world at that time. However, there was one advantage that the Americans had over the British – they were relentless. No matter how many battles they lost (and they lost most of them), the American army would not go away. After being repeatedly schooled by superior British generals at New York, Brandywine, and elsewhere, Washington showed up at Monmouth and fought the British to a standstill. In the end, it was he and the Americans that emerged as the victors.

This weekend, the British are back. However, this time they are not wearing red coats but instead masquerading as representatives of the people. They are bringing with them the same tyranny that they did in the 18th century – unjust taxes, illegitimate government power, and violations of the rights of every individual American. It is imperative that Americans once again refuse to go away. Millions have sacrificed time, money that they could ill afford to spend, and days, weeks, and months of their lives to write, call, march, and shout with all of their might against the destruction of our liberty that this government has accelerated with increasing brazenness over the past few years (under presidents from both major parties). It all goes for naught if our representatives learn that they need only wait for us to exhaust our energy before ignoring our wishes and trampling upon our rights as they please.

There is a disturbing sound in the air – silence. There is a feeling that the outrage has subsided and that the coast is clear for another weekend theft of our liberty and property. Let us not let last summer’s tremendous demonstration of the American spirit go to waste. If you opposed this bill the first time, if you traveled to Washington, spent money you didn’t have, took time away from your job or family to be sure that your voice was heard, it will have all been for nothing if they pass this bill this weekend.

Now is the time for Americans to be relentless. Call your representatives and let them know that what happened in New Jersey and Virginia a few days ago has nothing to do with Republicans or Democrats – it is the fate of all incumbent politicians, from any party, that abandon their duty to protect the rights of the people. From now until Saturday evening, we must shout louder, march longer, and get angrier than we have ever been before. Do not underestimate the power that you wield and do not let this government monster outlast you. As we said over two hundred years ago to a government that had marched against our liberty, let us shout to our representatives as loudly and for as long as it takes – this far shall you go and no farther.

[1] Barnhill, John Basil (1914). “Indictment of Socialism No. 3” (PDF). Barnhill-Tichenor Debate on Socialism. Saint Louis, Missouri: National Rip-Saw Publishing. pp. p. 34. Retrieved on 2008-10-16.