Tag Archives: property rights

Trump Protesters, Free Speech and Property Rights

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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.

Every law is a threat of violence

Rights and Responsibilities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[2] Paine, pg. 6

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

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

Tom Mullen on Robert Scott Bell Show today 12 noon Eastern

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We will discuss: Why Health Freedom and Freedom are the same. Property rights means health freedom.

Listen live today 12 noon Eastern https://www.naturalnews.com/NNRN-LiveStream.asp

The Constitution Does Not Protect Our Property

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

>What Is This Free Market We Keep Hearing About? Part II

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>Previously, I wrote an article entitled “What Is This Free Market We Keep Hearing About?” In it I attempted to demonstrate that a free market is the only economic system compatible with liberty, in addition to being the system that will yield the best results for society. The dissenting views were familiar ones, which I will attempt to answer.

The first category of dissenting opinions came from those that somehow misunderstood the article to have argued that a free market exists right now, or has existed in the recent past (perhaps under the Republican regime that has thankfully gone the way of the hula hoop). For the record, we have not had any semblance of a free market since at least the New Deal, and probably not since the institution of the Federal Reserve and the income tax in 1913. If anything, we have had markets that have been “progressively” less free in each succeeding decade, the trend accelerating markedly during a few notable periods, including the 1910’s, the 1930’s, the 1960’s, and the present devastation of our liberty that is occurring before our very eyes. As I have argued more extensively before, the Bush years did not represent free markets.

The next broad category of comments could generally be grouped as those which implied that a truly free market system would amount to no government or restrictions at all and therefore necessitate that market participants would have to be trusted to “do the right thing” at the expense of their own profits. Those making this argument went on to say that history shows that “the corporations” or other wealthy market participants will always choose profit over the good of society.

This is a complete misunderstanding of the concept of free markets presented in the article and of the non-aggression principle of liberty in general. “Non-aggression” does not mean the absence of the use of force (government) under any circumstances. In a free market, there is a very necessary role for government to play, just as in nature there is an appropriate time for the use of force. Specifically, the government brings force to bear against those who have committed or are committing aggression against another’s rights. In a truly free market, the government prevents any party from using coercion or fraud to secure an exchange of property. If a company lies on its financial statements to attract investors or credit, it is the government’s job to prosecute those responsible for fraud. If a company employs violence or the threat of violence in trying to eliminate its competition, it is the government’s responsibility to prosecute the aggressor in defense of the victims.

However, if the company participates in exchanges of property whereby all participants voluntarily consent to the terms and all information pertaining to the transactions are represented truthfully, then that activity is beyond the reach of government, just as speech, religion, and conscience are beyond the reach of government because they do not represent acts of aggression against anyone else’s rights.

With the natural boundary of non-aggression enforced, the market requires no consideration for any participant other than the pursuit of profit. With truly free markets, it is never true that society is threatened unless firms sacrifice their profits to benefit society. Rather, firms can and should pursue only profit so long as they commit no aggression against another’s rights. The law should never be a positive force – it should never compel anyone to do anything. It should only prohibit certain actions, namely those that amount to aggression (fraud being aggression against the rights to property). It is this principle that is consistently violated by our modern brand of “regulation.”

This brings us to a third category of objections, namely that insufficiently regulated markets have resulted in the massive consolidations that have occurred over the past quarter century, decreasing competition and creating overly influential corporations that dominate markets and our government. This argument is rooted in the same misconception as the first – that we have had free markets at some point in our recent past. However, even if one argues that some “deregulation” has taken place and that is the reason for the consolidation, the position still begs one question. Why are new competitors not entering the market to compete with these overly dominant corporations?

There are only two possibilities. One is that the corporations in question have achieved natural monopolies. A natural monopoly is a good thing. It means that one firm is producing products of such high quality and such low price that no other firm is able to compete with it. A natural monopoly can only be sustained as long as the monopolist continues to offer products that consumers prefer over all others based upon their own voluntary decisions. Natural monopolies harm no one.

The only other explanation for a dearth of competition is that there are artificial forces at work that are keeping competition out. This means that market participants are not acting voluntarily, but make their choices under some type of coercion. There is only one entity that can legally coerce participants in any market – government. In fact, it has been the ocean of rules and regulations itself – in violation of every market participant’s natural rights – that has led to the dearth of competition in our supposedly free markets. This conclusion is intuitive. If the corporations are not natural monopolies then their competition must have been eliminated unnaturally or artificially, i.e, by the government.

It is abundantly clear that our labyrinthine regulatory structure is an artificial barrier to new competition, particularly since the regulations are now written by the very corporations they are supposed to govern. However, the root of the problem is not bad regulations or corruption. It is the fact that any barriers to human action exist at all beyond those that prevent aggression. Even without back door deals and outright corruption, these artificial barriers necessarily favor entrenched market players over new firms trying to enter the market, as compliance with regulation drives up start up and compliance costs beyond what all but the largest firms can afford.

The so-called “deregulation” in many of our markets did nothing to dismantle this quagmire of regulation, but merely eliminated barriers to consolidation while continuing to insulate established players from new competition. The results were predictable but certainly not the results of natural market forces. The proper solution to this problem is not to violate the rights to liberty and property by prohibiting one company from buying another, but rather to remove the further violations of those rights that our massive regulatory structure represents.

On this point there were some thoughtful comments attempting to determine whether corporations have rights or whether only people have rights. I would argue that the rights in question when discussing corporations are those of the shareholders, who retain all of the same rights to life, liberty, and property as any other market participant. Some argued further that the shareholders obtain certain privileges granted by government, particularly in limiting liability, that justify taxes or restrictions that would not be justified on individuals.

However, this argument ignores the fact that corporations are required to register and therefore declare to all of society their corporate status. As the decisions to form a corporation, buy its stock, lend it money, or purchase its products are all made voluntarily and with full knowledge of its corporate status, there is no justification for government to impose special restrictions upon a corporation outside of those disclosure requirements necessary to inform the public that it is a corporation.

Finally, there were those that argued that unfettered free markets result in corporations achieving too much “power,” rather than merely too much wealth. Corporate “power” is a misnomer. Power is the ability to use force. Only government has power. It is government’s sacred duty to wield that power only in defense of each individual’s rights. No matter how much wealth a corporation obtains, it exercises no power, unless it literally spends its capital to raise an army and engage in open rebellion. Clearly, this has not been the case. However, it is also clear that corporate or other wealthy interests have used their wealth to buy political favors and to induce politicians to pervert the laws themselves, leading directly to the quasi-fascist economy that we find ourselves confronted with today.

This has been a failure of government, not the free market. It is certainly not admirable when an individual or group uses its wealth to achieve injustice. Nor are interested parties participating in a free market when trying to bring government force to bear upon competitors or other market participants. However, it is ultimately government that is entrusted to preserve justice. The members of government are never compelled to allow wealthy interests to persuade them to abandon their duty. It is the government’s job to say “no,” and when they fail to do so they are destroying the free market, not licensing it.

This brief article certainly does not answer every specific argument made against free markets, but it does illustrate something common to all of them: all objections against free markets result from a misunderstanding of what a free market is. A free market is one in which no one’s rights are violated, resulting in all transactions occurring by mutual, voluntary consent. Participants in a free market practice the non-aggression principle. This does not require unrealistic virtue from market participants, because it is government’s duty to enforce the non-aggression principle. Every economic problem plaguing American society today stems from some departure from the free market, which is some violation of the rights of market participants. Justice is the protection of those rights. Social justice can only be achieved when absolutely free markets exist. Properly understood, freedom and free markets are one and the same.

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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>What is This Free Market We Keep Hearing About?

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>“…every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interests his own way and to bring both his industry and capital into competition with those of other men.”

– Adam Smith (1776)[1]

As President Obama and his pet Congress continue their crusade to expand the reach of government into our lives, “conventional wisdom” continues to tell us that socialized medicine, rampant wealth redistribution, and government control over one industry after another is “necessary” because of the supposed failure of the free market to adequately address the needs of society. The way the “free market” is characterized by politicians and media pundits, it is not surprising that most Americans seem to regard it as some sort of special interest group (Mr. Undersecretary, the gentlemen from the free market are here to see you). Doubtless, when most Americans hear the words “free market,” they picture the CEO’s of Detroit automakers flying in on corporate jets or Wall Street financiers busy mastering the universe. This mischaracterization of the free market is ironic, seeing as both of these groups have recently sought and obtained capital from people who were not free to refuse (taxpayers).

So, before trying to ascertain whether or not the free market has failed society, it is necessary to define exactly what it is. This is not so much difficult as it is inconvenient for those who either wish to exert control over our lives or who wish to be controlled by those that they believe can offer them security in exchange for their liberty – even if it means destroying liberty for everyone. For both of these groups, the “free market” is something that must be characterized as something that it is not. To recognize it for what it is would both threaten their own ability to justify their positions and concede to their victims that what they advocate is in fact abject slavery. Neither result is palatable to opponents of the free market, so gibberish is necessary for them from both a moral and practical perspective.

So, let us say here what it seems that no one anywhere wants to come out and say: the free market is simply all members of society exercising their inalienable rights. It is nothing more and nothing less. Any other system, by definition, violates some or all of these rights.

Every individual has a natural right to labor and to keep the fruits of his labor (his property). This is his only means of pursuing his happiness. There is only one role for government in this area: to defend the property of each individual against theft by another person or group. A truly free market limits government’s role in regards to property to this natural boundary – for any further role constitutes government committing the very crime it exists to prohibit.

Every individual has a natural right to liberty – to do as he pleases as long as he does not commit aggression against the equal rights of another. In a free market, there can be no “regulation” (as we incorrectly understand the term today). The laws that restrict human action must be limited to those few necessary to ensure that no individual is forced or defrauded while paticipating in an exchange of property nor forced to accept any terms that he does not freely consent to. As the quote from Adam Smith illustrates, one cannot talk about “free markets” without at the same time incorporating the Non-Aggression Principle of Liberty. While Smith is generally regarded as the “father of capitalism,” he never actually called his economic system by that name. Instead, he referred to it as “a system of natural liberty.” Given the confusion that now accompanies the word “capitalism,” it might be better to revert to Smith’s terminology.

Since a free market is by definition the only system that allows individuals to exercise their rights, to say that an unfettered free market does not work is to say that society will not work unless those rights are systematically violated and that those violations must be protected by the law. A greater perversion of justice is unimaginable. Yet, the majority of our elected officials champion exactly this. Sadly, the majority of their constituents blindly parrot their horrific slogans.

In response to this argument, the more cunning opponents of liberty will say that we have given the free market a chance to work and it has failed. False prophet of freedom Alan Greenspan is notable among this gang of vipers. However, any lucid analysis of the difficulties that we find ourselves in now can indisputably be traced to the aspects of our society that prevent free markets. Bad mortgage loans were made because government committed the fraud of monetary inflation combined with the theft of guaranteeing loans with taxpayer money. The skyrocketing cost of health care is a result of government committing the theft of taking money from one individual and using it to buy health care for another, suspending the natural law of supply and demand with artificial demand. Contrary to the idea that individual rights must be balanced with societal needs, it is the violation of individual rights that causes all of our societal problems, most pervasively our economic problems.

As it is merely the economic application of the Non-Aggression Principle of Liberty, the free market is the only system that allows individuals the ability to exercise their right to pursue their happiness. By doing so, they naturally seek to profit from their labor and compete with each other without committing aggression against each other’s rights. History shows that individuals acting in this manner produce enormous benefits for their fellow human beings. The steam engine, the automobile, the airplane, the telephone, and virtually every other technological advance that provides a tangible improvement in the quality of human life have been the result of human beings peacefully competing with each other for profit.

Conversely, the atomic bomb, the concentration camp, and every other technology which serves the purpose of death, destruction, and enslavement have been the result of governments forcefully confiscating property from their citizens which would otherwise have been put to productive use.[2] It has only been by violating the individual, inalienable rights to life, liberty, and property that any of these horrors were able to come to fruition.

The free market has not failed. The free market is Freedom itself, and while it has only occurred for brief moments throughout history, it has never, will never, and can never fail. When we are confronted with gibberish about the failure of free markets and the need for government to “play a role in the economy,” or for a “public-private partnership,” let us not let ourselves be led into a carefully framed argument about what might provide more health care, produce more automobiles, or save more jobs. Let us recognize these arguments for what they are: a declaration of war upon our inalienable rights.

As our Declaration of Independence states, government’s purpose is to secure our rights, including our inalienable right to a free market within which to exchange our property. Whenever any Form of Government becomes destructive of this end, it is our right and our duty to alter or abolish it. Not only must we resist further government expansion into our economy, we must begin dismantling the institutions of tyranny that government has already established over the past century. Our representatives must hear this from us every day until they call off their attack upon our rights or until they can be removed from office. There is nothing in any of our lives that is more important than this right now.

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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[1] Smith, Adam An Inquiry into the Wealth of Nations from An Inquiry into the Wealth of Nations: Selections edited by Laurance Winant Dickey Hackett Publishing Indianapolis, IN 1993 pg. 165
[2] The reader should avoid confusing private companies developing weapons for the government with “the free market.” The fact that the companies are privately owned does not mean that they are operating in a free market. Quite the contrary. Since the buyers of their products do so involuntarily (taxes), the development of new weapons and subsequent sale of them to the government has nothing to do with a free market.

Life, Liberty, and Property Are Inseparable

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The reason why men enter into society, is the preservation of their property; and the end why they chuse and authorize a legislative, is, that there may be laws made, and rules set, as guards and fences to the properties of all the members of the society, to limit the power, and moderate the dominion, of every part and member of the society: for since it can never be supposed to be the will of the society, that the legislative should have a power to destroy that which every one designs to secure, by entering into society, and for which the people submitted themselves to legislators of their own making; whenever the legislators endeavour to take away, and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience, and are left to the common refuge, which God hath provided for all men, against force and violence.

– John Locke[1]

Life, liberty, and property were the central, inalienable rights that formed the foundation of the great experiment in self government called the United States of America. The founders of our country never broke apart this sacred triumvirate, because each one of these rights is inextricably bound to the other. No one of these three can exist without the other. Moreover, when all three are secured, it is almost impossible for injustice to exist. Wherever one does find injustice, one invariably finds a violation of one of these three basic rights at its root.

While it is certainly true that today the rights to life and liberty are grossly violated in innumerable ways, they are nevertheless at least spoken of by our politicians. However hypocritically, they at least say that they value life and liberty, even as they pervert those sacred rights as justification for their wars and plunder.

Yet, they never even hypocritically evoke the right to property. No journalist ever challenges them based upon it, and honestly, most average Americans don’t talk about it either. As a principle, property has vanished from our consciousness. However, as all of the great philosophers throughout history have understood, there is no right to life or liberty without property. In fact, property is part and parcel of life itself.

What is property? It is that which an individual rightfully owns. Included among every human being’s property are his mind, his body, his conscience, and his actions. Every act of mind and body undeniably belongs to the actor, including that act which he engages in more than any other: his labor. To deny someone’s right to ownership of his mind, body, or labor is to make him a slave.

It is labor that allows each individual to sustain his existence and pursue his happiness. All consumption must be preceded by production. Production can only be achieved through human labor. In fact, there is no way for an individual to pursue any goal, whether material, intellectual, or spiritual, without exertion. Even the search for God requires an intellectual and spiritual effort – it cannot commence without labor.

For most of us, the bulk of our labor is devoted to providing the basic necessities of life for ourselves and our children. Some portion of it also provides the extras – the toys, the vacations, or the dining out that enriches our lives and adds to our happiness. A further portion is devoted to study, prayer, or just simple reflection – the quest for meaning and purpose in our lives. None of these things are possible without labor; our labor provides them all. Every item in every store is the product of someone’s labor. Every phone call you make is made possible by someone’s labor. Healthcare is someone’s labor, as is education.

However, the actual effort of mind and body is not the most precious aspect of labor. If human beings were immortal, we could afford to spend our labor and its fruits indiscriminately, consuming as much as we wished and providing anything to anyone who asked it of us. If a shoemaker were able to make shoes for the rest of eternity, then certainly there would not be a bare foot on the face of the earth. If the land developer were immortal, we would all live in a mansion.

However, we are not immortal, and it is this fact that places such a premium on our labor. Our labor is not just composed of the exertion of mind and body that is necessary to produce some good or service. That exertion happens over time, the hours or days of the laborer’s life. Every hour of our labor is an hour of our life from a limited supply which cannot be replenished. Whatever we have produced with our labor now contains that portion of our life which we have sacrificed to produce it.

So, when human beings trade their goods or services with one another, they are really trading pieces of their lives. If they have exchanged their labor for money with an employer or customer, that money now contains some part of their lives – a part that can never be reclaimed. That is why the same verb is used for both money and time – both are “spent” in exchange for some benefit. Both also represent each individual’s means of self determination.

Therefore, it is impossible to call a person free if he does not own his labor and all the product of his labor. It is only through his labor that he can provide better food, clothing and shelter for himself and his family, send his children to better schools, or realize the leisure time necessary to grow intellectually and spiritually. His labor is his means to determine the course of his life. Without self determination, there is no liberty.

Furthermore, to deny a human being ownership of his labor is also to deny his right to life itself. Since his labor is his means of sustaining his existence, once his right to ownership of his labor is denied he lives only at the arbitrary whim of whoever has claimed ownership of it. For such a person, life is now a privilege granted by someone else, rather than a right.

To the founders of the United States of America, all of this was self evident. When one reads the writings of Samuel and John Adams, Jefferson, Madison, or Locke, one finds one word that is used many times more often even than liberty: property. Recognizing property as nothing more than the individual’s labor and/or the product of his labor, the founders placed the protection of property as the very highest priority of government. In fact, they often stated that it was the only priority of government. While no high school history book or Hollywood biopic even hints at this fact, merely reading the words of the founders for oneself puts any debate on this point to rest.

Let us apply this concept to a contemporary issue. The unambiguous statements in the Declaration of Independence that all human beings have unalienable rights and that government’s sole purpose is to secure them should absolutely beg at least one timely question from most Americans today. Why did the founders not provide for the right to health care? Why did they not establish Medicare or Medicaid? Given a whole system of government whose purpose was to secure individual rights, why was this right so glaringly overlooked?

Of course, the answer to that question is that the founders recognized that health care was not a right. Health care, like every other good or service, is someone’s labor. No one but the laborer can have a right to it. To say that people have a right to health care is really to deny the health care provider a right to his own life, for it is impossible for both he and his patient to have a right to ownership of his labor. It is no less a crime to forcefully rob the health care provider’s fee from a third party (the taxpayer), for that simply denies the taxpayer’s right to his own life. In either case – whether the health care provider is forced to treat the patient for free or a third party is forced to pay the bill – someone’s labor, some part of someone’s life, is being stolen from him. This is the specific crime that government exists to defend its citizens against. By instead committing this crime, government becomes the most grotesque absurdity imaginable.

This is not to imply that we are at some sort of crossroads because President Obama and his pet Congress are closing in on expanding government healthcare. We came to that crossroads decades ago and quite undeniably took the wrong road. Until our philosophy changes and we recognize that retirement benefits, health care, research grants, corporate subsidies, investment in alternative energy – all money, goods, and services – are really pieces of someone’s life that cannot be seized from them without their consent (not even by majority vote), we will never restore the liberty that we have lost. Instead, we will continue to be the most pitiable form of slave, not bound to one master, but to everyone.

When a fellow human being offers to buy your product or hire you for your services, he has paid you the highest compliment imaginable. That person has offered a piece of his life to you in exchange for something that you have to offer, which is itself a piece of your own life. He is saying that you have value and that what you offer is worth hours or days of his life that he can never reclaim. This consensual interaction between free people is the most beautiful aspect of civil society and has been responsible for every improvement in the quality of human life that has ever occurred throughout history.

Conversely, when a fellow human being points a gun at you and demands that you provide him with some good or service, he commits the most egregious crime imaginable, short of pulling the trigger and ending your life at that moment. For in reality, he is really stealing a piece of your life that you can likewise never reclaim. He may be committing this crime because he wishes to increase his wealth without earning it, or he may desperately need whatever he takes from you, but it is the same crime nonetheless. This interaction is the most evil aspect of civil society and has been responsible for every war and human misery that has ever occurred throughout history.

Government can only be organized to fulfill one of two purposes: to protect your property or to take it from you – for whatever purpose government or its constituents deem fit. There is no third choice. To organize society around competing groups stealing from one another is to create a society whose citizens exist in a perpetual state of war with one another – for the use of force to obtain another’s property without his consent is the definition of the state of war.

Such a society cannot endure indefinitely. Ours has come to the beginning of its inevitable end. Countless empires throughout history – some much more preeminent in their worlds than we are in ours – have disintegrated for exactly the same reason. We can still choose justice over injustice but our philosophy must change. We must again institute a government that secures our rights, rather than annihilates them in the attempt to provide us with the property of others.

This will not happen by any act of government itself. Whether we elect a liberal or a conservative, we will never achieve different results by continually electing different people or parties but asking them to do the same thing – provide us with the property of others. It must be the people who change their philosophy and then demand that government assume its appropriate role according to that philosophy. Our government ultimately gives us what we ask for. For the past century, we have increasingly asked it to make us slaves, seduced by the siren’s song of comfort and security without responsibility. This can only be provided to each of us at another’s expense and can only be provided to others at ours. Once we reject the idea that we can claim a right to another human being’s life, the chains that bind us will be broken. Then, it will matter not who makes our laws.

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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[1] Locke, John Second Treatise of Government Hackett Publishing Company, Inc. Indianapolis, IN (1980) Pg. 111

>A Nation of Hyenas

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>One never knows where one will find profound metaphors for human existence and society, and I certainly wasn’t looking for one while channel surfing last weekend after a morning of yard and house work. However, I had the good fortune to flip on Mutual of Omaha’s Wild Kingdom and observe a perfect analogy to what our once-great society has become.

That episode was about the cheetah, the fastest land animal on earth. The cheetah is a beautiful creature. As the show pointed out, it is literally built for speed at the expense of brute strength, of which it has relatively little compared to other predators in its habitat. While unfortunate for the antelope, it was nonetheless quite inspiring to watch a high-speed pursuit of that animal by the cheetah, exhibiting gracefulness which rose to the level of poetry. Having made her kill, the cheetah brought the antelope back to feed herself and her young.

However, the story was not to end so happily for this family. The smell of blood in the air had attracted a pack of one of the cheetah’s competitors, the hyena. While the aforementioned lack of brute strength would probably not allow the cheetah to fight off even one hyena, that fact was irrelevant in that it was ten or twelve hyenas which now threatened her. Why? They were after the antelope – the fruits of the cheetah’s labor – and were going to use their greater numbers to take it from her by force. They weren’t intent upon killing the cheetah or her young, but were willing to do so, if necessary, to obtain her property without her consent. The cheetah weighed the risks to herself and her cubs and retreated, left to try to make up the loss elsewhere to provide for her family.

A few nights later I broke an embargo of sorts and actually watched a “news” program. I tuned in Cavuto on Fox News[1], which is one of the few shows where actual journalism seems to occur occasionally, despite its network affiliation with right wing propagandists Hannity and O’Reilly.

Cavuto’s regular panel of guests is arguably the most libertarian one can find anywhere in the “mainstream media,” regularly featuring Jonathan Hoenig, Peter Schiff, and even Yaron Brook, President of the Ayn Rand Institute.

That night, the auto company bailouts were again on the docket, and familiar arguments were made by Hoenig and the other panelists about why the results would be worse if the government took control of the auto industry. Cavuto’s token panelist from the left[2] (a female panelist whose identity I have been unable to verify), made the now also-familiar argument that “we bailed out Wall Street and now Main Street is demanding that the government do something for them.” Most of the panelists answered correctly that they were against the Wall Street bailouts as well, a point that was left unemphasized due to several people talking at once. However, the real chance for a meaningful debate still lay ahead. The boisterous Cody Willard set the stage when he said, “if you want to help them, send them your money, but don’t hold a gun to my head.”

The reply from the panelist arguing the liberal perspective was monumental:

“That’s why we have a democratically-elected government and the people want the government to do something.”

When she gave that answer, it was time to stop the quips, the witticisms, and even delay going to a commercial, if necessary. Despite the fact that the host trivialized the exchange by talking over part of both her and Willard’s comments, the exchange between the two was enormous beyond what most viewers probably realized.

There are many who would probably consider Willard’s statement a half-facetious exaggeration for effect. It was not. It is the horrifying reality of what any government bailout or other redistribution of wealth represents. We as Americans have forgotten that all government action is exercised under exactly these circumstances: at gunpoint. That is the purpose of government, to exercise brute force on behalf of its constituents when it becomes necessary to do so. That is why our government was originally so limited. The founders of our nation believed that brute force was only justified in self defense. Therefore, government action was limited to protecting its constituents from harm by other people, whether it was harm by a fellow citizen or a foreign army.

However, when the government undertakes to “do something” about a failed bank or auto company, it really means that We the People have decided to apply brute force to the problem, even though it is not a matter of self defense. Willard was completely accurate: a government bailout of a distressed auto company, whether it saves jobs or not, is really the people using their collective means of brute force (the government) to take property from one group of people and give it to another. This exchange is done at gunpoint – there is no consent by the party being taken from. Had the managers or the employees of the auto company armed themselves and sought to raise the funds themselves by stealing them at gunpoint from the people directly, they would have been arrested and prosecuted for armed robbery. However, Willard’s opponent in the debate argues that there is some ethical difference because a “democratically-elected government” acts as the armed robber in their stead. What can the difference possibly be?

This is the fundamental question that we as a society must answer if we are ever going to reverse the downward spiral we find ourselves in. Do we believe that individuals have inalienable rights or do we believe that a majority vote can take those rights away?

If one takes an objective look at our society as it has evolved over the past century, one must conclude that we have already answered it. Stripped of euphemism, almost every government institution in our society amounts to us using the brute force of government to violate the inalienable rights of our neighbors. Let us consider just a few examples.

Government involvement in healthcare has driven the price so high (through the artificial demand it creates) that the poor and elderly cannot afford it. Our answer is to apply the brute force of government to steal the money at gunpoint from one group of people to provide healthcare to another. In a truly bizarre development, that practice has now resulted in such high prices that almost no one can afford healthcare. So, we will now steal from everyone to provide healthcare for everyone. Lewis Carroll couldn’t have dreamed of anything quite so mad.

In order to be able to stop working but still enjoy the quality of life we feel we deserve after a certain age, we use the brute force of government to steal from those who are still productive to support those who are not. We could save for our retirement, but we choose instead to steal. We call this “Social Security.” It should be called, “Anti-Social Insecurity.”

Similarly, in order to afford to buy a house without saving the necessary down payment and establishing superior credit, we use the brute force of government to compel our neighbors to guarantee our mortgage loans with their money. When the inevitable tsunami of defaults occurred last summer, some objected to the government stealing the money to cover the losses of the banks. In truth, the money had been stolen decades ago, the minute that Fannie Mae was established.

Rather than saving the money for college tuition or allowing our children to work their way through college if we cannot afford to pay the tuition in full, we use the brute force of government to compel our neighbors at gunpoint to guarantee our student loans with their money. As with healthcare, this evil practice has driven the price of college tuition so high that not only are students going into long-term debt just to pay for their education, but their parents are taking out decades-long loans as well.

Should fortune not smile upon us or should we not develop marketable skills with which to obtain employment, we use the brute force of government to steal the money needed to sustain us from our fellow citizens. We call this the “social safety net,” but it also should be recognized as “anti-social.”

If we believe that we have a scientific theory that could lead to a new discovery that will benefit society (and enrich ourselves), we do not seek out capital to research it from those who can provide it voluntarily. We use the brute force of government to steal the money from our neighbors with the flimsy justification that “federal funding of research” will “benefit all of society” with a new medicine or a new technology.

This is by no means the length and breadth of the ways in which we violate each other’s rights on a daily basis. Every program funded by government, besides those that have the express purpose of defending our rights (police forces, the courts, the military), amount to the same thing: using our collective means of brute force to extract money from one group and give it to another.

What should be obvious is that it is not one evil group (the poor, the elderly, the corporations, Wall Street, etc.) that engages in this morally repugnant practice. Politicians will pick their scapegoats to play to their own power bases. The Republicans will blame the poor to get votes and campaign contributions from their base, the corporations and the rich. The Democrats will blame the rich and the corporations to get votes and campaign contributions from their base, the unions, average Americans, and the poor (the poor have only their votes to give and get back only the most miserable portion of the loot).

However, we must wake up to the fact that we all have a hand in this. The steady growth of one redistribution scheme after another has made it virtually impossible to function in our society without in some way participating in the looting of our fellow citizens, while we are at the same time looted ourselves. We have established all of these redistribution schemes through the democratic process. This past century has not been a progressive century. It has been a regressive one. We have regressed from a society of free people that respect each other’s inalienable rights to a society that is based upon competing groups stealing from one another through the brute force of government. We use only the support of greater numbers (majority vote) to justify the institution of each new crime. We have regressed to the brutal law of the jungle. We have become a nation of hyenas.

This has all followed logically from one fundamental break we made from our founding principles. We have elevated democracy to an ideal, at the expense of the individual rights that our government – and any government of free people – was constructed to protect. We have convinced ourselves that anything a majority vote sanctions is just, even if it violates those rights. Once we accepted that premise, the seeds of our destruction were sown.

As one might expect, this is something that the founders of our nation warned us specifically against. When one takes an objective look at our founding documents, the first thing that should jump off the pages is how little democracy there really was in our original government. Only the House of Representatives was chosen directly by the people, with the president and senate chosen indirectly by electors or the state legislatures, respectively.

More importantly, it is vital to realize what all of the limits, checks and balances, and even the Bill of Rights were intended to protect us from. They were intended to protect us from democracy.

One does not need to engage in interpretation to support this claim. The founders said it explicitly on more occasions that one could count. Here are just a few examples:

“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,”[3]

“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]

“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.”[5]

These vitriolic attacks upon democracy and majority vote from the founders of our nation would probably surprise most Americans. Nevertheless, there they are. The founders understood that democracy was a means, not an end. Their end was protection of the inalienable rights of each individual. Democracy was only good and just insofar as it helped to defend those rights. Furthermore, it must be prevented from being used to violate them. Again, the founders said this explicitly.

“In short, it is the greatest absurdity to suppose it in the power of one, or any number of men, at the entering into society, to renounce their essential natural rights, or the means of preserving those rights; when the grand end of civil government, from the very nature of its institution, is for the support, protection, and defence of those very rights; the principal of which, as is before observed, are Life, Liberty, and Property. If men, through fear, fraud, or mistake, should in terms renounce or give up any essential natural right, the eternal law of reason and the grand end of society would absolutely vacate such renunciation. The right to freedom being the gift of God Almighty, it is not in the power of man to alienate this gift and voluntarily become a slave.”[6]

This passage elucidates another conclusion that proceeds from natural law. Not only is each individual prohibited from using the majority vote to violate the rights of his fellow citizens, he is prohibited from using that vote even to relinquish his own rights. That is because rights are not granted by society. They are inherent in man’s nature itself. They are non-transferable. They cannot be taken or even given away. That is the meaning of “inalienable.”

It was at the turn of the last century that we made the fundamental change in our philosophy. Since that time, we have held democracy up as our ideal at the expense of our natural rights. We did this primarily to justify the routine violation of one specific right: property. It is no accident that as democracy has become more and more extolled as an ideal, property has become more and more reviled. We have even had professors in American universities teach their students that “property is theft.”

Of course, like the hyena, we really do not care what our fellow citizens say or believe. We will not expend much energy in violating their rights to free speech or freedom of religion, because in the end we have nothing to gain from violating those rights. However, by violating their rights to the fruits of their labor, we do gain enormously at their expense. This is the true danger of democracy. We must face up to this plain fact and stop talking about everything but property. As Adams also said, “Now what liberty can there be where property is taken away without consent?”

We are at a crossroads. The system we have built upon the brutal law of the jungle is about to collapse. We are presently suggesting even more brute force (government) to try to preserve it. If we continue on this course, the relationship between predator and prey on the African savannah will seem civilized compared to the state of our society. Unfettered democracy – not unfettered capitalism – has brought us here. We must choose respect for our inalienable rights over the loot that unfettered democracy can provide us with. If not, we must admit to ourselves that the way in which we live and deal with one another is no different from that of the savage beasts of the jungle. A return to our founding principles is our only hope.

Are we not men?

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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[1] “Cavuto” Fox Business News May 27, 2009.
[2] While hard-core progressives might call her a “Fox News Liberal” for even appearing on the hated network, her role on this telecast was without question to argue the liberal side of the issue.
[3] Madison, James Federalist #10
[4] Jefferson, Thomas To Dupont de Nemours Washington ed. vi, 591 1816
[5] Madison, James Letter to James Monroe October 5th, 1786
[6] Samuel Adams The Rights of the Colonists (1772) The Report of the Committee of Correspondence to the Boston Town Meeting, Nov. 20, 1772 Old South Leaflets no. 173 (Boston: Directors of the Old South Work, 1906) 7: pg. 419.

The Myth of the Laissez Faire President

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It is generally accepted that one must wait several decades before looking back at an event or an era with sufficient “historical perspective.” Only from that vantage point can the significance and long-term effects of any piece of history be objectively observed, quantified, and analyzed. However, there is a dilemma inherent in this long-standing tradition. It is that there are always interested parties who wish to characterize significant events or eras in history in a way that suits their own agenda. As a result, by the time sufficient time has passed to satisfy the need for “historical perspective,” these interested parties have created an official story regarding the events in question and have had time to convince the majority of people that this official story is the truth. By the time a generation has passed, the official story has become both accepted history for academia and “conventional wisdom” for average citizens. Regardless of facts, reason, or any perspective whatsoever, the official story now is the truth.

Such has been the case countless time throughout American history. It is universally accepted that America’s Civil War started over slavery, and credits Abraham Lincoln with “freeing the slaves.” History and conventional also wisdom tells us that the quality of life of the working class in America declined during the industrial revolution, and credits the “progressive movement” for instituting needed reforms that saved the working class from capitalism. Most relevant to our situation in America today, history blames the Great Depression of the 1930’s on Herbert Hoover’s “laissez faire capitalism” and “unregulated free markets,” and credits FDR’s New Deal with ending the Depression and restoring prosperity.

When presented in the textbooks of high school history or college survey courses, there is a certain logic and reasonableness to these versions of historical events that makes them very easy to understand and accept. There is only one problem: none of them are true.

Americans are already familiar with the official story of our present crisis. Too much laissez faire capitalism” has resulted in an unprecedented crisis caused by predatory lenders, irresponsible borrowers, speculators, and other market participants acting in an environment with too little regulation. Without oversight, “unregulated free markets” naturally resulted in market players choosing short term profits over long-term prudence. This process was fueled during the past decade by George W. Bush’s “laissez faire policies.”

There is only one problem with this story – none of it is true, either. None of the problems we face today were caused by unregulated free markets and the policies of George W. Bush were in no way “laissez faire.” This is much more than an academic argument. The premise that unregulated capitalism is to blame for our present economic crisis is the basis for every action that our government is taking right now. If that premise is incorrect, then the results of action taken based upon it could be disastrous.

It is probably a good idea at this point to define some terms. Assuming that “laissez faire capitalism” and “free markets” mean the same thing, what I mean when I use those terms is this: a market economy where all exchanges of property are made with the mutual, voluntary consent of all parties to those transactions. While government’s role is limited in such a system, it is nevertheless crucial: to ensure that all transactions are made with the mutual, voluntary consent of all parties. To put it most succinctly, government’s role in a free market is to protect the property rights of each individual.

Is this what George W. Bush did or at least attempted to do? Let us examine the Bush economic policies and see for ourselves.

Bush campaigned on and did follow through upon a promise to cut taxes. He did this by reducing the income tax on the highest income earners and by sending each American family a “refund” of several hundred dollars. One might be tempted to argue that this was a move in the direction of free markets, as the returned money represented reductions of a government that had grown far beyond its role of defending life, liberty, and property. Thus, the tax money collected for these illegitimate functions was a violation of the property rights government was supposed to protect and the tax cuts were a partial remedy for those violations. This is what any self-respecting Republican would have you believe.

There is only one problem: there were no reductions in government. In fact, Bush greatly increased the size of the government with military and new entitlement spending. As a result, he ran huge deficits and doubled the national debt. Looked at objectively, there was a tenuous relationship at best between the money taxpayers had previously paid in taxes and the checks sent out by the government after all of that tax money was already spent. Furthermore, millions of Americans who hadn’t even paid taxes received “refund” checks anyway. Seen for what it was, this “tax refund” was merely a ploy to buy votes with other people’s money dressed up in Republican rhetoric, as well as a way to perpetuate debt-fueled consumerism for the benefit of President Bush’s friends in corporate America. Handing out money to people to whom it doesn’t belong has nothing to do with free markets, whether that money is borrowed from other nations or printed out of thin air. It represents complete distortion of the markets by government, along with a fundamental violation of the property rights of present and future generations.

Amidst this confusion we seem to have forgotten one major contributor to the aforementioned deficits: the Medicare drug plan. The Medicare drug plan was the Bush administration’s program from start to finish, and it was rammed through the legislature despite its dubious administrative plan and complete lack of funding. While it was rightly criticized for both of these faults, no media outlet seems to have recognized its complete antagonism toward free markets. In addition to violating property rights by forcing one group of individuals to pay for the healthcare services of others, Medicare and other government health care programs completely distort the health care market, creating artificial demand that inflates prices and suspends market forces. Here we have another major component of President Bush’s policy that is the complete antithesis of laissez faire capitalism.

The mass illusion about this president’s policies doesn’t stop there. The American public also seems to think that major deregulation occurred under President Bush, but actually the exact opposite is true. Even the Gramm-Leach-Bliley Act (repealing the Glass-Steagall Act), often mistakenly blamed for the massive expansion of derivatives that helped fuel the housing bubble, was actually passed when President Clinton was still in office. Bush’s only significant effect on the regulatory structure was to increase regulation, not decrease it.

Due to the political fallout from the accounting scandals during the early years of Bush’s presidency, especially the Enron scandal, Bush championed new, completely unnecessary, and profoundly destructive regulations under the Sarbanes-Oxley act. Despite the fact that the accounting scandals were clear cases of fraud, which was already illegal and which was prosecuted without a single new regulation, President Bush had a political need to show that he was “doing something” about corporate crime.

So, again in complete opposition to “free markets,” Bush signed Sarbanes-Oxley into law, saying as he did so that the bill represented “the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.”[1] Invoking FDR should have been enough on its own to erase any perception of Bush as a champion of free markets, but the hated “laissez faire” moniker seems to be a tough one to shake. As we now know, the Sarbanes-Oxley Act has been terribly destructive to American markets and has contributed to a migration of new investment away from America and to more business-friendly countries. Chalk up another victory for Bush against free markets.

Finally, there is Bush’s role in the housing bubble, the straw that broke the proverbial camel’s back regarding America’s borrow and spend economy of the past several decades. Here it should be noted that the lion’s share of the blame for this debacle should go to the Federal Reserve System, which kept interest rates artificially low and expanded money and credit to counter what would have been two recessions in the late 1990’s and early 2000’s. Remember, the private Federal Reserve System does not answer to any branch of the federal government. One could certainly argue that both Clinton and Bush merely happened to be in office while the Federal Reserve blew up two massive bubbles during their presidencies (the NASDAQ bubble and the housing bubble).

However, it was not just low interest rates or the expansion of money and credit that caused the housing bubble to inflate. There was also the role of government-sponsored enterprises Fannie Mae and Freddie Mac, which guaranteed mortgages that would not have been written in a free market. Starting with Clinton and continuing with Bush, the executive branch played cheerleader to the “ownership” society whereby every American was entitled to own their own home, whether they could afford the mortgage that went with it or not.

The mortgage debacle is often cited as an example of the “unregulated free market” producing negative results. Since both the “predatory lenders” and the “irresponsible borrowers” were acting voluntarily, the millions of subsequent defaults are characterized as the result of too little regulation on the market, allowing these freely-acting participants to eschew prudence for short-term profits. However, this analysis omits one very important fact: there were not two parties to most of these mortgage transactions, but three.

The forgotten third party was, of course, the taxpayer. It was the taxpayers’ money that was put up as collateral for the loans guaranteed by Fannie Mae and Freddie Mac, and the taxpayer was not acting freely. The taxpayer was forced by government to back these loans without his consent and against his best interests. Had the government not committed this crime against property rights to serve its goal of an “ownership society,” none of the defaulting loans would have been made.

In a truly free market, the desire for profit is balanced by the presence of risk. When one is lending one’s own money, the possibility that the borrower will default forces the lender to adhere to high lending standards to avoid making a bad loan. This is not done out of some civic duty or professional integrity (not that many lenders don’t possess both of these qualities), but out of recognized necessity for economic survival. The balance between desire for profit and risk is a naturally occurring market force when all participants are acting voluntarily in their rational self interest. However, by allowing lenders and borrowers to use other people’s money as collateral, this natural market force was suspended. To go on to call the resulting disaster the result of “unregulated free markets” is nonsense in the first degree.

Ironically, Clinton and Bush each pursued the exact same policy regarding the housing market for very different reasons. Clinton pressured Fannie Mae to take more and more risk in order to play to his base: low-income Americans who would not qualify for a mortgage in a truly free market. Bush went right on encouraging the process in order to appease his base: Wall Street investment houses that were making a killing securitizing mortgages. Regardless of the motivation, what is important to realize is that this policy is completely antithetical to the concept of free markets or laissez faire capitalism.

Of course, once the crisis began, most people recognize that nothing President Bush did could be characterized as “laissez faire.” Bush himself admitted that he was abandoning free market principles because “the market is not functioning properly,” a bizarre statement from one who supposedly believes in free markets in the first place. His massive intervention into the economy and egregious redistribution of wealth are characterized by the media as a departure from his previous “laissez faire approach.” Yet, anyone can see that this “laissez faire approach” was complete fiction. So why do all but a few contrarians keep saying it anyway?
There is an answer to that question. Characterizing Bush’s policies as “laissez faire” does serve a very useful purpose for politicians. It provides them with justification to loot more property and seize more power. The all-out war on free enterprise presently being waged by President Obama and his cohorts in Congress would not be possible if most Americans did not believe the official story that Bush’s presidency was an era of “laissez faire capitalism” or “unregulated free markets” and that these policies caused the economic crisis. Only the continued willingness by the majority of Americans to swallow this economic gibberish allows the destruction of our liberty to march forward.

To my fellow Americans, I say this: No politician (save perhaps one) is going to come forward and tell you the truth. Most of them don’t know the truth, and those that do have figured out that this official nonsense serves their own ambitions, just as saying that the world was flat once served the ambitions of medieval rulers. It is up to you to rub your eyes and look at the world as it really is. Two plus two does not equal five and you know that. Similarly, people voluntarily exchanging their own goods and services with one another can never cause anyone harm and deep down you must know that, too. It is time to reject the idiotic history that is being written about our present difficulties and demand that the evil incursions into our liberty cease immediately. You have enormous power when you know what to demand. It all starts with recognizing the obvious despite the well-funded efforts of those who wish to deceive you. As the good book saith, the truth shall set you free.[2]

[1] Bumiller, Elisabeth (2002-07-31). “Bush Signs Bill Aimed at Fraud in Corporations“. The New York Times
[2] John 8:32