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Deceived in Liberty: The Curse of American Nationalism – LewRockwell

Posted by M. C. on November 16, 2019

Hamilton was the most despotic in this regard. Rothbard quotes him as saying, “We must establish a general and national government, completely sovereign, and annihilate the state distinctions and state operations.”


All governmental power is propped up by an avalanche of myths and superstitions about the alleged benevolence, omniscience, honesty, selflessness, and magnanimity of the state, coupled with critiques if not outright demonization of private property, free market voluntarism, private enterprise, limited government, the rule of law, the free society, and all those who educate about and advance such concepts.  Your author once co-authored a book entitled Official Lies: How Washington Misleads Us, about mountains of such myths and superstitions.  A case can be made that at the top of the list of statist myths and superstitions is the myth of American nationalism — about the supposed “superiority” of a virtually unlimited, centralized and consolidated government, coupled with the never-ending hatred and demonization of federalism, states’ rights, nullification and secession, and anything else that challenges the notion of the “supremacy” of the central government.

In this regard American “nationalism” has nothing to do with the older concept of a people with a common language and culture, living within the borders of their own nation state.  The unique American version of “nationalism” was invented at the time of the founding by a group of conniving, Machiavellian politicians who sought to overthrow the results of the American Revolution – the casting off of the centralized, oppressive, mercantilist/crony capitalist British empire – and adopt the very same system in America – the British empire without the British.  There is nothing wrong with a corrupt, tyrannical, mercantilist empire that uses the coercive powers of the state to enrich the ruling class at the expense of the working class, these men said, confident that they would naturally assume the position of the ruling class.

These men were led by the likes of Alexander Hamilton, John Adams, Sam Adams, John Hancock, Thomas Paine, and other “Federalists,” many of who were “defectors” to the cause of liberty – the cause of the American Revolution – as Murray Rothbard wrote in Conceived in Liberty: The New Republic: 1784-1791.

The “triumph” of these “nationalists” with the adoption of the centralizing U.S. Constitution is the  theme of the latter two-thirds of Rothbard’s latest great work of scholarship, made possible by the heroic efforts of Patrick Newman in painstakingly (with the emphasis on “pain”) translating Murray’s handwriting of nearly the entire manuscript, which is 319 pages long in print.  The nationalists, wrote Rothbard, “wanted a strong central power that would control an aggressive national army and navy, wield a national taxing power to decimate the rights of the states and individuals, and federally assume public debts and army pensions.”  In doing so they hoped to “destroy the original individualist and decentralized program of the American Revolution.”  Conceived in Liberty tells the story, chapter and verse, of how these men subverted and overthrew the principles of American freedom that inspired the American Revolution with their “devious and sinister machinations.”

These “machinations” were employed to rig the constitutional convention with a lopsided majority of delegates from “the wealthy and eminent” and “also from the urban commercial interest, merchants, and artisans, the majority of commercial farmers, and leading urban-exporters.  In short, nationalist strength came from men who supported centralizing tariffs and navigation laws, raising the value of public securities, and an aggressive foreign policy, all at the expense of the taxpaying inland farmer.”  In seven of the twelve states represented at the constitutional convention there was no representation at all by the inland farmers.

This point calls to mind another statist superstition – that Alexander Hamilton was some kind of educated genius when it came to economic theory, whereas his political nemesis, Thomas Jefferson, was sort of a dopey agrarian dreamer on the subject who supposedly wanted all of America to be “a nation of farmers.”  Exactly the opposite is true: In his biography of Hamilton William Graham Sumner described his writings as a jumble of British mercantilists superstitions copied from propaganda pamphlets written by publicists for protectionists and other mercantilists.  When Hamilton’s political sponsor, Robert Morris, told George Washington that he wanted Hamilton to be the first Treasury Secretary, Washington told Hamilton that he didn’t know that he knew anything about finance since they never talked about it, as described in Ron Chernow’s Pulitzer prize-winning biography of Hamilton.

Jefferson, on the other hand, had read Adam Smith’s Wealth of Nations and translated the writings of French physiocrat Jacques Turgot, the French finance minister and precursor of the free-market Austrian School of economics.  To this day, a bust of Turgot is at the entrance of Jefferson’s home, Monticello.

What Jefferson opposed was not industrialization but the use of governmental power to tax farmers in order to subsidize the corporate merchant class.  He opposed, in other words, the nationalist project of using the coercive powers of the state to plunder the farmers of America for the benefit of the merchant class.  It is an insidious, nationalist lie that Jefferson opposed business and industrialization per se.

Like all criminal schemers, the nationalists decided “to hold the entire [constitutional] convention in strictest secrecy in order to make sure that the public would not know what was going on.”  This of course begs the question:  If what they were up to was in “the public interest,” as Hamilton laughingly argued, then why was it so important to hide it all from the public?

The main objective of the nationalists, Rothbard explains, was to “place the all-powerful national government beyond popular control.”  James Madison was one of the chief nationalist theorists who concocted the theory that a large, centralized government would somehow prevent the abuse of electoral minorities by majorities, the main argument of Federalist #10.  Rothbard correctly points out that exactly the opposite is true, as has been proven time and again by history.  It is decentralization that makes “the oppression of minorities” more difficult, not consolidation.  Nevertheless, the nationalists sought to crush the states altogether, for that is how the vaunted “people” had their only means of exerting any kind of control over the central government – as political communities organized at the state and local levels.

Hamilton was the most despotic in this regard. Rothbard quotes him as saying, “We must establish a general and national government, completely sovereign, and annihilate the state distinctions and state operations.” To Hamilton, “British monarchical government” was “the model for the American framers to follow,” even though they had just fought a bloody revolution to escape from such a system. Hamilton’s “ideal polity,” wrote Rothbard, was such that “no clearer blueprint could have been devised for absolute despotism.” (This perhaps is why the Broadway play “Hamilton” has been so wildly popular among today’s American statist class).

The Hamiltonian nationalists mastered the dark art of “fake news” some 230 years before Donald Trump made it a part of the American lexicon. Rothbard describes how most postmasters were Federalists who had a “stranglehold” over the nation’s press (newspapers were all delivered by mail). Consequently, they were able to “dictate the news at will” by censoring out opposition to the nationalist agenda while broadcasting it far and wide, giving the nation the false impression that there was not opposition to it. Many other means of what Rothbard labeled “the depths of chicanery” were employed by the nationalists to rig the ratification votes in most states. They even employed “outright bribery,” as Rothbard documents.

All in all, the new constitution was not the charter of freedom that generations of conservatives have insisted. The nationalists, said Rothbard, used “propaganda, chicanery, fraud, malapportionment of delegates, blackmail threats of secession, and even coercive laws to get enough delegates to defy the wishes of the majority of the American people . . .” A “new super government was emerging and carrying out on a national scale the mercantilist principle of taxation, regulation, and special privilege for the benefit of favored groups.” They even protected slavery with the Three-Fifths Clause and the Fugitive Slave Clause in order to get their consolidating, mercantilist constitution. The Constitution was in reality “a counterrevolutionary reaction to the libertarianism and decentralization embodied in the American Revolution” that would “institute a British-style mercantilism over the country.”

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Don’t Give Politicians Credit for a Growing Economy | Mises Wire

Posted by M. C. on September 10, 2019

“It is hardly possible to misrepresent in a more thorough way the fundamental facts of economics. The average standard of living is in this country higher than in any other country of the world, not because the American statesmen and politicians are superior to the foreign statesmen and politicians, but because the per-head quota of capital invested is in America higher than in other countries. Average output per man-hour is in this country higher than in other countries…… because the American plants are equipped with more efficient tools and machines.”

“One of the amazing phenomena of the present election campaign is the way in which speakers and writers refer to the state of business and to the economic condition of the nation. They praise the administration for the prosperity and for the high standard of living of the average citizen ‘You never had it so good,’ they say, and, ‘Don’t let them take it away.’”

The above statement sounds like something Republicans say in supporting Donald Trump for reelection. The White House proclaims the successes of the Trump economy while those who side with the Democrats say that Obama should also be given credit for any current economic successes. Both sides give presidents too much credit for our standard of living.

However, the quote above comes from a speech that Ludwig von Mises gave in October 1952. As with so much of Mises’ work, this speech is timeless. Much of this talk, “Capital Supply and American Prosperity,” applies to current events.

It’s true that government policy affects the economy. And Trump should get credit if any of his policies have reduced the governmental burden on our businesses. But the fundamental reason wages in the U.S. are higher than in most countries is not because of marginal policy changes. Our economic well-being is largely due to our capital accumulation, not the benevolence of our elected officials.

In this speech, Mises hammers away at this point, “It is implied that the increase in the quantity and the improvement in the quality of products available for consumption are achievements of a paternal government. The incomes of the individual citizens are viewed as handouts graciously bestowed upon them by a benevolent bureaucracy.”

This statement reminds me of the recent Democratic debates where the candidates were each trying to outdo one another with promises of new programs of federal largesse. They seem to believe that all of our economic problems are due to ungenerous government officials. The current federal budget deficits demonstrate the fallacy of this position.

Mises continues,

“It is hardly possible to misrepresent in a more thorough way the fundamental facts of economics. The average standard of living is in this country higher than in any other country of the world, not because the American statesmen and politicians are superior to the foreign statesmen and politicians, but because the per-head quota of capital invested is in America higher than in other countries. Average output per man-hour is in this country higher than in other countries…… because the American plants are equipped with more efficient tools and machines.”

That’s right. Our economic prosperity is due to our capital accumulation. And why do American businesses have so much capital? “Capital is more plentiful in America than it is in other countries because up to now the institutions and laws of the United States put fewer obstacles in the way of big-scale capital accumulation than did those foreign countries.”

But why did this happen in the U.S.? How do we account for our economic prosperity? The answer: capitalism.

“What begot modern industrialization and the unprecedented improvement in material conditions that it brought about was neither capital previously accumulated nor previously assembled technological knowledge…. the early pioneers of capitalism started with scanty capital and scanty technological experience. At the outset of industrialization was the philosophy of private enterprise and initiative, and the practical application of this ideology made the capital swell and the technological know-how advance and ripen.

“One must stress this point because its neglect misleads the statesmen of all backward nations in their plans for economic improvement. They think that industrialization means machines and textbooks of technology. In fact, it means economic freedom that creates both capital and technological knowledge.” (Italics added for emphasis.)

Mises also provides us with a stern warning that we face dire consequences if we destroy the engine of capital accumulation:

“The main problem for this country is: will the United States follow the course of the economic policies adopted by almost all foreign nations, even by many of those which had been foremost in the evolution of capitalism. Up to now in this country the amount of savings and formation of new capital still exceeds the amount of dissaving and decumulation of capital. Will this last?”

Mises provides us with the answer: “One must substitute sound economic ideas for fables and illusions.” We must influence public opinion. We must promote capitalism. We must explain the necessity of having economic freedom and free enterprise. In short, we must popularize Misesian ideas.

But what about income inequality? Won’t some people suffer under capitalism? Again, Mises provides us with an answer to this question.

“There are, of course, also Americans whose material conditions appear unsatisfactory when compared with those of the great majority of the nation. Some authors of novels and plays would have us believe that their gloomy descriptions of the lot of this unfortunate minority is representative of the fate of the common man under capitalism. They are mistaken. The plight of these wretched Americans is rather representative of conditions as they prevailed everywhere in the pre-capitalistic ages and still prevail in the countries which were either not at all or only superficially touched by capitalism. What is wrong with these people is that they have not yet been integrated into the frame of capitalist production. Their penury is a remnant of the past. The progressive accumulation of new capital and the expansion of big-scale production will eradicate it by the same methods by means of which it has already improved the standard of living of the immense majority, viz., by raising the per-head quota of capital invested and thereby the marginal productivity of labor.”

Yes, a capitalist society will have income inequality. In order to help the poor we must build and maintain institutions that promote capital formation. Redistributionist solutions to reduce income inequality will continue to destroy capital formation trapping more people in poverty.

This wonderful essay, “Capital Supply and American Prosperity,” can be found in one of my favorite short books, Mises’ Planning for Freedom: Let the Market System Work . If you haven’t read this compilation of essays, I recommend that you add it to your reading list.


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Government Road Management: Is There a Better Way? | Mises Wire

Posted by M. C. on March 7, 2019

Thousands of people are killed or seriously injured on Canadian roads and highways every year. Traffic congestion is common. Perpetual road construction/repairs. Cars lined up at a red light while non-existent cross traffic faces a green light. Idling cars, frayed nerves, road rage. If this was the performance record of private firms who owned and managed the roads, politicians would go ballistic and seize control of the roads in order to “ensure consumer safety.”

However, as we know, it is the politicians and bureaucrats who are responsible for this dismal, and deadly, performance record, so they unleash their propaganda: “Citizens have to be more patient”, “Commuters should car pool”, “Drivers have to slow down”, “More people should take public transit, or cycle, or walk”, “Employers should offer staggered shifts and allow some employees to work from home”, “Higher taxes will solve the problem”, and, my personal favourite, “We need more traffic laws. No, no, we are sincerely concerned for your safety, not our revenue.”

Whenever the government attempts to provide a service, service is severed from payment, which means taxation guarantees the salaries of politicians and bureaucrats without incentivizing them to provide the services most highly preferred by taxpayers. A visible example of this in London are the many miles of empty cycling lanes adjacent to congested car lanes. For every cyclist, there are at least a thousand motorists. So much for majority rule. And, for a city government professing deep concern for the environment, this is indeed a curious outcome: environmental resources are wasted on the construction of largely vacant cycling lanes, which in turn increases the environmental impact of internal combustion engines due to increased traffic congestion directly attributable to less road space for cars.

Private Road Management

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