tag:blogger.com,1999:blog-107673452024-03-13T00:51:59.426-04:00Alice Lillie's OpinionsThe news and views of an independent woman.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.comBlogger66125tag:blogger.com,1999:blog-10767345.post-13643585195432130882011-05-23T20:16:00.001-04:002011-05-23T20:16:18.779-04:00The Sorry State of American EducationAlice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-18719519043206699452011-05-23T20:04:00.005-04:002011-05-28T18:06:58.283-04:00Prologue: The Purpose of EducationI firmly believe that the purpose of education is to teach a person how to think independently and to question. Its purpose is to teach a person to think outside the box, be a self-starter and come up with new ideas. To learn how to question authority is part and parcel of an education.<br /><br />The educated person has learned how to <span style="font-style:italic;">learn</span>. Material and experience learned is used to figure things out independently. An educated person has learned to be a self-reliant self-starter and self-teacher.<br /><br />To learn how to read is very important, not just so one can parrot the ideas of other people, but so that the ideas of others can trigger the formation of ideas of one's own. The classics, including not only American literature, but also literature going back to the early Roman and Greek, are very good sources of ideas, as these works were written in surroundings entirely different from our own. Literacy has declined as schooling has increased. John Taylor Gatto described some statistics on the decline of literacy. The phonics method of teaching children how to read, which works, was dropped in our schools (1).<br /><br />In the United States today, there is very little of what can be called "education." In fact, until a person is 18 years old, true use of the mind is strictly forbidden. There are so many restrictions on young people that I believe a comparison study of slaves in the ante-bellum South and today's "minors" would be worth doing.<br /><br />And it is tragic. It has been shown that once people reach puberty they are capable of adult behavior (2). If they do not behave as adults it is because they have every reason not to (3).<br /><br />According to studies cited in the Epstein book, the ability to reason and figure things out peaks in the early teens. John Taylor Gatto believes that by age 12 a person should be enough of an adult to be earning his or her own money out in the community (4).<br /><br />So why are youth locked in that tiny little box? Why does the establishment refuse to acknowledge their abilities? I would answer that question with questions: How would the size and scope of government increase without minor-status laws? How would teachers' unions benefit from a change in the direction of freedom? They would not. Governments, unions, and other establishment entities are benefitting on the backs of youth.<br /><br />And, most important of all, how would the populace be kept docile if people were allowed to learn how to think at the time they could best learn? Keeping people in line is government's most important job if it is to go on growing stronger and taking freedom and productivity away. A thinking populace cannot be kept in line.<br /><br />So, as far as young people and their education is concerned, by the time they turn 18 and are allowed any freedom at all, the train has left the station. And I firmly believe this is exactly how the establishment has designed the system.<br /><br />Minor-status laws have proliferated exponentially over the decades. While it is true that most of these no longer apply to 18-, 19-, and 20-year-olds, they have become far more numerous and stringent for persons under the age of 18. This has been on a steep rise through the last half of the twentieth century and has <span style="font-style:italic;">doubled </span>since 1970! (5).<br /><br />Some status laws prevent young people from engaging in activities that are technically legal for them, such as the legal inability to sign a contract until they are 18. No contract? No cellphone, no car, no rentals, no land ownership, and no marriage, at least not on their own. And, on their own is the way they <span style="font-style:italic;">should </span>do such things. Californians under 18 cannot deliver newspapers because carriers are required by newspapers to buy insurance, which "minors" cannot (6). The health club I belong to requires members to be 18 and I am sure this is a liability issue that it has no control over. Regulations that are choking all of us are even tougher on youth.<br /><br />Therefore, "minors" are relegated to second-class- or even third-class-citizen status. Actually third-class is the more accurate as we study public schooling.<br /><br />The kids do not count, as we will see. They have no money, no vote, and no rights in the eyes of the establishment. We will also see that parents and taxpayers do not have much status either, at least not compared to politicians, bureaucrats, union big-shots, and others who are well-connected.<br /><br />It is these well-connected who hold the purse-strings and power, while the rest of us, especially the students, are shafted.<br /><br />As I explained before in previous essays, the establishment has picked policies out of the air when it comes to youth laws. No minor-status laws at all have any basis in either the Bible (7) or the Constitution. There is <span style="font-style:italic;">zero </span>mention of any age in the Constitution, except regarding holding elected office. There is no reason any young adult, Christian or otherwise, should observe any "minor" laws.<br /><br />Edwin G. West's <span style="font-style:italic;">Education and the State</span> (8) shows that state "education" applies to groups rather than individuals and leads to state monopoly. This tends to frustrate the universal desire for self-improvement. He starts the book right at the outset with the treatment of "minors."<br /><br />Even the most ardent 19th century advocates of <span style="font-style:italic;">laissez fair</span>e, says West (9), believed that the purpose of government is to protect people.<br /><br />They were wrong, in my opinion. The sole purpose of government is to protect the individual's <span style="font-style:italic;">rights</span>. So they were working from the premise that government is to protect <span style="font-style:italic;">individuals </span>themselves rather than individuals' <span style="font-style:italic;">rights</span>. If their premise is right, then it is perfectly OK, for a simple example, for government to force you to wear a seat-belt to protect you, but it should not protect your right to <span style="font-style:italic;">decide </span>whether or not to wear <span style="font-style:italic;">your </span>seat-belt on <span style="font-style:italic;">your </span>body in <span style="font-style:italic;">your </span>car.<br /><br />However brilliant these defenders of <span style="font-style:italic;">laissez faire</span> might have been, this was a fatal blunder. But what of children, who cannot protect themselves? This is what parents are for. God in His infinite wisdom has created mankind in such a way that the child has two parents, each responsible for protecting him from all kinds of dangers, including the other parent, <span style="font-style:italic;">and </span>including over-reaching paternalistic government. (Obviously sometimes a child has only one parent, or none, or cruel parents, but I will not digress.)<br /><br />Minor-status laws are one evil from which parents must protect their children, even into young adulthood. There are so many things young people technically cannot do, and it is the job of parents to help them find ways around these restrictions.<br /><br />Of course, the defenselessness of little children, plus the idea that government's function is to protect, led to special "protection" of kids and that segues right into the idea that education is a function of government. This idea was swallowed whole by even free-market of thinkers such as Milton Friedman (10).<br /><br />And now today, it is this very government school system that children need to be protected from, if they are to grow into truly educated people who can think for themselves, teach themselves, and question "authority."<br /><br />(1) John Taylor Gatto, <span style="font-style:italic;">The Underground History of American Education</span>, The Oxford Village Press, New York 2003, P. 52, 53.<br /><br />(2) Robert Epstein, <span style="font-style:italic;">The Case Against Adolescence</span>, Quill Driver Books/World Dancer Press Inc., Sanger (California), 2007, Chapters 6 & 7.<br /><br />(3) Ibid. P. 164, 165.<br /><br />(4) Gatto, <span style="font-style:italic;">Weapons of Mass Instruction</span>, New Society Publishers, Gabriola Island, B.C., Canada, 2009, P. 136, 137.<br /><br />(5) Epstein P. 32.<br /><br />(6) Ibid. P. 32.<br /><br />(7) Ibid. P. 288-290.<br /><br />(8) Edwin G. West, <span style="font-style:italic;">Education and the State</span>, Liberty Fund, Indianapolis, 1994, (Third Edition).<br /><br />(9) Ibid. P. 3.<br /><br />(10) Ibid. P. 4.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com2tag:blogger.com,1999:blog-10767345.post-70249392568308651582011-05-23T20:02:00.003-04:002011-05-24T16:53:19.139-04:00What To Do?So, in the light of excessive and screwball "minor-status" laws, and the fact that the same entity (government) that makes these laws is also in charge of education, what must be done? <br /><br />Thomas Moore says we need to start over from the ground up (1). We need to reconsider what education <span style="font-style:italic;">is</span>, he says.<br /><br />That's right. Education, I think, is the teaching of people how to learn and how to think outside the box. It is <span style="font-style:italic;">not</span> the teaching of people how to conform, obey, and co-öperate. It is not even teaching people how to compete, out-produce the other guy, and turn the biggest profit. These latter attributes are good as they make for prosperity, but once a person is educated, he or she has the ability to acquire these skills independently.<br /><br />We do not educate young people by controlling them like puppets on a string until they are 18.<br /><br />It is just another case of social engineering! (2) Social engineering is exemplified by the War on Poverty and the insane War on Drugs. These have been and are abject failures. Government schooling is but a war on young minds, and has to be the most pernicious case of social engineering. Not only is government teaching's purpose to socially engineer, but it is teaching children and young adults that social engineering is a positive good. Government colleges and universities are actually grooming students to become social engineers! I saw that first hand when I took a couple of mainstream economics courses. Thank goodness that was <span style="font-style:italic;">after </span>I had obtained bedrock knowledge of sound free-market (Austrian school) economics, so I could see right through much of the high-sounding theory.<br /><br />Social engineering in education is overt at least according to the California 2nd District Court of Appeals ruling in 2008 that homeschooling by non-certified teachers was illegal. The ruling said, in part, "the primary purpose of the educational system is to train school children in <span style="font-style:italic;">good citizenship, patriotism, loyalty to the state and nation </span>as a means of protecting the <span style="font-style:italic;">public welfare</span>." (Emphasis mine.)<br /><br />How does this compare with the goal of teaching people to think independently and question authority? Not very well.<br /><br />This hits the nail on the head as to why I am so angry about the state of education in this country. Tyrants through the ages have said something to the effect that if you gave them a child to train, the child would be theirs for the rest of the child's life.<br /><br />Then, too, on the other side, the Bible says "Train up a child in the way he should go, and when he is old he will not depart from it" (4). God created every individual different. Each has different natural interests and abilities. I believe that God intended for that Bible passage to mean the child should be raised in such a way as to encourage the finding of these abilities and the follow-up on them. Collective "education" is not conducive to that. While group learning has its place, most learning must be individualized. Teacher and student should be one on one and much learning should be independent study.<br /><br />John Taylor Gatto, who is an educator and whose writings are staple in libertarian households, concludes that "self-reliance is the antidote to institutional stupidity" (5).<br /><br />Amen to that. This holds true across the board for being independent of staid government. Self-reliance will go a long way to help someone get around bureaucratic rules and to outsmart bureaucrats. And John Taylor Gatto says the present system could not last a generation if people were taught to think critically (6). It would be the end of the line for the establishment.<br /><br />How does government dumb us down? John Taylor Gatto outlines seven ways. One of these is to "confuse" students by disconnecting subjects. There are all these various topics, taught by many various people, as raw data without any meaning (7). A second way is students are numbered and assigned to a class. It hardly pays to do really well and be assigned to a better class. Once you are in a class, for the most part that is where you stay (8). The third way is to instill in students not to truly care about anything. Even if a student is excitedly answering teacher questions correctly and feeling the satisfaction of it, when the bell rings it no longer matters. It is time to go on to the next subject. Who can really learn to care? (9).<br /><br />I remember being told it was not normal to want something very badly. On summer Fridays, I wanted so <span style="font-style:italic;">badly </span>to get to the lake. The time went so slowly. I was told I should learn patience. Thank goodness I did not. In 1964 I wanted Barry Goldwater to win the election so <span style="font-style:italic;">badly</span>. I was told that the majority rules and the minority must give in. Give in? I don't think so. I want freedom badly. Perhaps a Goldwater administration would not have delivered as I hoped. But this episode whetted my appetite for more pro-freedom activity. One important lesson is that if you want something badly enough and are willing to work for it, sometimes long and hard, you can have it. That does not mean to lie, cheat, or steal. It does mean to <span style="font-style:italic;">work</span>.<br /><br />Anyway, public education is set up in such a way that students are not encouraged to <span style="font-weight:bold;">want </span>or to <span style="font-style:italic;">care</span>.<br /><br />The fourth and fifth ways listed by Gatto as to how students are dumbed down are emotional and intellectual dependency (10). While obviously students are human beings and have God-given, constitutionally guaranteed rights, the school system does not acknowledge that fact at all. The comings and goings of students in school are by permission which can be granted or withheld at the whim of the teacher. Good students wait to be told what to do, Mr. Gatto says, and either they think what they are told to think, or suffer the consequences. Evolution was the example he gave. This was a good example as evolution is one of the establishment's sacred cows. If students are told evolution of human beings is a <span style="font-style:italic;">fact</span>, then the successful student will believe that. Later in life, good citizens wait for "experts" to tell them what to do.<br /><br />I have said in previous essays that the idea that human beings just happened by random natural selection descending from monkeys without at least some guidance from some conscious entity, is a bit crazy. If you want proof that this did not happen that way, look in the mirror! Evolution is an establishment sacred cow and that <span style="font-style:italic;">all by itself</span> casts doubt on it! It gives rise to eugenics, racism, and a multitude of evils Gatto discusses in <span style="font-style:italic;">Underground </span>(11).<br /><br />While public school students are intellectually dependent on the teacher, the teacher, in turn, is intellectually (and emotionally) dependent on the faceless bureaucrats who make the decisions about curriculum.<br /><br />The sixth way to dumb down students is to convince them that their self-esteem depends on the opinion of "experts," and not on self-evaluation as it should be (12). Well, that is no surprise. If students are not taught to think critically or to be self-starters, but rather wait to be told what to do, then there is no way they will be able to acquire self-esteem by independent accomplishment.<br /><br />The last way may be the most ominous of all. This is constant surveillance. Students have absolutely no alone time. Even in the restroom, one must hurry as the bell is about to ring or someone else needs the stall. Even at home their time is taken up with homework which takes time away from family and <span style="font-style:italic;">real </span>education.<br /><br />Now, why in the world would the establishment want to do this to people? Well, the question answers itself actually. The establishment wants to remain established, and that requires keeping the great unwashed in line, hard-working and obedient. I pointed out repeatedly in my Murray Rothbard reviews that the system is set up in such a way that wealth gravitates towards establishment interests. There needs to be wealth <span style="font-style:italic;">to </span>gravitate, and the order-following workers on the assembly lines and in the offices are producing that wealth. Of course, this begs the question: If people are educated and cannot stand boring assembly line and office work, who is going to do it? Much is already automated and there is no reason more of it cannot be.<br /><br />Mr. Gatto answers my question: Why did I do all my growing during the summer? He also answers the question: Why is the establishment trying to take children's summers away from them?<br /><br />As I write this, it just happens that I pick up Gatto's <span style="font-style:italic;">Dumbing Us Down</span> and begin Chapter 4, "We Need Less School, Not More," and it is November 16, 2010. I just saw the ABC Nightly News which ran a propaganda piece on education in China. They showed the beautiful Shanghai skyline that puts most of our skylines to shame, and I had to wonder just how much of a free market they have. All this building was done in a few short years. I did hear of a big hotel being built there in mere days, and freeways constructed in less time than it takes to get all the required permits here. Of course, safety and quality are in question. I honestly have no clues about China, but I do know that our own economy is at a virtual standstill because of stifling government bureaucracy.<br /><br />One reason the news program gave for all their progress (or what appeared on the show to be progress) is the education. Students spend so much time in school that they have no time left. That is exactly what Mr. Gatto says is wrong. I agree with Gatto not only because of my own experience but because even if this is good for some students (we are all different), it has to make it very difficult for a student to be a real <span style="font-style:italic;">individual</span>. After all, one needs time in which to be an individual. Conformity and obedience do not require time. Independence and critical decision-making for a single individual do. (Editor's note: "The man to whom nature and fate have granted the blessing of wisdom, will be most anxious and careful to keep open the fountains of happiness which he has in himself; and for this, independence and leisure are necessary." -- Arthur Schopenhauer)<br /><br />I believe that the establishment propagandists at the TV network were trying to instill the idea that Pres. Obama is right: We need longer school days and longer school years. I think I recently saw on a Web page that they were thinking of two additional years too, grades thirteen and fourteen, on top of centralized national curricula and testing (13), but maybe I was having a nightmare.<br /><br />Of course, the increase of government power and getting people into a lifelong habit of conformity and obedience is not the only reason for this. There is money to be made too (14). Teachers' union members and the manufacturers of school supplies such as textbooks and Scantron cards stand to gain at taxpayer expense.<br /><br />Mr. Gatto is calling for a free market in education (15) and of course I agree. If people are going to learn to <span style="font-style:italic;">think </span>and be independent, then government must not be involved.<br /><br />Mr. Gatto said something very interesting as he wound down the book and that was that institutionalized, quick-fix, easy, one-size-fits-all modes of education and of manipulating the American populace like cattle was our Calvinist legacy (16). This reminded me of "religious right" policies that are really closely related to socialism and leave the individual and the free will <span style="font-style:italic;">out </span>of the picture. Maybe you read my previous essay called <span style="font-style:italic;">How the Bush Administration is Destroying our Country and Damaging the Christian Church</span> (17) in which I made it plain that this does not reflect true Christianity any more than it reflects the principles of the Founders.<br /><br />The neo-conservatives and the left tend to forget the most important thing, and that is that people are <span style="font-style:italic;">people</span>, not robots! People need to be taught and learn accordingly. The one-size-fits-all way of our nation's government schools is a failure.<br /><br />But, then again, it is a total success! If the establishment really wants a docile populace that is oblivious to the gravitation of wealth to establishment interests at the people's expense, that is eager to give up precious God-given rights in exchange for security, and that actually believes that free<span style="font-style:italic;">dom</span> means free <span style="font-style:italic;">lunch</span>, then the public schools are a complete success. The establishment is getting everything it wants, and more.<br /><br />(1) John Taylor Gatto, <span style="font-style:italic;">Dumbing Us Down</span>, New Society Publishers, Gabriola Island, B.C., Canada, 2005, Foreword by Thomas Moore.<br /><br />(2)Louis E. Carabini, <span style="font-style:italic;">Inclined to Liberty</span>, Ludwig von Mises Institute, Auburn, Ala., 2008, P. 95-97.<br /><br />(3) Ibid. P. 95.<br /><br />(4) Proverbs 22:6.<br /><br />(5) David Albert in the Introduction to <span style="font-style:italic;">Dumbing Us Down</span>, P. XVIII.<br /><br />(6) Ibid. P. XXXV.<br /><br />(7) Ibid. P. 2 & 3.<br /><br />(8) Ibid. P. 4 & 5.<br /><br />(9) Ibid. P. 5 & 6.<br /><br />(10) Ibid. P. 6-9.<br /><br />(11) Gatto, <span style="font-style:italic;">An Underground History of American Education</span>, Oxford Village Press, New York, 2003, P. 179-181. Other references of major importance are found in the book.<br /><br />(12) <span style="font-style:italic;">Dumbing Us Down</span>, P. 9 & 10.<br /><br />(13) Ibid. P. 73.<br /><br />(14) Ibid. P. 63.<br /><br />(15) Ibid. P. 72.<br /><br />(16) Ibid. P. 88-89.<br /><br />(17) http://www.alicelillieandher.blogspot.com and click on "2007 (12)"Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-8746769780074106882011-05-23T20:01:00.003-04:002011-06-15T20:16:53.831-04:00What Are Some Alternatives?It seems to me that every time a dissident criticizes the status quo, the establishment demands that the dissident either have ready-made alternatives all figured out or keep quiet. <br /><br />Wrong! It is <span style="font-style:italic;">not </span>necessary to have an alternative. It is far easier to see where the system has gone wrong than it is to figure out how to make things right. Additionally, one needs to see that the system is wrong in order to have a reason to find alternatives.<br /><br />And, even then, too often, the "alternatives" they find will only make things worse. Listen to the pathetic cries for more government money. Very early on in the study of sound economics one discovers that this "alternative" is no better than the "alternative" of more drugs to relieve drug withdrawal symptoms. It seems to work a little bit for a little while, but, in the end, one is back where one started, only worse.<br /><br />Throwing more money into government schools might keep the system plodding along until present fat-cat bureaucrats start collecting their super-sized pensions and leave it all in the hands of future fat-cats, who then beg for more money.<br /><br />So, what is a parent to do? Every parent is anxious for a child to do well in school, graduate from college, and have a lucrative career (maybe as a school bureaucrat). Many parents now realize that public schools do not cut it, and some also understand that the real purpose of education is to teach the student (actually help the student to learn) how to think, how to self-teach and how to question not just authority, but <span style="font-style:italic;">everything</span>. What is available to these parents, who work long hours just to get by after the tax-man makes off with so much?<br /><br />There are alternatives out there!<br /><br />Homeschooling is good, and many states actually allow it! I realize that I am ignoring the money aspect and other problems attendant with relocation, but a family can relocate to where homeschooling is given wide latitude, or even where government is likely to overlook a family. Resources and networking can be found on the internet (1).<br /><br />There is no reason families cannot cooperate. How would it have been if my little friends and I were homeschooled on my street? My mother had been a teacher before she had me, and was very good in literature, reading, writing, and grammar. She could have taught all of us. We could have had an hour (yes! A whole hour!) playbreak and then trooped three houses up to where the woman was a math whiz. She taught calculus at the community college. That would take care of the "three Rs." Later, when my father came home from work, it would have been my favorite subject: science!<br /><br />Another woman on the street had been a home economics major and understood cooking and nutrition. There were at least two small businesspeople, a doctor, and a dentist on our street. There would have been days when each child would have gone, alone, as John Taylor Gatto sent his students, to observe and help out at these endeavors. This would have honed our skills, taught us what the work-a-day world was like, and helped us articulate questions, understand answers, take the initiative, and <span style="font-style:italic;">think</span>. <br /><br />Guided hikes through the adjacent forest could have taught about the indigenous fauna and flora. And there were factories and museums to walk through and even apprentice at.<br /><br />There were also at least two houses being built on our street while I was growing up. When I was seven or eight, one of them was next to ours. I stood and watched as the men worked. One day a worker said, "How would you like to pound nails?" I was beside myself! "Sure! I'd love to!" <br /><br />So, he gave me an old piece of wood, some used nails and a hammer. This went on fine until he found out I was a girl. Because I wore no top, and because to my mother the sun rose and set over short hair, he apparently thought I was a boy.<br /><br />Oh well. All good things come to an end, I guess. Of course, later the hair changed because to <span style="font-style:italic;">me</span>, the sun rises and sets not just over <span style="font-style:italic;">long hair</span>, but also the digging in of heels. (My heels dug further than hers did.) And, oh yes, the top business changed too, on which we agreed.<br /><br />But, that was a learning experience! Not just about being on the receiving end of bigotry, but also how to hold a hammer and pound without hurting my thumb. Important lessons!<br /><br />Most of my real growing was done during summer break.<br /><br />This is how it was on our street. It was a middle-class neighborhood, where most mothers were full-time housewives and mothers (which is hard work and I went the career-woman route because I <span style="font-style:italic;">never </span>wanted to work that hard), and children could run and play as they wished and come up with their own <span style="font-style:italic;">ideas</span>. Additional advantages were hilly country where we could jump on a sled and go a mile downhill (and walk back up, teaching a hard lesson in time preferences), and a forest beginning at the town limits only about a block away. A nearby stone quarry used as a gun range taught us that guns are not dangerous.<br /><br />I know that today there are dozens of laws on the books that we would have broken had they been on the books then and had the neighbors decided to take the bull by the horns and actually <span style="font-style:italic;">educate </span>their kids!<br /><br />But what of alternatives today? Today's kids are unique individuals just as we were. It is downright <span style="font-style:italic;">criminal </span>to cram them into huge one-size-fits-all, rule-ridden schools. So, what can a parent do?<br /><br />As I say, a good place to begin is the Internet.<br /><br />One alternative is homeschooling (or "un-schooling"). Gregory and Martine Millman documented their personal experience (2). Education must be personal, they say. There must be a relationship between persons, and between the student and learning. In a large class, there was no personal relationship between student and teacher. Rather, courses are taught in anticipation of a standardized test (if they are lucky, as Steven Greenhut pointed out) rather than to develop the student (3). The student learns to follow rules, memorize, and pass tests, but not to <span style="font-style:italic;">think</span>. <br /><br />Another take-home point the Millmans make is flexibility (4). There has to be time and location flexibility. When the family moved, they found (they probably already knew) that they – and, therefore, you – simply cannot stick to a ready-made schedule. Stuff happens! And, when trips are taken, the whole operation needs to go too, allowing for educational opportunities en route.<br /><br />Another alternative is the small private school. These vary. They need to, since students vary. If homeschooling is not a viable option, then parents can select a private school that is best for their individual child. Conversely, the school can be selective about the kind of student it accepts.<br /><br />Some schools are totally permissive. Take Summerhill, for example (5). Students there ranged in age from five to sixteen. They came from all over. Lesson attendance was not required. So the question is, did they learn how to think independently? This was not the emphasis, but self-confidence and originality were encouraged (6) and these are important too. While there were no exams, there was teaching to prepare students for college entrance exams. Best of all, conformity was seen for the stupidity it is.<br /><br />I guess I would say that independent thought was encouraged at Summerhill, even if it was not the main goal. The main goal in life, according to Neill, is to find happiness (7). I think he misses the point, but I guess that is better than the goal of being a "good citizen."<br /><br />Would I send a child to Summerhill? Maybe on a trial basis I would, and then observe for improvement in the propensity for independent thought, the desire to learn, and the ability to learn independently.<br /><br />Another example of a small, private school is the Academy of Basic Education in Milwaukee, Wisc. (8) It is now known as Brookfield Academy (http://brookfieldacademy.org/about-ba/history ). The Academy is more structured than Summerhill, but there is still a lot of freedom. Learning how to learn is the first order of business there, and I agree with its importance. The emphasis is on the individual and I believe this is key. In fact it is so key that when I chose colleges to apply to for myself, emphasis on the individual rather than the group was so obviously important that even at seventeen I knew that. Some college catalogues said "Students will conform..." and I read no further. Such catalogues hit the trash can with a resounding "clang."<br /><br />The Academy helps the student be all that he can be and, unlike the Army, that was real. At the Academy, however, classes are grouped (very small groups) by ability rather than by age, probably for efficiency, but one-on-one looms big. Students are responsible to learn on their own with the teacher as coach.<br /><br />Composition is stressed, and students recite their compositions to the class. This "structures the mind" and combats shyness. "Structuring the mind" implies to me a process of thought, and learning to think is what education is all about.<br /><br />Would I send a child to the Brookfield Academy? Yes, I think so.<br /><br />Yet another example is the Sudbury Valley School (9). The natural curiosity of the individual is the starting point. Students range in age from four to nineteen (10), but responsibility for oneself and one's education is expected from the start (11). Openness and transparency are key. Of course, individualism is bound to follow as individuals are responsible to pull their own weight.<br /><br />Of course there are failures. But failure is a superb teacher. Also, the one who has never failed is the one who has never tried. People <span style="font-style:italic;">must </span>be allowed to try. I certainly agree with that. The biggest problem with our economic system nowadays is that this obsession with safety and all the rules and regulations to "protect" us only keep us from trying.<br /><br />One passage stated that Sudbury Valley fosters "good citizenship." Before writing the school off, one must read on to find out what is meant by that. It was made clear that it goes back to the ideas of the Founders rather than defining good citizenship as conformity and obedience to officials who are considered <span style="font-style:italic;">better </span>than we peons are. Rights are inherent and accrue to the individual, and this includes "minors" (12).<br /><br />The booklet goes on to contrast this with the rights students enjoy in public schools, which are <span style="font-style:italic;">none at all</span> (13). If they at Sudbury thought this was bad in 1986, they should have fast-forwarded 25 years! I am not sure the perverse term "zero tolerance" was even coined yet in 1986!<br /><br />But, as we have already learned, the whole idea behind government schools is to train people to believe that there no absolute rights (or any absolute truths for that matter), and that any rights they may have are actually privileges extended to them by society (read government officials, who are believed to be <span style="font-style:italic;">better</span>.) Freedom of thought, while not overtly forbidden, is actually forbidden through lack of acknowledgement that it is even possible.<br /><br />And, contrasted with Sudbury where, like Summerhill, everybody gets a vote, government schools are a top-down hierarchy with students (and often parents too) at the bottom (14).<br /><br />Would I send a child to Sudbury Valley School? Yes, I think so, but not at the age of four. Students must assume self-responsibility and self-direction as soon as they arrive at the school. I would probably teach that to a young child at home before enrolling him or her at Sudbury, and by then he would be past the age of four. But, once ready, I would send him (15).<br /><br />Another innovative but old school was the Lancaster system, which began in London, England, in the early nineteenth century (16). Joseph Lancaster was a Quaker who felt the sting of discrimination. This motivated him to educate poor youth so they could pull themselves out of poverty. He had so many students that he had to devise a way to educate all of them on a shoestring. Thus the Lancaster System was born.<br /><br />Lancaster wrote a manual called "The Lancasterian System of Education" (17) in which the method was outlined. In a nutshell, he had the brightest students teaching classes of less knowledgeable students. Students did most of the work, and were paid. Tuition was low.<br /><br />The school lasted only a few years before the establishment destroyed it. The status quo establishment could not tolerate the idea of poor people making good.<br /><br />The Lancasterian idea also spread to America, but the establishment here also destroyed it in a unique American way, through the Trojan Horse of subsidy, which of course turns into management and then takeover.<br /><br />Had I lived in poverty in 1800 London, would I have sent my child to Lancaster? (Reason Magazine states that he taught girls too.) Strict discipline and unquestioning obedience were expected, but I guess when you have hundreds of children being taught by older children and few adults present, strict discipline is needed. Conventional wisdom has it that this was par for the course in those days anyway. They did learn the basics, they did go on to succeed, and the school did threaten the establishment enough to get the fat-cats off their oversized duffs. In the absence of anything better, yes. I would have sent my child to Lancaster in a heartbeat.<br /><br />This made me think back to Gatto's <span style="font-style:italic;">Weapons of Mass Instruction</span>. He quotes William James (18). James says that it is <span style="font-style:italic;">habit </span>that maintains the status quo. It is habit that keeps people in their ruts, so it is habit that keeps the poor in menial jobs and keeps them from rising. So, it is also habit that causes the establishment to keep the lower classes "in their place."<br /><br />Habit is a wonderful tool. I use it to schedule meals, housework, and other mundane tasks so that I can think about more important things. But habit can also be an enemy when it rules the person rather than the other way around.<br /><br />There are many alternatives to public schooling and almost all of them are better, if only people would take control of their habits.<br /><br />(1) Some sources are: http://www.unschooling.com/index.shtml , and http://www.johntaylorgatto.com<br /><br />(2) Gregory Millman and Martine Millman, <span style="font-style:italic;">Home Schooling, A Family's Journey</span>, The Penguin Group, New York, 2008.<br /><br />(3) Ibid. P. 93-95.<br /><br />(4) Ibid. P. P. 57, 58.<br /><br />(5) A.S.Neill, <span style="font-style:italic;">Summerhill: A Radical Approach to Child Rearing</span>, Hart Publishing Co., New York, 1960<br /><br />(6) Ibid. P. 6.<br /><br />(7) Ibid. P. 24.<br /><br />(8) The Freeman, magazine of the Foundation for Economic Education, October, 1966.<br /><br />(9) " 'And Now for Something Completely Different ...' An Introduction to Sudbury Valley School" The Sudbury Valley School Press, Framingham (Mass.), pamphlet, 1986. Also see Gatto, John Taylor The Underground History of American Education, The Oxford Village Press, New York, 2003, P. 57, 58.<br /><br />(10) "And Now for Something Completely Different" P. 1.<br /><br />(11) Ibid. P. 4.<br /><br />(12) Ibid. P. 9.<br /><br />(13) Ibid. P. 10.<br /><br />(14) Ibid. P. 11.<br /><br />(15) There are many Sudbury-type schools around the world. For a list, see http://en.wikipedia.org/wiki/List_of_Sudbury_schools.<br /><br />(16) Reason Magazine, March 1987 P. 40-43. See also Gatto, <span style="font-style:italic;">Underground History</span>, P. 20, 21.<br /><br />(17) Partly shown at http://www.constitution.org/lanc/lan_sys.htm.<br /><br />(18) Gatto, <span style="font-style:italic;">Weapons</span>, P. 173.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-60287424136108868092011-05-23T19:59:00.004-04:002011-05-27T16:19:58.635-04:00Review: 'An Underground History of American Education'<span style="font-style:italic;">An Underground History of American Education</span> <br />by John Taylor Gatto<br /><br />This book is just about the best on American "education" (1).<br /><br />Mr. Gatto begins with the chapter "The Way it Used to Be." The most important thing to me, after reviewing Dr. Rothbard's <span style="font-style:italic;">Conceived in Liberty</span> series is that Mr. Gatto vindicated Dr. Rothbard. <br /><br />There was very little formal schooling in the Colonies. Children were taught at home for the most part, often for very short periods per day. Much education was obtained by pitching in and helping. Without all the modern conveniences we now have, there was precious little free time. People were allowed to, being free, in fact, <span style="font-style:italic;">had </span>to think for themselves and come up with their own solutions to problems. Children could, in fact, <span style="font-style:italic;">had </span>to grow up on time rather than be forced into a state of artificial childhood until eighteen or any other arbitrarily picked age.<br /> <br />Chapter Two, "An Angry Look at Modern Schooling," begins with a picture page of "Four Architects of Modern Forced Schooling." Who would they be? The old establishment darlings: Andrew Carnegie, J.P. Morgan, John D. Rockefeller Sr., and Henry Ford. <br /><br />These are all familiar names. The establishment genuflects and the libertarians glare. So this is no surprise. These industrialists wanted to train a workforce that would be docile and compliant, and would be willing to perform the same tasks over and over. School, and extended childhood, would be the training ground. The lunatic Keynesian idea of "overproduction" was pressed into service as a way to curtail independent (small business) production (2).<br /> <br />It is very difficult to believe that all of this was <span style="font-style:italic;">on purpose</span>. While it is true that the division of labor and mass production are keys to universal (or at least widespread) prosperity, the whole thing was being perverted to dumb down the majority and gravitate wealth to the establishment.<br /> <br />Needless to say, "education" was re-defined. It was to to have <span style="font-style:italic;">zero </span>to do with individual independence. Rather, it was to be "a means to achieve important economic and social goals of a national character." It would be centralized at the federal level. The individual would not count, and if the individual held any opinions at all they would be controlled. There was anticipation of the widespread compulsory drugging of children with Ritalin and other psychiatric drugs, supposedly for the benefit of "society" (3). I repeat, the individual is left with <span style="font-style:italic;">nothing</span>. <br /> <br />This was <span style="font-style:italic;">on purpose</span>! Mr. Gatto, however, does not seem to think harm was intended. The powers that be thought this was the natural order of things. Some individuals (government officials) are <span style="font-style:italic;">better </span>and know what is best for the rest of us. Why people believe this is a mystery to me, but they do. Their premise apparently is that society (or the group) is more important than the individual, and that individuals, particularly children, are the state's property. <br /><br />Of course, there are natural elites. Some individuals are particularly talented. Einstein, Edison, and Bach come to mind, along with many others. The Parable of the Talents is true. Their talents make the world a better place to live in. <br /><br />But this is a far cry from allowing the establishment to groom its own to rule over us all. The establishment did, and does, not see it that way. They would have us believe that these ruling elites are God-ordained (4).<br /> <br />That this plan was on purpose was entirely overt. In 1900, Indiana University actually had a course for hand-picked students, in which they were specifically trained to become part of the ruling class. One of these was Ellwood P. Cubberly, who became a leader in the world of schooling (5). Cubberly is mentioned by Gatto from time to time, and it is always horrifying.<br /> <br />By mid-twentieth century (and I can remember a few rude awakenings), the idea of natural, God-given individual rights, even the idea of a free will, had gone along the wayside. During subsequent "booms" (inflationary booms as we know), while purchasing power went up for some, it declined for most as prices tend to rise before wages do, showing the drift of wealth toward establishment interests (6).<br /> <br />People raised on government schooling and Dick-and-Jane look-say reading, the inferior replacement for the better phonics reading, never had a clue.<br /> <br />As far as math goes, it is almost the same story (7). The "new mathematics" began in my locale after I was in grade school, so I really don't know how the "new" math differs from the "old" math. I only know that there is only one correct answer to a math problem. If you multiply X times Y, or if you divide A by B, there is only one correct answer. And, I do not believe that a student should use a calculator or consult another student when learning how to solve math problems. People need to be able to do this on their own, even when we all have helpful tools, even if only to sharpen mental skills.<br /> <br />But today, the elimination of that and good reading only diminishes the ability to think. On top of that, I often see classrooms on TV where students are sitting in groups, placing their desks together to make a table for four or more. The fact that some have to turn around to see the blackboard is bad enough, but they work in <span style="font-style:italic;">groups </span>rather than on their own as individuals. Poison. That is all I can say. Poison.<br /> <br />The whole curriculum began to be dumbed down in the early part of the twentieth century. Needless to say, economics was dropped. Honest-to-goodness history was no longer to be taught. Possibly history was my worst subject because of the wars, names, and dates. Trust me, Murray Rothbard did <span style="font-style:italic;">not </span>write our texts. "Social Studies" was introduced. I remember taking this is the 7th grade and calling it "Social Slops." Maybe I was on to something! The United Nations was praised as a savior, and government, of course, took the lead part. Slops? I'd like to empty that slop pail! The thing is, real history is important mainly because if people do not understand the consequences of past mistakes, these mistakes will be repeated.<br /> <br />Wouldn't it be so much better if the majority understood <span style="font-style:italic;">why </span>without an armed citizenry and without an army of soldiers who were able to think for themselves we would have had no America? Maybe if they understood that, they would understand <span style="font-style:italic;">why </span>our wars and meddling abroad are a, maybe <span style="font-style:italic;">the</span>, root cause of problems there <span style="font-style:italic;">and </span>problems here!<br /> <br />As <span style="font-style:italic;">Underground </span>progressed, in Part Two, Gatto outlined the history of American education from the late nineteenth century on. All of the big names were familiar establishment names as we see the death of actual <span style="font-style:italic;">education</span>.<br /> <br />He also pointed out the blows dealt by the establishment to the family. This began shortly after the American Revolution (9). It must have been difficult not to be fooled as the rights and welfare of children as individuals was used as rationale.<br /><br />We saw earlier from E.G. West that early defenders of freedom made the mistake of assigning to government the task of protecting children because of their inability to protect themselves. This was the camel's nose under the tent. Of course, the rights of small children need to be protected, and sometimes tiny children need to be protected from themselves. This is what parents are for, and if parents cannot or will not take care of their children, that is what extended families, friends, churches, and others are for.<br /><br />But government's function is to protect the <span style="font-style:italic;">rights </span>of <span style="font-style:italic;">all individuals</span>. What the freedom defenders did was a mistake because government's protection of children grew into a grotesque plethora of "minor status" laws being applied not only to children but to young adults, as we have seen. Compulsory school attendance is probably one of the earliest "minor" laws.<br /><br />While true education was being destroyed, so was the family. Parental rights were completely taken away and given to the state, per Gatto (10), but then some of these rights were given back as privileges "for the convenience of the state."<br /><br />The family, in my opinion, was designed by God for the purpose of raising children. I do not know of a better way to "train up a child in the way he should go," meaning to raise a thinking, independent, self-starting individual who can pull his or her weight. Is there a better way? I can think of only two other ways to raise a child:<br /><br />1. To keep the child in a group setting, like an orphanage. There, the child becomes part of a group. There will be rules, very strict rules and lots of them. There will be conformity and obedience, and probably not much originality. It would be like a public school, only 24/7/365. Structure is good, but only in measured amounts. Also "free" food, clothing, and shelter will teach dependence on someone else for these things.<br /><br />2. To allow the child to run wild like a street urchin. The child will have no way to know the difference between right and wrong. He will not understand why it is wrong to simply take whatever is not nailed down. In this case, too, conformity and obedience is bound to happen, especially if a street gang or a pimp takes the child in, taking advantage of the child's need to belong.<br /><br />What else is there? The family, and the establishment has been trying to destroy it for over a century. The nuclear (and extended) family is not good because it is traditional. It has become traditional because it is good. It works for the individual child and the individual adult better than any other institution. <span style="font-style:italic;">True </span>education takes place in a family setting, so the family seemed to be an impediment to the establishment.<br /><br />Of course, I have a couple of serious issues with the traditional family. Both of these issues are man-made rather than God-made in my opinion. Many Christians disagree with me. One of these issues is the headship of the husband/father. I believe that God created men <span style="font-style:italic;">as a class</span> the same as women <span style="font-style:italic;">as a class</span>. As <span style="font-style:italic;">individuals</span>, people are unique and there are no two even nearly alike, so each married couple needs to decide who will be responsible for what in the home, based on the individual aptitudes of each party. Traditional gender roles might have been appropriate decades ago when certain jobs required great physical strength that most most women do not have, but today they make no sense, especially when there are no pre-born or newborn infants involved. The other issue is child discipline. Children have rights. One of these rights is the right not to be hit. Spanking is hitting. So is slapping and swatting. A rose by any other name ... It does not work anyway.<br /><br />Well, enough of that rant. The establishment wants the family destroyed, and wants to fill the vacuum with more and more government schooling. The state is assuming <span style="font-style:italic;">Parens </span><span style="font-style:italic;">Patriae </span>powers, meaning the power of old-time kings, the power of primary father (11).<br /><br />And, true to form, government schools are excessively strict (according to some; it really varies). Until fairly recently, schools in most states were allowed to mete out corporal punishment to students. According to a recent newscast (March, 2011), twenty states still allow it, and a <span style="font-style:italic;">very </span>long, thick, heavy paddle resembling a canoe paddle was shown. These floggings could be excessive; in fact, severe injuries, even deaths have been recorded. I used to hear that if you received corporal punishment at school, there would be a re-run at home. There is no way in the universe I would send a child to a government school, but if for some reason I did, and some tax-eating bureaucrat laid a hand (or implement) on that child, there would be another beating all right, but it would not involve the child.<br /><br />Enough of that rant too. Education was becoming more centralized (12). John Dewey, one of the worst establishment big-shots (his name was a household word in mid-century) heralded the end of the "old individualism" and the beginning of the "new individualism" that was actually thinly disguised collectivism (13).<br /><br />Textbooks and children's books are published mostly in New York City and Boston (14). We know that New York State and Massachusetts are two of the most socialistic establishment strongholds in the country. The content of the books would now reflect the establishment's conformist and collectivist views. There was a focus on the child's need for freedom, but this was a mirage. The separation of the child's individuality from the family gave the establishment the chance it needed to mold the child (15).<br /><br />The thing is, small children, and big ones too, even young adults need the feeling of belonging, need guidance and mentoring, and they will get it one way or the other. If they don't get it at home from a family as God intended, they will get it from other sources, such as a street gang or the establishment. Of course the establishment had itself in mind. The child was to be tricked into a <span style="font-style:italic;">feeling </span>of freedom and self-direction towards what he or she wanted, but was actually being guided along to what the planners wanted.<br /><br />Maybe this is what was meant by Dewey's "new individualism." Children, young adults, and parents would have to be "dumbed down" not to see it.<br /><br />Gatto has a lot more to say about Dewey later on. It will shock you as it did me if you do not already know all about John Dewey.<br /><br />Gatto continues by giving a short history of Prussia and the Prussian method, after which our school system is modeled. Very briefly, in the beginning, Prussian authorities wanted to train the vast majority of people to be content with their (impoverished) station in life, while children of the well-connected rich would be the only ones to receive a <span style="font-style:italic;">real </span>education. These would be groomed for important positions. Later, universal "education" would be training to obey orders and to not question authority. The vast majority were to be groomed for the boring assembly line work. Again, those who did extremely well could wind up in officialdom. <br /><br />Most people did learn to read and write (after a fashion), and those who wanted to give the less fortunate a chance thought universal schooling was a good thing. Of course, it would be if it were the universal <span style="font-style:italic;">opportunity </span>to become <span style="font-style:italic;">educated</span>, opening doors for one to go as far as one's talent and ambition will take him. However, universal government schooling does not do that, as we know. The "well-schooled" populace is gullible. Look at the mainstream "news"! And, look at our elected officials. Do you think G.W. Bush or Barack Obama would have gotten anywhere <span style="font-style:italic;">near </span>the White House had the public not been gullible?<br /><br />It was that way in old Prussia, too. Our superb education here was uprooted for that!<br /><br />Government schooling was set up in such a way that those who have a hierarchical, authoritarian mentality wind up in positions that encourage them to believe they are <span style="font-style:italic;">better</span>. The rest of us are taught to conform, obey, and look up to <span style="font-style:italic;">experts</span>. The ones who decide if you may have a gun, if your doctor's medical marijuana recommendation is honored, if your tax return is audited, if you get custody of your child, if you are pulled over by the police, if you get any of a plethora of required permits or licenses, or if you have broken any of thousands of rules are those who are in high-paid government positions, and the rest of us, we whose money pays them, are at their mercy. <br /><br />That is the "American System" (mercantilism) Henry Clay wanted, the same system our Founders threw off when the American Revolution was won. But it is back, thanks largely to Prussian-style schooling, because the American people cannot think for themselves. It was designed with the needs of big, well-connected businessmen in mind. Their need was for automatons on their assembly lines (16).<br /><br />Not only that, very generous welfare and entitlements keep an increasing number of people dependent on the system. Unless "ObamaCare" is repealed, all of us will become dependent on the federal government. If this is not an incentive to toe the line, I don't know what is. We all get sick. Right now, April, 2011, there is widespread panic about a government "shutdown" if a new budget is not passed. Many believe they will lose benefits during this "shutdown" and they have no idea what they are going to do. They are <span style="font-style:italic;">dependent</span>! <br /><br />The needs of government officials are met. They need an obedient citizenry that is anxious for everyone to pay their "fair share" in taxes so as to keep "essential government services," including the schools, going.<br /><br />As I drafted this in February, 2011, this "obedient citizenry" is extremely anxious to make sure that government employees, including teachers, can keep their very generous benefits and strong unions despite the fact that states are broke. Government employee benefits, and salaries in some cases, are so lucrative that even with the reductions they are being asked to accept they will still do better than private sector workers. But some of the things government employees and their puppy-dog supporters are saying about the advocates of fiscal responsibility cannot be repeated here. (That is, I refuse to use that kind of language.) I guess these obedient good citizens believe that government employees, who are providing "essential services" are <span style="font-style:italic;">better</span> than us private-sector peons and deserve to be pampered. Of course nothing is said about essential private sector workers in struggling small businesses, many of whom have very few benefits, and worry that their employers may go under at any time (often at the hands of government).<br /><br />The difference between <span style="font-style:italic;">education </span>and <span style="font-style:italic;">schooling </span>has become evident.<br /><br />Also, the establishment, at the time Gatto is discussing, seemed to see the bogus Keynesian economics coming. The myth of "overproduction" was openly discussed. The "overproduction" by innovative, thinking people was causing the "overproduction" of goods and services. The small entrepreneur had to go, or at least be placed under centralized control by licensing legislation (17). People would not have been about to put up with that without mass schooling for obedience.<br /><br />Right about now, I am having an "aha!" moment. School vouchers have created a lot of controversy. (I am thinking back to Lancaster too.) This is a system whereby people who want to send their children to a private school, but cannot afford to, can apply to the government for a voucher to help pay for tuition. At first I loved the idea. It would help keep families out of poverty and also give students a chance to learn how to think for themselves. However, it was during the first Harry Browne, Libertarian for President, campaign in 1996 I realized this was wrong (18). Nobody wants to see doors open for the less fortunate more than I do. Most poor children in urban areas do not have any John Taylor Gattos to teach them. Most of their parents have all they can do to earn enough for food, clothing, and shelter. So, many poor youngsters are out of luck. Another Joseph Lancaster is not about to come along to help them and, even if he did, government stifles just about every enterprise like the Lancaster school.<br /><br />So, these vouchers, why am I now suspicious? While the voucher system may be a notch or two better than no vouchers, it is far from ideal. Browne points out that a new government bureaucracy would need to be set up to administer the vouchers and to decide which parents would receive them and which private schools would be allowed to accept them for reimbursement. Also, the bureaucrats would have more to say about home-school use of the vouchers.<br /><br />Vouchers are a Trojan horse into the world of private education, and could well destroy it. So, why was this an "aha!" moment?<br /><br />John Taylor Gatto points out (19) that establishment giant J.P. Morgan suggested that one way to defuse dissent was <span style="font-style:italic;">to infiltrate and subsidize it</span>! Vouchers are a subsidy, and with subsidies come rules. Whenever there is a ruling class, there will be the beginnings of insurrection against it. Infiltration is Fabian socialism.<br /><br />I have seen it with my own eyes. At many Libertarian Party gatherings, I have "sniffed out" establishmentarians. Usually it is very subtle, but the more radical the libertarian, the more likely the libertarian is to know such interlopers are lurking around.<br /><br />And I am a radical! Make no mistake about that!<br /><br />Charles Darwin's theory of evolution was a great help to the establishment in general and the Fabians in particular (20). This theory, actually still in the hypothesis category, expounded the over-reaching importance of genetics in determining what a person is cut out to do, and even how, or if, a person thinks. The hypothesis gives rise to racism, sexism, and all manner of collectivism. It aided the establishment in justifying the keeping of the vast majority in "their place." This is in contrast to the old way the Founders envisioned. They believed that at least some individuals should be allowed to go as far as their individual talents and ambitions would take them, and real education was available to that end. To the Fabians, Darwin was gospel (21). I guess they believed that the elite were some kind of pedigreed dog and the rest of us were mongrels, with no concept of individual rights or even individual responsibilities, except the responsibility to obey and pay homage to the state.<br /><br />It's funny ... peculiar, that is. If it is genetically determined that the individual is a certain way, why do we need laws to mandate that? For example, if women are genetically pre-determined to be submissive homebodies, and men to be the fearless leaders out in the work-a-day world, why were these laws on the books dictating gender roles in marriage and "protecting" women from certain lines of work? If we need those laws, do we not also need laws mandating eating, sleeping, and breathing? Why do we need laws telling people to do what comes "naturally" ?No establishmentarian ever answered that question. If there has to be some sort of law to keep someone in "their place," then maybe that is not actually the person's true place.<br /><br />Gatto mentions in passing something that is really important today, and that is the succession of crises that cause the people to rally behind paternalistic government. As a tiny child, I used to run to my parents whenever I got a scare. Adults should not scare easily, if at all. However, the crises that have occurred, the September 11 attacks being the worst, have caused the American people to throw their freedoms away like so much trash. Some of these crises have been "false flags." These crises have caused a "ratcheting up" of government. When the crisis is over, government backs off again, but not completely. Robert Higgs has written extensively about this (22). Between crises, in the mainstream news, it seems like they are always talking about the possibility of terrorist attacks or environmental catastrophes. If it's not one darn thing it's another. Of course, the situation in Japan right now (April, 2011) is serious, and real answers are obviously needed, but "solutions" to these events always seem to come from government!<br /><br />Next, in Gatto's <span style="font-style:italic;">Underground</span>, we have the "Gary Plan" of about a century ago (23). The school superintendent in Gary, Indiana, was brainstorming some ideas for progressive schooling. It was his idea to shuffle students from one classroom and subject to another at the sound of a bell. That is usual today, of course, and I didn't half mind; after all I could get up and walk every hour or so which was welcome. But, Mr. Gatto points out, this forces the student, and the teacher, to suddenly drop everything they are doing, like it or not, and go on to something else.<br /><br />The "Gary Plan" also reminded me of the "Obama Plan," to lengthen the school day and the school year. This way, school is all-pervading in children's lives (24), leaving less time for home, family, and "hanging," the latter being part of growing up.<br /><br />Not only did the establishment need to do this to keep students from learning how to think, they also needed to fix the teachers. Teachers had always been role models, stressing the development of intellect, so their hands needed to be tied. Bigger schools replaced small and one-room schools, and bureaucrats moved in to run the show (25). When I was in elementary school, the principal was also a teacher. There were six or seven women there and all of them were teachers. The only on-site adult who did not teach was the janitor. Well, maybe even he taught; at least the class obeyed him the time or two it was indicated. I cannot say it was a very good school. It was not strict at all as schools go, but then there was a parent at home who taught proper school behavior. Everyone was pretty happy. However, we were not being taught <span style="font-style:italic;">how to think</span>, so I cannot say it was a very good school. It was better than most. That is all.<br /><br />But, at least in those days there were small schools that were not over-run with bureaucrats (and, nowadays police!) and teachers had a lot of latitude. <br /><br />Now, added to bureaucratic control are standardized tests (26). In order to see that students score well in these tests, a teacher must teach the material that is likely to be on them.<br /><br />And, of course, local oversight of schools was replaced by centralized state and federal oversight. Local school boards disappeared and parents were left out of decision-making. Students fell through the cracks.<br /><br />Then there was a move toward <span style="font-style:italic;">homogeneity </span>(27). Immigrants were regarded as a threat to the establishment, as was a high birth rate among the "lower class." We know, of course that, today, birth control and murder of the unborn are sacred cows. This was all part of the elitist agenda, as was occupational licensure, which was <span style="font-style:italic;">extremely </span>harmful to the lower and middle classes.<br /><br />The real purpose of occupational licensure and business licensing is to make it more difficult for non-establishment workers and entrepreneurs to better their lives, thus opening more doors to the already well-connected. Small, independent businesses failed partly because of these barriers, giving more business, and thus more profit, to the establishment. And, as anyone who has not been off-planet for the last half-century knows, licenses cost plenty and they are a real cash cow for government. Additionally everyone knows, or should know, that licenses are part and parcel of the system. In fact license requirements are taken for granted by the uneducated as though they were part of some natural law. Actually, in many states the right to start a business is regarded as a "privilege" rather than the natural right it actually is.<br /><br />So much for the "land of opportunity" beckoning to impoverished immigrants. Of course, nowadays with our lax welfare system, illegal immigration is indeed a problem which needs to be addressed by better border security. But this problem and the welfare problem (and the unemployment problem that is causing so much anguish today) both stem from barriers to work and from overtaxation. This is really so plain, but in-the-box thinking on the part of the majority who have been schooled by the government cannot see it.<br /><br />Another assault on the not-so-wealthy was eugenics (28). This is normally associated with Hitler's Germany, but it was used here too. Some, who were labeled "feeble minded," were destined for sterilization and/or institutionalization, whether they liked it or not. Some of these were without doubt people with very low I.Q.s, but some were merely non-conformists. There were certainly some who were actually gifted! All, though, had rights, which were ignored. This was another nail in the coffin of individualism and freedom.<br /><br />Eugenics gives rise to not only Darwin's "theory" of evolution, but also racism. The idea is that intelligence is inherited through the genes. Of course it is to some extent, but this helped to create the myth that Anglo-Saxon Americans were a superior race. Well, I am one myself and I can say that this is a crock. In the early twentieth century, white anglos were told to multiply so as to preserve the race. Now, how smart would that be? That so many of them were snookered into this malarky is evidence that they are not really so swift.<br /><br />Meanwhile, as already mentioned, minority growth was being curtailed.<br /><br />It was in the interest of homogeneity, furthering the mass of people over the individual. White Anglo dominance failed as evidenced by the great variety of ethnicities in the country today. I really don't care, as long as they are here legally and as long as individuals are free.<br /><br />Gatto's Chapter 11 in <span style="font-style:italic;">Underground </span>(29) lists all the grotesque ways the establishment used to get everybody in lockstep in the early twentieth century before World War I (and following chapters continue this). In fact, getting into war was on that list, along with the outlawing of private education in some states. I won't go into that, but some of these methods are being used now.<br /><br />The Rockefellers and Carnegies, establishment big-shots, spent more money on schools than the government did! (30). The idea, obviously, was to exert influence over the schools. It was billed as "scientifically humane, thoroughly utopian" (31). Of course it was actually thoroughly <span style="font-style:italic;">neanderthal</span>. <br /><br />There was a lot of propaganda, and this included the idea of hereditary societies, such as Daughters (and Sons) of the American Revolution. While these might have been descendants of the Sons of Liberty (32), I do not see any common ground. The same goes for the Society of Mayflower Descendants (33). While I do take pride in this ancestry, really, ultimately, what use is it?<br /><br />Certain characteristics do come to a person through the genes, but I do not think one's general way of thinking does, at least not very much. It has more to do with one's surroundings and what one <span style="font-style:italic;">decides </span>to do with what one has.<br /><br />But, this turn-of-the-century propaganda was leaning far toward elitism; those who had these magic ancestries were <span style="font-style:italic;">better </span>and were qualified to be the decision-makers (read, go into government work) and (by the way) to receive huge sums. The rest must conform and obey, as they were being schooled to do.<br /><br />It reminds me of old hereditary dynasties. (It also reminds me of the Bush clan, and the Rockefellers and Kennedys ...) What a throwback! And, to think this was called "Americanization"!(34)<br /><br />There was a great deal of effort to trace Anglo-Saxon ancestry back to common ancestry with the Aryan race, implying a past "super race" (35). I think maybe there is a common ancestry (I couldn't care less), judging from physical resemblance. But, why would this be a big deal? Unless one is bending over backwards to demonstrate superiority of one race (usually one's own; did you ever notice that?) and the inferiority of the rest, I do not see why this would be so all-fired important.<br /><br />This whole chapter, at the end of the day, casts further doubt on Darwin's theory. The theory (actually a hypothesis) has been used for a number of collectivist and authoritarian causes. The research to uncover any common ancestry between the Anglos and Aryans was done prior to Darwin. I have to wonder if the sacred cow of "evolution" as applied to humans was not <span style="font-style:italic;">cooked u</span>p to vindicate both this "Americanization" stuff and Aryan supremacy in later Germany.<br /><br />Big business and big government were of one mind, and they still are, as we know. Decisions were (and I believe still are) made behind closed doors, and the subsequent appearance of disagreement was an act, just as is the appearance of disagreement between the two branches of the Establishment Party, the Democrats and the Republicans. Of course, government schooling decisions followed the closed-door decisions (37).<br /><br />As the book goes on, many times the point is made that in ever so many ways the establishment tried to extinguish thought.<br /><br />And, then, there was a real blockbuster! The name John Dewey has come up a few times, and I can remember his name being a buzzword in establishment education circles.<br /><br />John Dewey lived in China for two years in the 1920s. That was before Mao, of course, but there were the beginnings of the Maoist movement, and its leaders were influenced by Dewey. The influence was pronounced enough that Mr. Gatto calls John Dewey "a godfather of Maoist China" (38).<br /><br />I guess that says it all about establishmentarian John Dewey.<br /><br />It does not stop there. In the early part of the twentieth century, Dewey and other establishment people and foundations began a new field called "psychiatry," and made sure it was socialized. A White House Conference on Education warned that a psychological time bomb was ticking in the schools (39).<br /><br />I did touch upon the psychiatric system in previous essays, and how people can be dragooned into allowing their children to be forced to take psychiatric drugs, and how children and adults can be imprisoned in psychiatric "hospitals" and drugged, even electroshocked, against their wills. An organization called "Mindfreedom" (40) is hard at work bring this grave injustice to the attention of people and helping people who are trapped by the system. Mindfreedom accepts <span style="font-style:italic;">no </span>government or drug company funds. They operate on contributions from people like you and me.<br /><br />Then, in mid-century, another White House Conference, this one on Children and Youth, warned that mental disabilities were being overlooked, and government-funded agencies needed to be set up for people of all ages. Individual self-responsibility was kaput. Students were to be "bent" for the benefit of society (41).<br /><br />The turning point was the 1965 passage of the Elementary and Secondary Education Act. It allocated substantial federal funding for psychological and psychiatric programs in schools. Included was teaching for what was later known as the New World Order (42).<br /><br />So, your tax money is being used to propagandize the impressionable young, whether you like it or agree with the propaganda. I personally do not agree and do not like it one bit.<br /><br />Later, Gatto points out something that is really apparent. Along with the move toward a longer school day and a longer school year, the school system keeps a record on every student. This goes much further than academic records. It includes attitudes and behavior (43). I am sure there are subjective comments in those records, and I am equally sure that the student is barred from amending, possibly even seeing, his record.<br /><br />I wonder what would happen if I wrote to demand my record. Would I even get a reply? Would received records, if any, be complete? Is it even worth a postage stamp?<br /><br />Alexander Inglis and his candid book, <span style="font-style:italic;">Principles of Secondary Education</span>, was re-visited (44). According to Gatto, this 1918 book said "that the new schools were being expressly created to serve a <span style="font-style:italic;">command economy</span> and a <span style="font-style:italic;">command society</span> ... " (emphasis mine) (45). Some of the sorry aspects of these new schools included conformity (of course) for the purpose of predictability of an individual's behavior, and what would actually be a "glass ceiling," whereby students would be "guided" into areas that the establishment wanted them to be in, and would be allowed to go no further. A very few would be hand picked to become future leaders.<br /><br />The Inglis book is out of print and I could not obtain it for this essay.<br /><br />Inglis was a well-known figure in his day. In fact he was a Harvard professor, where the later (maybe their tenures overlapped) Harvard President James Bryant Conant wrote <span style="font-style:italic;">The Child, The Parent and the State</span> in 1949 and The American High School Today in 1959. He was also a major player in the establishment, and his latter book played a role in upsizing schools and school districts, and convincing skeptics who were beginning to realize that the new schools did <span style="font-style:italic;">not </span>truly educate (46).<br /><br />The whole idea, of course, was to prevent the best and brightest from becoming self-reliant entrepreneurs and turning them into loyal corporate employees (47), and the way to do that is to extend compulsory schooling through grade twelve, and extend childhood until age eighteen or even twenty-one.<br /><br />Sadly, it is working. And, what a sorry mess our unfree country is.<br /> <br />(1) John Taylor Gatto,<span style="font-style:italic;"> The Underground History of American Education</span>, Oxford Village Press, New York, 2003.<br /> <br />(2) Ibid. P. 38.<br /> <br />(3) Ibid. P. 40, 41.<br /> <br />(4) Ibid. P. 47.<br /> <br />(5) Ibid. P. 46, 47.<br /> <br />(6) Ibid. P. 48.<br /> <br />(7) Ibid. P. 98.<br /> <br />(8) Ibid. P. 108.<br /><br />(9) Ibid. P. 120, 121.<br /><br />(10) Ibid. P. 120.<br /><br />(11) Ibid. P. 121.<br /><br />(12) Ibid. P. 124.<br /><br />(13) Ibid. P. 125.<br /><br />(14) Ibid. P. 126.<br /><br />(15) Ibid. P. 126.<br /><br />(16) Ibid. P. 153.<br /><br />(17) Ibid. P. 166, 167.<br /><br />(18) Harry Browne, <span style="font-style:italic;">Why Government Doesn't Work</span>, St. Martin's Press, New York, 1995, P. 116.<br /><br />(19) Gatto, <span style="font-style:italic;">Underground</span>, P. 176.<br /><br />(20) Ibid. P. 178, 179.<br /><br />(21) Ibid. P. 180.<br /><br />(22) Robert Higgs, <span style="font-style:italic;">Crisis and Leviathan</span>, Oxford University Press, USA, 1989. <br /><br />(23) Gatto, P. 187, 188.<br /><br />(24) Ibid. P. 189.<br /><br />(25) Ibid. P. 193.<br /><br />(26) Ibid. P. 193.<br /><br />(27) Ibid. P. 221, 222.<br /><br />(28) Ibid. P. 222, 223.<br /><br />(29) Ibid. P. 221-236.<br /><br />(30) Ibid. P. 237.<br /><br />(31) Ibid. P. 238.<br /><br />(32) Ibid. P. 244.<br /><br />(33) Ibid. P. 242.<br /><br />(34) Ibid. P. 243.<br /><br />(35) Ibid. P. 245, 246.<br /><br />(36) Ibid. P. 237-257, "Daughters of the Barons of Runnemede."<br /><br />(37) Ibid. P. 251.<br /><br />(38) Ibid. P. 275-277.<br /><br />(39) Ibid. P. 281, 282.<br /><br />(40) http://www.mindfreedom.org.<br /><br />(41) Gatto, P. 283.<br /><br />(42) Ibid. P. 284.<br /><br />(43) Ibid. P. 307, 308.<br /><br />(44) Ibid. P. 320, 321.<br /><br />(45) Ibid. P. 321.<br /><br />(46) Ibid. P. 321.<br /><br />(47) Ibid. P. 322.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-25036537380617738152011-05-23T19:56:00.005-04:002011-05-28T17:25:16.486-04:00Just What Is Education, Anyway?Albert J. Nock (1870-1945) is a household name among libertarians. He was an educational theorist and social critic. First he was a minor league baseball player, then an Episcopal priest, and then a journalist. He denounced all forms of totalitarianism. His most famous work was <span style="font-style:italic;">Our Enemy, the State</span>. He also wrote his autobiography, <span style="font-style:italic;">Memoirs of a Superfluous Man</span>.<br /><br />In <span style="font-style:italic;">The Theory of Education in the United States</span> (1), he starts by asking the question, what is education? I have my own idea of what education <span style="font-style:italic;">does</span>. It teaches the individual how to think for himself or herself, question just about everything, and go about finding out things independently connecting the dots.<br /><br />That is what it <span style="font-style:italic;">does</span>. But, what <span style="font-style:italic;">is</span> it? I would say that education is that which teaches an individual how to think, and that would vary from one person to another.<br /><br />Nock does not answer the question right away. In fact, I am not sure he gives a direct answer at all precisely because of individual differences. Rather, he turns to the recent (recent, that is, when he wrote the book in 1932) history of education in the U.S. He claims that a major decline began around the turn of the century, when government started to try this or that to engineer schools. One thing that was done was to build great big schools (big by 1932 standards) where there would be an assembly-line approach in stark contrast to the one-room schools of the nineteenth century. Apparently some real education took place in those one-room micro-schools. <br /><br />Today we are taught about how strict they were and how teachers, or "masters," would flog students. Well, maybe there was some truth in that. I seriously doubt the abuse was anywhere near as bad as we are led to believe, just as I doubt today's schools are as lax as some would have us believe. In fact, schools today are apparently extremely strict. There are school police, real <span style="font-style:italic;">police </span>with guns, and students have been expelled who even <span style="font-style:italic;">draw a picture</span> of a gun or wear a small crucifix around their necks. There have even been a couple of cases where five- and six-year-olds have been taken from school in handcuffs by police. It has happened, but you probably don't know about it unless you read about it on libertarian Internet pages. There have also been censorship cases in which the valedictory speeches have been cut off because the speaker saw fit to share faith in Jesus Christ (2).<br /><br />By the way, if you are speaking at your public school graduation, it might be good to leave the part about your faith until the very end. Then when they pull the plug on you, your speech will be over anyway.<br /><br />Nock wrote a few pages about the decline of education after the turn of the century. I got out my copy of <span style="font-style:italic;">A People's History of the United States</span> (3) by left-wing historian Howard Zinn.<br /><br />I used Zinn in a history class back in the 1990s. The professor was really left-wing, but at least attempted to be fair. Whenever we had an assignment out of Zinn, we were to write a short piece on that subject from another point of view. I already had a pretty good Rothbard collection and turned to that as a contrast to Zinn. However, I was surprised at how many things on which Rothbard agreed with Zinn!<br /><br />As far as education goes, and I believe Dr. Rothbard would agree, Howard Zinn realized that the big industrialists were already teaming up with the government almost from the start. John Taylor Gatto wrote extensively on this in <span style="font-style:italic;">Underground</span>. Remember the essay I wrote about Abraham Lincoln, and Henry Clay's "American System," and how they wanted to return to the old mercantilist system that the Founders fought and died to defeat. Zinn and the leftists call that system "capitalism." Of course, as we have seen in my previous essays, <span style="font-style:italic;">ad nauseum</span> in fact, that with the mercantilist system where big business and big government (and big unions too) team up to the detriment to the rest of us, the result is far from capitalism; it is more like fascism and that is different from socialism on paper only.<br /><br />The big industrialists were anxious to get employees (and customers too) who were willing to obey and look up to "experts" for guidance. This meant that people needed to be trained for conformity and obedience from an early age. This spurred on mass schooling (4). The Zinn book is very good and really difficult to put down. However, it is essential to have a very good handle on libertarian theory in order to avoid the leftist booby traps. It is so easy to get sucked in!<br /><br />So the decline of education Albert J. Nock is describing actually began long before 1900 but that is probably when the decline became really steep. Again, John Taylor Gatto wrote extensively in <span style="font-style:italic;">Underground</span>. <br /><br />Nock says (5) the educational system has been treated as a machine. The main problem with that is, it is actually <span style="font-style:italic;">people</span>, and people are not cogs in any machine, no matter how hard the establishment tries. Parents were to move forward in these attempts to improve schools because of the universal desire for one's children to have a better life. This was based on emotion rather than reason, of course. And Mr. Nock refers to Thomas Jefferson's ideas of education. A literate citizenry will assure honest government (6). I am not so sure that "honest government" isn't a contradiction in terms, but I do agree that people who can read are far more likely to be able to think. Of course the quality of the reading material does matter (7). The reading of Harlequin romances is not conducive to profound thought. In my opinion, the reading of Murray Rothbard is, but it <span style="font-style:italic;">does </span>matter.<br /><br />Mr. Nock mentions, in passing, Thomas Jefferson's opinions on education. Jefferson made an error, I think, in advocating government-run education, but his error was not as grave as I previously thought. What Jefferson wanted was an equal <span style="font-style:italic;">chance </span>for everyone to become educated (8). Nock does not say whether this was to apply to girls as well as to boys. Every child in the state was to be taught the three R's, after which the best and brightest would go on with their education from there. In other words, every child would have a <span style="font-style:italic;">chance</span>, but it was acknowledged that by no means were all people educable. That should surprise no one. But all could <span style="font-style:italic;">try</span>. So many, possibly the vast majority of people have a strong propensity to make it easy on themselves rather than get off their behinds and actively change their situation. Nock apparently believed that too (9).<br /><br />I am still waiting for Nock's definition of education, but he does differentiate education from <span style="font-style:italic;">training </span>(10). Thirty-odd years before the book was written, i.e. around 1900, training and education began to be thought of as the same thing, and that is when the trouble started in earnest. Higher math, logic, the arts, Latin and Greek literature, and other former staples of education went to the back burner. These studies were staple, I think, because they gave students the raw materials to come up with their own ideas. But, how-to training (as important as this might be) does not do that.<br /><br />They were finding that most people were not up to these classical studies, so with universal schooling becoming a sacred cow, they had to be back-burnered in favor of training (11).<br /><br />Right around that time there were some extremely important scientific advancements. The internal combustion engine, electricity, indoor plumbing and telephones were but a few and these made life a lot easier and more prosperous for the vast majority. There is no rational way to condemn this sort of thing. It spurred on universal interest in science. Elementary science is something most people can grasp, so watered-down science began to be taught in the schools. What took over schooling was actually vocational training.<br /><br />Of course the number of students in the universities rose as the curriculum became vocational. Everything was big. Big was good. Herbert Hoover, in one of his campaign speeches, bragged that the United States had ten times the number of students as any other country (12). Dr. Murray Rothbard describes Hoover's sorry legacy in <span style="font-style:italic;">America's Great Depression</span>, which I reviewed here a couple of winters ago. The American people were easily sucked into Hoover's and Roosevelt's regimes just as they are now being sucked into the Bush/Obama regime.<br /><br />Not only were more people going to the university, but the university was different. In the old-style, traditional university, students had to be self-starters, learning independently. The faculty would help them, but not lead them by the nose as is done today (13). Today, the professors are training students rather than helping students educate themselves. Nock lists some of the courses that would lead to a degree at Columbia at the time he wrote (you are not going to believe this): Book Reviewing, Gymnastics, Newspaper Writing and Layout, and Home Laundering (14).<br /><br />Home Laundering? (I could <span style="font-style:italic;">teach </span><span style="font-style:italic;"><span style="font-style:italic;">that</span></span>!) Do these teach people to think critically?<br /><br />In fact, Mr. Nock visited a college class taught by a friend called "English Composition" and opined that the work being done in that class was really around eighth-grade level (15).<br /><br />Nock wrote his book in 1932! No wonder the "greatest generation" had no idea how to think! What is it like today? Today's generation is really no better. There was a ray of hope during the Vietnam era when thinking people took to the streets in protest and the Libertarian Party was born in response to freedom-enemy President Nixon's alarming policies. But, alas, that generation too failed, possibly due in some cases to drug-caused brain damage or in other cases to simple burnout.<br /><br />The watering down of education is, I believe, a primary cause of failure to question, and government control of education is the primary cause of the watering down.<br /><br />When Mr. Nock asked a college president why they had to keep students whose education was still at the grade-school level, the president told him that if they did not, there would be nobody left and the institution would have to close (16). Would that be so bad? Dr. Rothbard would say no. The resources could be put to better use by consumers elsewhere.<br /><br />You can't turn bad theory into good practice, says Nock, especially when it applies to a growing bureaucratic machine where unique individuals tend to fall through the cracks (17).<br /><br />Actually, Nock says, the university system as it is (meaning was, but I think still is), is doing a fine job at what it does. That job is to train students. They come out fine bricklayers and chefs (18). Most people are not educable – let's face it – but they can be <span style="font-style:italic;">trained</span>. So, maybe the schools should be for that purpose.<br /><br />But then colleges and universities would have to be called something else (19). "College" and "university" imply <span style="font-style:italic;">education</span>, not training. Such institutions could be called "institutions" with honor. And "liberal arts" (bachelor's) degrees should not be given out for a major in wrestling (20).<br /><br />So, the vast number of ineducable people do the heavy lifting of the world. What would we do without them? What if nobody were willing to clean the office buildings and empty the Dumpsters? What if there were nobody to do the assembly-line and secretarial work? This is why God made so many of them; there is always a lot of work to do that requires no independent thought, but rather requires the following of cook-book directions.<br /><br />But what of the many millions who <span style="font-style:italic;">are </span>educable? Mr. Nock points out that, the way the system is, they go to waste (21). Well, not all of them. Look at Mr. Nock's own work, not to mention Murray Rothbard's. But for the most part, people who think for themselves do not endear themselves to the system. That is an understatement. In the Soviet Union, Nazi Germany, Red China, and certainly other places, thinking people have been rounded up and placed in camps.<br /><br />There are those who believe the U.S. government has the same in store for the independent thinkers here. I personally do not claim to know, but I do believe that if these thinkers are as sharp as we believe they are, they all have a plan in place to put into effect at the first sign of such a move on the part of any government.<br /><br />But, do the educable have any function at all given the current system?<br /><br />Nock seems to think so, but then he puts his finger close to the <span style="font-style:italic;">real </span>issue of what education <span style="font-style:italic;">is</span>. He puts his finger <span style="font-style:italic;">on </span>what an educable <span style="font-style:italic;">person </span>is: One who is capable of right, mature, and clear thought (22). Of course this means independent thought. I have a hunch we are closing in on what Nock believed education <span style="font-style:italic;">is</span>. <br /><br />The results of wrong thinking incur a "fine" from nature, and sometimes it takes a while for that to happen, so cause and effect are likely to be missed by all who are not educated. Look at how the terrible fiscal and monetary policies, not to mention the paternalistic nanny-state, have destroyed our country. The income tax and the Federal Reserve came into being nearly a century ago, the outlawing of marijuana came in the 1930s, and gun control started to really proliferate with "Saturday Night Specials" around 1968. Now, in 2011, we are seeing catastrophic results. A few people are actually dying and a majority are suffering economically. Only the most astute and independent thinkers would have seen this coming so many decades ago. But, hindsight being 20-20, we now see that it was inevitable.<br /><br />Our problems today are the "fine" nature has imposed on our wrong thinking a century ago, in fact one could say all the way back to Henry Clay.<br /><br />The Bible says the sins of the fathers will be visited on the sons. This is what is being referred to, I believe.<br /><br />If a society does not make a place for the educable, those who can think, then this is bound to happen. Right thinking is essential for individuals to flourish, and individuals must flourish if society is to flourish. After all, society does not really even exist but for the individuals in it.<br /><br />Nock winds up by saying that the truth will prevail in the long run. It has to. Falsehoods bring great nations to their knees, as we are finding out.<br /><br />It was pointed out in the West book that the reason there is no improvement in education (training) is that people will not think outside the box. It has always been this way and change is just too difficult. Questioning the status quo is frowned upon, maybe from sheer laziness or maybe because most people (the ineducable) are obsessed with being "safe."<br /><br />So how did the public schools get started? In England, according to West (23), it was believed in the nineteenth century that education would reduce crime. However, counterintuitively, this does not seem to be the case (24). It seems to me that to teach someone how to think independently would raise the person's propensity to work, and lower it to steal.<br /><br />Of course, what passes for "education" at the hands of government is not that at all, as I have pointed out many times, so maybe this is why the correlation between "education" and law-abidingness may not exist. Not only that, the proliferation of laws and regulations, especially those affecting young adults under 18, make it even more difficult to avoid running afoul of the law.<br /><br />One more interesting note: In the 1940s and 1950s, crime statistics among young men showed that when men aged out of compulsory "education" and went to work, their crime rate dropped. This implies the opposite of what most people believe: Maybe forcing young people to stay in school <span style="font-style:italic;">increases </span>their propensity to commit crime! (25). I always thought voluntary work (paid or volunteer) was the best way for one to straighten oneself out.<br /><br />But, the thing is, since <span style="font-style:italic;">when </span>did government want people to think? It never has. Actually, the British government was overtly worried in 1803 about people being literate enough to correspond or to understand Thomas Paine (26). In fact, taxes on paper and other obstacles were placed, but most people learned to read on their own anyway! Literacy is in the people's rational self-interest, so we do not need government to pretend that government programs are necessary for literacy. People read <span style="font-style:italic;">despite </span>government, and are therefore better able to think and question authority.<br /><br />There is no reason to think anything has changed since 1803 as far as authoritarians' desire to rule is concerned. Nobody can tell me that whistleblower Julian Assange, the hero who exposed a great deal of government corruption and hanky-panky, is being persecuted for any <span style="font-style:italic;">other </span>reason than because he is upsetting the authoritarian applecart. You'll notice that <span style="font-style:italic;">thinking </span>people, not just libertarians, but leftists and even some neo-conservatives, are rallying behind the hero, while the establishment is livid enough to be calling for an end to him and Bradley Manning, who is accused of helping him, (27) by any means, even the death penalty! We need to rally behind both of these hero journalists.<br /><br />Thinking people and the government are natural enemies. So, why would government ever educate? The best you can say for government schools is that they <span style="font-style:italic;">train </span>people to do the heavy work of the economy.<br /><br />But government schools also claim to give everyone equality of opportunity. One does not pay tuition, at least not directly, in grade and high schools, so theoretically all have a chance. But, we all know that public schools around town, around the country, and around the world offer different qualities of training. Realistically, there is no equality of opportunity. A baby born in Ethiopia will not have the same opportunity as a baby born in Beverly Hills. It does not need to be due to any prejudice, such as race or gender prejudice. It might not even be the economic system or the per capita income. It is simply that they were born in places where the opportunities are different possibly because of different climates. It is nobody's fault. It just <span style="font-style:italic;">is</span>.<br /><br />Then, of course, people use their opportunities differently. Some will be more productive because they want to make more and others value leisure enough to cut back on work and accept lower pay. Is it fair that they have different purchasing powers? Of course it is! (28). The one has more purchasing power while the other has more leisure.<br /><br />But what the "equality of opportunity" crowd is really after is equality of <span style="font-style:italic;">outcome</span>. We all wind up with the same wealth. This is not only crazy but impossible, unenforceable, and even the far left has abandoned these notions, as evidenced by the Soviet "Glasnost," as impossible. I am inclined to think that <span style="font-style:italic;">envy </span>is at the root of the quest for such "equality." Many people do not like to see anyone better off than they are. Rather than praise someone for their ability to honestly acquire money, people want to take "surplus" money and goods away. Michael Moore made a world-class <span style="font-style:italic;">donkey </span>out of himself in Wisconsin around March 8, 2011, when he said governments are "not broke," because the rich are hoarding money. Presumably government should just take it, as he seems to think it "really belongs" to the government.<br /><br />In any case, how are we ever to achieve equality of opportunity <span style="font-style:italic;">or </span>outcome when people are unique and ever-changing?<br /><br />As far as the schools go, West points out (29) that if higher-income parents are not allowed to spend extra money on a better education, then they would be inclined to outdo competing parents by pleasing school authorities. There is nothing equal about opportunity if the authority is your competitor's crony. Equality of opportunity is really better served by a free, competitive market (30).<br /><br />West's chapter on equality of educational opportunity ends by pointing out that it was well known that "the number of poor men that rose to distinction" was greater in an era that government involvement in education was small to non-existent (31).<br /><br />The reason education was so successful under these circumstances was certainly the wide variety offered by the marketplace. There is not just one kind of child. If schools are all pretty much alike as government schools are, then many children are going to have a problem because the school and methods of teaching are contrary to how God hard-wired each child. In a competitive free market, schools will vary. Also home-schooling is permitted. This way, parents have more to choose from.<br /><br />Similarly, as West points out (32), there is a problem in government schools as to what, if any, values are to be taught. His example is the question of religious values. Should the Bible be read? What religion should be taught, if any? We have had the same problems in our public schools. Should we allow prayer? Christmas carols and nativity scenes? Sex education? Military recruiters on high school campuses?<br /><br />I have my own opinions about such issues, but ultimately, in order to solve these problems, we need to get government out of education. Some private schools might have sex education, allow recruiters, or teach from the Bible, and others might not. Parents would make the choices. These issues would become moot if people could choose. Tax money now spent on public schools could stay in parents' pockets.<br /><br />Some pro-government people would allow local school boards to determine what is taught according to "community standards." If I were a parent, that would never wash, as I think most "communities" cherish low, communitarian standards, such as strict subservience on the part of individuals to local ordinances no matter how stupid they are. Examples of rules imposed by some cities and communities would be anti-property zoning laws including lawn decoration laws, house color laws, wall and fence height laws, also mandatory business licensure, blue laws, curfews, zero-tolerance school rules, clothing codes, leash laws, and other such tripe which goes on and on. Also, the "religious right" has elected school board members who are interested in teaching Creationism as fact (which I believe is as much hypothesis as the Darwin "theory"). They may also want to liberalize rules that censor prayer and Christian speech, but, I wonder, how well would they defend Muslim speech? Even rule on the local level is still rule, and schooling is one-size-fits-all.<br /><br />So, why wouldn't the brightest students just quit? If school is such a waste of time, why not go to work instead?<br /><br />Of course, "child" labor laws stifle any real ambition in youth and they foster dependence. Such laws might go a long way toward preventing parents from enslaving their offspring, but when they affect young adults up to age 18 they are ridiculous. So, if one cannot work at all or if one's parents can steal one's wages, one is behooved to continue in school.<br /><br />Also, high school graduates can command better salaries than non-graduates, and college graduates can command still more. Do these degrees mean a person will be a better worker? Maybe, as anyone who is stick-to-it-ive enough to earn a college diploma is also disciplined enough to hold a job. In fact, my first job seemed to be a vacation compared to both high school and college. At least I did not have to do homework from suppertime until bedtime nightly.<br /><br />But, did the courses in my major prepare me for the job? Only one of them really did. The rest was on-the-job training, and every new employee was a college graduate with that major and needed the same on-the-job training.<br /><br />Nobody who had not earned a college degree was even considered. Why? I really don't know. Licensure laws and union rules go a long way towards raising the bar to keep people out of a profession, thus raising salaries for those already there (33), but there is still something "mystical" about a college degree. It matters not whether one can think outside the box or not.<br /><br />I went to a good private liberal arts college where students were encouraged (nay! <span style="font-style:italic;">required</span>!) to think for themselves. The first thing I had to do upon setting foot on campus was to write a short <span style="font-style:italic;">subjective </span>essay. The last thing I had to do before receiving my degree was to write a "philosophy of life" thesis. (When I pull these out I see the work of a budding libertarian! I didn't even know the word "libertarian" yet!) In between, I had to take courses out of every department, with class participation, and complete a major.<br /><br />But, how many colleges and universities give you credits for what the establishment would call "mouthing off?" Not many. Home laundering and wrestling, perhaps. But my state university graduate co-workers, once on-the-job trained, could do everything I could do, except "mouthing off," which was my own private domain. I worked in a hospital laboratory. My boss, who was very tolerant as long as the work was done very well and on time, said, "This is the only lab with a philosophy department." I cannot really consider non-thinkers as "educated" no matter how many degrees they have. But they had <span style="font-style:italic;">training</span>, as per Albert J. Nock, and the almighty diploma.<br /><br />So, for whatever reason, a college degree pays for itself. But, how do we know that is the best investment? Investment in stocks or gold might or might not pay more (34).<br /><br />Nowadays, one must also consider that many students graduate with thousands of dollars of debt, and jobs are hard to come by at this time in early 2011. Many graduates owe thousands and are unable to find any work at all. But, the statistics out now, January 7, 2011, that I saw on CNN, show the unemployment rate for college graduates is only about 5 percent while for high school graduates it is about 10 percent.<br /><br />Another factor at work is the instability of the dollar (35). We learned from Dr. Rothbard that we cannot count on a stable dollar. People <span style="font-style:italic;">do </span>count on it, but that is hopelessly naive. It is the best and brightest that realize that this can have an adverse effect on the desirability of a degree. <br /><br />The West book is a bit tough on a certain dyslexic with a very short attention span, so I will set that aside at least for now and turn to John Taylor Gatto, who probably knows more about what is wrong with schooling than anyone else. In the prologue to <span style="font-style:italic;">Weapons of Mass Instruction</span> (36), it becomes apparent that Mr. Gatto is on the same page with Albert J. Nock. Mr. Gatto was awakened to the establishment's purposes for mandatory schooling when he read a book by long-time Harvard President James Bryant Conant called <span style="font-style:italic;">The Child, the Parent and the State</span> in which he mentioned the "revolution" in education in the early twentieth century that Albert J. Nock mentioned. This was, of course, the Neanderthal "progressive" era. Conant refers to a 1918 book by Alexander Inglis called <span style="font-style:italic;">Principles of Secondary Education</span> where the real purposes of compulsory schooling (preferably in huge public schools) are spelled out (37).<br /><br />Very briefly, they are habitual obedience, role orientation (as opposed to goal orientation), favoritism (Goody Two-shoes types get preferential treatment while nerds like me get crumbs. I remember!). So much for teaching students to <span style="font-style:italic;">think</span>! The idea then, as now, was to make cheerfully obedient citizens who would ante up any taxes demanded and would parrot blathering nonsense such as "It's for our safety," or the war is being fought "to keep us free."<br /><br />As time went on, the corporate establishment, as exemplified by Carnegie and Rockefeller (and I believe the name John Dewey will come up), along with government ,got more involved with education. Also, such "science" as behaviorism and Darwinism became involved, to study how individuals think and behave, not as a way to help individuals learn critical thinking, but as a way to control their thoughts (38). There were many publications in the mid-twentieth century pushing these ideas, and the results were the likes of "school to work," "outcome-based education," and other high-sounding ideas that were a disaster to true education.<br /><br />One U.S. Office of Education publication (where in the Constitution is this Office authorized?) "redefined 'education' after the Prussian fashion as 'a means to achieve important economic and social goals of a national character.' " That says it all. This has nothing at all to do with true education. It has everything to do with social engineering.<br /><br />And it's working, much to the detriment of our once-free country.A docile populace is lapping up government propaganda, including the idea that whistle-blower hero Julian Assange should be hanged, while actually people should be seriously questioning how government is getting away with doing such harm to us all.<br /><br />Even more scary, all of this hearkened forward to the use of such drugs as Ritalin on millions of youths, and the drumming out of non-establishment political candidates (40).<br /><br />This is all quite deliberate. In 1885, the Senate Committee on Education issued a statement that education was causing discontent, and the ability to think on the part of workers was interfering with plans to manage (41).<br /><br />And the ability to think in the general population is obviously a threat to the entrenched establishment. As long as officials are chosen in general elections, and bureaucrats are appointed by these officials, the common people have the last word. Therefore it is essential to make sure voters choose the "right" officials. Voters must be made to see only the two establishment political parties as viable options, and must be made to ignore not just the many other parties, such as the Libertarian and Constitution Parties, but also certain non-establishment candidates within the establishment parties, the most important being the exceedingly popular Republican Ron Paul, whom I vigorously support. I am a charter and lifetime member of the Libertarian Party, but I will do whatever is necessary to support him, up to and including to re-register Republican temporarily and then fumigate before returning Libertarian.<br /><br />John Taylor Gatto spells out exactly how it happened that the electorate is so naive. And, in his second chapter, he gives numerous examples of "unschooled" people who have made their mark. Examples ranged from Thomas Edison to Warren Buffet to Mark Twain (whose work the establishment is trying to change to make "politically correct"). Other examples are poor students or non-students who have misused their ability to think to destroy our country. They include George W. Bush and Franklin D. Roosevelt. On the good side, Gatto points out St. Paul, whose letters to early congregations underscore individualism, decentralization, and the use of the mind. With early Christians, the main thing was a personal relationship with Jesus Christ, and not rules, rituals, and hierarchy (42).<br /><br />The schools ought to take a page out of St. Paul's book, meaning the inspired Bible, inspired by God who designed and created human beings and therefore knows how human beings work. But government schools behave more like government bureaucracies, which they are, and this is why they don't educate.<br /><br />Schooling by government at the local level is bad enough even with parental input. But, when George H.W. Bush was elected President in 1988, his campaign promise was to be "the education President." He also promised to reduce federal government spending, regulation, and taxes. While he certainly failed to deliver on these latter promises, he did keep the former one with a vengeance (43). I remember hearing that the Soviet premier had said that every child in a given grade in the USSR would be on the same textbook page on the same day. How crazy, I thought, when you have a huge country with many languages and cultures. It is getting that way here now, with national standards, while even the best teachers are being forced to teach for national testing.<br /><br />John Taylor Gatto could not stand it. He devised a way to challenge students to get out into the real world and discover ... and <span style="font-style:italic;">think</span>! He sent them off, preferably alone which fostered self-reliance, to all kinds of places to accept challenges head-on. This is what is normally done by graduate students! The hardest part was grappling with bureaucrats. Not only did it work, but it worked fabulously. He and the students earned all sorts of awards. The establishment had no clue how! It was because the jackboot of the system was off students' necks, and students were learning to be participants rather than spectators, and seekers of their own goals (44).<br /><br />And some of these students, I am sure, became a pain in the neck for the establishment because they acquired the ability to see through establishment propaganda (45). I hope I measure up to this myself.<br /><br />Truly educated people who think, and principled people who put principles <span style="font-style:italic;">first </span>are monkey-wrenches in the system. In Communist Russia they were called "wreckers." Here, I hear the word "uncooperative" a lot. The System, based on "science" (yeah, right) cannot withstand such people, and the powerful want their almighty System to run like a well-oiled machine. This is what public schooling trains people for. If you zig when everybody else zags you are trouble (46).<br /><br />Most people, after 12 or more years in mind-numbing school where conformity and obedience are by far the easiest way to survive, simply give up on fighting the System. No wonder there is so much addictive behavior (47).<br /><br />Mr. Gatto continues on with a talk he gave in 1991 in testimony to the U.S. Senate Committee on Labor and Human Relations. They were speculating on how school would look in ten years. Senator Ted Kennedy was the chair. What Mr. Gatto said must have ruffled some establishment feathers. School had not changed for more than 100 years and probably would not in the next ten. The status quo is built into the system because, like all government entities, there is too much at stake for job-holders in schools, who are actually union bureaucrats, politicians, campaign donors, and others who benefit from the status quo.<br /><br />As someone who has numerous issues with unions (closed shops, meaning required membership for those in certain lines of work for one thing, and the attendant exclusion of many from fields of their choice for another), my first thought is that teachers' unions are instrumental in resisting change in government schools. Steven Greenhut (48) acknowledges that public employee unions are getting the royal treatment. I agree; I have said any number of times that government people are treated as if they are <span style="font-style:italic;">better </span>than the rest of us. They certainly are coddled (49). Not to mention they are a huge voting bloc, so public officials are inclined to pander to them.<br /><br />While lucrative government salaries and benefits surpass private ones on similar jobs, government people can also get away with murder, sometimes literally, as they are often not prosecuted for lawbreaking. The propaganda would have you believe that some government employees, particularly police and firefighters (teachers too, perhaps) are "selflessly putting their lives on the line to protect and serve us all." Undoubtedly some are. However, this is always trotted out to justify the high salaries and benefits, and to justify elected officials' backing of these employees.<br /><br />No wonder government employees are change-resistant. No wonder government is big and getting bigger.<br /><br />In Greenhut's chapter, "The Education Racket," he says he lives in a terrific school district where there are many Asian immigrants. These ethnicities are very anxious for their children to get the very best education. Test scores are very high. Maybe this is why Asians seem to be smarter than other races, or maybe they really are smarter and therefore more interested in education.<br /><br />But when Greenhut questions unionization or the public school monopoly, even these people think he is nuts (50). These ideas are out-of-the-box thinking and they are too politically incorrect to even consider. The parents and teachers had themselves been public school students and had lost their critical thinking abilities.<br /><br />The thing is, people will not consider real change in public schooling for the same reason they will not consider real change in other areas of government. The decision-makers are in lucrative positions, thanks to union, tenure, salaries, benefits, and pensions. This does not even <span style="font-style:italic;">mention </span>political action! We cannot expect any change. Mr. Gatto is right about that (51). And, these public "servants" have turned into <span style="font-style:italic;">masters</span>. We all know that. I needn't hash through that again. Just look at Wisconsin in March of 2011.<br /><br />The fact that young lives, particularly in inner city schools, are ruined does not seem to matter (52). This is typical. Government does not care about individuals, particularly if these individuals have no money and have no vote. Public school students do not pay union dues either, so why should unions give them the time of day? (53). The important thing to the powers-that-be is to keep kids in their schools, not only to keep kids from learning how to think, but to keep the cash flow positive. Money flows into districts based on average daily attendance, ADA (54).<br /><br />So, if anyone says that students count, what they are referring to is the <span style="font-style:italic;">head count</span>. In my state right now (late January, 2011) a new Republican, fiscally sort-of conservative, governor has just been sworn in. One of the first things he is doing is to cut the budgets of state higher education. Students, faculty, and administrators are livid, of course. Heads will roll and employees will be thrown out of work. Students will have to drop out for lack of funds. But, at the same time they are talking about a new domed arena on the campus. Why? They already have a very nice arena over there. And in town we have a big football stadium and a very nice minor league baseball stadium that possibly could be upgraded to major league if needed. I oppose bringing in major league as we are in a deepening recession and more tax-funded projects would not help, and private concerns need to be pinching pennies now, too.<br /><br />Having said that, why can the state afford a new arena when it cannot afford to keep tuition rates down and can no longer afford to provide what it has been providing to students?<br /><br />Nobody questions this on the mainstream news, and most people know so little about economics that they believe the state should not slash education budgets, for the federal government can always step in and pick up the tab. If they don't say that, they will probably say the new arena will come out of a "different budget," will "provide jobs," and will "attract tourism."<br /><br />In any case, no matter how it plays out, bureaucrats and the well-connected will make out like bandits on the backs of students and taxpayers, and the arena will become a white elephant, sitting empty most of the time. I have seen this so many times.<br /><br />Gatto winds down the book (55) by comparing "schooling" with "education." He is on my page ... actually I am on his since he had this all figured out before I did. Education fosters independent thought and independence on the part of the individual. Schooling renders one, well ... brain-dead. Let's face it. People believe that the accumulation of "things" is the be-all end-all, and how you do that is to conform, obey, work hard at a non-thinking job, and stay out of trouble.<br /><br />There is nothing wrong with living well. But there is a <span style="font-style:italic;">lot </span>wrong with conformity and obedience; what is the point of living well if you are sleepwalking through life?<br /><br />While I was in a health-related career, there was nothing that made me feel better than to have a doctor tell me that my work had helped him or her save a patient's life. This has to be the best feeling one can have.<br /><br />But a very close second is the euphoric feeling I get when I say "No!" to someone in "authority." Not only is it because of the sheer act of will, but their facial expression is always priceless! It shows how obedient people are, since "authorities" are not used to being said "no" to, so their eyes widen and their jaws drop.<br /><br />Only educated people can experience this and I would not trade it for any amount of gold.<br /><br />So, to go back to the original question: What are we going to do about this? To separate school from state is what is needed but it won't be that simple. Mr. Gatto ends <span style="font-style:italic;">Weapons of Mass Instructio</span>n with what he calls "The Bartleby Project." In a nutshell, when students are told to take a standardized test, they can refuse, come what may (56).<br /><br />(1) Albert J. Nock, <span style="font-style:italic;">The Theory of Education in the United States</span>, Ludwig von Mises Institute, Auburn, 2007 (First Edition 1932).<br /><br />(2) http://www.rutherford.org/articles_db/commentary.asp?record_id=679 John W. Whitehead, "Raising Up an Orwellian Generation." October 11, 2010.<br /><br />(3) Howard Zinn, <span style="font-style:italic;">A People's History of the United States</span>, HarperPerennial, New York, 1990.<br /><br />(4) Ibid. P. 256-258. If one reads this in context, at least beginning on P. 256, one can see the marked leftward slant.<br /><br />(5) Nock P. 21-24.<br /><br />(6) Ibid. P. 27.<br /><br />(7) Ibid. P. 42, 43.<br /><br />(8) Ibid. P. 32, 33.<br /><br />(9) Ibid. P. 58.<br /><br />(10) Ibid. P. 59.<br /><br />(11) Ibid. P. 62.<br /><br />(12) Ibid. P. 70.<br /><br />(13) Ibid. P. 72-75.<br /><br />(14) Ibid. P. 77.<br /><br />(15) Ibid. P. 89.<br /><br />(16) Ibid. P. 90.<br /><br />(17) Ibid. P. 92, 93.<br /><br />(18) Ibid. P. 113.<br /><br />(19) Ibid. P. 116.<br /><br />(20) Ibid. P. 119.<br /><br />(21) Ibid. P. 122.<br /><br />(22) Ibid. P. 124.<br /><br />(23) West, P. 35.<br /><br />(24) Ibid. P. 37-39.<br /><br />(25) Ibid. P. 40, 41.<br /><br />(26) Ibid. P. 48.<br /><br />(27) Karen Kwiatkowski, "Brad Manning Has Rights!" http://www.lewrockwell.com/kwaitkowski/kwaitkowski260.html December 20, 2010. Manning has not been convicted but is suffering unconstitutional treatment at Guantanamo Bay for scaring the establishment. (Actually he is being held in an onshore facility, but he might as well be at Guantanamo.)<br /><br />(28) West, P. 61.<br /><br />(29) Ibid. P. 71, 72.<br /><br />(30) Ibid. P. 76.<br /><br />(31) Ibid. P. 82. West quotes Dicey, <span style="font-style:italic;">Law and Public Opinion in England</span>.<br /><br />(32) Ibid. P. 84 on, Chapter 6.<br /><br />(33) Ibid. P. 115-116.<br /><br />(34) Ibid. P. 118.<br /><br />(35) Ibid. P. 120.<br /><br />(36) John Taylor Gatto, <span style="font-style:italic;">Weapons of Mass Instruction</span>, New Society Publishers, Gabriola Island (B.C., Canada), 2009.<br /><br />(37) I could not find the book in the public or university libraries. Maybe someone does not want it read.<br /><br />(38) Gatto, P. 3, 4.<br /><br />(39) Ibid. P. 5.<br /><br />(40) Ibid. P. 6.<br /><br />(41) Ibid. P. 15.<br /><br />(42) Ibid. P. 54, 55.<br /><br />(43) James J. Drummey, <span style="font-style:italic;">The Establishment's Man</span>, Western Islands Publishing, Appleton, Wisc., 1992, P. 59, 60.<br /><br />(44) Gatto, P. 96, 97.<br /><br />(45) Ibid. P. 107.<br /><br />(46) Ibid. P. 126, 127.<br /><br />(47) Ibid. P. 127.<br /><br />(48) Steven Greenhut, <span style="font-style:italic;">Plunder! How Public Employee Unions are Raiding Treasuries, Controlling our Lives, and Bankrupting the Nation</span>, Forum Press, Santa Ana, Calif., 2009.<br /><br />(49) Ibid. P. 1-3.<br /><br />(50) Ibid. P. 164.<br /><br />(51) Ibid. P. 166.<br /><br />(52) Ibid. P. 170.<br /><br />(53) Ibid. P. 173.<br /><br />(54) Ibid. P. 180.<br /><br />(55) Gatto, P. 177, 178.<br /><br />(56) Ibid. P. 202-206. The project is self-sustaining. Please see http://www.johntaylorgatto.com.<br /><br />Please continue on to the Epilogue and Further readings, which might show up on your computer as "Older Posts." Thank you.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-28683540907897647682011-05-23T19:54:00.003-04:002011-05-27T21:40:23.320-04:00EpilogueJohn Taylor Gatto's <span style="font-style:italic;">Underground </span>is a very rich resource for background readings. He names establishment names, big names, and many books by these big names expounding establishment goals. There is virtually no way to miss the overt pronouncements of what the establishment had in mind for itself and for the majority of the American people ... or the whole world. <br /><br />It was based on the idea that human beings could be controlled the same as machines, that workers were part of the machinery, and that they had no free will. Whether they had read or understood the great economists such as those Ludwig von Mises studied under is questionable. Probably not. They must have sensed, however, that their plans would cause wealth to gravitate toward their own establishment interests, leaving the vast majority just sufficient to keep them content enough not to rebel. The establishment has been working on all of this since the time of Lincoln.<br /><br />And it is working! The minority of decent people, such as Ron Paul, libertarians, and constitutionalists, are horrified, but we don't quite know what to do about it, except to <span style="font-style:italic;">educate </span>people, and hope, in turn, these people will educate their children and others, one by one by one, each one educating two. This is how to restore both education and freedom.<br /><br />Otherwise, I wonder how many people will die, be imprisoned, and/or be impoverished before there is an uprising here like the uprisings in the Middle East. If that happened, what we have could be replaced by something as bad or worse.<br /><br />Therefore, we must <span style="font-style:italic;">educate</span>. Not school, but <span style="font-style:italic;">educate</span>, starting with the person in the mirror.<br /><br />Freedom does not mean very much to people who do not think for themselves, and to think for oneself means to be educated, and then <span style="font-style:italic;">to </span><span style="font-style:italic;">educate</span>.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-35827091404872955522011-05-23T19:48:00.003-04:002011-05-28T17:25:46.417-04:00Further readingshttp://www.newswithviews.com/Cuddy/dennis202.htm Dennis Cuddy, "A Guinea Pig Remembers." The author was a student who was used in psychological experiments on students. Many establishment names mentioned by Gatto turn up here. March 7, 2011.<br /><br />http://www.campaignforliberty.com/article.php?view=1165 Jim Powell, "Public Schools and Social Conflicts." Public schools do not prevent conflict. They <span style="font-style:italic;">cause </span>it. October 21, 2010.<br /><br />http://www.npri.org/publications/homeschoolers-reveal-the-path-to-greater-educational-achievement <br />Barbara Dragon, "Homeschoolers Reveal the Path to Greater Educational Achievement." The key to achievement is the absence of government regulation. December 6, 2010<br /><br />http://www.freedomsphoenix.com/Article/081186-2010-12-31-is-this-the-public-education-you-are-paying-for.htm?From=News <br />Nina Dimitrov, "Is This the Public Education You are Paying For?" She had dreamed of being a teacher since she was little, and became a very good one. But the nature of government school was such that she could not continue. December 31, 2010.<br /><br />http://www.sharonsecor.blogspot.com Sharon Secor's blog. Practicing Resistance and Raising Revolutionaries.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-30549666133765257782010-05-03T15:36:00.002-04:002010-05-12T14:44:19.908-04:00The Works of Murray N. Rothbard (Part III)(Please note: Because of Blogspot's new format, you will need to click on "Older Posts" to find the latter parts of this post. Parts III through the Epilogue will be on "Older Posts" pages. I hope you find it well worth your while to read the whole thing. And I do thank you.)Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com1tag:blogger.com,1999:blog-10767345.post-56517583358515452202010-05-02T20:12:00.001-04:002010-05-03T15:29:50.253-04:00PrologueAs I have said a few times before, history was my worst subject, contrasted to my best, gym and lunch. English was my next-worst, while the sciences were my next-best.<br /> <br />But, as time went on, I realized that science and technology are not really the most essential component in prosperity. They are hugely important, of course, as technology has given us, and I hope (and expect) will give us, more and better food and water, better homes, faster and more comfortable transportation, instant communication, and far healthier and longer lives. It seems to me that nowadays science is being emphasized in education. There was a time, during my own student years, that I thought the humanities such as history, philosophy and literature were being over-taught at the expense of science. The past is done, so why study it? We are where we are; that was then, this is now. We need to concentrate on the future because that is where we are going. This means science! Lots and lots of science! (My own aptitudes did tend to bias my thinking.)<br /> <br />Now, they are teaching science, which is fine and dandy, but the problem is nowadays, students are not taught to think critically about important issues. They may be encouraged to think, but only to a point, within certain parameters.<br /> <br />The same high school student who wins a state- or nation-wide first prize in technology and winds up being interviewed by Dr. Gupta on CNN may not realize that he is being kept within parameters when his class is asked to write an essay answering this question: “What rights am I willing to give up in order to reduce or eliminate gun violence in and around schools?”<br /> <br />The star science student might say, “See? We are being encouraged to think about issues!”<br /> <br />But look at the question: “What rights.” Isn't the answer “I will only give up this small right, but no more” about the best we can expect when the question is worded this way? If the student answers “I am not willing to give up any rights” it would be a pretty short essay and the teacher is likely to consider the assignment undone. So, the student wants to write more. If he writes that he has given up enough already and why he thinks so, he will be viewed as “selfish” and might face ostracism or even counseling.<br /> <br />Chances are it will not even occur to him that he could answer the question by saying he wants all his rights back, citing the Second Amendment, and if it does and he answers that way, he will be lucky only to get a bad grade. Many students have been suspended for much less with today's asinine “zero tolerance” policies.<br /> <br />Yes, thinking can get a student into serious trouble even if the science department is first rate.<br /> <br />Scientific innovation itself is being curtailed, I believe, because of this in-the-box thinking. And, even if it is not, the way wealth gravitates toward establishment interests (as Dr. Rothbard has shown and as I pointed out these past two winters), innovation will benefit the powerful while the rest of us are left behind.<br /> <br />Freedom, much more than technology, is essential. So essential, in fact, that the very first point Dr. Rothbard made in the Conceived in Liberty series is that history consists of the battle between liberty (the people as individuals) and authority (the State). Whenever liberty is ahead, the people prosper and progress. Whenever authority is ahead, the people become poorer and their lives become more difficult.<br /> <br />Right now, authority is way ahead. It has been ahead for decades. The people are languishing. Mainstream “news” media make a major point of this, but do not give the real reason.<br /> <br />I pray daily that liberty will rise and cut authority down.<br /> <br />But now, as a lousy history student, I want to look at what has happened in the country since my ancestor, William Bradford, came in on the Mayflower. This may give me, and you, a better understanding of why we no longer have a free country, why government is ’way out of control, why the Constitution is being completely ignored, and why most people do not even seem to notice. History repeats itself. This is true but it is because we do not learn from past mistakes!Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com1tag:blogger.com,1999:blog-10767345.post-65112163516265721152010-05-02T19:51:00.004-04:002010-05-04T15:48:56.965-04:00A New Land, A New People<span style="font-style:italic;">Conceived in Liberty, Volume I<br />A New Land, A New People:<br />The American Colonies in the Seventeenth Century</span><br />by Murray N. Rothbard<br /> <br />This first volume is about the seventeenth century and the English colonies in North America. Dr. Rothbard laments that this important period is glossed over by most historians (1). It was during this time that the British learned that the Americans were not to be toyed with, and were deadly serious about freedom.<br /><br />The very first point Dr. Rothbard hastily makes is that the American continent was first “discovered” thousands of years ago by people from Asia who crossed at the Bering Strait, where apparently at one time one could walk from what is now Russia to what is now Alaska. (Editor’s note: There are also theories that other peoples came here from Europe and Africa, though none stayed as permanently as the people who became known as “Indians.”)<br /><br />In Europe, as Dr. Rothbard starts the book, until around the eleventh century, poverty and squalor prevailed because of feudalism. Then, feudalism began to crack, and among areas that were free of feudal restrictions, trade picked up and spread (2). Consequently, goods and services became more available, and many people prospered. Trade routes were developed by land or sea or both.<br /><br />This lasted for quite a long time, until the fourteenth century when it came to a halt. The reason it stopped was the new wealth was tempting to the powerful (read government authority), who wanted to get that wealth to use for their own purposes which were inimical to freedom and prosperity (3). New nation-states were forming and, of course, governments are always looking for sources of money. The systems imposed on economies were to all intents and purposes mercantile systems. We have, at least a couple of times in past essays, discussed what Dr. Rothbard defined as mercantilism, and compared it with the system the Founders rebelled against and the system we are languishing under today. What galls me the most is that people today are out in la-la land pretending to believe, even actually believing that what we have is “free-market capitalism” and that we have it because of the wars we have fought. Nothing could be further from the truth.<br /><br />Mercantilism meant taxes and regulations and, in those days, ruination of trade routes. Monopoly privileges were granted by governments to merchants in exchange for the merchants' collection of taxes (4).<br /><br />However, as Dr. Rothbard points out, the free market has a way of surviving: Taxes and regulations were evaded, easily perhaps. As much as I love modern technology, the downside to it is that regulations and taxes can be enforced much more rigorously now, and they are. So, in 2009, we are not benefiting from a free market nearly as much as we could be.<br /> <br />Many explorations of the earth, including Columbus's, were in hopes of enhancing trade.<br /><br />After about a century of mercantilism and successful attempts to get around its rules, mercantilism began to crack, and economic progress began to move forward again (5). It has been shown that, contrary to some historians, a free market does not need a centralized government to develop. Quite the contrary (6).<br /><br />The specific thing important to this essay is the ascension of the Tudor dynasty in England in 1485. They re-applied medieval repression in an efficient manner. There was cruel enforcement of the rules and prohibition of dissent. This was the model for the future domination of the people of America (7).<br /><br />While the New World looked promising to Europeans who were under the yoke of stultifying mercantilism, England, which had settled the biggest part of North America, had been under feudalism for centuries and did not know anything else.<br /><br />I think feudalism is very close to socialism (or fascism). The government is the true owner of land and decides who “owns” how much and under what conditions. From 1066 until at least the 1600s, large tracts were parceled out (by government) to favored warlords. Farmers (peasants) who lived on the land were compelled to obey the overlord and were not allowed to move elsewhere, and the land was not allowed to be broken up into smaller parcels (8). The farmers were serfs, and required to work for free in exchange for rent on the land they were forced to remain on. This was lightened up by the late 1300s when money could be paid instead.<br /><br />The English had thought of the Irish as savages, and had imposed feudalism on them, along with “surplus poor” English people who were sent to Ireland to form a colony.<br /><br />As for the New World, the English government granted tracts of land to favored monopolists. These were interested in profits so they sold parcels of land to individual colonists. This was good (assuming Indians did not already own the land in question), but it would have been better if the colonists could have simply homesteaded the land for free, rather than having to pay for it (9), leaving government and monopolists out of the picture.<br /><br />In Part II of the volume, Dr. Rothbard turns to the Southern colonies in the seventeenth century.<br /><br />In England, the whole idea of colonization was to siphon off “surplus poor” and “undesirables.” They had formed plantations in Ireland, and so followed the same procedures in the New World.<br /> <br />Dr. Rothbard starts with the Virginia colony. Right away he points out that the most important decisions, those regarding land, commerce, native relations, etc., had been pre-made by the British government before any colonists arrived. Feudalism was implemented and the American Indians were driven from land that was rightfully theirs. This was modeled after the policies the English had foisted on Ireland (10).<br /><br />England was imperialistic on the high seas, too. Even though in 1602 it had agreed that the open sea was government-free and open to all for fishing, Dutch competition caused worry for English fishing, so there was an about-face, with a declaration that England possessed exclusive fishing rights in certain areas, and anyone else who wanted to fish had to pay a tax. Restriction and belligerency were on the increase (11).<br /> <br />The Virginia colony did so poorly that most of the people died. The government-imposed system, malaria, and the hard labor required were the reasons. Communist-type principles were foisted on unwilling colonists by the Virginia Company, which had received the land grant. This caused an incentive to skip work, as each was guaranteed a fair share of the common store (12). Between the malaria and the excessively strict laws, it is no wonder that most people died. Leaving was not allowed.<br /> <br />And, like the Obama administration and the Bush administration before it, the powers-that-were tried to solve the problems by inflicting more of the cause of the problems (13).<br /> <br />Finally, the system started to crack; the communist-type regime started to dissolve with grants of small plots of land to individuals who were then allowed to keep the fruits of their labor (14). The Virginia Company was taken over by liberals (classical liberals, that is, meaning of a more libertarian bent and, while it seems strange now, these liberals were predominately Puritans), who made changes that were desperately needed. Conditions, not to mention the people's morale, improved by leaps and bounds. They were even allowed to elect a General Assembly (those who could vote, that is but at least that is better than nobody having a voice at all) (15). Improvements in growing methods made tobacco a staple.<br /> <br />Things were not perfect. The Virginia Company still regulated the economy quite a bit, from who could have how much land to how much of what crop was planted to pricing.<br /> <br />All of this was labor-intensive, and had the market been truly free, it may not have been sustainable (of course as it was government ate up a lot of productivity, so maybe it would have). Slaves and indentured servants were doing a lot of the work, and of course in a free market there is no slavery.<br /> <br />The pendulum swings. King James did not take kindly to what little classical liberalism there was, even though most of the people were better off. Far from liberal, King James had wanted to ban tobacco on health grounds, just as paternalistic, authoritarian government bans cannabis and strictly regulates tobacco today (16). In 1624, the Virginia Company's charter was annulled, the King effectively stealing the colony. The King then appointed many of the officials. Legislative and judicial powers were combined which, as we know, is too much concentration of power (17).<br /> <br />Of course, the richest tobacco planters had the lion's share of decision-making power. They held many positions in the assembly and many major county offices (18). Most farmers were small farmers who, along with their families, did most of the work themselves. They were hard working and productive, and were more nearly free than they could have ever hoped to be in backward, feudalistic England (19). Crops, mostly tobacco were mainly sold to England.<br /> <br />Tobacco grew to the point that supply outran demand, forcing the price down, making it tough on small farmers who had to compete with large plantations and their bond-servant labor. But, regardless of mythology, the big planters did not have it easy either, as managing their holdings was quite more than a full-time job (20). But they did cultivate learning. Many founded “free schools,” which educated the children of those able to pay and those unable to pay (21).<br /> <br />Religion played a major role in the 17th century. In England, the Crown wanted to bring the Anglican Church under its domination in order to loot church property. In the New World, its stated purpose was to out-compete Catholic Spain. That is one of the main reasons, the Crown said, the Virginia colony was planted in the first place. Anglicanism was by law the official religion of the colony. Compulsory church attendance and certain Anglican rules were mandatory, although rarely enforced because of economic necessities. There was no separation of church and state at the parish (the smallest political unit) level. The church vestry ran the show, and could levy taxes. Catholicism was banned.<br /> <br />Liberalism ebbed and flowed, as did loyalty to the Crown. England left Virginia alone for a while, making it independent, and Virginia learned enough about defiance to groom itself for future revolution (22).<br /> <br />Dr. Rothbard devoted an entire chapter called “British Mercantilism Over Virginia” (23). I think the word “over” is especially appropriate, as mercantilism then and mercantilism now is actually rule over the population. More and more power gravitated to the governor of the colony as more rules were made to favor the establishment. Today, as I write this at the end of October, 2009, President Obama has put a cap on CEO salaries in the big banks and other big businesses that have received “stimulus” money. Anyone who accepts money from the government can expect strings to be attached, whether that money is a gift or a loan. Power gravitates toward government, and government power gravitates toward the executive. This is how it always seems to be in the absence of a free market.<br /> <br />The governor of Virginia colony made sure that he and his planter allies got the best land and had a monopoly on the Indian fur trade. They also worked for the re-establishment of the Anglican Church to instill conformist “values” (24).<br /> This is an example of how the church was used by the state to keep people obedient. Today it is the mainstream “news” media. Right now, in late October, 2009, the Obama administration is calling down Fox News and conservative talk radio for not toeing the party line.<br /> <br />The Virginia colony persecuted non-Anglicans, particularly the Quakers, as “Dissenters” (25). I guess the Quakers were the “Fox News” of their day, failing to dish out government propaganda.<br /> <br />So, while Fox News and some conservatives seem to be on the right track now in condemning socialized medicine and other authoritarian schemes, where were they during Bush's long strides into socialism?<br /> <br />As for Obama, what he is advocating is not really that different. He uses high-sounding terms, but he also emphasized that the school day should be lengthened and the school year should be lengthened, even abolishing summer vacation. This is so alarming for a list of reasons. I remember so well how very much my summers meant to me. Even today, those precious summers affect me. Without them, where would I be? As for the school day, I realize that Barack Obama is an ambitious, highly intelligent young man who probably thrived on school. But does he not remember how much more slowly the hours tick by for a child or even a teenager? In the second grade, my mornings were two-and-a-half hours long. That time seemed longer than an eight-hour workday does now. A forty-five-minute class period in high school seemed longer than two hours do now. And, then there is homework ... and asinine zero-tolerance policies ... has he never heard of burnout? This essay is coming from someone who was a highly energetic child who could not sit still, but one needs to understand that there are as many Alices as there are Baracks and there are all gradations in between.<br /> <br />Well, enough of that. Suffice it to say that today's students will fare no better than students in the Virginia colony as far as critical thinking outside the box and questioning of authority are concerned. In fact it will be worse, the super-long hours and loss of vacation time will take away time for growing and learning, and demoralized, bored students in too many cases will throw in the towel.<br /> <br />But that is what they are really after! God forbid the members of the up-and-coming generations should want to cast off their chains!<br /> <br />So freedom ebbed and flowed, and so did relations with the Indians. Sometimes there was war. The colony stole land from the Indians when they could have bought it instead. The Indians massacred colonists a couple of times, and the colonists burned Indian homes and crops. But sometimes they traded and gifted. The Indians saved the colonists from starvation at least once.<br /> <br />Now we get to (Nathaniel) Bacon's Rebellion, the revolution in Virginia. Dr. Rothbard discusses revolution in general (27) and emphasizes that it is not cut and dried. Among participants in a general revolution, each has his own specific reasons. The motives on both sides change throughout. People are not about to interrupt their daily lives and assume all the risk of participating in a revolution unless they have multiple grievances, and then some situation is the spark that lights the fire (28).<br /> <br />Some writers believe that the American Revolution (and the revolution in Virginia) was “conservative,” or against government disruptions of the status quo. Nor was this one in Virginia any “class struggle” as leftists might see it. It was against rich people, but only certain rich people, those who had government special privilege (29). It was not against wealth per se (that would be pretty stupid), but for whom the government was acting against, i.e., the non-establishment, whether rich or poor.<br /> <br />The grievances were mostly against the government and were for the most part libertarian grievances against mercantilist rules. But they were also the opposite: grievances against too much leniency toward the Indians (30). This was actually the main grievance.<br /> <br />The revolution itself failed, but Nathaniel Bacon and other leaders of the revolution were elected to high office and were able to make a few changes, despite the governor. The governor was not open to stricter anti-Indian laws, but condoned the Bacon crowd because he knew that there were 2,000-odd armed citizens who favored Bacon. Now, if this shows anything it is that an armed citizenry will behoove government officials to think twice before crossing them (31). The Bacon crowd, backed up by arms, made their way into power and passed “Bacon's Laws,” which were mostly libertarian aside from Indian policies. So, in a way, the revolution succeeded.<br /> <br />Well, power corrupts. Bacon became more of a despot as his power grew, insisting on a revolt against England, plundering, enforcing loyalty oaths (to him) and declaring martial law (32). Bacon suddenly died, and the revolution fell apart as a result (although I think it might have succeeded had power not corrupted it). The old governor proceeded to aggrandize himself more than ever (33). But, revolution became deeply ingrained in the minds of the Virginians.<br /> <br />Dr. Rothbard then turns his attention to nearby Maryland. There, the main dispute seemed to be over religion. It was a feudal colony but it had an assembly of landholders and was more liberal than Virginia religion-wise. The Puritans and the Catholics tolerated each other.<br /> <br />But, grievances mounted (34). Rents rose as tobacco prices dropped. There were issues about the Quakers, who placed God's laws over the state's laws. They were eventually expelled, but later were not just tolerated but welcomed.<br /> <br />Although Maryland was feudalistic, the conditions in the New World with its land abundance and liberal (classical, that is) tendencies, land was gradually bought up by the settlers, so feudalism gradually gave way to a market economy (35).<br /> <br />The main characteristic of feudalism, Dr. Rothbard says (36), is the “quitrent.” This is the rent landholders must pay (either in money or some other way such as a certain quantity of tobacco) to the big landlord to whom government granted the land. There was no getting around it: Pay or lose your land. Moving did not help as this landlord owned all the land. How our property tax differs from feudal quitrents escapes me.<br /> <br />Turning to the Carolinas, a very familiar name crops up: John Locke! Yes, this is <span style="font-style:italic;">the </span>John Locke, one of the forebears of contemporary libertarianism, and one of the philosophers who greatly influenced our Founders (37). Locke, of course, was a staunch defender of private property.<br /> <br />But, there is private property and there is private property. Private property under feudalism and private property in a free market are two different animals (despite leftist rhetoric - the leftists are out to lunch on economics anyhow).<br /> <br />Locke, hired by proprietors, drew up a scheme of hierarchy for the feudal Carolinas. This work was called Fundamental Constitutions, and it is to be compared and contrasted with Civil Government, written about ten years later, which defended individualism and laissez-faire. <br /> <br />The agreement Locke wrote was not really very good in the minds of today's libertarians, but at least it did include trial by jury and a large measure of religious freedom for believers in God. Non-believers were excluded from legal protections, however (38).<br /> <br />That is where John Locke was at that time. Fortunately, the Carolinas' assembly was ahead of him and never ratified the plan. Rather, the system that came into being distributed land widely, even though the proprietors got a large share.<br /> <br />The ebbs and flows of relative freedom vs. authoritarianism in the Carolinas continued. It depended upon who was the strongest, the people who favored freedom or the Crown and proprietors who didn't. Exiles from Virginia bolstered freedom, but the shoddy treatment of the Indians bolstered authority. Religious toleration and economic liberty (or lack thereof) seem to be the most important factors.<br /> <br />Now, Dr. Rothbard begins his discussion of the North in Part III of the volume, The Founding of New England. One way this area contrasted with the South was in religion. The Church of England, which was established and thus taxpayer supported, was dominant in the South, whereas in New England most people had come over to be able to practice their religion undisturbed (39). <br /> <br />The Plymouth colony that came over on the Mayflower is of particular interest. For one thing, this is the one that is in the establishment's history books. While in school, I was under the impression that this was the first colony. Of course it was not. It is also interesting because this colony is an object lesson in private property. The death rate was high for a long time because they insisted on a communist-type system. When they finally divided up the land into private plots, crops (corn was the main crop) grew in abundance. People worked hard because they knew it was their own families they were working for (40).<br /> <br />Governor William Bradford instituted the private-property system. I am proud to be a descendant of his as he apparently started the free market system here. I am not sure just how free the market became, but it was certainly a major stride forward. People stopped dying and started to enjoy a much better quality of life.<br /> <br />Like the rest of us, though, Bradford was by no means perfect. There was no religious freedom in the colony (41).<br /> <br />The Plymouth colony and many others had left England to go first to the Netherlands because of religious intolerance in their own country. People originally hoped to go back some day, but the main industry in England, unfinished cloth, was essentially destroyed by government greed. To bolster tax revenues, the government established a monopoly on trade in unfinished cloth, giving one company the special privilege and taking away 50 percent of the profits. This was one main cause of a depression (the Thirty Years' War on the continent being another), and the government dealt with the depression in ways similar to those, centuries later, of Hoover and Roosevelt (42).<br /> <br />So, the Plymouth colonists landed in Massachusetts. Later on, in England, there were great strides toward economic liberty, that is, as long as England had the sense to stay at least behind the scenes of the Thirty Years' War. They had “only” acted through diplomacy and subsidies (43). Once England did enter the war, taxes were raised to finance it over the libertarian objections of Parliament. No taxes would be ratified until some grievances were addressed. So, true to form, the Crown dissolved Parliament and arrested opposition leaders (44). The Puritans, which most of these colonists were, had been oppressed but now it would get worse. On the continent, the Catholics were prevailing against the Protestants, and this was likely to spread to England, so America was looking really good to the Puritans (45).<br /> <br />It was not that freedom was their long suit. They may have been sympathetic to economic freedom, knowing that economic freedom and prosperity go together. They did, however, set up a “theocracy” in Massachusetts. Theocracy means rule by God, but in reality it is rule by people who use God as an excuse to make everyone over in their own image. Of course, strict, unquestioning obedience to civil authority was part and parcel of the system. Natural liberties were to be regarded as a “wild beast” and to be tamed by “authority” (46).<br /> <br />Though ministers were selected by congregations, town governments paid their generous salaries (47). These ministers had a great deal of power over the people. Only church members could vote, and the minister had to approve all memberships.<br /> <br />I am sure I have no clue how much good it does the individual to practice Biblical morality when the club of government is about to come down on one's head. Even this is under the naive assumption that the “authority” that is wielding the club even understands what the Bible is really saying. The obedient subject is actually obeying the club-wielder rather than God, and to me that is completely pagan. You are not your brother's keeper; rather, you need to be your brother's brother. This is why Thomas Jefferson and the Founders were quite determined to keep church and state separate.<br /> <br />Dr. Rothbard makes some interesting comments on the forcing of people into a set of moral rules (48). This only spawns hypocrisy. Those who believe in a moral code do not need to be coerced. Those who do not believe in it might act according to the code, but go on believing differently. They are made to be hypocrites because they are forced to act one way even as they believe another.<br /> <br />I call this “acting lessons.” When a kid, if I was told I would have to behave in a certain way in order to get a privilege (or in some cases to exercise a right, as children do have rights), I'd behave in that way. However, once obtaining the privilege, my behavior reverted.<br /> <br />“Keep your Sunday dress on through lunch,” I'd hear, “and you can play outside all afternoon.” So, I would, but do you think I preferred a frilly dress and Mary-Janes to shorts and bare feet? Hah! That will be the day! In fact I hated them worse! I was putting on an act. All I know about acting (quite a bit, perhaps) I learned in this manner. Later on, for the boss, I put on an act of not realizing quitting time was soon. Especially on Friday!<br /> <br />And of course people were encouraged to rat on each other (49), just as today 800 number hotlines are available to report suspicious activity.<br /> <br />It should surprise nobody that the rules were not just about religion any more than the restrictions we languish under today are just about security (or health care). Laborers and indentured servants got the brunt as keeping them in their place was important to the well-connected and powerful (50).<br /> <br />Then, enter one Roger Williams, a minister or church teacher, who seriously stirred the pot with decentralist/libertarian ideas. Not only did he believe that church authority should not be backed by any civil authority, but that the Crown should not be making land grants. The land belonged to the Indians, he correctly believed; therefore if one wanted land, one should make them an offer for it (51).<br /> <br />Williams was strong-armed into recanting, but fortunately he said this again, and more (52). Finally Williams was exiled after he repeatedly refused to recant, but some of the colonists prepared to follow him. The authorities were then determined to ship him against his will back to England, but he fled alone on foot before they could (53). After Indians had put him up for the winter, some colonists then joined him in a move. He founded Providence, bought land from the Indians and was determined to preserve religious freedom (54).<br /> <br />Williams, who had Dissenter roots in England, was probably the most libertarian of his time in his religious freedom views. He called for liberty of all religions, not just Christian sects.<br /> <br />In the new place, there were some problems about land allocation, but the religious freedom stuck. Roger Williams subsequently invited Anne Hutchinson and her following to move there after she had been tossed out of Massachusetts for heresies. Once there, she and her husband saw to the continuation of religious freedom (55). This lasted until they were overthrown by their deposed authoritarian former governor, but a compromise was reached in Hutchinson's favor.<br /> <br />Meanwhile, Massachusetts continued its harassment, and Anne died in a raid the Indians conducted on Massachusetts' behalf. The so-called “Christians” in Massachusetts gloated, but her spirit lived long after the theocracy ended.<br /> <br />Her legacy lives on today in the minds of Christians who realize that civil government action is not the best way – is not any way — to make people “good.”<br /> <br />Well, it should surprise nobody that trouble brewed in Rhode Island, too. Roger Williams became very moderate, and he and the authoritarians wanted to get rid of a real libertarian-leaning radical, Samuell Gorton and his followers, and they enlisted Massachusetts to do it. Of course, the Puritans in Massachusetts were willing as long as they got to rule (56).<br /> <br />In the end, troops from Massachusetts overcame the Gortonites and dragged them back to Boston. The Gortonites surrendered on condition they go back as “guests” rather than prisoners, but governments never keep their promises, so they were dragged there after they surrendered. Once there, the brave Samuell Gorton got to speak in church one last time, and he said there is only Christ, and all of the ordinances and ministers were man made. Gorton and his followers barely escaped the death penalty. Rather, they were put on a chain gang and worked in public, where they defiantly went on preaching. Finally, they were banished, rather than killed, and they went back home (57). I have to wonder if there was some divine intervention there when one must consider the disregard the Puritans had for life.<br /> <br />Roger Williams had been a pretty good libertarian (at least by seventeenth century standards). While in England, he had become involved with the Levellers and other libertarian movement organizations, but the movement collapsed. That must have been really discouraging. Eventually, the power he had in Rhode Island took its toll on him.<br /> <br />He took a major fall. This was not a fall down the stairs. Would that it were something that could be so quickly recovered from. But it was an about-face on his philosophy. We don't know why, but Dr. Rothbard thought it was the corrupting influence of power along with the disappointment over the demise of the libertarian movement in England.<br /> <br />The first sign of Williams' fall was his imposition of, of all things, a draft. The draft is about the most authoritarian of institutions; it is but slavery, not different from any other kind of slavery. There was resistance on the part of the Baptists, who were very libertarian in their views. In fact, they believed that government is anti-Christian (58). I am inclined to agree. I cannot be certain that government <span style="font-style:italic;">per se</span> is anti-Christian, but many things government does clearly go against the laws of God. It routinely lies, cheats, steals, and kills.<br /> <br />Williams believed that individuals must obey officials, but never said anything about how or why some became officials (59). A passenger ship with the whole population aboard was what he used as an analogy, but who owns the ship to make decisions? And, why should there be only one ship? He could not answer, and as far as I know neither could anyone else since.<br /> <br />He started right in by centralizing Rhode Island. Towns lost their home rule first. Then, civil liberties were viciously attacked. Liquor was compulsorily licensed and taxed. “Verbal incivilities” were outlawed, probably defined about as well as “sexting” is today. Morality was legislated and punishments intensified.<br /> <br />The Anne Hutchinson incident, along with Massachusetts-led aggression against the Indians, brought the various authoritarian colonies together and a New England Confederation was formed (60). This almost amounted to a new layer of centralized government, but it was enough of a republic that a colony could nullify its decisions (61). Rhode Island was still too individualistic to be admitted.<br /> <br />Of course, immediately there was a Puritan crackdown and tax levy on member colonies. But, arguments about wars and other matters threatened to pull the confederation apart (62). The confederation did not pull apart, and the crackdown, especially the zero-tolerance policies toward Quakers, got even worse. In fact, a “Cart and Whip Act” was passed whereby Quakers were to be tied behind a cart and dragged out of the colony while being whipped (63).<br /> <br />Dr. Rothbard was, for the most part, an objective writer, unlike some people who will remain nameless just now; he did not go off on an indignant libertarian tangent. However, I have been reading between the lines here and have detected his anger over these horrendous punishments that the Quakers were subjected to, and his admiration (which I share) for the Quakers who continually defied the punishments. They were no more than banished from the colony in this manner when they went right back and resumed their ministry.<br /> <br />The Cart and Whip Act was used primarily against Quaker women (64). The women were stripped to the waist for the dragging and whipping ceremonies, and I cannot but compare this with the pornography censorship of today.<br /> <br />It is human nature, and some humans will not exercise their God-given free will to rise above their nature. These are often the same humans (I am using the term loosely) who get themselves into positions of “authority.” They presume they are better than the rest of us, just as the Puritans believed they were better than the Quakers.<br /> <br />It is rewarding to see that the more the Quakers were persecuted, the more determined they became. Not only that, but the general population started to oppose the persecution (65). Would that people had that much backbone today. If they did, my dream of general strikes and pro-freedom, anti-government demonstrations on every street would come true.<br /> <br />In Plymouth colony at that time, we might be shocked to see that it was necessary to get government permission to build a church (66).<br /> <br />Let us not forget that today one must grovel, and pay, for a permit (permission) to build a church, a home, or anything else. And hoops have to be jumped through. All kinds of bureaucratic approvals and licenses are involved. Today the excuse is “safety” or “environment” (actually this is a cash cow for government coffers), whereas in colonial times it was religious conformity. In both cases, any official who wanted to stop the building did not have to look far to find some rule to trot out to serve his or her own ends.<br /> <br />But the theocracy was actually done in by economics. The devout Puritans knew nothing about the natural laws of economics. This law is not dealt with very much in the Bible except in a very general way. “Thou shalt not steal” really does say it all, but only if you already understand economics.<br /> <br />Consequently, trade was suspect as it took time away from “Godly” concerns (67). They did understand the value of time (which most people today do not) and did not waste any on activities they believed were unnecessary. So, trade was discouraged unless it was monopolized and/or heavily regulated. The fur trade was the main trade, and governments imposed price controls, taxes, and licensure on traders. It should not be a surprise that in Roger Williams' Rhode Island (before he fell) the fur trade was more free and furs did not become scarce as they did elsewhere in New England, where other types of trade were turned to (68).<br /> <br />Price controls played particular havoc, as we have seen in other Rothbard works. Land was cheap and plentiful while the numbers of people were low. So, the demand for labor far outstripped the supply, forcing market wages way up. Most of the indentured servants and black slaves were not farm workers (69). The government in Massachusetts passed a maximum wage law in addition to compulsory service during harvests. Of course, this only encouraged free workers to cut back on hours or move away.<br /> <br />Enforcement being impossible and the laws of economics being inevitable, the scheme only lasted six months. But, when the working class began to prosper, the establishment became angry and slapped the controls back on, this time with a minimum of hours to be worked, and with conscription. Can anyone spell “slavery”?<br /> <br />At the same time, economic ignorance (read mercantilist fallacies) brought about price ceilings on products. The powers-that-be seemed to think that if wages were depressed then prices ought to be also. They had no knowledge of what Rothbard students learn early, that market prices fluctuate relative to each other, due primarily to shifting supplies and demands.<br /> <br />Many such mercantilist schemes were tried in many places but all met with failure.<br /> <br />Mercantilism (the system dominant at that time and the system we have been saddled with for numerous decades and expect to be for the foreseeable future) is based on the idea that it is a legitimate function of government to direct the economy (70). The Obama administration assumes this, as did the sorry Bush administration before it. This goes way back, as I pointed out in my 2005 essay, to the Lincoln era. The economy is faltering badly, as is obvious to the many who cannot find work and are deeply in debt. I fervently wish the establishment and its lapdog, the mainstream media, would place the blame where it belongs, but this is not something I can hope for. My greatest hope lies in the freedom movement as exemplified by Ron Paul, the Campaign for Liberty, and also the Tea Party if the latter can stay away itself from neoconservative influence. But these could be stopped at any time.<br /> <br />Power seems to swing back and forth between the Democrats and the Republicans, as the government becomes more powerful. Those in high places want their party, and hence themselves, to be in control. The struggling regular people see that the party in control is not solving problems, so they turn to the other one. Of course, very few are aware of smaller parties and those who are seem afraid to vote for them because if they do the worse of two evils will win the election. We saw this in the off-year 2009 elections where there was a Republican sweep in what few races there were; and in early 2010 in a special election in Massachusetts to fill the seat held by the late Ted Kennedy, a Republican whose voting record in Massachusetts was indecisive at best, won, when a thoroughgoing Libertarian was available.<br /> <br />I think that the royal, feudal mercantilism of the seventeenth century had more similarities to than differences from today's mercantilism. Government had the final say. Owners of the means of production have to obey rules rather than discern and follow the dictates of the free market, and when losses occur, these owners have to absorb all the losses, while any profits have to be shared with government.<br /> <br />It is unlikely that anyone in the colonies pretended they had a free market. Maybe they were fooled into thinking the rules were good, but at least they realized that they had to obey rules. Today, particularly on the left, there is pretense that the market is unregulated and that this and corporate greed are what are causing the problems. On the right, you see an even crazier pretense, that we were both free and prosperous until noon on January 20, 2009, and then suddenly everything went belly-up.<br /> <br />Cause and effect in economics takes time. Had Bush's policies been free market we would still be benefiting from them even with Obama's crazy socialist/mercantilist policies, and the harm from Obama's policies would (and will) manifest itself down the road. People need to see this.<br /> <br />People think of merchants, or capitalists, as a “class.” They are not (71). Remember Rothbard's <span style="font-style:italic;">Man, Economy and State</span>. If government grants privileges, it grants them to particular favorites, and this is at the expense of other capitalists, or would-be merchants or capitalists who were excluded altogether by government action.<br /> <br />Everybody is different and has a different situation, so there are no “classes” unless they are formed by government action. Not only that, but were there “classes” in a free market, the lines would be fine as people are always able to jump from one to another.<br /> <br />There was a battle of sorts in Massachusetts between the merchants and the Puritan fat-cats. The merchants were the “good guys,” regardless of left-wing rhetoric, as they understood that their well-being depended on everybody's well-being, and that depended on more free trade. The Puritan officials also understood that their own wealth and power were the inverse of freedom and free trade.<br /> <br />Fortunately, the liberalization of the Puritan church in England resulted in a liberalization in the new world, too (72). Unfortunately, I am sorry to say, my ancestor Gov. Bradford sided with the opponents of religious toleration (73). I guess his economic reasoning took him only so far. Plymouth colony actually became a ghost town because of these anti-freedom policies.<br /> <br />The more the establishment cracked down, the more people resisted. Many flocked into Quaker and Baptist churches, and elected non-establishment people to higher office (74). Removal of these officials brought about more resistance.<br /> <br />After the restoration of the monarchy in England, which had given way to democracy for a while, the king did some good by extensive land grants to his brother, and this caused some shifts that eventually ended Puritan theocracy in New England (75). Well, even monarchy is not always bad for freedom. But while theocracy was dealt a major blow, mercantilism was not. The monarchy re-imposed many of its economic restrictions and monopolies (76).<br /> <br />Dr. Rothbard then turns to the Dutch colonies in New Netherland, where New York is now. An explanation of what was happening in the Netherlands was in order, although the situation is familiar. There was the establishment who were rich fat-cats, and there were the merchants. I don't think religion was the major factor that it was in New England, but the establishment consisted primarily of Calvinists. The Calvinists were Christians who did not believe in a free will and favored a strong central government. They are a mystery to me. Just suffice it to say that they, like today's neoconservatives, wanted government to direct the entire economy in such a way as to benefit the big guys. This carried over to the colonies in North America. The system was feudal and mercantilist, and there was close to zero freedom for a while (77). The colonies suffered for lack of population and lack of prosperity. <br /> <br />Again, freedom ebbed and flowed and so did colonist well-being.<br /> <br />Finally, changes occurred. They had to. More freedom brought more people. The individual Dutch got along fine with the individual English, of course. Why shouldn't they? But, governments are always greedy and jealous … determined to be number one ... so the Netherlands and England were at odds over the land (78).<br /> <br />The Calvinist theocrats held the power in New Netherland, so there was no religious freedom. Only the Dutch Reformed church was allowed (79). Quakers were imprisoned and expelled, being dragged away by the tail of a cart. (There was no mention of being whipped but that would not surprise me at all as authoritarians so often adopt the perverse ideas other authoritarians lie awake to cook up.) This persecution only served to strengthen the Quakers (80).<br /> <br />When the Duke of York conquered New Netherland for England, the colonists gave right up. They did so not so much because they were greatly outnumbered, but because the English guaranteed them basic freedoms, none of which they had under the Dutch (81). So, New Netherland came to an end. Of course, governments never seem to keep their promises, and the Dutch population went on suffering at the hands of the English (82).<br /> <br />Meanwhile, the colonies, especially authoritarian Plymouth, were harassing the Indians. Indians were required to observe the white man's laws, including strict observance of the Sabbath. It was insulting to the Indians that gun control and taxes were imposed on them and that they were forced to settle their own disputes in the white man's courts. After all, who had been there first? While Indians did get to sit on juries, the fairness of trials was questionable at best (83).<br /> <br />The situation escalated and, long story short, the Indians laid waste to many Plymouth towns, which began “King Philip's War” (Philip, or Metacom, was an Indian chief), and that ended what little freedom there was in Massachusetts. Men ages sixteen to sixty were enslaved and travel permits were required to leave one's town. Who was really the enemy here, Dr. Rothbard wonders, the Indians or the whites' own government? (84). It should surprise nobody that authoritarian New England decided to virtually exterminate the Indians. It was about the land, of course.<br /> <br />Rhode Island, as Dr. Rothbard has discussed earlier, was predominately Quaker and had a relatively libertarian administration. They saw no point in fighting in King Philip's War and believed (rightly, I think) that it was caused by persecution of the Indians (85). But, after Indians laid waste to parts of Rhode Island, the libertarianism faltered. Roger Williams had taken a great fall as we mentioned; in fact he sold Indian prisoners into slavery (86).<br /> <br />In 1675 there was a change of administrations in England that ended what little liberalism there was and began the takeover of New England by the Crown (87). Of course, the idea was to centralize, regulate, and tax. It started in Massachusetts, which put up a valiant resistance, but lost. The Crown had sent Edward Randolph to collar Massachusetts.<br /> <br />New Hampshire was next on Randolph's list. But, once New Hampshire was spoiled, he returned to Massachusetts and became collector of customs, meaning the enforcer of the mercantilist Navigation Acts. He inspected ships, and if they were carrying the wrong articles in the wrong place, he would seize the ship. This authoritarian act is akin to our present-day forfeiture laws, except, under Randolph, shippers were better off than today's victims of forfeiture laws. At least there needed to be evidence of law-breaking, and the ships were not sold with the booty distributed among officials and tattlers until the trial was over. And, unlike today, the people of Massachusetts were aware of the injustice and also aware that a jury can judge both the facts of the case and the law, so there were few convictions (88). The people of Massachusetts, Puritanism notwithstanding, had the gumption to resist Randolph's mercantilist rule.<br /> <br />But later Massachusetts fell, because the pragmatists prevailed over those who stuck to principle (89). Dr. Rothbard seems to be implying that compromise and consensus are not good in important matters and, of course, I agree.<br /> <br />Today, the Libertarian Party is divided between the pragmatic moderates and the hard-core cleavers to principle, of which I am one, and we will be sorry if things go as they have been.<br /> <br />The Crown took over all New England (except good old Rhode Island and Connecticut). There was no representation in government of the people and Edward Randolph held many lucrative offices (90). For the rest of the offices, cronyism was the order of the day.<br /> <br />Feudalistic/mercantilist regulations stifled the economy. A blatant example cited by Dr. Rothbard was that of the “carters,” or push-cart vendors. The regulations caused a shortage of carting services (91). Added to that, of course, were the old problems of tariffs and religious favoritism.<br /> <br />And, of course, there were rivalries among governments for jurisdiction and power.<br /> <br />The battle between freedom and despotism also ebbed and flowed as it always seemed to. Freedom is certainly ebbing today, but in West New Jersey, during the 1670s, freedom flowed pretty well, as a result of a fellow named Edward Byllinge, whom Dr. Rothbard describes as a “veteran libertarian” (92). He was helped by William Penn, who was also quite liberal, which makes me proud because I am a direct descendant of Penn.<br /> <br />Byllinge had been influenced greatly by the Levellers in England (whom I just have to study) who were instrumental in the libertarian movement there (93).<br /> <br />They were to have a representative assembly, trial by jury, no taxation without representation, religious freedom, and no debtors’ prisons. There were other libertarian provisions, some of which we could only dream of now (94).<br /> <br />But, as in the case of Roger Williams, when the King declared the whole government of West New Jersey to be in the hands of Byllinge, Byllinge fell and repudiated his libertarian principles (95).<br /> <br />William Penn went on to bigger and better things. The King satisfied a debt to the late elder Penn by giving the younger Penn a huge tract of land, most of which was later Pennsylvania. He sought and quickly found settlers for the land by the institution of religious freedom, and exacting low land prices and feudal quitrents (read property taxes; I would really like to know what difference it makes) (96). One of his major achievement was to make peace with the Indians, whom the Quakers recognized as what they are, human beings. And, of course, the Indians reciprocated (97).<br /> <br />Penn did not fall with a resounding splat from libertarian principles the way Roger Williams and Edward Byllinge did, but he did deviate, particularly in the area of taxes (98), but when he went back to England for an extended period, Pennsylvania's government all but stopped. It was because government officials were not paid salaries, but their main livings were made elsewhere. Their priorities were with their own livelihoods, so meetings were rarely held and government “work” rarely went forward. Pennsylvania and its people were none the worse for wear; everything went fine.<br /> <br />William Penn didn't like this. He had not counted on Pennsylvanians having minds of their own after he had done so much to form a haven for Quakers. He expected something in return: money and power. This is yet another example of the corrupting influences of power.<br /> <br />Everything stayed fine in Pennsylvania for the most part.<br /> <br />Meanwhile, things were not going so well to the north. A fellow by the name of “Sir” Edmund Andros, whose name was synonymous with tyranny among Americans, was sent by the Crown to rule (99). He started right in by ending religious freedom and instituting requirements, fees, and taxes. Not only that, but Andros, like Obama, G.W. Bush, and others before them, notably Hoover and FDR, raised government expenditures to the extent that a depression occurred (100). As we have learned, and I hope this can be easily understood, spending one's way out of recession does not work.<br /> <br />Andros was an imperialist, too, spreading his despotism over a large area.<br /> <br />Then, finally in the fall of 1688, James II, the same king who foisted Andros on the colonies, was overthrown. When news of that finally reached America (Andros found out in advance and tried to stonewall the news), a plot to overthrow Andros began (101). He did take his well-deserved fall. There was a revolution, after which he spent a year in jail (102). It was a conservative revolution, meaning the people knew what they were doing, and not only were elections held, but the franchise was extended (103).<br /> <br />The struggle was not completely over. It was difficult to get the Crown (William and Mary were in power then) to recognize the new government, but they did. Not only that, Andros and his lackeys were sent for and shipped back (like a package of lard, I like to believe). I like to imagine the colonists, including my own ancestors, partying on the shore as the ship carrying the prisoners disappeared over the horizon, and I like to think that Andros himself could hear and see the party as he went. It reminds me of the Obama Inauguration where former President Bush's plane was seen taking him back to Texas (no offense to Texas as it is a pretty good state, relatively speaking, at least in the gun rights department). He was probably looking out of the window at the events. I will continue Dr. Rothbard’s book in hopes of reading the colonists would not be disappointed in their new regime as I am in Obama. I have learned not to expect much since power always corrupts, but we'll see what Murray Rothbard, always the optimist, says.<br /> <br />Dare I hope in January of 2013 it will be Obama flying out as Ron Paul is sworn in?<br /> <br />Many writers, Dr. Rothbard says (104), have chalked up this revolution to “class” conflict, “ethnic” conflict, or religious disagreement. I think that is in-the-box thinking as is this entire obsession with race and all this “class struggle” nonsense. It was the ordinary people wanting freedom from self-proclaimed authority, very much like today's Ron Paul supporter. The opposition was the same as the opposition today: politicians, bureaucrats, and their favored cronies (105).<br /> <br />Andros was gone, and good riddance. Unfortunately, however, another evil fiend rose in his place, a fellow by the name of Jacob Leisler. Leisler was a tax-and-spend imperialist, against whom there was plenty of rebellion. He sent troops here and there to quell dissent and conquer new places. He even invaded Canada (106)! To raise the money and manpower for this, very despotic means were used which did even more to spur rebellion (107).<br /> <br />Leisler was determined to carry out the invasion despite lack of cooperation, and the expedition inevitably failed due to lack of coordination, manpower and supplies. Only one place up there was pillaged, but was pillaged thoroughly (108).<br /> <br />Leisler's self-proclaimed authority was on the line, and he dug in his heels by forbidding any emigration and ridiculously ordering any previous emigrants to return (109). Of course his reign continued to go downhill until civil war developed, and Leisler and his men were jailed by a new governor who had recently been sent by the Crown. Long story short, Leisler wound up dead.<br /> <br />Unfortunately, all of this put the old oligarchy back in power, but it was not quite the Andros regime. At least there would be a representative assembly (110). The actions of this assembly were mixed, but one good thing it did was to make sure the governor understood that he had to depend on it for funds.<br /> <br />The seventeenth century was drawing to a close. Some pro-freedom progress had been made giving representative assemblies. But, in Massachusetts, while the Puritan threat had subsided, the Puritans managed to establish their church, so that all taxpayers were compelled to support it (111).<br /> <br />This relative liberalism was short-lived as some big shots wanted to re-institute the plunder in Massachusetts. Their chance came when the witch hunt came to Salem in 1692 (112).<br /> <br />Dr. Rothbard, in Chapter 59, gives an interesting account of the witch trials and it was, indeed, a classic witch hunt, whereby if somebody did not like somebody else, witchcraft allegations were made.<br /> <br />We all know pretty much what a witch-hunt is. A present-day example that comes to mind is that of Sheriff Arpaio in Maricopa County, Arizona, who behaves as if he has never heard of the Constitution, and who is waging a vendetta against his opponents (113). Also, there was a witch-hunt against Vietnam War protesters in the late 1960s, to name another example. <br /><br />Today, outspoken dissidents need to be on guard. How the Obama administration will treat Census resisters in 2010 remains to be seen. Suffice it to say I will not talk to strangers through the door when they knock, much less open the door. Witch-hunts have happened throughout human history and probably will continue, at least as long as we are under the yoke of strong governments.<br /> <br />In Salem, eventually fully informed juries (114) and the people in general saw the light and ended the hunts (115).<br /> <br />As the book winds down, Dr. Rothbard simply states that, at the turn of the eighteenth century, the colonies were still under the Crown's oligarchic rule, only enough progress had been made that each colony had its assembly as a buffer between the Crown's despotism and the people's desire for liberty (116).<br /> <br />As Dr. Rothbard said at the beginning, history's most important consideration is the battle between freedom and self-proclaimed authority. The pendulum swings back and forth, giving first one the upper hand and then the other. I believe the pendulum swings very far into authority and then not very far into liberty.<br /> <br />(1) Rothbard, Murray <span style="font-style:italic;">Conceived in Liberty Volume I A New Land, A New People: The American Colonies in the Seventeenth Century</span> (Auburn: Ludwig von Mises Institute, 1999) P. 10. <br />(2) Ibid. P. 15, 16. <br />(3) Ibid. P. 17. <br />(4) Ibid. P. 19, 20. <br />(5) Ibid. P. 31. <br />(6) Ibid. P. 31, 32. <br />(7) Ibid. P.32, 33. <br />(8) Ibid. P. 48. <br />(9) Ibid. P. 49. <br />(10) Ibid. P. 53, 54. <br />(11) Ibid. P. 56. <br />(12) Ibid. P. 57-59. <br />(13) Ibid. P. 60. <br />(14) Ibid. P. 60. <br />(15) Ibid. P. 61. <br />(16) Ibid. P. 42. <br />(17) Ibid. P. 65, 66. <br />(18) Ibid. P. 67. <br />(19) Ibid. P. 68. <br />(20) Ibid. P. 68, 69. <br />(21) Ibid. P. 69. <br />(22) Ibid. P. 86. <br />(23) Ibid. P. 87-94. <br />(24) Ibid. P. 91. <br />(25) Ibid. P. 91. <br />(26) Ibid. P. 91. <br />(27) Ibid. P. 103 on. <br />(28) Ibid. P. 104. <br />(29) Ibid. P. 105. <br />(30) Ibid. P. 105. <br />(31) Ibid. P. 107. <br />(32) Ibid. P. 110. <br />(33) Ibid. P. 111. <br />(34) Ibid. P. 118. <br />(35) Ibid. P. 119. <br />(36) Ibid. P. 119. <br />(37) Ibid. P. 123. <br />(38) Ibid. P. 123. <br />(39) Ibid. P. 157. <br />(40) Ibid. P. 161, 162. <br />(41) Ibid. P. 162, 163. <br />(42) Ibid. P. 166. Also see my last year's essay's segment on Rothbard's <span style="font-style:italic;">America's Great Depression</span> at http://alicelillieandher.blogspot.com/2009/04/americas-great-depression.html <br />(43) Ibid. P. 167. <br />(44) Ibid. P. 168. <br />(45) Ibid. P. 169. <br />(46) Ibid. P. 176, 177. <br />(47) Ibid. P. 175 <br />(48) Ibid. P. 177, 178. <br />(49) Ibid. P. 178. <br />(50) Ibid. P. 180, 181. <br />(51) Ibid. P. 183. <br />(52) Ibid. P. 183, 184. <br />(53) Ibid. P. 185. <br />(54) Ibid. P. 186. <br />(55) Ibid. P. 194, 195. <br />(56) Ibid. P. 200. <br />(57) Ibid. P. 202. <br />(58) Ibid. P. 215. <br />(59) Ibid. P. 215, 216. <br />(60) Ibid. P. 230, 231. <br />(61) Ibid. P. 231. <br />(62) Ibid. P. 234-236. <br />(63) Ibid. P. 247. <br />(64) Ibid. P. 247. <br />(65) Ibid. P. 248. <br />(66) Ibid. P. 249, 250. <br />(67) Ibid. P. 251, 252. <br />(68) Ibid. P. 253. <br />(69) Ibid. P. 254. <br />(70) Ibid. P. 260. <br />(71) Ibid. P. 261. <br />(72) Ibid. P. 271.<br />(73) Ibid. P. 273. <br />(74) Ibid. P. 275. <br />(75) Ibid. P. 281. <br />(76) Ibid. P. 288. <br />(77) Ibid. P. 302. <br />(78) Ibid. P. 303. <br />(79) Ibid. P. 320. <br />(80) Ibid. P. 320. <br />(81) Ibid. P. 323. <br />(82) Ibid. P. 326-328. <br />(83) Ibid. P. 344-346. <br />(84) Ibid. P. 346. <br />(85) Ibid. P. 350. <br />(86) Ibid. P. 351. <br />(87) Ibid. P. 355. <br />(88) Ibid. P. 367, 368. <br />(89) Ibid. P. 371. <br />(90) Ibid. P. 376. <br />(91) Ibid. P. 382. <br />(92) Ibid. P. 397. <br />(93) Ibid. P. 398. <br />(94) Ibid. P. 398. <br />(95) Ibid. P. 400. <br />(96) Ibid. P. 403. <br />(97) Ibid. P. 404. <br />(98) Ibid. P. 405, 406. <br />(99) Ibid. P. 412. <br />(100) Ibid. P. 413. <br />(101) Ibid. P. 423. <br />(102) Ibid. P. 424. <br />(103) Ibid. P. 425. <br />(104) Ibid. P. 434. <br />(105) Ibid. P. 435. <br />(106) Ibid. P. 441. <br />(107) Ibid. P. 442. <br />(108) Ibid. P. 443. <br />(109) Ibid. P. 444. <br />(110) Ibid. P. 447. <br />(111) Ibid. P. 451. <br />(112) Ibid. P. 453.<br />(113) http://www.lewrockwell.com/ <br />(114) http://www.fija.org <br />(115) Rothbard P. 458. <br />(116) Ibid. P. 508.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com1tag:blogger.com,1999:blog-10767345.post-8455958832503514832010-05-02T19:35:00.004-04:002010-05-20T14:28:54.172-04:00"Salutary Neglect"<span style="font-style:italic;">Conceived in Liberty, Vol. II “Salutary Neglect”: The American Colonies in the<br />First Half of the Eighteenth Century</span><br />by Murray N. Rothbard<br /> <br />In the Preface, Dr. Rothbard reiterates that history is actually a story of the conflict between “Power,” meaning government authority, and Liberty (1). I guess from time immemorial, government officials have regarded themselves as better, and they have fooled enough of the common people into believing it. And, unfortunately, this is the case today, to an extreme measure, I believe, and will most likely remain the case for a very long time.<br /> <br />There are no inherent conflicts among any various “classes” or groups in society unless government intervention causes them.<br /> <br />Volume II is about the first half of the eighteenth century, the period leading up to the American Revolution. At the beginning of the century, as we observed in Volume I, the British thought they had a good grip on the colonies. Not true! Over time, the colonies were able to regain their independence.<br /> <br />The colonies had their own elected assemblies which were a check on authority. The assemblies also determined the governors' salaries, which were based on the governors' behaviors (2).<br /> <br />Dr. Rothbard begins this volume with a recap of the developments in the separate colonies. Actually, this takes up nearly half of the volume. As I read, I have a strong hunch that the conflict between liberty and authority will be prominent. Massachusetts is discussed first, and there, in the early eighteenth century, slavery and involuntary indentured servitude were rationalized by the idea of “natural hierarchy.” Some people, it was claimed, were naturally suited to serve, as they were being “protected” by their masters. These people were told they were “better off” than they would be free (3). This is so familiar. Women’s being told they needed to be “protected” under someone's wing and restricted “for their own good” is something recent enough for me to remember. And, anyone who is under eighteen years old, actually twenty-one, and has a measurable I.Q. will tell you the idea still thrives. And, of course, these “benefits” were then backed up by the whip, and are now backed up by tasers, guns, and incarceration in a prison or, worse, a mental ward or behavior-changing school.<br /><br />Meanwhile, the Puritan establishment was broken down in Massachusetts by more liberal thinkers both inside and outside the denomination (4).<br /><br />While Massachusetts became more libertarian, Rhode Island, a real libertarian stronghold, went the other way (5).<br /><br />New England, especially New York, was still practicing feudalism into the eighteenth century, which retarded freedom. Typically, one owner would hold a very large tract of land, and rent out parcels. This owner would also have a great deal to say about who would sit in the assembly, and who would judge cases. Some of these owners also held governorships (6).<br /><br />In super-backward New York, a tenant uprising finally began around 1750 (7). There had also been slave rebellions there in the early eighteenth century, probably as a result of some really tough laws regarding slaves, about the worst being a death penalty for runaways who were caught more than forty miles north of Albany while on the run (8). As government always seems to do, laws were made all the more rigid.<br /><br />There were land disputes in New Jersey too. After settlers bought land from the Indians and worked their land, feudal proprietors claimed the land as theirs, made rules and tried to charge quitrents (might as well read “property tax” as they are similar if not identical). The proprietors were also government officials. In fact, the governor was also the judge (9). This gave new meaning to conflict of interest, of course. Fortunately, the people's rebellion escalated as government oppression did, and riots ensued. Would that people today were as feisty; today if there is a demonstration at all it is almost always to plead for government money or for services to be increased, unless it is a Tea Party. And, the demonstrators are only too eager to obey the police. As far as I know, only at Tea Parties have marchers exercised their God-given, constitutionally guaranteed right to bear arms right there at the march. The strait-laced left would never dream of anything so politically incorrect. Well, I guess if you are begging, you are behooved to bow to whom you are begging from.<br /><br />But, in the 1740s the people, their assembly, and their fully-informed juries would not cooperate with the establishment. In fact, if a demonstrator was imprisoned, the people would march on the prison and rescue him (10).<br /><br />Unfortunately, the Crown had a change of personnel at the Board of Trade and took a much more pro-authority stance (11). The official government now had Crown support, and the pro-liberty forces weakened as many of them left the colony to avoid prosecution. When the Crown apparently changed its mind, the attempt to impose feudalism collapsed and the people won (12).<br /><br />In the mid-eighteenth century, Benjamin Franklin appeared on the scene. Good, I thought, as it was he who warned that to give up freedom for security would lead to the loss of both. Very timely for today, especially as I write between Christmas 2009 and New Year's when another would-be terrorist (at least this is what the mainstream media is saying without answering some very pertinent questions about the incident) just tried to bring a plane down over the Detroit area. The government is spewing forth with some crazy new rules which will not increase safety, but will destroy yet more freedom.<br /><br />In any case, my response to the chapter on Franklin was “good,” until right off the bat Dr. Rothbard says Franklin's reputation is over-inflated. For one thing, Franklin wanted colonist involvement in King George's War, which might be a bit like the wars in Iraq and Afghanistan today. The involvement idea was totally wrong, wasteful and unnecessary. Franklin published a pamphlet, Plain Truth, which went a long way toward bringing people into the pro-war camp. Then, he went forward on forming his own militia and financing munitions with a lottery.<br /><br />Oh boy! Imagine if you and I did that now! We would be afoul of dozens of laws, not to mention being labeled “terrorists,” or at the very least “gang-bangers.” And, we would be lucky to ever see the outside of a prison again.<br /><br />But, those people who are so sure that our presence in Iraq and Afghanistan is so all-fired important should do exactly what Franklin did rather than use Big Brother to force all of us to participate. Yes, I am aware that this is illegal, but they should do it anyway until laws against it are repealed. Then, at least, we who believe that U.S. military presence in foreign countries is harmful and stirs up hatred can refuse to participate.<br /><br />Franklin, assuming that entering King George’s War was proper (I doubt it), was doing it right. It was legal then as, even with oligarchic rule, there was more freedom, and the oligarchic establishment supported him (13).<br /><br />Actually, far from a libertarian but a mercantilist, Franklin started right in at a young age currying establishment favor. He was in the printing business, and at least he knew how to compete. He wormed his way into lucrative government printing contracts, not just by competing but by rubbing elbows with high officials (14).<br /><br />His next job was to push the pernicious scheme of paper money. Now, who do you suppose he had in mind for the super-lucrative government contract to print the money? He got the contract. This was a springboard to more government printing contracts, and a Postmaster position which was bought by a powerful judge.<br /><br />In the end, Franklin was instrumental in dividing and conquering the libertarian-leaning Quakers, not to mention the Indians (15).<br /><br />Dr. Rothbard then turns to the Southern colonies, beginning with Virginia. The land policy there was not on a free market or homesteading basis, but was feudalistic, controlled by the oligarchy of large landowners who were often also government officials (16).<br /><br />The tobacco farmers hit hard times. Despite wageless slave labor, the cost of production went up because of such factors as a rise in the price of slaves and soil exhaustion (17). Special privileges were sought such as maximum quotas on tobacco production to keep tobacco prices up. This didn't work because farmers elsewhere could simply grow more to reap the profits. The quotas hurt the small Virginia farmer the most, especially since tobacco was often used as money to pay a variety of bills (18).<br /><br />Dr. Rothbard, in Chapter 17, “Virginia Tobacco,” gives us a short lesson in economics by showing how the supply of and demand for tobacco caused prices to fluctuate.<br /><br />The colony of Georgia was particularly interesting because of lessons in Chapter 25, “Georgia, the Humanitarian Colony” (19). What the proprietors did there was to bring over impoverished people from England to “help” them at “no” profit to themselves. This raises several libertarian red flags. First off, Dr. Rothbard has shown again and again that the profit motive is the best way to help the needy. But, when benefits are handed to a beneficiary, you can bet your last nickel that regulations will follow. Even if the benefactor genuinely wants to help, it is almost always the case that the benefactor will foist his own preferences on the beneficiary. People who accept “freebies” almost always find their freedom diminished, and they are behooved to accept that.<br /><br />Sure enough. People who went to Georgia found themselves under minute central planning, with no input into the rule. It was very much like the USSR and was run as poorly. Finally, there had to be a liberalizing as the best and brightest fled and those who were left were impoverished. One of the worst things was that the rulers were determined to set up an economy dependent on silk, when silk worms cannot survive in Georgia. They would never give that up.<br /><br />The moral is this: Do not depend on anyone. Do not give large sums to any organization unless you are sure that what they are already doing is what you want, or you will be tempted beyond endurance to try to make the organization over. And, do not try to grow silk worms in Georgia.<br /><br />I have to wonder – actually, I do not have to wonder at all as I know – if this relates to what we are experiencing right now in 2010. There have been so many milestones in making more people more dependent on various levels of government. We have welfare, Social Security, Medicare, Medicaid, scholarships, unemployment insurance, and numerous other bailouts and other handout programs. Right now, the Obama administration is pushing through a new health care plan that will all but socialize medicine. Everyone needs some health care and as the huge “boomer” generation has aged, most people now need a great deal of health care. This will increase dependency on government, not just on the part of patients, but also the armies of bureaucrats who will have high-paying, high-pensioned, tenured jobs to administer the system.<br /><br />Just like eighteenth century Georgia when the impoverished colonists were dependent on government for everything and those in control (the agents of the colony's philanthropic founders) became wealthy (20), the American people are going to have to pay huge taxes to support the bureaucracy. And, I think, just like eighteenth century Georgia and just like the USSR, regular people like you and me will have to obey government officials. These officials will have great power.<br /><br />If you think you might have cancer or heart symptoms, you want to be seen by a doctor immediately. But if this health care plan goes through, chances are you will have to wait your turn with high officials being allowed to line-jump, and it could be days, even weeks and then you will have to kowtow to a bureaucracy.<br /><br />Fortunately for Georgia, the do-gooder proprietors of Georgia had a term limit, after which the colony would revert to the Crown. After that, they prospered. The silk fiasco was over, and they turned to rice and indigo which thrive in that climate (21). There were downsides but, at the end of the day, things improved.<br /><br />Is there any chance that Obamacare will sunset? Probably not. Nor will other debacles, such as “Cap and Trade” (based on the non-ratified Kyoto Treaty), Real ID/Pass ID, and other Bush/Obama abominations.<br /><br />Yes, there were still issues in Georgia, just as there were issues in all the other colonies. The pendulum between freedom and authority would swing and this seems to be the undercurrent in this entire series by Murray Rothbard.<br /><br />Part II of Volume II, “Intercolonial Developments,” starts out with the chapter “Inflation and the Creation of Paper Money.” Last winter I reviewed a few Rothbard books on monetary policy in which he explained in full detail why a commodity standard such as a gold standard is critically important to the economy. The creation of fiat paper money, not backed by gold or some other commodity, is a vehicle whereby the government and its big-shot cronies can steal you blind. If you did not read that essay, The Works of Murray N. Rothbard Part II (22), it might be a good idea to do that now, or, better yet, read the books. This way you will better understand what he is saying at this point in the <span style="font-style:italic;">Conceived in Liberty</span> series.<br /><br />Money had always been a commodity until the first half of the eighteenth century (23). Tobacco and other crops had been used as such in the colonies to pay quitrents and other bills. Gold and silver had also been used. It was difficult for officials to debase such a currency and fool the public. Before applying his monetary theories to the colonies, Dr. Rothbard gives a brief overview of the theory's principles (24). I am not sure the word “theory” is correct, however, as it has been proven true over and over again.<br /><br />In the colonies, the English government did not allow mints to be set up and it also did not allow English coins to be imported. The colonists got around that by trading with marketable commodities such as tobacco as mentioned and coins from other countries, gold, silver, and Indian money (“wampum,” whatever it was) (25).<br /><br />When colonial governments started to decree what this unit of money would be worth in terms of that unit (and they did not all decree the same thing), it caused dislocations in pricing, and some kinds of money being driven out of the market (Gresham's Law) (26).<br /><br />In the 1640s, Massachusetts officials decided to print paper tickets as “money” (27). Of course we know what happened, having studied Dr. Rothbard's works on money and banking (28). They believed that an increase in the money supply would solve a variety of problems. Or, being the ruling oligarchy, maybe they knew that this scheme would line their own pockets to the detriment of the general public, particularly as currencies were inflated to pay for wars.<br /><br />As we can predict, all the paper monies depreciated almost at once, as Dr. Rothbard shows when he describes what happened in various colonies (29) as the depreciation spurred calls for more paper and the usual people were hit the hardest, debtors, charities, manual laborers, and those on fixed incomes. The establishment blamed the private sector for the depreciation (30), just as the Obama administration and the Bush administration before it blame the economic situation on banks today. Obviously the banks are not innocent, but the blame really fell then, as it does now, on the creation of money out of thin air. Some things never change.<br /><br />Dr. Rothbard turns to the dissemination of ideas in the colonies. In the seventeenth century, there were no printing presses in the New World, except in Massachusetts where he implies there was only one, and there the Puritan oligarchy had iron-clad control. News came from England. After the turn of the eighteenth century, presses were being built. Unlike England, where newspapers were in cahoots with the postal service and could bar competition, and where the mail could be read by government officials, there was a measure of free competition. The mail carrying was private, via Indians or other travelers (31).<br /><br />In Massachusetts in 1754, there was a case that exemplifies the double standard that so often prevails in government, and most certainly prevails now: One strict standard that ordinary people must adhere to, and another lax standard for government officials, showing that they believe they are better. A fellow by the name of Daniel Fowle was accused of criticizing by satire the debates in the assembly on an unpopular tax bill, possibly in the same manner we libertarians and tea party types criticize the debate in Congress about health care legislation. The debate is: The partly socialized system is broken, so shall we leave it alone or socialize it further? Nothing is ever said about freeing up the system, except by Ron Paul, apparently the only sane official inside the lunatic fringe beltway. Of course the establishment will not even acknowledge what Dr. Paul is saying. At least he has not landed in jail – yet.<br /><br />Mr. Fowle did. Sending him to jail was illegal, but he spent a few days incommunicado in a dungeon (32), and defiantly wrote a pamphlet about it. The courts ruled against him and officials went free of blame.<br /><br />Dr. Rothbard claims the John Peter Zenger case is trotted out by historians as the case that brought freedom of the press to the colonies, but that this is wrong (33). Zenger won his case because the “seditious” article was true, and because his attorney convinced the jury to judge not only the facts of the case but also the law.<br /><br />Today it is actually part of a jury's job to judge both the facts of the case and the law. However, today we have less freedom than Zenger and his attorney had; judges today often refuse to allow jurors to be told they can judge the law. (Editors note: The state of Georgia is an exception. There the law explicitly states the jury is to judge the law also and judges say so in their charges. Tennessee also has the provision in its constitution.) The libertarian Fully Informed Jury Association is hard at work to fully inform jurors of this fact (34).<br /><br />But, the Zenger case did not free the press. The seditious libel law was still on the books (35). Juries are fickle and there was no guarantee that even a fully informed jury would acquit. At the time, public opinion was such that criticism of government was considered politically incorrect (even worse than today), and Assembly opinion mirrored that (36). So there were more prosecutions, with many breaches of justice.<br /><br />Meanwhile, on the religious front, people were gradually becoming more liberal (37) and the “Great Awakening” was beginning.<br /><br />I knew little of this except that I once heard another Christian with libertarian leanings call it the “Great Falling Asleep.” And, right away in Chapter 29, “The Great Awakening,” Dr. Rothbard calls it a “profoundly reactionary counterblow to the emergence of a liberal and more rational and cosmopolitan religious atmosphere” (38). It was a throwback to the old eighteenth century rigid Calvinism, and was based on emotion rather than reason (39).<br /><br />They remind me very much of today's neoconservative establishment. Today's “religious right” made its way into positions of power as I demonstrated a few years back in my essay <span style="font-style:italic;">How the Bush Administration is Destroying Our Country and Damaging the Christian Church</span> (40). This was hit home when Dr. Rothbard pointed out that a moderately “Great Awakening” minister endeared himself to the authorities by encouraging participation in the French and Indian War (41). Today's religious right totally endorses our invasion in Afghanistan and Iraq which is more about imperialism and oil than anything else. As I write this in January, 2010, the recent failed bombing of a commercial airline is being milked for all it is worth in an effort to rationalize a military move on Yemen, where the bomber had apparently been. (This is not even to mention the push for more “security” at the expense of yet more freedom.) Any military move on Yemen would be for the same reason as our invasion of Afghanistan and Iraq, I believe, and my question #1 is: Is there oil in Yemen?<br /><br />Anyhow, the neoconservatives are anxious to move forward on this, and the left is strangely silent because the president and most of Congress are Democrats. It goes to show how ignorant the left is, and how little difference there really is between the Democrats and the Republicans.<br /><br />We can really learn a great deal from what happened in colonial times. Unless we learn from previous mistakes, history does repeat itself. And to allow emotion to rule rather than reason is a whopper of a mistake.<br /><br />There was a major upside to the “Awakening.” This was the splintering of many denominations into smaller groups. This decentralization had the good effect that decentralization will have; it made it difficult for any one sect to become established (42).<br /><br />When you do have an established religion, or established anything else, the power of government is almost always used to stonewall opponents. This is what licensure, registration, zoning, codes, and regulations are really for!<br /><br />In 1742, the Connecticut Assembly, controlled by one type of religious thought, licensure was used to stonewall another type (43). This had been par for the course all along but I just now mentioned it.<br /><br />The “Great Awakening” had its far-out extremists, some claiming to be “perfect and immortal” (those particular ones have since learned differently, that's for sure) and one even claimed to be the risen Christ (44). (Boy! Was he ever in for a jolt!) It was this sort of thing that caused a backlash toward rationalism. This brought about “Deism,” or the worship of God and His natural laws (45). As for the old Calvinist beliefs, they threw out the baby with the bath by not only rejecting such nonsense as predestination and Sunday blue laws, but also rejecting core Christian truths such as the Trinity, the Resurrection, and remission from sin. They seemed to believe that reason could do everything. Well, it can do most things, but it cannot make one perfect which one must be to enter the presence of God. Nobody is perfect, nor will anybody ever be and this is why Jesus died on the Cross. But the Deists did not see that. I wonder if they thought reason would keep them alive forever. I consider myself one of the most rational people God ever created, and that very same reason tells me that their belief was irrational. Of these great believers in the free will and natural law, I wonder where they thought this free will and natural law came from (46). Although some of them did believe in Jesus, they believed that Jesus was just another values teacher.<br /><br />There was quite a struggle among Pennsylvania Quakers regarding the morality of slavery. Unfortunately, as relatively libertarian as these Christians were, many were in denial; I guess they thought with their bankbooks rather than their rational minds (47). In 1742, a young fellow named John Woolman, who was a year later to become a Quaker minister, was an apprentice and had the job of making out a bill of sale for a black woman as though she were a horse or cow. That is when he realized how wrong it is; one human being cannot own another! Jesus Christ died for this woman the same as He died for Woolman (and you!) (48).<br /><br />Woolman wore down the resistance of many leading Pennsylvania Quakers and made them see the light, and finally, in 1758, the top Quaker brass at their annual meeting condemned slavery. Quakers were asked to free their slaves with severance pay. Quakers who would not were disciplined (but not excluded until 1774), and a committee was set up to help them in the transition (49).<br /><br />In other colonies, Quakers followed suit.<br /><br />Quakers, being very individualistic, rational, and libertarian were, in many important ways, on the same page as the Deists. But I believe the Quakers were right, i.e., Biblically correct, as they were similar to the very early Christians who held church services in homes (sometimes covertly). The thing is, without a free will and the freedom to choose right or wrong, one cannot be truly virtuous. What good is living a moral life if someone is there forcing you at gunpoint? Coercion and strict rules take all the good out of the good. But they certainly leave the bad in the bad.<br /><br />Well, the undercurrent for this entire Rothbard series is the continual battle between liberty and authority. Liberty will win some day. It is hard to believe that in 2010. But it will.<br /><br />Now Dr. Rothbard really gets to the meat of the matter in Chapter 33, “The Growth of Libertarian Thought.” He re-emphasizes that the linear view of history is inaccurate as change does not occur at a steady pace. We are taught that economically things get gradually better, and in a way they do as new ideas bring about technological advances. But, actually, freedom and prosperity come and go. Dr. Rothbard often mentions the battle between liberty and authority and how the pendulum swings between them. Libertarian thought grew, first in England and then in America during the eighteenth century. But the ideas were not really articulated (50). The abundance of land spurred on individualism, but it was the Levellers in England, and Roger Williams and Anne Hutchinson in America who actually brought the ideas into focus only to have the movement all but destroyed by reactionaries. This happened all over Europe too (51). We recall from before how England foisted authority on America, rendering all colonies about the same, after some were free and prosperous.<br /><br />The only real competition to libertarian thought was theocratic fanaticism (52), and I do not need to tell you which is obviously the better way to go. The only mystery is how theocracy lasted so long. Dr. Rothbard discusses some of the lights of the libertarian movement such as Algernon Sidney, John Locke, and Trenchard and Gordon of <span style="font-style:italic;">Cato's Letters</span>. To this day, John Locke is a household name in the present movement, and the moderate libertarian Cato Institute was named for <span style="font-style:italic;">Cato's Letters</span>. You can see their influence on the Founders.<br /><br />One recurring theme is one the establishment despises so much that it is all but illegal: If the government refuses to defend the God-given rights of individuals to life, liberty, and property (and hence the defense of these rights which includes the right to keep and bear arms), then the people have the right to dissolve that government and form a new one that will defend these rights (53).<br /><br />Locke added that no just title can be acquired by taking property against the owner's will, and that includes government officials' takings which would render eminent domain wrongful (54).<br /><br />I think most libertarians fiercely oppose eminent domain. I know I do ... even when it is authorized by the Fifth Amendment.<br /><br />After all, Locke believed, the whole purpose of government and society is to protect the rights of the individual (55).<br /><br />Amen to that.<br /><br />The right of the individual to his property, he went on, is a part of the right to his own person, and to resist government intrusion is part of the right to resist the intrusion of garden-variety crooks. He does not differentiate (56).<br /><br />Amen to that, too.<br /><br />(I notice that a lot of Locke's terminology wound up in Jefferson's writings.)<br /><br /><span style="font-style:italic;">Cato's Letters</span> radicalized and applied Locke's creed (57). Dr. Rothbard quotes extensively from these (58), and from these quotes I gather they are a must-read for libertarians or anyone else who is interested and not afraid to become a libertarian.<br /><br />I will hasten to add, however, that I have not read them, nor Locke extensively, which is my own fault so I cannot make any guarantees. No human being is infallible, and every writer who quotes cherry-picks the quotes. Dr. Rothbard, as brilliant as he was, and as much as he represented the gold standard of libertarianism, was not immune, but I think we can be reasonably sure he was right about Sidney, Locke, and Cato.<br /><br />The colonists devoured Cato, and ministers preached God-given liberty, and separation of church and state (59). I would say it was like the sun coming out.<br /><br />Having discussed the growth of libertarian thought, Dr. Rothbard now turns to foreign relations. In my own opinion, the former is watershed, for without these libertarian principles we might never have had any America in the first place, much less would we have any hope of regaining it now.<br /><br />Foreign relations included dealings with England (60). Governors were royal appointments and assemblies were elected. Right away we know they did not see eye to eye on things, possibly like a smart young adult, who is still legally a child, and a not-so-smart parent, to whom the sun rises and sets over government, do not see eye to eye.<br /><br />Governors had veto power over acts of assemblies. (I am not aware of any over-riding of vetoes.) There were also councils but they were appointed by the Crown with governor advice, and they were a sort of upper house in addition to being a high court.<br /><br />The mercantilist “Navigation Acts” regulated imports and exports from overseas to favor establishment interests in much the same way our volumes – make that “libraries” – of economic regulations do today. Violators of these rules were “tried” by courts appointed by the governor. I see nothing about any assembly having to confirm the judges. There was no appeal except in major cases, and I guess we can assume who defined “major.” These appeals went to England. The Crown also appointed enforcers just as TSA agents are bureaucratically appointed to enforce airport security rules now (61).<br /><br />I do not believe the crews of ships in the pre-revolutionary eighteenth century dared to look cross-eyed at the Crown's enforcers either, but at least the general public knew better than to fall for the “it will make you safe” routine.<br /><br />At least the assemblies had one ace to play: money. They held the purse strings and were the ones to levy the taxes and pay the government's bills, including the governor's salary. They also established common-law courts for jury trials. The money power was the reason the assemblies finally prevailed, that and the lax enforcement of mercantile restrictions on the part of the Crown (62). But the most important reason was rampant libertarian hostility to power and corruption, and the influence of Cato's Letters (63).<br /><br />England's attitude from the get-go had been domination of the colonies. The Navigation Acts regulated the terms of how and by whom goods were transported to and from overseas (64). How much these were enforced depended on who was in power (65).<br /><br />But, the Navigation Acts were by no means all. There were other Crown-inflicted regulations, geared to give English industry an advantage. Dr. Rothbard describes regulation of wool, felt hats, hops (a beer ingredient), iron, and timber (66). Fortunately, the rules were enforced only sporadically and with great difficulty. The New Hampshire frontiersmen had the right attitude: The wood was not the king's and they would cut as they pleased (67). There should be more like that today.<br /><br />King George's War was yet more mercantilism. Lives were lost for no reason when warmongers used any excuse they could to drag England into war with Spain (68). The real reason for this was big business wanting a monopoly on slave trade to the Spanish colonies, so Spain had to be forced to grant this monopoly to England. This led to a base for general trade (69). The war spread to France, and also to the colonies, specifically Massachusetts in the 1740s, where a French fortress was conquered and favored businesses received contracts for war materials. Just like today, “defense” lined establishment pockets. Of course some of this money found its way into incumbent campaign funds (70). Additionally, the money was paper, backed by nothing. As we have learned, this means that, at the end of the day, the poor were subsidizing the moneyed establishment. Does this not have a familiar ring to it?<br /><br />To add injury to insult, the same poor who had to pay for this war were forced to endure “impressment,” which is worse than the injustice of draft registration (I have lots to say about that evil), and even worse than the draft itself. “Impressment” means the kidnapping of men off the street to serve in the war. There is no reason to think these men had to be eligible to vote, were not disabled, or did not have little kids at home. They were simply grabbed off the street and forced to go to war. Period.<br /><br />The good thing about this was it caused riots and began to set the stage for the American Revolution (71).<br /><br />Then, along came the French and Indian War. Although English colonists greatly outnumbered French ones, warmongering establishmentarians stirred up fear of the French, and the English-appointed governors wanted to take them over. The French colonists were west of the Appalachians, and the English colonies had spread that far, so, in order to spread further, the English wanted to oust the French (72).<br /><br />The colony of Virginia just up and granted French land in the Ohio area by the hundreds of thousands of acres to fat-cats without so much as batting an eyelash. Even when the war was over, these “grants” continued, one of which was made to the Ohio Company which was a racket of sorts on the part of a rich man who pleaded for government subsidies (73). Another company, the Loyal Company, received eight hundred thousand acres of land from Virginia at the behest of the Crown, land that already belonged to French colonists and/or Indians.<br /><br />This whole episode is an object lesson in establishment <span style="font-style:italic;">quid pro quo</span>. I wonder how many people were duped into thinking that any of this was good for development and prosperity. Maybe it would be the same people who believe that war helps the economy or that urban renewal and redevelopment are good for the poor. It has been shown time and time again that such activities line the pockets of the rich (who gave large campaign contributions to and entertain establishment politicians) and hurt the poor.<br /><br />Meanwhile, of course, the French in the Ohio Valley prepared to defend what was theirs and the Indians'. The Crown ordered all the English colonies to resist this French “invasion” (“Invasion” on the part of the invaded sounds like a Bush-ism to me.) (74).<br /><br />So, war was on. Now at last the common people of Virginia had a voice; they refused to be drafted and refused to allow their supplies to be “drafted.” In order to raise the manpower, Virginia promised enlistees land free of quitrents for fifteen years (75).<br /><br />Virginia's commander was George Washington. That disappointed me, but he was young then and possibly quite naive.<br /><br />The French won, but Virginia's governor was a hard-liner and wanted to throw more lives and livelihood away. He asked England for more troops and for a tax throughout the colonies. He would have re-attacked only one month after being defeated, but saner heads prevailed among elected representatives.<br /><br />The warmongers called for a joint conference of the colonies, at which the idea of a central government was on the table as a way to spur on imperialism. This scheme would be paid for by the Crown, which would get the money from taxes collected in the colonies. The general population would have limited input. Fortunately this harebrained scheme could not fly because the common people thought they were being oppressed quite enough by their colonial government, and another layer of government was something they did not need (76). One reason for the idea was that Virginia could get all the Ohio Valley land, leaving the other colonies out, and a central government would be more “equitable” (77). The common people did not seem to care about that.<br /><br />What they did care about was “liberty” and “property” and these were becoming the watchwords as they resisted entering the war (78).<br /><br />The English suffered numerous defeats, but had one victory in Acadia (which particularly refers to regions of the Canadian Maritimes that have French roots, language, and culture, primarily in New Brunswick, Nova Scotia, and Prince Edward Island, as well as in the state of Maine), where they wreaked havoc on the common people. The British had conquered the area a couple of times in the past, and now the people were prohibited from leaving as the government wanted a labor force. Dr. Rothbard calls this slavery, which it is (79). That was by no means all. It took many pages to list all the injustices that were done to these people. They were confined to the area, then expelled, then rounded up and sent to the far corners of the earth as indentured servants, and stripped of all possessions (80).<br /><br />The war went on, and the English finally overtook the French and took over the entire area, including Canada, by 1760 (81).<br /><br />Meanwhile, during the war, the individualistic colonists were going ahead and trading with the “enemy” (82). Rhode Islanders in particular sent shiploads of supplies to France and French Canada, and the establishment accused them of supplying the enemy with provisions and of lawless smuggling. The question, of course, was “whose enemy?”<br /><br />On the other hand, lucrative government contracts were offered to establishment cronies who were tempted away from that actually quite legitimate trade (83).<br /><br />The free trade was not the only war resistance; there was also massive draft resistance centered in Boston. The governor tried to end this, but the Massachusetts Assembly seemed to be on the people's side and declared that the French were not as great a threat as the English, who were coming to be forcibly housed and to enforce the draft, sometimes by impressment. Taxes for the war effort caused a recession (84). Then the English tried to change the international law of the sea, which had called for free shipping, in such a way as to take over the seas (85).<br /><br />Men who did go to war would not hear of any “back-door draft” either. It seems like I am forever wishing people of today had not just the will, but also the education, to resist “authority.”<br /><br />There was a battle of the pamphlets in Britain around 1760: the imperialists who wanted to spread empire vs. those who wanted to make peace (86). So there was a lot of back-and-forth, but finally peace prevailed. The English imperialists got the best deal, but at least there was peace.<br /><br />Dr. Rothbard winds down Volume II with a description of how the English imperialists administered the conquests. It was not very pretty (87). The English Empire had won and was to rule the world, but what it did was to precipitate the American Revolution.<br /> <br />(1) Rothbard, Murray <span style="font-style:italic;">Conceived in Liberty Volume II “Salutary Neglect”: The American Colonies in the First Half of the Eighteenth Century</span> (Auburn: Ludwig von Mises Institute, 1999) P. 10.<br />(2) Ibid. P. 17.<br />(3) Ibid. P. 19<br />(4) Ibid. P. 21-24.<br />(5) Ibid. P. 26, 27.<br />(6) Ibid. P. 39.<br />(7) Ibid. P. 39.<br />(8) Ibid. P. 44.<br />(9) Ibid. P. 48.<br />(10) Ibid. P. 48-50.<br />(11) Ibid. P. 51.<br />(12) Ibid. P. 52.<br />(13) Ibid. P. 64.<br />(14) Ibid. P. 66.<br />(15) Ibid. P. 74.<br />(16) Ibid. P. 80.<br />(17) Ibid. P. 83.<br />(18) Ibid. P. 83.<br />(19) Ibid. P. 107.<br />(20) Ibid. P. 114.<br />(21) Ibid. P. 118<br />(22) See http://www.alicelillieandher.blogspot.com and click on “2009 (9)”<br />(23) Rothbard P. 123.<br />(24) Ibid. P. 123-126.<br />(25) Ibid. P. 127.<br />(26) Ibid. P. 127.<br />(27) Ibid. P. 129.<br />(28) Ibid. P. 131.<br />(29) Ibid. P. 133, 134.<br />(30) Ibid. P. 138.<br />(31) Ibid. P. 141.<br />(32) Ibid. P. 146, 147.<br />(33) Ibid. P. 147.<br />(34) See http://www.fija.org.<br />(35) Rothbard P. 148.<br />(36) Ibid. P. 149.<br />(37) Ibid. P. 156-158.<br />(38) Ibid. P. 159.<br />(39) Ibid. P. 160.<br />(40) See http://www.alicelillieandher.blogspot.com and click on “2007 (12)”<br />(41) Rothbard P. 164.<br />(42) Ibid. P. 166.<br />(43) Ibid. P. 166, 167.<br />(44) Ibid. P. 170.<br />(45) Ibid. P. 171.<br />(46) Ibid. P. 171, 172.<br />(47) Ibid. P. 175, 176.<br />(48) Ibid. P. 176.<br />(49) Ibid. P. 177, 178.<br />(50) Ibid. P. 186.<br />(51) Ibid. P. 187.<br />(52) Ibid. P. 188.<br />(53) Ibid. P. 188 for Sidney, P. 191 for Locke, and P. 195 for Cato.<br />(54) Ibid. P. 191.<br />(55) Ibid. P. 191.<br />(56) Ibid. P. 191.<br />(57) Ibid. P. 192.<br />(58) Ibid. P. 192-195.<br />(59) Ibid. P. 196, 197.<br />(60) Ibid. P. 201.<br />(61) Ibid. P. 202.<br />(62) Ibid. P. 202.<br />(63) Ibid. P. 204.<br />(64) Ibid. P. 205, 206.<br />(65) Ibid. P. 207.<br />(66) Ibid. P. 208-210.<br />(67) Ibid. P. 210.<br />(68) Ibid. P. 216.<br />(69) Ibid. P. 217.<br />(70) Ibid. P. 218, 219.<br />(71) Ibid. P. 219-221.<br />(72) Ibid. P. 227.<br />(73) Ibid. P. 228-230.<br />(74) Ibid. P. 230.<br />(75) Ibid. P. 231.<br />(76) Ibid. P. 233.<br />(77) Ibid. P. 234.<br />(78) Ibid. P. 236.<br />(79) Ibid. P. 238, 239.<br />(80) Ibid. P. 240-244.<br />(81) Ibid. P. 249.<br />(82) Ibid. P. 250.<br />(83) Ibid. P. 251.<br />(84) Ibid. P. 252.<br />(85) Ibid. P. 254.<br />(86) Ibid. P. 256.<br />(87) Ibid. P. 265-268.<br />Please click "older posts" to see the next entries. Thank you.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com1tag:blogger.com,1999:blog-10767345.post-46823068025577519622010-05-01T21:38:00.006-04:002010-05-20T14:45:11.372-04:00Advance to Revolution<span style="font-style:italic;">Conceived in Liberty, Vol. III<br />Advance to Revolution 1760-1775</span><br />by Murray N. Rothbard<br /> <br />In this volume, Dr. Rothbard discusses the brief time between the end of the French and Indian War which ended, as we have just seen, in the iron rule of the British, and the outbreak of war at Lexington and Concord (1).<br /> <br />As Volume III opens, England was lord and master of everything it surveyed. But a libertarian undercurrent survived in the colonies. It takes longer than two or three short decades to stamp out libertarianism. Look at how long it took in the United States. In my Three Enemies (2) I discussed this and it seems that we were a libertarian nation until around the 1850s, or for about 75 years, and then the people started to be duped into dependence on government to take responsibility for them. Every generation has seen more government programs, more taxes, more spending, and further inroads of government into every aspect of life. Government takeover of schooling put an end to independent thought outside narrow parameters. Cooked-up reasons for wars have spread hysteria and lightened people’s wallets. Various hysterias ranging from “terrorism” to “obesity” have people running to Big Brother for protection. And now, the government is trying to completely take over health care. What will this bring about? Certainly not freedom or financial solvency, and certainly not improved health.<br /> <br />We have become a socialized nation of little kids who are crying and tugging at the government’s arm. A libertarian’s nightmare!<br /> <br />But, it took at least a hundred years before there was an end of individualist talk in the mainstream media. The Goldwater campaign in 1964 is the last time I have heard a steady stream of serious talk of individual rights. Today you might occasionally see Ron Paul or some other individualist for all of five minutes. Libertarian Party Presidential Nomination Conventions are seen on C-SPAN. Otherwise there is nothing at all. Individualism is kaput. Dead in the water. You have to go on the Internet to get news items of how the government is flattening individuals.<br /> <br />Meanwhile, the libertarian sentiment among the colonists survived in 1760 when the English were playing god. Many had been living when the colonies were left alone to prosper, they had seen with their own eyes how the English treated individuals, and they didn’t like it. This is how Volume III opens. <br /> <br />Now that the Brits had all that Ohio land, they wondered what they would do with it. I think we already saw that they had or let Virginia grant huge tracts – hundreds of thousands of acres to favored cronies. The Indians were supposed to get a cut of their own land, but that was abruptly canceled. What they did get was a prohibition against selling them ammunition and rum, and an admonition to behave (3). After being treated as the human beings they were by the French, they were now being treated as inferiors by the English.<br /> <br />So, it should surprise nobody that the Indians arose. Ottawa Chief Pontiac headed up the rebellion, called Pontiac’s Rebellion, and it was successful, spurring on other Indians to the east. Authority acted as authority always does, with a crackdown, and of course this escalated the conflict, since liberty acted as liberty always should (4).<br /> <br />The British general engineered a smallpox epidemic among the Indians, beginning the “art” of germ warfare (5).<br /> <br />Eventually, peace resumed, it seems to me in a draw (6).<br /> <br />A long time before they knew about Pontiac’s Rebellion, the English were considering giving the Ohio and Mississippi Valleys west of the Appalachians to the Indians for their exclusive use. Pontiac’s Rebellion did not cause this but expedited it (7). It would be ruled militarily and no whites would be allowed there. The ulterior motive was, of course, mercantilist. Keeping the whites along the coastline would bolster trade with English business (8). Government officials’ and their cronies’ interests were more important than the common people’s. So ... what else is new?<br /> <br />Fortunately, some settlers defied the ban and went ahead and settled to the west anyway.<br /> <br />The Brits had their soldiers stationed in America to “protect” the Americans ... from what? Now that the French and Indians were gone, whom the Americans did not necessarily want gone, why were they here? To enforce mercantilist rules, and force the Americans to pay them to do it (9).<br /> <br />One of the taxes, an excise tax on cider, was levied in such a way that it affected “liberal” gentry (presumably that means upper-middle or upper class) who apparently made the cider at home. There were protests, even riots, under the slogan “Liberty, property and no excise!” (10). It took a couple of years, but the tax was finally repealed.<br /> <br />The English needed to raise money to support the army and bureaucrats who were doing so much harm to the colonists, so the idea of a tax stamp was hatched (11).<br /> <br />Old, nearly forgotten acts such as the Navigation Act, Hat Act, and Molasses Act mentioned in Volume II were renewed and vigorously enforced. In Massachusetts, “Writs of Assistance” gave customs officials leave to invade private property to look for “smuggled” items (12). These writs precipitated some political action; a couple of parties formed. The Popular (or “Smugglers’”) Party was the liberal party, and Samuel Adams was associated with it. The Prerogative Party consisted of Tory establishmentarians.<br /> <br />Samuel Adams is a household name among libertarians today; many local clubs are named after him. He was a real radical agitator at the time (13).<br /> <br />The Molasses Act provoked the greatest response from colonial merchants. Molasses was a staple being imported from the West Indies in exchange for exported goods. The tariff was high, and had been enforced but laxly until around 1764, so businesses organized for its non-renewal (14). They lobbied their legislatures to send letters to the Crown explaining why the tax was a major burden.<br /> <br />However, this move failed. The mistake was to urge a lower tax on molasses rather than to urge outright repeal on principle. The Crown came down even harder to enforce the tax, added other goods to be taxed, and also taxed intercolonial trade.<br /> <br />Cases were tried in “vice admiralty” courts which, unlike common law courts, had no juries. The burden of proof was on the defendant (15). The court was ’way off in Halifax and the judge was an Englishman appointed by the Crown (16). This was about as fair as a military tribunal. Before this crackdown, the courts had been pretty lenient, often acquitting the “offending” merchant.<br /> <br />News of this new law reached America in May, 1764, and set off a storm of protest. The protest centered in Boston, where Samuel Adams drew up a set of instructions to their representatives in the Massachusetts House, and that was ratified by the town meeting. It claimed that the taxes violated the charter right to self-government, and it called for uniting the other colonies in protest. The protest went from the House to London along with an essay by liberal James Otis, Jr., called “The State of the Rights of the Colonies” which claimed that the taxes were contrary to the Magna Charta and common law (17). <br /> <br />Later on, the House sent word to London that the colonies should be exempt from the taxes because of the “British right of no taxation without representation,” but unfortunately the Council (much like a Senate) watered it down on pragmatic grounds, saying that only “internal” taxation was intolerable (18).<br /> <br />That killed it.<br /> <br />In Connecticut and Rhode Island, the very same thing happened. The epistle sent to London was also watered down. In both cases, the oligarchy representatives shot down any attempt to actually rebel against taxation without representation.<br /> <br />The New York statement, however, said flatly that taxation without representation was an infringement of a property right. Period. There was no nonsense about any “internal” vs. “external” taxation (19).<br /> <br />Pennsylvania was another story. The Keystoners were cowed completely, and there the controversy was between oligarchic rule and royal rule, for all the difference it made and to the libertarian that was not much. The lone voice for freedom was John Dickinson and a liberal opposition rose because of his actions. His idea was that government cannot alter rights without the consent of the governed, another idea to play a role in the Revolution (20).<br /> <br />In New Jersey, the controversy was over the presence of British troops who were supposedly there to protect against the Indians. All the whites and Indians wanted was peaceful trade, and this is what they had until the troops arrived. After that, problems began with the Indians who were (rightfully) suspicious (21).<br /> <br />There is a lesson to be learned here and I wish the Obama administration would listen to its own campaign promises to heed it. (I wish equally fervently that the Bush administration and administrations before it had understood these concepts – nay – I wish the American people would think a little bit and tell the imperialist officials to either shape up or ship out.) The lesson is, leave things alone! Sending troops into places will make things worse and arouse suspicion and anger. Why do you think 9-11 happened? Because we are “free” and prosperous? Give me a break! It was because we have troops in more than 100 countries making people mad, and there are those who can and will seek revenge.<br /> <br />Of course the Indians were suspicious and angry. So, of course, problems occurred as a result of troop presence.<br /> <br />The duties on molasses and other goods were almost impossible to enforce as the colonists and their officials stonewalled enforcement at every turn, and impressment into the British forces was met with fierce resistance (22). Not only that, but there was a more indirect resistance by manufacturing locally items that could substitute for taxed imported items, thus circumventing the tax.<br /> <br />With all this talk about resistance in the years leading up to the Revolution, I thought I could detect the pleasant aroma of tea. However, Dr. Rothbard turns to ideology and religion. This is important, as the Church of England wanted to ride in on the coat tails of the English crackdown by establishing Anglican bishops in America (23). Liberals, including most Anglicans, opposed that, including libertarian minister Jonathan Mayhew. He argued that liberty is taken away gradually, as people acclimatize to the loss of liberty gradually (24). It is the frog in the kettle that heats up gradually who is cooked before he realizes what happened. Or the camel’s first getting his nose in the tent. I call it “gradualism.” There are numerous examples, the income tax being one (you should know how that started out).<br /> <br />Mayhew’s pamphlets were influential, and John Adams carried the ball reminding people that the Anglican church was established in England, and the Crown’s taxes could get it established in America too (25). Mayhew’s influence even brought the Calvinists around to his side, the Calvinists being much like today’s neoconservatives.<br /> <br />Fierce resistance caused a back-off by the church, but rumors continued to fly, so resistance grew (26).<br /> <br />Then there was the saga of John Wilkes (27) in England, who put out a radical liberal (libertarian) weekly. He was denounced by the establishment and revered by the less affluent. He did make some mistakes, one of which was to publish some smut on the side, and that nearly did him in. But, in the end, he was a hero to the people, who interfered with the burning of his libertarian publication. This agitation further set the stage for the American Revolution.<br /> <br />And, now we come to something I have been waiting for, a major milestone to the Revolution: the Stamp Act. This would be devastating to the colonies. At first it was to be low, but the establishment so much as admitted that the low rate would get the colonists accustomed to the idea, then the rate would go up (another example of gradualism). The idea was that importers would get a paper stamped, presumably to prove that the tax was paid (28).<br /> <br />The colonists were alarmed, so the Brits held out an olive branch (not a real one) and said they might forgo the stamp tax if the colonies would raise the money themselves. How much money was undetermined, so this offer was worthless (29).<br /> <br />Many of the colonies sent protests to England, but most of the protest was appeasement rather than the digging in of heels (30). We all know what happens when you appease a spoiled child. I fear Benjamin Franklin was the primary appeaser. One of his schemes was for an inter-colonial currency of paper, some of which would be sent directly to England. Guess who would get the lucrative printing contract (31). This did not happen, thank goodness.<br /> <br />But the Stamp Act passed and wreaked havoc over every aspect of the colonists’ lives. Even newspapers were taxed, and author names were required for publication (32). The newspaper tax backfired on printer Franklin, serving him right.<br /> <br />Either total submission or rebellion was the choice. There was no middle ground. We know that, in the end, the right side won, but let’s see how.<br /> <br />The Americans had many grievances, but it appeared as though the Stamp Act would be a tipping point. Dr. Rothbard has some words to say about revolution in general (whether that revolution be a violent one like the American Revolution where a war must be fought or a non-violent, intellectual one such as what the Ron Paul movement and the Libertarian Party are trying to effect now). If it is to occur, it is necessary to have a good percentage of the population on board. It is also necessary to have leadership (maybe in the sense of spokespeople) so as to spark the revolution and to make sure dissidents know they are not alone (33). How many people across the country thought they were very few in number until Ron Paul finally got covered by the news (not very well, but covered) as he ran for the 2008 nomination? The establishment felt very threatened! Imagine what could have happened were most people educated!<br /> <br />A leader came out of Virginia. That was Patrick Henry (yes, that Patrick Henry), an attorney who had already won a court case that ruffled establishment feathers. Just at the right time, in May of 1765, between the time the Stamp Act was passed in England and the time it was to go into effect, Henry was elected to Virginia’s House of Burgesses. The staid House had all but given up any protest at all, but Henry stirred it up again by drafting five resolutions against the Stamp Act. Younger members rallied around these resolutions while older ones did not want to rock the boat.<br /> <br />I swear that, even if I live to be 150, I will (all else equal) side with youth in the battle between youth and age. It is so discouraging to see good principles sacrificed to not rocking the boat. What’s not to like about rocking the boat? After all, if you are going to row the boat, you have to rock it!<br /> <br />Well, Patrick Henry certainly rocked the boat! A young fellow named Thomas Jefferson was very impressed! (34).<br /> <br />All five resolutions passed. The margin was narrow but they passed. Unfortunately, even Patrick Henry made some errors. Once the resolutions were passed, he went home. After he left, the opposition reared its ugly head and made a resolution to rescind the resolutions. In one case they succeeded (35).<br /> <br />News of the Henry resolutions traveled quickly, and the people lapped it up. It is too bad that those who enforced and judged were not under the assemblies, but under the Crown. Civil disobedience was the only option (36).<br /> <br />The people were quite pleased with Patrick Henry. But, move over, Pat, for Sam Adams in Boston. Most of the old liberals had either died or become moderate. Sam Adams wanted to take the protest to the streets, and to aim it at the low-echelon bureaucrats who were administering the actual stamps (37). He got together a group of nine stalwarts, called the Loyal Nine, to lead. They were diverse small business people. They got a variety of people, ranging from wealthy merchants to gang members of Boston, and trained them (38). Later in the summer, Adams gave the signal and they all hit the streets. This riot set the pace for protests not just against the stamps but for protests all the way to the American Revolution (39).<br /> <br />They hung stamp-masters in effigy. I am glad they had the presence of mind to use effigies. Today’s left, not believing in any real rights, could conceivably just hang a real person. Of course, these stamp masters did deserve to be hanged, but due process is really the way to deal with such. And, one thing is for sure, whenever there is a march today it is almost always to plead for government money or for more regulations heaped on somebody. It is almost never a demand to be left alone.<br /> <br />The establishment tried to cut the effigy down, but the people would not allow it. Rather, that night, the people cut it down and marched it around in a “funeral” procession!<br /> <br />But, even they did perpetrate some violence by threatening the life of a stamp-master (who had fled) and rampaging through his home (40).<br /> <br />All this happened on August 14, 1765. Dr. Rothbard calls it a day to live as liberty rose (41). I agree; it should be a holiday, even if only to give federal bureaucrats one less day to mess us up.<br /> <br />The next day, the demonstrations continued. They demanded the resignation of stamp-masters, which they got and which ended the stamp. But the people realized that the enemy was actually the Crown’s higher-ups. The local head honcho had his house and office torn up, and his list of tax violators destroyed.<br /> <br />The freedom-loving people had made their point and quieted down. Adams took this time to shore up his organization: The Loyal Nine expanded into the Sons of Liberty. They were from all walks of life and all incomes. They were rich, poor, and middle class, merchants and farmers. Actually, so were the royal bureaucrats they were fighting (42). So this was not any “class struggle” despite what left-leaning historians will tell you (43). It was part of the struggle between collectivist authority and individual freedom.<br /> <br />Meanwhile, Rhode Island was still fairly libertarian. News of the rebellion in Boston reached them, they swung into action. The mob actions in Boston and in Connecticut were described in the Providence and Newport newspapers (44). Actions started in Rhode Island right away with marches and effigies, followed later by demands for resignations, ransackings and razings of the homes of royal bureaucrats (45).<br /> <br />Basically the same scenario played out in all the colonies. The stamp-master would arrive but quickly be met by a crowd of Sons of Liberty, and would soon resign.<br /> <br />The colonies’ assemblies could not do very much about the Stamp Act except to send protests to England. They could not just nullify the Act as nullification would have to have the royal governor’s signature which they would not be able to get. So they sent protests. These were largely ineffective, except for Patrick Henry’s Virginia Resolves which, as we have seen, caused quite a splash (46).<br /> <br />The one official protest that made any headway was the Stamp Act Congress, a convention of assembly-members from the colonies. This body agreed that the stamp tax was evil, among other basic things. What they could not agree on was the scope of England’s authority over the colonies. In the end, their declaration said that they owed “all <span style="font-style:italic;">due </span>subordination” (emphasis mine) to Parliament, and because “due” remained undefined it was up to the individual to define it. Then they drew up the protests to England, based on the declaration. Back home, their assemblies all approved the Congress’s actions (47).<br /> <br />So, the stamp masters were gone and the stamped paper was destroyed by the demonstrators. Now, the colonists had a decision to make. Should they carry on business without the stamps thus ignoring the law? Or should they not carry out any transactions that were affected so as to avoid breaking the law? My own two cents is that the law was certainly immoral and probably technically illegal, so there was no reason to obey it. But what did they do?<br /> <br />The royal governors were pretty naive and even after the protests they expected the colonists not to break the law, stymieing the economy to the point of famine. Then they would break and go ahead and use the stamps and pay the tax (48).<br /> <br />But the colonists, naturally, went ahead with all the transactions without the stamps. Even newspapers, which were the most overt, published. The only problem was exports. Smuggling was one solution to that problem (49). The stamp was necessary to prevent British seizure of ships (50). Also dealings with the government were a problem.<br /> <br />The government officials floundered around, not knowing what to do, so the Sons of Liberty bore down on them and gave them until December 17 (it was early November, and the law had gone into effect on November 1) to either go or get off the pot, or the Sons would storm the customs house. The government finally acted, and officials finally allowed ships to export without stamps. So, on December 17, the Sons partied, Samuel Adams as the guest of honor.<br /> <br />It went on ... enforcement of the Stamp Act was shut down and it was, in effect, nullified. With that, the whole government authority was stymied (51). Voluntary organizations like the Sons of Liberty filled the vacuum, along with local governments.<br /> <br />Dr. Rothbard says that whenever there is a breakaway of popular allegiance to government, there is an increase in individual self-government and voluntary cooperation (52). I guess that when people learn that Big Brother is not going to take care of them, they rise to the occasion and take care of themselves. There is a quote from Lysander Spooner in which he said that the lone individual has as much a right to defend himself from government marauders (my terminology, not his) as any group has (53). In other words, acting alone is no more criminal than acting in a group.<br /> <br />So, why didn’t Britain send troops? They knew it would take an army to put down the resistance. So, why didn’t they?<br /> <br />It was because the colonists were armed.<br /> <br />The Sons of Liberty organizations moved to guard against an armed attack from England by uniting and pledging mutual aid (54).<br /> <br />Britain repealed the Stamp Act but didn’t simply throw in the towel. The king had a falling-out with a Tory (pro-stamp mercantilist) cabinet minister and tossed him out, replacing him with a Whig (anti-stamp, pro-free-market). The Whigs were friendly to merchants and, obviously, those merchants who dealt with America wanted not just to end the stamp tax but to end mercantilism in general (55).<br /> <br />Must be they had the education and backbone to resist pro-government propaganda. Would that today’s small-business people were not so eager to be “protected” or, at least, not so resigned to the plethora of regulations they must adhere to.<br /> <br />There was a lot of struggle, and some chicanery on both sides, but the Stamp Act was repealed. There was a lot of partying on both sides of the Atlantic. The celebrations might have been premature, however, as Parliament also passed a “Declarative Act” which re-asserted Parliament’s authority over the colonies, and was ambiguous over whether that authority included the right to tax (56). Some Sons of Liberty realized they were not quite out of the woods because of that (57).<br /> <br />There was still not complete freedom as some restrictions such as the Navigation Acts and some taxes remained. It was much better than before. A fellow named William Pitt was selected by the king to head up the Cabinet, which was composed of Tory imperialists. At first, the Americans were delighted since Pitt had a libertarian history. But Pitt, who apparently did not have both oars in the water, vacillated from one side to the other. Rothbard had brought Pitt’s name up a few times and Pitt seemed to be unstable. So, more astute colonists hedged their bets on Pitt and the future of freedom (58).<br /> <br />There was another law imposed by England that was an egregious infringement on the God-given property rights of colonists. That was the Mutiny Act. While troops were occupying them, the colonists were required to quarter these troops in their private homes. This was modified slightly to exclude actual homes, but include people’s barns and inns. I would not want to check into any Motel 6 where government officials are staying (today’s government officials probably stay at the Ritz Carlton anyway), even though today obviously we are not being occupied by a foreign army and no motel has to accept any freeloading guests it does not want (at least overtly). But it must have been bad for business when British troops were running around in the halls of inns like unsupervised children (probably) and it certainly was not good for privacy if they could strut right into your barn and make themselves at home with their whiskey, candles, and all.<br /> <br />So, the soldiers were quartered at seaports to “protect” the colonists from some “enemy.” Just what enemy? If there were any enemy it was on the frontier and that was dubious. The whole idea was intimidation. People could see right through it. Once the Stamp Act was repealed, the Brits started fierce enforcement of the Mutiny Act (59).<br /> <br />Today’s scanners at airports can see right through your clothing, so that government bureaucrats can see your everything, but people today cannot see through the government’s obvious efforts to scare us all into submission.<br /> <br />And, of course, then as now, the people had to pay to have their rights infringed.<br /> <br />Compliance was only partial in many colonies. But the British expected complete submission, as usual, and, as Dr. Rothbard puts it, this partial compliance was like waving a red flag in front of a bull (60). (Editor’s note: John Bull?) I’d simply add that this bull had a low I.Q. even for a bull. (Irish Editor’s note: Definitely John Bull!) William Pitt showed his true colors over this and also over a petition from 240 New York merchants that respectfully pleaded for use of their God-given right to operate in a free market with no restrictions or navigation laws. He got Parliament to dissolve the New York Assembly. This never happened because the Assembly caved amid vehement protests from our side. They caved because of lack of support from neighboring colonies, who quartered troops for them (61).<br /> <br />The landed oligarchy in New York, who had received government land grants, were grateful for the troops, however, and this might be a big reason for the Assembly’s failure to uphold freedom. The troops were suppressing a tenant rebellion. The British government had taken large tracts of land away from the Indians and given it to favored cronies. Tenants on that land knew this was wrong and that the land rightfully belonged to the Indians, and the tenants bought the land in a free exchange from the Indians. They knew that morally they did not have to pay any rent to the oligarchs to whom the government “granted” the land (62).<br /> <br />In at least the case of one oligarch, it was taken to court, which was no better than a kangaroo court, the Indians and tenants having no legal representation and the oligarchs showing phony bills of sales they said were from the Indians. The judges themselves were land grant recipients, so you can guess what happened (63).<br /> <br />This occurred when the Stamp Act tax fight was going on and the tenants of that manor were inspired. They called a tenants’ meeting, at which they decided on some measures, not the least of which was forming a militia. In two other cases at two other manors, tenants demanded to buy outright their land and/or demanded an end to rent and taxes. They rescued leaders who had been arrested and jailed (64).<br /> <br />At the end of the day, the tenants lost their legal battle, and many of them left New York. It is regrettable that social concerns kept the Sons of Liberty from entering the fight, since they and the tenants were fighting for the same thing (65).<br /> <br />The Townshend Acts of 1767 were the next major catastrophe. These used the false distinction between “internal” and “external” taxation. They would levy “external” duties and institute measures to enforce imperial customs and regulations. Money collected, of course, went towards imperialist rule over the colonies. Follow-up measures increased enforcement and expanded the number of courts (66).<br /> <br />Of course, resistance began immediately and it started in the libertarian hotbed of Boston. A list of imported goods that were affected by the Townshend Acts was made and distributed with the idea of boycotting those imported goods and buying locally made goods and substitutes (67).<br /> <br />Unlike the Stamp Act which was both internal and external, the Townshend Acts only applied externally, i.e., to imports. This is why resistance to the Stamp Act had to be armed in order to unseat royal bureaucrats, and resistance to Townshend could be done by boycotts and smuggling (68).<br /> <br />But, were uncoordinated boycotts and petitions enough? No, so they tried to organize, but Philadelphia, a big city full of merchants who were on the Tory side, would not cooperate. So the organization failed (69).<br /> <br />Boston merchants decided to go ahead with the boycott anyway and were soon joined by New York and other areas. Merchants who refused to boycott were themselves boycotted. It took a few months, but Philadelphia merchants finally came around. Success was nigh (70).<br /> <br />Well ... not quite. They succeeded in uniting the colonies in the boycott but not in getting the British government to relent. A protest letter from Massachusetts infuriated the British. The governor of Massachusetts knew that would happen and saved his own posterior by dissolving the Assembly. Sure enough, Britain forbade the Assembly to meet until it repudiated the letter (71). The Americans were angered; in fact the conservative George Washington (who we recall fought on the wrong side before) was beginning to come around, which as we know he finally did to the extent he fought on our side in the Revolutionary War.<br /> <br />A crackdown came to Boston. The Assembly, before it was dissolved, voted overwhelmingly not to rescind the letter of protest. Attempts were made to strictly enforce the Townshend Acts but the people got around them whenever they could. The people hit the streets again, captured ships were liberated and customs officials were tarred and feathered (72).<br /> <br />Two radicals who were active in the protests were Paul Revere and John Hancock. I think we will hear more about them later. John Hancock was a wealthy businessman (“class struggle” goes out the window ... again) who had at least two ships in the harbor with imported goods on board, and he refused to allow customs officials aboard. The British towed one of the ships out to where their own battleship was to keep the people from liberating it. This escalated the conflict even more. A Stamp Act type protest happened all over again: Tax commissioners were threatened and had to flee (73).<br /> <br />Meanwhile, John Hancock’s ship was still being held on the trumped-up charge of unloading wine and not paying the duty. Hancock was held with very high bail, and then tried. We will hear more about that, and the able John Adams who defended him in court.<br /> <br />Meanwhile in England, thanks to an English fellow named John Wilkes who had been ejected or had fled from England for his activism and was living in France, the libertarian movement began to blossom again around 1768. This activity was an inspiration to Americans. It was also a major encouragement to Wilkes who returned home despite not being allowed to. He ran for Parliament in London in the primaries and lost, so carpetbagged to another county and ran in the general election. This time he won, and his supporters, who did not always behave like libertarians, rioted for days, breaking Tories’ windows and otherwise being destructive (74).<br /> <br />What would the government do with Wilkes? Some wanted severe punishment, particularly since he had already been in trouble. That is exactly when the Massachusetts letter arrived (75). (Talk about splendid timing!) Of course, the establishment could have made the obvious connection between the Wilkes movement and the letter. Wilkes went to jail.<br /> <br />Although activists wanted to rescue him, he declined as he wanted to obey the royal command. Why I don’t know, but possibly his seat in Parliament was in jeopardy.<br /> <br />At least 20,000 marched! That was a lot of people in those days! They gathered in St. George’s Fields, where troops were sent “to keep order.” The scenario was quite similar to today’s demonstrations (except these people, rather than pleading for a handout, were demanding liberty). Very often today, if there is trouble at a demonstration, it is started by police or their “agents provocateur.” Chances are this was the case at St. George’s Fields in 1768. Had this occurred only two years later, it would have been exactly 200 years before four innocent students were gunned down at Kent State. Human nature never changes. Only individuals change by applying their God-given free will.<br /> <br />John Wilkes was a hero because he obeyed the dictates of his conscience and not the dictates of the establishment.<br /> <br />In any case, the crowd and the soldiers at the Fields became more restive. Slogans were chanted, some of which I won’t repeat, including that this was an opportunity for revolution. A justice read the riot act only to be pelted with stones. One stone hit him, and soldiers opened fire killing a half-dozen. A policeman reported that the troops seemed to enjoy firing on the crowd (76).<br /> <br />The Wilkes supporters then went and tore up the houses of leading Tories. (I am not sure I advocate this sort of thing even if it served the Tories right, since they did have families who were, or might have been, innocent.) Those who were arrested lucked out for the most part as grand juries were more inclined to indict soldiers than demonstrators. But the culprits in the killings wound up acquitted (77). John Wilkes was sentenced to 22 months for a list of charges.<br /> <br />The movement picked up steam, goaded by these recent events. The government was asking for it and would get it. Correspondence to and from Wilkes in prison and the Americans showed their solidarity and bolstered hope on both sides of the Atlantic (78).<br /> <br />In Boston, resistance to the Townshend Acts was ongoing. The boycott continued and there was also resistance to a rigid crackdown on “illegal” trade concentrated in Boston. Britain had gone forward with the decision to send troops there against which the people prepared to dig in their heels, to the center of the earth if need be (79). Thank goodness ordinary people had arms! Had the government taken the arms away from people there would not have ever been the kind of America we all want back. But, of course, this is what gun control is all about, isn’t it? It is not so much about guns as it is about control! These people had a backbone and never would have given up so much as a round of ammunition (well, maybe one round to shoot the assailant who was trying to get the gun) and maybe the Brits knew better than to try.<br /> <br />But they steeled themselves for the onslaught of redcoats. In the absence of the Assembly which the governor and Crown had dissolved, the focus of the resistance was the Boston town meeting. The town meeting had the authority to order citizens to carry arms. This is a form of gun control, of course, but it is a lot better than the other kind. To fool the establishment, the “reason” given was the possibility of a war with France.<br /> <br />When the troops arrived, the Boston Sons of Liberty did not simply go out and shoot. This could have caused other towns to back off. They did not do a whole lot right away. Meanwhile, John Hancock’s trial lasted for months, but the various arguments by lawyer John Adams about technical issues caused the prosecution to tire and to drop charges (80). Hancock’s popularity did not hurt either.<br /> <br />Dr. Rothbard went on for a while about the boycotts of imported British goods to protest the Townshend Acts. The main point here, I think, was to demonstrate the effectiveness of the boycott. Merchants who did not participate were themselves boycotted. Those who still did not participate were listed in pamphlets so that everyone would know. This was embarrassing and terrible for business, so most of them finally participated. If the government were really interested in consumer protection, it would back off and allow consumers to do their own protecting by boycotting and spreading the word on businesses that ignored health, safety, and other benefits. Look at how Toyota sales have suffered because of safety issues! There is no need for government to step in.<br /> <br />There were incidents of violence on both sides of the dispute. Murray Rothbard, on numerous occasions, has pointed out the major difference between self-defense, which includes one’s attack on someone who is trying to use coercion, and offense, which includes the use of force to infringe on one’s God-given rights (81).<br /> <br />Troop presence in Boston was making the people justifiably angry. Scuffles occurred, and a soldier shot and killed one little boy and wounded another. This touched off a major firestorm, and the boy’s funeral procession was miles long (82). (It is worthwhile noting that as oppressive as the regime was, no permit was required which shows how much oppression we have today that people now take for granted. Of course, traffic has grown and changed, but so what? Rights do not change.)<br /> <br />Clashes continued and, two weeks later, a young apprentice (probably not much more than a child) was smacked by a soldier with his musket for talking about the child killing. A crowd gathered where troops were stationed and the apparent attacker was seen and attacked by the crowd. Soldiers fired, killing five and wounding six. This was the “Boston Massacre” (83).<br /> <br />The people withdrew but vowed to return, this time armed. The Boston Massacre was the last straw. The people met and selected John Adams and John Hancock to go to the governor and demand the troops leave or be destroyed by 15,000 armed citizens. The demand was met by a frightened governor and soldiers were withdrawn to Castle William (84). I don’t know how far away that was, but wasn’t it a good thing citizens could be armed? All this could repeat at some point, so we need to exercise our God-given, Constitutional-protected, unconditional right to bear arms.<br /> <br />The next job was to bring to justice the guilty parties in the Massacre. The city authorities arrested them, but the Crown dragged its feet, delaying the trial and skewing the jury, bringing about acquittals or light sentences. What this showed was the futility of depending on royally appointed courts for justice (85).<br /> <br />So the Sons of Liberty formed a militia. Rumors were rife about a new troop arrival (86).<br /> <br />In New York there was also conflict. The Assembly had caved in to British pressure to see that the troops had supplies, so many wanted to imitate the brave of Boston. One of the major complaints against the British soldiers was that many of them were hiring themselves out undercutting local labor. They were also repeatedly cutting down the “Liberty Pole” which commemorated the repeal of the Stamp Act. A clash occurred between soldiers with bayonets and people with chains and sticks, wounding several citizens. This was the Battle of Golden Hill (87).<br /> <br />Because New York was under the oligarchy, the Sons of Liberty were not a dominant movement. The clash caused a conservative backlash. Alexander McDougall, a major pamphleteer, was the “John Wilkes of America” and emulated the brave Wilkes. The turncoat Assembly had him locked up until the end of their session, when charges of “high contempt” were dropped.<br /> <br />McDougall was pleased to be associated with Wilkes, as Wilkes had an enormous following both sides of the Atlantic and unified the entire movement. John Wilkes was revered; his was a household name among the libertarians just as Murray Rothbard’s and Ron Paul’s are today.<br /> <br />In fact, possibly Ron Paul is the John Wilkes of today; he has unified the entire movement, which seemed to be splintered before into organizations from the moderate Cato Institute to the Libertarian Party (88) to the International Society for Individual Liberty (particularly important if you are overseas) (89) to the radical Ludwig von Mises Institute (90) which I strongly support as I am a radical libertarian myself. And then, of course, there are the Tea Parties. As I write this, some of the Tea Parties have been “hijacked” by neoconservatives, but we hope the Ron Paul supporters will take them back.<br /> <br />Ron Paul is supported by individuals from all these libertarian camps and a plurality (if not a majority) of these are also a member of his Campaign for Liberty (91) or its youth arm, Young Americans for Liberty (92). We fervently hope that we can restore liberty now just as the Wilkes/Sons of Liberty movement restored liberty in the late eighteenth century.<br /> <br />Libertarians in Wilkes’ day read History of England by libertarian Catherine Macaulay (93) just as today we read the Conceived in Liberty series by Rothbard which I am currently reviewing. It might pay to read Macaulay today. History, my worst subject in school because of complete lack of interest or appreciation, is important, as without it past mistakes will be repeated. Not that my best subjects, lunch and gym, should be removed from the curricula of course. Certainly not.<br /> <br />Anyway, these libertarians were very educated in a time that the establishment would not even publish a woman, much less study her work<br /> <br />Unfortunately, a schism came about in the movement in England. England had taken over the Falkland Islands from Spain, and now Spain wanted them back, but English imperialist Tories did not want to give them up. Some of these Tories talked a good libertarian talk, and some thought it would be a good idea to form a coalition. Wilkes was by then an alderman in London, and when impressment (on-the-spot draft) was to begin for the fight with Spain, Wilkes would not cooperate. Some said he was undermining public safety and appeasing the enemy (94).<br /> <br />This is very similar to the schism in the Libertarian Party and the rest of the movement today: pragmatism vs. principle. Some are in favor of the war in Afghanistan because we “need” to bring Osama bin Laden to justice. (He has been dead for years, I am 90 percent sure.) Some even favored the war in Iraq. We need to “widen our umbrella” or we will not win any elections. This is what the pragmatists say.<br /> <br />Anyway, the warmongers could talk a good libertarian talk (still can) and some were hoodwinked (still are), so this divided the movement and made it much less effective (still does) (95).<br /> <br />If we were going to win, it would be in America (96).<br /> <br />As for the Townshend Acts, England had so many problems that it decided to give in part-way on the Acts. There was the Falklands problem, the Wilkes crowd leaning on them, major trouble in the colonies as we know, and some problems in Ireland. Besides this, another problem at home was losses incurred by businesspeople because of the boycott. It was decided to repeal all the taxes except the one on tea. Tea was the biggest cash cow of the taxes, and does not grow in England, so it was chosen. To retain this tax alone would bring in the money and soften American resolve, wrecking the boycott. Also it would make the point that Parliament still had the “right” to tax America.<br /> <br />So, how were the colonies to react? Continue the boycott? Or end it? Or boycott tea only? The colonies took the high road except in three cases. In two cases merchants were themselves boycotted and finally re-joined the boycott against British imports (97).<br /> <br />There was a lot of trouble between supporters of the boycott and opponents who wanted to boycott only tea. There was a student demonstration for total boycott at Princeton and among the marchers was a young man named James Madison (98).<br /> <br />But, one by one, the colonies partially caved, and ended the boycott against everything except tea (99). At least the British did not gain much revenue, as tea was the main cash cow for tax revenue. That was certainly a factor.<br /> <br />The disagreement with England over whether the colonists were human and had rights or not was center stage in the colonies. But other issues were present as you can never get complete agreement among people on anything.<br /> <br />Dr. Rothbard teaches us a couple of important things. One is that government is slow while private people are quick. That’s relative; I am always complaining about most people being so slow, but compared to government, they’re quick. Look at how fast privately raised aid got to Haiti after the earthquake and look at how slow government is. It is nearly two weeks later as I write this and the help sits on the tarmac at Port-au-Prince because of government rules and top-down “organization.” I want to scream out: Deliver it anyway to where it is needed! People wait to be told what to do. I’d like to go down there and deliver it myself! But I would probably be shot by the U.N.<br /> <br />The other lesson Dr. Rothbard is teaching in this series is that representation in government favors older settlements over newer ones. People move and populate new places, but reapportionment follows much later (100).<br /> <br />This problem is why the Constitution calls for a census every ten years. “But Alice,” you may be saying, “why do you say you ‘never have and never will’ answer the census?” It is because the census we have and the census the Constitution mandates are two different animals. The census the Constitution mandates is simply a head-count of how many citizens live where, an “enumeration.” Depending on how “enumeration” is defined, maybe they can ask names. However, the census we have now asks a multitude of irrelevant questions. The 2010 questionnaire is shorter, but it still asks for one name, and the sex, race, and age of each of a home’s occupants. It does not ask if one is a citizen or foreigner. All are expected to be counted and to answer all of the questions, both citizens and foreigners. Now, how can that be accurate for representation in law-making bodies? In January, we were already being told to comply with a carrot and stick approach. In my state we are being told that the state will lose almost $10,000 over the next ten years in federal funds for each person who does not answer. What an insult to someone who knows economics! We are gouged to the bone for federal taxes, and then we are fed that line? That is the oldest “pick-up” line there is! We should have kept that money in the state’s federal taxpayers’ pockets in the first place! Of course! Not only in this state, but in all the states. Some carrot! This money will not land in your pocket.<br /> <br />The stick, of course is the threat of fines (101). The fine will not be paid by the state, either.<br /> <br />I am not answering, not only because of the inaccuracies, but because of the intrusive nature of the questions and because of the compulsion. They will not get any answers no matter how hard they try!<br /> <br />Anyway, back to Rothbard, inaccurate representation skewed toward older settlements was a bone of contention among the colonists. He was discussing South Carolina in particular in this, Chapter 50, where this problem occurred. Also, in South Carolina, there was the problem of inequitable property taxes. (I should say “equal,” not “equitable” since an “equitable tax” is a contradiction in terms.) Lower-valued land outside Charleston was taxed by the acre and not according to market value, which was unfair to poorer country people (102). But the main complaint in the country was poor (or absent) law enforcement giving rise to outlaw gang activity. Finally, the back-country people had to band together into a gang of their own to end the crime. The people chose a thousand men, who would be “Regulators” and who would take care of the criminals by vigilante justice. The justice was not always completely just, but it did solve the crime problem. Of course, government is all too often on the wrong side, and the governor and Assembly took the side of the crooks. Later, the Regulators’ side was presented in a better fashion, and the Assembly became more sympathetic and legalized the Regulators, even sending help. The anti-crime effort succeeded (103).<br /> <br />Of course, power does corrupt, and just as in the Sons of Liberty, some Regulators were too anxious. Some of the back-country poor were petty thieves who needed to be stopped, but some were making a living in unsavory and immoral ways that did not infringe on anyone’s rights so should be outside the scope of government, such as prostitution and gambling. Others, simply homesteading unused land, were labeled “squatters,” and then there were vagrants. More-wealthy people always seem to look down their noses at these types. There was apparently a labor shortage and these people did not want to work for somebody else, and that made potential employers angry. So the Regulators turned to harassment of these people. There was forced labor and floggings. If a wife thought her husband was not bringing home enough bacon, she had him flogged (104). This was mentioned, but that probably worked both ways if she did not fry it in a pan sufficiently.<br /> <br />The Regulators did not stop there. They tossed the South Carolina government out of their area when victims tried to sue in the courts. The state caved because they had enough problems already in preventing a slave revolt (105).<br /> <br />So another private group had to rise to defend against the Regulators, who had been formed to defend against criminals and then at least some had turned into criminals. This new group was called the “Moderator Movement.” These were deputized by a Charleston judge to serve warrants.<br /> <br />Long story short, the Regulators and the Moderators agreed to disband if the Assembly and the Council brought courts and law enforcement to the back country, which they did (106).<br /> <br />So, in South Carolina, the government had refused to raise a finger to enforce the law. In North Carolina, it was pretty much the opposite. Crooked sheriffs and other officials charged outrageous quitrents, taxes, and fees. People had to pay the sheriff to collect fees. The “poll tax” was the worst on the poor. A sheriff might come calling without notice and demand the money on the spot, and if the citizen could not pay, the sheriff took his land to re-sell (usually to a crony) right then and there (107).<br /> <br />Finally, a couple of libertarian reform groups called meetings of neighborhood delegates which were unsanctioned but took place anyway. They hailed the Sons of Liberty and called for liberty at home. They warned that power corrupts and that they would keep watch on their rulers (108).<br /> <br />It was difficult to find copies of the laws everyone had to live by, but a judge found one. Extortionate court fees were illegal! But the judge was silenced by the losing of his post (109).<br /> <br />The peaceful protests were ignored, so the people decided they had to become, shall we say, more forthright. Taxes continued, and a very large sum was appropriated by the North Carolina Assembly for a governor’s mansion (when so many people were poor). This brought about the group named after the Regulators, but this was entirely different from the group in South Carolina. These Regulators announced a tax strike until grievances were redressed. Of course, officials never listen to mere citizens. The Regulators offered to meet with the sheriff and officials to give them a chance to account for how money was spent. The olive branch resulted in the sheriff stealing a man’s horse and saddle, and selling them for some “unpaid” tax levy. A crowd charged the sheriff and liberated the horse. An official threatened to fire into the crowd, so the crowd shot up an official’s roof (110).<br /> <br />The militia was called out by the authorities, but because many militiamen were sympathetic to the people, few turned out.<br /> <br />Later, the governor fooled the Regulators by saying if they would go home and behave, he would ask the Assembly to redress their grievances. Of course, no such thing would happen, as Dr. Rothbard points out the old principle of English rebels: Grievances must be redressed before the edge of protest is softened (111).<br /> <br />Let us notice and learn that lesson right now! Don’t let up on your protest until after grievances are redressed.<br /> <br />What the Regulators got for “behaving” was a demand for submission, for an end to their meetings and for the payment of their taxes! This is what happens when you give in to authority! More authority! Authoritarians are intoxicated by submission.<br /> <br />But, at least they disobeyed this latter edict. A sheriff walked in on a meeting demanding tax payment. They refused, and about a week later they marched on the county seat. Things escalated, but, alas, the Regulators dispersed on promise of a meeting to account for the money. For shame – fool them twice, shame on them (112).<br /> <br />Well, enough said. Freedom gains and freedom loses, on and on it goes. Oftentimes it goes on because people refuse to learn the lesson Dr. Rothbard just taught: Do not let up on your protest. Keep leaning on them until they have already redressed your grievances. The Regulators sold out, failing time and again to heed this lesson and the establishment laughed all the way to the bank.<br /> <br />By 1771, the Regulators were finally waking up to this lesson after being jerked around that way for so long. While some had decided to fight fire with fire, they were divided and some still wanted to go crawling back for more “negotiations.” Without leadership in the battle that was fought against the militia, called the Battle of Alamance, the Regulators were soundly trounced. Most of the leaders fled the area and the rest were captured (113).<br /> <br />Meanwhile, among the other colonies, there was a lull in the trouble once the Townshend Acts were repealed and the importation boycott ended in 1770. But British troops were still stationed in Massachusetts, both on land and on the sea. This, in addition to Britain’s decision to pay the governor’s salary, was the winds of change. If government officials were to be paid by the British rather than the colonists, this would mean they would be controlled by Britain. He who pays the piper ... (114).<br /> <br />The liberals had been split, and the Tories said the liberals were leaning toward “anarchy” in the name of “freedom,” and opposing the Puritan religion. Sam Adams, who believed in Puritan values, said this was not true. The deists and rationalists should be judged by their politics, not their religion. Of course, a lot of stalwarts had fallen away, which weakened the libertarian movement. Only Samuel Adams forged ahead; maybe he realized, Dr. Rothbard says, that no movement proceeds in a straight line, but is stop-and-go, kind of like some of our freeways. You are not sure you will ever get there, you want to give up, but if you hang in there you will arrive at last (115).<br /> <br />The seeds of the next advance were being sewn. The British started paying judges’ salaries in Massachusetts next, as predicted (116).<br /> <br />Trouble was brewing in Rhode Island as customs enforcement cracked down in 1771. The lull had ended there. The British ship Gaspee arrived, and its commander shot at practically every ship under color of law. The sailors also acted like pirates, stealing on land and sea. When the ship ran aground, the people of Providence were overjoyed, ran right out there and burned the Gaspee. The British retaliated in two ways: They formed a commission to find the “guilty” and drag them to England for trial, and they made the decision that England would pay judicial salaries in Massachusetts out of customs revenue (117). We knew that, but apparently the Gaspee incident was what precipitated it.<br /> <br />Samuel Adams called a Boston town meeting, and this meeting formed a standing “Committee of Correspondence.” Because it was time, he thought, to declare if they were to be free men or slaves, the job of this committee would be to expound the rights of the colonists and communicate its declarations to other towns (118).<br /> <br />The committee hammered out the “Boston Resolves.” It listed the colonists’ rights and how they were infringed. The case rested on natural rights as opposed to positive law. It reminds me of the Declaration of Independence which, of course, followed shortly. Rights listed were life, liberty, property, support and defense of rights, and ability to leave the society one is in. Infringements included taxation and legislation without representation, quartering of troops in homes without owner consent, and payment of officials’ salaries by Britain out of taxes (119).<br /> <br />The Resolves and the committee idea spread like wildfire. The Resolves were endorsed in hundreds of towns. It was the propertied people who took the lead, but all income levels joined in (120). This was more about freedom to manage one’s own life and to keep what one earns than anything else.<br /> <br />And, needless to say, in the 1773 elections there was a liberal sweep (121). I wonder what it feels like to have one’s own party sweep an election like that. Since I am getting older and freedom is getting weaker, it does not look good for a Libertarian sweep in my lifetime. Oh well. At least where I am going next there will not be any civil government as we know it. (Editor’s query: All the politicians will be in the hot place?)<br /> <br />Actually, Virginia was ahead of Massachusetts; Committees of Correspondence had been suggested six years previously, and now the likes of Patrick Henry and Thomas Jefferson were leaders in their House. Actually the local committees were the instruments of agitation where the Sons of Liberty went, as they were not tied down by provincial (state) lawmakers and could turn on a dime (122). The Crown got no cooperation from any local authorities so could not chase down any “guilty” parties, and lawsuits against the British succeeded (123). <br /> <br />We come to the tea situation. I have been waiting for Dr. Rothbard to get to the Boston Tea Party, and finally it looks like that is nigh, what with the duties on, and boycott of, tea. The English share of the tea market was not over eight percent, so I think it was the principle of the matter, and principles do come first. Of course also, Dr. Rothbard points out that the tea monopoly granted to the East India Company skewed prices, among other things, and that also makes a difference, not to mention inflationary credit expansion. In any case, the East India Company’s monopoly was a real bone of contention with the American people, along with the famine in Bengal which they believed the Company caused (124).<br /> <br />The tea policy whipped up opposition, particularly in New York, and was led by Edmund Burke (125).<br /> <br />The East India Company had a government-granted monopoly on English tea and had almost the force of law. It selected a few cronies to distribute the tea and no other merchant could deal. Merchants were angry and decided to act. Benjamin Franklin, who was possibly going straight by now, unearthed some old letters of the governor urging Britain adopt tough policies against the colonists, and Franklin sent these to the Assembly. Sam Adams published them. Not only that, three of the cronies who got distributorships in Boston were governor’s relatives. The people demanded their resignation but didn’t get it. The distributors had the backing of the governor so dug in their heels until the tea actually arrived, then they sought refuge with British troops (126).<br /> <br />Sam Adams was determined to stop the tea ship from landing. He called on towns’ committees of correspondence and for mass meetings, and it was decided that the ships be sent straight back, without off-loading and with no duties paid. Then the governor would not allow the ships to leave until the duties were paid, leaving them stranded. After twenty days, Customs could take the ships and cargo. This must not happen; it would be better to destroy it all. One day before the twenty days was up, a mass meeting was called to decide what to do. We all know; even establishment history books admit to the heroism. That night, more than 100 Sons of Liberty, from all walks of life and all income levels, disguised as Mohawk Indians, snuck out to the ships and tossed the whole cargo overboard. I wonder how it tasted to the fish. They probably partied on the caffeine. There was no violence and no destruction. The Sons just did their thing and left (127).<br /> <br />John Adams called this “the most magnificent moment” of all the actions, and he was right as even the establishment schools teach the Boston Tea Party. Their versions might not be totally accurate, but they teach it, or at least they did not too long ago. It radicalized many people (of course it also scared the timid).<br /> <br />In the other colonies for the most part it was easier for the Sons of Liberty. When it demanded that the monopoly’s distributors resign, they did, and when the Sons would not allow tea to be offloaded, the ships headed back. At least once, tea was dumped overboard again and at least once a ship was taken by Customs and the tea stored (128).<br /> <br />The Boston Tea Party really jolted the British, who thought things were pretty quiet in the colonies. Boy, were they wrong! They saw that they had to go one way or the other, either back off and leave the colonies pretty much alone, or to crush them in a major crackdown. Of course we know what the Tories chose (129). <br /> <br />Britain decided to confine its efforts to Boston, and Parliament presented four “Coercive Acts.” First, there was the Boston Port Act, closing Boston’s port until the town paid East India for the tea and the Crown for duties on it (130).<br /> <br />Then, there was the Massachusetts Government Act. That would end the Massachusetts Charter and Council, and install a royally appointed body. The royal governor would appoint other officials. There would be no more town meetings or agenda acted upon without governor permission (131).<br /> <br />The Administration of Justice Act gave leniency to officials committing crimes on duty, and the Quartering Act required colonies to quarter British troops (132).<br /> <br />Yet another, the Quebec Act, fastened a permanent government on Quebec and expanded Quebec’s borders. Most historians have praised this, but Dr. Rothbard does not and we can almost see why without reading further. The people there were French who had been left alone since they were conquered. They were thought by the British to be an inferior race that needed to be ruled. The Act took away some basic rights, including religious freedom, and imposed taxes to be used to pay officials (133).<br /> <br />The Americans wondered if this was their future too. They started to call the above Acts the “Intolerable Acts.” The gauntlet was down and the steam was up in Boston. Would the other colonies rally behind them? The town meeting and committee of correspondence met to decide what to do. They sent word to the other colonies asking for a boycott of both imports and exports until the Port Act was repealed. It is interesting to note that it was Paul Revere who took some of these messages (134).<br /> <br />The colonies responded valiantly. Packages of aid poured into Boston, and on the day the Port Act went into effect, people hit the streets as they should this very day. Not everybody was in agreement, however. Some merchants were more interested in making money (which is also a fine principle as profits are a barometer of how well customers are pleased) than supporting this cause (135). Everyone has his own scale of values and we all need to respect that, but you do not need to patronize a business, and these merchants did lose business (136). The boycott is a potent tool, and a staple in free-market regulation. Some of the colonies were reluctant to support Boston (137). Some former supporters of the Sons of Liberty were becoming more conservative and backing off. They wanted to go the route of selecting delegates to a congress to petition Britain, meaning to go hat-in-hand, begging, rather than to dig in their heels and make demands. Pleading with a government for what is rightfully yours does not work! It never has and never will.<br /> <br />However, the moderates won the day, and the radicals decided to join them in electing a congress. They did not sell out any principles, but decided that the moderates’ tactics would have to do.<br /> <br />This congress was called the “Continental Congress” (138). The main issue was whether to boycott, and the colonies chose delegates according to that.<br /> <br />Virginia made the most radical statement advocating the boycott of all imports (except medicine) from and all exports to England until all grievances were redressed. There was also talk of armed resistance and secession. Of course, with the likes of Thomas Jefferson, Patrick Henry, and an apparently reformed George Washington around, no wonder. George Mason and Richard Henry Lee were no slouches, either (139).<br /> <br />Meanwhile, back in Boston, the new governor, the new boss who was the same as the old boss, and actually worse, had received a large number of British troops. The people used passive resistance and non-cooperation, an example of which was their refusal to quarter troops, who had to camp out. It was summer then, but fall would arrive soon in Boston, followed by winter.<br /> <br />The governor was in a position where a large number of people, probably a majority, were against him, so he did what governments do: He mobilized the troops. The militia responded by getting ready to defend the people (140).<br /> <br />On September 5, 1774, the Continental Congress met in Philadelphia. Present were the individuals I listed above along with Samuel Adams and John Adams (who were distant cousins). These were the radical leaders who believed that rights come from God or nature. There were plenty of conservatives there, however, who did not care about that but wanted to confine statements of grievances to British law.<br /> <br />Samuel Adams went right to work for the radical (libertarian) cause. He sent back to Boston for radicals there to draw up some resolves (they had to meet out of town as the British had outlawed such a meeting). These resolves were against the Coercive Acts, for civil disobedience, and for non-payment of taxes. They even called for a dual government that would ignore the British. They called on the Continental Congress to boycott all trade with England. Paul Revere hurried the resolves down to the Congress in Philadelphia. These swayed the Congress enough that the radicals prevailed. John Adams remarked that it was one of the happiest days of his life (141). I believe it because I was living in California when Proposition 13 (property tax limit) passed and later when Proposition 215 (medical marijuana) passed, and I was overjoyed both times. This was small potatoes compared to the Continental Congress’s radical victories.<br /> <br />Everything had passed except the dual government resolve, which ran into trouble. The Tories (conservatives) wanted to move the other way, toward a colonial central government, which was to be not much more than the king’s and Parliament’s puppet. This plan lost the vote, but barely, so Tory influence was significant (142).<br /> <br />Now they came to a declaration of rights. A Tory was in charge of the writing, so the supremely important natural rights to life, liberty, and property were played down. Rights like petition, trial by jury, assembly, etc., were played up. These are perfectly legitimate rights, of course, but they had more to do with government. And it opened the door to regulation. The Congress’s address to the king contained “proper” obeisance (143). This was moderate at best and must have galled the disappointed radicals.<br /> <br />At the end of the Congress, the Continental Association was begun as an ongoing association until all grievances had been redressed. If grievances still prevailed, the Congress would meet again in six months.<br /> <br />At the end of the day, the Congress backed Massachusetts on the Coercive Acts issue, so was a general success (144).<br /> <br />In the colonies, enforcement committees for the Association were formed to see to the terms of the Congress. Not all the colonies went along. New York and Georgia in particular were more inclined toward obeying British rule (145).<br /> <br />Dr. Rothbard took time to point out that the libertarian Association movement, except in a very few isolated cases, used non-violent, libertarian means to achieve the goals, and did so with major success. This proves that these methods do work (146). What impresses me the most about these protesters is they realized that part and parcel of freedom is responsibility. Freedom and responsibility are two sides to the same coin. This is why little tiny children cannot be entirely free. While they have rights, they do not yet know how to exercise these rights. To be free, one must be required to take responsibility for one’s own actions. Little kids cannot do that yet. They need to learn and by the time they are big children or young teenagers they should know. They should be required to take responsibility for themselves by the early or mid-teens, ready or not. If they have not learned by then, they never will. The colonists understood that, and their protests were for the most part responsible. Today we are subjected to such a sheltered youth that many never really grow up. They have to do exactly what they are told and abstain from any critical thought until they are eighteen, and by then it is way too late. They go on obeying from there on in. If they protest, it is to plead for government benefits. But, of course, that is what the establishment wants: infantile dependence. Is it not?<br /> <br />The boycott was a major success. It had the desired effect on British merchants, and they in turn pressured Parliament to repeal the Coercive Acts. In fact, in London, merchants even set up a relief fund for depressed New England (147). But the Tory government dug in its heels claiming that government purposes over-ride the interests of commerce. They passed the New England Restraining Act which forbade New England from trading with anyone but England (148).<br /> <br />They also mocked the colonies by passing another act which would allow the colonies to “tax themselves” to pay royal salaries, the tax rate being dictated by Britain, of course (149).<br /> <br />Before the colonies even had time to say “Bullfeathers!” though, Lexington and Concord happened.<br /> <br />The Whigs’ anti-Coercive Acts campaign in England was unsuccessful. At the same time, the Tories were waging their own campaign in America. They cried out for “liberty” while denouncing the libertarian rebels. Of course they fooled nobody. Too bad people today are not that astute. I keep hearing high-sounding phrases about freedom coming from high officials even as they tax us blind and try to convince us (successfully, all too often) that a tax break is a subsidy.<br /> <br />What Tory journalists were doing was to confuse government mandates with voluntary boycotts, pretending that a boycott was a form of coercion, and accusing the rebels of “tyranny” and “anarchy” in the same breath (150).<br /> <br />In the fall of 1775, the radicals appointed a committee, the Committee of Safety, to call on the militia to collect munitions and supplies in case the British attacked. Also, the best qualified militiamen were recruited to form the “minutemen,” as they would drop everything and go if called (151). The entire militia made ready. They were trained with the same ideas as their politics, as free individuals rather than obedient automatons (152). I always wondered how a militia of private citizens could prevail against the British Redcoats, except by divine intervention. I guess now I know. The money and supplies were obtained by voluntary means, church offering plates being one. Many Congregational ministers backed the rebellion, calling for the separation of church and state, and the God-given rights of life and liberty. The Baptists were lukewarm, and the Anglicans were on the other side (153).<br /> <br />Everything was coming to a head. In Virginia, the House of Burgesses met. They did so without the governor’s authorization which they needed to meet legally. There, Patrick Henry made his famous speech. We all know some of the speech’s beautiful content. The reason for it was a resolution he wanted passed that would strengthen the Virginia militia to oppose the British. The resolution barely squeaked through due to conservative opposition. The conservatives would have watered down the militia effort were it not for the fact that in Virginia, as in many other colonies, militiamen elected their officers and funding was by voluntary contribution (154).<br /> <br />The British were positive they could crush the Americans. After all, they were trained to march in lockstep and take orders. The Americans thought for themselves. A military mind would say this was a slam dunk. Well, we’ll see.<br /> <br />They planned a pre-emptive strike against the Americans, and their first job was to arrest rebel leaders, especially John Hancock and Sam Adams. Fortunately, those two were not in. They had gone to Lexington or Concord where there stores of military supplies the rebels had stashed. The British followed them there to arrest them and take the supplies. They learned that this would not be a “piece of cake” since the general population was on the side of the rebels. Their troop movements and strategies were soon discovered, so no secrets were kept (155).<br /> <br />Paul Revere’s famous ride took place when he rode to Lexington to warn Hancock and Adams. Revere was captured, unfortunately, so someone else rode on to Concord. The Minutemen gathered and, long story short, the battle of Lexington and Concord took place. First at Lexington, the Americans were badly outnumbered and lost. However, at Concord, the Americans were smarter. They waited while the cocky British swaggered in to help themselves to the stored supplies. Then the Americans ambushed them, and armed citizens ambushed them all the way back to Boston (156).<br /> <br />Lexington and Concord (“the shot heard around the world”) was the beginning of armed revolution. It proved beyond a shadow of a doubt that without a citizenry that used its God-given right to keep and bear arms – no licenses, registrations, or permits – we would never have had the free country we had for so long. We could become free again, but one crucial thing we must have is the total repeal of all gun laws.<br /> <br />But the vital force behind all this is the expansion of libertarian thought. All the firearms in the world are no help unless they are used, and they will not be used unless people are really determined. How did they get so determined?<br /> <br />One lone Englishman by the name of Thomas Hollis V was an ardent libertarian. In 1754 he hatched a plan to disseminate books on liberty worldwide. Perhaps he can be considered the forerunner of today’s Ludwig von Mises Institute. He worked alone, which is really the best way; no long discussions, meetings, or consensus, just a decision made and acted upon. One can just go ahead and do things, not have to “run it by” anybody and then wait for someone to “get back to” you. Fortunately, Hollis was wealthy enough to finance his effort. He distributed the works of Locke, Milton, and other liberal (classical, of course) writers to European countries first, but when the Stamp Act occurred, he turned his attention to the New World. He sent hundreds of works to the library at Harvard, and started a correspondence with influential liberal ministers in Massachusetts. In England, he was also involved with the Wilkes movement and was, of course, on the radical side of the dispute between the principled radicals and the pragmatic moderates (157). It reminds me of the schism in today’s Libertarian Party, and unless the radicals take the reins back, the Party will be useless.<br /> <br />John Locke’s works had always been widely read in America, especially now with Hollis’s work, and especially after Civil Government was reprinted in 1773 (158).<br /> <br />Even more consistent than Locke on the inalienability of natural rights was German philosopher Christian Wolff, in <span style="font-style:italic;">Institutiones </span>(1750). Thomas Jefferson had his own copy of that and had marked it up. Swiss writer Emerich de Vattel also influenced some of the Founders. The French liberal Voltaire did too, as he pointed out that warring states were comparable to armed gangs. Political history, he said, was all violence foisted on populations by states. Jean-Jacques Rousseau was also influential in his defense of the people against rulers, but was inconsistent. The list goes on and on; the American people were well-educated and galvanized for freedom.<br /> <br />Another radical libertarian who did a lot of good was Ethan Allen. He was in New Hampshire when the New York governor got the notion that settlers who had bought New Hampshire land were squatters and decided to evict them and give the land to favored oligarchs. Allen and many of the settlers formed a resistance group called the Green Mountain Boys. Dr. Rothbard described their tactics against the New York soldiers as “guerrilla warfare” and discusses guerrilla warfare a bit. The showdown reminded me of Lexington and Concord, driving home the point yet again that citizens are either armed or they are slaves. When Lexington and Concord occurred and the revolution began, the Green Mountain Boys joined right in (159).<br /> <br />Dr. Rothbard winds down Volume III with two statements about the Revolutionary War. One is that the people were behind it, maybe not 100 percent, but the majority supported it (160). The other statement was that the war was fought for both political and economic reasons (161). Freedom and prosperity go together. They seemed to understand that. To throw off the yoke of British economic despotism (mercantilism) in favor of a free market (capitalism) would mean individual freedom and individual prosperity. Today’s Obama-supporting left would have you believe that a free market will impoverish the many and enrich the very few. This is not true as has been shown again and again. In fact, it is the opposite of the truth. And the Bush-supporting neoconservative would have you believe that the despotism of the Bush administration is freedom! That is pure insanity. There is no dichotomy between liberty and property; human rights and property rights are the same rights. They knew that in 1776. Later generations made the false distinction (162).<br /> <br />So, why did the Americans of 1776 want freedom so badly? For the same reasons those Americans of 2010 do, that is, those who understand it do. Just what is the essence of the state? It is an elite few ruling over and living off the powerless many (163). Most people have to spend most of their time making a living, so this minority elite are full-time professionals at ruling. But why, other than lack of free time, does the majority obey (164)?<br /> <br />This is where the intellectuals come in. The rulers must somehow get the intellectuals to go along. There was a time when religious intellectuals were used. In fact, today some ministers are telling their congregations to obey the civil “authorities,” especially in the event of some dire emergency and they trot out Romans 13. This would require an essay in itself. Romans 13 does say to obey authority. But is this authority the kind of authority experts have? Does it mean that I should take to heart the advice of my pastor? I think it does. Or does it mean to obey civil government authority? If it does, since the Constitution is the supreme law of the land, then I only need to obey laws and orders that are Constitutional, and darn few are these days.<br /> <br />But, rather than religious intellectuals, the intellectuals who are in the government’s stable today are the scientists. Al Gore and his crowd are urging us to accept more government intrusion and restrictions to “save the planet.” Then there are TV doctors such as Dr. Sanjay Gupta. A thinking person must do his homework and make his own decisions. I watch all those medical shows. There are lots of opportunities to learn new things about staying healthy, but I must separate the sheep from the goats. One needs to realize that the mainstream media is part of the establishment and therefore hand in glove with government, and one needs to allow for this during all programs. The only real point of view you see is that government must act to solve problems. The difference is only in what way. Only the Internet is a source of varying views, and government takeover of that is only a matter of time.<br /> <br />Does anybody know of an offshore site to mirror this blog?<br /> <br />In any case, one main reason the elite wants to aggrandize state power is for the booty taken from the citizenry, and the job of the intellectuals is to make the people believe this is in the people’s interest (165).<br /> <br />But, what about those times when some people realize that the emperor wears no clothes? Usually this opposition is ideological rather than economic (166). This is true. Economically I have nothing to gain by railing against the system. In fact, someday I could be destitute or worse. But, I am a libertarian, rain or shine, and have to act. This is what God created me for, so I have to do it.<br /> <br />Many people have to be fired up over something to get them to stop turning the other cheek (and start turning over tables in the temple, so to speak) to the authority that slaps them over and over. It has to be philosophy, a belief system, and has to be motivated by the right kind of intellectuals. This is what Ron Paul and others are trying to accomplish. Even Glenn Beck and Sarah Palin are doing something. I don’t know how close to being a libertarian either of them is (both are pro-war which is not good), but at least they are loudly opposing the Obama administration. That is a start. All these people are well-to-do, but there is a strong temptation to sell out because of the economic advantages of that. Ron Paul, bless him, has hung tough for decades, but he is one in a million.<br /> <br />So, the ideology needs to be fierce. Ideas have to come before tangibles. So, as far as the popularly supported American Revolution is concerned, this proves that people were guided by ideas and not purely economics. Economics did enter in, of course, since people knew that freedom and prosperity go together. But they also knew that economic gains would come later, and they might suffer more in the present for their ideas.<br /> <br />(1) Rothbard, Murray N. <span style="font-style:italic;">Conceived in Liberty Volume III Advance to Revolution, 1760-1775</span> (Auburn: Ludwig von Mises Institute, 1999) P. 12.<br />(2) http://alicelillieandher.blogspot.com/2005_05_01_archive.html<br />(3) Ibid. P. 19, 20.<br />(4) Ibid. P. 21.<br />(5) Ibid. P. 21, 22.<br />(6) Ibid. P. 23.<br />(7) Ibid. P. 24.<br />(8) Ibid. P. 25.<br />(9) Ibid. P. 28.<br />(10) Ibid. P. 30.<br />(11) Ibid. P. 33.<br />(12) Ibid. P. 37-39.<br />(13) Ibid. P. 39<br />(14) Ibid. P. 42, 43.<br />(15) Ibid. P. 47.<br />(16) Ibid. P. 45, 46.<br />(17) Ibid. P. 48.<br />(18) Ibid. P. 49.<br />(19) Ibid. P. 55.<br />(20) Ibid. P. 58.<br />(21) Ibid. P. 59.<br />(22) Ibid. P. 65, 66.<br />(23) Ibid. P. 71, 72.<br />(24) Ibid. P. 72.<br />(25) Ibid. P. 72.<br />(26) Ibid. P. 73.<br />(27) Ibid. P. 80-84.<br />(28) Ibid. P. 89, 90.<br />(29) Ibid. P. 90.<br />(30) Ibid. P. 91.<br />(31) Ibid. P. 92.<br />(32) Ibid. P. 94.<br />(33) Ibid. P. 97.<br />(34) Ibid. P. 100.<br />(35) Ibid. P. 100, 101.<br />(36) Ibid. P. 101.<br />(37) Ibid. P. 104.<br />(38) Ibid. P. 104.<br />(39) Ibid. P. 105.<br />(40) Ibid. P. 106.<br />(41) Ibid. P. 106.<br />(42) Ibid. P. 109.<br />(43) Ibid. P. 108.<br />(44) Ibid. P. 110.<br />(45) Ibid. P. 111.<br />(46) Ibid. P. 125.<br />(47) Ibid. P. 128.<br />(48) Ibid. P. 130.<br />(49) Ibid. P. 132.<br />(50) Ibid. P. 131.<br />(51) Ibid. P. 138.<br />(52) Ibid. P. 138, 139.<br />(53) Ibid. P. 139.<br />(54) Ibid. P. 141.<br />(55) Ibid. P. 144.<br />(56) Ibid. P. 152.<br />(57) Ibid. P. 154, 155.<br />(58) Ibid. P. 156.<br />(59) Ibid. P. 159.<br />(60) Ibid. P. 160.<br />(61) Ibid. P. 160, 161.<br />(62) Ibid. P. 162.<br />(63) Ibid. P. 163.<br />(64) Ibid. P. 163.<br />(65) Ibid. P. 165.<br />(66) Ibid. P. 166, 167.<br />(67) Ibid. P. 169.<br />(68) Ibid. P. 169.<br />(69) Ibid. P. 170.<br />(70) Ibid. P. 171.<br />(71) Ibid. P. 172.<br />(72) Ibid. P. 174.<br />(73) Ibid. P. 175.<br />(74) Ibid. P. 178.<br />(75) Ibid. P. 178.<br />(76) Ibid. P. 179.<br />(77) Ibid. P. 179.<br />(78) Ibid. P. 180.<br />(79) Ibid. P. 181.<br />(80) Ibid. P. 183.<br />(81) Ibid. P. 196, 197.<br />(82) Ibid. P. 199.<br />(83) Ibid. P. 199, 200.<br />(84) Ibid. P. 200.<br />(85) Ibid. P. 201.<br />(86) Ibid. P. 201.<br />(87) Ibid. P. 204.<br />(88) http://www.LP.org.<br />(89) http://www.isil.org.<br />(90) http://www.mises.org<br />(91) http://www.campaignforliberty.com.<br />(92) http://www.yaliberty.org<br />(93) Rothbard P. 208.<br />(94) Ibid. P. 210.<br />(95) Ibid. P. 210.<br />(96) Ibid. P. 211.<br />(97) Ibid. P. 215, 216.<br />(98) Ibid. P. 220.<br />(99) Ibid. P. 221.<br />(100) Ibid. P. 227.<br />(101) http://www.lewrockwell.com/paul/paul192.html <br />Paul, Ron, “None of Your Business” 7-13-04, and <br />http://www.lewrockwell.com/barnett/barnett15.1.html <br />Barnett, Gary D. “The 2010 Census: Beware of the State’s Assault on Privacy” 1-28-10. Reasons the Census is unconstitutional and it offers encouragement to us resisters.<br />(102) Rothbard P. 227.<br />(103) Ibid. P. 228, 229.<br />(104) Ibid. P. 229, 230.<br />(105) Ibid. P. 231.<br />(106) Ibid. P. 232.<br />(107) Ibid. P. 234.<br />(108) Ibid. P. 235.<br />(109) Ibid. P. 235.<br />(110) Ibid. P. 236.<br />(111) Ibid. P. 237.<br />(112) Ibid. P. 238.<br />(113) Ibid. P. 244.<br />(114) Ibid. P. 249.<br />(115) Ibid. P. 250.<br />(116) Ibid. P. 250.<br />(117) Ibid. P. 254.<br />(118) Ibid. P. 255.<br />(119) Ibid. P. 256.<br />(120) Ibid. P. 257.<br />(121) Ibid. P. 257.<br />(122) Ibid. P. 258.<br />(123) Ibid. P. 259.<br />(124) Ibid. P. 260-264.<br />(125) Ibid. P. 264.<br />(126) Ibid. P. 266.<br />(127) Ibid. P. 267.<br />(128) Ibid. P. 271.<br />(129) Ibid. P. 272.<br />(130) Ibid. P. 273.<br />(131) Ibid. P. 274.<br />(132) Ibid. P. 275.<br />(133) Ibid. P. 276, 277.<br />(134) Ibid. P. 279.<br />(135) Ibid. P. 280.<br />(136) Ibid. P. 280, 281.<br />(137) Ibid. P. 282, 283.<br />(138) Ibid. P. 284.<br />(139) Ibid. P. 291.<br />(140) Ibid. P. 294, 295.<br />(141) Ibid. P. 297.<br />(142) Ibid. P. 298.<br />(143) Ibid. P. 299.<br />(144) Ibid. P. 300.<br />(145) Ibid. P. 302, 303.<br />(146) Ibid. P. 304.<br />(147) Ibid. P. 311.<br />(148) Ibid. P. 312.<br />(149) Ibid. P. 312.<br />(150) Ibid. P. 316.<br />(151) Ibid. P. 319.<br />(152) Ibid. P. 320.<br />(153) Ibid. P. 321.<br />(154) Ibid. P. 323, 324.<br />(155) Ibid. P. 327.<br />(156) Ibid. P. 328, 329.<br />(157) Ibid. P. 334.<br />(158) Ibid. P. 335Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-9610507453479714572010-05-01T21:34:00.003-04:002010-05-20T14:29:53.568-04:00The Revolutionary War<span style="font-style:italic;">Conceived in Liberty, Volume IV<br />The Revolutionary War, 1775-1784</span><br />by Murray N. Rothbard<br /> <br />Dr. Rothbard starts Volume IV with how the news of Lexington and Concord spread. Determined, individualistic, armed Americans used their heads and prevailed against the British, and this attack by the British is what started the Revolutionary War (1).<br /> <br />The next job for the Americans was to raise an army because it was a sure thing the British would attack again. The call for soldiers was answered practically overnight by 20,000 men who seemed to pop out of the ground (2).<br /> <br />Two committees were set up: one to investigate what had happened in Lexington and Concord so as to get the facts straight, and the other to draw up a narrative based on these findings, so as to get the truth out to the media. The head of the narrative committee was unfortunately a turncoat, and the committee under him jumped the gun and wrote an exaggerated account. Rumors tend to multiply, and whenever the account was passed from one person to another it was embellished further (3).<br /> <br />Word spread to England. Money was raised to help out the widows and orphans of those the British had killed. The Crown not only imprisoned the money-raiser but denied the whole story. When official word arrived, the Crown was a laughing-stock! (4).<br /> <br />Opposition in England to the war was very widespread, and many in the army resigned their posts. They believed that they must be on the side of their “fellow subjects” against the Crown (5).<br /> <br />One has to laugh about this: After Lexington and Concord, the defeated British cried like little kids, “No fair!” The Americans, rather than marching in formation out on to the field as in “conventional” warfare, shot from behind trees and walls as in guerrilla warfare. They had better sense than to strut on to any open field! (6). When you are at war you had better use your brains or your brains will be shot out. What did these British think this was? A rugby game? No fair, my foot.<br /> <br />The Americans had home field advantage, so to speak, and mass support, and they used it. This was a guerrilla war, a war of national liberation, and individuals were still responsible for their jobs and to their families. There was no top-down bureaucratic control. They were relying on the zeal of the participants. This was the libertarian way to fight a libertarian war (7).<br /> <br />The tactics, however, were not perfect. They had 20,000 individuals keeping 4,000 British in Boston, and many began to go back home. Also, the American leader, Joseph Warren, took the step of calling for a conventional army to replace the militiamen, with actual enlistments until the end of the year (8).<br /> <br />The Continental Congress met again, and because of middle-of-the-roaders and conservatives, they were lukewarm, especially since Fort Ticonderoga had been captured from the British. This was regarded as offensive rather than defensive, and they didn't like it (9). Eventually, they agreed to keep it rather than turn it back to the British (10).<br /> <br />The Continental Congress then turned its attention to the army surrounding Boston. Massachusetts asked to form its own government, which was approved but only on a temporary basis until such time as it reconciled with the British. The same conservative Congress counseled New York that, if the British were to land there, there should be no resistance. And they pleaded with Britain for negotiation. Of course, the radicals were livid (11).<br /> <br />Later the Congress decided to raise and supply an army, which consisted partially of marksmen who had fought at Concord. They needed to pick a commander. John Adams, of course, wanted the soldiers to vote. The libertarians caved on the issue, and pro-oligarchy George Washington was selected. Both Adamses were beginning to move in a conservative direction (getting old perhaps) and gave the selection the nod. At least in this instance he could be depended on (12).<br /> <br />Dr. Rothbard states that a fellow named Charles Lee would have been a far better candidate and devotes a whole chapter, Chapter 6, to him (13).<br /> <br />To contrast: Washington was an oligarchic conservative and wanted to arrange the military along the top-down European model. Lee was an individualist steeped in libertarian thought and could see the flaws in the traditional military model. Lee was the rare individual who was both an intellectual and a good soldier. He was one of the few Americans who had military experience, including guerrilla experience. But he had no political base, and, although eminently qualified, he was not chosen. By comparison, Washington was mediocre at best.<br /> <br />Lee did not mince any words when he talked about the British; George III was a ”reptile” and Parliament was a “den of thieves” (14). Well, we have that sort in office today, too. Too bad there are not that many Charles Lees around.<br /> <br />Charles Lee's pamphlets were a major encouragement to the Americans and these were one reason they did not lose heart (15).<br /> <br />Lee did wind up as a general. George Washington acknowledged Lee's expertise and went to bat for him at the Continental Congress (16).<br /> <br />While all this was going on the Battle of Bunker Hill ensued. The British won, but a lot of their men died and their generals made foolhardy decisions, being so sure they were better (17).<br /> <br />When Washington took command, he immediately transformed the army from self-responsible, free individuals who thought for themselves into automatons of various ranks. Discipline was strict, punishments were brutal and pay was low. Of course, boredom and mutinous attitudes replaced the desire to do one's part for a cause. At the end of enlistment, most left and had to be replaced (18).<br /> <br />Armies, obviously, have to be financed, especially traditional armies. To supply guerrilla armies is simpler, as the soldiers are living at home, or close by, and working at regular jobs, and voluntary contributions supply the army. Traditional armies have to be fed, clothed, and sheltered. How would this be handled? It was up to the Continental Congress (19). Since the Continental Congress was not really a government, it could not tax, especially since the Americans were conducting an anti-tax revolution. Instead they borrowed. They also printed out “money” that was not backed up by gold or any other commodity. It was a conservative, landed, aristocratic member who came up with that idea, which we have learned is extremely dangerous at best (20). Each colony would be responsible for redemption based on its relative population. This was a tax, but a delayed one. Of course, we know what happened. The bills were soon “not worth a continental.”<br /> <br />The Revolution was stymied in other ways. There were authoritarian tactics, such as the jailing in New York of those who would not sign a statement agreeing to support the Congress (21), and the rightward drift of some revolutionary leaders.<br /> <br />The radicals did not always behave in libertarian ways, either. They formed committees to persuade the Tories to come over to their side and if that didn't work, bullying tactics were used (22). The committees were responsible to no one.<br /><br />There were lots of Tories in the country. New York and Georgia seemed to have the highest percentage. They were of all incomes and walks of life, but royal bureaucrats, to no one's surprise, tended more to be Tories (23). These were not mobilized by the British because for a long time the British did not take the Revolution seriously. Like most counter-revolutionaries, they believed that this was just a little rebelliousness that would play itself out like a child's tantrum. This is infuriating to us who want to be free, but it actually works in our favor, since the opponents fritter away their time laughing while we get a head start on them in gaining our freedom. Remember that when you are in that position. But also remember that this does not mean that you have a moment to waste.<br /><br />How these Tories were treated in various places is really embarrassing: It was actually illegal to support the Crown, and Tories were imprisoned and lost their property (24). This was very un-libertarian, of course, and today's dissidents are very much against this sort of thing since the wind is now definitely blowing in the direction of outlawing dissent. You do not need a weatherman to see that.<br /><br />This was not good, but a past blunder came back to haunt the Americans. The Indians tended to side with the British because it was the colonists who had taken their land, and the British had treated them more like what they were (25). The black slaves were also inclined to favor Britain, probably for similar reasons (26).<br /><br />Dr. Rothbard describes the offenses and defenses of both Tories and rebels as the book really gets under way. I don't think there is any need for a blow-by-blow account. Suffice it to say that there was a lot of activity by Americans on both sides. The rebels were able to hold their own against the Tories and the British.<br /><br />Offshore, however, it was a whole new ballgame. The British ruled the sea, and Americans out there could not turn to supporters for help (27). American ships went on the offensive conducting surprise raids on the British, to get their gunpowder and other supplies. After the British punished them by burning down an entire town, the Americans sailed to the British West Indies and Bermuda to raid their stores (28). However, the main activity was on the part of private ships defending the harbor (29).<br /><br />Privateering was relatively inexpensive and efficient, not to mention libertarian. It was so successful that General Washington imitated some privateer methods on his own ships (30).<br /><br />Later, the Continental Congress acknowledged the privateers and their work, and provided them with letters of marque and reprisal (31).<br /><br />As for international trade, there was some back-and-forth, but in April, 1776, the Continental Congress declared all trade to be free except with Britain. This was a big step toward independence (32). However, the Congress did institute price ceilings on salt and other commodities that were in short supply which, of course aggravated the economic problems (33).<br /><br />There was a major gunpowder problem. No gunpowder, no revolution. Subsidies did not help in manufacturing gunpowder when there was very little manufacturing in a new country that was almost all agriculture. In the largest city at the time, Philadelphia, powder factories sprang up (34). This was amazingly quick compared to today's glacial pace even with all our technology. The point proven here is not the urgency factor, but the fact that today's regulatory climate slows things down to a glacial pace.<br /><br />In the end, gunpowder had to be imported. But from where? When Dutch and French merchants became optimistic about the war's outcome, they started selling powder, and lots of it, to the Americans. Arms and powder soon started to come in, but by a southern route, presumably to avoid the British (35).<br /><br />The arms themselves were manufactured in Pennsylvania, where there was an abundance of iron ore (36). Other colonists pitched in, including individual blacksmiths (hooray for lack of permits and licenses!), in making munitions.<br /><br />Because cloth for clothing which was no longer imported from Britain was becoming scarce, households stepped up to the plate and compensated (37). Again, lack of permitting requirements made something simple that would be difficult or impossible today.<br /><br />A free country was being born! It must have been exciting to watch. In 2010, it is tragic to have to watch it die.<br /><br />But not all the war purchases were free market. The Continental Congress appointed secret committees composed mainly of conservatives that gave lucrative contracts to favored firms to purchase raw materials abroad and manufacture items needed on a “cost-plus” (guaranteed profit) basis. This means the government will buy the items for what it costs to make them, plus a given percentage for profits (38). Do the math. The incentive is to spend as much on production as possible.<br /><br />To add insult to injury, the members of these secret committees were businessmen themselves, so guess who got the contracts (39). And to think the Revolution was supposed to be to throw off the yoke of mercantilism!<br /><br />Meanwhile, in England, the popular sentiment was against the Americans (40). An army was being raised to send to the colonies by hiring mercenaries from other countries. After being turned down by two countries, England finally rented 30,000 troops from Germany. The German people, who, having read Rousseau and Voltaire, supported the Americans, protested this renting-out of their troops. In the end, 7,500 of these were killed and another 5,000 defected to the Americans (41).<br /><br />The advent of these foreign troops convinced the Americans of the need for independence, if they were not already convinced. Leaders called for the opening of ports to all maritime powers (presumably to help) and the confiscation of Tory property (not really very libertarian; “confiscate” is a synonym for steal). These were the key planks in the radical platform (42).<br /><br />After Lexington and Concord, two very basic and important decisions had to be made by the colonies. One was whether to push forward toward independence from Britain. That seems like a no-brainer to me. The other was what kind of government(s) to set up (43). At the time it was pretty decentralized; the ruling was done by committees of safety and town councils. My question: Why change? The Continental Congress was asked and answers would depend on the composition of Congress, Tory or radical, and how members felt about severing ties with Britain. Not everybody was that enthusiastic about that at the time.<br /><br />New Hampshire was advised to form a new government which it did. The first constitution in America was written. It had the most liberal suffrage laws to date: Just about all adult male residents could vote. A bi-cameral legislature was formed. Nobody was completely satisfied but it was a definite step forward for democracy (44). Some were so dissatisfied that they refused to participate, mainly because the upper house (Council) was too much like the old oligarchy (45).<br /><br />New England was ready for independence, but some in other colonies were not. The residual idea, actually superstition, of looking up to the king as better had not been entirely shed. It was taboo to attack the king. To cut away at these notions required a writer of top intellect and integrity. That person appeared: He was Thomas Paine. Paine had been a poor boy in England who had educated himself and worked in a few different fields including as a petty bureaucrat and tax collector. Losing his job, he emigrated to America, where he got a job as a magazine editor. He became a superb writer and got his reputation as a libertarian when he published an attack on slavery (46).<br /><br />Then Paine urged the Quakers to take up arms in defense of liberty against the British. His Common Sense went viral! This was the shot in the arm the Revolution needed. There was either independence or there was slavery. Americans must choose. Then he attacked the taboo, and called King George “the royal brute of Great Britain,” and Americans ate it up. This was the nourishment they needed (47).<br /><br />Thomas Paine did not stop with that. He attacked the very institution of monarchy, referring to the Old Testament Jews who were fine without a king. Kings were “crowned ruffians” and states were born in naked conquest and plunder (48).<br /><br />He also distinguished society (meaning the marketplace and voluntary human association) from government (force) (49), Dr. Rothbard says.<br /><br />Even then, Paine did not stop but rather went on to describe the ideal foreign policy, and what that boiled down to was free trade with all, but entangling alliances with none (50), says Dr. Rothbard, an idea echoed by Jefferson. The empire America has now become and the trade restrictions we are languishing under thanks to NAFTA, GATT, WTO, etc. are the precise opposite of what he had in mind. I believe he was correct.<br /><br />Furthermore, Paine called for a government (or state and local governments, rather) whose main job is to protect the rights of individuals (51). Today we have a government that is doing everything but that (51). Also, people need to think. There is nothing like the bright light of reason shining on authority to bring it down (52).<br /><br />This is all beautiful to a radical like me. But not everyone in the colonies agreed. Plenty of people did not even want independence. When it became obvious that supporters of independence were winning, that minority decided that independence would be OK as long as oligarchic rule was set up at home (53).<br /><br />Then there were some pro-independence people who had been radical on the independence issue but were conservative on domestic issues. Dr. Rothbard says that as a revolution progresses, factions are bound to occur. People do not always stick to principles behind the revolution (54).<br /><br />Massachusetts was a good example of radicals on independence being conservative on domestic issues. Dr. Rothbard says that there had been so little Tory opposition to radicalism there that people became lax. Even the Adamses became domestic conservatives. There seemed to be no radical anchor for principles. In fact, John Adams was angered by Common Sense (55).<br /><br />So, how would governments develop? Adams' ideas were better than the British Oligarchy, with some checks and balances, but were not as democratic as they could be. They were a sort of middle ground (56).<br /><br />In Massachusetts, a new cadre of libertarian radicals came on the scene to fight for pro-freedom changes, one being the disestablishment of the Congregational Church, and another being the end of Assembly people putting themselves in other civil and military offices. The leadership was made up of young college graduates and centered in Berkshire, out in western Massachusetts. The Rev. Thomas Allen was at the forefront, and he traveled around calling for a new libertarian constitution. The movement was called the Berkshire Constitutionalist Movement. Even the most modest proposal got them called anarchists. So Allen wrote a lengthy article on their views and, as it turns out, the critics were not far wrong. Allen pointed out that, since the suspension of government, the people lived in peace (57). And indeed they had, calling into question the necessity of government above the local level, if even that.<br /><br />In his efforts, Allen referred to Paine's Common Sense (58). He also referred to James Burgh's Political Disquisitions, another radical liberal work widely read (59).<br /><br />In the drive toward independence, there was a lot of back-and-forth about the set-up of governments. Should law-making bodies be bicameral or unicameral? Who should be allowed to vote? What about term limitations?<br /><br />In Virginia, the first bill of rights, a radical libertarian idea, came about, amid much discussion and amendment. This, the Virginia Declaration of Rights, is one of the great documents of American history. It acknowledged the fact that rights are derived from nature rather than government and set the pattern of bills of rights (60).<br /><br />One of the Tory arguments against independence was by Anglican priest Charles Inglis in Pennsylvania. Pennsylvania seemed to lean away from independence. He really came to the root of the matter: Which comes first, meaning which gets priority, the individual or society? He opposed John Locke and Thomas Paine (61).<br /><br />To me, there is really no discussion necessary. We do not have to debate on whether the earth is flat. The idea that society or the group is more important than the individual has no more credibility than does the earth being flat. I will not elaborate yet again. Suffice it to say that without individuals there would be no group or society. Groups are formed to benefit individuals in them, not the other way around. Families, neighborhoods, even nations exist to benefit their members. Any group of no use to any individual disbands, unless it is being forced to stay together.<br /><br />In many cases, those who opposed independence on the grounds that democracy would be the “tyranny of the many” were really afraid of losing their special privileges (62), although I will be the first to agree that democracy can be as tyrannical as any king. But the fact is government officials were greedy then and are greedy now. They want the status quo so their pockets go on being lined. This applies to all levels of government, and also to government wannabes like the United Nations. That is why people who need help go on being unhelped despite grandiose claims on the part of officials that government (or the U.N.) is there to help them.<br /><br />Opponents of independence also said the evil inherent in human nature was such that a strong government is needed. Thomas Paine pointed out the rather obvious flaw here: If humans are so evil they need to be ruled, then who will rule them? Other imperfect humans? (63).<br /><br />Except New York, all the colonies came over to the independence side by late June, 1776 (64).<br /><br />On July 2, an independence resolution that bore a strong resemblance to the coming Declaration of Independence, and that had been presented by Richard Henry Lee a few weeks before, was ratified by the Continental Congress. With that, these United Colonies were born (65).<br /><br />Two days later, on July 4, 1776, Thomas Jefferson presented another declaration for the purposes of explaining the ideas behind the first declaration, and this came up for a vote. This was the Declaration of Independence we are, or should be, familiar with (66). Dr. Rothbard quotes passages and makes comments (67). It said that rights come from God, not from the government, that all people have the same rights (this is what “created equal” means), that government's sole purpose is to secure these rights, and that when government is derelict in that duty, the people have the right to abolish it and make a new one. (Editor’s note: Abraham Lincoln, in one of his debates with Stephen Douglas, echoed these sentiments, but apparently he didn’t mean it.)<br /><br />I wonder what Jefferson would have said about today's government that is doing everything except securing our rights? (68).<br /><br />The Declaration of Independence was a break with the past and the beginning of a bright future (69). New York had joined the rest, and there were celebrations throughout these new United States. An effigy of King George was paraded and a lead statue of him was toppled and turned into bullets (70) which were on hand for the newly freed people to defend their freedom. The British might try anything; they had all these German troops offshore, and they were just crazy enough to make false moves.<br /><br />The British were planning to invade relatively friendly New York, and then branch out, isolating radical New England from moderate colonies to the south (71).<br /><br />However, the British did not try very hard. They committed so many errors it was clear they did not have their hearts in the war. Some claimed what the generals really wanted was to reconcile, not to fight. Of course, King George wanted to completely vanquish the Americans (72). As many errors as General Washington made, it was just as well that the British generals did not really want to fight (73).<br /><br />According to Murray Rothbard, General Washington went on making errors, and by the end of 1777, his men were half-starved, half-clothed and out in the winter winds as disease spread through his army. They were reduced to stealing from the citizens (73). But his chief rival for the General position was ill and his clout was such that he was able to stay on (74).<br /><br />Washington was still convinced that a traditional, hierarchical army could fight better, even though guerrilla fighting had saved the day. A soldier from Prussia, Baron von Steuben, who was not either a baron or a general, came into the army and quickly rose to the top, as Washington approved of his “Prussianizing” the army, meaning he turned self-starting, independent men into order-obeying automatons (75). I have to think of how our schools have been changed in this manner which is why the “education” in this country has nose-dived.<br /><br />Meanwhile, around the time the Declaration of Independence was signed, the “Plan of 1776” was adopted to set treaty policies. The policies were libertarian, i.e., entangling alliances with none, but freedom of trade with all. This was a statement on how nations should deal with one another. Free trade would be of mutual benefit. Governments were to stay out of the way. Militarism was to be regarded as old fashioned (76).<br /><br />Dr. Rothbard, who was apparently versed in military strategy, gave a blow-by-blow account of the war and critiqued the generals' strategies on both sides, often remarking how it was the people, who had no qualms about keeping arms for self-defense, who often saved the day with guerrilla warfare.<br /><br />Then, he gets into the political history from 1776 to 1778. The most important event was a move toward a formal confederation of states. The radicals wanted a loose confederation rather than a strong central government (77). And, obviously, they were right. We now have a strong central government with precious little accountability, and look at what has happened.<br /><br />The conservatives, particularly the financial oligarchs, did want a strong central government, so as to reinstate mercantilism and special privilege (for themselves) a la Britain (78). The conservatives tried a ruse: They claimed that a central government would protect individual rights by curtailing the states. Many fell for that (79). The problem with that notion is it is easier for individuals to protect their rights at the local and state level than at the federal level. One individual has more clout locally (that is not saying much in 2010). And, since when can you trust government, any government?<br /><br />In the interim, the conservatives tried to bolster the Continental Congress’ power over the states and the people. They were aiming at something much stronger and more binding, a sort of harbinger of Abraham Lincoln (80).<br /><br />This controversy was raging as they were hammering out the Articles of Confederation. In the end, the Articles leaned more toward centralization than we libertarians and the radicals in the Congress would like. There were many centralist provisions such as the prohibition of the states keeping their own armies and navies, and the requirement that states supply revenue to Congress based on land values and other considerations (81).<br /><br />One really good thing in the Articles was term limits for Congressmen, and limits on their serving in another important office at the same time (82).<br /><br />The real radicals did not wish to ratify the Articles for a very good reason: once the war was over there was no need for a confederation (83). Had I lived at that time I would have agreed, as those who were pushing for a confederation were centralists and were up to no good.<br /><br />Dr. Rothbard, upon starting a chapter on radical victory in Pennsylvania, states this victory is “the most exciting political event in the years after the Declaration of Independence” (84).<br /><br />The radicals had been forced to form a dual government in the face of conservative opposition. A state constitution was drafted by a convention of delegates elected by the people, who had the audacity to think for themselves rather than to automatically vote-in incumbents. The state constitution included a bill of rights. These rights bore a similarity to the Bill of Rights we should all be enjoying. One was particularly interesting to this fiercely pro-Second Amendment libertarian and that was the right to be a conscientious objector to bearing arms!<br /><br />In other states, the fight over constitutions was basically the same: The rights of the individual vs. traditional British-style oligarchic rule vs. many shades in between.<br /><br />Dr. Rothbard then turns back to the war itself. In and around New York City, the British were stationed. There were major problems for the American soldiers, aside from shortages of food, etc. They were being forced by General Washington to behave like a traditional army, rather than the guerrillas they were cut out to be. Worse, they were suffering under increasing inflation which caused market prices to skyrocket, while states pursued the Nixonian policy of price ceilings. Of course this creates shortages. Soldiers were forced by hunger to steal from nearby farmers (85).<br /><br />There were desertions, mutinies, and illnesses which seriously stymied the war effort. But, the regular people dug in their heels against the British, and that was what saved the day.<br /><br />Well, if there is one thing that will bring a good person down it is someone of the opposite sex. Benedict Arnold had been a fine American soldier, bravely leading the fight against the British on many fronts, until in 1779 he fell in more ways than one. He fell for an aristocratic Tory woman and married her. This woman was apparently accustomed to a high life-style, and Arnold needed extra money. Money is another thing that will bring a good person down. He made a deal with the British and was paid 10,000 pounds by them, a fabulous sum in those days (not too shabby today) to maneuver for command of an important American fort at West Point and then surrender it to the British. However, his British contact was caught and he himself fled to New York where he was made a general for the British. This is how the name “Benedict Arnold” became a synonym for “traitor” (86).<br /><br />I wonder what you would call today's government officials who took an oath to defend and protect the Constitution and then fail to do so. If you are ever tasered by an official, will you scream out the “T” word? Why not? It will not harm. I am not sure which police are sworn to defend and protect the Constitution, but why not yell it? The person who is tasering you is not listening, but those nearby are.<br /><br />Benedict Arnold committed treason, pure and simple. But, what about private citizens and companies trading with private citizens and companies in an enemy country? It does benefit both ends of the trade, obviously, but does it benefit the enemy country in such a way as to harm one's own country? Dr. Rothbard does not directly answer this, but seems to think it is all right to trade like that (87).<br /><br />Dr. Rothbard continues at length on the war in the mid-west. I won't say much, only that each side inflicted cruelties on the other and both sides dug in their heels. It went on for a considerable time.<br /><br />He remarks that it is typical of imperialists who are invading to tend to think that the common people are for them, and that the rebellion is caused by a few rabble-rousers (88). Not true. He was right, I think, and I believe that his idea is right today about Iraq and Afghanistan. The establishment is telling us otherwise, but people there would just as soon be left alone.<br /><br />Actually, contrary to what is generally believed, most people in America did support the Revolution (89). Those who were lukewarm became supportive when the British maltreated them, one example being the South Carolina back country. The British took charge believing the people would be in their corner, but their martial law only served to drive the people into the American camp (90).<br /><br />But, of course atrocities occurred on both sides as is usual during war. One American set of atrocities was an attack on some Indians who had not fought on the side of the British (91).<br /><br />Cornwallis's surrender at Yorktown did not bring a screeching halt to the war, as word of this did not reach those fighting out west. But in England they were stunned. They were sustaining losses in the war against France and Spain too, among other losses (92). The Yorktown loss and the tax burden bolstered opposition to the war. The British government made the same kinds of appeals that the Bush administration made about the Iraq war: They just couldn't let the American Tories down. The Tories would be left holding the bag, and whatever would they do without the British (93)? (I know. The American Tories would just accept living in a freer country or go back to England. That's what they'd do.) The British were “winning,” victory was imminent – “mission accomplished” – so, how could the British just pack up and leave (94)?<br /><br />And, of course, there was the “domino theory.” The loss of America could mean the loss of the West Indies and the loss of American trade (95).<br /><br />In other words, the King's fat-cat cronies stood to gain from the continuation of the war (96). Parliament gradually came around to the anti-war position and voted to pull troops out of that part of America.<br /><br />The Americans had learned a valuable lesson, the lesson of Edmund Burke: It is important to remain true to principles and not form coalitions with those who are soft on principle (97). Had the Americans been more moderate and pragmatic, we might have been under the British today. Freedom fighters cannot soften up or give up.<br /><br />The war was won, not in spite of, but because it was a people's war fought by people who wanted freedom, in a manner of free-spirited people (98).<br /><br />The radicals learned, or should have learned, a very hard lesson in sticking to principle. All of this took place before Dr. Rothbard, Ludwig von Mises, or any of the hard-core Austrian economists were born so none of the Founders had any way of knowing much about economic theory except to reason things out. So, during the Revolutionary War, wartime inflation was extreme (the “Continentals” soon were “not worth a Continental”), and governments, particularly at the state level, did what Richard Nixon did to combat inflation. They imposed price ceilings. Unlike Nixon, Mr. Establishment, who was the fat-cat's fat-cat, they really thought this was helpful to Joe Average, but as time went on they saw the havoc that price controls always create, and the more astute, liberal and conservative, rich and poor alike turned against the controls, calling for totally free, unrestrained trade. Meanwhile, the government tried all kinds of clumsy schemes to halt inflation which failed, and the Continental went belly-up (99).<br /><br />The inflation resulted in something else very pernicious, however. The conservatives, especially in New York and Pennsylvania, used this as a reason to re-institute the old British system of a strong central government that would control monetary and fiscal (especially tax) policies. They wanted to form a central bank (100). We learned from Dr. Rothbard last winter some of the history of central banking and the havoc it wreaks and is still wreaking. These ideas did have legs, since there was a turn to a more conservative stance within the states, and individual rights, including voting rights, were being discussed (101).<br /><br />In fact, worse, the conservatives were thinking military dictatorship! But the sharp rightward turn showed the oligarchs that they could meet their goals without that (102). The conservatives moved ahead very quickly to set up bureaucratic agencies, each headed by one man, the Office of Finance, with Robert Morris at the head, being very powerful indeed. In fact, Morris, a very conservative oligarch, could practically write his own ticket (103). All the power seemed to gravitate to him. Three days into his appointment, Morris had a bill introduced to create the country's first central bank. Morris probably knew that, what with the sorry state of money at the time, this would line his and his cronies' pockets (104). Well, isn't that what a central bank is really for? To enrich the establishment?<br /><br />Morris admitted as much! (105). Most politicians and top bureaucrats are too cowardly to admit that they are looking out for themselves and their fat-cats, rather they become expert at rationalizing their policies as furthering the national interest. The Three Enemies I then wrote on, and Presidents Wilson, Nixon, and Obama come to mind in particular.<br /><br />Robert Morris was a top bureaucrat, heading a top department that had control over not just monetary policy but fiscal policy as well. He had messed up the money supply and was going to “fix” that by messing up the marketplace with the high hidden taxes that inflation causes, and overt taxation too. The debt grew.<br /><br />The war could have been paid for in a decentralized manner by forwarding war costs to the states. But of course the centralists would not allow that. They wanted the central government to be able to tax the people rather than request the states for the money (106). This is not what the Sons of Liberty, who fought and died, had in mind! But the central government's ability to tax was key to the conservative counter-revolution.<br /><br />Morris did leave soldier payments to the states, but he made sure his bureaucrats were paid amply and on time (107).<br /><br />It was difficult to levy federal taxes under the Confederacy. So, the conservatives turned to tariffs. It started with a 5 percent import duty, which was actually the camel's nose in the tent (108). While the libertarian movement was all but dead, one libertarian writer did warn that the import duty would give rise to other taxes and that bureaucrats would multiply like rabbits (109). He didn't say it quite that way, of course, but it reminds me of the Bush era when bureaucrats did multiply like rabbits and continue to do so under Obama.<br /><br />Fortunately, the tariff, which would have had to be ratified by all the states, failed as Rhode Island and Virginia wound up giving thumbs down (110).<br /><br />The conservatives did not want to give up, but they knew they should hurry, as the war was about to conclude, ending war as an excuse for centralization. They decided that army officers should retire with half pay as was standard in traditional armies abroad. A standing army was also a goal which was contrary to what the Sons of Liberty fought and died for. The states, more inclined to be radical, along with Congress, balked at this. The officers sent a delegation to Congress demanding back pay and half pay, or else. They also met with conservative leaders about a central government which could levy taxes to pay officers. Congress knew that failure to cooperate would lead to violence.<br /><br />Morris twisted arms. He threatened to resign unless Congress demand the states pay their shares of the national debt, and if they did not within a yea,r Congress should seize its own ability to tax. This was as unconstitutional as it gets. Between this and the army's threats (which their commander Washington averted), Congress finally granted five years full pay to the officers (which I don't think they got). As for the tax, they also reinstated a reduced tariff, and added an estate tax as a compromise measure, and Morris stayed on (111).<br /><br />Robert Morris's post, however, deteriorated and his power was reduced to administrative tasks. Many of his conservative cronies left office and went to work elsewhere (112).<br /><br />Also, the central bank was turned into a private commercial bank. The central taxing power had mostly failed, as did a standing army. So, at that point, the conservative movement had lost its steam but was far from dead. They bided their time, organizing (113).<br /><br />Their organization reminds me a bit of Skull and Bones. It would be hereditary, the eldest sons of members allowed to join along with some true-blue aristocratic reactionaries. This was called the Order of the Cincinnati, and was a real menace (114).<br /><br />Dr. Rothbard is winding down the book, and thus the entire series. (Thank goodness! Spring is here and I want out!) He cautions us not to believe the myths about the American Revolution the neoconservatives would have us believe. It was a real, honest-to-goodness Revolution. People were hurt, people died and property was destroyed. It was a war, no two ways about it (115).<br /><br />The good guys won. But, being the imperfect human beings they were, when it was over, they did not leave the vanquished Tories alone. Of course, it was also true that gangs of Tories did inflict violence which needed to be dealt with. They had been deprived of rights and property, taxed specially, rounded up, even enslaved because of their opinions. There were cases of their families being held hostage. They might even be deported if they refused to sign a loyalty oath to the United States. Accusations of being a Tory were almost like a witch hunt (116).<br /><br />This just goes to show what happens when human beings follow the crowd rather than to think for themselves as individuals. This happened during the Salem witch hunt, it happened during and after the Revolutionary War, it happened during the FDR regime with its internment of Americans of Japanese, German, and Italian ancestry, and it is happening now with this “War on Terror.” We dissidents need to step up our dissent and also be on our toes lest the establishment cause real trouble.<br /><br />One bright side, in North Carolina, was that the last remnants of feudalism were ended when large Tory land holdings were confiscated and re-sold in small parcels (117). Not that I advocate the taking of honestly acquired land no matter how much the owner has (if it was really honest which in this case I don't know), but at least the little guy was cut into the deal.<br /><br />There was some graft and corruption. Whenever government is in charge, politicians, bureaucrats, and their cronies always seem to be at the front of the line. In New Jersey, land taken from Tories was advertised for sale in such a way that officials got first dibs (118).<br /><br />The New York land situation was unique. The super-old feudalistic land monopolies remained. When land confiscations from Tories happened there, the main question was: How much of the land would go to the tenants rather than state-privileged speculators? In any case, most of the land “belonged” to just four Tories, and would up in the hands of hundreds which was a vast improvement (119).<br /><br />The state first had the Tories' personal property taken and sold at auction by the counties (120) and then the land was taken and placed in trust and leases granted. Favoritism ruled, and the state was as cruel a landlord as the Tories (121). Big surprise! Government is no better than establishment fat-cats; they are usually hand-in-glove! If the left-collectivists think socialism will solve the problem of most of the wealth and power being in the hands of the few, they should think again! We went over this before. Under socialism, power is even more concentrated in the hands of even fewer! I won't digress just now as I think this has been shown time and again.<br /><br />Some in high office opposed the confiscations. It was the little people, the tenants, who favored it (122). I think we must ask how the land was acquired in the first place. Was it taken away from someone or was it bought in a voluntary exchange? That is key. It should remain in, or be placed in, the hands of the rightful owners or their heirs.<br /><br />Fortunately, most of the land did go to the tenants, democratizing the land structure (123). It had to be sold in smaller parcels of 500 acres or less, tenants had first dibs, and tenants had a real say in how much the land was worth (124).<br /><br />Thomas Jefferson was one of the primary opponents of feudalism and worked hard to end it (125). Meanwhile, people were also waking up to the now-obvious fact that one human being cannot own another, so the institution of slavery was beginning to crumble in the Northern states where, in some cases, new slaves could no longer be brought in (126), and in other cases slaves were freed upon reaching a certain age, and, in still others, further progress was made (127).<br /><br />Aaron Burr, of New York, was one libertarian who argued for total emancipation for black citizens (128). The Southern states went the other way, digging in their heels to preserve slavery (129).<br /><br />The American Revolution had a great impact in Europe. It spurred on a political press, which influenced political opinion which was very positive. In fact, the revolution in Belgium in 1789 (known as the Brabant Revolution) was directly influenced by the American Revolution, and its new constitution was modeled after the Articles of Confederation (130).<br /><br />In the Netherlands, a new party was formed around the ideas of government elected by the people and the right to bear arms (131).<br /><br />In Ireland, there was agitation for greater civil and economic liberty under the yoke of England, and there was a measure of success, including, ultimately (after more than a hundred years) a grant of home rule (132). <br /><br />However, in many cases, the liberal revolutions failed. Dr. Rothbard says this is because they were upper-class rebellions, leaving the common people out. This was a mistake; if a liberal (pro-freedom) revolution is to succeed, it must be all-inclusive, as the common people really have the most to gain (133).<br /><br />But progress was made. The American Revolution had a positive effect all over the world. <br /> <br />(1) Rothbard , Murray N. <span style="font-style:italic;">Conceived in Liberty Volume IV The Revolutionary War</span>, 1775-1784 (Auburn: Ludwig von Mises Institute, 1999) P. 17.<br />(2) Ibid. P. 19.<br />(3) Ibid. P. 19.<br />(4) Ibid. P. 21.<br />(5) Ibid. P. 22.<br />(6) Ibid. P. 23.<br />(7) Ibid. P. 24.<br />(8) Ibid. P. 26.<br />(9) Ibid. P. 28.<br />(10) Ibid. P. 29.<br />(11) Ibid. P. 31.<br />(12) Ibid. P. 33.<br />(13) Ibid. P. 13-39.<br />(14) Ibid. P. 36.<br />(15) Ibid. P. 38.<br />(16) Ibid. P. 39.<br />(17) Ibid. P. 40-42.<br />(18) Ibid. P. 44.<br />(19) Ibid. P. 53.<br />(20) Ibid. P. 54.<br />(21) Ibid. P. 60.<br />(22) Ibid. P. 65-67.<br />(23) Ibid. P. 68-70.<br />(24) Ibid. P. 72, 73.<br />(25) Ibid. P. 77.<br />(26) Ibid. P. 85, 86.<br />(27) Ibid. P. 97.<br />(28) Ibid. P. 98.<br />(29) Ibid. P. 98, 99.<br />(30) Ibid. P. 99.<br />(31) Ibid. P. 100.<br />(32) Ibid. P. 103.<br />(33) Ibid. P. 104, 105.<br />(34) Ibid. P. 105.<br />(35) Ibid. P. 106.<br />(36) Ibid. P. 106, 107.<br />(37) Ibid. P. 107, 108.<br />(38) Ibid. P. 110.<br />(39) Ibid. P. 111.<br />(40) Ibid. P. 117-119.<br />(41) Ibid. P. 121, 122.<br />(42) Ibid. P. 125.<br />(43) Ibid. P. 130.<br />(44) Ibid. P. 131.<br />(45) Ibid. P. 132.<br />(46) Ibid. P. 135, 136.<br />(47) Ibid. P. 136, 137.<br />(48) Ibid. P. 137.<br />(49) Ibid. P. 138.<br />(50) Ibid. P. 138.<br />(51) Ibid. P. 138.<br />(52) Ibid. P. 139.<br />(53) Ibid. P. 141, 142.<br />(54) Ibid. P. 142.<br />(55) Ibid. P. 142, 143.<br />(56) Ibid. P. 144.<br />(57) Ibid. P. 146.<br />(58) Ibid. P. 147.<br />(59) Ibid. P. 148.<br />(60) Ibid. P. 158, 159.<br />(61) Ibid. P. 164, 165.<br />(62) Ibid. P. 165.<br />(63) Ibid. P. 165, 166.<br />(64) Ibid. P. 174.<br />(65) Ibid. P. 177.<br />(66) Ibid. P. 177, 178.<br />(67) Ibid. P. 178-180<br />(68) Call 911 and Die<br />(69) Rothbard. P. 180.<br />(70) Ibid. P. 183.<br />(71) Ibid. P. 187.<br />(72) Ibid. P. 188, 189.<br />(73) Ibid. P. 222.<br />(74) Ibid. P. 223.<br />(75) Ibid. P. 224.<br />(76) Ibid. P. 233, 234.<br />(77) Ibid. P. 243.<br />(78) Ibid. P. 243, 244.<br />(79) Ibid. P. 244.<br />(80) My 2005 Blog Essay <span style="font-style:italic;">The Three Worst American Enemies of Freedom</span> http://alicelillieandher.blogspot.com/2005_05_01_archive.html<br />(81) Rothbard P. 253-255.<br />(82) Ibid. 255.<br />(83) Ibid. 256.<br />(84) Ibid. P. 257.<br />(85) Ibid. P. 281.<br />(86) Ibid. P. 282.<br />(87) Ibid. P. 286.<br />(88) Ibid. P. 303.<br />(89) Ibid. P. 305.<br />(90) Ibid. P. 318, 319.<br />(91) Ibid. P. 349-351.<br />(92) Ibid. P. 352.<br />(93) Ibid. P. 352.<br />(94) Ibid. P. 353.<br />(95) Ibid. P. 353.<br />(96) Ibid. P. 353.<br />(97) Ibid. P. 354.<br />(98) Ibid. P. 366.<br />(99) Ibid. P. 373-383.<br />(100) Ibid. P. 384.<br />(101) Ibid. P. 385-387.<br />(102) Ibid. P. 388, 389.<br />(103) Ibid. P. 389.<br />(104) Ibid. P. 391.<br />(105) Ibid. P. 394.<br />(106) Ibid. P. 395.<br />(107) Ibid. P. 395.<br />(108) Ibid. P. 402.<br />(109) Ibid. P. 402.<br />(110) Ibid. P. 403.<br />(111) Ibid. P. 407.<br />(112) Ibid. P. 409.<br />(113) Ibid. P. 410.<br />(114) Ibid. P. 411, 412.<br />(115) Ibid. P. 423.<br />(116) Ibid. P. 423-428.<br />(117) Ibid. P. 427.<br />(118) Ibid. P. 427, 428.<br />(119) Ibid. P. 429.<br />(120) Ibid. P. 429.<br />(121) Ibid. P. 430.<br />(122) Ibid. P. 430.<br />(123) Ibid. P. 431.<br />(124) Ibid. P. 432.<br />(125) Ibid. P. 434.<br />(126) Ibid. P. 435.<br />(127) Ibid. P. 436.<br />(128) Ibid. P. 436.<br />(129) Ibid. P. 436, 437.<br />(130) Ibid. P. 447, 448.<br />(131) Ibid. P. 448.<br />(132) Ibid. P. 450.<br />(133) Ibid. P. 452.<br />Please click "older posts" to see next entries. Thank you.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-69031745426215884532010-05-01T21:31:00.000-04:002010-05-01T21:33:12.215-04:00EpilogueAt the end of the series, Dr. Rothbard asks in the title of Chapter 80 of Volume IV, “Was the American Revolution Radical?” Good question. The neoconservatives, as he points out, make a claim that is far from true. That claim is that the American Revolution's purpose was to preserve British aggrandizement! How wrong can they be? I wrote an essay a few years back (1) that traced Bushite noeconservatism back to roots it shares with Marxism. Today's neoconservatives do advocate exactly what we have today under the Obama administration and had under the Bush administration before it: a top-down, bureaucracy-driven regime with a regimented mercantilist-turning-socialist economy, with civil liberties dwindling as the group gains supremacy over the individual. Wealth and power gravitate to establishment interests at a faster clip, as we have learned in other Rothbard works.<br /> <br />Is this what the American Revolutionaries fought and died for? A system very similar to what the British imposed in the seventeenth and eighteenth centuries? If so, why did they even fight the war?<br /> <br />Let's see what Dr. Rothbard says in Volume IV, Chapter 80.<br /><br />Every revolution was in reaction to state abuses. Let us take another look at the Declaration of Independence. It listed “a long train of abuses and usurpations” on the part of Britain. Yes. The Revolution was radical, meaning it got to the root of the matter, the root being an absence of freedom, mostly economic and religious freedom. Radical, in this case at least, does not mean “extreme.” Of course, from my extremely libertarian point of view, the Declaration of Independence seems very rational and down to earth, as does the Bill of Rights. They are not extreme at all. In fact, I'd make some changes in a more extreme libertarian direction, but at the end of the day, they get to the root of the matter and are therefore radical. They go right to natural, individual rights. Rights come from God and nature, and accrue to the individual. This is “what ought to be,” a guidepost, according to Lord Acton, for judging “what is.” The libertarian ideology had taken form and was tradition in America. These ideas are our roots.<br /> <br />Not only that, but, Dr. Rothbard said, the American Revolution “was the first successful war of national liberation against western imperialism. A people's war ... by the majority ... against constituted 'legitimate' government ... guerrilla strategy” against the traditional British army ... and we won!<br /> <br />Of course, there is always danger that a revolution will betray its principles. As it started out, government was mostly on the small, local level. It was years before any state governments dared to impose any taxes. Because it was often at the state level that the oligarchies had ruled, the backlash against these brought about some very libertarian state constitutions, with widening suffrage.<br /> <br />It was conservatives who worked hard to bring about a national government, although they did have to accept the Bill of Rights.<br /> <br />We seem to be back to square one. Was the war worth all the lives, injuries, and property losses? Only those who died, were injured, or lost their property can judge that. After all, the lives and property belonged to them, so they have the right to make that call.<br /> <br />Would it be worth it to fight it again to restore freedom? You decide. You own your life and property, so you get to judge.<br /> <br />As for me? Yes! Second only to my eternity, my freedom is the most important. My life comes third. I'd fight, and fight to the death if I thought it would restore freedom!<br /> <br />See you next spring!<br /> <br />(1) The Roots of Neoconservatism http://www.alicelillieandher.blogspot.com/<br /> <br /> Go to the index on the right and click on “2006 (ii)”Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-84598136392417388992010-05-01T21:26:00.002-04:002010-05-01T21:31:05.179-04:00Further ReadingsFurther Readings<br /> <br />http://www.alternet.org/story/145872/how_the_dea_scrubbed_thomas_jefferson%27s_monticello_poppy_garden_from_public_memory<br /> <br />Hogshire, Jim "How the DEA Scrubbed Thomas Jefferson's Poppy Garden from Public Memory" 3-3-10. Thomas Jefferson used opium. So what? But in 1987 the DEA wet its pants over it and forced Monticello to destroy all evidence of it. (Be sure to pick up entire 2-line url.)<br /> <br />http://www.rutherford.org/articles_db/commentary.asp?record_id=632<br /> <br />Whitehead, John W. "Should We Be Compliant Lambs or Nonviolent Gadflies?" 1-25-10. We need to wake up and observe the great old American tradition of civil disobedience.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-70538976244647691152009-04-22T18:26:00.001-04:002009-04-22T18:28:06.094-04:00The Works of Murray N. Rothbard, Part II<div align="center">PROLOGUE<br /></div><br />Before I begin, I need to pass along to you some wonderful news from the Ludwig von Mises Institute. Most of the books and seminars offered by the Institute are now available online for your education and enjoyment free of charge. Please see <a title="http://www.mises.org/" href="http://www.mises.org/" target="_blank">http://www.mises.org</a>.<br /><br />Last year's (2008) essay left off with <em>Man, Economy and State,</em> so this year I will begin with its sequel, <em>Power and Market</em>.<br /><br />In <em>Man, Economy and State</em>, Dr. Rothbard said a few things about interest rates. I believe what he said was key. Since my essay was posted, we did indeed enter a major recession. You have seen some major spectacles on TV. People are out of work. People are losing their homes. We are in a terrible way now, in late November, 2008, as I begin writing this (and still are in spring, 2009. Ed).<br /><br />All kinds of reasons are being given for the problems. Ron Paul is the only one who is making sense, but nobody is listening to him (1). All the talking heads are discussing is “corporate greed.”<br /><br />The government is throwing out money by the bushel basket, mostly in the direction of the bankers and big corporations, the same people who are being raked over the coals for being greedy and messing up the entire economy.<br /><br />My own opinion is that artificially low interest rates set by the Federal Reserve are the main culprit. When interest rates are lowered, the money supply is increased, or inflated, resulting in higher prices. Lower interest rates also encourage borrowing. The Clinton administration imposed regulations that forced banks to lend to people who might not really have been qualified to borrow. According to some news reports, on average today people are thousands of dollars in debt. People embarked on projects the consuming public did not really want. That is, people were embarking on business ventures that the bad market signals had indicated were wanted by the consuming public, but actually were not wanted. Businesspeople were getting wrong signals. Now their chickens have come home to roost and businesses are having to close their doors, throwing people out of work. You see TV news stories about plants closing and you see the suffering of laid-off employees who find themselves looking for jobs that simply are not there.<br /><br />Everybody feels their pain and wants to help. People are generous but people who need help themselves cannot help others.<br /><br />Since I can, I am determined to take food to the food banks and increase my donations to the church which is reaching out to feed, clothe, and shelter the homeless, the numbers of whom are increasing. I hope you can give too, since this government of ours seems determined to make things worse.<br /><br />Actually, this is really what the establishment has been waiting for. More centralization of wealth and power leading to world government is the New World Order they have dreamed of. Another benefit to the powers-that-be is that, as the economy gets worse, recruitment to the armed forces might grow.<br /><br />President Obama seems determined to out-Bush Bush, even to be freedom-enemy FDR all over again.<br /><br />Ron Paul is ballistic, as is everyone who understands economics. The wise are stocking up on non-perishable food, guns, ammunition, and gold.<br /><br />So, once I finish <em>Power and Market</em> (this is really to finish the work I started last winter), I will turn to some of Murray Rothbard's works on monetary economics and the Great Depression, which seems about to be re-run.<br /><br />(1)<a title="http://www.mises.org/literature.aspx?action=" id="392" href="http://www.mises.org/literature.aspx?action=author&id=392" target="_blank">http://www.mises.org/literature.aspx?action=author&id=392</a>, Paul, Dr. Ron, “Mises and Austrian Economics: A Personal View” and other works.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com12tag:blogger.com,1999:blog-10767345.post-44252448513605943122009-04-22T18:15:00.004-04:002010-05-20T14:35:40.285-04:00Power and Market<div align="center"><em>POWER AND MARKET<br /></em>with<br /><em>Man, Economy and State<br /></em>(The Scholar’s Edition, 2004)<br />by Murray N. Rothbard</div><p>Right away, Chapter 1 is titled “Defense Services on the Free Market,” in which I thought – goody gumdrops – Dr. Rothbard would again disprove gun control notions. But, rather, he discussed how police protection and courts have to be provided by private companies rather than a government if we are truly going to have a free society.<br /><br />It is hard to swallow, even for a libertarian, but let’s face it, one cannot, at least I cannot, refute him.<br /><br />The thing is, the main function of government is to protect the property rights of individuals (which include “human” rights), but, in order to function, government must take from these same individuals in order to pay its employees to do the protecting. It is hard to protect rights by infringing on them. It makes no sense. You cannot have your cake and eat it too, so one has to choose: Does one believe in rights or does one believe in government?<br /><br />Government is not necessary for the definition of rights. All one needs is reason; Rothbard and others, such as Mises and Hoppe, have shown that rights are a priori. Without them, life cannot go on. This was elaborated on in <em>Man, Economy and State</em> in the Crusoe illustrations.<br /><br />And Rothbard goes on to point out that people who are under different governments with very different laws in some cases can get along fine. Then, why is government necessary at all to make people get along in peace? (1)<br /><br />So, back to a free market defense system, what would we have? That the individual has the right to self-defense is a given. Otherwise, what else can be done? We cannot know any details of how any free-market defense would work, any more than we could have known how the television industry would work fifty years before television (2). But we do know some generalities. Dr. Rothbard thinks that chances are security companies would sell subscriptions or memberships and charge regular premiums in much the same manner that insurance companies do. In fact, insurance companies might take on this work (3). In an unfettered free market, with free entry, there would be genuine competition, eliminating a lot of the present problems with insurance companies.<br /><br />Of course, there is the real possibility that any given protection or security company might become rogue, or start to behave like a criminal gang. This would be difficult in a free market because rival companies would step up to the plate and put a stop to it. Why? The paying customers of the rogue company and also the honest companies say so, that’s why. Customers can always take their money elsewhere.<br /><br />In contrast, government agencies can do as they please. If you own a gun store and have a brush with the BATFE, you know this very well. Also, if you run a medical marijuana dispensary, you know how much control consumers have over the DEA. You cannot stop your payments to these agencies; the IRS will see to that. Under government, the breaking of heads and the taking of property is legal or else laws against it are ignored. In the free market it is illegal and the law is justly enforced.<br /><br />We move on from that brief chapter to Chapter 2, “Fundamentals of Interventionism.”<br /><br />The most fundamental fact here is that to satisfy one’s wants, one must either work to produce what he wants by making it himself or exchanging for it, or he must take it from somebody by force. It is either/or (4). One who uses the latter means can be called an intervener. This person intervenes into the order of the free market. There are three basic kinds of intervention, all hegemonic, and I will cite my own examples of each in hopes that you can relate.<br /><br />First, there is autistic intervention (5) whereby the intervener dictates to an individual as to how the individual conducts his life or uses her property. An example of this would be mandatory seat belt and motorcycle helmet use. Such autistic intervention as exemplified by these laws has become more draconian by the year, and proves beyond a shadow of a doubt that the government is interested only in becoming more powerful as the God-given rights of individuals are usurped.<br /><br />The system is such these days that those who advocate such laws that “protect” the individual from his own “foolishness” will often say the health care system will have to pay a great deal more money to restore someone to health who was injured in an accident only because he was not wearing a seat belt, and had he been wearing one, such injuries would not have occurred. What this actually shows is that the government should not be involved with health care in the first place, but that individuals should be required to be responsible for their own health and safety. This gets us into the affordability of health care which again shows the system is a quagmire of economic and collectivist fallacies, for one thing the level of taxation is the first most important reason health care is unaffordable. Dr. Rothbard treats these fallacies in many places in his works, so right now all I can do is say what I say more than anything else (except maybe that individuals need to have guns) and that is people need to know their economics.<br /><br />The second kind of intervention is binary intervention (6). In this instance, the intervener forces the individual to turn some property over to the intervener. Taxes are the example coming to mind right away. You work hard all year in hopes of being paid enough to make all the time and effort put into your job worthwhile. From the time you leave home until the time you return you are working for that paycheck. When you receive that check, have a look at the stub and see what has been withheld for income tax. It is outrageous. Regardless of what you think of wars and other government endeavors ... you might even favor them (please tell me why) ... you must admit that you and your employer have zero to say about these deductions.<br /><br />Governments take and take and take. There are so many ways they do it, including inflation as Rothbard explains. If inflation is 5 percent per year, then the dollar you have today will be worth 95 cents a year from now. So, the government has taken away from you a nickel for every dollar you have. This is a 5 percent tax. What can you do? Zero! If you are going to be smart and save, they will tax your smartness this way.<br /><br />The last type of interventionism is triangular (7). In this case, a deal between two individuals is interfered with. Say a family is having dinner at home and shares a bottle of wine. The youngest child, a 20-year-old adult, partakes of the wine. By no stretch of the imagination is this going to disrupt civil order in any way. But in the eyes of the government, the serving of alcohol, even by the parents, to a neonate of a mere 20 years of age is enough to bring the sky crashing down on a ruined civilization. Of course that is not literal, but the battering ram and ten police cars outside are very literal if the wrong people get wind of the fact that this child is all of three days before the magical age of 21.<br /><br />Now, it is pretty easy to flout ridiculous laws of that sort in the privacy of your home. Sometimes. This private home had better be isolated if this family would like to pass a joint along with the wine.<br /><br />But some equally intrusive and unjust interventions usually cannot be avoided. Try to get a job without a Social Security number, or if you are the wrong age and cannot live at home. You probably do not want to work at what few jobs are available to you.<br /><br />The bad things that happen to you that are no fault of your own are often the result of some intervention, meaning some infringement on your rights, and as often as not this intervention is by government. All three kinds of interventions are bad as they force people to do something other than what they would otherwise do, meaning utility is lost. The consequences of all kinds of interventions go much further than one thinks they will (8). The book deals with these consequences. Dr. Rothbard points out that there is actually no way to effect any real change under the circumstances, as the Libertarians repeatedly said in this last election, which was allegedly about change. I firmly believe that no true change will occur under the Obama administration as intervention will continue. The details might change a little bit, but the system is still involuntary, therefore interventionist.<br /><br />We have already belabored the method interventionists use to keep people obedient. That is propaganda.<br /><br />As a result, people have the idea that government agencies can prevent harm to consumers. We saw in <em>Man, Economy and State</em> that they cannot. The left insists that consumers are ignorant of the information they need to make smart choices and that bureaucrats who are distant can make smart choices for them. That is insane; you are right there doing your full-time job of being responsible for you. The politician or bureaucrat does not even know that you are alive, and makes decisions in a one-size-fits-all manner. These decisions are based on wrong data, and have far-reaching consequences (9) that most likely cannot be traced back to government decisions (10).<br /><br />A good and timely example is touched upon on page 1071. We are having great economic problems right now, just before Christmas, 2008, as thousands are losing their jobs. The lack of consumer spending in holding prices down (which is a good thing in and of itself) and jobs are hard to come by when normally seasonal part-time jobs open up. The establishment is blaming the whole mess on greed, while actually all the problems can be traced back to artificially low interest rates and an increase in the money supply. The propaganda machine will not allow the Ron Pauls of the world to explain what is really happening.<br /><br />All the incentives are wrong, Dr. Rothbard explains (11), for bureaucrats and politicians to serve the public. Why should they? After all, their pay comes from compulsory taxation rather than voluntarily paying customers. The politician who has to run for re-election will use the propaganda machine against a challenger who is equally unfit and has less name recognition, and possibly third-party candidates who may be fit but get no media coverage at all. The incumbent can also count on cronies whom he favored while in office. Since one voter has very, very little influence over an election, there is very little incentive to look into the records of candidates.<br /><br />By contrast, in the marketplace the consumer is sovereign.<br /><br />In the next chapter, “Triangular Intervention,” we begin to examine the far-reaching adverse effects of government intervention. These cases are when the intervener compels two people to exchange in a manner that is different from the way they would have exchanged if left free.<br /><br />There are two general kinds of triangular intervention: Price control and product control. Price control dictates the terms of an exchange and we have seen this dealt with so many times it is unnecessary to hash it over here. Even the establishment had to give up on this intervention after it saw the inevitable results of freedom-enemy President Nixon’s price-freeze decree (12).<br /><br />But, Dr. Rothbard goes into more detail on price controls by discussing exchange rates (I have personally experienced that roller coaster since I spend a great deal of time in Canada, so the first thing I do when I get there is to check the exchange rate, even before I check the price of gasoline), bi-metallic standards (when government decrees the ratio of two money metals such as gold and silver), and usury laws (where interest rates are tampered with). These are all under price control.<br /><br />Product control is then treated by discussing prohibition (again, this has been touched on in other Rothbard works which I have reported on) and rationing (a form of partial prohibition, an example of which would be the limit on how many guns a person may buy within a given period of time), government priorities (some people have better access to a product than others), and maximum-hour laws (when a law forbids one to work more than X hours a week, as women’s earning capacity used to be limited, holding them back).<br /><br />The grants of compulsory monopoly are also a form of product control. This was discussed in Chapter 10 of <em>Man, Economy and State</em>. Compulsory monopolies are obviously injurious to the consuming public, so in order to keep them, government uses its foremost tool: propaganda. Many laws that enforce monopolies or partial monopolies are not even associated with this by the gullible public, and are only opposed by libertarians on individual rights grounds. Most of the time, the government is claiming to be “protecting” someone. Examples are (13) licensure, child labor laws (with a very high age of majority), minimum wage laws, anti-pushcart laws, Sunday blue laws, and more, which do nothing except to grant special privilege to some businesses and limit consumer choices. These rules create partial monopolies. These and other examples are then elaborated on (14). The bottom line is that consumers always lose out on goods and services they might have enjoyed at lower prices, businesses lose out on production opportunities, workers lose out on preferred jobs they might have done well, and government bureaucrats win as they gain on money and power. This is what Dr. Rothbard is focusing on here, although my main objection to them is the infringement on the rights of individuals.<br /><br />But it is the politicians and bureaucrats who make the rules, so it should surprise nobody that they are made to benefit them, the politicians and bureaucrats, and the rest of us are just unwilling cash cows.<br /><br />Out of these examples, Dr. Rothbard mentioned immigration restrictions. Of course in a free market the flow of people from one country to another would be as unrestricted as the flow of goods and services. Dr. Rothbard advocates open borders. Wages tend to equalize the world over, given a free or only somewhat hampered market.<br /><br />But, what he ignores (at least in this section of the book) is the welfare system, public “education,” and all the various ways people can feed at the public trough at your expense and mine. I cannot agree with open borders unless and until we clean up this welfare system, or at least find a way to prevent foreigners from partaking in our welfare.<br /><br />I frequent Canada. In Canada I am a foreigner. I am there on a visa and have to live by the terms of that visa. The terms are easy except I cannot work for pay. So, I don’t. If I help someone out, I do not accept any money or in-kind remuneration. When the visa is up, I have already left. How would it be if I were to seek free medical care? That would be wrong. I either purchase a health insurance policy or I pay out of pocket. By the same token, foreigners who are here in the U.S. should not have their expenses paid by the government here. They need to buy insurance or pay out of pocket, and they need to refrain from working if they do not have a green card or whatever it is that permits them to work.<br /><br />Many changes must be made before I think we can have open borders. Once these changes are made, open ‘em wide! Basically, Dr. Rothbard is right; his theories are sound.<br /><br />Dr. Rothbard discusses anti-trust laws (15) which are supposed to be pro-competition, anti-monopoly laws. These laws have been on the books longer than most people have been alive, so they are regarded as a fact of life, and not questioned. They are not analyzed by anyone, not even establishment economists. For if they were, they would have to be re-thought. If there is any criticism of these laws it is that they are too weak.<br /><br />But, as we saw in <em>Man, Economy and State</em>, the only true monopolies are those that have obtained monopoly status from special privilege granted by the state. Therefore, anti-trust law does not prevent monopolies. What it does is to allow the government to harass business by trotting out anti-trust charges whenever it pleases (16). If government really wanted to stop monopolies, it would simply stop monopoly privilege.<br /><br />Government itself is a monopoly. One thing this particular monopoly called government does, something nobody has the natural right to do, is to forcibly prevent one from selling labor or some other product without special permission. Without the special permission, the selling is illegal. This special permission to engage in a particular line of work or to conduct a business is called a “license.” The false idea behind this is that there is no right to conduct business, but that it is a “privilege” granted by the state. In order to conduct a business, one must be granted a license, for which one must pay a fee, sometimes a large fee.<br /><br />We have learned that to buy, sell or trade (i.e., carry on business) is a natural right.<br /><br />Dr. Rothbard discusses the trend toward monopoly inherent in the bribing of public officials. A bribe occurs when someone wants permission from a public official to do something that is illegal. The person pays the public official to look the other way (17).<br /><br />What is really the difference between selling a license and taking a bribe? Economically, and in Dr. Rothbard’s opinion, none! None at all! Licensure is simply bribery with a cleaned-up name. I have always opposed business licensure and occupational licensure mainly because it infringes upon the right to start a business (nobody has to patronize the business) or to bargain with prospective employers or employees. Compulsory union membership, I may add, is not different. It all keeps prospects out of a field, tending towards a monopoly favoring those already in the field. The solution to both problems (the blow to individual rights and the monopoly trend) is, of course, to repeal the laws that outlaw the activities.<br /><br />And, we have to remember that government itself is a monopoly! Just try to compete with it! As we have seen in this chapter, government is at the bottom of all monopoly and its attendant problems.<br /><br />All of this has been triangular intervention, whereby the government prohibits, requires, or regulates an agreement between two other parties, causing a trend toward monopoly.<br /><br />So, how does government acquire the funds to finance this intervention? We already know from <em>Man, Economy and State</em> that inflation fills establishment (including government) coffers. We also know about taxation, the direct compulsory collection of the people’s hard-earned money.<br /><br />Now, let me ask you this: Is the difference between inflation and counterfeiting, and the difference between taxation and robbery any more than the difference between licensure and bribery? Is it really? (18) Are government officials better than the rest of us or must they live by the same standards? We need to get real about this! It is going to hit the fan in this country and the sooner we get real and stay real, the less we will suffer.<br /><br />Now, Dr. Rothbard asks us who is hurt by and who benefits from taxation and expenditures. Obviously, the people who pay the taxes are hurt the most. As I have said at least once before, look at your paycheck stub and see how much has been taken out for taxes. This is money you worked hard for but were not even allowed to look at. Next, look at a sales receipt and notice the sales tax that the business had to absorb and still get you to buy the product (19).<br /><br />Who benefits? Government bureaucrats. They are the people who tell you what to do. They are the police, building inspectors, judges, and school officials; they have a heck of a lot of power. They are the “deciders.” This goes for politicians, of course, but at least politicians face re-election. Bureaucrats get tenure. You are paying them to mess up your life, even to take your property.<br /><br />This is liable to cause the problem of public support. Therefore, there needs to be more than just government employees on the government payroll. There are those who adhere to the government’s cause, whom Dr. Rothbard calls “adherents” (20). I would say that these are a large part of the “establishment.” The armaments industry is an example, companies that manufacture war materials. I think today one could cite Halliburton and Blackwater as examples. This would include suppliers to these companies. This is one way wealth drifts toward establishment interests.<br /><br />It also shows how taxes and government expenditures distort the market, and it thus proves that a “fair” tax or “neutral” tax is neither fair nor neutral. Government spends this money in the marketplace, but not in the same way the consumer would. Consumers would spend it on food, clothing, shelter, education, entertainment, medical care, self-defense, and other things people need. The government takes money from these areas of the economy and spends it on war materials, prison cells, chasing down pot-smokers and seat-belt-non-users, and other things that people do not need. Of course, some of the money goes to border security (such as it is), roads, bureaucrat salaries, some medical care, and some things people do need. But, how efficiently? Regardless of how you think about these issues, you must understand that the spending is changed from what it would have been had earners been allowed to keep what they earned. So, the economy is distorted, and it is mainly the little guy with no connections who loses out as resources are taken away from what he wants (21).<br /><br />This distortion of the economy, I fear, is about to get even worse. This is because of the distortion caused by government taxation and spending level (regardless of kind) proportional to the private sector (22). We have just about finished (it is nearly Christmas 2008) the disastrous Bush administration, the earmarks of which were enough spending to make drunken sailors appear sober and frugal, so a great deal of the distortion we see now is from this cause. But while we can celebrate Bush’s retirement, we have to face the Obama administration which promises to be even worse. They are describing new policies to be like unto FDR to combat the present recession. This is scary for numerous reasons, and for an elaboration on that, please see my 2004 - 2005 winter essay, The Three Worst American Enemies of Freedom (23) for my thoughts on FDR’s sorry record, paying close attention to works cited in the footnotes, which are worthy of reading by anyone who is interested in the subject.<br /><br />Dr. Rothbard, in his discussion of taxes, talks about income vs. sales taxes (24). Many libertarians, including myself until I took courses in Austrian economics, would like to see a repeal of the income tax and an enactment of a national sales tax to replace it. The rationale is that this would end the dread Internal Revenue Service with its mounds of personal information requirements and it would tax consumption rather than earnings.<br /><br />While this would be a step forward, Dr. Rothbard shows that it is all wrong.<br /><br />Most people believe that it is the customer who is paying the sales tax; that the seller is “passing on” this expense to the customer. They tell you that the item you are buying is X dollars and Y cents, “plus tax.” This leads you to believe that you are paying the tax. Actually the price of the item includes all you pay (plus time and expense).<br /><br />Let’s say that I won’t pay more than $9.00 for a T-shirt as per my example in last year’s essay. That is $9.00, plus time and expense of getting to and from the store. I bundle my errands, so this might be negligible. Of course I know what the sales tax will be and that is considered. If this tax brings the T-shirt over the amount I will pay, I will not buy. I will buy at $8.50, tax or no tax. I will not buy at $9.50, tax or no tax. If the store does not absorb the tax, it loses business.<br /><br />I remember an example from a few years ago when I was in British Columbia. The government announced an additional sales tax of three cents a liter on gasoline to go into effect on a given day. The demand for gasoline is inelastic (until prices rise to a certain level), so I thought prices would be up by three cents the morning of the tax. Sure enough, they were. I thought that maybe we were not entirely right about this, at least when demand for the product is inelastic, but if we were right, prices would drop back again by competition, forcing producers to absorb the tax. Not many days later, the prices were down again, vindicating the Austrian economists. This could have been the straw that broke the camel’s back in the case of some fuel stations, closing the station and throwing its employees out of work.<br /><br />Sales taxes, explains Dr. Rothbard, do not get passed forward as a product is sold from one producer to another on its way to completion and the end consumer. Rather, the taxes get passed back to the original producers on their income. They harm everyone by distorting the economy.<br /><br />Technically, I think the added gasoline tax I just mentioned is an excise tax rather than a sales tax. But, it boils down to the same thing. Whatever you think of the oil industry, for better or for worse, they are the ones who are paying the tax, and they are specially penalized to the same extent that other products are not taxed the same way (25). The supply of the product in question is lowered as some producers are driven out of that line of production. This will cause an upward trend in the price of the product as demand will not change. The tax, like all taxes, causes distortions in the economy, and these distortions favor government and government-subsidized firms at the expense of the independent private sector.<br /><br />Consequences of a direct tax on income are more straightforward. It may be that this tax, which reduces the remuneration for your productivity, and hence your standard of living, can either discourage your productivity, or else the greater marginal value of what few dollars you have left can force you to work harder to make up for it (26). Either way, it is a loss. The same work means less income. More work means less leisure, and leisure is also an economic good.<br /><br />Time preferences are adversely affected by the income tax (27). Less income means a greater percentage of the reduced income must be budgeted toward present necessities, such as food, clothing, and shelter that must be consumed before another paycheck is received. Therefore, a smaller percentage can go into savings and investment. A higher time preference, meaning a greater emphasis on now rather than the future, is forced onto individuals who really are wise enough to put something aside for future needs. Investment into badly needed capital is curtailed.<br /><br />Those who retort that government expenditures are “investments” are kidding themselves or are being sucked in by propaganda such as education spending’s being an “investment in tomorrow’s leaders,” or highway work’s being an “investment” in the road. It is true that investment may occur (28). A rebuilt bridge today may prevent a catastrophe next year, or at least save on next year’s higher cost of the work, and under other circumstances education expenditures now would pay off in a more productive populace in future decades, were it not for the fact that government schools do not teach students to read or think, at least not very well.<br /><br />The point really is that money spent by government is spent on things that the marketplace does not necessarily want as much as it wants the things the money would have been spent on had taxpayers been allowed to keep that money. There would have been real investment, directed by the marketplace.<br /><br />The chapter continues the discussion of various kinds of taxes, one by one for about 100 pages, but the conclusion is always the same: The economy is distorted away from the approach the consuming public prefers, and economic signals to entrepreneurs and businesspeople are skewed so they are less able to profit by fulfilling the needs of consumers.<br /><br />The “progressive” tax, whereby higher-income people pay a higher percentage of their income in taxes (29), is discussed at length. My gut reaction is that this is fairer than a flat tax, but my gut reaction is based on my emotional response to poverty. It is also based on the very long and numerous days I put into a career that paid only a moderate salary. Obviously we would all like to help the poor, and I make it a point to give to food banks and charitable activities of the church. But, my gut reaction to the progressive income tax is one hundred percent wrong, since Dr. Rothbard shows beyond doubt that what is wrong with this is the level of taxation in all brackets, and not the progressive nature of the tax (30). What is needed is an across-the-board tax reduction, even if this means a tax that is more steeply progressive. This would punish high-earners less and this would distort the economy less while forcing government to shrink.<br /><br />Later in the chapter, Dr. Rothbard discusses the “just” tax. We covered the just price already last winter. This is whatever price people are willing to pay for a good. However, since in a truly free market, there is no tax, so the “just tax” is a contradiction in terms.<br /><br />Adam Smith tried to describe a “just tax” (31). It should be inexpensive to collect and relatively convenient to taxpayers. But, since when do bureaucrats want to keep costs down? Their jobs are on the line, so make-work is inevitable. Also, an expensive and inconvenient tax is more likely to be flouted, so it is actually more just than a cheap, easy one (32).<br /><br />In discussing the distribution of the tax burden (33) Dr. Rothbard reiterates something we all should understand (whether we agree or not), and that is that taxation is basically like slavery. Therefore an equal distribution of the tax burden is no better than equal enslavement, and that to escape taxation is no more immoral than it is to escape slavery. Some will cry that it isn’t fair that some can escape the tax while others cannot, so the means of escape must be cut off. The real solution to this inequity is to discontinue the tax altogether.<br /><br />This does not even mention the problem of defining “income” (33). Would it include an increase in the market value of your house? The market value of plants grown in your garden? The wages you would have had to pay a housekeeper had you not done your own housework? If these market values were counted as income, in the absence of actual sales of these products, how are these values to be determined? And what about “capital gains?” Is this income? If it is, a correction for the purchasing power of money must be made (34).<br /><br />In fact, if you want to make any attempt to be “fair,” the purchasing power of money must be considered in determining the tax.<br /><br />So, Dr. Rothbard has shown that taxes are both immoral and impractical, and even if there were such a thing as a “just” tax, there is no way to calculate it justly. Nor is there any way to accurately calculate “ability to pay” (35).<br /><br />Nor is there any way to calculate the sacrifice an individual makes to pay a tax. As individuals differ, the perceived sacrifice differs. If you are a libertarian and oppose just about everything the government does, a “small” tax is probably a big sacrifice, but to someone in the establishment, a “big” tax may be a small sacrifice. Therefore it is impossible to calculate a tax on the basis of sacrifice (36).<br /><br />Then, beginning on P. 1245, Dr. Rothbard begins a section called “Voluntary Contributions to Government.” I had to laugh out loud. Say what? Anyone who thinks our “voluntary” income tax is voluntary in any way, shape, or form is out in la-la land. Hero Irwin Schiff had been preaching that there is no law saying one had to pay an income tax because the federal government could not produce one, and he has now gone to prison for that. He was right, but he is in prison. Others believe that because we use un-backed-up paper as money, we have no real money, so we owe no taxes. They are right too, but some of them are also doing time.<br /><br />It is compulsory, it is harmful, and it is wrong. ’Nough said about taxation.<br /><br />Rothbard then turns to the binary intervention of government expenditures. He points out right away that the intervention of credit expansion (a very important topic at this time) was discussed in <em>Man, Economy and State</em> (37).<br /><br />Government expenditures have multiplied like rabbits, especially during the allegedly conservative but actually far-left Bush administration. Some of these expenditures are “transfer” payments such as subsidies, welfare, and Social Security payments, but many of the most recently prolific ones are what Dr. Rothbard calls “resource-using.” The wars are an example of that, as are the enforcing of numerous laws that have also multiplied like rabbits. The housing of millions of prisoners, many of whom are non-violent drug or gun offenders, is also an example as, in a free country, they would not be law-breakers at all. Actually, there is a lot of overlap between transfer and resource-using expenditures, but there is still a distinction (38).<br /><br />Transfer payments such as subsidies encourage factors of production to remain in areas where they are used less efficiently. Right now, the automakers are a good example. Without going into why the automakers failed (over-expansion of credit and artificially low interest rates are at the bottom of the entire economic mess and that includes automaker failure), the Bush administration’s bailout of these companies is wrong because if these companies are failing, perhaps they should fail. While I feel for the workers being laid off during the holidays, a free market would open up new jobs for them, and this money, kept by the taxpayers, would be spent or invested in areas that the consuming public really wants. To keep these dinosaurs on life support now will only delay their demise and all the hardship that goes with it.<br /><br />Another aspect of resource-using expenditures besides those above is the pricing (39). There is no way to determine the pricing of government activities. Those who consume government “goods” such as roads or schooling do not pay market prices. There is no way to tell if consumers are getting their money’s worth, as the paying and the consuming are severed. The government cannot find out how much to spend on what, so politicians and bureaucrats arbitrarily decide. Even if a government “enterprise” is run “like a business,” it is false because the government can always obtain more funds through taxation (40). Also, managers are not investing their own personal funds. If you can remember, the Post Office was “privatized,” re-named the Postal Service and run “like a business” in order to “make a profit.” Many people fell for this, and believed that the post office was then actually a private company. All who were paying close attention and had even rudimentary understanding of economics knew that there had been no real change. When losses occurred, tax money was injected. This gave the Postal Service an unfair advantage over UPS and other package delivery firms.<br /><br />This is enough to drive anyone “postal.”<br /><br />As we have pointed out before, the inability of government “enterprise” to determine prices is the most important practical reason socialism does not work. Socialism, whether it be actual undisguised socialism where government owns the means of production, or fascism where the means of production are nominally privately owned but actually directed by government (we are headed that way at breakneck speed as the Bush administration ends and the Obama administration begins) (41) never has worked and never will work because it cannot work. Prices, i.e., how much to pay, how much to charge, and how much of what to produce is impossible to calculate in a socialist (or fascist) “economy.” Dr. Rothbard, and Dr. Mises before him, and others, have proven that beyond a shadow of a doubt, and the results of socialist attempts around the world have vindicated them.<br /><br />I personally consider socialism (including fascism) as in the same category with other superstitions. Socialism is false just as is the idea that a black cat crossing your path will bring you bad luck.<br /><br />Socialism, Dr. Rothbard says, is the “polar opposite of the purely free market.”<br /><br />I had to pause. “Polar opposite.” That is saying that socialism and freedom are as far apart as the two poles. I have to wonder. These left-wing types who preach socialism also want more freedom, so they say. They bemoan the insane war on drugs but want to step up the war on guns. They scream bloody murder when the police beat down someone’s front door but oppose the private ownership of land. They want to help the poor but criticize businesses like Walmart that sell for very low prices and also give first-time workers a chance to get started in the workplace. We all start at the bottom. To cut the bottom rungs off the ladder of success by jacking wages above market is not going to help. They want to help the poor but refuse to study their economics to find out why gouging the rich is going to hurt the poor.<br /><br />The left, and the Bush-ite neoconservatives who prattle about the free market and are really part of the left, are trying to get to one pole by heading straight for the other one.<br /><br />But, what about staying at or near the “equator”? What we have had here, and what they have in most countries, is a “mixed economy,” or a partially socialist and partially free economy. We have been moving toward the socialist “pole” for decades, at least 150 years, but we are not there yet.<br /><br />While the plethora of rules and regulations and the extent of taxation are at the top of the list of culprits, the expansion of government lending is up there too (43). Dr. Rothbard makes this a very important point, as he says that, regardless of the legal status of the lender, the lender is also part owner (44).<br /><br />Think about it. Did you make a sizeable loan to anyone? Or did you borrow a sizeable sum from anyone? Does that not change your relationship? If someone owes you thousands, don’t you feel you have a claim on them? Of course you feel that way, because you do have a claim on them. Even if you believe and follow the Bible and will forgive the loan, this is still the case.<br /><br />This is another reason free market people like Ron Paul are so dead set against the bailout of banks and automobile companies. Of course, the banks have been in the government’s stable forever, and the big automakers have not exactly been averse to a centralized economy. But this bailout is horrific for numerous reasons and Dr. Rothbard is pointing this out. Government will now be part owner of these companies, which is a giant step to socialism.<br /><br />And, we must not forget a lesson learned from Rothbard and others: “Public” or “government” ownership really means ownership by those officials who are the deciders (45). Additionally, there is no incentive for these officials to use the property efficiently, as when they leave office they cannot take it with them. Rather, they are inclined to abuse it for their own self-aggrandizement while in office.<br /><br />The next chapter, “Antimarket Ethics: A Praxeological Critique,” explores some of the most popular criticisms of the free market.<br /><br />One of them is individuals do not know what is best for them, so they need Big Brother to protect them from their own foolishness “for their own good” (46).<br /><br />I suppose this is all right for children under ten or twelve, but they have their parents to guide them, and the rest of us are big boys and girls now, so who are these government officials to wreak all of this harm on us “for our own good?” Are they better than we are?<br /><br />The free market assumes that all individuals act in their own perceived self-interest and that individuals are far more able to determine their own interests than anyone else. And, if one is not sure exactly what to do to further his own interests, one may hire a consultant (47). For example, to stay out of trouble with the IRS people, who, if they are paying attention, know that I am fiercely opposed to their very existence, I go to a tax preparer. I also pay the preparer extra to run interference for me. Chances are you have a doctor, a dentist, and maybe even a financial planner. You can discontinue these services any time. At the end of the day, you call the final shots. Or, at least you should. We are not a free society any more. You can do these things within the limits prescribed by Big Brother. In some areas of life, there is no freedom at all. Try to remodel your house. Even if the house is all paid for, just try it without Big Brother’s licenses and permits (for a fee, naturally). You will run into an avalanche of “have to’s” and “can’ts.” You will soon find out that one’s home is not one’s castle at all.<br /><br />To remodel your home, you should be able to choose your own experts (or do it yourself and learn the hard way as you go). And, in fact, you can, but these experts have to grovel to Big Brother’s “experts” for expensive licenses. Who is to say that Big Brother’s experts who license contractors, doctors, and just about all other professionals, know what they are doing or care what they are doing when they are tax-paid bureaucrats and probably tenured? Their positions are political, and perpetuating the system and their positions is their priority (48).<br /><br />One of the main reasons some people advocate strong government is that people are evil (49). They are right that everyone is evil, but everyone is good, too. Everyone is a mixture of good and evil. No one is perfect. That is why Jesus died on the cross. Nobody can become perfect. Therefore, some say, we need a strong government to keep people in line. This is an error. First off, who determines what is good and what is evil? We have the Bible and we have our ability to reason. We may have some a priori knowledge that it is wrong to kill, steal, etc., and can agree that these acts should be prohibited. Some actions infringe on the rights of others and these are the actions that should be prohibited. But there are some actions that do not, or might not, infringe on the rights of others. They might be sinful, but should not be illegal. Smoking a joint, keeping a loaded gun in one’s purse, sleeping with someone who is not your spouse harm no-one except possibly the participants and violate no rights. My own view is that the first is sinful only because it is unhealthful, the second is not sinful at all, and the third is sinful because it may have far-reaching effects on the participants and also the new life it might bring, a child without two full-time parents. I think the last of the three is the worst, especially since it is one thing that the Bible expressly prohibits, but it is the only one that is legal.<br /><br />I could try to foist these beliefs on others, but to do so I would have to believe that I am somehow better. But I am not. And, neither are any of those who are charged by our powerful government to enforce the rules.<br /><br />There is one thing you may notice about those who advocate strong, all-inclusive government. They imagine themselves (or at least someone who thinks like them) as the one to determine what is allowed and what is not. In reality, not only will they not be in charge, but whoever is will foist rules on them that will be entirely different from the rules they want. It is then that they will realize that government officials are not better.<br /><br />All the power that the neoconservatives worked so hard to give George W. Bush will now be in the hands of Barack Obama. They are already sorry. We warned them about this, but of course they would not listen.<br /><br />The fact that we are all imperfect is one of the few things we all have in common. Dr. Rothbard treats the concept of “equality” by showing that there is no such thing except for equality of natural rights (50). We are not equal, rather we are all different. Different talents and different levels of ambition will reap different incomes. It is impossible that we even start out equally since being born in different places means different opportunities. And, there is no way to change that. Remember the Parable of the Talents (51). What the parable tells us is that we all have different resources and abilities, and the important thing is what we do with what we have.<br /><br />In an effort to complete this segment and move on to some of Dr. Rothbard’s works on monetary policy which are so critical to understanding the situation at hand, I skipped over part of this chapter, but beginning on P. 1321 there is a section called “The Charge of ‘Selfish Materialism.’” The free market discourages altruism and distracts from “higher” goals is what we hear all the time. We do not even have a free market for gosh sakes but the establishment keeps talking about how “unfettered laissez-faire capitalism has caused the current recession” (52). This is such nonsense that I would hardly know where to begin if it were even necessary to hash over yet again how unfree our almost-socialist market actually is. If it is a free market at all it is only in comparison to the degree of socialism the establishment apparently wants.<br /><br />As for “selfishness,” as a Christian I am put in an untenable position by the prattlings of the left/neoconservative, Bushite, Obamaite establishment. The Bible says help the poor, go the extra mile, turn the other cheek, love thy neighbor as thyself, and so on. And I certainly believe in that and live accordingly to the best of my ability.<br /><br />This does not mean that one should not put oneself first. Rather, you have to put yourself first. If you do not take care of yourself, how do you expect to care for someone else? Your minister had to study, perhaps paying large sums to go to school for years before being able to do his or her job. The doctor needs to rest before surgery. I was operated on early in the morning. I wanted to make sure that the doctors had taken care of themselves before cutting me up.<br /><br />Jesus often prayed for a long time in preparation for a major job.<br /><br />You have to put yourself first! Any other idea is nuts! So, don’t listen to this B.S. about not being selfish.<br /><br />A person’s monetary income serves his chosen ends which may be altruistic or “selfish.” Whatever the person does is what he believes is in his rational self-interest. A successful person might be able to afford a yacht for himself or to build an orphanage. He will choose according to his rational self-interest (53). The establishment person, thinking inside the box, will laugh and say, Guess which I will choose! Chances are he will be right.<br /><br />Why would that be in many cases? Do you have any idea how difficult our so-called “free market” has made it to build an orphanage? No? Well, go down to your city hall and see where one can start all of the bureaucratic procedures to get the licenses, permits, zoning variances, etc., and don’t forget to ask about the fees and time frames! This is assuming you even can find out! I think you will agree with me that buying the yacht is far simpler, not to mention quicker. [Editor’s note: Look up the story of when Mother Teresa tried to open a shelter in New York City. Even her saintly patience was so tried, she gave up.]<br /><br />In a truly free market, all it takes is to buy the land, hire the builders and architects, and go ahead and do it! Of course, one is responsible. But, even in our regulatory micromanagement, if anything goes wrong, the philanthropist or entrepreneur is still held responsible, even though it is government that makes it such an obstacle course that many additional things can go wrong.<br /><br />In any case, the pursuit of monetary income cannot be rationally criticized. Altruism requires this as much as egoism does. Monetary rewards are good measures of how well one is serving consumers. As I said last winter, Bono’s income far exceeds mine, and rightfully so. If you want to be truly unselfish, then earn as much as you can by serving customers. Of course, the left-wing (and neoconservative) altruists will tell you that you are selfish. They will always do that, until you adapt your lifestyle to their dictates.<br /><br />Many of these same establishment types that bleat “selfish!” at people who are well-to-do because they are ambitious (and that is no matter how charitable they are), will also say that a competitive free market takes us “back to the jungle” (54). I really do not think I need to say it again, as Murray Rothbard has made it so very clear as I have pointed out so many times, but the free market is not just competitive, it is also cooperative. Think back to Crusoe alone on the island and how difficult it was, and how much easier he and the other man made it for each other, and how much easier yet it was as more people arrived. Law of the jungle? Quite the contrary. Actually it is more government involvement that takes us back to the jungle.<br /><br />Dr. Rothbard moves on to a section called “Power over Nature and Power over Man.” This is particularly interesting as in the beginning of Genesis we are told that man has dominion over the earth and what this means is that we human beings are responsible for the earth and all the plants and animals on it. It’s ours. God gave it to us (55). Of course we have learned that the best way to take care of the earth and ourselves is for individuals to privately own whatever they find, make, or exchange for. Dr. Rothbard has spent a lot of time and pages explaining this.<br /><br />But some individuals believe they can own, or at least control, people. Of course, they cannot. What came to mind, even before reading the section, was those who presume that government should enforce morality as they see it, and that wars should be fought to uproot regimes they see as detrimental to their goals.<br /><br />There is this group or these groups of people whom some call “dominionists” who believe that the admonition in Genesis also means dominion over people. I did want to include something about this in my essay, How the Bush Administration is Destroying our Country and Damaging the Christian Church (56), but never had time to research it. Most likely, the Bush administration was supported by these, and chances are there were many in the administration itself. It would be worth looking into.<br /><br />I firmly believe in what Genesis says, not only because I believe in the Bible’s being the Word of God, but because it simply makes sense! Man must “conquer” or use nature in order to stay alive (57), and cooperation rather than coercion makes it possible to give and get help in doing that. This is compelling evidence that the Genesis passage refers to dominating the earth, plants, and animals, but not human beings.<br /><br />Dr. Rothbard touches on the leftist-invented dichotomy of human rights and property rights (58). The left often talks about the need “to place human rights over property rights.” This makes no sense at all, as property rights are human rights. The individual owns himself, as he is his own property. Were this not true, he would be a slave to some other person (where would that person’s right to him come from?) or to society as a whole in which case he would have to ask everyone’s permission to do anything.<br /><br />We have seen that this is incompatible with life.<br /><br />Some individuals believe that the property rights to be abolished would be the right to land and big ticket items. This, they believe, would make it possible to respect human rights over property rights. The left, for example, is all for freedom of the press (or at least claims to be). In fact, some even agree with us libertarians that there should be no censorship at all, not even of (indefinable) hard-core pornography. However, the state, they believe, should own all the land and the means of production including printing presses. If the state owns all the presses (or, nowadays, a monopoly on Internet service provision), what makes you think it will allow just anything to be published? How do you think priorities will be set for publication?<br /><br />Even if printing presses are allowed to be privately owned, what makes you think there will be land allocated on which to put the press? Or even put your feet if someone in power does not like you?<br /><br />The answer seems to be: “Trust us.”<br /><br />Yeah, right.<br /><br />Human rights are property rights, and that includes the right to own land. It also includes the right to protect your property, and that means the right to self-defense, including the right to own a gun.<br /><br />As the book is winding down, Dr. Rothbard critiques an important study that was published a few years before he wrote the book (59). Not having read the Henry M. Oliver study I cannot really judge, but Dr. Rothbard thought it was a pathetic attempt to explode laissez-faire. He goes through some or all of Oliver’s objections to the free market, which appear to me as pathetic. It would not be worth mentioning at all were it not for the fact that some of these objections are still being heard and that the book was very well received by the establishment. It would be worthwhile to read the Oliver book with the Rothbard critique close at hand.<br /><br />Dr. Rothbard ends the book with an overview of all the principles that were explained in the book, the difference between a free market society and a socialistic one, with emphasis on the fact that every economy is somewhere in the continuum between them.<br /><br />1) Rothbard, Murray, <em>Power and Market</em>, Auburn: Ludwig von Mises Institute, 2004, P. 1051.<br />(2) Ibid. P. 1051.<br />(3) Ibid. P.1052.<br />(4) Ibid. P. 1057.<br />(5) Ibid. P. 1058.<br />(6) Ibid. P. 1058 - 1059.<br />(7) Ibid. P. 1058 - 1059.<br />(8) Ibid. P. 1069.<br />(9) Ibid. P.1070.<br />(10) Ibid. P. 1071.<br />(11) Ibid. P. 1070 - 1074.<br />(12) Ibid. P. 1076 - 1077.<br />(13) Ibid. P. 1093.<br />(14) Ibid. P. 1094 - 1144.<br />(15) Ibid. P. 1117 - 1121.<br />(16) Ibid. P. 1117.<br />(17) Ibid. P. 1141 - 1142.<br />(18) Ibid. P. 1050.<br />(19) Ibid. P. 1151 - 1152.<br />(20) Ibid. P. 1152.<br />(21) Ibid. P. 1154.<br />(22) Ibid. P. 1155.<br />(23) <a title="http://alicelillieandher.blogspot.com/2005_05_01_archive.html" href="http://alicelillieandher.blogspot.com/2005_05_01_archive.html" target="_blank">http://alicelillieandher.blogspot.com/2005_05_01_archive.html</a> Scroll down to Franklin Roosevelt to see a litany of blow after blow he dealt to the economy, preventing recovery and destroying freedom. Please do check out the works cited in the footnotes.<br />(24) Rothbard P. 1156 - 1162.<br />(25) Ibid. P. 1162.<br />(26) Ibid. P. 1165.<br />(27) Ibid. P. 1166.<br />(28) Ibid. P. 1168.<br />(29) Ibid. P. 1191 - 1196.<br />(30) Ibid. P. 1194 - 1195.<br />(31) Ibid. P. 1216.<br />(32) Ibid. P. 1217.<br />(32) Ibid. P. 1218.<br />(33) Ibid. P. 1222.<br />(34) Ibid. P. 1223.<br />(35) Ibid. P. 1227.<br />(36) Ibid. P. 1234 - 1235.<br />(37) Rothbard, Murray, <em>Man, Economy and State</em>, P. 989 - 1024 (Same volume as Power and Market)<br />(38) <em>Power and Market</em>, P. 1254.<br />(39) Ibid. P. 1261.<br />(40) Ibid. P. 1262.<br />(41) Ibid. P. 1273.<br />(42) Ibid. P. 1273.<br />(43) Ibid. P. 1274.<br />(44) Ibid. P. 1274.<br />(45) Ibid. P. 1277.<br />(46) Ibid. P. 1300.<br />(47) Ibid. P. 1301.<br />(48) Ibid. P. 1301 - 1302.<br />(49) Ibid. P. 1303 - 1308.<br />(50) Ibid. P. 1308 - 1312.<br />(51) Matthew 25:14-30.<br />(52) <a title="http://www.lewrockwell.com/woods/woods106.html" href="http://www.lewrockwell.com/woods/woods106.html" target="_blank">http://www.lewrockwell.com/woods/woods106.html</a>, Woods, Thomas E., Jr., “We Need Our Heads Examined, Says Harvard.” This is of interest in this regard. In early March, 2009, Harvard sponsored a conference called “The Free Market Mindset” that included top establishment thinkers (?) who just did not see the “elephant in the living room.” Dr. Woods raises the obvious questions they never touched on.<br />(53) <em>Power and Market</em> P. 1322.<br />(54) Ibid. P. 1324 - 1326.<br />(55) Genesis 1:26.<br />(56) <a title="http://www.alicelillieandher.blogspot.com/" href="http://www.alicelillieandher.blogspot.com/" target="_blank">http://www.alicelillieandher.blogspot.com/</a> Click on 2007 in Blog Archive.<br />(57) <em>Power and Market</em> P. 1330 - 1331.<br />(58) Ibid. P. 1337.<br />(59) Oliver, Henry M., Jr., <em>A Critique of Socioeconomic Goals</em>, University Press, Bloomington, 1954. There is a link at http://books.google.com/books?id=VS5gIb1S8ewC&pg=PA294&lpg=PA294&dq=%22Henry+M.+Oliver%22&source=bl&ots=aic9bk6EDC&sig=Mze6Uyo7LDW6WUDmVD8Va7r4Wxg&hl=en&ei=U5DqSeveDtDgtgeStfmMBg&sa=X&oi=book_result&ct=result&resnum=5 </p>Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com1tag:blogger.com,1999:blog-10767345.post-32115955511084406572009-04-22T18:13:00.002-04:002009-04-22T18:33:52.281-04:00What Has Government Done To Our Money?<div align="center"><em>WHAT HAS GOVERNMENT DONE TO OUR MONEY?<br /></em>(1990 Edition)<br />by Murray N. Rothbard</div><br />The question is asked: Why do we need money? Why do we exchange? I dealt with this last year in my first essay on the works of Murray Rothbard. Money is the medium of exchange, a marketable commodity that everyone wants for the purpose of exchange. I pointed out Dr. Rothbard's analysis of how exchange among diverse people in diverse locations is necessary to prosper and how money makes exchange much faster and easier. Gold and silver have the most time-honored uses as money, because through the centuries they have won out as the most marketable commodities.<br /><br />It must be emphasized that money is a commodity. The only difference between the money commodity and other commodities is that the money commodity is demanded primarily as a medium of exchange (1).<br /><br />Another emphasis is that the private manufacture (also called “minting”) of coins, or pieces of gold or silver resembling coins, is a legitimate function of the market (2). If someone owns a piece of metal, he or she has every right to shape it in any way, including a round, flat disk. However, if one does this today with gold or silver, one runs the risk of arrest for counterfeiting.<br /><br />Dr. Rothbard continues his case for absolute freedom of money by discussing price stabilization and co-existing moneys before launching into “money warehouses” and banks.<br /><br />Storing money (gold) in a warehouse and then using receipts for this money in trade was discussed in Man, Economy and State. The warehouse owner is in the business of safely storing money (gold) for his customers. He gives the customer receipts for the money that the customer placed in his care. These receipts may be traded for goods and services, and the money never needs to leave the warehouse unless the holder of the receipt wants to take it out (3). If the warehouse owner is honest he will not make up receipts that claim to represent physical money but in fact do not.<br /><br />These warehouses are today analogous to banks. The receipts for the money are analogous to our dollar bills (and, of course, $5, $10, $20, etc. bills), but many people nowadays prefer to write an order to the warehouse (bank) to transfer some of their money to someone else without having to deal with “warehouse receipts.” This order is a check.<br /><br />In an unhampered market with a commodity (such as gold) standard, checks and paper “money” are only stand-ins for the real deal.<br /><br />The warehouses (banks) are businesses and have to make money just like any other business. They charge fees to their customers for keeping their money safe. If banks print up receipts for money they are not holding, they are being dishonest. Customers who find out will withdraw their money. And they will be quick about it too, as they know that phony-baloney receipts are redeemed, the bank will run out of money before all the real receipts are redeemed.<br /><br />This issuance of un-backed-up receipts is called “fractional reserve banking.”<br /><br />If enough banks do this, we have more receipts in circulation than there is gold in the bank. People believe they are richer than they really are. Now, we have “inflation” (4). Inflation is a fraud on bank customers. It would not be tolerated in a free market.<br /><br />The important lesson we have learned from the book so far is that money, on the free market, must be a useful commodity that is used as a medium of exchange. If it is not, inflation is bound to occur.<br /><br />Dr. Rothbard continues (5) to explain another very important concept: Inflation does not happen evenly across the board. The new money created reaches some people before it reaches others. These “first receivers” are usually people who are well connected. The recent bailout (recent when this was written in late October, 2008, and referring to the bailout of late summer, 2008) of $700 billion went primarily to banks and other fat-cat institutions. I never saw a dime. Did you? The only people on the lower rungs who get any will be borrowers. All recipients will go forth and spend a goodly portion of this new money. It will not be very long (a few months) before prices across the economy will drift up. In fact, I have begun to notice it already, except in the area of gasoline prices, which dropped in the fall of 2008. This came at an opportune time for me, since my summer place and my winter place are a few days' drive apart. This break in gasoline prices proves yet again the law of supply and demand. Had demand not fallen, I believe we would have been paying at least $4.00 a gallon, whereas it is actually well under $3.00 at this time.<br /><br />Dr. Rothbard drove home that point many times, but right now he is talking about inflation. By the time the new money has “trickled down” (and up and over) to you, the well-connected have gone forth and spent, driving prices up. They did much of their spending before businesses had time to realize demand was up and adjust their prices accordingly. Later, if you are lucky enough to be still working and get a raise, the new money finally comes your way. But a lot of good it does if prices have already gone up. It is even worse for those on fixed incomes. The extra money you have to spend to pay the higher prices is like a transfer payment from you to the well-connected who get the new money first.<br /><br />I have said many times that the establishment's system is set up in such a way as to assure that wealth gravitates to establishment interests.<br /><br />Of course, prices do not all go up at the same time and rate any more than all people get the new money at the same time. This makes business calculation difficult (6). How can a business people determine what the cost of a capital good will be when they know it will have to be replaced in five years? Or even five months? They cannot. How can they even tell if they are making a profit if they cannot calculate their expenditures in five months? And, although it is very difficult for even a talented entrepreneur to anticipate consumer wants, it becomes nearly impossible when nobody knows how much purchasing power anybody will have in even a few weeks.<br /><br />The exact situation we are in right now is what causes the business cycle (7).<br /><br />After a brief history of coinage and bimetallism, Dr. Rothbard demonstrates that legal tender laws give rise to inflation. Legal tender laws give the government a money monopoly. Under them, only the sovereign government's money is legal to use as such and, therefore, the government has control of the nation's money.<br /><br />As soon as governments took control of their countries' money in this manner, gold and silver was used in exchanges between countries only, not individuals (8).<br /><br />As usual, it was government propaganda that sold the people on centralized control of the money by way of central banking. Then, as now, government blamed economic problems on the free market rather than government misbehavior.<br /><br />We had free banking in the U.S. in the early part of the 19th century (9), and some of the bankers were unscrupulous and stole from their clients. The government did not stop this theft as it should have, and then blamed the free market for the problems. Today we do not even have a free market at all and haven't for several decades. In the early 19th century we did have a lot of freedom, but the government seemed to look the other way when real crimes were committed by its cronies such as bankers.<br /><br />Central banking eliminates all checks on inflation because central banks have a monopoly on note issue. The only brake on inflation is the competition between national currencies. This is why the establishment's dream of a world-wide currency with a world central bank would be a disaster.<br /><br />Dr. Rothbard briefly outlines the effects of fiat (government-issued or central bank-issued paper backed by nothing) money.<br /><br />This was followed by Part IV of the book, beginning on P. 90 of the 1990 edition, where Dr. Rothbard traces the decline of money through inflation in the 20th century.<br /><br />Until 1914 the situation approached the ideal, where most countries' currencies were defined as weights of gold. Exchange rates were therefore fixed, but not by government edict. An American dollar, for example, was worth 1/20 ounce of gold, and a British pound was about 1/4 ounce of gold. This meant that a pound was worth about $5 yesterday, today, and tomorrow, by definition (10). This made things a lot easier on people who traded with others in different countries. It was almost as good as having an international free-market currency. Dr. Rothbard emphasized that gold was not arbitrarily picked out of a hat by government bureaucrats as the commodity money, but that (despite what establishment textbooks teach) gold gradually came to be used on the free market because it fills the bill for consumers. Equally important, it wards off inflation and other government tampering and keeps the balance of payments in equilibrium (11).<br /><br />The system broke down because governments broke it down (12). To the U.S. government, and other governments, the waging of the unnecessary World War I was more important than the well-being of the people. Big surprise! War is good for the establishment elite; the gold standard is not.<br /><br />Later, the “gold exchange” standard was established. This was to allow foreign governments to exchange their dollars for gold, but individuals could not. Dr. Rothbard does not suggest it (although I have a strong hunch he would agree) but, judging from the havoc caused by this, I have to believe that the intentions were less than honorable.<br /><br />Economic law will eventually catch up with government shenanigans, and in 1968 the system started to crack. The dollar was fixed at $35 per gold ounce. Americans were not allowed to own gold coins or bullion, but citizens in other countries were allowed to and did. They sold their American dollars for gold at $35 per ounce which was a real bargain because the real value of the inflated dollar was much less. Gold, therefore, was leaving the country, and dollars were returning. Why Americans obeyed the gold prohibition edict I will never understand.<br /><br />The establishment was telling us that people's faith in paper would grow and that gold would drop in value in the marketplace. If you have been tracking the price of gold (and silver) you know how wrong they were!<br /><br />On August 15, 1971, Mr. Establishment himself, arch-enemy of freedom President Richard Nixon went on television and announced the economy was about to be hit with two of the biggest blows he could deal, and be all but destroyed. He did not say it quite that way, of course, but he might as well have (13).<br /><br />The first blow was “to combat inflation.” He froze all wages and prices effective immediately. Even a college freshman who has taken a microeconomics course knows what a disaster that was. I have written a lot in past essays so I will say no more here.<br /><br />The second blow was a total severance of the dollar and gold. This meant that the dollar was now totally fiat. We have seen the results of that, too.<br /><br />Older people can remember the price inflation that took place in the 1970s and in this book Dr. Rothbard briefly explains why.<br /><br />What is needed is to go back to the classical gold standard, as he makes obvious. But, alas, since the book was written, we have gone in the opposite direction, drifting toward a world fiat currency, controlled by a world central bank and well-connected elite who would be the deciders about who would be the first receivers of newly printed money. I don't think you or I are in the running.<br /><br />We already have a regional currency in Europe, the Euro. Internet savvy people are aware that there is a move toward another regional currency on the American continent called the Amero. A regional currency could be coming to the Far East, too. Eventually the establishment hopes to merge them all into one. This would pave the way for inflation to the establishment's stony heart's content.<br /><br />Dr. Rothbard's work is a warning.<br /><br />(1) P. 20, Rothbard, Murray N., <em>What Has Government Done to our Money</em> (1990 Edition), Praxeology Press of the Ludwig von Mises Institute, Auburn, 1990.<br /><br />(2) <a title="http://www.lewrockwell.com/rothbard/rothbard191.html" href="http://www.lewrockwell.com/rothbard/rothbard191.html" target="_blank">http://www.lewrockwell.com/rothbard/rothbard191.html</a><br /><br />(3) <em>What has Government Done to our Money</em>, P. 43 - 45.<br /><br />(4) Ibid. P. 48.<br /><br />(5) Ibid. P. 55 on.<br /><br />(6) Ibid. P. 58.<br /><br />(7) Ibid. P. 61.<br /><br />(8) Ibid. P. 68 - 69.<br /><br />(9) Ibid. P. 70 - 71.<br /><br />(10) Ibid. P. 91. Actually the pound was worth $4.86. P. 95.<br /><br />(11) Ibid. P. 92.<br /><br />(12) Ibid. P. 94.<br /><br />(13) Ibid. P. 105.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-79598385212256370542009-04-22T17:33:00.011-04:002009-04-22T19:12:40.708-04:00The Case Against the Fed<div align="center"><em>THE CASE AGAINST THE FED</em><br />by Murray N. Rothbard </div><div align="center"> </div><div align="center"> </div><div align="center"> </div><div align="center"> </div><div align="center"> </div><div align="center"><br /> </div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left"></div><div align="left">However scary and threatening, government agencies, even the dread Internal Revenue Service, are all subject to being checked by Congress.<br /><br />One entity, however, which people who know their economics believe is the scariest since it has iron-clad control of the nation's monetary system, is accountable to nobody, not even Congress. It is the Federal Reserve (1).<br /><br />The establishment assures the public that the Fed needs to be in such a position. Anything as important as that needs to be “independent of politics.” Don't fall for it! What that really means is the Fed can do anything it darn pleases with the money supply (2). The banks the Fed controls like it that way. There is something fishy here. Since when do those who are being regulated want unbridled power in the hands of their regulators (3)? The Fed wants this power “to fight inflation.” Hah! And, since when do bankers want inflation checked (4)?<br /><br />The fact is, there is inflation. Only one institution can bring it about (legally, that is, but illegal counterfeiters are few and far between) and that is the Federal Reserve as it creates more money out of thin air. The Fed stays away from “inflation” to about the extent that I stay away from pasta, and that is darn little.<br /><br />So, the Federal Reserve is not a solution but is a big problem. To understand this, Dr. Rothbard says (5) we need to understand the history of money. I have discussed this in other essays in reviews of Rothbard's other works, so it is not really necessary to go into much detail here. Suffice it to say that any commodity that is used in the market and is marketable enough can be used as a medium of exchange, or money. This commodity can either be used as a consumer good in its own right or as something to exchange for other goods. Gold and silver are both time-honored moneys (6). This did not come about by government edict. It came about over time in a free marketplace. Having such a medium of exchange greatly facilitates and accelerates prosperity. It also allows business firms to calculate profits and losses more accurately than is possible under barter.<br /><br />Dr. Rothbard reiterates, and I will too, briefly, that, even though money is a “good thing,” an increase in the supply of money in the economy will not be helpful (7). This is because this increase cannot augment the amount of available goods and services in the market. There is no “optimal” supply of money. Now we are beginning to see through the Fed's and the establishment's propaganda.<br /><br />That counterfeiting is wrong should be obvious to anyone. But what is not so obvious is that the manufacture of un-backed-up money by the Federal Reserve is really not different (8). The temptation to counterfeit is in the fact that the counterfeiters get to spend the “money” they manufacture before the increase in the money supply they are causing has had a chance to raise the price level. This enriches the counterfeiters at the expense of the rest of us. Those who get this new money first, the counterfeiters themselves, are the “first receivers” of the money. They get to spend it right away. Those businesses they patronize and their employees receive it next, and the businesses they patronize receive it next after that, and so on and so on. By the time you and I get it, the new demand caused by it has already long since pushed up prices, so actually the “first receivers” of the money have benefited at our expense (9). As I said before, this amounts to a transfer payment from you to the well-connected.<br /><br />Inflation, therefore, does not happen evenly.<br /><br />Next time you pour cream into your coffee, observe something. When you pour the cream in (slowly near the edge of the cup will illustrate this better), the coffee nearest the cream source gets the cream first. The coffee on the other side of your cup stays black a while longer.<br /><br />Think of the coffee as the marketplace, the cream pitcher as the Federal Reserve and the cream as money. When the Fed manufactures money backed up by nothing and adds it to the economy, they add it through the banks. The first receivers are the well-connected establishment people, for the most part, although there might be an occasional dissident first receiver. Their place in the “coffee” is near the source of the “cream.” People like most of us are closer to the other side where the “coffee” remains “black,” meaning it lacks the new money. By the time we get it, supply and demand have already raised the price level.<br /><br />This is why wealth gravitates toward establishment interests. And, as far as the Federal Reserve's manufacture of money is concerned, is this really any different from counterfeiting?<br /><br />Is it? Just because it has the blessing of the government? Unless you think of government as some sort of god, you have to agree with Dr. Rothbard and me on this!<br /><br />This is the root cause of our economic problems in late 2008. Obviously greed in places other than government is a factor, but the main blame is on the Fed and the federal government (10). But people will fall for any propaganda the establishment dishes out because almost all public school graduates and most private school graduates are illiterate when it comes to monetary economics.<br /><br />And, you can bet your last nearly-worthless dollar that, while government officials are acting as though they are scrambling for solutions and throwing you a few crumbs, they are laughing all the way to their cronies at the bank! They are aware that inflation is more than just a general rise in prices due to an increase in the money supply. They are aware that it is an uneven distortion of the economy through transfers of wealth (11). They know this; how could they not?<br /><br />Dr. Rothbard then discusses loan banks in a free market. These banks borrow from you when you set up a certificate of deposit for interest, and then they lend that money at higher interest (12). There is nothing crooked or inflationary about this.<br /><br />Next, he turns to the subject of warehousing and warehouse receipts, which is something we have seen in other works.<br /><br />The point driven home (13) is this. Right now, in November, 2008, the government is anxious to “get the economy going again” by a couple of ways that Dr. Rothbard believed (and so do I) are totally pernicious. One is they want to encourage borrowing. So they enact this $700 billion “bailout,” giving huge amounts of money to banks and other such entities. Where did this money come from? Thin air! It rolled off the printing press. This is a blatant case of first receivers being the bankers. So is the money being loaned? From what I hear, no. Well, thank goodness! It is the low interest rates and liberal lending practices that got us into this mess in the first place! Do you seriously think the same practices will get us out? The banks seem to know better, so they are being cautious.<br /><br />The other way they claim to be restarting the economy is “economic stimulus packages.” Tax “rebates” went out to less well-to-do taxpayers last spring, and I wrote in last year's essay that I hoped people would be smart enough to use this to pay down their debts and to squirrel away what was left for a rainy day. This is exactly what people did. This isn't rocket science! If you are in debt and realize you have nothing at all saved for retirement, and this check comes in, what would you do? Buy a big-screen TV? Not if you have a measurable I.Q. But the Bush administration, which created this money out of thin air, wanted you to do just that.<br /><br />In <em>Man, Economy and State</em>, Dr. Rothbard explained why saving and investing creates more employment and wealth over the long run than spending does. This is why bailouts and “stimulus” packages will not work in the end.<br /><br />Now, President-elect Obama (as I write this in November, 2008) wants another “economic stimulus package” and will probably call for another bailout too.<br /><br />Back to the bankers, they want to keep the public in the dark, or at least in blind faith, about their solvency. They are not solvent, thanks to fractional reserve banking. This means the banks only hold a fraction of the reserves needed to cover all the demand deposits. Now, what if all, or even some, of the depositors wanted to draw out all their money at the same time? This thought strikes fear into the bankers because banks cannot honor their promise to very many people (14). The bank would go belly-up, unless it got a supply of cash from the Federal Reserve's printing press. That would really be inflationary.<br /><br />If there are monetary problems (and there are right now in November, 2008) and banks begin to worry about runs on banks (which they do), what they are likely to do is curtail loans (which they are) (15). Obviously, this is the smart thing to do. Just as you and I cannot spend ourselves rich, banks that are in trouble due to loan defaults are likely to hold on to their money. Prospective borrowers are thinking twice also.<br /><br />The Bush administration, and the coming Obama administration want more lending and more credit and the Fed is pumping new money into the banks. I have said this before and will be the first to admit that I seem like a broken record. But this is critical. This is exactly the wrong thing to do, and in the long run it will not solve the problems that government's poor monetary policy has created. I will belabor this no more right now. I think you get the point, or at least you will if you read the book.<br /><br />Dr. Rothbard gives a brief history of central banking. We learn that this creates a cartel among a country's banks. They all do together what, in a free market, no one bank would dare do and that is to not have sufficient funds in case all the depositors wanted their money at the same time (a bank run), or if there were anything like a gold standard, not have enough gold deposits either in the bank or at the central bank.<br /><br />One bank trying that in a free market would quickly go out of business as has been explained. But all of them together, under the central bank, would only have a problem with banks in other countries (16). The central bank has no control over banks in other countries. This is why the establishment would like to see a world central bank.<br /><br />Once the brief history of central banking in general is discussed, Rothbard gives us a brief history of banking in the United States. It was interesting to note that it was the Republican Party during Lincoln's time that called for a central bank and inflationary policies, where it was the Democrats (the party of Jefferson) who were calling for sound money. Actually that should be no surprise after reading my <em>The Three Worst American Enemies of Freedom</em> on this blog and the references listed (17).<br /><br />And, of course, nobody should be surprised that it was the big industrialists who were also the top Republicans who were the most avid supporters of central banking (18). The Panic of 1873, which was caused by war and inflation, was what brought about at least a temporary victory for gold (19). I guess it is too much to hope that the economic crisis of today would re-kindle a gold standard, as today's people are so terribly uninformed of such matters and government is so much stronger. Unfortunately, by the turn of the century, the Democrats fell and became even worse than the Republicans.<br /><br />As the strong belief in freedom decreased, the power of the anti-hard-money establishment increased (20). In Dr. Rothbard's narrative on how central banking with its attendant inflation and gravitation of wealth toward establishment interests, it is plain that the establishment snookered the general public into acceptance of central banking. It did it through academia and newspapers such as the <em>Wall Street Journal</em> (21), which should surprise nobody since in modern times the “educational” system and the “news” media have replaced the church as the means of keeping the people in line.<br /><br />The actual bill to authorize the central bank was hammered out at a posh resort on Jekyll Island, Georgia, in 1910. The participants were a who’s-who of the new establishment which still has to this day a stranglehold over each and every honest, hard-working person on the planet, and which is responsible for the poverty, illness, and death of billions of people worldwide. These people, and those who took over for them after they died and went to where nobody wants to go, have destroyed our freedom and prosperity, and somehow have managed to fool enough people enough of the time to continue the destruction.<br /><br />Dr. Rothbard (22) describes a step-by-step process of how the money supply is inflated, at least how it was done when the book was written. I doubt there has been much change, unless it is for the worse.<br /><br />So, what to do? Obviously the Fed has to be abolished. While this is not going to happen any time soon, Dr. Rothbard ends the book with ways it could be done.<br /><br />(1) Rothbard, Murray N., <em>The Case Against the Fed</em>, Ludwig von Mises Institute, Auburn, 2007 edition, P.3.<br /><br />(2) Ibid. P. 4 - 5.<br /><br />(3) Ibid. P. 7.<br /><br />(4) Ibid. P. 9.<br /><br />(5) Ibid. P. 12.<br /><br />(6) Ibid. P. 16 - 17.<br /><br />(7) Ibid. P. 19.<br /><br />(8) Ibid. P. 20 - 22.<br /><br />(9) Ibid. P. 24.<br /><br />(10) Ibid. P. 24 - 25.<br /><br />(11) Ibid. P. 25 - 26.<br /><br />(12) Ibid. P. 29 - 33.<br /><br />(13) Ibid. P. 39 - 40 in particular.<br /><br />(14) Ibid. P. 46.<br /><br />(15) Ibid. P. 54 - 55.<br /><br />(16) Ibid. P. 64.<br /><br />(17) <a title="http://alicelillieandher.blogspot.com/2005_05_01_archive.html" href="http://alicelillieandher.blogspot.com/2005_05_01_archive.html" target="_blank">http://alicelillieandher.blogspot.com/2005_05_01_archive.html</a>.<br /><br />(18) <em>The Case Against the Fed</em> P. 78.<br /><br />(19) Ibid. P. 78.<br /><br />(20) Ibid. P. 91.<br /><br />(21) Ibid. P. 112 - 113.<br /><br />(22) <em>The Case Against the Fed</em> starting P. 137. </div>Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com2tag:blogger.com,1999:blog-10767345.post-1434399474803331212009-04-22T17:33:00.007-04:002009-04-22T18:48:25.360-04:00The Mystery of Banking<div align="center"><em>THE MYSTERY OF BANKING</em><br />(Second Edition, 2008)<br />by Murray N. Rothbard</div><br />The foreword to this book, by Prof. Joseph T. Salerno, who is an associate of the Ludwig von Mises Institute (mises.org) which I proudly support, points out that an important aspect of the book, possibly the most important, is that it asks and answers the question: Just who benefits the most from the Federal Reserve? In fact, who benefits the most from all the various government regulatory agencies?<br /><br />I have said often the system is set up in such a way that wealth gravitates toward establishment interests. Let's see if it does.<br /><br />The first two chapters examine concepts Dr. Rothbard explained in <em>Man, Economy and State</em> and other works. I wrote on this last winter in <em>The Works of Murray Rothbard, Part I</em> on this blog. One of these concepts is how money originated, how a marketable commodity gradually, by custom, comes to be used in trade to alleviate the need for a “double coincidence of wants.” I illustrated by asking what would happen if my favorite rock band were headed this way and tickets had to be obtained by barter in the absence of a marketable commodity that is customarily used as money. How would I get a ticket? Somebody has a ticket he will part with but he wants a dog. I have no dog I will spare, so decide to go to the pound to get one for the ticket man. How will I pay for the dog? Well, dogs like steak and the pound has dogs to feed, so I get a few steaks out of my freezer and go to the pound. I surrender the steaks and they surrender a dog. I take him and surrender him to the ticket man, who gives me the ticket. Everyone is happier, but look at all the work that had to be done, and all the luck that was necessary. Over time, people realized some commodities were always welcome in a trade. These commodities could have been anything, but silver and gold prevailed. These became money, and that is how money originated. Government is nowhere in the picture.<br /><br />The other concept is the law of supply and demand. I illustrated this with my own demand for T-shirts. I can often find nice T-shirts in a thrift store for $1. I will almost always buy one if I see one or, as an economist would say, the “quantity demanded” is high at that low price. Conversely, if the shirt is $25 I will probably take a pass. The “quantity demanded” is very low. The price on the tag depends on what the shop keeper believes he can get. If the supply in the store is too much and he wants to get rid of them, he will lower the price to attract more buyers.<br /><br />The shop keeper's supply, plus the supply in other shops, constitutes the “supply.” The “demand” comes from customers who are in the market for the product in question. You can plot it on a graph to find the “equilibrium price,” or the price at which all the items are sold and all who want them can buy.<br /><br />Once these concepts are reviewed, Chapter 3 goes into the demand for money itself. Right away, I see where Dr. Rothbard explodes the actions of the Obama administration, and the Bush administration before it. (There is really not that much difference between them.)<br /><br />An individual's demand for money is the amount of money he wishes to hold on to (1). Obviously, everybody wants to have as much money as he can get. But he only has X amount. He spends or invests some of what he has, and keeps the rest. The part he keeps, or his cash balance, is his demand for money.<br /><br />The demand for money is tied to the price level. If prices are high, one's demand for money or one's need for a cash balance is high, and vice versa.<br /><br />If new money is pumped into the economy by the Federal Reserve, such as by way of bailouts or “stimulus packages,” people, particularly the “first receivers” or early receivers of the new money, will see that their cash reserves are higher than their demand for money, so they will go out and spend, bidding prices up (2). This means the purchasing power of each dollar has gone down, because of more dollars chasing the same amount of goods. Now, prices are rising and people are now finding themselves short, so they are demanding more money by trying to add to cash balances and therefore cut back on spending.<br /><br />The government has been yapping because people are not spending. The myth it is trying to make us believe is that economic problems now are the result of a cutback in spending and borrowing. It is not difficult to see what hogwash this is: You do not spend yourself rich. You save yourself rich.<br /><br />So, the general price level is determined by the supply of and demand for money itself. If one of these changes, the price level changes.<br /><br />Let's assume the money supply in the economy increases (3). This causes the people (or some of the people) to have extra cash in their balances. What do these people do? They go right out and spend, driving prices up. After they spend for a while, they see that their extra cash is almost gone, partly because of rising prices. When they see that their cash balances do not exceed their demand for money, they slow down their spending and things return to normal (sort of). Of course, the early receivers of the new money have benefited at the expense of the later receivers, as was explained by Dr. Rothbard in <em>Man, Economy and State</em> and other works, and I hope I have made it very clear in my reviews.<br /><br />When the money supply falls, the opposite occurs, but how often does that happen?<br /><br />That is how the money supply affects the general price level. The other factor is the demand for money (4). There might be a reason the demand for money rises, that is, a lot of people are holding on to more of their money. This means they are spending less, causing a shift in their demand schedules, which encourages a reduction in prices. A general reduction in prices means the money they have is worth more and that will reduce their demand for money. Of course, when the demand for money decreases, the opposite occurs.<br /><br />My main focus here is the supply, even though Dr. Rothbard seems to be focusing on both the supply of and the demand for money in the next two chapters. The reason for my focus is that, right now, as 2009 and the new Obama administration begin, and government seems to want to bail out anything that shows signs of life, this bailout and the new “stimulus package” might total up to a trillion and a half dollars! Now, where in the heck is all this going to come from? We have to remember that this is on top of other government expenses! I needn't list these, but I cannot resist throwing some more darts at the illegal, immoral, and completely wrongheaded wars and the monstrosity unleashed here at home called “Homeland Security” which are worst than wastes of our productivity.<br /><br />And, because the States are all strapped for funds (they cannot possibly consider any cutbacks now, can they?), I think the Obama administration is more than likely to bail them out too.<br /><br />Naturally these bailouts will always mean more federal control over the industries and states to be bailed out and, yet again, power will gravitate to Washington.<br /><br />Were I a betting person I would wager that Obama will out-Bush Bush in centralizing power into the federal government, into the Executive Branch and into the White House.<br /><br />Goodbye, cruel world, I am off to Canada.<br /><br />But, the money has to come from somewhere. Taxes? That would necessitate a huge tax hike. The left is screaming for more taxes on “the rich.” There are lots of issues here (the destruction of jobs is one, since the “rich” use their wealth to provide jobs), but right now the main issue is that there are not nearly enough truly rich people to be taxed enough to cover the kind of expenditures the government is considering. And, if the “rich” are taxed that way, they will not remain rich very long. This tax hike would have to be a major one on everybody. This will be a tough sell, and will take a very long time.<br /><br />So, how else can they raise the money? What is almost certain is that money will simply be made (printed) out of thin air, backed up by nothing but pure faith. This means an increase in the money supply, and that is what Chapter 4 is about and is my main focus. The demand for money is important, too, but the supply of money is what I think is the most critical right now.<br /><br />So, what is the optimal supply of money (5)? Isn't more money better than less? When we are talking about the supply of money in the economy, the answer is no. Unlike consumer and capital goods (which are always scarce), money is not used up. It goes from one person to another to another as it is being exchanged for what people want. Goods and services, like concert tickets, dogs and steaks, are what people want. You cannot eat, be loved by, or listen to money. Assuming the same amount of goods and services in the economy, when the money supply increases, so do prices. An increase in the money supply does not bring about any increase in goods and services. It simply dilutes the purchasing power of the dollar. Therefore, what the money supply quantitatively is doesn't matter. What does matter is the qualitative change in the money supply.<br /><br />If we had a strict gold standard as Dr. Rothbard advocates (and I agree), there would be only one way to increase the money supply and that would be to dig more gold out of the ground. That is tough work, so the money supply would remain about the same. And it is really difficult to pass off something else as gold (6).<br /><br />However, let's say someone could pass a cheap metal off as gold and manufactured some coins. He benefits from these, and whoever he buys from with them is next in line to benefit. If enough of these phony coins are passed off as gold, they will cause a rise in consumer demand as they flood the market. Prices will rise as a result. The “first receivers,” i.e., the counterfeiter himself and the first few who receive the fake money, will benefit. Those who are late in receiving the coins will have to pay these higher prices before the coins reach them. They lose out as the early receivers gain.<br /><br />This is an important concept and I am belaboring it because it is key.<br /><br />Once the printing press was invented (which is one of the best inventions ever but it can be misused) and paper money began, all bets were off. Counterfeiting became easy. And, while it is one of the most serious felonies for individuals, governments are tempted (7). Government greed goes on forever. So, if a government can print paper tickets and people believe these tickets are worth something, then governments have the means to take as much wealth as they can without people catching on.<br /><br />This is how the money supply is increased. Right now, another big bailout is pending, and the first receivers of the new money are government cronies, the banks, automobile companies, and certain others. They will benefit. The rest of us are in the back of the bus. Inflation will kick in, big time, before we see a dime of it. The added cost of living can be thought of as a tax on us, paid to the government and its rich cronies. Don't think for one minute that it is accidental because it is not (8). In fact, because it is covert, it is worse because there is no protest.<br /><br />Chapter 5 discusses the possible causes of a change in the demand for money other than the purchasing power of money. These are the supply of goods and services, how frequently people are paid, how fast clearing systems operate, public confidence in the money, and, most important, the expectation of inflation or deflation.<br /><br />Right now I believe we can expect some major inflation because of all the money being pumped into the economy. Wise people are thinking they should buy their needed big-ticket items now or soon.<br /><br />So the choice is now or soon. I was thinking of what I really needed and should get that would keep me from having to get it when prices soar. I got a car last winter. Should I have waited another year? The dealerships have more cars than they know what to do with and prices are reduced. But, last winter, I feared the old one would break down on this last summer's trip and I would have had to pay out-of-pocket for repairs. The new one did not, but a problem later on did strand me for a few days. At least this time there was a warranty. I don't know if it was the right decision. I'd have to contact the new owner of the old car to see if it in fact broke down.<br /><br />That is water under the bridge. Right now, after a holiday season with deep discounts and very good prices, I went and got a few new middle-ticket items that were name brands for very reasonable prices. Because of these low prices, my demand for money decreased and I spent some that had been kept for just such a situation. I cannot say this situation is “deflation,” but when items I need are on sale at 70 percent off I think I can spend my money stash down a bit.<br /><br />It would be different if lower-yet prices were expected. Then, my demand for money would be up right now, not down. But they are not; higher prices are almost inevitable. Therefore, my demand for money is down right now, and will go up as prices rise. Why hang on to money that is going to depreciate in value when, instead, one can hang on to items such as furniture, appliances, and especially gold and silver (9).<br /><br />Prices have not gone up much yet. (Of course the major part of the government spending has not happened yet, but it is expected.) This actually worries me more. When the bailout and other money hits the economy, how much lag time will there be before prices start to really rise? People seem to expect the results of a monetary action within one day. Actually it may take a few months. The bailout may seem to be working. Unemployment may go down for a while and the foreclosures may drop for a while. But that is only postponing the inevitable. Later it is bound to catch up with us, just as it did in Germany in 1923 (10). What will the government do? I think there will be yet another bailout, this one bigger than ever! Inflation will accelerate, and the demand for money will actually drop as people realize that it will buy less and less.<br /><br />The demand for money drops because people have to pay higher prices for necessities. When they do not have enough, they start to clamor for more money, meaning more inflation (11). This is a vicious circle where inflation is causing higher prices, higher prices cause a clamor for more money, and more money causes inflation. We will be in big, big trouble.<br /><br />Where will it all end? We hope with the shutoff of the money spigot. But, barring that, it will end with barter, the use of foreign currencies and/or the use of gold (12).<br /><br />The next question is, where do loans fit into the picture? I have been having a hissy-fit about how people get themselves into debt, and how government wants to re-start loans, as though borrowing made the world go around.<br /><br />Chapter 6, “Loan Banking,” is about that. Normally in a free market, people keep their savings in a bank at interest, and the bank lends and invests this money at a higher interest. Dr. Rothbard gives a very simple, scaled-down summary of how the books in loan banks are kept (13), although, of course, we have to remember that the first edition of the book was written before the sophisticated computers we now have were in use. But I doubt much has really changed in this regard. What change has occurred is the whole banking system because of central banking. For one thing, Federal Reserve and government actions have changed market signals in such a way that people borrow money they believe they can pay back but later find they cannot.<br /><br />After this description of loan banking, Chapter 7 is titled “Deposit Banking.” This is a different kind of banking. In fact, Dr. Rothbard regretted that both kinds of banks were called “banks” (14). Deposit banks came into being as warehouses where people kept their valuables, such as gold and silver, safe. One would leave one's valuables and receive a warehouse receipt, and when he wanted some of these valuables back he would go back to the warehouse and present the receipt.<br /><br />It got so that when people left money in the warehouse, rather than take it out to pay debts, they would remit the receipt to their creditor. This way neither debtor nor creditor would have to make a trip to the warehouse (15).<br /><br />The warehouse finally evolved into the deposit banks, and the warehouse receipts evolved into the checks we are so familiar with. Unlike loan banks, these banks do not borrow the money from depositors; rather they store it. (At least that was the case.) The major difference is that the loan bank borrows and must pay interest and the deposit bank stores and probably charges a fee. The loan bank borrows for a fixed period of time and the depositor makes a time deposit (such as a CD). A depositor of a deposit bank can take money out or put it in at any time (16).<br /><br />Of course, as Dr. Rothbard points out and as everyone has thought, embezzlement is always a temptation. It always has been and always will be, particularly when the stored gold is something fungible like money. The warehouse, or bank, has many depositors and it is very unlikely that very many of them will withdraw their funds at the same time. It might not even be necessary for the embezzler to remove the money itself; he or she might simply write checks against it. Or, today, maybe it is only necessary to change computer records to embezzle or counterfeit money. In the old warehouse days, a dishonest warehouse keeper might have printed out fake warehouse receipts and passed them off as receipts for gold stored.<br /><br />There was a court case in England in 1848 that ruled money deposited in a deposit bank belonged to the banker (as in a loan bank) rather than to the depositor, giving the banker free reign (17). This was a disaster as it went a long way toward paving the way to our present fractional reserve banking. I would also add that it is a disaster twice over, not just because of that but because a ruling by a foreign court in a foreign country was an influence here, undermining our national sovereignty. This is particularly serious these days as “transnationalism” is being advocated by the New World Order crowd, and being taken very seriously. Our side must also take this very real threat seriously.<br /><br />I think most people who set up demand deposit accounts such as checking accounts believe the money in these accounts belongs to the depositor, not the bank. If your deposited money in your checking account is the bank's, then the bank can do any darn thing it wants with it. It could add your money to its balance sheets. As long as the bank keeps your (or the bank considers it its) money right there anyway, it is not going to do that much harm. But, the temptation is not to keep it there, but to lend it out. (Remember, loan banks can do this; it is on the up-and-up because depositors have loaned their money to the bank at interest, but deposit banking is different.) The deposit bank that lends money that is in your checking account is lending your money out which is at the same time also in your account. Problem is, money cannot be in two places at once any more than you and I can. You and the bank's borrower both have receipts for the very same money, and that is fishy at best (18).<br /><br />This is the essence of fractional reserve banking, and this is one way the money supply is increased. To be blunt, it's inflationary and fraudulent (19).<br /><br />This is the creation of money out of thin air (20) and this is probably the single most important point Dr. Rothbard is making in the book.<br /><br />It is also the most important reason I am doing this particular project at this particular time. Our economy is in a state of ruin, and this increase in the money supply with money created out of thin air, backed up by nothing but faith, is the root cause.<br /><br />Maybe you think I am a conspiracy theorist and this is exaggerated or completely wrong. No! This is really how it is and has been for a very long time. It caused the Great Depression, and I am about to review Dr. Rothbard's <em>America's Great Depression</em>. It is about to cause another great depression.<br /><br />And, of course, again as we have mentioned, the new money does not reach all parts of the economy at the same time. It is injected into the economy at some particular point, and that point is more likely to be Joe Biden than Joe Blow (21). Those at that point will benefit at the expense of the rest of us, and wealth will gravitate toward establishment interests.<br /><br />Dr. Rothbard points out (22) that the expansion of bank credit (which this is) makes banks “shaky,” as he puts it, and leaves them open to a contraction of their credit. If the money supply contracts, so will prices, and people will want to withdraw money from the shaky banks. Banks will want to call in or not renew loans (23).<br /><br />This is what seems to be happening now if I read it right, and government wants to get the lending and borrowing (and inflation) going again.<br /><br />Bank credit expansion causes a “boom,” which is inflationary with the late receivers of the new money having to pay what amounts to a tax to the early receivers, and this is followed by a contraction where credit and investments are liquidated. This is the business cycle (24).<br /><br />Because of the ability to inflate, deposit banks and loan banks started to combine, forming “commercial banks” (25).<br /><br />This made it possible to inflate even more. What we need, Dr. Rothbard says, is a requirement that banks keep a 100 percent reserve (26). What happens if banking is left entirely free? Some believe inflation will go totally wild, while others believe the market would keep it in check.<br /><br />Chapter 8 is about that. What if banks were given free reign and could treat demand deposits such as your checking account as though they were the bank's and not the depositor's? Those who advocate central banking say this would cause hyper-inflation. I would like to know exactly what they believe central banking causes. However, in a free market, a bank, like any other business, must earn a reputation. I can open a restaurant or health clinic without a license. But, I will not see customers arriving unless and until I can show that my food is fit to eat or that my doctors are real doctors. Chances are I will hire a reputable firm (if not five of them) to come in and carry on an inspection in hopes of earning their seal of approval, since if I do not convince people that I am legitimate, I will not make a dime in profits. And I will have to continue to toe the line. The same goes for banks. In a free market they toe the line and do not claim to have money they do not have, and withdrawal requests are promptly granted, or else it is belly-up.<br /><br />Not only that, people have to be willing to use the bank's drafts. If you get a draft or counter check from the Bank of America from someone in payment for something (I paid the car dealership last year with just such a check), the recipients (once they know the check is actually a BOA check) need to have enough trust in the BofA to accept it. They “know” that when they take the check to the bank, the money will be there.<br /><br />The problem is, it might not be! Under fractional reserve banking, the banks do not have enough cash on hand to cover all the deposits recorded on their books. If enough of their depositors decided to withdraw their funds at a given time, or a “run” on the bank occurred, there would be trouble (27). A few months ago, people were losing faith and a lot of withdrawals were taking place, and the banks had to get more cash (backed up by nothing) from the Federal Reserve.<br /><br />I was in Canada at the time and felt some anxiety about getting back into the country to stock up on cash. By the time I crossed the border, things had cooled off a bit, but I bee-lined to my bank's ATM.<br /><br />Also, a free market in banking will allow many banks to operate, limiting the clientele of each one (28). In a free market, my BofA draft to the car dealership would probably be cashed with the money ending up at a competitive bank. The BofA had better be prepared to come up with the cash. Of course, in my counter check's case it was, but not because of free banking. Actually, all the banks are tied together to the Fed, so we are all clients of the same bank. There might be an element of competition. Many years ago I was a lot sloppier and did not always balance my checkbook. One time I overdrew and had to go into overdraft protection, i.e., I had to actually borrow. When the bill came, not only did I pay it in full the same day it came, but I did it in person. Later I got a letter telling me that this payment had been late, and that in order to keep my overdraft protection I would have to fill out a form listing all my monthly payments. I adamantly refused for a number of reasons, not the very least of which was the very on-time payment. After I would not budge for a few weeks I had to threaten to close my checking and savings accounts and move them to another bank if the bank did not relent. It relented. What I did not tell it, however, was that from then on I would be more careful about balancing my books.<br /><br />So, the banks at least feel competitive. Most people probably think the banks are different companies, and, on paper I think they are. However, they are all tied together by the Federal Reserve. The only exceptions I can think of might be state banks and credit unions, but I really don't know much about these.<br /><br />This element of competition is a brake of sorts on inflation, as no bank wants to be the first to be hit with a bank run, but that could change at any time. Under free banking, competition is a major brake on inflation with no change in sight.<br /><br />What little competition there exists is likely to end. Right now (I am writing this the night before the Obama Inauguration) there is talk of “nationalization” of the Bank of America, Citibank, and other major banks. This talk is not just libertarian and Constitutionalist hooey. The bailouts and the move toward more regulation are a very big step in that direction. Whether these bailouts are gifts or “loans” does not matter. You infuse government money into an area, more regulation follows as surely as night follows day, and whoever makes decisions over a concern might as well be the owner. So this talk of nationalization must be taken very, very seriously. That will stop competition dead in its tracks, and fuel inflation.<br /><br />The only brake on inflation in that case is banks in other countries (29). If we are going to have a world central bank, that the establishment is working toward with its “New World Order,” we are done for.<br /><br />In conclusion to that chapter, free market banking is the best way to curb inflation. Dr. Rothbard then turns to the real reason for central banking: to use government-granted privilege to remove the barriers to inflation (30). A central bank has the government monopoly privilege of issuing bank notes or cash. For banks to issue cash to clients, they have to obtain the cash from the central bank. So the central bank is the “bankers' bank.”<br /><br />Next is a discussion of exactly how the money supply is expanded (and even contracted sometimes) (31) which I will not go into; for one thing it is like a very complicated shell game. Suffice it to say that the banks hold only a fraction of the money that is deposited in them.<br /><br />The way things are now, with the Federal Reserve and totally fiat money (fiat meaning not backed up by gold or any other commodity), all money kept in banks is subject to inflation (32). What should one do? Yank your money out? Even I use a bank, because paper money kept in one's house or one's car is subject to theft. This is not to mention that, while it is technically legal to have as much cash as one wants, if one is caught with enough of it, it will be stolen (the euphemism is “forfeited”) by government officials and the owner will be labeled a “drug dealer.” Many innocent people have lost their life savings in this manner (33) to greedy government.<br /><br />So the use of a bank is practical. Don't “do your part.” Rather, look out for number one.<br /><br />If your bank inflates, it is not checked by competing banks. They are really all the same bank under the Federal Reserve, or at least they are cartelized. The banks welcome this as it is their road to easy wealth (34).<br /><br />Banks are allowed to inflate because the reserve requirement is only a fraction of the money that is deposited. For example, if the reserve requirement is 1/10, then the banks can lend $100 for every $10 deposited. This is what the infamous money multiplier is (35). They want to lend as much as they can, too, as this is how they make their profits. They also want to minimize the reserve requirements in order to make more loans. This increases the money supply. If the reserve requirement is changed from 1/10 to 1/20, the money supply can double! (36).<br /><br />How are total reserves determined? This is what Chapter 10 is about. There are two general factors, one being the marketplace and the other being the central bank.<br /><br />The public's demand for cash is a big market factor. Most people feel the way I do about keeping large amounts of cash at home or in their car because they fear theft. (I am dismayed that a lot of people are oblivious to the specter of asset forfeiture of cash by police or they are foolish enough to believe that it is legitimate.) So most people keep most of their money at the bank. The more money is in the bank, the more the bank can inflate on that money. This is another reason banks dread bank runs: Money withdrawn is money that cannot be inflated upon (37).<br /><br />In 1933, the federal government decided to try to end the possibility of the loss in public confidence that causes bank runs. It established the Federal Deposit Insurance Corporation (FDIC) which used the power of government to guarantee replacement of deposits that are lost up to a very high amount. This opened the door to far more inflation, as money would be manufactured out of thin air to replace the lost funds.<br /><br />Under a gold standard, the public's demand for gold would similarly affect the total reserves. Of course, we are now completely off the gold standard (38).<br /><br />The Federal Reserve can expand or contract the total bank reserves by increasing or decreasing its outstanding loans to banks. (It also uses this power to manipulate bank behavior) (39).<br /><br />There are short term loans that are usually made to bring a bank back into line with the reserve requirement, and corrections are made so as to return the loan as soon as possible (40). More often nowadays, however, banks borrow for this reason from other banks (41).<br /><br />But by far the most important method of manipulating bank reserves by the central bank is open market operations. The term “open market” does not have anything to do with any free market. What the central bank does is to buy an asset, any asset. (Usually these assets are U.S. government securities.) These assets are paid for by check, the check being backed up by nothing. The recipient of the check takes it to a local bank to cash. The local bank deposits the check at the central bank, increasing the local bank's reserves. The money supply has gone up by the amount of the check and the amount that can be inflated upon it by more bank loans. How much more depends on the reserve requirement (42).<br /><br />Conversely, the reverse is true if the Fed holds an open market sale, selling off assets.<br /><br />Inflation could be halted in its tracks by a law prohibiting the purchases of assets by the Fed (under the naive assumption that the law would be followed). But this will not happen; the government puts the blame for inflation everywhere but where it belongs (43).<br /><br />Listen to the mainstream news these days and you will see this in action! Of course, Dr. Rothbard believes, along with Ron Paul (and I agree) that the real solution to inflation is to abolish the Fed and return to the gold standard!<br /><br />Exactly how is bank credit expanded? This is what Chapter 11 explains. Now, if all the banks were the same company, i.e., the same bank with many branches, this would be no problem as all the bank would need to do for a loan client would be to simply open an account for the borrower, list the amount loaned, and allow the borrower to write checks (44). The recipients of these checks would also be clients of the same banks and would deposit the checks there.<br /><br />But, the way things are now, at least here in the U.S., there are many bank companies (at least on paper) and they compete (sort of). Dr. Rothbard is reviewing what he has gone over once: What happens if the recipient of the borrower's check is a client of a different bank? That bank goes to the first bank with the check for cash. But with the reserve requirement being so low, the first bank might not have the cash. Then what? Bankruptcy?<br /><br />That is why a bank cannot just lend money in such amounts as to simply comply with the minimum reserve ratio. They all expand much less, according to a formula. The expansion is such that the first bank will be able to pay the second bank, so this problem is averted (45). In the end, the aggregate expansion (on the part of all the banks) is as high as it can be.<br /><br />So the Federal Reserve purchases a bond, this expands the money supply by however much it paid for the bond, and then when the check for it was deposited, the money supply was expanded more by the portion of that money that was loaned out. That money too was spent and the check taken to a third bank. And so on and so on (46). What I could see here was that the same money was added over and over, and I have to wonder how that kind of arithmetic could be used. Had I done this in third grade, I would have had to stay after school.<br /><br />But this is how it is done, and this is how the “money multiplier” (inflation) comes about.<br /><br />Now, the next question is, how do government deficits come into play? This is an important question because the Bush administration spent with the abandon of a drunken sailor (this is really unfair, to drunken sailors that is) and I am fearful of how the Obama administration will behave. Are government deficits really as important as free market people claim?<br /><br />Actually, government deficits and inflation do not necessarily go together. Government can be in the black while the Fed is inflating and vice versa. The government bonds the Fed buys are old ones (47). Deficits can be financed by the Treasury’s selling new bonds to the public which shifts money to the Treasury but does not create any new money (48).<br /><br />The problem here is that money spent on government bonds is money taken away from true private-sector production. And, when payback time comes, it will raise the tax burden. This is why free market people complain that deficit spending is a tax on future generations who will be in the work force when payback time comes (49).<br /><br />(They no longer simply “print out” currency to spend, even though free market people often say the “printing presses at the mint speed up.” That is purely an expression, but it boils down to the very same thing.)<br /><br />The Treasury might also sell new bonds to commercial banks. This “monetizing the debt” creates new demand deposits to cover a government deficit. Thus, future taxpayers must not only pay for this with their taxes, but they must pay interest on it as well. This is both inflationary and a future tax burden, and it lines bankers' pockets (50).<br /><br />So actually there is a connection between government deficits and inflation, and inflation if left unchecked can lead to runaway inflation (51).<br /><br />So much for the nuts and bolts. Not very pretty, is it?<br /><br />How did the scourge of central banking come to be, anyway? Dr. Rothbard turns to that next.<br /><br />It started in England in the 1600s (52) with a deal between a government nearly broke from war (chances are that war was no more legal or moral than our wars in Iraq and Afghanistan, but that is only my making a presumption) and corrupt money-changers. The Whig Party was in control and that consisted of special-privileged monopolists. The foreign policy was imperialist and mercantilist (Gads! This sounds familiar!), the very thing that our Founders were so dead set against and that spurred on our founding. It was also the very same system we have today, thanks largely to the three villains I raked over the coals in Three Enemies.<br /><br />These shenanigans cost big money then just as they do now. Government bonds did not sell, and the government did not dare raise taxes, as civil wars had been fought over this issue (53).<br /><br />Where would the money come from? A diabolical scheme was hatched. A “Bank of England” would be founded, which could “buy” government bonds with “money” simply printed up. This “bank” would run the presses and print out notes. If you had a copier in your basement, printed up bills, took them to the store and tried to pass them off as the real deal you would be guilty of counterfeiting.<br /><br />But that is exactly what this “Bank of England” did. It printed them and took them to the treasury and “bought” bonds. Then the government was no longer broke, and could finance its deficit.<br /><br />Once this “bank” was chartered, the king and some in Parliament rushed right in and bought shares of stock in it. This whole thing was shrouded in mystery (which I read as hocus-pocus) and prestige, and I can only imagine the pomp and ceremony that went with it.<br /><br />Later – long story short – the government allowed the Bank of England to stop paying its obligations in gold, but allowing it to demand payments to it be made in gold. This happened on and off for quite some time. The bank nearly failed, however, when some enterprising Tories founded a competing bank. This failed, and the Bank of England got its cronies in Parliament to outlaw such competition (54). Not only that, but banks became more strictly regulated in order to empower the Bank of England more.<br /><br />England was beset with boom and bust, inflation and all that goes with it thanks to the central bank. Scotland, by contrast, had free banking and none of these problems (55). Mainstream historians and economists conveniently forget this. In fact, Scottish money was so much better than English that in border counties the English were using it instead of their own.<br /><br />Later, in 1844, finally a classical liberal (libertarian), Sir Robert Peel became prime minister (56). As an advocate of 100 percent reserves, he instituted a crackdown on the Bank of England to stem the tide of inflation. However, his policies were flawed. Rather than close down the central bank, he gave it monopoly power. Monopoly privilege always has a corrupting influence. He also insisted that demand deposits were not part of the money supply, and that their issue (which I believe could mean loans of demand deposits) was not inflationary. So fractional reserve banking was not ended at all (57).<br /><br />Let that be a word to the wise. It is a major step forward if a libertarian is in high public office. At least we would have a fighting chance to remove many shackles, but that libertarian had better understand monetary economics backwards, forwards, and sideways or else his or her policies might backfire.<br /><br />In the United States, central banking got its start in the beginning. Not all the Founders were decentralist, small-government libertarians. Robert Morris, a war contractor supplying the Revolution, drove a central bank through the Continental Congress. He also favored a mercantilist system of the English sort against which the people had rebelled (58). A central bank would be part and parcel of that. Needless to say, a lot of money flowed into Morris's pockets, just as today it lines establishment pockets as a result.<br /><br />Fortunately, the public was sharp (would that it would be so sharp today) and notes from the central bank were not well received. Finally, Morris decided the bank would have to change into a commercial bank like any other, and the federal government gave up its stock in it.<br /><br />That ended the central bank scourge here in the States, for the time being at least.<br /><br />But, alas, self-proclaimed authority always rears its ugly head, which is why the price of freedom is eternal vigilance.<br /><br />Morris's cronies, called Nationalists (they called themselves “Federalists”), were still bound and determined to foist English-style mercantilism and statism on the American people, most of whom were in the libertarian Thomas Jefferson's camp. Secretary of the Treasury Alexander Hamilton, one of the Founders who was not on the right side, was a lapdog of Morris, and led the charge. Hamilton founded the next central bank, the First Bank of the United States. Unbacked paper money paid government debts and subsidized big-business cronies of government (59).<br /><br />The wholesale price index rose by 72 percent in the 1790s, which should surprise nobody, and a score of new commercial banks came into being. Ditto for state banks and they multiplied like rabbits. These banks could print their own notes. The Jeffersonians could not do much about it as moderates took the wrong side. I really understand as today's libertarians (particularly we radicals) cannot even get a platform except on the Internet. The moderates at least could stop those radicals on the other side, the radical Nationalists or Federalists (60), which slowed down the slide down to despotism, but they also thwarted the rise up to freedom.<br /><br />When this bank's charter was not renewed, causing it to close, free banking was tried again, but this time it did not work very well because it was not really tried! (This is kind of like capitalism today, when so many problems are blamed on capitalism; we do not have even a speck of free-enterprise capitalism.) Under free banking, when a bank cannot pay the checks on it, it goes bankrupt and must close. But this was not allowed. Banks were allowed to not pay their debts, and they were allowed to continue to print notes. This is a free ride, not free banking, and it really opened the floodgates to inflation (61).<br /><br />Something had to be done, and there were two choices. One was to go back to hard (backed-up) money, compelling the banks to redeem in gold or else liquidate. This way was not chosen by the powerful elite. Rather, a new central bank was founded, the Second Bank of the United States, which opened in 1817.<br /><br />At least a few people in Congress were able to be heard advocating a gold standard. Today there is one in Congress, Ron Paul, and how often do you see him on the news? Not very, even though he has a tremendous following, including myself.<br /><br />Just one year later, in 1818, inflation was so rampant that the central bank curtailed loans and credit, beginning an enormous contraction and a depression (62). This seems similar to what we are seeing today.<br /><br />Finally, during the 1820s, a serious move to restore the gold standard and laissez-faire was made. President Andrew Jackson, who was by no means perfect (63), was part of this movement and in 1831 his veto prevented the renewal of the Bank's charter. That veto also got him re-elected in 1832.<br /><br />Some claim there was no inflation in the 1820s because prices did not really rise (the very same thing happened a century later in the 1920s). The reason prices did not rise was gains in productivity increased the amount of goods and services in the market, and this increase pushes prices down. What is important is that prices are higher than they would have been had inflation not occurred (64).<br /><br />Inflation continued even after the central bank was jettisoned, but this time it was for an unrelated reason. There was an influx of silver coins from Mexico, caused by the Mexican government’s minting copper coins and trying to pass them off as equal in value to silver ones. We still had fractional reserve, so we were not in free banking heaven, and banks inflated on top of this silver (65).<br /><br />The deflation and recession that was sure to follow had a very speedy recovery (66). Of course, at that time we were not saddled with any “New Deal” as we were later in the 1930s or any “bailouts” as we are now, which really only make matters worse as those who know sound economic theory understand.<br /><br />But, alas, people did still have confidence in the banks and the cycle continued until the central bank closed in 1841.<br /><br />Meanwhile the states were going broke, as so many are now, and, as now, were pleading for federal help over the objections of the citizens, who at that time had the brains and the backbone to look out for #1 rather than the state and its rich cronies (67). The Whigs were in power and they issued $200 million in bonds to help. Of course at that time that was an astronomical sum, maybe even more than today's bailout.<br /><br />If you read my <em>Three Enemies</em> on this blog, you might remember the Whigs and Henry Clay's totally evil “American System.” I can pick up the strong, putrid stench of that here.<br /><br />Dr. Rothbard points out that the recession at that time was not a hardship on the people (except for a few months), at least not compared to the Great Depression and the deep recession we are experiencing at this time, as I write this on January 28, 2009 (68). There is absolutely no comparison between the economy then and the economy now. Despite all the advanced technology today, problems of unemployment, foreclosures, etc. are rampant. The difference is, today's economy is riddled with regulation, sometimes hair-splitting rules from all levels of too-big and ever-growing government. And the rules are very strict these days with enforcers who act as if they think they are better. In the 1840s, the economy was very free, the freest on earth, allowing individuals to go as far as their ability and ambition would take them.<br /><br />After these episodes, central banking was ended once and for all and a system of “free banking” was instituted. However, it was anything but free; it bore no resemblance to the free banking described by Dr. Rothbard earlier in the book. For one thing, banks were allowed to inflate on top of state government bonds they had invested in (69), meaning they could inflate on state government debt. This, along with a myriad of regulations and special privilege, did not add up to free banking, but at least it was not fiat money.<br /><br />When the War Against Southern Independence began in 1861, however, money (greenbacks) was simply printed up to finance the war. The money supply almost doubled in three years (70). Later, the greenbacks were discontinued, but public debt financed the rest of the war. This public debt was bonds sold to the public, like today's savings bonds or municipal bonds, the bond issues I always vote “No” on.<br /><br />Then the National Banking Acts were passed which were worse for the monetary system than anything else. (I also notice the same names coming up again and again; the same elite fatcats are always at the bottom of it.) This was not a central bank, but it was a cartelized and inflationary banking system. It paved the way to the central bank that has wreaked so much havoc on us during the twentieth and twenty-first centuries so far: the Federal Reserve. The statist mentality prevailing after the turn of the twentieth century made it inevitable that central banking was here to stay. During and after the War of Secession, inflationary policies were going gangbusters (71).<br /><br />After the war, National and State banks proliferated like rabbits and all of them inflated on their deposits (72). This caused a few “panics” (recessions), the last one being in 1907, the worst one before the Federal Reserve. Bankers wanted the possibility of a government bailout were their banks to get into trouble (73). And they wanted money to be “elastic,” a fancy term meaning they wanted government to create more when “needed.” Of course, the entire establishment was on that page; there is no way they could not know that this would cause the gravitation of wealth into establishment coffers. Either they had seen it happen, they had studied it, or they had figured it out. People are not part of the establishment because they are dumb or ignorant.<br /><br />People are part of the establishment because they are evil!<br /><br />This statist, collectivist mentality was called progressivism and (like “progressive” education) it was modeled after Bismarck’s Germany (74). It was about as progressive as taking a wife by clobbering her over the head and dragging her off by the hair, and no more respectful of individual rights. But, alas, the term “progressive” is still used to describe this mentality, and when young people hear the term and look it up in the dictionary, they often say, “Gee! That's me!” I made that mistake myself, but fortunately got disillusioned right quick. The same applies to the term “liberal.” It is very backward and very illiberal.<br /><br />The biggest shots in the establishment held the infamous Jekyll Island, Georgia, meeting in December, 1910, to hammer out the details of the even more infamous Federal Reserve Act of 1913. The year 1913 was a very dark one because of that, and also because the federal income tax was rammed through (via chicanery) in the same year.<br /><br />The Federal Reserve was created for the purpose of inflation (75). For one thing, it had a legal monopoly on the legal printing of notes, so banks had to go to it for money for their customers. The Fed's “reserve banks” got to inflate on top of their deposits at the Fed, member banks could inflate on top of their deposits at reserve banks, and non-member banks could inflate on top of their deposits at member banks (76). This added up to a heck of a lot of inflation! Not only that, the reserve requirement was halved (77).<br /><br />At first, gold certificates were made available. These were backed 100 percent by gold, but it was not long before these were withdrawn by the Fed and substituted for by Federal Reserve notes which were backed only 40 percent (78).<br /><br />Bank deposits rose during the boom of the 1920's. Dr. Rothbard points out that the boom was largely fueled by credit expansion going into time deposits, especially in New York and Chicago where the Fed's open market operations were conducted. These time deposits “were not genuine savings but merely a convenient means by which the commercial banks expanded on top of new reserves generated by open market operations,” he wrote (79). Businesspeople and others would borrow, and any borrowed money they did not need right away would be placed in an interest-bearing time deposit.<br /><br />Dr. Rothbard goes on to name names. It reads like a who's who of the establishment of the time. There were connections with munitions factories which, along with the inflation, spurred us on into unnecessary involvement with World War I (which also led to a draft and the early death of many thousands of the best and brightest).<br /><br />Now, in Chapter 17, “Conclusion: The Present Banking Situation and What to Do About It,” Dr. Rothbard winds the book down. Right off, he says that, after the crash of 1929, the Fed under Hoover went right to work to inflate the currency, with open market purchases and heavy loans to banks. But the public distrusted the banks, and that stonewalled the whole thing. I guess the public was a bit more sophisticated then, at least in that regard. (People were pretty naive, however, being tricked into giving up their gold, obeying a ton of rules that only made things worse, not to mention allowing freedom's arch-enemy Franklin Delano Roosevelt to imprison 110,000 law-abiding Americans of Japanese ancestry for absolutely no reason at all. Please see my <em>Three Enemies</em> essay on this blog where I am proud to have excoriated this evil-doer.)<br /><br />Another evil thing the Roosevelt administration did (the list seems to go on forever; you would think they were trying to stamp out prosperity and individualism forever) was to take the country off the domestic gold standard. Internationally, we were still on the gold standard, albeit with a debased dollar. Americans' gold was taken away (“borrowed,” but of course it was never given back). The Federal Deposit Insurance Corporation guaranteed bank deposits and that calmed the fear of bank runs. It still does. If your bank goes belly-up, the FDIC will refund your money (80). That seems good, but it is only one bright spot in an otherwise dark picture. Individuals are, quite honestly, screwed by the system no matter what they do.<br /><br />What galls me the most is that most people do not even know it! One of these years, I will have to write about the school system...<br /><br />All of this is one thing that prolonged the Great Depression. Another equally important factor was President Herbert Hoover's economic interventions followed by President Roosevelt's, the latter magnifying the former's regimentation of the economy. The Depression went on and on. Dr. Rothbard's very brief list of what they did (81) reads like a brief rundown of what the Bush and Obama administrations are trying to do now, and the results will be no better.<br /><br />After World War II – Dr. Rothbard mentions international monetary policy as a big reason for the United States to enter (82) – there was a turn of events in Europe. Some countries wised up and turned to hard money and free market principles, leaving the U.S. as the most inflationary power. Gold flowed out of the country into the hands of Europeans (83).<br /><br />Of course, one of the darkest days in history, August 15, 1971, the diabolical President Richard Nixon declared a complete end to the gold standard. He also declared an across-the-board price freeze. I did not understand the part about the gold at the time, but even I knew the damage price controls would do. I thought I was having a nightmare.<br /><br />Now we come to the present. Just how is the Fed to control the money supply? And just what is the money supply? With this confusing array of M1, M2, M3, etc., nobody can agree on that (84)! The lines between these Ms get fuzzier. I remember when my savings bank gave me checks to write against my money market account. I also remember when my simple checking account started to pay interest. Checking account money and money market or CD money are not the same M. Or are they? There are lots of changes like that.<br /><br />The real difference between money that is part of the money supply and money that is not part of the money supply, says Dr. Rothbard, is whether it is available in cash, on demand at par (presumably this means without a penalty). If it is, it is part of the money supply. If not, it isn't (85).<br /><br />In other words, your checking account that you use day in and day out is part of the money supply. It is money in, money out all the time. But your certificate of deposit (CD) is a time deposit and you must wait until the end of the term to withdraw or else pay a very large penalty. This is because the bank has loaned the money out on a time loan. That CD is not part of the money supply.<br /><br />“M1” is cold cash plus demand deposits, and things like travelers' checks. “M2” is that plus short term deposits. There are a lot more Ms that I remember from economics courses (seems like they go up to 25 or so), and the higher they go, the more illiquid the money is. I think of the cash in my billfold and money in my checking account as “liquid.” And, I think of my CDs as “gelatinous” (my term, not Dr. Rothbard's) since I can get money out but it will cost me plenty. These, I think, become “liquid” during rollover time. So, what would the CDs actually be? M2 because of their smaller size? M3 because of their longer term? I am not sure and I do not think that is agreed upon (86). What about money I could get by exercising my God-given right to sell a kidney? That money is not at all liquid, but is rock solid. M100 perhaps? That particular liquidation is not on my agenda, at least not for the foreseeable future. That would be last resort, but since individuals have every right in the world to do that, it is a possibility. (A God-given right, though, is not necessarily legal, and man-denied rights include selling body parts, which is illegal. Editor)<br /><br />The Ms are not easy to sort out, as Dr. Rothbard illustrates toward the end of the chapter.<br /><br />Lastly, he discusses how to return to sound money. I guess first of all we have to give the entire establishment one-way tickets to a long and happy retirement some place outside the U.S. and lock the door behind them. The French Riviera perhaps? That expense would be a drop in the bucket compared to the astounding deficit the government has racked up at this time.<br /><br />To abolish the Fed, return to the gold standard, and separate money from state would be necessary. A 100 percent reserve would have to be enforced (87).<br /><br />The dollar must be redeemable in gold on demand, regardless. In a free country, the government has no “emergency powers.” Rights are unalienable and these include the right to own gold. This is the only way to have a true gold standard that people can trust.<br /><br />However, it has to be determined some way how many dollars shall equal an ounce of gold. It was $20, then $35 decades ago, but that is certainly dated now. How about Ludwig von Mises' proposition to use the current market price? Right now I believe that would be about $1000 per ounce [which is down to below $900 toward the end of April. Editor]. This illustrates the inflation we have undergone: Today's dollar is worth about what two cents was at one time. Maybe less! My parents, when they were dating in the early 1930s, frequented restaurants where they could get a full-course dinner for a dime. After dinner, they would go to a local “speakeasy” (an illegal bar during prohibition – they made me proud!! and I wasn't even to be born for quite some time). Today a dinner like that could easily be well more than $20, which is two hundred times as much! So, today's dollar is worth about a half cent!<br /><br />But, once the price of an ounce of gold is established, it must be fixed by definition. A dollar would be defined as 1/1000 of an ounce of gold, just as a yard is defined as three feet.<br /><br />And, Dr. Rothbard adds, the gold that was stolen from the people in 1933 must be returned by the redemption in dollars (88). I personally think it should be returned to the heirs of those from whom it was stolen, but I don't know how or if records were kept.<br /><br />He briefly outlines a step-by-step plan for the changeover (89). After the dollar is defined, all the gold should be removed from Fort Knox and other places where the Treasury has it (is there really any left?) and sent to the banks, liquidating their accounts at the Fed. Banks would have to keep a 100 percent reserve. Banks would have to keep a tight ship or else bank runs would bankrupt them. The minting of coins could be done by private companies on a competitive basis.<br /><br />My only question: What would keep the gold from exiting the country? We would hope other countries would see the benefits of a gold (or some commodity) standard and follow suit with their own gold. Otherwise, that question is unanswered.<br /><br />But, at the end of the day, a gold standard is by far and away better than what we have now.<br /><br />(1) Rothbard, Murray N., <em>The Mystery of Banking</em>, Second Edition, Ludwig von Mises Institute, Auburn, 2008, P. 32.<br /><br />(2) Ibid. P. 34.<br /><br />(3) Ibid. P. 36.<br /><br />(4) Ibid. P. 39.<br /><br />(5) Ibid. P. 44 - 45.<br /><br />(6) Ibid. P. 48.<br /><br />(7) Ibid. P. 51.<br /><br />(8) Ibid. P. 5.<br /><br />(9) Ibid. P. 67.<br /><br />(10) Ibid. P. 68 - 69.<br /><br />(11) Ibid. P. 72.<br /><br />(12) Ibid. P. 74.<br /><br />(13) Ibid. P. 76 - 79.<br /><br />(14) Ibid. P. 85.<br /><br />(15) Ibid. P. 86.<br /><br />(16) Ibid. P. 87.<br /><br />(17) Ibid. P. 92.<br /><br />(18) Ibid. P. 96.<br /><br />(19) Ibid. P. 97.<br /><br />(20) Ibid. P. 98.<br /><br />(21) Ibid. P. 101.<br /><br />(22) Ibid. P. 101.<br /><br />(23) Ibid. P. 102.<br /><br />(24) Ibid. P. 103.<br /><br />(25) Ibid. P. 107.<br /><br />(26) Ibid. P. 110.<br /><br />(27) Ibid. P. 112 - 113.<br /><br />(28) Ibid. P. 114.<br /><br />(29) Ibid. P. 123.<br /><br />(30) Ibid. P. 125.<br /><br />(31) Ibid. P. 126 - 132.<br /><br />(32) Ibid. P. 132.<br /><br />(33) See <a title="http://www.fear.org/" href="http://www.fear.org/" target="_blank">http://www.fear.org/</a><br /><br />(34) The Mystery of Banking P. 134.<br /><br />(35) Ibid. P. 136.<br /><br />(36) Ibid. P. 137 - 138.<br /><br />(37) Ibid. P. 147.<br /><br />(38) Ibid. P. 149.<br /><br />(39) Ibid. P. 149.<br /><br />(40) Ibid. P. 150.<br /><br />(41) Ibid. P. 151.<br /><br />(42) Ibid. P. 155 - 156.<br /><br />(43) Ibid. P. 158.<br /><br />(44) Ibid. P. 161.<br /><br />(45) Ibid. P. 164.<br /><br />(46) Ibid. 166 - 169.<br /><br />(47) Ibid. P. 170.<br /><br />(48) Ibid. P. 171.<br /><br />(49) Ibid. P. 171.<br /><br />(50) Ibid. P. 172.<br /><br />(51) Ibid. P. 176.<br /><br />(52) Ibid. P. 177.<br /><br />(53) Ibid. P. 178.<br /><br />(54) Ibid. P. 180.<br /><br />(55) Ibid. P. 183.<br /><br />(56) Ibid. P. 186.<br /><br />(57) Ibid. P. 188.<br /><br />(58) Ibid. P. 192.<br /><br />(59) Ibid. P. 193 - 194.<br /><br />(60) Ibid. P. 195.<br /><br />(61) Ibid. P. 197.<br /><br />(62) Ibid. P. 203 - 204.<br /><br />(63) According to left-wing historian Howard Zinn, Pres. Jackson mistreated the Indians terribly. See Zinn, Howard, <em>A People's History of the United States</em>, HarperPerennial, New York, 1990.<br /><br />(64) The Mystery of Banking P. 204.<br /><br />(65) Ibid. P. 210.<br /><br />(66) Ibid. P. 211.<br /><br />(67) Ibid. P. 212.<br /><br />(68) Ibid. P. 213 - 214.<br /><br />(70) Ibid. P. 219.<br /><br />(71) Ibid. P. 226 - 229.<br /><br />(72) Ibid. P. 229.<br /><br />(73) Ibid. P. 230.<br /><br />(74) Ibid. P. 232.<br /><br />(75) Ibid. P. 235.<br /><br />(76) Ibid. P. 236. See the reverse pyramid.<br /><br />(77) Ibid. P. 238.<br /><br />(78) Ibid. P. 238.<br /><br />(79) Ibid. P. 240.<br /><br />(80) Ibid. P. 248.<br /><br />(81) Ibid. P. 248.<br /><br />(82) Ibid. P. 249.<br /><br />(83) Ibid. P. 251.<br /><br />(84) Ibid. P. 252.<br /><br />(85) Ibid. P. 254 - 255.<br /><br />(86) Ibid. P. 255 - 256.<br /><br />(87) Ibid. P. 261.<br /><br />(88) Ibid. P. 262.<br /><br />(89) Ibid. P. 263 - 264.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-20491831405478049362009-04-22T17:27:00.003-04:002009-04-23T15:17:02.721-04:00America's Great Depression<div align="center"><span style="font-style: italic;">AMERICA’S GREAT DEPRESSION</span><br />by Murray N. Rothbard</div><div align="left"> </div><div align="left"><br />While reading the introduction to this great work by Dr. Rothbard, one thing stood out immediately: Just about everyone at the time of the Depression accepted the idea that “laissez-faire capitalism was to blame.” They believed that “unreconstructed capitalism” prevailed during the 1920s and that the crash in 1929 “showed” that it could “no longer work.” We needed a top-down management of the economy and then if another depression were to occur, socialism would be the answer (1).<br /><br />Well, the top-down fiscal and monetary management we have suffered through ever since has brought a series of recessions, the worst of which we are now in. And, sure enough, the entire establishment is bleating for one or another degree of socialism.<br /><br />The “unbridled capitalism” of the last decade is being blamed. One who is knowledgeable does not know whether to laugh or cry; it is very frustrating to one who knows that there is very little (if anything) left of free-market capitalism now, especially during the extremely heavy-handed G.W. Bush years.<br /><br />It is assumed that the free market causes depressions. Where is the proof? Or even evidence? There isn’t any. We have not had a free market to cause either the Great Depression or this one, which proves that depressions and recessions can occur in the absence of a free market. We do have evidence, as Dr. Rothbard has shown in many works, including the one I have just reviewed, that the more free the market and the more free banking is, the fewer, milder, and shorter recessions will be. In fact, he and Ludwig von Mises have shown compelling evidence that monetary intervention such as money and credit expansion is the cause of depressions and recessions (2).<br /><br />The aim of this book is to describe and highlight the causes of the 1929 depression. This is not a list of all that happened during the time, but is a trace of cause and effect. We will be looking at 1921 through 1929, the boom period preceding the depression, for causes of it. Then we will be looking at 1929 through 1933 for why it lasted so long.<br /><br />Dr. Rothbard starts off in Chapter 1, “The Positive Theory of the Cycle,” with another obvious statement: If you are going to study a business cycle, then you must base your study on business cycle theory. Just crunching statistics numbers does not cut it. You need a theory to go on (3). My question: But what if that theory is wrong? Well, let’s see what he says.<br /><br />The problem is, most students of the business cycle have no theory at all.<br /><br />Ludwig von Mises pioneered a cycle theory that stems from general economic theory, and Dr. Rothbard makes the claim that this makes it the only theory that provides a correct explanation (4).<br /><br />Now, a business cycle is not an ordinary business fluctuation. There will be fluctuations in any market. Things change. Entrepreneurs predict consumer wants, sometimes rightly and sometimes wrongly, and consumer wants, like time preferences, change. Also, technological improvements and weather changes occur. We can expect that. I am a very healthy female person and most days I feel really good, but there are some days I feel less good or, rarely, really lousy, and some days I feel absolutely great, on a monthly or non-monthly basis and I don’t think anything of it. These are fluctuations. We do not have the “evenly rotating economy” Dr. Rothbard described in Man, Economy and State for the purpose of illustrating his points. That is why there never has been and never will any “stability.” Conditions change and people change. This is what “fluctuations” are (5).<br /><br />I used to love ramen noodles and eat them every day. Now, I am sick and tired of them. Egg noodles are now preferred. This is a change in one consumer’s wants. Everyone changes in these small ways. Sometimes, many people suddenly start to like something, such as hula hoops in the summer of 1958. Some entrepreneur is still rolling in dough from that! But, these are fluctuations, the former being almost insignificant, and the latter being very significant at that time. Business cycle theory does not deal with this.<br /><br />Business cycle theory deals with when there is a general (across the economy) boom or depression. It would not deal with a person’s, even a million people’s switching from ramen to egg noodles. It would deal with supply, demand, and prices all (or mostly) moving up or down. In other words, we are dealing with what is going on across the board. Such movements across the board are transmitted by money. Causes for these changes occur in the monetary sphere (6). We have already discussed changes in the supply of money which change the general price level.<br /><br />But, the question is, why is this so important to business cycle theory?<br /><br />It is because of a “cluster of business errors,” Dr. Rothbard explains. It takes time to explain it all. It is too bad that most people simply cannot or will not take the time to study this. They want 30-second sound bites. When it comes to this subject, 30-second sound bites simply do not cut it, but most people simply will not listen any longer than that. They believe they are “well-read” if they read the newspaper. They are infantile, and it is not entirely their fault. The establishment has planned it that way, first by what passes for “education,” and second by keeping the tax and regulatory level so high that a two-parent family might have to have four paychecks (four!) just to keep up!<br /><br />They do not have any time! How is a four-paycheck family with three children (with layoffs and foreclosure a real possibility, not to mention pensions, IRAs and other savings going up in smoke) going to set aside time to study business-cycle theory? It’s not happening! Even as a single young retiree, I resent the hours taken away just keeping myself alive with mundane tasks that seem to go on forever. A family of five has many times as much to do in addition to bringing home the bacon and frying it in a pan. That is why most people almost have to be nailed down to hear even the simplest libertarian precept.<br /><br />Meanwhile, back at the ranch, what is this “cluster of business errors”? Everything seems to be going very nicely, and then rather suddenly it is seen that businesses are making poor decisions. Not just a few businesses, but lots of them. Their wrong decisions cause them to incur losses. Entrepreneurs, whose job it is to take risks and try to foresee consumer and producer needs, make profits when they are right and losses when they are wrong. So, the question is, why would almost all of them err at one time? (7)<br /><br />Right now on the news we have been hearing about all these companies, big and small, some of which are a century old, having made some foolish decisions. We have seen empty storefronts where there have been companies that went out of business because of “foolish” decisions. Also we have seen homeowners being foreclosed because they made the “wrong” decision to buy in the first place.<br /><br />Why? Is it a contagious disease?<br /><br />All this is generated by an expansion of bank credit (8). So, how is bank credit expanded?<br /><br />Dr. Rothbard then begins to talk about interest rates and how they are determined. Generally speaking, on the free market, interest rates are determined by people’s time preferences. If people’s time preferences are high, as they seem to be right now, i.e., if people want what they want when they want it and cannot get to the mall fast enough to spend their money, then they save less. If you spend more, then obviously you save less. Less money in time deposits like CDs means less money for banks to lend, and the law of supply and demand will raise interest rates. Conversely, if time preferences are low and people are frugal and save their money, there will be more available for loans, driving down interest rates. That is on the free market with a 100 percent reserve requirement.<br /><br />But, what about our market which is far from free and has a very low reserve requirement? The nuts and bolts were explained by Dr. Rothbard in The Mystery of Banking. The banks can inflate on top of saved money. If you and all your friends have CDs at the bank, all rolling over at different times, what are the chances of all of you redeeming these CDs at the same time? Very low, and that is what the bank is banking on. So, for every dollar in those CDs, they can lend several dollars. Business people who are borrowing believe, or act as if they believe, that the money they are borrowing is money people put in the bank. However, a lot more money is being loaned out than was deposited and this takes interest rates artificially low.<br /><br />So we have a situation now where few dollars are in CDs (people go to the mall instead) and lots are lent out at low interest. Businesspeople take this borrowed money and use it for capital for their businesses. For instance, the bakery needs a new oven and gets one. These expenditures increase the demand for such capital and producer goods, driving prices on them up. This in turn stimulates more investment in capital goods, leaving less investment in consumer goods.<br /><br />As this new (inflated) money trickles around to wages, etc., unless there has been a shift of some kind, it will be spent in the old consumption-investment proportion as before. Then it will be seen that the change in investment from consumer goods to capital or producer goods was wrong. Capital goods have been overproduced and some of these stand idle (9).<br /><br />It is during the “boom” that these malinvestment errors are made, and they were made because of the expansion of bank credit. The “crisis” appears when consumers re-establish their true desires by continuing old consumption-investment proportions. The “depression” occurs as the economy is re-adjusting to consumer desires. Wasteful projects are being liquidated. It is sad to see so many people being thrown out of work, but that is the result of poor monetary policies, and the continuation of these policies with the bailouts of banks and favored big businesses will only postpone, and worsen, the consequences. The best that can be done is to make the best possible use of capital that is sitting idle (10). This does not include a government takeover.<br /><br />So, now we see, however briefly, how bank credit expansion causes depressions. It is most definitely not any lack of consumer spending. And, if government would just get out of the way and allow it, the present recession could end within a year or so, maybe even sooner.<br /><br />Another feature of a depression might be deflation. This is a real silver lining as prices go down giving consumers a break. We might be seeing a bit of that now in early 2009. Possibly prices are not actually going down, but they are not going up compared with the increase in the money supply. People are being wise and braking their spending which is prompting stores to offer discounts. So, tight-fist Alice here trots out the door to the mall, where I find parking easy and prices reasonable. I go to the Foot Locker for some new cross-training shoes, to Home Depot for miscellaneous repair items, to Sports something-or-other for some new sweatsuits and T-shirts, and to Walmart and Target for underwear and socks, and also for some new pumps, slacks, blouses, and maybe a purse for church and more “pulled-up” occasions.<br /><br />Well, what can you expect from someone who considers Super 8 a fancy hotel?<br /><br />I believe that the continued injection of money into the money supply will fuel inflation again, so needed items should be bought now. My old table radio is wearing out and music means a lot to me, so I got a new Bose high-gain table radio with a special high-gain antenna to replace it. Too bad I do not need a new TV, computer, desk, couch or other furniture. Get it anyway? No. There is never any reason to get un-needed items unless you believe you can sell them at a profit later. Storage does cost.<br /><br />Deflation is a blessing, but it does not always occur during a recession. Deflation is actually a lowering of the money supply which I do not believe is happening unless people are hoarding money. If prices are not rising I think it is mostly due to lowered aggregate demand.<br /><br />But, Dr. Rothbard says the depression begins when inflation ends (11), and depression (or recession) has definitely begun. So, I don’t pretend to know; I just know that businesses are closing, layoffs and foreclosures (symptoms of deflation) are all over the news but government is still in bailouts using un-backed money (symptoms of inflation, especially when banks are on the receiving end of that money).<br /><br />Another symptom of depression is the demand for money (12). That also tends to lower prices as people brake their spending and pay off debts. That is smart. Businesses, in the rash of bankruptcies, are cautious. That is smart too. Government’s admonitions to go forth and spend are being wisely ignored. Part of President Obama’s bailout plan includes what I consider a small tax break. Good. I resent the implication that allowing people to keep their own hard-earned money constitutes a bailout, but I never met a tax break I didn’t like, so at least that much is good.<br /><br />This “hoarding” of money and other items, as politically incorrect as it is, is downright good. It does not harm the recovery. What brings about the recovery is the prices of capital goods falling faster than the prices of consumer goods. The fact that businesses have to pay a lot less for capital goods and can charge a little less for consumer goods means a greater profit margin.<br /><br />This deflation, coupled with less spending and more saving, will end the depression, barring government interference. You cannot spend yourself rich. But you can prosper if you save.<br /><br />So, what should the government do? Mr. Libertarian, as Lew Rockwell calls Dr. Rothbard, says it should do nothing. Stay out of the way. Any government action will either have no effect at all or will do harm. Remember what the Roosevelt administration did, what the Nixon administration did, and what the Bush and Obama administrations did and are doing. Harm, harm, and more harm.<br /><br />The government’s favorite “cures” for a depression are the very things that will delay the recovery. These are preventing or delaying the liquidation with bailouts, furthering inflation with the encouragement of more loans, keeping wages and prices higher, telling people to spend, spend, spend, and, of course government deficit spending (13). This is what was done during the Great Depression and this is what is being done now.<br /><br />If politicians and bureaucrats have ants in their pants and have to act, what they can do is slash government spending and taxes, but I do not think this is quite what they have in mind. Such action will tend to increase people’s propensity to save (14).<br /><br />The best way to deal with a depression is to prevent it in the first place. First, the government must prevent inflationary credit expansion from the beginning. This could be done by a system of competitive free banking as described in The Mystery of Banking, and defining a fractional reserve as the fraud it actually is (15).<br /><br />Of course the establishment will not hear of it! Of course not! After all, they have a lot to lose if they concede that freedom is the way to go. So Dr. Rothbard discusses some Keynesian answers to his and Mises’ proposals.<br /><br />One Keynesian complaint about Austrian and classical economics is the association between savings and investment. The Keynesians claim that there is no common ground between the two, for “savings” are taken out of the economy, they say, and “investments” are plowed back into it. But, where does investment money come from other than savings? If I invest in $1000 worth of gold today because I am convinced that inflation is nigh, where am I going to get the grand? Either from savings, or from bank credit, but we have already seen the results of bank credit. I could borrow from a friend, but then it is my friend’s savings. Or I could invest the $1000 in future spending by locking it up in a safe. In any case, when a person has money, he decides how much to spend now and how much to spend later and that depends on his time preference (16). If one locks the cash up, one’s demand for money has increased. This is a saving and an investment in the future. Saving is really the same thing as investing.<br /><br />The Keynesians also claim that interest rates are determined by some “liquidity preference,” which means demand for money. I guess it means they think people squirrel away cash. I think nearly everyone does hide some cash, but not enough to affect anything. In a free market, interest rates are determined by people’s time preferences, the same as is the ratio of consumption to savings. Of course the natural (time-preference) rate of interest is what Dr. Rothbard refers to, which is not necessarily the interest being paid on loans (17).<br /><br />Next, we get into a section on Keynesianism and wages. During deflation prices fall. As much as we’d all like to see wages hang steady, they are a cost, a price, the price of labor, and have to fall too. And, under normal circumstances, they cannot rise over free-market rates without unemployment. But Keynesians want to prop wages up regardless. They seem to (conveniently) forget that when prices and wages both drop, real wages do not drop. Governments and unions keep wages artificially high, and they advocate inflation to curb unemployment. The inflation brings real wages down, and the unions and the government do not object to that, which proves to me that they really do not care about the wage-earner. What they really want is to line fat-cat pockets, which this does.<br /><br />Right now we hear of people – you might be one of them – who are out of a job due to massive lay-offs and are sending resumes out by the thousands with no response at all. Many of these people would be glad to forgo benefits and/or accept low wages as anything is better than what they are getting now. But, this is not allowed and I do not hear any talk from the establishment about changing the rules. They have to know this! It is not rocket science, but they care so little about the individual that to really help him is out of the question. And some workers have been fooled into buying into that. They are devoted to their unions, or believe in the system (read believe that Obama will save them) or both (18). To allow wage rates to drop would allow more hiring (19).<br /><br />One must remember that, when government sets minimum wages, people who really want to work and would accept lower wages are barred. Those who are not willing to work at the lower wage can always decline a job. Nobody is forcing them. What this means is that government is making a decision for you that you have every right to make yourself based on your rational self-interest.<br /><br />You have the right to negotiate your wage the same as you have the right take a drug or drive without a seatbelt. It is your life; God in His infinite wisdom gave it to you as your sole property. And, no matter how many laws are made, you still have this right as rights are unalienable.<br /><br />Sometimes something other than a boom precipitates an economic crisis, as Dr. Rothbard begins with in Chapter 3, “Some Alternative Explanations of Depression: A Critique.” These are things like a cutoff of an important import, a sharp increase in taxation, or a sudden distrust in banks. These are all government-precipitated but I would think that other things like weather problems, such as the extra-severe winter this year in eastern parts of the country, would qualify. But I believe Dr. Rothbard in this book is sticking to problems caused by economic policies which explain the deeper causes of the Great Depression and myths about these causes (20).<br /><br />One of these myths, very easy to see through by anyone who is willing to so much as peek out of the box, is that general “overproduction” is a cause, or the cause of a depression. The problem that we now have is being caused by too many goods and services? How can that be when people’s wants seem to go on forever? Resources are scarce, but one’s wants are plentiful. Even the Keynesians agree with that. As long as there are wants, production is needed to satisfy them.<br /><br />The establishment bleats, however, the goods are there, but people cannot afford them. The answer is simple. Even the “greediest” businesspeople need to get rid of their merchandise since they need money too. So, whether they like it or not, they have to lower their prices or else keep the merchandise. They either accept low prices or they make no money at all. So, down prices come and more people start buying (21).<br /><br />The problem here is not that items must be sold at too-low prices. The problem is that the businessperson paid too much to buy or make these items. This is one of that cluster of errors that so many businesspeople made at the same time that Dr. Rothbard already discussed. Production went into unprofitable lines because of the expansion of credit. Any overproduction was in these unprofitable lines that caused underproduction in other lines (22).<br /><br />Corollary to the idea of “overproduction” is the idea of “underconsumption.” The idea is that production over-ran consumption during the boom. But, then, why did costs rise so much that products are unprofitable at selling prices? See above (23).<br /><br />Dr. Rothbard next attacks the establishment’s myth of “the acceleration principle.” This is the idea that consumption (which the government seems to be encouraging) will add to production. This seems plausible, but only to the economic theory novice. Actually, the only way to increase production is by saving (investing). We need to think of basics. Remember Crusoe. In order to produce, we need capital. To get capital we need to save. To save, we must curtail consumption. The only other way is expansion of credit, which leads down the path to depression (24).<br /><br />There are many things wrong with the acceleration principle, but that is the main one.<br /><br />Only the Austrian school of economic thought (the libertarian school that is associated with Dr. Rothbard, Ludwig von Mises, and Friederich Hayek, and the one I subscribe to) regards an inflationary boom as a “bad” thing. It isn’t that we don’t like prosperity – of course we do. But the inflationary boom necessitates a depression. And, the longer and “boomier” the boom, the longer and worse the depression. We have seen why in these works by Rothbard.<br /><br />Now, we turn to Part II of the book: “The Inflationary Boom: 1921 - 1929.”<br /><br />One big mistake that most economic theories make is to use statistics to prove one theory or disprove another. Statistics reflect the operation of numerous causal forces. One of the things that always happens when bank credit is expanded is that interest rates go lower than they would have gone otherwise. But, a statistic will show a certain interest rate only; it will not show what the rate would have been without credit expansion (25).<br /><br />The same goes for consumer prices during the 1920s. This was a highly inflationary period, but prices remained steady or even dropped. If you go by statistics only, you might think there was no inflation. There was, though, great technological progress during that time, such as electricity, internal combustion engines, telephones, and radio becoming widespread and making it possible to produce more goods faster and less expensively. This had a downward pressure on prices. Had there not been inflation, prices would have dropped much more, and more people would have been able to partake in prosperity. But, statistics do not show that.<br /><br />So, exactly how much did the money supply increase between 1921 and 1929? The table on P. 88 shows it increased by more than half again (63% he later states). The table (I wish I could reproduce it here) is broken down by currency outside of banks, demand deposits, time deposits, and other areas, and also shows the annual change in money supply.<br /><br />That is your evidence of inflation in the 1920s. I greatly fear the money supply has been increasing faster than that during the Bush years. We were still on the gold standard in the 1920s. The inflation took place in the form of bank loans to businesses. The increase in the money supply was not covered by any increase in the gold supply regardless of some discussions of 1920s inflation (26). The gold supply did increase but the dollar supply increased a lot more. The banking system was actually bankrupt (27). So, exactly what was responsible for all of this? Well, duh! Greedy government and government-connected fatcats, of course, but how did they do it?<br /><br />Dr. Rothbard said that currency in circulation (meaning pocket money) did not increase. The expansion took place in bank deposits and other monetary credit. Bank deposits are the foundation on which expansion is based, as he explained earlier. The reserve requirement varied according to where the bank was, but 13 percent was the highest. “Country” banks had the lowest requirement, 3 percent (28). So, was there a shift in demand deposits to “country” banks? Actually, there was not, which surprised me. Nor was there a shift from Fed member to Fed non-member banks.<br /><br />However, there was an increase in the percentage of time deposits in the ‘20s. This is important as the reserve requirement on time deposits was much lower than that on demand deposits (both were obscenely low). There were time deposits in commercial banks (besides S&Ls) and commercial banks have a lot to gain by these, so of course they pitched time deposits to their customers, presumably by dangling attractive interest rates. I remember this happening in the early 1980s. I got to the bank and it was full of other yuppies with their tongues hanging out because of 15 percent interest rates. We were experiencing 18 percent inflation, but a loss of 3 percent was a lot better than a loss of 18 percent, so I bit too. What irked me the most then and still does now was that most people thought they were gaining 15 percent rather than losing 3 percent. Can’t they do simple arithmetic? Or is their blind faith in the system really that abject?<br /><br />Thus, a change in reserve requirements was a definite factor, and so was a change in the total bank reserves themselves. The increase in total reserves accounted for more than 80 percent of the inflation (29).<br /><br />But what caused the increase in reserves? This is key. Was this controlled by the Fed or another part of the government, or was it the result of market forces? At that time, one could deposit gold at the bank, and the bank would add that gold to its reserves at the Fed. (Most of these gold deposits were foreign transactions.) Of course at the time people did not know the coming Roosevelt administration was going to “borrow” (read steal) the people’s gold.<br /><br />Let’s stop here a moment for a sidebar, a very important lesson that I hope you have already learned. If government at any level ever, and I mean ever wants to “borrow” anything, gold, guns, toilet paper, anything, and offers you a receipt, even a framed, engraved receipt, along with an ironclad promise on a stack of Bibles to return the item, do not under any circumstances whatsoever turn over your item if you value it. You will probably never see it again.<br /><br />Also, fellow dissidents, listen up, if the government (or a firm you have never heard of) “invites” you to go and collect a “prize” you have “won,” don’t go. This is how they find and catch crooks. Well, crooks are dumb enough to fall for that, but we are not.<br /><br />Meanwhile, back at the ranch, people would deposit their gold at the bank. This was the only increase or decrease of reserves the marketplace controlled. Other ways to increase or decrease reserves were controlled by the Fed or by the government (30). At the top of this list is Open Market purchases by the Fed. Then comes Fed loans to banks, and several more causes of changes in reserves. There are two tables shown on P. 102 and P. 103 that depict the forces causing reserve changes in the 1920s, and the rates in these changes. Reserves controlled by the market (i.e., gold reserves) declined, while reserves controlled by the Fed and the government increased dramatically. Dr. Rothbard believes this was entirely deliberate. It is a cinch, however, that deliberate or not, the inflation was not caused by an influx of gold. It does appear as though continuous and permanent inflation was the Fed’s goal (31). Loans to banks were on very easy terms; banks could borrow from the Fed at well below market rates, then lend at market rates (or maybe somewhat below), making a tidy profit on what amounts to a cost-plus basis for the purpose of helping all kinds of “legitimate” business (read “favored” business which obviously means big, pro-establishment business, and of course campaign contributions were involved then as now).<br /><br />This is the result of a bailout having “strings attached.” We had a “no-strings” bailout in 2008. (I am not so sure there were really no strings.) For the coming bailout (or “stimulus package” as they insist on calling it) there will be “oversight” and regulations, so we will have loans going to favored recipients (read politically correct recipients) and not to other equally legitimate businesses. This whole thing just opens the door to even more government manipulation of all society, causing distortions in the marketplace, and limiting freedom and opportunities for individuals.<br /><br />And, now, as another sidebar, I see where there is some close observation of the details of the package, after Pres. Obama declined to talk about it except in general terms. We see there is some further government spying thrown in and ways to even further extend the list of people who will not be allowed to buy a gun for one reason or another.<br /><br />Now, we go from various causes of the changing of reserves to the actual cause of the boom of the 1920s. One might ask, why are you comparing the ill actions of government during the boom with the ill actions of the government now during today’s recession? The reason is that the actions of government do compare. In the 1920s these policies kept the boom going (which made the policies appear to work) and a boom caused by credit expansion must end with a depression when credit is contracted. We have had over-expansion of credit for many years and our chickens have come home to roost. What is the government doing? This “stimulus package” is more of the same policies. Either it will “work” by causing another boom (only to be followed by a worse depression later, maybe even hyper-inflation) or else it will not work and we will sink into a depression anyway. The latter is the lesser of evils.<br /><br />Cheap credit was the policy in the 1920s. There was a recession in 1920 - 1921, and the inflationary policies appeared to end that.<br /><br />Loans to foreign countries factored in too, of course. Then, as now, the U.S. government felt it was responsible to give foreign countries a hand, at tremendous expense to American taxpayers, the more astute of whom were most unwilling. Charities such as World Vision who help the impoverished overseas are fine, in fact I have money deducted monthly for WV, but these are voluntary and actually help people. Government aid and loans are non-consensual and help mostly governments. In the ’20s, Britain was helped in particular. Britain botched an attempt to return to the gold standard after World War I and wound up inflating. Gold left the country for the States, so the U.S. inflated too on the backs of Americans (32) for the benefit of many foreign countries, especially the Brits, particularly their government and labor unions (33), as Dr. Rothbard explains here in a step-by-step fashion (34). This was a major cause of the Great Depression, in which, as I pointed out in Three Enemies, American children were crying for food. And, yes, they did know something like that would happen. How could they not?<br /><br />While this inflation was happening, however, there was seeming prosperity masking the inflation. This was throughout the Western world where central banks were working together (35).<br /><br />The American people were flat-out not allowed to know what was going on. They believed lies and once the crash had come, they blamed capitalism rather than inflationary government (36).<br /><br />This sounds familiar. The mainstream media of today refuses to carry the truth. When the crash came on October 24, 1929, it took people by complete surprise, and when our economy turns in such a way as to show that the current monetary and fiscal policies (particularly the 1,100-page “stimulus package” bill that no law-maker ever got a chance to read) have backfired, people will be surprised again. What needs to be done is to deflate (37)!<br /><br />Herbert Hoover was elected president in 1928 and took over the office in March, 1929. He has the reputation of being a laissez-faire, hands-off president but actually he was far from that. He laid the groundwork for the New Deal, which prolonged the Great Depression for more than a decade when the right policies could have ended it in a very short time. How he ever got the reputation as pro-laissez-faire I will never understand and the same can be said of President George W. Bush. The ultra-pro-government-slanted mainstream media is and was a main culprit along with the abysmal education in economics.<br /><br />The inflationary policies continued. “To help the farmers” was the given reason to make borrowing easier (bad idea) and this was done in late summer after the farmers had done their seasonal borrowing, so it did not help them at all (38). Funny that people did not see this.<br /><br />In the next chapter, Dr. Rothbard turns to “price stability.” This is something else I cannot figure out. What is so great about price stability? Maybe people are interested in knowing what prices will be down the road. I suppose that would be good to know (knowing the price of gas and motels next summer would help me budget my trip), but nobody knows even their own distant future wants, so why would that be so important?<br /><br />In the minds of many, even economists, prices holding steady means inflation is checked. We have learned that this is not necessarily true. The mischief caused by inflation is in the distortion of the relationships between prices. In the 1920s, greatly increased productivity pushed wholesale and consumer prices down to about the same extent that inflation pushed them up, so overall they held steady, obscuring the inflation. Inflation is evidenced by the increase in the money supply (39). This is what economists should be tracking, not prices. Not only that, not all prices were stable: real estate, stocks, rent and wages all increased about 13 percent between 1922 and 1929 (40). Some prices fell and some rose.<br /><br />But the establishment, going all the way back to 1911, was jazzed on stable price levels. When prices are rising, that idea is not so bad since it can put a brake on inflation, but if they are falling the idea is indeed pernicious (41). Not much about “why” was discussed by the establishment except for the non-truth that a fall in prices causes unemployment (42). The labor unions and others on the left picked up the ball on that.<br /><br />Now, we get out of the “boom” era and into the Depression itself, or at least the prelude to it. Dr. Rothbard makes it quite clear that President Herbert Hoover was anything but a free market president. He is quoted in one of his campaign speeches (for a second term) as a real critic of the free market (43). In fact, a lot of the quote could have come from Pres. Obama. He insulted the market by exhorting businesses to “voluntarily” follow rules, but if they did not, the rules would become compulsory. Now, even a dog understands that there is nothing voluntary about this. He was not laissez-faire, and never pretended to be! Nor had he been for quite some time. As Secretary of Commerce under Pres. Harding he pioneered the course away from laissez-faire toward more government economic activity. Of course, among businesses, the biggest businesses hopped on board first (44). This “spirit of cooperation” sowed the seeds of the New Deal.<br /><br />Hoover was fiercely pro-union and pro-collective bargaining, and was in favor of keeping wages above market level. It does not take an advanced degree in economics to realize that this will cause unemployment; indeed this concept is what we cut our baby teeth on.<br /><br />Another government intervention Hoover fought for during the 1920s was the 8-hour work day (45). The steel industry, and others, had a 12-hour day. For some workers, maybe this is obscenely long, especially with a 6-day week. But this is between worker and employer. A worker can always go to work for a more reasonable employer, and the really good workers will. Workers can also organize into associations (unions) and I have no problem with this as long as it is voluntary. I have always refused to join unions precisely because closed shops make membership compulsory. Last winter – if you read my essay you may recall – I wrote about my striding out of an employee meeting when the discussion turned to a compulsory union.<br /><br />But a totally voluntary organization is based on free association, and in a free country this is perfectly legal. Employees who wished for an 8-hour day could take measures to achieve one. They did not need any anti-free-market, pro-government Herbert Hoover to agitate for the passage of any law. But he was doing just that and he was doing a great deal more to promote government intervention into labor and, hence, into the economy as a whole. Terms like “scientific” and “modern” were used to lull people into thinking that all this backward thinking was the new cutting edge (46).<br /><br />Herbert Hoover was instrumental in spreading the new (false) gospel that high wages cause prosperity when actually high productivity causes both prosperity and high wages.<br /><br />In the next lengthy chapter, “The Depression Begins: President Hoover Takes Command,” Dr. Rothbard shows exactly how far Herbert Hoover was from laissez-faire. He was at the interventionist starting gate on October 24, 1929, when the stock market crash sounded the shot and opened the gate. And he was off!<br /><br />The first thing he did after the crash was to call conferences with big business wheels to “persuade” them to do exactly the wrong thing to be done at that time and that was to maintain wage rates and expand their investments. That was very unsound when cutbacks are appropriate for anyone. The brunt of the depression should fall on profits, Hoover said (47), which is even more unsound. Profits motivate business activity, hence motivate higher wages and expansion.<br /><br />But, possibly the most important development in these conferences was that now industrialists would act together rather than as individuals (48). To this particularly individualistic free-market libertarian, that says more about the Hoover administration than anything else.<br /><br />Meanwhile, back at the Federal Reserve, inflation did not end with the boom. More money was poured into the banks to spur lending. This sounds very much like the Bush/Obama bailout plan. It saved shaky banks just as it does today. But should shaky banks be saved? Only if the marketplace decides they should. To pour money into failing businesses is to throw good money after bad. The marketplace will not do that, but the government will, for the sake of its well-connected cronies.<br /><br />A public works program began. Hoover urged governors to expand state public works, and the federal government began to build ships and federal buildings, a wasteful boondoggle that the country could ill afford.<br /><br />If Hoover’s philosophy is sound, then the next time I have a shortfall of funds, I will treat it by booking a Caribbean cruise or something.<br /><br />It was Hoover who began the New Deal Farm program, characterized by farm price supports. Farm intervention had been going on for many years. Farmers became “kept” by subsidies, loans, encouragement of curtailing yields to keep prices up, and other regulation favoring farmers (49). So much for laissez-faire in the 1920s.<br /><br />Kudos to those rugged individualist farmers who defiantly expanded production anyway, and reaped the profits they deserved.<br /><br />What it all added up to was a farm cartel directed by the government for the cartel (50). This is so typical of regulation, and reason number two I so fiercely oppose it (reason number one being the God-given rights of individuals) is that regulation of big business is almost always controlled by the regulated and only poses as protection of the little guy from big-guy abuse. It actually screws the little guy and benefits the big guy. A truly free market levels the playing field.<br /><br />By early 1930, people were lulled into thinking recovery was nigh, thanks to Pres. Hoover taking the bull by the horns and assuming dictatorial control over the economy. A public works program had been started with federal funding to states and municipalities in hopes of opening up jobs. This does sound very much like the “stimulus package” Pres. Obama just signed. There were $915 million in federal dollars in 1930 which would be billions today when you consider the inflation in the last eighty years (51).<br /><br />Well, let’s see what happened as a result of the 1930 bailout. Maybe we will get some idea of what is ahead of us now. It is not good, and of that I am positive.<br /><br />An easy-money policy was instituted. For a while it seemed to be working as the stock market rose, but it fell sharply again, and employment and production fell too.<br /><br />Then Hoover pushed through the Smoot-Hawley Tariff, which hampered the economy, especially the farm economy even more. Obviously a protective tariff is going to be retaliated against by countries at which it is aimed (52).<br /><br />Hoover made it plain that he believed the crash was caused by credit being unavailable, insufficient public works, and underconsumption. Obviously, then as now, the situation is the reverse. Overspending and overextension of credit are the root causes.<br /><br />There were some economists then, as there are now, who understand how foolish these policies are. But these economists are unheeded (53). It is almost impossible to believe that policymakers are that ignorant. The policymakers, politicians and top bureaucrats benefit, so why shouldn’t they turn a blind eye to sound advice? They do benefit from the status quo, as is evidenced by recent news stories (mainstream news, yet!) of Congressional junkets after business executives were publicly raked over the coals by Congresspeople, and a huge bonus for the Postmaster General and for those bureaucrats in Fannie and Freddie who wreaked such havoc, after Pres. Obama announced that mega-bonuses in the private sector had to stop. Is this all just a drama being staged?<br /><br />So, new government programs, such as public works, sprang up to help fix the problems government programs had caused. Of course, the idea of discontinuing the causes of the problems was never mentioned.<br /><br />Today, the local unemployment figure is nearly 10 percent here and the local government is salivating over federal money headed this way. They are going to build a new city hall! And, boy, is it ever fancy! All the bells and whistles. I suppose it is a little better than paying people to dig holes and fill them up again, as eventually a new city hall will have to be built anyway.<br /><br />Wait a minute!! To build a government building is to dig a hole and fill it up again ... isn’t it?<br /><br />If I had my way, I’d move the city bureaucrats into tents and allow the homeless to occupy city hall. (Maybe then I would not scream bloody murder so loud whenever cruel bureaucrats bulldoze the tent city.) And, that is moderate in my opinion; why can’t the mayor and city council sit on the sidewalks and do their “work?”<br /><br />Government expenditures are not part of the GDP. Rather, because they come out of the pockets of unwilling (those who ever think are unwilling) taxpayers, these expenditures are actually a burden. Not only does a depression indicate straightening up and flying right in the monetary policy area, but fiscal policy needs to be sounder as well. That means a cutback in government spending and taxes, so that people will be able to do the smart thing. People seem to be doing the best they can right now, and that is to cut their own spending, pay off debts, and save. Saving is particularly important, not just to hold money aside for a rainy day but also to invest. I realize how many times I have said this, but as the present situation worsens it becomes ever more important.<br /><br />But, of course, this will never happen. Government’s take from the GDP grows all the more during a depression, taking away people’s ability to do what needs to be done, and tax money is spent on projects that the market cannot afford at the time or does not need at all.<br /><br />As the Great Depression wore on, people always thought recovery was just around the corner. Well, when I have a headache I keep vacillating between thinking it will never end and thinking it is about to end. This was probably the attitude of people who were really suffering. But of course we now know that it was not about to end. Even establishment histories say it did not end until 1933. Dissident free-market historians’ views vary. My own is that it ended when World War II ended and the government finally let go or at least lightened up.<br /><br />In 1931, Europe was particularly hard hit thanks to inflation and tariffs (54). Many European countries went off the gold standard because they were broke, and this affected the U.S. as many feared the U.S. would go off the gold standard, such as it was (55). The Federal Reserve inflated, but wages and prices still dropped.<br /><br />Meanwhile, government expenditures rose (56). Dr. Rothbard calls these “depredations,” which I had to look up in the dictionary. A “depredation” is a plundering. Very appropriate as the government does plunder the people, especially when they are already down and out. This was one burden the people did not need, and we do not need it now, either. President Obama is sending new troops to Afghanistan, their numbers being greater than the small city I grew up in. President Hoover amassed the largest deficit to date at that time, just as President Bush did during his administration. Laissez-faire either one of them? Not in the minds of anyone who has actually lived on the planet Earth.<br /><br />These expenditures were in transfer payments, public works and aid to cities and states, not unlike today’s, only at least at that time we were not at war (yet) (57). We need to remember that expenditures towards public works, which may or may not be what the marketplace (that’s you and I!) wants or can afford, crowd out expenditures in the private sector, which are what the marketplace wants (58).<br /><br />Meanwhile, there was a futile attempt to keep wages steady as prices went down. The idea was that if wages were high there would be more consumption and consumption spurs production, alleviating the depression. Actually is donkey backwards! The two reasons, both of which Dr. Rothbard has already driven home, are that wages held artificially high cause unemployment and that employers have to make money or close their doors laying off everybody.<br /><br />The cost of production does not determine a product’s selling price. The selling price is determined by what people are willing to pay. Therefore, production costs have to be brought down lower than the selling price, and if they cannot be, production ends. If selling prices go down, then the costs of production, including labor which is the greatest single cost of production, must also go down (59).<br /><br />Well, I guess nobody is a complete socialist, not even Herbert Hoover. When it came to relief (welfare), he opposed it on the grounds that this belonged to private charity. Unfortunately, he later caved. (Of course. Oh, well.) People were generous then as they are now. In those days there was enough spirit of independence still alive that when a relief bill was introduced in Congress, charitable organizations such as the Red Cross fiercely opposed it (60). Would that they would today! But today, such charities work hand in hand with government, and I personally do my own giving to churches and charities that stay independent.<br /><br />Despite that, aid to farmers was ongoing and there were relief programs at the state and local level (61).<br /><br />President Herbert Hoover was so far from being a laissez-faire advocate, that the passage on P. 242 - 243 could describe today’s Obama policies, if one substituted “Obama” for “Hoover.” This just about says it all. The difference is only in the details. Banks and others were “asked” to cooperate, and if they were not going to they would be forced to by legislation (62).<br /><br />Meanwhile, toward the end of 1931, socialist ideas were creeping into the business community. Why, I know not. Possibly the authoritarianism on the part of the Hoover regime played an intimidation part and/or falsehoods about need to cooperate to end the depression hoodwinked people. Just like today, when there is any sort of crisis, people whimper about the setting aside of individual rights, needs or even beliefs for the sake of the “public good.” Dissent cannot be tolerated. Really fruitcake ideas were taken seriously such as a board (a government board, I take it) to rule over each industry and even a board board to rule over the boards.<br /><br />Why didn’t Hoover simply wire the Soviet Union and say, “Take us, we’re yours?” In fact, one plan was to emulate the Soviet system, complete with asinine “Five Year Plans” (63).<br /><br />These people were nuts! I hope we do not degenerate to this point, but I fear we will.<br /><br />It was interesting how the States (primarily) micromanaged crude oil. This may well have been the beginning of the oil problems that go on still today (64).<br /><br />There was a federal deficit (obviously) just as there is today. Apparently Hoover was in Bush’s league (Bush league?) when it came to spending, but at least he gave balancing the budget more than mere lip service. He could do one or both of two things: he could cut spending and/or raise taxes. Unfortunately, he chose the latter with a vengeance (65). He yet again showed absolutely no knowledge of either economics or individual rights. This backfired, partly due to the depression itself, which of course, was caused by the government (66).<br /><br />Meanwhile the States and locales were forced to cut back. Unlike the federal government, they cannot print up money (well, thank goodness!). Federal spending was down too, but a higher percentage of the GDP.<br /><br />To Hoover, a reduction in spending would cause the sky to fall, while to halve the budget would have left in place all the annual government spending per person in the previous decade. But, like today’s liberals, Hoover could not conceive of a cut in spending. Establishment liberals were blunt in saying (in fact, my jaw dropped to the floor) that we had saved our way into depression, so we must spend our way out of it. They were serious! (67).<br /><br />I cannot make this stuff up! Neither could Dr. Rothbard.<br /><br />So, Hoover stepped up his inflationary policies (68). The public resisted by looking out for their own interests. People hoarded cash which was a smart thing to do, especially in the light of possible bank failures, and this is one of a few reasons why all his efforts did not increase the money supply and raise prices (69). A massive propaganda effort to shame people out of this hoarding was begun. The hoarding did slow down in mid-1932, but fortunately still some people were too wise to fall for the idea that individuals should sacrifice their own and their children’s interests for society as a whole.<br /><br />Meanwhile, the banks were being smart and cautious too by putting a brake on lending. Hoover got after them too, over that (70).<br /><br />But, if we think Herbert Hoover was a rip snorting interventionist and inflationist, some of his big-wig cronies were calling for even more extreme measures to inflate the money and “stabilize” prices (71).<br /><br />Then, Hoover went after the stock market. Short-sellers and others who were simply peering into the future as entrepreneurs do are merely trying to make an honest buck. Claiming that stock prices represent “true values” (and we talked about “true values” while reviewing Man, Economy and State), he trumpeted the socialist rhetoric that investing should be done with the interests of the country’s future in mind, presumably in contrast to the buyers’ and sellers’ rational self-interest.<br /><br />I have a hunch that the Soviet Union was thinking that it would take very little effort on its part to bury us.<br /><br />During the 1932 presidential campaign, after the GOP was fool enough to re-nominate this anti-free-market president, he campaigned on a platform of intervention. One glaring example of campaign rhetoric was the statement loudly made that we had the “highest real wages in the world” which were due to artificially bolstering wage rate, of course, but of course he never mentioned the high unemployment rate caused at least in part by the same thing (72). This is only one example of how Hoover’s policies hurt the little guy (73). Obviously his interventionism had miserably failed and he got his just deserts on Election Day, just as Pres. Bush’s identical twin John Mc Cain did in 2008. Unfortunately, the Democratic candidate who won on essentially the same platform, Franklin D. Roosevelt, was just the same, only worse, much worse.<br /><br />You can read my excoriation of how Roosevelt carried on with Hoover’s policies on this blog in my Three Enemies essay. Suffice it to say that permanent damage was done to this country, and to this day people cling to the old superstitious myths about the Hoover/Roosevelt New Deal.<br /><br />The book ends with the end of the Hoover administration, but Dr. Rothbard does not pretend that the Great Depression ended in 1933 as the fables contend. It did not. It went on and on, the economy was strangled and people suffered until the end of World War II when the government finally loosened its stranglehold.<br /><br />At the end of the Hoover administration the monetary system really took a turn for the worse and people started to worry about the incoming Roosevelt administration, as some of Roosevelt’s advisors were talking crazy about new policies (74). At that time administration changeovers occurred in March, and in March of 1933 the depression was at its depth (75).<br /><br />Why? Was it because President Hoover had boldly gone where no man had gone before (in this country) to jettison the free market and rule the economy with an iron hand for its own good pulling it out of depression quicksand?<br /><br />Had these policies worked, the depression would have ended even faster than past recessions that blew over quickly when government allowed nature to take its course via the free market.<br /><br />But, these policies did not work at all, and the depression worsened.<br /><br />We should learn from this. The current recession, or depression, caused by the Federal Reserve over many decades, and especially by interventions by the G.W. Bush administration, will not improve unless the Obama administration does an about face very soon.<br /><br />That is not happening. We are already on the rough ride that the economists of the Ludwig von Mises and Murray Rothbard (Austrian) school have predicted.<br /><br />(1) Rothbard, Murray, <em>America’s Great Depression</em>, Nash Publishing, Los Angeles 1972, P. 2.<br /><br />(2) Ibid. P. 3.<br /><br />(3) Ibid. P. 11.<br /><br />(4) Ibid. P. 12.<br /><br />(5) Ibid. P. 12- 13.<br /><br />(6) Ibid. P. 14.<br /><br />(7) Ibid. P. 17.<br /><br />(8) Ibid. P. 17.<br /><br />(9) Ibid. P. 18.<br /><br />(10) Ibid. P. 19 - 20.<br /><br />(11) Ibid. P. 21 - 22.<br /><br />(12) Ibid. P. 22.<br /><br />(13) Ibid. P. 26 - 27.<br /><br />(14) Ibid. P. 28.<br /><br />(15) Ibid. P. 30 - 31.<br /><br />(16) Ibid. P. 39 - 40.<br /><br />(17) Ibid. P. 42.<br /><br />(18) Ibid. P. 45.<br /><br />(19) Ibid. P. 49 - 50.<br /><br />(20) Ibid. P. 54 - 55.<br /><br />(21) Ibid. P. 55.<br /><br />(22) Ibid. P. 56.<br /><br />(23) Ibid. P. 58.<br /><br />(24) Ibid. P. 64.<br /><br />(25) Ibid. P. 81.<br /><br />(26) Ibid. P. 87.<br /><br />(27) Ibid. P. 89.<br /><br />(28) Ibid. P. 92.<br /><br />(29) Ibid. P. 95 - 96.<br /><br />(30) Ibid. P. 96.<br /><br />(31) Ibid. P. 112.<br /><br />(32) Ibid. P. 131.<br /><br />(33) Ibid. P. 132.<br /><br />(34) Ibid. P. 131 - 145.<br /><br />(35) Ibid. P. 135 - 137.<br /><br />(36) Ibid. P. 143 - 144.<br /><br />(37) Ibid. P. 148.<br /><br />(38) Ibid. P. 151.<br /><br />(39) Ibid. P. 153.<br /><br />(40) Ibid. P. 154.<br /><br />(41) Ibid. P. 158.<br /><br />(42) Ibid. P. 162.<br /><br />(43) Ibid. P. 169.<br /><br />(44) Ibid. P. 171.<br /><br />(45) Ibid. P. 178 - 181.<br /><br />(46) Ibid. P. 184 - 185.<br /><br />(47) Ibid. P. 188.<br /><br />(48) Ibid. P. 190.<br /><br />(49) Ibid. P. 194 - 211.<br /><br />(50) Ibid. P. 203.<br /><br />(51) Ibid. P. 212.<br /><br />(52) Ibid. P. 215.<br /><br />(53) Ibid. P. 221.<br /><br />(54) Ibid. P. 227.<br /><br />(55) Ibid. P. 228.<br /><br />(56) Ibid. P. 233.<br /><br />(57) Ibid. P. 234.<br /><br />(58) Ibid. P. 235.<br /><br />(59) Ibid. P. 238.<br /><br />(60) Ibid. P. 239.<br /><br />(61) Ibid. P. 240.<br /><br />(62) Ibid. P. 243.<br /><br />(63) Ibid. P. 245 - 251.<br /><br />(64) Ibid. P. 250.<br /><br />(65) Ibid. P. 253 - 254.<br /><br />(66) Ibid. P. 255.<br /><br />(67) Ibid. P. 257 - 258.<br /><br />(68) Ibid. P. 268 - 272.<br /><br />(69) Ibid. P. 270.<br /><br />(71) Ibid. P. 272 - 277.<br /><br />(72) Ibid. P. 282 - 283.<br /><br />(73) Ibid. P. 282.<br /><br />(74) Ibid. P. 285.</div>Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-41134711711273891672009-04-22T17:25:00.002-04:002009-04-23T15:21:06.768-04:00EpilogueNow, we know quite a lot of what has happened to our economy and, in a broader sense, what has happened to our country.<br /><br />The Republican Bush-supporters will tell you the problems were caused by the Clinton administration, and the Obama supporters will tell you they were caused by the G.W. Bush administration. Actually, the bad policies that caused the present situation go way back many, many decades, and every administration contributed to them.<br /><br />Briefly and bluntly, we are no longer a free and prosperous country. We have, over these many decades, turned into an authoritarian, socialistic (or fascistic), imperialist country, and free citizens have been turned into subjects, even slaves, as our Founders believed that a citizen is by definition armed and a slave is not.<br /><br />No one individual can do very much about this. We will simply have to ride it out.<br /><br />However, every individual can do a great deal to protect himself or herself from the worst of it. It goes a lot farther than exercising your God-given right to obtain an unregistered, unlicensed gun, although I heartily approve of that if you can avoid obtaining a stolen one. Anyone with a speck of honesty who finds himself in possession of stolen property must do everything possible to return it to its rightful owner even if it means getting in trouble with the “authorities” who presume themselves to be some sort of God Junior. Nobody wants that to happen. Also, be sure you have more rounds of ammunition than you think you will ever need, as the fiercely anti-gun outgoing and incoming administrations are seriously discussing the registration of each and every round. My understanding is that stores are running out, so it might be wise to explore the possibility of making your own.<br /><br />And have an emergency plan in mind ahead of time in case the floor falls out quite suddenly. These “survivalists” might just have the right idea. A generator, candles, matches, batteries, soap, lots of toilet paper and paper towels, non-perishable foods, and canned foods (don't forget the [non-electric] can-opener!) are things it never hurts to have.<br /><br />But, what about the financial situation? Common sense! Pay down your debts; don't spend money you don't have. Save as much as possible. Buy gold. I am not an investment advisor. This is just one libertarian’s opinion.<br /><br />I recently heard an interview with Dave Ramsey, a financial adviser. Google him. He has a radio talk show and is also on Fox Business. I think he has all the right ideas. He reminds us that the love of money is the root of all evil (1). Money itself is not. Money is that commodity that is used in exchange for goods and services<br /><br />The love of money is greed. I think it is the greed that is the root of evils like overbearing government. It is because of government greed that we have so many asinine laws. Drive without a seat belt? Pay Big Brother. Delinquent on paying Big Brother? Pay Big Brother more. Use an ATM at a bank other than where your account is? Pay the fat cats at both banks. Want to use your God-given right to work in a given line of work? Drive a car or boat? Own certain inanimate objects or even a dog? Build a home? Open a business? Grovel for permission and pay Big Brother! Want to renew these permissions later? Toe the line and pay yet again.<br /><br />Buy a big-ticket item on time? Do not ask “How much down and how much a month?” as you will pay the fat cats big time. Dave Ramsey says ask “How much?” period. I would add pay up front in cash (or a bank draft to be exact) if you possibly can and all the fat cats get is the service charge on the draft.<br /><br />Credit card debt? Dave Ramsey says pay off the small debts first, then attack the big ones. Getting the small debts paid will free up money to help pay the big ones. I would add to then cut up the credit cards and flush them down the toilet! Never get another credit card! A debit card tied to your checking account is as close as anyone should get to a credit card. Even I have a debit card. It's called “discipline.” It is painful when you subject yourself to it, but it will pay in the long run (2). The long run becomes the short run before we are ready. And, from the get-go, start putting money aside for a rainy day or for retirement.<br /><br />Dave Ramsey pointed out that the borrower is slave to the lender and the rich rule over the poor (3). Of course, this is not right (meaning just or moral), but it is right (meaning a true statement of fact). The rich, meaning all-powerful government, including the Federal Reserve, rule this country with an iron fist, and they do it through our pocketbooks. We are all subjects, but one who owes money is a slave.<br /><br />So, get out of debt and shed some major chains. No one can say that one is free any more, even if one is out of debt, as one still has to grovel to Big Brother to do, be, or have ever so many things that God gave each individual the right to.<br /><br />Last, the most important thing you can do to resist the establishment is educate yourself. If you have read this essay, you have started. As I said in the very beginning, most of the books and seminars the Ludwig von Mises Institute offers, including the Rothbard selections I have reviewed, are on-line for free at <a title="http://www.mises.org/" href="http://www.mises.org/" target="_blank">http://www.mises.org</a>. Please continue. See you next winter!<br /><br />(1) Timothy 6:6-10.<br /><br />(2) Hebrews 12:11.<br /><br />(3) Proverbs 22:7.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-77396049873990387632009-04-22T17:21:00.001-04:002009-04-22T17:21:36.567-04:00Further ReadingsFURTHER READINGS<br />(in no particular order, but of interest in this general topic)<br /><br /><a title="http://mises.org/story/3382" href="http://mises.org/story/3382" target="_blank">http://mises.org/story/3382</a>, Shostak, Frank, “The Fed Did It, and Greenspan Should Admit It,” March 19, 2009. This is about interest rates, and how the Federal Reserve created the present boom-and-bust cycle.<br /><br /><a title="http://www.lewrockwell.com/rockwell/hitlers-economics.html" href="http://www.lewrockwell.com/rockwell/hitlers-economics.html" target="_blank">http://www.lewrockwell.com/rockwell/hitlers-economics.html</a>, Rockwell, Lew “Hitler’s Economics,” August 2, 2003. Hitler’s economic policies followed closely the Keynesian approach, as did the FDR policies.<br /><br /><a title="http://www.infowars.com/?p=" href="http://www.infowars.com/?p=7070" target="_blank">http://www.infowars.com/?p=7070</a>, Nimmo, Kurt, “Obama: Americans Will Accept Bankster Engineered Depression,” January 10, 2009. The bailout is a tool to concentrate power, and we will all be asked to accept “shared sacrifice” for it. (I refuse.)<br /><br /><a href="http://www.mises.org/story/3353" target="_blank">http://www.mises.org/story/3353</a>, Reisman, George, “Economic Recovery Requires Capital Accumulation, Not Government ‘Stimulus Packages,’“ February 25, 2009. That says it all.<br /><br /><a href="http://www.mises.org/story/3359" target="_blank">http://www.mises.org/story/3359</a>, French, Doug, “Forbidden Thoughts from Mencken,” February 26, 2009. H.L. Mencken was Murray Rothbard’s own favorite author. He was a well-known journalist and social critic in the 1920s, and was called the “Sage of Baltimore” or the “Bad Boy of Baltimore.” Would that we had some attention paid to writers like him today (if there writers like him today).<br /><br /><a href="http://www.nakedcapitalism.com/2009/03/black-hole-alert-aig-to-get-as-much-as.html" target="_blank">http://www.nakedcapitalism.com/2009/03/black-hole-alert-aig-to-get-as-much-as.html</a>, “Black Hole Alert: AIG to Get as Much as $30 Billion More,” March, 2009. They can’t do that? Oh, yes they can, and it is you who are getting robbed!<br /><br /><a href="http://www.lewrockwell.com/orig10/celente1.html" target="_blank">http://www.lewrockwell.com/orig10/celente1.html</a>, Celente, Gerald, “The Collapse of ‘09,” March 22, 2009. Not very pretty. But very accurate, I fear.<br /><br /><a href="http://www.lewrockwell.com/butler-b/butler-b12.html" target="_blank">http://www.lewrockwell.com/butler-b/butler-b12.html</a>, Butler, Bill, “Squeeze Play,” March 10, 2009. Does the FDIC actually have a fund that insures your bank accounts, or is it like the Social Security “fund”? And, how are FDIC policies discriminating against small, local banks that are frugal and solvent in favor of big banks that have been bailed out? Private insurance is suggested.<br /><br /><a href="http://www.lewrockwell.com/north/north688.html" target="_blank">http://www.lewrockwell.com/north/north688.html</a>, North, Gary, “Children’s Books in Dumpsters: Washington’s Madness Continues,” February 18, 2009. The Little Engine that Could and The Poky Little Puppy! Slightly off-topic, but remember them? Many of these stories taught us individual independence and the difference between right and wrong when we were pre-schoolers. But these precious little books had to be thrown away! Hold on to yours for your posterity with a “cold dead hands” attitude!<br /><br /><a href="http://www.lewrockwell.com/grigg/grigg-w80.html" target="_blank">http://www.lewrockwell.com/grigg/grigg-w80.html</a>, Grigg, Norman, “Turning ‘Mr. Hand’ into ‘Mr. Fist,’” February 20, 2009. Another way of expressing how the private sector is being made to suffer while the government sector is thinking of ways to squander its new wealth from “stimulus.”<br /><br /><a href="http://www.lewrockwell.com/woods/woods105.html" target="_blank">http://www.lewrockwell.com/woods/woods105.html</a>, Woods, Thomas E., “The Deck Chairs Are Fine Where They Are,” March 7, 2009. This is a speech given by Dr. Woods at the Campaign for Liberty’s Liberty Forum at the Conservative Political Action Conference (CPAC). There were neoconservatives there, and those who dared listen to him found themselves bee-lining to the restrooms. Dr. Woods is one of the greatest assets the libertarian movement has.<br /><br /><a href="http://informationclearinghouse.info/article22260.htm" target="_blank">http://informationclearinghouse.info/article22260.htm</a>, Paul, Dr. Ron, “We’re on the Verge of a Major Crisis,” March 20, 2009. A video on which Ron Paul discusses how the AIG bonus controversy is actually caused by the bailout.<br /><br /><a href="http://campaignforliberty.com/article.php?view=32" target="_blank">http://campaignforliberty.com/article.php?view=32</a>, Murphy, Robert, “The Threat of Hyper-Depression,” April 4, 2009. A spendthrift president, an unleashed Fed and a Congress hostile to property rights point to stagflation squared.<br /><br /><a href="http://informationclearinghouse.info/article22370.htm" target="_blank">http://informationclearinghouse.info/article22370.htm</a>, Marshall, Andrew G., “The Financial New World Order: Towards a Global Currency and World Government,” April 7, 2009. Following the 2009 G20 summit, plans were announced for implementing the creation of a new global currency to replace the U.S. dollar’s role as the world reserve currency. At this time I am too busy to read this article, but thought it should be listed here FYI.<br /><br /><a href="http://www.lewrockwell.com/obamas-corporate-state.html" target="_blank">http://www.lewrockwell.com/obamas-corporate-state.html</a>, Rockwell, Lew, “Obama’s War on Recovery,” March 18, 2009. Obama’s policies are thought to be in favor of the little guy but are really a rip-off of the ordinary citizen to favor big business. Maybe some on the left will wake up and realize that this is following in Bush’s footsteps.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com0tag:blogger.com,1999:blog-10767345.post-36213318567554088602009-02-05T20:14:00.008-05:002009-03-28T11:39:50.315-04:00A symbol for our timesBecause of technical difficulties, the original artwork here has been lost. It was a United States flag, shown upside down. It is NOT a symbol of disrespect, as you can know from reading the Flag Code, but it is a symbol of distress. Please see this link: <a href="http://www.jeffhead.com/liberty/flagdistress.htM">http://www.jeffhead.com/liberty/flagdistress.htM</a> (or just click on the headline).<br />Also please note we now have a permanent such symbol in the upper right corner of the blog.<br />Please come visit often and let us know your opinion. Thank you.Alice Lilliehttp://www.blogger.com/profile/02731555062527562517noreply@blogger.com3