Taking It for Granted

"Capitalism, says Marx, unthinkingly repeating the fables of the eulogists of the Middle Ages, has an inevitable tendency to impoverish the workers more and more. The truth is that capitalism has poured a horn of plenty upon the masses of wage earners who frequently did all they could to sabotage the adoption of those innovations which render their life more agreeable. How uneasy an American worker would be if he were forced to live in the style of a medieval lord and to miss the plumbing facilities and the other gadgets he simply takes for granted!" —Ludwig von Mises, Human Action

The Miracle of Mass Production

"The fact that my fellow man wants to acquire shoes as I do, does not make it harder for me to get shoes, but easier." —Ludwig von Mises, Human Action

Shame on You, Socialists

American socialists not only pit workers against entrepreneurs; they also pit rich American workers against the poor workers of the rest of the world. Shame on you, socialists!

The Value of Selfishness

"The welfare school pretends not only to stand for the interests of the whole of society as against the selfish interests of profit-seeking business; it contends moreover that it takes into account the lasting secular interests of the nation as against the short-term concerns of speculators, promoters, and capitalists who are exclusively committed to profiteering and do not bother about the future of the whole of society. This second claim is, of course, irreconcilable with the emphasis laid by the school upon short-run policies as against long-run concerns. However, consistency is not one of the virtues of the welfare doctrinaires. Let us for the sake of argument disregard this contradiction in their statements and examine them without reference to their inconsistency.

"Saving, capital accumulation, and investment withhold the amount concerned from current consumption and dedicate it to the improvement of future conditions. The saver foregoes the increase in present satisfaction in order to improve his own well-being and that of his family in the more distant future. His intentions are certainly selfish in the popular connotation of the term. But the effects of his selfish conduct are beneficial to the lasting secular interests of the whole of society as well as of all its members. His conduct produces all those phenomena to which even the most bigoted welfare propagandist attributes the epithets economic improvement and progress....

"The welfare propagandist, it is true, raises two objections. First, that the individual’s motive is selfishness, while the government is imbued with good intentions. Let us admit for the sake of argument that individuals are devilish and rulers angelic. But what counts in life and reality is—in spite of what Kant said to the contrary—not good intentions, but accomplishments. What makes the existence and the evolution of society possible is precisely the fact that peaceful cooperation under the social division of labor in the long run best serves the selfish concerns of all individuals. The eminence of the market society is that its whole functioning and operation is the consummation of this principle."

—Ludwig von Mises, Human Action

Mises on Equality and Inequality

"The liberal champions of equality under the law were fully aware of the fact that men are born unequal and that it is precisely their inequality that generates social cooperation and civilization. Equality under the law was in their opinion not designed to correct the inexorable facts of the universe and to make natural inequality disappear. It was, on the contrary, the device to secure for the whole of mankind the maximum of benefits it can derive from it. Henceforth no man-made institutions should prevent a man from attaining that station in which he can best serve his fellow citizens."

—Ludwig von Mises, Human Action

TGIF: Police-State Progressives

Progressives see themselves as, well, progressive. But they aren't. Even at their best, in opposing the national security state, they support massive government power in other realms of life. At heart they are social engineers. They seek a "moral equivalent of war," that is, regimentation without bloodshed. They are even anti-democratic when it suits them.

We can see all of this through the eyes of Ludwig von Mises. This is from his book Planned Chaos (1947; free audiobook here). Mises, of course, championed the unhampered market economy, or laissez-faire capitalism. He wrote:

In the market economy the consumers are supreme. Their buying and their abstention from buying ultimately determine what the entrepreneurs produce and in what quantity and quality. It determines directly the prices of the consumers' goods and indirectly the prices of all producers' goods, viz., labour and material factors of production. It determines the emergence of profits and losses and the formation of the rate of interest. It determines every individual's income. The focal point of the market economy is the market, i.e., the process of the formation of commodity prices, wage rates and interest rates and their derivatives, profits and losses. It makes all men in their capacity as producers responsible to the consumers. This dependence is direct with entrepreneurs, capitalists, farmers and professional men, and indirect with people working for salaries and wages. The market adjusts the efforts of all those engaged in supplying the needs of the consumers to the wishes of those for whom they produce, the consumers. It subjects production to consumption.

The Worker as Free Person

"In the market economy the worker sells his services as other people sell their commodities. The employer is not the employee’s lord. He is simply the buyer of services which he must purchase at their market price. Of course, like every other buyer an employer too can take liberties. But if he resorts to arbitrariness in hiring or discharging workers, he must foot the bill. An employer or an employee entrusted with the management of a department of an enterprise is free to discriminate in hiring workers, to fire them arbitrarily, or to cut down their wages below the market rate. But in indulging in such arbitrary acts he jeopardizes the profitability of his enterprise or his department and thereby impairs his own income and his position in the economic system. In the market economy such whims bring their own punishment. The only real and effective protection of the wage earner in the market economy is provided by the play of the factors determining the formation of prices. The market makes the worker independent of arbitrary discretion on the part of the employer and his aides. The workers are subject only to the supremacy of the consumers as their employers are too. In determining, by buying or abstention from buying, the prices of products and the employment of factors of production, consumers assign to each kind of labor its market price.

"What makes the worker a free man is precisely the fact that the employer, under the pressure of the market’s price structure, considers labor a commodity, an instrument of earning profits. The employee is in the eyes of the employer merely a man who for a consideration in money helps him to make money. The employer pays for services rendered and the employee performs in order to earn wages. There is in this relation between employer and employee no question of favor or disfavor. The hired man does not owe the employer gratitude; he owes him a definite quantity of work of a definite kind and quality."

--Ludwig von Mises, Human Action

Labor as Commodity

For the individual actor, "as for everyone, other people’s labor as offered for sale on the market is nothing but a factor of production. Man deals with other people’s labor in the same way that he deals with all scarce material factors of production. He appraises it according to the principles he applies in the appraisal of all other goods. The height of wage rates is determined on the market in the same way in which the prices of all commodities are determined. In this sense we may say that labor is a commodity. The emotional associations which people, under the influence of Marxism, attach to this term do not matter. It suffices to observe incidentally that the employers deal with labor as they do with commodities because the conduct of the consumers forces them to proceed in this way."

--Ludwig von Mises, Human Action

Some Things Never Change

"The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.”

--John Philpot Curran, Irish statesman, 1790

TGIF: That Was the Election that Was

One can be overjoyed by the repudiation of a candidate without being pleased with the opposing candidate's victory. This election is an occasion for that reaction. An American (or anyone actually) is perfectly justified in taking pleasure in Kamala Harris's humiliating defeat while anguishing over the intemperate Donald Trump's impressive win. As I like to say, every election has good and bad news: the losers lost but the winners won. That's where I am today if anyone cares to know.

I rejoice at the defeat of Harris and virtually all that she stands for, while also realizing that some of the grounds for that defeat are themselves to be repudiated. Most Trump voters seemed to have had "the economy" uppermost in mind, with immigration a distant second. That's sort of good news, except that most people think tariffs are a big solution for our economic woes. (In fact, there's no "economy." There are only cooperative interacting individuals deploying material factors and human effort to improve their conditions.)

Trump's defects have been widely discussed here and elsewhere. No need to rehearse them now. (As Yogi Berra said pre-internet, "You could look it up.")

One of Harris's problems was that while there was no there there, she was likely surrounded by the condescending woke set whom she would have wanted to please. This held the potential for outright violations of freedom and impediments to advancing prosperity. It may well have aggravated tensions between people of different skin tones and ethnicities—something no advocate of social cooperation through the market economy should take lightly. We must be wary of those who seek to undermine domestic peace, especially when the cause is not justice, but trivial natal characteristics (like where your parents were born). (For an account of the dangers of a Harris administration, see Gene Healy's "Fear and Loathing at the Ballot Box.")

Trump was called Hitler, a Nazi, and a fascist, which was not only ill-defined and absurd but malicious. The people who trafficked in such charges, including the top of the Democratic ticket, deserved to lose just for using such tactics. Warnings that he would establish a dictatorship were hollow and not really believed by many who issued the warnings. Remember that a partly Democratically controlled Congress reauthorized horrendous surveillance powers for this "worse than Hitler" figure during his first term. How are we to explain that? Politics, that's how.

We have to discount much of Trump's flamboyant rhetoric because we know that he loves to play to his core audience, which in turn loves to see the woke progressives sent into rage on MSNBC, CNN, etc. His core audience called on candidate Trump in 2016 to "lock her up," meaning his rival, Hillary Clinton. Did his Justice Department bring a case against her? No, it didn't. He didn't try to lock her up.

When Trump partisan Sean Hannity asked him during the latest campaign if he would abuse his power to retaliate against his enemies, he smiled and said he would, but only on day one. What would he do? "Seal the border" and "drill, baby, drill" for oil. When Hannity said, "That's not retribution," Trump ignored him and kept talking. That did not keep his opponents from "reporting" that he said he would be a dictator on day one and beyond and would punish his opponents. The Democrats' implicit message all season seemed to be this: "He's really not so bad, so we have to make up stuff."

I'm not defending his "seal the border" promise or his promise to round up and deport millions of people for lacking government permission papers. Those would be terribly unjust policies. Tragically, however, a president probably has decades-old congressionally delegated powers to do such things. So technically Trump wouldn't be acting like a dictator. The same is true for oil drilling. We don't know exactly what he means, but if he intends to free producers to bring more oil and gas to market, then yay! If he intends to direct an effort to create energy independence, then boo. We'll have to wait and see. The point is that any president would probably already have congressionally authorized powers to loosen restraints on oil producers. His promise does not imply dictatorship.

But let's consider the possibility further. Would there be no checks on his power if Trump tried to be a dictator? Would the military obey orders to arrest, say, Supreme Court justices or recalcitrant members of Congress? Would the courts support him? Unlikely. How would he enforce orders no one obeyed? He'll have no guns.

America still has a legacy of liberalism in the best sense, which includes deep-seated attitudes about government power, as well as an independent judiciary and a Constitution-bound military. This limits what even a dictatorial-minded president could get away with in America. In a sense, it really can't happen here. At least it's highly unlikely compared to other places without our traditions.

My old friend the historian Jeffrey Rogers Hummel, who has thought much about the role of ideology in society, used to say that if a Soviet ruler had magically appeared as the president of the United States, he could not have ruled in the Soviet style. Likewise, if a libertarian had magically become the head of the Soviet government, he could not have governed like Ron Paul would have. History and tradition—ideology—would have prevented it. The result is a sturdy, albeit not indestructible set of taboos.

Even Trump is probably not blind to what is unique about the American liberal legacy (including freedom of enterprise) and what makes for legitimacy. Ideas, not force, rule the world, Hummel says. "Ideas ultimately determine in which direction [people] wield their weapons or whether they wield them at all," he writes.

This does not mean we will be able to sleep soundly from Jan. 20, 2025, through 2028. Guarantees are not to be found in such things. But we need not run around like our hair is on fire. I question the claim that Trump will be a dangerous freer agent in his second term. As self-centered as Trump is, he will surely have an eye on the mid-terms; he won't want to lose the House or Senate in 2026. Moreover, he won't want to hamper J. D. Vance or another would-be successor for 2028. He won't be free to offend those who still are connected to America's pro-freedom legacy.

In foreign affairs, if Trump means to get and keep out of other people's conflicts, then good. But he gives us no reason for confidence. Look at his first term. Look at his unwavering support for Israel's violence against the Palestinians. (No defense of the brutal Hamas is hereby implied.) Look at his belligerence toward Iran. Look at his acceptance of the expansion of NATO. To state the obvious, Donald Trump is no Richard Cobden, even if we ignore the tariffs, which we cannot do.

So I'm not optimistic about foreign policy, though Harris would have been worse. (Did she push her boss to reinstate the nuclear deal with Iran that Trump canceled? We have no evidence of that.)

None of this is amenable to mathematical or scientific proof. How could it be? We're talking about the always-uncertain future and individuals who have free will. On this day, however, this is how I see it. It seems reasonable

Then again, what the hell do I know?

Right Diagnosis, Wrong Prescription

The populist Sanders-left (which is actually broader because it includes Tucker Carlson and others called rightists) is partly correct and partly incorrect about what happened to the Democrats last Tuesday.

They say correctly that the Democrats failed because they have taken non-elites for granted, patronizing and subsidizing some (minorities, for example) and disparaging and penalizing others (regular bourgeois working Americans of both sexes and all skin tones and ethnicities). This is usually stated as "The Democrats have betrayed the working class."

This is good as far as it goes, but it goes not far enough. The elites have taken some Americans for granted. Meanwhile, a large swath of Americans, especially those between the coasts, have been treated like outhouse-using country bumpkins if not outright racists and patriarchists. Remember Obama's sneering reference to people who in troubled times seek refuge in their guns and bibles?

It was only a matter of time before an officer-seeker would voice the concerns of the disparaged. It happened in 2016 and again this week. Enough of those people struck back on Tuesday, benefitting Trump and humiliating Harris. People will take only so much abuse or condescension before shouting, "Cut it out!"

Where the Sandersnistas go wrong is in prescribing a warmed-up Marxism. Not full-out nationalization of the means of production, mind you, but heavy government interference with everyone's market relations: a minimum wage, rent control, price ceilings, usury laws, tariffs, product regulation, immigration barriers, etc. They think this is what the "working class" needs. (Ironically, government control of nominally private enterprise is an essential feature of fascism.)

But no, intervention is not the answer, though class bigotry blinds the Sandersnistas to that fact. The same could be said for the MAGA architects. These measures have long harmed people, especially the intended beneficiaries, and they will do so in the future. But you have to know something about economics to understand that. They don't.

The first thing the "working class" needs to do is reject the Marxian notion of an inherent class conflict between business and employees. The market economy—the profit-and-loss system void of government regulation and subsidy—is good for all because, as Ludwig Mises spent his life teaching, we all have a deep harmony of interest in freedom, social cooperation, and rising living standards. Surface disputes are insignificant compared to that deeper compatibility.

The industrious "class"—all contributors to the creation of wealth (which excludes politicians and bureaucrats)—should reject the "left" and the "right."

The Morning After

The fear of dictatorship is absurd.

The Dems Are What They Claim to Hate

As I said in 2016 (or was it 2015?), I despise Trump and I despise most of the people who despise Trump. I will never forgive the Democrats for making it necessary for me to defend him against their lies.

TGIF: Election Reflections

The history of the human race is one long story of attempts by certain persons and classes to obtain control of the power of the State, so as to win earthly gratifications at the expense of others.

--William Graham Sumner, 1883

For advocates of individual liberty, this has got to be the most depressing election in many years. (Well, at least since 2020, the most depressing election since 2016.) Full, true, laissez-faire liberalism is far from public discussion. Kamala Harris ("I'm smart and I care"), the mush-mouthed empty suit, and Donald Trump ("I'm Trump!"), the narcissistic, militantly nationalist demagogic windbag, both threaten what remains of Americans' liberty.

No one can confidently say which is the bigger threat. Their styles differ, but that cannot camouflage the danger each represents. This may be availability bias speaking, but I am not so sure. There has been no joy for liberalism this season.

The palpable lesson of nearly everything we see in politics is that freedom and prosperity are at risk when the government can do almost anything a majority or an influential minority wants—when the idea of constitutional constraint is treated as old-fashioned. It matters little whether those who get their hands on such power come from the "left" or the "right," ideologically incoherent terms signifying little but tribal membership.

Hammers, Nails, and War

The old saying about the guy who only has a hammer and thus sees all problems as nails is a story about psychology. He's let the available tool warp his vision. 

The same goes for people who see war, or more generally the state, as the only real tool. It warps their vision. We need not ascribe bad motives, just bad judgment, to such people. They may not be blood-thirsty, psychopathic warmongers, as some people describe them.

'Nuff Said

Recommended!

 

TGIF: Happy Halloween, Traders!

It's the Halloween season, the perfect occasion to introduce your young children and grandchildren to the wonders of the market economy. After all, the market is a process in which individuals strive to improve their situations through trade—that is, lucrative peaceful cooperation—with others. (Today we'll ignore all the ways politicians and bureaucrats get in the way.)

As a result of their trick-or-treating, children will bring home a vast quantity and variety of candies. Of course, not all kids (or adults) like the same kind of treats. While that could bring disappointment for some children as they survey their haul, it also brings opportunities.

But before we get to the opportunities, let's note that each child, being an individual, prefers some kinds of candy to others. Every child could rank candies from most to least favorite (including those disliked entirely), with rankings subject to change. No two children's rankings would be identical.

Moreover, value can't be measured like size and weight. Valuation is subjective, internal; thus no unit of value exists. We can say, for example, that one child prefers a Butterfinger to a Twix and another prefers a Twix to a Butterfinger, but we can't measure any of this. Money prices are not measurements, but exchange ratios. Someone prefers, say, a Mars bar to anything else he could spend his $1.99 on at a given moment. We're talking ordinal numbers, grading, here (1st, 2nd, 3rd), not the cardinal numbers required for measurement (1, 2, 3).

Given the randomness of trick-or-treat candy distribution, It's unlikely that any given child's bag will contain only his or her top-ranked candies. He or she may wish the bag had more Almond Joys and fewer Kit Kats, or vice versa. What's to be done?

People long ago discovered the answer: trade. Even kids who have never heard the word economics will quickly, if implicitly, comprehend the idea of gains from trade. Parents will not have to teach this. Even a fairly young child will quickly see opportunities for mutually beneficial exchange. I wouldn't call this a "propensity to truck, barter, and exchange," as Adam Smith did. Rather, like Carl Menger, I think the possibility of gains from trade is so obvious that nearly everyone sees it unassisted.

That doesn't mean parents have no role in the teaching moment that Halloween presents. On the contrary, they can supply simple concepts even to young children, making the implicit explicit. That knowledge will serve children well as they grow into adults because free exchange is pervasive in modern life.

Imagine two children, a sister and a brother. Let's call them Cruz, a 7-year-old girl, and Cass, a 5-year-old boy—by sheer coincidence, those are my grandchildren's names and ages. Full of excitement, they've just brought their candy bags home after a hard night of trick-or-treating. They empty their bags to reveal an impressive variety of sweets. Their eyes shine with delight, but as they look over their inventories, they each see some kinds they like "less" than other kinds. Chances are their preferences differ somewhat.

They see opportunities to trade. Let's say that Cruz has a Hershey's without almonds and Cass has a Hershey's with almonds. Let's also say that Cruz loves almonds, while Cass dislikes them. Being the alert, entrepreneurial kids they are, they realize they would each be better off, in his or her own opinion, if they traded. A simple change of possession and—voila!—they have climbed higher on their personal candy value scales. The number of candy bars did not change, only the ownership. It's a miracle!

That's the simplest example; things could get more complicated. Cass might be willing to trade two Hershey's with almonds for one without or any other arrangement that strikes his and Cruz's fancies. It's up to them. It depends on their values and their candy stocks.

They will realize that when they trade, they each are happy to give up something to get something else because they prefer it to the original something. In their views, the exchange looks worthwhile or they would not trade. Each makes a psychic profit. It's win-win! That's how trade works. (Alas, some early economists labored under the misconception that when people trade, they exchange equal, not unequal, values.)

True, after the trade occurs, one or both might feel regret. We all know that feeling. The world is uncertain, and our knowledge is always incomplete. When we say trade is mutually beneficial or it would not have occurred, we refer to the moment the trade is made. Error is always possible. Hopefully, learning follows.

Parents who want to take the lesson further could point out that what the kids are doing is engaging in barter, candy for candy, in contrast to what we do at a shop, where we trade money for goods. Checks, plastic cards, and apps are other, indirect ways to use money. We use money because barter is inconvenient. It requires a "double coincidence of wants." Two people hoping to trade must each want what the other is willing to trade. If they don't, they're out of luck. Thankfully, society found a way around barter inconvenience long ago:  money, a generally accepted medium of exchange, that is, a thing useful in its own right that everyone is willing to accept in trade, intending to trade it on, because everyone else is willing to accept it too. Kids can't learn about money too early.

When our children and grandchildren grow up, they will spend a good deal of time in the marketplace peacefully and beneficially cooperating, largely with strangers. How many understand that the division of labor and trade made civilization what it is and broadened circles of trust to encompass the entire world? Ludwig von Mises wrote in Human Action:

The fundamental facts that brought about cooperation, society, and civilization and transformed the animal man into a human being are the facts that work performed under the division of labor is more productive than isolated work and that man’s reason is capable of recognizing this truth. But for these facts men would have forever remained deadly foes of one another, irreconcilable rivals in their endeavors to secure a portion of the scarce supply of means of sustenance provided by nature.... No sympathy could possibly develop under such a state of affairs.

Our kids can make a good start in life by learning about trade this Halloween.

TGIF: Socialism Is War by Other Means

Readers may have wondered about a quote I used from Ludwig von Mises recently. In his book Liberalism Mises distinguished the (classical) liberal case against war from what he called the "humanitarian" case against war. To understand Mises, let's examine a "humanitarian" on the war question: philosopher, psychologist, and eugenicist William James (1842-1910). Is it relevant to the largely illiberal antiwar movement today? Let's see.

Whether Mises was thinking of James when the great economist wrote the "peace" section of Liberalism (1926), I cannot say. He may well have. James had given a lecture titled "The Moral Equivalent of War," which appeared in his book Memories and Studies (1911). It's an instructive lecture, and antiwar thinkers and activists should read it. James said:

The war against war is going to be no holiday excursion or camping party. The military feelings are too deeply grounded to abdicate their place among our ideals until better substitutes are offered than the glory and shame that come to nations as well as to individuals from the ups and downs of politics and the vicissitudes of trade. There is something highly paradoxical in the modern man's relation to war.

James believed that while no American would wish for another "war for our Union" (that is, war of secession), neither would anyone vote to have it "expunged from history, and the record of a peaceful transition to the present time substituted for that of its marches and battles." In other words, James said, modern Americans have a love-hate relationship with war. War's blood, death, and destruction were not enough to put them off its inherent bravery, heroism,  and discipline—virtues that men have celebrated for millennia. The war ethic is hardwired into us, James thought.

The question James raised was how society could have the glory without the gore.

Blaming Freedom

Freedom is nearly always blamed for the bad consequences of unfreedom, that is, of government intervention. Take immigration.

We hear these days that migrant gangs are killing, terrorizing, and stealing from Americans. Some immigrants without government papers have definitely committed heinous crimes. Opponents of immigration say that migrants join violent migrant gangs to pay off debts incurred in the process of traveling to the United States. If that's true, we can see that it's not freedom that leads to crime, but rather the black market. Black markets by definition are products of unfreedom, that is, of government prohibition of peaceful behavior. Freedom is not the culprit.

Because legal migration is next to impossible, desperately poor and oppressed people pay thousands of dollars to coyotes to get them from Latin America to the United States. If migrants can't repay the money, they might be forced to work off their debts by joining a migrant gang. Their creditors are likely nasty people because that's what prohibition does. It doesn't make an activity disappear; it simply turns the activity over to organized crime. Think of U.S. alcohol prohibition in the 1920s.

Just as repealing drug prohibition would break the backs of the drug cartels, repealing immigration prohibition would break the backs of the coyote and migrant gangs. Under legal immigration, people would apply at U.S. consulates, gain approval if they weren't violent criminals, buy their plane tickets for a few hundred dollars, and come to America. End of.

Pretending that free immigration causes crime is like thinking that Al Capone was a free-market entrepreneur.

The Soul of a Socialist

 From the pen of H. G. Wells (1908), socialist:

War is a collective concern; to turn one’s back upon it, to refuse to consider it as a possibility, is to leave it entirely to those who are least prepared to deal with it in a broad spirit. 

In many ways war is the most socialistic of all forces. In many ways military organization is the most peaceful of activities. When the contemporary man steps from the street, of clamorous insincere advertisement, push, adulteration, underselling and intermittent employment into the barrack-yard, he steps on to a higher social plane, into an atmosphere of service and cooperation and of infinitely more honorable emulations. Here at least men are not flung out of employment to degenerate because there is no immediate work for them to do. They are fed and drilled and trained for better services. Here at least a man is supposed to win promotion by self forgetfulness and not by self-seeking. And beside the feeble and irregular endowment of research by commercialism, its little shortsighted snatches at profit by innovation and scientific economy, see how remarkable is the steady and rapid development of method and appliances in naval and military affairs! Nothing is more striking than to compare the progress of civil conveniences which has been left almost entirely to the trader, to the progress in military apparatus during the last few decades. The house-appliances of to-day for example, are little better than they were fifty years ago. A house of to-day is still almost as ill-ventilated, badly heated by wasteful fires, clumsily arranged and furnished as the house of 1858. Houses a couple of hundred years old are still satisfactory places of residence, so little have our standards risen. But the rifle or battleship of fifty years ago was beyond all comparison inferior to those we possess; in power, in speed, in convenience alike. No one has a use now for such superannuated things.

TGIF: Full versus Shrunken Liberalism

Language, like the old common law and other customs, is a decentralized, undesigned, spontaneous institution. It serves humanity well. Nothing is perfect, of course, but no alternative—if one were conceivable—could hold a candle to it.

One of the downsides is that people may change how they use handy expressions; more wordy phrases may be needed to replace a "corrupted" one. Here's one: classical liberal. Liberal, of course, originally related to individual liberty and its conditions and consequences: private property, constraints on government power, and free markets. It still means something like this outside of America. (A few pioneering liberals, such as Gustave de Molinari, thought the free market could produce security better than the state could.)

Then "progressives" hijacked the word liberal in America and England. Perhaps they didn't want to be associated with socialism. Now it meant advocating the welfare state and government intervention in the market for the sake of so-called "social justice." Private property was pushed to the back burner. The commitment to free speech and other civil liberties continued, but "modern liberalism" had little else in common with original liberalism even in the matter of war and peace.

Because of this change, the qualifier classical became necessary to distinguish original liberals from the welfare/warfare-state, or mixed-economy, advocates. Later, classical liberals started using libertarian to ensure no one was confused. That word has the same root as liberty, and even though socialists of various stripes had used it, the word has nothing to do intrinsically with socialism, that is, the abolition of private property in the means of production. Since socialism must extinguish liberty, the word libertarian is supremely inappropriate for that philosophy.

Like free people and free markets, language never stands still. Lately, classical liberalism has come to mean not advocacy of individual liberty across the board; rather, it signifies a "modern liberal" (an opponent of laissez faire) who continues to believe in free speech. Today we have the spectacle of nonclassical classical liberals. Go figure.

Why did this happen? It seems this came about because in this century, many welfare-state liberals, Democrats for the most part, gave up on free speech. Their former heroes, such as Supreme Court Justices Hugo Black and William O. Douglas, stopped being heroes. Just recently Barack Obama, John Kerry, Hillary Clinton, and Democratic VP candidate Tim Walz have unambiguously opposed free speech and First Amendment protection on the internet and social media. Kerry summed up his side's case well: because all sorts of views and information are easy to come by these days, "it's really hard to govern today." Poor politicians. Meanwhile, Clinton, who favors repealing Section 230—which exempts social media companies from liability for what users post—says that if those companies do not monitor content as the government wishes, "We lose total control." Control of what? Us, you and me. Obama says government oversight is required, and Walz compared freedom of expression to shouting fire in a crowded theater. First Amendment? What's that? Pathetic, all of them.

These alleged liberals were delighted to see the government lay its heavy hand on social media to suppress information they did not like about COVID-19, Hunter Biden's laptop, and other matters. In some quarters, opposition to free speech combined with a rising interest in an anti-Western value system ("woke-ness") and cultural Marxism left over from the 1960s. Criticism of the Enlightenment grew more common.

Fortunately, this was too much for some "modern liberals." So those who remained committed to reason and free speech picked up the label classical liberal to distinguish themselves from their former colleagues.

The new classical liberals, of course, are not original classical liberals. They are modern welfare-state interventionist liberals, not advocates of individual liberty across the board, including the free market. I've heard some of these thinkers, whom I admire and have learned from, insist that they are still on the "left" and so are not "economic liberals." (I would not put original liberalism on the left-right spectrum, which is incoherent.)

Hence, I suggest we distinguish full liberalism from shrunken liberalism.

Shrunken liberalism espouses free speech, free press, abortion rights, and other civil liberties —but that is pretty much it. What's missing? Any direct reference to so-called economic liberty!

As I've explained before, I don't like the term economic liberty because full, original liberalism refused to carve the individual into personal and economic spheres. The a person is an integrated whole. Each pursues a variety of chosen ends, some involving money and some not, and adapts means best suited to his objectives. Economics is necessary for analyzing those pursuits and the social implications, but the ends are neither economic nor non-economic. They simply are personal ends. The marketplace for goods and services is a marketplace of ideas. The price system, which communicates information to us all, should be protected by the First Amendment.

That is why full liberals proudly did and do champion full-spectrum freedom: civil liberties, the free market, and peace, with its complementary opposition to imperialism and what Jefferson called "entangling alliances." It's as important today as it was in the time of Richard Cobden, John Bright, Lord Acton, Herbert Spencer, William Graham Sumner, and Ludwig von Mises.

It was Sumner who answered the charge of isolationism leveled against the opponents of the empire-building during the Spanish-American War (a charge made today against noninterventionists) with this:

When the others are all over ears in trouble, who would not be isolated in freedom from care? When the others are crushed under the burden of militarism, who would not be isolated in peace and industry? When the others are all struggling under debt and taxes, who would not be isolated in the enjoyment of his own earnings for the benefit of his own family? When the rest are all in a quiver of anxiety, lest at a day's notice they may be involved in a social cataclysm, who would not be isolated out of reach of the disaster? What we are doing is that we are abandoning this blessed isolation to run after a share in the trouble.

in his book 1927 book, Liberalism, laissez-faire advocate and intellectual destroyer of socialism Mises declared:

The liberal critique of the argument in favor of war is fundamentally different from that of the humanitarians [who sought a bloodless "moral equivalent of war"]. It starts from the premise that not war, but peace, is the father of all things. What alone enables mankind to advance and distinguishes man from the animals is social cooperation. It is labor alone that is productive: it creates wealth and therewith lays the outward foundations for the inward flowering of man. War only destroys; it cannot create. War, carnage, destruction, and devastation we have in common with the predatory beasts of the jungle; constructive labor is our distinctively human characteristic. The liberal abhors war, not, like the humanitarian, in spite of the fact that it has beneficial consequences, but because it has only harmful ones.

The list of full-liberal positions is not random. As Mises pointed out, war is antithetical to individual freedom, private property, the division of labor, and global free exchange, Altogether this constitutes social cooperation.

So we must point this out to the well-meaning shrunken liberals. Bravo on your continued commitment to free speech, other civil liberties, and reason! But don't stop there. Without full liberalism, we aren't fully free.

Interview on "Ideas Having Sex"

Chris Kaufman interviewed me about my book What Social Animals Owe to Each Other on his podcast Ideas Having Sex. Listen here or on your podcast platform.

TGIF: Tariffying Trade-Warmonger Trump

"The word tariff, properly used, is a beautiful word. One of the most beautiful words I’ve ever heard. It’s music to my ears." —Donald Trump

The once and possibly future president threatens to wage economic warfare against countries and companies everywhere if they don't knuckle under to his nationalist demands. He promises to impose tariffs on American firms that calculate that moving operations to Mexico or other foreign locations makes good business sense. He's also ready to strike at allied countries that irritate him by, say, slighting the dollar. (Watch or read his economic-policy speech.)

To his credit he promises to lower taxes on investment and to cut the regulatory burden. He also wants lower energy prices, which would be good all around, but exactly how matters. He's no laissez-faire advocate.

At any rate, Trump's determination to restore the American economy to what it was when much of the world lay in ruins after World War II suggests that, despite all the changes since then, he would much do more than de-tax and deregulate. For example, he promises to lure foreign companies here. Again, how? His government would no doubt play an active role in what should be private matters. He's already promising to make the taxpayers pay for business infrastructure projects. As he said about the audio industry, "It’ll be like it was 50 years ago." He won't be able to turn the clock back, but he can do much damage trying.

This is economic nationalism. He sees the world as an arena in which countries—as if they were companies—compete against one another: for one country to win, the others must lose. Powered by this worldview, Trump wants to be the CEO of the company known as the United States.

His vision is dangerously wrong. The world is not an arena in which countries compete with one another, where one nation's gain is the others' losses. That American manufacturers routinely buy foreign-made materials, tools, machines, and semi-finished products demonstrates this. We have a global division of labor in which capital, resources, and all kinds of goods have been able to move across national boundaries fairly freely as market forces require. As a result, world poverty has diminished unbelievably, and Americans are richer than ever. (The rough spots can be attributed to unabated domestic government intervention.) This progress has been in the making for about 80 years, but the liberalization responsible for it has been reversed recently—to the world's detriment.

Trump understands none of this, and he has no incentive to do so. Since entering politics, his demagogic promise has been to wreak vengeance on the world for, as he sees it, taking advantage of the United States. This is his aggrieved-nation shtick. The U.S. government has been the biggest bully since 1945, but Trump would have gotten nowhere politically had he promised to stop throwing America's weight around. Instead, he portrays the United States as a pitiful giant that has been everyone's chump. It's nonsense.

What's foreign to Trump's mentality is any notion of an unplanned, spontaneous market order built on individual freedom and choice, which is at the heart of sound economics. He must see himself as a hands-on CEO who can solve any problem. That's the last thing we need. He should read Leonard Read's "I, Pencil." (The video version is here.)

In a word, Trump is an economic warmonger, a not-too-distant cousin of a regular warmonger. As the old free traders said, "When goods can't cross borders, soldiers will."

It would be one thing if Trump were promising to shrink the government so much that businesses everywhere wanted to flock to these hospitable shores. But his "New American Industrialism" is an old-fashioned industrial policy in which he or his team of experts would pick winners to carry out his glorious vision. Which firms and industries get protected or subsidized and which don't? Those decisions would be made on a political, not an economic, basis. The problem is that Trump and his experts could not know what they would need to know to carry out their plan. Only the free market—through the unhampered price system—can produce that knowledge, which would be widely dispersed, often tacit, and therefore unavailable to a central bureaucracy. Even the great Donald Trump cannot defy the laws of economics.

What would Trump do if other countries tried to make their economies more hospitable to the world's businesses, say, through rigorous liberalization? Would he up the statist ante? The economic nationalist is not likely to back down.

No one should be surprised that Ludwig von Mises—the unparalleled champion of peace through full liberalism—had much to say about economic nationalism. In Human Action, he wrote: "Economic nationalism is incompatible with durable peace.... It is an illusion to believe that a nation would lastingly tolerate other nations’ policies which harm the vital interest of its own citizens."

Trump might endorse Mises's last sentence, but he'd be missing the point. Other countries would respond to Trump's program. If he responds in turn, he will hurt Americans for sure (and perhaps foreigners). Consumers will largely pay the tariffs and, along with import-using American manufacturers, face higher prices. That's the point!

Freedom in the economic sphere, as in all other spheres of life, is in the deepest interest of all citizens. Protectionism and other interference are not. One industry or firm may calculate that if it can win protection from the state, it will prosper even if others suffer. But protection granted to one interest will encourage others to ask for it too. Now the original gain begins to dissolve. As Mises put it in Socialism: An Economic and Sociological Analysis,

A system which protects the immediate interests of particular groups limits productivity in general and, in the end, injures everybody—even those whom it began by favouring.... The greater the protection afforded to particular interests, the greater the damage to the community as a whole, and to that extent the smaller the probability that single individuals gain thereby more than they lose....

[I]f all particular interests were equally protected, nobody would reap any advantage: the only result would be that all would feel the disadvantage of the curtailment of productivity equally. Only the hope of obtaining for himself a degree of protection, which will benefit him as compared with the less protected, makes protection attractive to the individual. It is always demanded by those who have the power to acquire and preserve especial privileges for themselves. [Emphasis added.]

Why would they all lose? Because, as we've known at least since David Ricardo formulated the law of comparative advantage (or what Mises called the law of association), the division of labor and free exchange bring specialization that yields immense gains to all—even when an individual, group, or nation is less efficient than others at producing a whole range of goods.

Trump displays the words Made in the USA onstage. The wiser course is to specialize and to trade with others rather than trying to produce everything. Market price signals, not Trump, should be our guide. If the frontiers were closed to foreign goods, Mises wrote in Socialism, "Capital and labour would have to be applied under relatively unfavourable conditions yielding a lower product than otherwise would have been obtained."

Thus Trump's blustering warfare would shrink incomes and risk conflict by disrupting the signals that channel productive energies to where consumers most want them.

TGIF: Who Cares about Inequality?

What accounts for the preoccupation with income and wealth inequality? We hear about it every day. Isn't our absolute living standard what matters and whether it is improving or deteriorating? I'll bet that's what regular people care about. However, the professional grievance mongers see things differently, They want you to resent those who are richer.

To start with the basics, we are not talking about inequality. We're talking about income and wealth differences. Substitution of the term inequality is an appeal to emotion, a cashing in on other senses of the word. "You oppose equality? Don't you believe that 'all men are created equal'?" That's demagoguery not argument.

In a market-oriented economy, most income is not distributed. There's no distribution to describe as equal or unequal, fair or unfair. (What the government does is another story.) As Ludwig von Mises, wrote 102 years ago in Socialism: An Economic and Sociological Analysis, "Under Capitalism incomes emerge as a result of market transactions which are indissolubly linked up with production." That's not distribution or allocation.

Mises continued:

We do not first produce things and afterwards distribute them. When products are supplied for use and consumption, incomes for the greater part have already been determined, since they arise during the process of production and are indeed derived from it. Workers, landowners, and capitalists and a large number of the entrepreneurs contributing to production have already received their share before the product is ready for consumption.

"[T]he concept of distribution is only figurative," Mises added. What people call "the income distribution" is not the outcome of a grand allocation plan. It's a snapshot of a dynamic, decentralized series of exchanges and is always subject to change.

People transact, trade, only when they expect to gain. Otherwise, they wouldn't bother. That's true for both parties to a transaction. It's win-win. Among the things people trade are labor services for money and vice versa. That people have to work so they can eat is not the fault of employers, who also have bosses to satisfy; they're called consumers. That's the nature of reality. But in a free and competitive market economy, few people are dependent on only one buyer or one seller. They are free to choose.

If no distribution occurs in a market economy, then no redistribution is possible. When the government taxes our incomes and gives the money to others—be they low-income people or military contractors—that's plain old distribution. And it's illegitimate.

Taxation and other forms of political manipulation are objectionable even if large-scale wealth and income differences do not result. So that cannot be the primary objection. Political manipulation is objectionable because it aggresses against nonaggressors and disrupts the process that best serves consumers. It would be odd to say, "I see inequality, so I wonder what government manipulation has brought that about." It would be reasonable to say instead, "I see government manipulation, so I wonder if, on top of all the other bad consequences, it also has disrupted the wealth-creation process."

Economic differences among individuals and groups are to be expected among free people and ought not to arouse suspicions of illegitimacy. To expect economic equality as the default is to commit the fallacy Thomas Sowell has exposed concerning all sorts of disparities among groups. Uniformity is found nowhere in the world.

Everyone knows that people's contributions to productive activities vary widely, with a relatively few people at the top and bottom and most in the middle. No mystery here. Individuals differ in intelligence, age, ability, disposition, upbringing, energy, alertness, patience, ambition, education, work habits, culture, risk tolerance, entrepreneurship, and much more. No one should be surprised that their contributions to wealth creation also differ vastly or that they change over time. Thus vast differences in income and wealth are to be expected. I couldn't have done what Bill Gates, Steve Jobs, Serge Brin, or Jeff Bezos, did—and, appropriately, my income reflects that.

Despite the seeming paradox, the huge economic differences that can result from innovation benefit everyone. Much would be lost without that possibility. Incentives matter. Moreover, the innovators' gains are minuscule compared to the total gains to consumers. A system designed to prevent or stamp out those rewards to innovation would impoverish us all. It would also put us on what F. A. Hayek called "the road to serfdom."

It should also be noted that the price system, of which income levels are a part, signals to producers what consumers want most. It's our way of telling producers where to put their efforts and scarce resources.

What indicates progress or regress in society is not the latest dubious measure of a gap between rich and nonrich, but how easily people of determination can climb the income ladder. If the government stays out of the way, the obstacles are minimized. Gaps don't matter. Think of an elevator that can expand like an accordion: the floor can rise even if the distance to the ceiling increases.

Most people don't envy wealthy innovators. They admire them. But anti-freedom politicians, intellectuals, and activists think you should resent anyone who is considerably wealthier. They're running a scam designed to obtain power. We need to call them out.

If you like gaps, check out the shrinking consumption gap, the product of the growing availability of resources worldwide thanks to the spread of economic liberalization and the liberation of human ingenuity and entrepreneurship.

 

TGIF: "We Are All Social Engineers Now"

I don't know if anyone has actually said, "We are all social engineers now," but someone might as well have. (The variation "We are all Keynesians now" was declared a long time ago, even by Milton Friedman, although see this.)

When I say "all," of course, I don't mean all. If you look hard enough, you'll find a few opponents of social engineering. But if you throw a dart into a crowd—don't try that at home—you'll most likely hit a social engineer. Most people think the government should do more than apprehend, try, and punish real criminals; maintain courts for peaceful dispute resolution; and keep a small defense force in the unlikely event of a military invasion. (The free market would most likely do those things better without coercion.) Today the government, to much public applause, goes far beyond Adam Smith's vision of "peace, easy taxes, and a tolerable administration of justice."

Large constituencies favor government management of Americans' education, trade with each other and the rest of the world, immigration, housing construction, land use, business, occupations and professions, industrial organization, finance, energy, medical services, income and wealth "distribution," product quality and safety, and culture itself, to name just a few. Did you hear a public outcry when the Republican presidential candidate promised to force the taxpayers and insurance companies to pay for in vitro fertilization? Money comes with strings.

What are the taxpayers not on the hook for these days?

Social engineering in recent years has notoriously been extended to matters involving speech and the written word. Disinformation, misinformation, and malinformation are the newest hobgoblins. Expression about climate change, COVID-19, and even elections has been targeted. We can be grateful this has been countered with a rousing defense of free speech, but caution is in order. Most advocates of free speech support social engineering in myriad other matters, ignoring that government managers will always look askance at expression that might undermine the consensus believed necessary to successful social engineering.

If you support social engineering in one area, what grounds do you have to oppose it in others? A politician who ran for high office promising to strip the national or state government of the power to manage society would surely be buried by his opponent on election day. People are addicted to government management.

That's the world we inhabit. What is the cost of living in such a world? I don't mean the dollar cost. It's easy to find the numbers corresponding to the budget, the deficit, the debt, the shrinking of purchasing power because of central-bank money creation, and so on.

I'm thinking of cost in a different way. What must we forgo because politicians and bureaucrats—no matter which major party is in office—manage so much of our lives? Social engineering is government planning. It may not be total central planning, though some may wish for that, but it does entail a significant degree of it. Many people think the president of the United States runs the country, not merely the executive branch of the government. He or she is regarded as the public's commander-in-chief and not merely the commander of the military, theoretically subordinate to Congress's constitutional war-declaration power. (That's not been a real thing since the 1950s.) No, the president is widely thought to be in charge of almost everything. Executive orders are more common than legislation, which is bad enough. The two major parties have a few differences over what the government should manage, but taken together, their programs encompass pretty much the whole kit and kaboodle.

Social engineering is a fancy term for politicians and bureaucrats telling us what we must and must not do. As Ludwig von Mises wrote: "Planning other peoples’ actions means to prevent them from planning for themselves, means to deprive them of their essentially human quality, means enslaving them."

So don't let it be said that our choice is between government planning and chaos. Wrong. It is between would-be dictators pushing us around and individual self-direction coordinated in the free market. It is between coercive bureaucracy and social cooperation—largely but not exclusively among strangers—guided by private property, contract, market prices, and entrepreneurship.

The 19th-century French liberal economists strove to explain how "Paris gets fed." Every day the shops offered meat, bread, eggs, milk, etc., yet no one ran things overall. Many people coordinated freely without commands. Those economists did not ask, "Does undesigned order exist?" They could see it. Rather, they asked, "How does it happen?" And they proceeded to explain the division of labor, enterprise, trade, market prices, and supply and demand.

That's what we lose to the extent the government interferes with social cooperation. Because of that interference, we've lost a lot since 1789. When the draft constitution was announced back then, many thoughtful people warned that it allowed too much power to the central government, which could be expected to grow from that baseline. Who would disagree with them today?

 

Foreign Interference

People are being told to be alarmed about alleged foreign interference in the upcoming presidential election. Maybe they should be understanding rather than alarmed. The U.S. government conducts a wide-ranging interventionist foreign policy, which can substantially affect other countries. That has included frequent interference in elections and other political operations. So why wouldn't the governments there not only take an interest in U.S. elections but also perhaps attempt to exercise some influence over the voters? Much is at stake militarily and economically.

American  politicians used to say, "Politics stops at the water's edge." However, after America had turned into an empire, Felix Morley, the classical liberal critic of U.S. foreign intervention, commented that politics stops at the water's edge only when policy stops at the water's edge, which it no longer did. 

If we want foreign countries to ignore American elections, the U.S. government should go back to ignoring foreign countries. End the foreign entanglements! Americans should be free to trade with anyone, but the government should pull back to the water's edge—and much further.

TGIF: The Russians Are Coming? The Russians Are Coming?

Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.

―H. L. Mencken, In Defense of Women

It is in Mencken's spirit that I would size up this announcement from the U.S. Justice Department, titled "Justice Department Disrupts Covert Russian Government-Sponsored Foreign Malign Influence Operation Targeting Audiences in the United States and Elsewhere":

The Justice Department today announced the ongoing seizure of 32 internet domains used in Russian government-directed foreign malign influence campaigns colloquially referred to as “Doppelganger,” in violation of U.S. money laundering and criminal trademark laws. As alleged in an unsealed affidavit, ... Russian companies..., operating under the direction and control of the Russian Presidential Administration, ... used these domains, among others, to covertly spread Russian government propaganda with the aim of reducing international support for Ukraine, bolstering pro-Russian policies and interests, and influencing voters in U.S. and foreign elections, including the U.S. 2024 Presidential Election.

The release quoted FBI Director Christopher Wray: “Companies operating at the direction of the Russian government created websites to trick Americans into unwittingly consuming Russian propaganda. By seizing these websites, the FBI is making clear to the world what they are, Russian attempts to interfere in our elections and influence our society."

So once again a foreign power—usually Russia—is allegedly trying to manipulate the American people with disinformation as a presidential election is coming on. How dare the Russians do this? Political manipulation is allowed only to certain anointed Americans. It's a position of privilege. So the government will protect us from "consuming" Russian propaganda without knowing it. We're too stupid to check claims out for ourselves when they sound fishy—even when they come from so-called legitimate" sources. (Point of information: are Russians incapable of saying anything accurate worth hearing? Just asking.)

Before we get all primed for nuclear war, let's take a deep breath. Maybe it would help to picture a scene that may or may not have occurred in the Kremlin.

Picture President Vladimir Putin (not a guy I'd ever hang with) summoning a top aide to his office. "Sergei, I have a great idea," he might say this trusted aid. "Here's $10 million. I want you to launder it, then have some American-looking company pass the money to big-time American internet influencers. But make sure the money goes to people who are already saying what we want them to say. No sense wasting it on people who don't like us. Pay these friendly guys to post propaganda favorable videos."

Putin might have gone on: "What we want to do is capitalize—pardon expression, comrade—on the American sport of arguing about politics and culture. Muhahahahahaha! Yes, I know, America is severely divided over more issues than I can name. But it's not divided nearly enough for our purposes! We can do better, da? This will help us in many ways, primarily by disillusioning Americans about Ukraine. That would be good, nyet?"

After hearing Putin, Sergei might have laughed under his breath and agreed to oversee the project. Why might he have laughed? Because he might have been thinking, "Do we need to pay even a ruble on polarizing America? What a waste of money! America is doing just fine polarizing itself. They don't need our help. And $10 million? Is he kidding? That's a drop in the bucket compared to what Americans spend bitterly promoting their views on public issues. Is this the Putin who's cracked up to be so foxy? Sheesh! Maybe I should be president."

According to the government's indictment:

Many of the videos published by U.S. Company-I contain commentary on events and issues in the United States, such as immigration, inflation, and other topics related to domestic and foreign policy While the views expressed in the videos are not uniform, the subject matter and content of the videos are often consistent with the Government of Russia's interest in amplifying U.S. domestic divisions in order to weaken U.S. opposition to core Government of Russia interests, such as its ongoing war in Ukraine. [Emphasis added.]

Immigration, inflation, and other topics related to domestic and foreign policy? Are we to believe that Russian officials think they need to amplify divisions in America? How much more amplified can they get? And what about the Justice Department's acknowledgment that "the views expressed in the videos are not uniform"? What are we being asked to get upset about?

J. D. Tuccille writing at Reason points out:

Translated Russian documents [provided by the Justice Department] outlining a "guerilla media campaign in the United States" caution their intended audience that "in the United States there are no pro-Russian and/or pro-Putin mainstream politicians or sufficiently large numbers of influencers and voters. There is no point of justifying Russia and no one to justify it to." [Emphasis added—SR] The campaign was meant to exploit "the high level of polarization of American society" by paying commentators to say things they were already saying.

It's not clear they got a lot of mileage from that program.

That's an understatement, I'd say. But Putin's objective (if he was behind this) might simply have been to upset American officials and the public. Here's a suggestion: let's not get upset. Read the rest of Tuccille's article for more particulars about the effectiveness of meddling and about the U.S. government's own sorry decades-long record of manipulating other countries' political systems. Then remember the advice about stones and glass houses.

"So, take reports of Russian interference in American elections with a grain of salt," Tuccille advises, "knowing that Putin is paying Americans to say what they already believe, and the U.S. does the same in other countries. Importantly, none of that interference prevents you from making your own decisions."

I have plenty of criticism of democracy, as readers know, but I wonder: is America so fragile? Or is this one of Mencken's hobgoblins? If so, who benefits?

TGIF: What Government Has Wrought

Imagine two candidates for president, and ask yourself who is more likely to win.

Candidate A observes that people are facing generally rising prices. Their total at the supermarket checkout is higher than last year. Filling up the car at the gas station takes a bigger bite out of the budget. Everything the kids need seems costlier. Besides all that, the prospect of buying a home or moving to a larger apartment looks grim—too expensive.

Responding to this situation, Candidate A launches a campaign promising to defend the middle class and other working people against "corporate greed." Specifically, he proposes an expanded child tax credit, a crackdown on "price gouging," and down-payment subsidies to first-time home buyers. Targeted tax credits to homebuilders and small businesses are among the promises. (These and other tax credits are called "refundable," which means qualifying people who pay little or no taxes have their nonexistent tax payments refunded to them—a logical impossibility.)

Candidate B, not your typical frontman for a mass-marketing campaign, sees the same hardships as Candidate A, but he has a different message. He pledges to move heaven and earth to repeal taxes on savings, investment, and business, including the capital-gains tax and the corporate income tax. He explains that taxes on savings, investments, and enterprises are dishonest because businesses don't pay taxes; they collect them—from workers, customers, and corporate shareholders. Such taxes constitute double and even triple taxation. (See Roy Cordato's "Corporations Should Pay Higher Taxes?" and "Taxing Investment." ) He also promises to work to abolish regulation on business, which raises production costs, hikes prices, and reduces the supply and variety of consumer products.

The candidate unabashedly promotes his plan in the name of economic growth and prosperity for everyone. He does so because he believes that the only way for everyone to get rich(er) is for production to expand, for labor to become more productive, and for real prices to fall through increased supplies. That requires saving and investment, that is, deferred consumption. Anything that discourages savings is bad, he says. He favors prosperity, he says, over income equality, which is a recipe for poverty.

The candidate proposes to accommodate the lost revenue by pushing Congress to cut spending all through the budget. He also calls on the governors, county executives, and mayors to eliminate the barriers to home and apartment construction, including zoning, because, he notes, high housing prices are caused by politically restricted supply. This is especially egregious where some of the most lucrative jobs are. However, since housing is artificially scarce, many people can't move to where the best jobs are because they're priced out of the housing market. He also promises to get rid of any federal regulations that keep the housing supply from meeting the demand.

In general, Candidate B explains to voters that increased consumption requires increased production (not vice versa) and that bureaucracy discourages savings and raises costs and prices. The government is not good at creating real wealth; it is a consumer and engine of transfer, not a producer.

Who's likely to win the election? The one who promises direct help to middle- and working-class consumers or the one who promises to help them indirectly by freeing up entrepreneurship and free enterprise?

Does anyone doubt who, other things equal, would prevail? Candidate A would be widely portrayed as a champion of the people, a hero bursting with compassion and courage to take on special interests. Candidate B would be portrayed as a shill for Big Business and Wall Street, who favors having all the wealth go to the top 20 or even 1 percent, while the rest of America gets poorer and poorer. (Although that is the opposite of what's been happening for many decades.)

In other words, the candidate who understands how the free-enterprise system tends to work when left unmolested by politicians and bureaucrats will be scorned as an enemy of progress. Meanwhile, the candidate who either is ignorant of economics or engages in demagoguery will be lifted on people's shoulders and carried into the White House.

That's what a representative democratic republic produces. The result is a total national debt—$35 trillion and change—larger than GDP—almost $29 trillion—not counting the unfunded liabilities of the so-called entitlement programs. Interest paid on the debt will be about $900 billion this fiscal year, which ends September 30. Annual budget deficits have hit $2 trillion, which the government covers by selling bonds, which in turn the Fed (short for Federal Inflation Generator) buys up, creating money out of thin electrons. Inflating the money supply then raises prices generally as more dollars chase the same amount of goods, imposing hardship on regular people. A fiscal crisis looms.

If this tale of two candidates does not make you question the utility of government, what would?

TGIF: Doing Good at a Profit

[P]eople started to believe that the bourgeoisie and its economic activities of trade and innovation were virtuous, or at least tolerable. In every successful lurch into modern riches from Holland in 1650 to the United States in 1900 to China in 2000, one sees a startling revaluation in how people thought about exchange and innovation.

"How the Bourgeois Deal Enriched the World"
Art Carden and Deirdre Nansen McCloskey

Perhaps it's time for another, similarly positive reevaluation of exchange and innovation. Heaven knows we need it. Our age features a distinct lack of appreciation of trade through the global division of labor, the innovation and prosperity it produces, and the signs of entrepreneurial success, namely, the wealth of innovators. We have witnessed a surge in good feelings toward socialism and various socialism-lites despite their unbroken record of death, oppression, and stagnation.

Could the varied opponents of market-liberalism—libertarianism in its purest form—suffer an allergy to what Adam Smith identified as a key feature of the "system of natural liberty"? In The Wealth of Nations Smith famously observed,

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.

Apparently, for people who dislike the market economy, producing even astounding benefits for others does not count if one does it at a profit. That is strange.

In 1900 about 80 percent of the world's population lived in extreme poverty. Today, less than 10 percent does. The reduction since the 1980s alone has been phenomenal. And during that time the world's population has grown dramatically —from under 2 billion in 1900 to 8 billion today!

Deirdre McCloskey and Art Carden write that since 1800 per-capita wealth has increased by 3,000 percent. Per capita! (They explain how and why in Leave Me Alone and I Will Make You Rich: How the Bourgeois Deal Enriched the World. Also see this.)

Malthus and Marx must be spinning in their graves. Paul Ehrlich, still alive, declared in the late 1960s that "the battle to feed all of humanity is over." About that prediction, Maxwell Smart would have said, "Missed it by that much." (Ehrlich still gets treated by the news media like an oracle.)

Do people know about this marken-driven progress? Did the establishment and alternative media report it? I must have missed it.

The eradication of poverty has many freedom-related reasons. Economic liberalization (marketization), that is, the freeing up of entrepreneurship and trade deserves much credit. But something else was also required. Economic historian McCloskey primarily credits a change in attitude toward the "bourgeois virtues," such as innovation. "In every successful lurch into modern riches from Holland in 1650 to the United States in 1900 to China in 2000," McCloskey and Art Carden write, "one sees a startling revaluation in how people thought about exchange and innovation." Envy and resentment at success diminished, freeing people to innovate, trade, and get rich while making consumers better off. Mass production emerged for the first time in history. Producers didn't work just for the political elite. How great was that?

Let's put it another way: poverty has been eradicated at a profit! Was that virtuous? Would it have been more virtuous had it been done by nonprofits? The antipoverty record of nonprofits, especially governments, is dismal.

Where is the praise for the market from all the usual antipoverty voices? I can find only one voice, however grudging: Rock star Bono, who said in 2022:

There’s a funny moment when you realize that as an activist: The off-ramp out of extreme poverty is, ugh, commerce, it’s entrepreneurial capitalism. I spend a lot of time in countries all over Africa, and they’re like, “Eh, we wouldn’t mind a little more globalization actually. I would point out that there has been a lot of progress over the years.” . . . Capitalism is a wild beast. We need to tame it. But globalization has brought more people out of poverty than any other -ism. If somebody comes to me with a better idea, I’ll sign up. I didn’t grow up to like the idea that we’ve made heroes out of businesspeople, but if you’re bringing jobs to a community and treating people well, then you are a hero.

As I said, grudging, but better than nothing. But did Bono's friends and fans become pro-market? I don't see it.

One might expect that in a world of scarcity, a system of political economy that harmonizes diverse interests and creates widespread wealth from those differences to win enthusiastic praise. But no. Enthusiasts for markets and economic success have been scarce throughout history because a relative few succeed fabulously as innovators while most others merely succeed as consumers—beyond their recent ancestors' wildest dreams.

"People before profits!" shout envious ignoramuses, who can't be bothered to figure out that businesses that fail to please people record losses, not profits, and go bankrupt. It's a profit-and-loss system (unless the government violates the system by intervening).

By the way, pure entrepreneurial profit emerges when a business can sell its goods for more than its costs, including wages. That is, an entrepreneur happens upon a discrepancy between the price (valuation) of inputs and the price buyers are willing to pay for the output. Hence my battle cry: Exploit price discrepancies, not people!

However, some find it more satisfying to look for exploitation in any encounter whether it is there or not. Sellers exploit buyers; employers exploit employees. It requires no proof because it is a sacred article of faith. The faithful are blind to the deep harmony of interests of sellers and buyers, of employers and employees. They need each other because the system of natural liberty, even when burdened by state intervention, makes all parties richer than they ever could be without the market, its prerequisites (respect for others and their property), and its consequences (the global division of labor).

Getting back to Adam Smith's point, what could be the objection to trade based on mutual benefit? Why should anyone expect the butcher, baker, and brewer to live for their customers? Like their customers, they have lives and families too. Are sellers wrong because they don't give away their wares? Do their customers give away their products and services? Then what's wrong with charging what "the market will bear," that is, what people are willing to pay?

We all agree that no one can own other people? If you want something that belongs to another person, you offer to trade. Just as you don't own other people—that's called slavery—you also don't own their belongings until they accept the terms of trade. Governments often seek to set the terms of trade, but it has no legitimate power to do so. Governments are usurpers. The terms are up to the parties because the parties are trading their property. (If they violate the rights of nonconsenting third parties, that's a matter for the courts.)

Smith didn't mean that buyers and sellers can't be friendly or care about one another. His point was that benevolence is not necessary for mutually beneficial exchanges. It would take place anyway. All that's required is the realization that trade is positive-sum. Each exchanges something less-preferred for something more-preferred. Person A gets what he wants by offering to Person B what he wants, and vice versa. One serves one's interests by figuring out what's in other people's interests. The pursuit of self-interest serves the interests of all. That's one fine arrangement.

Somebody once said that if America is worth saving, it's worth saving at a profit. That goes for the whole world.

TGIF: Back to Barbarism

Has Kamala Harris inadvertently done free-market advocates a favor? Let's not get too hopeful, but maybe. How so? By pandering to voters and marketing herself as a consumer watchdog who will stamp out (undefined) supermarket "price gouging." This could create teaching opportunities for champions of the unhampered market economy.

This should be our message:

• Prices emerge from countless transactions through which people seeking mutual benefit trade their money for goods and vice versa.
• Monetary exchange, unlike the barter system that preceded it, permits the widest possible division of labor because if you want to exchange eggs for apples, you need not search for someone who wants to exchange apples for eggs. Money, which arose through the market process, does the trick.
• The division of labor is the epitome of social cooperation, which enables everyone to acquire more and better goods than they could acquire otherwise. It lets masses of people live long and prosperous lives. As Adam Smith wrote, "The division of labor is limited by the extent of the market."
• Thus, an attack on money and prices is an attack on civilization itself, a step back toward barbarism.

This is Ludwig von Mises's open-and-shut case against socialism, the obliteration of the market economy. But it is also relevant to lesser government intervention in the economy. The standard case against government price controls and guidelines applies to what Harris vaguely proposes. That case can be readily found with any search engine. Tampering with prices brings unwanted shortages, gluts, discordination, misaligned investment, and social strife. (Try this for starters.)

Here I want to concentrate on the deeper, though related reason for concern about Harris's pronouncement. (Trump should not be allowed off the hook because many of his proposed interventions, such as tariffs and job-rescue plans, fall to the same objection.)

That deeper reason is this: an attack on market price-setting, whatever the rationale and however modest at first, is an attack on society itself. While most people think a price is just a number on a tag attached to a product on a store shelf, it is much more. It is even more than an informative exchange ratio that emerges from the interactions between countless buyers and sellers pursuing their interests and signaling relative scarcity and demand. Most important, a price is the result of a life-sustaining process. Free pricing is the glue that holds a great society together and makes other kinds of social bonds possible.

Isn't that an exaggeration? It is not. Even if you think the Harris proposal to stamp out "price gouging" is modest, we have no reason to think it would stay modest. Why only groceries? What about clothing, shelter, and other things we need? (The government already has a lot of influence over interest rates.) And if the "modest" measures fail to satisfy the bureaucrats or the most vocal part of the public, we may expect the politicians to try harder to rein in free pricing. They are not likely to give up their politically winning program. Failure will be grounds for expansion because voters are economically illiterate. Intervention may beget more intervention. Think mission creep and slippery slope.

Ludwig von Mises, writing in Human Action, thought that, short of bombs and socialism, there was no more serious way to destroy civilization than by crippling the price system. Price controls, inflation, and antitrust are among the ways to accomplish that. Intervention is destructive because the price system makes economic calculation possible, and monetary calculation is indispensable for rational thought in a modern society. As a medium of exchange and a common unit of account, money permits people to translate the disparate things they subjectively value into meaningful objective sums that producers and consumers can use to plan, coordinate, and cooperate in the market. Mises's insight is that monetary calculation is necessary for a free, humane, and prosperous society.

As Mises wrote, "Monetary calculation is the guiding star of action under the social system of division of labor." Need one point out that the division of labor based on property rights is essential to personal and social progress?

It is the compass of the man embarking upon production. He calculates in order to distinguish the remunerative lines of production from the unprofitable ones, those of which the sovereign consumers are likely to approve from those of which they are likely to disapprove. Every single step of entrepreneurial activities is subject to scrutiny by monetary calculation. The premeditation of planned action becomes commercial precalculation of expected costs and expected proceeds. The retrospective establishment of the outcome of past action becomes accounting of profit and loss.

Distinguishing profitable from unprofitable activities is necessary because while consumer wants are unlimited, resources and labor are scarce. At any given moment, we cannot have everything we want in the quantities we want, so we must make choices and accept trade-offs. Market prices tell producers what consumers want more of and less of. Looking back, prices signal success or failure—and prompt course corrections.

Mises next makes a crucial point:

The system of economic calculation in monetary terms is conditioned by certain social institutions. It can operate only in an institutional setting of the division of labor and private ownership of the means of production in which goods and services of all orders are bought and sold against a generally used medium of exchange, i.e., money. [Emphasis added.]

Then he clinches the deal: "Our civilization is inseparably linked with our methods of economic calculation. It would perish if we were to abandon this most precious intellectual tool of acting."

If you don't believe Mises, try to imagine living a free, decent, and prosperous life in a society deprived of private property, the division of labor, free exchange, and the resulting market prices. It can't be done unless you count images of chaos and barbarity. Ironically, some people who view themselves as foes of slavery are eager for the government to impose the terms for the disposal of other people's products.

Mises closed Human Action with these words:

The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race.

Our future depends on how quickly we repel the economically illiterate clowns who seek political power. We won't find allies among so-called "progressives" and "conservatives."

TGIF: Gaslighting

I wonder who's gaslighting us now. Here are some of the major perpetrators:

• The pundits and pseudo-economists of all tribes who try to convince us that the government can spend, borrow, and create money almost without limit or harm. What happens when interest on the national debt swallows up so much of the federal budget that little is left for anything else? The government isn't likely to close shop (too bad), so we ought to be discussing what desperate measures it and its dependents will resort to when the well dries up.
• The "labor advocates" who try to convince us that the government can set a minimum wage without inflicting hardship on unskilled workers through lost jobs, curtailed hours, deteriorating work conditions, fewer amenities like training, or higher consumer prices, which those workers face as consumers.
• The "consumer advocates" who try to convince us that the price system is the enemy of the common man and woman. When a politician promises, as Kamala Harris does, to stamp out high prices, "gouging"—without mentioning the money-creating Federal Reserve—beware. You are about to be victimized by the perennial bipartisan war on prices, which means us.
• The regulatory crusaders who try to convince us that increasing the cost of producing goods and interfering with voluntary transactions can raise the general standard of living. It cannot.
• The so-called progressives who try to convince us that mass consumption can precede mass production. It cannot. And as economist Bryan Caplan points out, mass production has never benefitted only a small fraction of society. How could it?
• The Marxists, neo-Marxists, and those they have inspired who try to convince us that our free market transactions are inherently exploitative rather than mutually beneficial. Their condescension knows no bounds.
• The "environmentalists" (having seen socialism's dismal record) who try to convince us that the free market is bad not because it produces too little, but because it produces too much.
• The anti-trade agitators who try to convince us that tariffs harm foreigners (as though that were a good thing) rather than Americans. Centuries of evidence and sound theory show this is not true. Tariffs are meant to raise domestic prices and limit choice for consumers. That can't be good.
• The national conservatives and progressives who try to convince us that immigrants cause rising housing prices rather than the endless array of government restrictions on building. How cruel is that?
• The border closers on both sides who try to convince us that Americans would be better off without eager workers from around the world seeking to escape poverty and tyranny and make better lives in wealthy America, where they can at least double their incomes. The fixed-pie nonsense was invented by demagogues and is embraced by Donald Trump and Bernie Sanders alike.
• The gatekeepers who try to convince us that the government could pull off a historic mass deportation without jeopardizing everyone's liberty and disrupting the social cooperation that voluntary represents.
• The "social justice" warriors who try to convince us that any disparity deemed unflattering is the result of bigotry and oppression—evidence to the contrary be damned.
• The bigotry hustlers who try to convince us that America is the most racist and otherwise bigoted society in world history, with the only question being, not if bigotry caused a situation, but how it did so.
• The self-described "decolonizers" who try to convince us that the only way to rectify long-past injustices associated with Western imperialism and slavery is to destroy self-ownership, private property, the market, reason, the scientific method, and individualism—anything, that is, to do with modern civilization. Meanwhile, similar past crimes committed by non-Western ethnic and tribal groups are to be flushed down the memory hole. Somehow we're supposed to believe that civil strife over past wrongs is good for everyone.
• The Israeli government and its devoted American supporters who try to convince us that the mass murder of tens of thousands of children, women, elderly, and male noncombatants packed into a small space can be morally justified. Questioning this makes you a pro-Hamas antisemite.
• The advocates of the U.S. empire who try to convince us that if we don't fight Russia in Ukraine, we'll be fighting them here. Doubting this makes you a Putin agent.
• The "transgender" ideologues who try to convince us that sex is not limited to male and female, is not immutable, and is not important, and that human beings have "gendered" souls that can be wrongly matched to the bodies they are "trapped" in.  This allegedly justifies Nazi Mengele-type "medical" sadism on children, that is, mutilation and sterilization. (Adults should be able to do what they want to themselves. But parents do not own their children and have no right to abuse them, whether the children "consent" or not. When can third parties intervene to protect children? At what age does childhood end? Libertarians need to take up these questions.)

Strictly speaking, not all of this gaslighting. In the movie Gaslight the bad husband tries to drive his wife crazy by covertly doing things, such as dimming the gaslights, and making her think she had forgotten that she'd done them. Some of my examples involve assertions that Americans should know are wrong but don't. The dominant view is a lie intended to make them susceptible to demagoguery and tyranny. We can see it as advance gaslighting: when people see the facts, they won't believe their own eyes.