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."

TGIF: The Populist Trap

If you care about individual freedom and general prosperity, you'll want to avoid all shades of populism like the plague. It is economic illiteracy proudly proclaimed and writ large. As an alternative to libertarianism, it is bad in its own right—freedom is not on its agenda—but it is bad also because it is wedded to nationalism. That is, it treats the nation-state—not individuals and their projects—as the fundamental unit. It's ours against theirs. Disregard the hosannas to persons, families, and local communities. It's the nation that matters. 

Don't believe me? Then why do populists always want to interfere with people's right to trade as they wish regardless of borders? Never mind that protectionism holds the seeds of economic and military conflict and that unmanaged global trade is global cooperation.

I'm tempted to say that basically, the populist believes that scarcity is a capitalist plot. (There's some unwitting vulgar Marxism in that.) Populism presents itself as the politics of grievance: "working people" are fed up with an elite conspiracy of elected officials, bureaucrats, and "corporate" cronies who enrich themselves at the expense of ordinary people.

Bailouts and subsidies give the grievance some credence, but it's exaggerated. The unnamed culprit is market dynamism—or freedom. Entrepreneurship, innovation, and consumer sovereignty bring change in the demand for goods, which understandably makes people nervous. The bias favors the status quo. Blacksmiths and assembly-line workers are no longer wanted.

Anyway, since coercive government power is the only way to grab privileges at other people's expense, power itself should be—but never is—the villain. Greedy "Big Business" is the target. No distinction is made between bigness achieved through successful service to consumers and bigness achieved through anticompetitive government interference with market relations.

What is the populists' alternative? They say they want a government that serves working people. Never mind that people produce to consume, not vice versa. How do they intend to get the government and economy they want? Through democracy, though they ignore the elitism inherent in any political system. Politicians in a democratic republic need to cobble together majorities to get elected and reelected, but when in office they have elbow room to set the agenda for the one-size-fits-all program that they decide best serves the people's needs. Since people don't understand economics and are biased against markets and foreigners, the program brings tariffs (which hurt American consumers and workers by raising prices and provoking retaliation), bailouts, and deficit spending financed through the hidden inflation tax. Fiscal restraint is not a priority. Every penny of the budget has a constituency behind it.

We find populist agitation within what is misleadingly called the "right-wing" and "left-wing." On the left, the populists try to counterbalance inane identity politics, which in their view has pushed class politics off the agenda. They seem not to realize that class politics is an earlier form of identity politics; it holds, wrongly, that an inherent and irreconcilable conflict exists between haves and have-nots, between employers and employees, that can only be rectified by making the state more powerful than it is today. Never mind that mass production must come before mass consumption, and markets have wiped out much poverty worldwide. The headline-rich "inequality" red herring will keep everyone distracted.

When a Republican populist (say, J. D. Vance) hears the term economic freedom, he is likely to envision unilateral scope for the sovereign state: specifically, a strong leader who wields tariffs, trade quotas, sanctions, antitrust prosecution (which protects inferior competitors, not consumers), and more in his crusade to strengthen the "U.S. economy" by increasing exports (by muscle if necessary), blocking imports, saving or restoring "American jobs," and punishing businesses that provide superior consumer service. What he doesn't envision is free individuals trading goods, services, and labor with whomever they want, including new immigrants who seek a better life without government permission.

The populist can't tolerate individual freedom because, in his view, that would be chaos. He rejects consumer sovereignty, so he goes with the only thing left: the state. He has yet to learn what has been known at least since the Scottish Enlightenment of the late 1700s: that the best kind of social order is spontaneous order, the order that results from free, cooperative, commercial human interaction, not central planning or industrial policy.

The populists, "left" and "right" point to people's economic hardship, but it never occurs to them that government intervention, of which there is no shortage, could be at fault. Are housing prices too high? They blame immigrants (who improve our lives along with their own), not the myriad government building restrictions. Are supermarket prices rising? Blame corporate greed and ignore the money-creating Federal Reserve. This blindness to government intervention is on display with every issue. The populists never see the straitjacketed markets, only too little democracy. But democracy can't get us out of the mess it's got us into. Virtually everything the government does affects market relations. Yet voters know nothing about economics. They don't even know that prices fall when supply rises.

The populists find industrial policy more to their liking than freedom. That's central planning—economic and social engineering, "picking winners"—without nationalization. It's subtle socialism, and it has the same flaws. No one can know enough to plan the economic interactions of billions of people. Anyone delusional enough to think he and some "experts" could manage that task should be laughed off the stage. Aside from the knowledge problem, the incentive problem will always plague us. We know what Lord Acton said about how power corrupts. But power also attracts the already corrupted.

But aren't the populists at least antiwar? Sometimes. They tend to oppose U.S. participation in the Ukraine-Russia war—now. But they can't be relied on. They tend to favor arming Israel in its Gaza onslaught. As nationalists, they always present a potential for conflict, these days with China and Iran. We saw that in Trump's term as president. He cannot be counted on to dismantle the trip-wire alliance system, and he's enthusiastic about the de facto alliances with Israel and Saudi Arabia. Think of the arms sales! That's good for American workers, right?

Let's not forget the link between border security, which populists demand, and the drug war, which they also love. That link offers populist leaders many opportunities for bloody intervention south of the border. One more thing we can be sure of: the populists do not see global trade as a peace-maker, or trade restrictions as a source of conflict. Globalization, even without a government role, is a dirty word. I see no reason for comfort here.

Even when the populists oppose wars (did Trump oppose any?), it is not so that the taxpayers can keep their money and spend it as they like. No, the populists stand with progressives: they want to transfer the money from the Pentagon and CIA to domestic departments. Details may differ, but that's all.

The best reason to oppose war and the preparation for it, aside from the obvious one, is that they require a bloated, intrusive government, battalions of bumbling bureaucrats, and the diversion of scarce resources from consumers to military contractors. Populists just want to redistribute the bloat.

It may be that the "right-wing" populist leaders are phonies and don't mean what they say. Some in the "left-wing" tribe say that about Trump and his running mate, Vance. Maybe that's true. But if they are liars who stand for something else, we can be certain they don't stand for shrinking the state and expanding individual liberty. That's not on the menu these days.

TGIF: Who Rules? That Is Not the Question

Today's two major contenders for political power seem to be elitists and populists. Funnily enough, both types are present in each of the big tribes known as progressive/liberal and conservatism, left and right, or Democratic and Republican. (Here's the lowdown on paleoconservative elitists.)

However, the elitist/populist framework should leave everyone dissatisfied. It omits too many details. Namely, it presents a contest apparently over who should rule: an anointed elite or "the people," which is not always well-defined. I put the term in quotes because the whole people cannot possibly rule.

The common framework ignores the far more fundamental question: which rules? In other words, what are the rulers, whoever they are, proposing to do? Exactly which orders are to be enacted as legislation and imposed by force? Are there to be limits on this rule? By what means? What happens if the limits are breached, as they have been constantly over the years?

That's what libertarians care about first: the rules. Who rules comes second. But everyone should care about this. Under certain rules, it wouldn't matter who was "in charge." Imagine a rule against anyone -- even "rulers" --  initiating force in any way against anyone else.

The problem is that the rules typically administered by the state, including representative democracies, shouldn't exist. We shouldn't want anyone enforcing those rules because they are bad rules. They may constitute legislation, but, as F. A. Hayek and others have taught, they are not (natural) law.

We cannot assume that populist, or unfiltered democratic, rule would be preferable in all circumstances to elitist rule. I think of the self-styled "extreme libertarian" H. L. Mencken's famous observation, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

Take the Federal Reserve System -- please! If a gun were held on me, I'd choose the current system over a Fed run by Congress or by plebiscite. I'm not sure that's a tough call, but I'm marking on a steep curve. (Ron Paul wanted to end the Fed, not hand it over to "the people.") 

In The Myth of the Rational Voter, libertarian economist Bryan Caplan reports that surveys consistently indicate that better-educated individuals tend to give more sensible answers on economic-policy questions than the general, less-educated population do and thus are less, say, anti-trade and anti-foreign.  What might that mean for trade, immigration, and even monetary policies? Of course there shouldn't be trade, immigration, and monetary policies. They override individual freedom, cooperation, and spontaneous order.

Look across the Atlantic and consider Brexit. With good reason, a majority of Britons didn't like policies being made by distant and largely unaccountable politicians and bureaucrats. Most voters chose to exit, that is, they opted for decentralization. At the same time they favored nationalism and national sovereignty, that is, immigration control and protectionism.

Notice what wasn't on the ballot: individual sovereignty -- not just for Britons but for everyone. In the Brexit case, decentralization coincided with more national government power over the freedom to trade and to deal with would-be migrants. That's hardly a win if the standard is individual liberty. (Decentralization has a potential advantage: it lowers the cost of voting with one's feet.)

It's not that "the people" are stupid -- far from it. While most of us are reasonably competent in normal life, in the political realm we face special incentives and disincentives that make us act stupid. When one vote is impotent, why would most individuals spend scarce time and money studying complicated subjects to investigate whether to vote for Smith or Jones? They might as well vote their feelings and biases. Besides, most individual voters will bear a only microscopic fraction of the total expense that the winning candidate will help to impose. Bad incentives all around.

Admittedly, democracy as a way to pick officeholders is certainly preferable to violence in the streets, but that is faint praise. We can do better.

But we don't want an elite to rule either. Elitism's track record here and elsewhere is nothing to brag about. It includes war, depression, and other lamentable political maladies. Of course, the rejection of elitism doesn't mean the wholesale rejection of expertise, as some people seem to think. That would be irrational. Who doesn't consult a doctor when ill? No, what must be avoided is endowing select experts with access to political power. The damage can be seen in the recent pandemic.

The alternative to elitism isn't more democracy, which would trade one form of authoritarianism for another. The alternative is individual liberty in markets and civil society, and that calls for the strictest limitation on -- as we work for the elimination of -- all coercive political power. The objective is to free all peaceful relations from government. Instead of elitism and populism, let's have individual liberty and cooperation.

TGIF: Games Politicians Play

Except for the civic religion on ostentatious display at the annual presidential state of the union address, one can hardly think of a reason for the tradition at all. It's not as though we learn something substantive or even hear a truthful material claim. (Yes, it could be useful in launching a president's reelection campaign.)

I'm sure someone somewhere has pointed out that democracy is not only a religion but also the opiate of the masses. When too few people could swallow the silly claim that the head of state represented the applicable deity, a new way was needed to assure the people's enduring acquiescence in their own subjugation. What better way than by having them believe that the power rested in their own hands? They had only to use it wisely (that is, by choosing those whom history if not Yahweh had ordained to rule). If they didn't, the fault was theirs alone. Thus no need for revolution or regicide. They needed only to traipse to the polls when called and participate more conscientiously in the collective exercise of their sovereignty. Helping to articulate and then loyally abiding by the General Will was the essence of freedom, after all. So stop complaining and participate civically!

The rest follows. The rites and holidays serve to remind us of our purported awesome power. Each year, then, the president goes before a joint session of Congress to report on the state of our union, with the cabinet (minus one) and the august justices of the Supreme Court duly assembled. The presidential box is graced by people who, for some very poor reason, allow themselves to be politically exploited by the occupant of the White House.

From there, it's all pretty routine, and Joe Biden stuck to the script. Take his boast about creating a record number of jobs, shrinking the deficit, controlling inflation, and the like. We've heard it countless times before. If something has gotten worse, say, crime, vow to make it better but accept no responsibility.

Never mind that the job growth (attributable to enterprise) was predictable with the waning of the Covid-19 pandemic and other factors beyond the power even of the Oval Office. Never mind that huge budget deficits loom as far as the eye can see -- Washington is addicted to spending our money -- and that the debt limit has again been reached and will soon be raised. The sky's the limit, you know. That justifies forecasts of more Fed inflation and malinvestment, then recession and involuntary joblessness.

Never mind that the federal budget line labeled "interest on the debt" continues to increase and will tower over ever more spending categories. Never mind that Biden's Buy American policy means that the government will intentionally spend more of our money than necessary in procuring materials for infrastructure projects it should have nothing to do with anyway. (And leave foreigners with fewer dollars with which to buy what politically unfavored Americans make.)

Never mind that newly proposed price controls and regulations will lower the living standard of everyone, lower-income people included. And never mind that "illegal" immigrants aren't the problem with the welfare state or the source of fentanyl. (That would be the misnamed war on drugs.)

Mind none of that. Just jump to your feet multiple times and applaud. That goes even for you good folks at home -- just in case your smart TV is watching you back. (I'm just sayin'.)

I did enjoy the lively give-and-take that went on when Biden said that “some Republicans want Social Security and Medicare to sunset.” Republicans were heard to shout back, "No!" and "Liar."

That's another game they all play: pretending that Social Security and Medicare won't crash -- sunset is too gentle a verb -- on their own without any help from Congress. Both programs will be insolvent in the short term. The implicit crash provision was built into the original legislation in the 1930s and 1960s.

But before the people had a chance even to wonder if the chief executive was indeed lying, he engaged in classic misdirection by saying, “Let’s all agree — and we apparently are — let’s stand up for seniors.”

Everyone -- yes, everyone -- got to their feet and applauded. He might as well have said, "Let's all agree that the law of gravity has been suspended!"

The Republicans of course have their own overlapping game. They brand themselves as the party of limited government (but not of limited military or surveillance) and fiscal responsibility and expect us to pay no attention to the small men behind the curtain who spend oodles of our money just like their opponents do. They are bad wizards and bad men. Since raising taxes would go against the brand, they are, despite their incessant squawking, secret agents of deficit spending, which means inflation and recession. Of course, many Republicans -- MAGA and the other denominations -- thrill to the words Buy American and to any industrial policy as long as the prefix strategic is attached. That's music to their ears. And they don't want immigrants polluting the culture or labor market. The populists of left and right are substantially of one mind.

How reassuring that it's business as usual in old D.C. Thank goodness the adults are back in charge. The civic religion can proceed with its rituals mostly intact.

TGIF: Tucker Carlson Needs Love from His Leaders

Fox News host and Trump cheerleader Tucker Carlson is a culturally conservative, big-government, nationalist populist. As such, he’s upset that establishment politicians and their sponsoring elite don’t care enough to promote his and his fellow Americans’ happiness. 

That’s weird. Why would he want them to?

Read TGIF at The Libertarian Institute.

TGIF (The Goal Is Freedom) appears Fridays. Sheldon Richman, author of America's Counter-Revolution: The Constitution Revisited, keeps the blog Free Association and is executive editor of The Libertarian Institute. He is also a senior fellow and chair of the trustees of the Center for a Stateless Society and a contributing editor at Antiwar.com.

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