May 27, 2019

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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>What is This Free Market We Keep Hearing About?

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

– Adam Smith (1776)[1]

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

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

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

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

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

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

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

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

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

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

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

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

How Do We Defeat Racism and Discrimination Once and For All?

We haven’t heard a lot lately about discrimination in the job market. Perhaps the economic crisis has pushed it into the background. “Progressives” may be too busy promoting their economic gibberish (Keynesianism) to fall back on this tried and true “divide and conquer” issue. However, as surely as night follows day, there will come a time when our friends in Congress will again need a different reason to try to tell people how to conduct their business, and nothing garners more support than railing against discrimination. When that shoe finally drops, I have a suggestion. Let’s not go back down the road of affirmative action, quotas, or any other idiotic idea that our retro-liberal Congress is likely to resurrect. There is only one remedy for discrimination in the workplace: free market capitalism.

I can speak from personal experience that this is true. I have interviewed thousands of people for jobs over the course of my life. The candidates were black, white, Hispanic, male, female, young, and old. How did I decide who to hire? I chose the same way every time. I picked the candidate that I believed would make me the most money. When I chose a black candidate or a woman, I did not do so because I wanted to promote diversity or equality. I did not do it out of altruism or for women’s rights. When I made those decisions, I had one thing and one thing only on my mind – profit.

Sometimes, I chose a white male over a black female and didn’t give it a moment’s thought. Sometimes, exactly the opposite was true. Nonetheless, in each case I chose based purely on my own self-interest (or that of my employers). I did not hire people to help them and they did not come to work for me to further some missionary cause (or even because of my sparkling personality, believe it or not). They came to work for me because the opportunity I offered them would benefit them personally more than any other available to them at the time.

The people that have worked for me in the past and who work for me now are my equals. They have skills and services to sell and I am their customer. We deal with one another in the same way that people deal with one another when buying or selling a house. I am looking to get the highest quality work that I can for the best price. They demand the highest price that they can get for their services. They choose to sell those services to me because I am willing to meet their price. If they call me “Mr.” or “Sir,” it is not out of subservience any more than the owner of an exclusive restaurant is subservient when he calls you “Sir” or “Madam” while you are paying him $150 per plate. When someone buys your product, you show gratitude for the high compliment they have paid you. They have chosen what you have to offer over all other alternatives.

Were I to make hiring decisions based upon anything other than the profit motive –based upon racial discrimination for example – the market would punish me. It would reward my competitor with a more talented employee and an advantage in the market. If I were to do this habitually, my competitors would soon have more talented employees throughout their organizations and I would be forced out of business. Anyone who has run a business knows that one cannot afford to discriminate based upon anything but profit. The market forces me to ignore race, creed, or sex for my economic survival. Only politicians remind me that I should consider demographics.

The plain fact that no politician in history has ever understood is that the market requires no altruism for everyone to benefit. Competition for employees creates higher wages and better benefits. If competition for jobs drives wages down, then the cost of production drops with wages and real wages rise despite the nominal decrease. There is no need to “balance” profit and social justice. The profit motive creates social justice. People exchanging their goods or services with one another by mutual, voluntary consent is social justice. It is only coercion that is unjust.

When people are left to themselves to deal with one another by mutual, voluntary consent, the profit motive will trump racism and discrimination every time. Show me a firm that passes on superior talent because of race or sex and I will show you a firm that is not going to be around for very long. Show me an entire industry that has put the best talent on the sidelines due to race, sex, or age, and I will be open for business in that industry the very next day. Within six months, I will be that industry’s next billionaire. The company with the most talented employees wins – every time.

This relationship between employer and employee – between buyer and seller of services – is one based upon all parties acting in their own self interest. My employees do not need my help or my altruism – they need my business, just as I need the business of my customers. They strive to perform at the absolute highest level that they can so that they can demand even more money from me for those services. I happily pay it when their improved performance increases my sales or my profits. I offer less when I can get the same performance at a lower price.

The beneficiaries of all of this are our customers. I am constantly trying to lower my costs and raise the quality of my products. I do this to gain market share and increase profits. My employees continually improve their service to our customers so that they can make more money for themselves. Higher performance from my employees is what raises the quality of my products.

Neither I nor my employees bother to stop and take note of the color of anyone’s skin or whether they are a man or a woman. We cannot afford to and, quite frankly, we just don’t have the time. This is the way the real world works. Just ask anyone who has to make a living in it. Only politicians and the people they are able to confuse see it any differently.

So, the next time your politicians bring up discrimination in the workplace, try to explain all of this to them. Tell them to put away their pamphlets and spend some time with you – working for a living. Six months spent actually earning a living rather than living off taxes collected at gunpoint would make capitalists of them all. You may say I’m a dreamer, but just imagine the freedom and prosperity that would result.

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

>Government’s Old Shell Game

>Most Americans have seen the hilarious skit on Saturday Night Live, where the CEO’s of the Big Three automakers return to Congress with the “turnaround plan” demanded of them as a condition of receiving (stolen) bailout money. In the skit, the CEO’s drive cars manufactured by their respective companies from Detroit to Washington in order to make amends for flying corporate jets en route to their first appeal for our money. Of course, all three cars break down on the way, making the CEO’s late for their appointment with the (looting) Congressmen. The punch line of the skit is that the only plan that the automakers have come up with is to return to Congress every six weeks to ask for more money. To top it off, the GM CEO promises that by the time that they are ready to accept the December payment – provided that car sales rebound – they would actually need even more money.

It is sometimes said that life imitates art. As funny as the Saturday Night Live skit was, real life proved even funnier. The CEO’s did manage to marshal the resources of their Fortune 500 companies (referencing the 2006 list) and come up with three Detroit-manufactured vehicles that could make it to D.C. However, as in the comedy, the CEO’s show up at Congress three weeks after asking for $25 billion and actually ask for more! Rather than outrage, Americans should really take the opportunity to find some humor in this. As the last vestiges of our Republic are destroyed, one can either laugh or cry. Let’s recognize this ridiculous exercise for what it is – a farce – and have ourselves a good, hearty laugh. We deserve it. Then, let’s stop laughing and turn our attention to the real villains in this immorality play: the United States Congress.

As tempting as it is to focus our attention on the pompous CEO’s of these horribly run companies, let’s not forget why they became so horribly run. It seems to be routinely forgotten that it was Congress that created the labor union problem, with its National Labor Relations Act of 1935 and subsequent violations of property rights. This is why the American auto companies can’t afford to compete. It is also forgotten that Congress created Fannie Mae/Freddie Mac and the Federal Reserve (the three entities entirely responsible for the housing bubble), Medicare and Medicaid (the programs entirely responsible for the both the bubble-prices of healthcare and the lion’s share of our $50 trillion in unfunded entitlement liabilities), the Department of Education (the agency entirely responsible for the next bubble – tuition prices), and every other economic problem that the United States faces. It is no less than tragic that Americans still have not figured out that, left to themselves, with a government limited to enforcing contracts and protecting them against violence, they would trade freely with each other indefinitely to their mutual benefit. Instead, Americans still look to this body of criminals to SOLVE problems that said criminals created. How are they continually fooled?

There are a number of answers to that question, but there is one strategy employed by our ruling class that is particularly frustrating. Students of philosophy may call it the Hegelian Dialectic, while political strategists may call it “framing the debate.” For us plain folks, you might just call it the “heads I win tails you lose” strategy. Every time that Congress wishes to commit some new crime, they present it with a ready-made debate, eagerly facilitated by our so-called journalists. In each case, the issue is presented as if there are only two alternatives, both of which advance government’s purpose to our detriment. Any alternatives beneficial to the people are excluded entirely. It’s the oldest manipulation trick in the book, not much more sophisticated than the old shell game where the pea actually isn’t under any of the shells. Unfortunately, we fall for it hook, line, and sinker, every single time.

This latest farce with the auto companies provides a good example, although there are hundreds (maybe thousands) more. When the idea of stealing our money to give to the failing automakers first came up, there was immediately “fierce debate” in the media about whether the automakers “deserved” the money. Some argued that it was the companies’ own fault that they were in the shape that they were in. Others argued that even if given the money, the automakers would still eventually fail. Congress pompously demanded a turnaround plan from the automakers as a condition of their receiving the money. The media provided (and is still providing) the façade of spirited debate about all of these straw man issues. Every angle to come at this problem is argued, except one: Does Congress have the RIGHT to take our money and give it to somebody else?

Once the deafening silence on this issue is acknowledged, the underlying assumption behind all of the rest of the arguments becomes clear. We no longer have any individual rights. In debating whether or not the bailout money would keep the companies from failing, the obvious assumption is that if the bailout would save the companies, then Congress has the right to forcibly steal our money to save them. In debating whether or not the companies themselves had caused their own demise, you must assume that if they did not, then Congress has the right to steal our money to help them. When demanding that the automakers come up with a turnaround plan to ensure that they do not need taxpayer money again in the future, Congress assumes that they have the right to steal our money as long as the automakers present a reasonable plan.

Not one journalist, not one talk show host, not one panelist – no one anywhere – no matter how liberal, conservative, or even libertarian they claim to be, has made the argument that Congress DOES NOT HAVE THE RIGHT to forcibly take money from one person and give it to another. This argument has been excluded from all debate.

There is a very good reason for this. It is that there is no reasonable argument that can be made on these grounds justifying this theft of our property. The Declaration of Independence tells us that governments are instituted to secure our rights. The Declaration also says that those rights are unalienable, meaning that no government – not even a democratically elected government – can take them away. No majority can vote them away. Foremost among these rights is our unalienable right to the fruits of our labor – our property. THIS was the right that the American Revolution was fought over. Read your history. King George wasn’t denying the colonists free speech, or freedom of the press. The colonists didn’t tar and feather censors. They tarred and feathered TAX COLLECTORS. As I’ve said before, it is your property that tyrants covet, not your right to free speech or freedom of religion. This hasn’t changed in two hundred years, nor will it ever change. Government’s job is to protect our property from theft by other people. There is no circumstance that justifies them committing this crime rather than defending us against it.

Therefore, by stealing our money – for any reason – Congress is contradicting the sole reason for its existence. It doesn’t matter if Congress thinks its actions will save jobs (they won’t), if their actions will save the economy (they won’t), or even if they believe the majority of Americans support their bailout. Even if every American citizen alive save ONE was in favor of giving the auto companies this money, Congress WOULD NOT HAVE A RIGHT to give it. To do so is incompatible with liberty.

Seen in this light, it is obvious why it is imperative that the subject of rights does not come up in any discussion of government bailouts. At all costs, Americans must be distracted away from their rights and lured into arguing about something else. Thus, we argue about CEO bonuses, private jets, energy efficient vehicles (and why Detroit doesn’t make them), and a long list of other unimportant details, while ignoring the one and only issue that matters: that this money is the property of each individual American and that government has no right, under any circumstances, to take it from us. Period.

The automaker bailouts are not unique in this regard. This same parlor trick was played on us with the bailouts of the financial companies. Would the executives keep their golden parachutes? If not, then Congress had the right to steal our money. Would the financial system collapse if Congress did not act? If so, then Congress had the right to steal our money. Would 401K’s and other retirement accounts be decimated without the bailout? If so, then Congress had the right to steal our money (did you notice that they were decimated anyway?).

Over many decades, government has employed this simple subterfuge to bait us into abandoning our impregnable position – our rights – and dupe us into arguing the practical merits (or lack thereof) of their crimes. By taking the bait, we disguise the crimes of our government as ineptitude, and relegate ourselves to complaining about poor results rather than recognizing these usurpations for the crimes that they are.

When the banking bailout was proposed, we objected. For one, brief, shining moment, we were Americans again. We told our representatives that they were NOT to take this money. For one glorious day, our government blinked. Then, they told us that some unimaginable doom awaited us if we did not surrender our property to them. We believed them. They told us that our retirement accounts would be devastated if we did not allow them to violate our rights, so we let them take our money. Our retirement accounts were devastated anyway, and we deserved it. By surrendering our own rights, we violated those of our neighbors. The money we let them take was not theirs OR ours to give.

We have another chance. We can call them again and order them not to give this money to the automakers. Yes, I said ORDER them. Rights are not something that you request of your government. They are something that you DEMAND be respected. Our government is about to once again violate our unalienable right to the fruits of our labor. We must order them not to do so. Do not let them derail you with spurious arguments about what might happen if they don’t steal your money. Stick to your guns and keep bringing the argument back to the only issue that matters: this money belongs to you and they don’t have the right to take it. Make no threats of violence or harassment, but accept no compromise or offer to “agree to disagree” either. Hold their feet to the fire and remind them that this government is YOUR servant. You will be surprised how much power you actually wield.

Check out Tom Mullen’s new book, A Return to Common Sense: Reawakening Liberty in the Inhabitants of America. Right Here!

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>Be Careful What You Fight For

>There is one positive consequence of the economic collapse that is occurring, and the futile attempt by the government to stop it with money stolen from its constituents: the American public has woken up. Despite the best efforts of the major media outlets to spin this the way the government would like, it is apparent that mainstream America is mighty angry that they are being fleeced to prop up the financial system. I hope that anger does not fade with the passage of time – at least not until after November 4th. While wholesale changes are unlikely, it would be nice to see a few incumbents packing after this election and replaced by non-Republicrats. It would be an encouraging sign of things to come.

However, as good as it is to finally see some outrage over the destruction of our Republic, there is still a long way to go. Listening closely to the cries of anger, it is apparent that the majority of Americans still haven’t found their way to actually demanding their freedom. While they are angry, it seems that government has successfully channeled their anger in the wrong direction. Generally, Americans are mad at Wall Street, and are blaming this crisis on “greed.” To the extent that they fault government, they are blaming the crisis on “not enough regulation on Wall Street” and even (ugh) “too much laissez faire capitalism.” This of course plays right into the government’s hands, because the answer to “too much laissez faire capitalism” is more government intervention into the marketplace – which was the REAL cause of this problem in the first place.

If anything, the number one clue that it was not free enterprise that caused this debacle is that the government says it was. By now, every American should know to listen carefully to everything that the Bush Administration says and assume that exactly the opposite is true. However, decades of conditioning to mistrust the free market is paying off for the government, at least for the time being. They have turned this into a class war, instead of an ideological one. They have Americans indiscriminately resenting the wealthy, whether they earned their money legitimately or not. They have Americans condemning corporations, whether they achieved their place in the market legitimately or not. While Americans are mad at their government, they have been convinced, for the moment, that government’s failure was not protecting the average American from the evils of capitalism.

Of course, the truth is that this crisis was a failure of socialism, not capitalism. It was the socialist idea that every American was entitled to a house, and that taxpayers must pay for them, that led to the creation of Fannie Mae and Freddie Mac. Those companies guaranteed mortgages to people that would not have received them in a free market. Only the ability of the government to forcibly collect taxes to back those mortgages allowed the lenders to offer them. If there was any doubt that the government was backing Fannie and Freddie with taxpayer money, that doubt was removed when the government took over the companies when their inevitable failure occurred.

Even with the GSE’s in place, it took another socialist institution, the Federal Reserve, to supply the imaginary money needed to lend to all of those “sub-prime” borrowers. Without the imaginary “liquidity” provided by the Fed, the loans could never have been made and the home prices could never have been bid up so far. The Fed merely blew up another bubble, as it has been doing since the day it opened its doors in 1913.

What these interventions into the marketplace do is create artificial demand. Everyone knows that an increase in demand, while supply remains equal (or when the increase in demand outpaces an increase in supply), results in an increase in price levels. However, demand is not merely the desire to purchase a product, but also the ability to do so. If demand were merely the desire to have something, there would be unlimited demand for all products and services, taking most of the challenge out of running a successful business! The Fed and Fannie Mae certainly didn’t increase the number of people who desired to have a house, but it dramatically increased their purchasing power. In fact, the combination of easy money and credit by the Fed and the incentive for lax lending standards represented a massive increase in demand over the entire housing market, with the predictable dramatic increase in home prices. None of this represents free market forces at work. It is textbook socialist central planning and wealth redistribution.

That brings us to the government “solution,” and what Americans should really be mad about. Our government is now going to forcibly extort trillions of dollars from us in a misguided attempt to maintain the artificial conditions it created in the market. It won’t work. They have tried it many times, and it has never worked. The artificial demand drove prices far above their natural level, and natural market forces are now pushing them back down. Borrowers were lent money that they were never going to be able to pay back. What is worse, a large percentage took the artificial equity caused by the rise in price of their homes in home equity loans and spent it. That money is gone, and the borrowers can’t pay it back. Government taking possession of the mortgages isn’t going to change that. Those borrowers are still going to default, and the home prices are eventually going to go where they naturally must go. Economic forces are like forces of nature. In the end they cannot be stopped.

This intervention is practically identical to the interventions attempted during the Roosevelt administration in the 1930’s, which turned a severe 2-year recession into a crushing, 10-year depression. This bailout will have devastatingly similar results. It doesn’t matter whether a CEO gets away with a $10 million dollar bonus or not. What matters is tens of millions of Americans unemployed for a very, very long time. THAT will be the result of government’s attempts to maintain the artificial conditions in the economy that GOVERNMENT created in the first place.

Since the Austrian economists predicted all of this, while the Keynesians did not, it might pay to listen to what the Austrians suggest as a solution to these government-created crises. While their first advice was always not to create the problems in the first place, they certainly were clear about what to do when the inevitable bubble bursts occurred. Not surprisingly, they advised us to do EXACTLY THE OPPOSITE of what the government proposes. The cure for the recession, according to the Austrians, was to EASE regulation on business, especially in the labor market, and allow the quickest, smoothest reallocation of resources (including human resources) that was possible. As government intervention had created the problem, more government intervention was not going to solve it. In fact, any intervention could only make it worse, no matter what form it took. That is because the wealth creating mechanism of capitalism depends upon the participants making their decisions voluntarily, and government intervention represents forcing people to make different choices. This is really what most Americans are demanding from their government right now – for government to force market participants to choose differently than they otherwise would. Be careful what you fight for, Mr. and Mrs. America, you will probably get even more than you asked for.

I do have hope, however. Sooner or later, Americans will figure this out. At least they’re screaming about something now, which is a lot better than the docile slumber they’ve exhibited over the past several decades as we’ve marched toward oblivion. The government would much rather have them keep on sleeping than to have to divert their anger towards scapegoats and imaginary boogeymen. They will succeed in doing just that this time, but their system is nearing its end. The inevitable economic debacle will occur, and hopefully that will be the final straw. Americans have put their faith in government control and central planning of their lives for almost a century, and it has consistently let them down. Perhaps this last calamity will finally make them see the socialist lie for what it is. Then, they will finally stop walking down the road to serfdom.

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>A Crossroads

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Among the natural rights of the Colonists are these: First, a right to life; Secondly, to liberty; Thirdly, to property; together with the right to support and defend them in the best manner they can. These are evident branches of, rather than deductions from, the duty of self-preservation, commonly called the first law of nature.”

– Samuel Adams The Rights of The Colonists (1772)[1]

Although the United States has the reputation as the most capitalist nation on earth, she is fast moving away from the principles of laissez faire capitalism, while formerly communist countries like China and Russia are moving closer to those principles. This is not surprising, given the 20th century history of China and Russia. Each rejected capitalism for communism, and each have already seen where the end of that road leads: poverty, starvation, mass murder, and totalitarianism. Russia and China have already had to face the fact that communism doesn’t work and reject it for a more free market economy, or face collapse and annihilation. To the extent that they have become freer, they have become more prosperous. To the extent that they still cling to the old ideals of communism or socialism, their progress is retarded.

The United States has not yet faced economic calamity on the scale of that faced by Russia or China, and that is due to the far lesser degree to which the United States has embraced socialism. Along with the western European countries that stood against communism throughout most of the last century, the United States has chosen the path of the “mixed economy,” attempting to mix elements of free market capitalism and socialism in an effort to more “equally” distribute the fruits of production, and to build a “social safety net” for those who at some point in their lives are unable to produce enough to meet their own needs.

However, if there is one common characteristic to the mixed economies of the west during the past century, it is economic decline. Certainly, there are temporary recoveries here and there by one country in relation to the others, but the overall quality of life for people in the mixed economies has been diminishing almost from the moment that they have decided to try to mix socialism with capitalism. Most people do not see the European Union for what it is: a temporary solution for a group of countries that became unable to sustain themselves economically on their own. This was not a result of new competition from emerging nations as much as the natural result of plundering the more productive members of society to support the less productive. Combining their economies under one currency and centrally planned economy merely allows the European Union to pool the productive capabilities of all of their societies, in order to create a larger surplus to plunder. However, the same forces that caused those nations to fail economically on their own will eventually overcome the group of nations together, as will be the result for the United States.

The United States has been able to avoid the economic collapses of the European economies largely due to the fact that it has “mixed” its economy with less outright socialism, at least in decades past. However, the compromises it did make with socialism were the cracks in America’s economic foundation, and as it has moved farther and farther toward socialism in recent decades, those cracks have begun to widen. Now America sits on the edge of the same economic precipice that overcame the economies of Europe. Those realities will become apparent within the next presidential term, possibly under dire circumstances.

Why doesn’t a mixed economy work? The answer is that even a mixed economy violates a fundamental moral and economic principle: property rights. While some might argue that a mixed economy attempts to combine a moral solution (economic equality) with a pragmatic one (productivity), a clear understanding of property rights shatters this fallacy. Violating property rights even for the purposes of achieving what some might regard as more “just” distribution of wealth is both ineffective AND immoral. If there is some transcendent justice in the world, it is that the practice of violating property rights is never successful in creating a sustainable economy.

It takes no monumental exercise of reasoning to see why capitalism has produced such enormous wealth so quickly wherever it has been practiced. In a complex society of millions of people, with each person making the most advantageous exchanges of property that they can, and with an incentive to consume less than they produce in order to realize savings for either capital or future retirement, productivity soars. Productivity in excess of what is consumed produces savings, or capital, which increases the means of production and results in even greater productivity. This was the system that made the United States the wealthiest nation on earth in one short century.

Thus, in economic terms, we have two identifiable extremes. Freedom is defined by the universal recognition of an unalienable right to the fruits of your labor. In contrast, slavery is the complete absence of ownership of the fruits of your labor. More than anything else, it is where a society falls between these two extremes that determines whether or not a society is free. The United States was once as close to the freedom extreme as may be possible for a society of flawed human beings.

Socialism does not recognize a person’s ownership over the fruits of his labor, nor his right to freely exchange those fruits with others. In a socialist system, the fruits of labor are distributed by the state as the state deems fit, not by the free exchanges between their citizens. Thus, their citizens do not enjoy the most basic right that makes them free, nor does the economy benefit from the fundamental building block of productivity.

Even in a mixed economy, where citizens retain some property rights, some of the fruits of their labor are still taken by government and redistributed without their consent. In the United States, this occurs through massive social programs like Medicare, Medicaid, Social Security, and Public Welfare. While Social Security and Medicare are funded partially by the contributions of the beneficiaries, there is no effective controlling mechanism to distribute benefits proportionately according to contribution, although Social Security has a crude methodology attempting to do so. More importantly, these programs violate the vital principle of consent. The participants in the programs do not participate voluntarily, but under the coercive power of government. Thus, ownership of the fruits of their labor is not respected in terms of the monies taken from them to fund the programs.

The violation of property rights does not stop with providing for the poor or elderly, but for corporate welfare as well. In an attempt to “manage the economy,” public funds are also used by the government to bail out failed corporations that are deemed “too big” or “too important” to be allowed to go bankrupt. This not only violates the rights of the people whose property is confiscated in order to underwrite these bailouts, but also causes distortions in the economy.
Rather than some type of compromise between freedom and slavery, which sounds bad enough, the mixed economy makes a more fundamental break with the principles of liberty. In a mixed economy, the citizens no longer have an unalienable right to the fruits of their labor, or property rights, but rather have the privilege of keeping that property that the government does not choose to take. Changing property from a right to a privilege is a monumental change in the principles that a society is founded upon. It crosses the majority of the divide between freedom and slavery. The moral argument against socialism or even a mixed economy is that they both violate property rights: the most important, most basic right that people have.

It is also easy to see why even a mixed economy is not sustainable economically. As it violates those property rights on a regular basis, it is siphoning off the surplus productivity from those producing more than they consume and distributing those savings to those consuming more than they produce. Thus, savings and capital are diminished at first, and eventually destroyed when the incentive to save is eroded. In practical terms, the laborer of today no longer saves for his retirement, partly because he is unable to due to the sizeable portion of his property that is seized to pay the benefits of present beneficiaries, and partly because he knows (or at least believes) that future generations will pay those benefits for him.

One need look no further than the present state of the American economy to see this argument proven out. After decades of growth of socialist programs like Social Security and Medicare, the United States has gone from being the world’s largest creditor to the world’s largest debtor. Its people and its government are mired in debt, and its economy has a negative savings rate. No longer is the American worker the highest paid or most productive in the world. One by one, the United States has lost its dominance in almost every economic sector, no longer producing the majority of goods and services it consumes. While our politicians may try to lead us to believe that economic cycles “just happen,” a sober look at the departure we’ve made away from our founding principles reveal the true reason for our economic decline. The foundation of this departure has been our violation of property rights.

We are now at a crossroads. Socialism, even “diluted” in our mixed economy, has lead us to where it always leads: to the verge of economic collapse. During the next presidential term, the United States is going to face an economic crisis that will startle even the most disinterested and apathetic of its citizens. The question is not so much “what is to be done?” as it is “who will you believe?” Already, politicians and the media are framing the debate on the assumption that it was capitalism and too little regulation over “greedy speculators” that caused our problems. False prophets of freedom, like Lou Dobbs, are masquerading as champions of the people while emphatically calling for more government regulation, and not denouncing wealth redistribution, but merely criticizing the way the loot is split. A new edifice is being built in the capital of the empire of lies.

No matter who gets elected, no matter what policies are made, an economic crisis is coming, and it will be painful. The only way for America to recover from it will be to rebuild its awesome productive capacity that once made it the greatest, wealthiest nation on earth. That cannot be done without rejecting the socialism – even the mixed economy variety – that has ruined her. She must again be an example to the world that liberty and individual rights are the only sustainable economic and political system. It will not be easy for America to choose this path. The voices of liberty have grown few and those advocating socialism have the media, the politicians, and the guns. However, as difficult as it may now seem, we must convince the American people that this calamity was not a failure of capitalism, regardless of what they are told. Economic upheavals spawn revolutions. In Russia and Germany during the early 20th century, those revolutions ended badly. We must educate our neighbors so that we choose a wiser path. Make no mistake; the danger is real. Lies and ignorance in the midst of this crisis can enslave us for generations, but the truth can surely set us free.

Tom Mullen

[1] Samuel Adams The Rights of the Colonists (1772) The Report of the Committee of Correspondence to the Boston Town Meeting, Nov. 20, 1772 Old South Leaflets no. 173 (Boston: Directors of the Old South Work, 1906) 7: 417-428.

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>To the People of the United States of America

>To the People of the United States of America,

I am writing today because no one has asked my opinion in any poll. No candidate has sought my vote, and no lobbyist taken up my cause. It seems that of all of the “special interests” in America, mine is forgotten – unworthy of notice by politicians, activists, media commentators, and the press.

It may be because I am neither a Republican nor a Democrat, nor represented by lobbyists for the disabled, senior citizens, minorities, trade unions, nor any other lobby. In fact, I am not a member of any group whatsoever.

I am the individual. Our Constitution was written to protect me from the majority. I am the victim of Democracy, which has overwhelmed the safeguards of the old Republic and replaced the Republic with mob rule. I am raising my voice now, while I am still able to raise it, if for no other reason than to let posterity know that I was still here when the ruins of our Republic are examined.

I have lived my life in a country that proclaims itself to the world to be the “land of the free,” but have watched my freedoms erode. The most basic right I had – ownership of the fruits of my labor – has been taken from me. Now, politicians argue over what portion of my labor will purchase medical care for the poor and elderly, what portion will pay social security, what portion will educate other people’s children, and what paltry sum I will be allowed to keep so that I may go out tomorrow and work another day.

I once lived in a country which recognized my right to do as I pleased, as long as I did not violate the rights of others. Now, mountains of laws and regulations have been passed in the perverse effort to prevent me from having even the opportunity to commit a crime. As a result, I am rendered paralyzed, as there is almost no action that I can take, beyond rising from my bed, that cannot be construed by someone to be a crime or violation.

More of my property is seized to support grand adventures in foreign lands, where my government spreads “freedom” through the crosshairs of its guns. My government’s invasion of countries that pose no military threat to us whatsoever has made me hated throughout the world, merely for being an American, and helped enslave my children to unserviceable debts.
Most ominously, even the legal protections of my person have been revoked in the name of protecting my fellow citizens against “terrorism.”

While the Constitution guarantees me sound money, as only gold and silver shall be legal tender, I am nevertheless forced to use the worthless paper notes of a private banking cartel that decreases their value daily, providing me no safe store of value to save for my future. To aid financial speculators who produce nothing whatsoever, the volume of these notes is increased out of all reason whenever these gamblers and thieves stand to suffer a loss. As a result, the purchasing power of this slave currency is constantly decreased, widening the gap between rich and poor, and destroying the middle class. I am left with no practical means to participate in free trade and civil society.

I give my fellow citizens the benefit of the doubt, and believe that they have merely forgotten what the true nature and purpose of government is. I remind them that government is nothing more than the collective use of force – and that the use of force is never justified except in defense. It is, by definition, a last resort. Government has almost limitless power, but very few rights. It has no right to do anything beyond protecting my life and my freedom.

Government has no right to provide for the needy with monies extorted at gunpoint from its citizens. I will gladly work with my fellow citizens to help those in need, once I have a choice. In the meantime, I demand that my labor cease to be taken from me without my consent.

Government has no right to bring freedom to the oppressed by initiating force. I remind my fellow citizens that all of the tyrants of history justified their conquests under the false guise of “liberation.” I will gladly stand with my countrymen to fight any foreign power that truly threatens us, but I demand that my government immediately cease to invade foreign countries in my name.

Government has no right to “manage the economy.” Trade is only truly trade when it is free – the result of exchanges between people by mutual, voluntary consent. There is no role for government in this whatsoever. I demand that my right to trade freely with my fellow citizens and citizens abroad be respected and no longer subject to inspection or interference.

Government has no right to “prevent crime.” It may only punish activities that are truly criminal, and those are relatively few compared to the ocean of laws and regulations that have been passed. I demand that any law prohibiting an act that does not directly harm another person be repealed, along with any law that prohibits unpopular thoughts or speech. Neither the threat of terrorism, poverty, natural disaster, nor epidemic justifies the surrender of one ounce of liberty. I demand that habeas corpus be restored.

Finally, government has no right to rob me of my property by forcing me to use paper currency whose value is subject to its whim. I demand that gold and silver no longer be taxed as capital gain if it rises in price relative to paper currency.

While I owe my fellow citizens nothing in return for heeding these demands, I nevertheless offer a thousand-fold in return. My fellow citizens are running out of fossil fuel – I will discover a new, renewable energy source. Our planet is growing crowded – I will unlock the secrets of traveling to others. The productive members of our society will soon be outnumbered by those less able or unable to produce any longer – I will feed them all. For it was I – the free individual – that gave you everything you have. It was I that invented the telephone, the automobile, the airplane, and the computer. It was I that devised methods to produce mass amounts of goods, making them affordable and available to everyone. It was I that devised a system of government where the rule of the jungle was replaced by the rule of just laws.

In return for restoring my rights, you will again free my creative power to give you more than you can possibly imagine, and solve problems which you are unable to solve without me. I ask nothing more in return, for it is no more my right to make claims upon my fellow citizens than it is their right to make claims upon me. I hereby waive any supposed “entitlement” to public welfare, medical care, retirement benefits, or any other benefit that requires coercion of my fellow citizens to provide it. In return I demand that my liberty be restored. As I believe that I am the last individual left on earth, I do not believe that my tax money will be missed. However, if there are other individuals besides me that would claim their freedom as well, I invite them to join me, and to them I pledge my life, my fortune, and my sacred honor.

Regards,

A Farmer

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