November 13, 2018

Michael Moore Wants to End the Fed (He Just Doesn’t Realize It)

 

“You keep on using that word. I do not think it means what you think it means.”

– Mandy Patinkin as Inigo Montoya in The Princess Bride (1987)

It is ironic that Michael Moore’s latest movie, Capitalism: A Love Story features two appearances by writer and comedic actor Wallace Shawn. There is even a clip of Shawn exclaiming “Inconceivable!” in his hilarious turn as Vezzini in The Princess Bride. However, the most appropriate clip from that movie would have been Inigo Montoya uttering the words quoted in the prologue of this article. Using one of Moore’s staple filmmaking techniques, he could have cut to the clip immediately after one of his own pronouncements about capitalism. For although Moore says the word over and over throughout the movie, it is apparent that it “doesn’t mean what he thinks it means.”

The closest thing to a definition of capitalism that Moore provides to his audience comes early on when he remarks, “Capitalism: a system of giving and taking – mostly taking.” He goes on to show a half dozen or so clips of people extolling capitalism for providing “the freedom to succeed and to fail” or hailing the virtues of competition. However, the common mistake made by both Moore when attacking capitalism and the Republican politicians he depicts defending it is their mutual failure to recognize the central tenet of capitalism: property rights.

True capitalism is based upon one simple principle: that all exchanges of property are made with the voluntary consent of all parties. Private ownership of property and competition – the other two components of capitalism in most traditional definitions – are actually results of this foundational principle. As all governments are institutions of coercion, there is no way for them to acquire property through voluntary exchange. Further, with all exchanges being voluntary, sellers must by definition compete with one another in order to sell their products. So, the foundation of “capitalism” is really the non-aggression principle applied to property. Capitalism requires that no one’s property can be taken from them without their consent.

However, Moore’s film does not examine anything close to that system, which Adam Smith called “a system of natural liberty” (the word “capitalism” was not coined until nearly a century later). There is a good reason for that – it doesn’t exist. What Moore mistakes for capitalism is really the soft fascism that has been increasing in intensity in the United States since the Federal Reserve and income tax were created and property rights were destroyed. He makes the same mistake that Republican voters make when they vote Republican politicians into office. They believe the politicians when they say that they support “free markets,” despite the fact that they go on to govern in exactly the opposite way.

The injustices that Moore depicts in his film are without exception caused by government. Not one can be traced to people voluntarily exchanging their goods and services with one another. What Moore represents as “capitalism” is really what Thomas Dilorenzo described as “Hamilton’s Curse” in his 2008 book of the same name. Without attempting to reduce Dilorenzo’s treatise to a few sentences, he generally describes the economic system whereby the government allies itself with the wealthiest segment of society in order to plunder the wealth of everyone else in pursuit of “national greatness” or “the common good.” The hallmarks of the system are corporate welfare, deficit spending by government, protectionist tariffs, and most importantly, a central bank with a government-granted monopoly on the creation of money.

This system purports to benefit society by encouraging the growth of domestic industry and thereby increasing the power and standing of the nation as a whole, as well as providing employment for the working class. However, like socialism, it must achieve “societal goals” by violating the fundamental principle of capitalism. It must violate the non-aggression principle by taking property away from people without their consent and redistributing that property to others. Some of this is accomplished through taxation. A much greater part is accomplished through monetary inflation.

It is astounding that most people are able to ignore the fact that the central bank is an instrument of theft and thereby completely antagonistic to capitalism. It takes an incredible dearth of healthy skepticism not to question the reason for legal tender laws, which force people to use the central bank’s currency. There is only one reason for these laws: without them no one would choose to accept an un-backed paper currency in exchange for their real goods or services. People are forced to use Federal Reserve Notes so that the government and its corporate allies can use inflation (expansion of the money supply) to transfer wealth from everyone in society to the privileged few who benefit from the transfer. The beneficiaries include corporate defense contractors, large farming corporations, Wall Street banks, and other “pillars of the economy.” It is inflation more than anything else that widens the gap between rich and poor. It is the chief vehicle for what Bastiat described as “the few plunder the many.”

However, Michael Moore does not recognize the right to the fruits of one’s labor and so he is completely blind to the difference between capitalism and the system promoted by Republican politicians (in deed if not in word). He fails to see that every aspect of our financial meltdown was caused by some violation of property rights, representing a departure from capitalism.

The money needed to extend all of those “deceptive mortgages” was created by the Federal Reserve out of thin air, thus diluting the value of all existing U.S. dollars. This was a theft from the holders of those existing dollars. Most of the loans themselves were guaranteed by Fannie and Freddie Mac, which uses the coercive power of government to force taxpayers to put up their money as collateral for people who would either not receive those loans or who would pay a much higher interest rate without it.  Again, this is not capitalist voluntary exchange but instead wealth redistribution and a distortion of the free market. Similarly, the hundreds of billions paid out to defense contractors and other beneficiaries of President Bush’s wars in the Middle East were also funded by inflation, which the Republicans overtly flaunted by cutting taxes while skyrocketing government spending.

Since he fails to recognize that it was violation of property rights that truly caused our economic meltdown, he doesn’t recommend the restoration of property rights as the solution. Moore blindly accepts the traditional “progressive” fallacy that free market participants can only benefit at someone else’s expense, instead of recognizing that people who exchange voluntarily do so to their mutual benefit. As a result, he accepts government’s role as plunderer of property and merely suggests dividing up the loot differently. He promotes the bogus idea that the government can grant rights to people, and suggests that the coercive power of government no longer be used to redistribute to the wealthy, but instead be used to redistribute to everyone else. He objects to a system wherein the few plunder the many, but suggests it be replaced with a system where “everybody plunders everybody.”

Moore asserts that FDR had the answer when he proposed a “Second Bill of Rights,” granting Americans the right to a reasonable wage, health care, a pension, and other entitlements. Again, as the concept of property rights is foreign to him, Moore is able to ignore the fact that granting a right to these things means that those who provide them have no rights. He extols the “justice” of labor unions, but ignores the fact that it was the unions that destroyed the U.S. automakers by claiming exactly these rights. It was actually an alliance between government and these unions – identical in principle to the alliance between government and Wall Street – that turned his beloved Flint into a ghost town. He suggests that we should set these forces loose upon all of society. His ability to ignore reality is, to quote Mr. Shawn, “inconceivable.”

Like all of his movies, Capitalism: A Love Story is very well made. Moore is exceptionally good at what he does, bringing wit, comedic timing, and emotional power to the screen. Also like all of his movies, he identifies real injustices and expresses appropriate outrage at them. However, throughout his distinguished career he has made the classic mistake of misidentifying the cause of the problems he depicts so poignantly on the screen.

He compares the United States to Rome and points to the similarities between our problems and theirs. He correctly identifies half of the cause of Rome’s decline and ours: the government’s unholy alliance with a landed aristocracy that plunders the wealth of the people for redistribution to the privileged few. However, he fails to recognize his solution as the other half of the cause of both Rome’s decline and ours: the rest of society attempting to share in the plunder by means of majority vote (democracy). It was both of these forces acting together which destroyed Rome’s currency and led to her eventual collapse. Like Rome, we are also afflicted with both of these ills.

The only real solution to our predicament is to implement a system that supports Bastiat’s third alternative – “where nobody plunders anybody.” It is only by following this principle that justice can truly prevail. The most significant step in achieving such a system would be to eliminate the Federal Reserve System. Neither the Republican system of plunder for the wealthy nor the Democratic system of plunder for everybody is possible without monetary inflation. There is no way that government could ever achieve either through direct taxation.

I believe that Michael Moore’s intentions are good. At the end of his film, he asks Americans to join him. I have an alternative proposition for him. If he truly wants to see justice restored in America, along with equal opportunity for all Americans to pursue their happiness, he should call off his misguided attack on capitalism and join us to End the Fed.

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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© Thomas Mullen 2009

Conspiracies? They Don’t Matter

800px-harold_pratt_house_004Immediately after an official story is created, there is usually an alternate or “underground” theory about the same events, purporting to be the “real story” that somebody doesn’t want us to know. This instinct to question the official story is very healthy, and should not be discouraged. Skepticism is the prime motivation behind critical thinking and analysis. Certainly, many of the “official stories” we’ve heard to explain major news events do little to dissuade those that immediately call them into question. The result is often what have come to be known as “conspiracy theories,” a moniker used with contempt by the establishment and mainstream media and even avoided by those alleging a conspiracy themselves. Conspiracy theorists are immediately branded as paranoid by the establishment, for whatever reasons, and some say that this is a media conspiracy in itself.

Conspiracy theories are usually compelling. Conspiracy theories give meaning to tragic events that would otherwise be more horrifying because there was no one to blame, no cause to invoke, or no reason for the death and destruction. For example, if lightning strikes an airplane and it crashes, killing all aboard, it is only worthy of our attention for a day or so. However, if a theory arises that it was not really lightning, but a bomb or sabotage that brought down that plane, that story has legs for years, especially if the theory accuses what we perceive as a villainous establishment of victimizing innocents. No one wants to face the fact that suffering occurs due to unfortunate accidents or random forces of nature. Everyone wants to hear that there was a sinister force behind the tragedy, because then we can solve the mystery, bring the perpetrators to justice, and prevent the dastardly event from every occurring again. While researching his role in the 1997 movie “Conspiracy Theory,” Mel Gibson interviewed many “conspiracy theorists,” acknowledging that the longer he spoke with them the more believable their theory seemed to become.

None of this is intended to suggest that conspiracies do not exist. Let us not forget the wise axiom, “just because I’m paranoid doesn’t mean that they’re not out to get me.” However, it is important to recognize that there is a strong motivation for us to see conspiracies where they may not exist, and also to see conspiracies as much more vast than they may really be. Ockham’s razor is best not forgotten, that, all things being equal, the simplest explanation is often the right one. The same critical thinking, analysis, and skepticism should be applied to the contrarian or conspiracy theory as to the official story, addressing evidence to the contrary of the theory as fairly as evidence in support of it. Too often, neither the official story nor the conspiracy theory attempts to do so.

Ultimately, I believe that conspiracy theories are often harmful to the cause of achieving political change or reform, because they distract the great majority of people from focusing on the problem itself and its solution, and instead focus all of the intention on ferreting out conspirators. That is not to say that understanding the cause of a problem cannot help with its solution. However, in many cases, the cause is irrelevant. In a representative republic with officials chosen by majority vote, the solution ultimately lies in winning over the majority of the citizens, not in finding the culprits behind dark plots or conspiracies.

The Council on Foreign Relations is a perfect example. The basic tenet of this conspiracy theory is that the CFR is a front for a conspiracy by international bankers to secretly corrupt the United States with a socialist agenda, undermine the sovereignty of the United States, and ultimately bring the American people under the rule of one world socialist government. Books have been written about this conspiracy, political organizations have been formed to fight it, infiltrators have attempted to expose it, and, at one time or another, most of the world’s problems have been attributed to it.[1] I don’t know if these allegations are true or not. Like Mel Gibson, I find that the more I listen to people arguing for this conspiracy theory, the more believable it sounds. In the end, it really doesn’t matter.

Doesn’t matter? An organization bent on corrupting the American people with socialism and bringing them under international rule doesn’t matter? No, their “conspiracy,” if that is what people want to call it, doesn’t matter. What matters is whether or not the American people will give it their consent. Ultimately, this is still a government of the people, by the people, and for the people. If you think that the American people do not want socialism, then try to get signatures on a petition to phase out Social Security and Medicare. Once it’s time to give up the promises of government benefits, the missionary zeal against socialism dissipates rather quickly, even amongst the so-called “Constitutionalists.” Conversely, if 70% of the American people DEMANDED that their representatives introduce legislation to phase these programs out or face unemployment by the next term, the legislation would be introduced and passed with all of the self-righteous blustering with which they presently give us more socialism.

Ultimately, the American people get what they demand. Right now, most Americans are demanding some type of government “solution” to healthcare. Similarly, when the unemployment rate goes up, Americans typically DEMAND that their government does something about it, instead of demanding that government cease interfering with the free market. The unfortunate reality for conspiracy theorists is that the majority of people AGREE with the CFR agenda. Without that agreement, it would be powerless.

Another popular conspiracy theory concerns the past two presidential elections. It alleges that the Republican Party stole or fixed the vote in crucial states (Florida in 2000 and Ohio in 2004) to give George Bush a victory over his opponents. Again, I don’t purport to know whether this conspiracy theory is true or not. However, to me it is again irrelevant. While I agree that the candidate who gets the most votes should be the winner, no matter how narrow the margin of victory, the Bush presidency is still one that is basically the result of an equally divided nation. No one alleges that Al Gore or John Kerry won Florida or Ohio by a landslide. Everyone acknowledges that both elections were extremely close when it comes to overall votes. They were so close that in most statistical models they would have been considered an even draw. However, proponents of the conspiracy theory tend to characterize the Bush presidency as one that was obtained by a great fraud, against the will of the majority of Americans. The ugly truth is that about half of American voters WANTED George Bush in office – twice! Certainly if he had only obtained 25% of the vote, it wouldn’t have mattered much how hard those chads were to poke out. Today he would be where he belongs, shoveling out stable stalls in Crawford.

A final example is of the mythical conspiracy by “Big Oil.” This one is popular among the disgruntled from every political party, race, color, and creed. “Big Oil” is blamed for fixing the price of oil and gouging the American public, suppressing alternative energy innovations to maintain their monopoly, carrying out assassinations, coup d’états, and all manner of diabolical intrigue. “Big Oil” is behind most of our problems, until a few facts are examined. For one, government-owned oil companies account for about 70% of the world’s oil supply. The American oil companies play a very small part, with the largest, Exxon, accounting for only 2% of world supply. Oil prices are set on an exchange, just like the prices of stocks, so the buyers really have a lot more control than the sellers. Most importantly, the publicly traded “Big Oil” companies are not owned by a shadowy group of billionaires – we own them! Over 98% of Exxon is owned by average Americans, in their 401K retirement accounts. The ultimate irony – WE ARE “Big Oil.” In the end, this one doesn’t even stand up to critical analysis. Monetary inflation necessitated by government spending on those social programs we aren’t ready to give up is a much better place to lay the blame for high gasoline prices than on the mythical ogre, “Big Oil.”

I do not condemn the conspiracy theorists. I do not know whether the conspiracies are real or not. I suspect that many of them are partly true, that none of them are wholly true, and that a few of them are just plain nuts. However, the vast conspiracies that are accused of being at the root of our problems here in America all have one thing in common: they need our consent in order to succeed. If “the bankers” are conspiring against us, they can be completely defeated with legislation requiring a 100% reserve requirement. If there is a socialist conspiracy, it can be defeated by legislation to phase out the social programs and reinstitute property rights. If the American people want these things, the government can still be made to give them to us.

However, we must recognize that right now, the American people are not demanding these things. In fact, the American people are actually demanding more socialism, and as recently as the last presidential election, about half of them were still behind the war in Iraq. While the conspiracy theorist is searching for cryptic documents and incriminating photographs to prove his conspiracy, he is not convincing his neighbor next door not to go to the Barack Obama rally and cheer while Obama promises universal healthcare. Therein lies the problem. It was suggested by one Break the Matrix member that conspiracy theories themselves were a conspiracy – to distract us from taking the action necessary to solve our problems. That’s probably the most dangerous conspiracy of all.

Tom Mullen

[1] One objection I have to the idea of this being a “conspiracy” is that it doesn’t fit the definition. According to Webster, a conspiracy has to be a secret agreement, and I don’t believe anything about the CFR is a secret. You can go to their website (http://www.cfr.org) and read their very public positions on most of the issues, and their long term goals are hardly shrouded in mystery.

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