The blame game

Whose deserves the blame, really, for all this financial chaos? George Bush? Ben Bernanke? Henry Paulson? Big bad corporations? Greed?

Maybe it's our own fault, for not heeding the advice of Milton Friedman:

[G]overnmental measures constitute the major impediments to economic growth in the United States. Tariffs and other restrictions on international trade, high tax burdens and a complex and inequitable tax structure, regulatory commissions, government price and wage fixing, and a host of other measures give individuals an incentive to misuse and misdirect resources, and distort the investment of new savings. What we urgently need, for both economic stability and growth, is a reduction of government intervention not an increase.

From Capitalism and Freedom.

Review: The Road to Serfdom

Elsewhere I've talked about some of the impact that F. A. Hayek's The Road to Serfdom has had on me, but this little book has a long history of influencing thought throughout the West. Originally published in England in early 1944 as the Allies began to have success against Germany, the book was published in the US later that year. A Reader's Digest version was published in 1945, exposing hundreds of thousands of readers to Hayek's ideas.

But even though the book got people talking on both sides of the Atlantic, Milton Friedman in 1971 wrote that "its message is no less needed today than it was when it first appeared" and that "the same collectivist fallacies are abroad and on the rise today." All that changed, he said, was that "the immediate issues are different and so is much of the jargon." "Central planning" was no longer popular, but replacing it were attempts to eliminate "urban poverty" and make businessmen "socially responsible." Friedman continued:

Unfortunately, the check to collectivism did not check the growth of government; rather, it diverted its growth to a different channel. The emphasis shifted from governmentally administered production activities to indirect regulation of supposedly private enterprises and even more to governmental transfer programs, involving extracting taxes from some in order to make grants to others—all in the name of equality and the eradication of poverty but in practice producing an erratic and contradictory melange of subsidies to special interest groups. As a result, the fraction of the national income being spent by governments has continued to mount.

In 1994, Friedman similarly wrote:

Today, there is wide agreement that socialism is a failure, capitalism a success. Yet this apparent conversion of the intellectual community to what might be called a Hayekian view is deceptive. While the talk is about free markets and private property [...] the bulk of the intellectual community almost automatically favors any expansion of government power so long as it is advertised as a way to protect individuals from big bad corporations, relieve poverty, protect the environment, or promote "equality." [...] The intellectuals may have learned the words but they do not yet have the tune.

So Hayek's critique of collectivism seems to have had some impact, in that few serious collectivists now talk about central planning and state-run industries. But as Friedman says, all that has changed is the vocabulary—government continues to become more powerful and freedom more scarce.

In his book, Hayek addressed a similar consistency of ideas disguised by distinct vocabulary, but then, the dividing words were "central planning" and "naziism." Hayek saw a significant "similarity of much of current English political literature to the works which destroyed the belief in Western civilization in Germany and created the state of mind in which naziism could become successful." And while "few people, if anybody, in England would probably be ready to swallow totalitarianism whole, [...] there is scarcely a leaf out of Hitler's book which somebody or other in England or America has not recommended us to take and use for our own purposes." Then, as now, the battle was over words, not ideas—the notion of the desirability of government control remained constant. Indeed, Hayek warns:

We should never forget that the anti-Semitism of Hitler has [...] turned into his enemies many people who in every respect are confirmed totalitarians of the German type.

Collectivists today think of Fidel Castro and Che Guevara just as collectivists of the 1940s thought of Hitler: "Yes, I have problems with some of the things they did, but many of their ideas were good!" Now, as then, "most of the works which are preparing the way for a totalitarian course in the democracies are the product of sincere idealists and often of men of considerable intellectual distinction." It's telling when the supporters of one sincere idealist in particular seem to also have an affinity for El Che.

Still relevant, thus, is Hayek's systematic demonstration that collectivism inevitably leads to corruption, arbitrary rule, tyranny, discrimination, individual irresponsibility, and the destruction of morality. Though the jargon is now "universal health care" and "Patriot Act" and "a living wage," nothing has changed—government continues to grasp for more power.

Hayek learned the lessons of those who thought they could make the world a better place by using the government for good. He saw that their real accomplishments were the destruction of liberty and the rule of murderous dictators.

Sadly, most of our society seems intent on repeating history.

Good and harm

Capitalism and Freedom, Milton Friedman:

The power to do good is also the power to do harm; those who control the power today may not tomorrow; and, more important, what one man regards as good, another may regard as harm.

Liberalism, defined

A commenter brought up the issue of vocabulary--after all, the meaning of the word "liberal" in this blog's title does not match today's typical definition of the word. Instead, I've taken a page from Milton Friedman and identified myself with the great classical liberals of past centuries. The distinction between the two types of liberalism is described by Friedman in Capitalism and Freedom:

The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth century liberal regards welfare and equality as either prerequisites of or alternatives to freedom. In the name of welfare and equality, the twentieth-century liberal has come to favor a revival of the very policies of state intervention and paternalism against which classical liberalism fought.

And again:

Jealous of liberty, and hence fearful of centralized power, whether in governmental or private hands, the nineteenth-century liberal favored political decentralization. Committed to action and confident of the beneficence of power so long as it is in the hands of a government ostensibly controlled by the electorate, the twentieth-century liberal favors centralized government.

Both classical liberals and modern-day liberals claim to be on the side of "liberty," but as their goals are diametrically opposed to each other, this isn't possible without playing with the meaning of the word. In The Road to Serfdom, F. A. Hayek explains that the difference between liberals comes from their different definitions of "liberty" and "freedom":

To the great apostles of political freedom [the classical liberals] the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a superior to whom he was attached. The new freedom promised [that of modern-day liberals], however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the "despotism of physical want" had to be broken, the "restraints of the economic system" relaxed.

Freedom in this sense is, of course, merely another name for power or wealth.

Indeed, it is the modern-day liberals who have perverted the English language, first redefining "liberty" to mean "wealth," and then claiming to be "liberal" when in fact they support making people equally wealthy (through methods completely impossible in systems where individual liberty exists).

Classical liberals value equality, but not in the same way, as Friedman explains:

The [classical] liberal will therefore distinguish sharply between equality of rights and equality of opportunity, on the one hand, and material equality or equality of outcome on the other. He may welcome the fact that a free society in fact tends toward greater material equality than any other yet tried. But he will regard this as a desirable by-product of a free society, not its major justification.

Tocqueville, in Democracy in America, argues that the struggle between individual liberty and equality plagues all democratic peoples, and that our natural tendency is unfortunately to prefer equality:

Democratic peoples have a natural taste for liberty. Left to themselves, they seek it out, love it, and suffer if deprived of it. For equality, however, they feel an ardent, insatiable, eternal, invincible passion. They want equality in liberty, and if they cannot have it, they want it still in slavery. They will suffer poverty, servitude, and barbarity, but they will not suffer aristocracy.

This "ardent, insatiable, eternal, invincible passion" must be conquered. History has demonstrated the superiority of true liberalism in bringing wealth, political freedom, and happiness to mankind, and has likewise shown that collectivism, by any name (including today's "liberalism"), results in poverty and tyranny.

Some say that Confucius said that "when words lose their meaning, people lose their liberty." Whether he did or not, surely this is doubly true when the word "liberal" itself loses its meaning. Modern-day collectivists have bastardized the term and assigned it to themselves, hoping to give credibility to their debunked system of political thought. On this blog, however, I refuse to allow such destruction of language to go unchecked, and defend liberty--both the word and the ideal.