In his academic work, Robert Higgs has dissected the government’s shrewd secret excesses that lead to the Welfare State, the Warfare State, and the Administrative State. For several decades he has unstintingly chronicled the federal, state, and local governments’ malfeasance in these many areas of life that all levels of government have intruded upon without Constitutional mandate. In this book, however, are essays that show a whimsical, introspective, and personal side of this world renowned scholar. From the myth that the government has derived its powers from the consent of the governed to the role of independent experts in formulating monetary and fiscal policy; from the government’s duplicity in announcing the unemployment rate in a given month to how the state entraps us, if you want to see a true polymath at work, these lofty, serious, sad, and illuminating essays will educate you beyond what you had thought possible about life, liberty, and the economy.
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About the Author
Robert Higgs is senior fellow in political economy for the Independent Institute and the editor of the Institute’s quarterly journal, the Independent Review. He is also the author of several books, including Against Leviathan, Competition and Coercion, Delusions of Power, Neither Liberty Nor Safety, Resurgence of the Warfare State, and The Transformation of the American Economy 1865–1914, and the recipient of numerous awards, such as the Gary Schlarbaum Award for Lifetime Defense of Liberty and the Lysander Spooner Award for Advancing the Literature of Liberty. He lives in Lafayette, Louisiana. Judge Andrew P. Napolitano currently serves as the senior judicial analyst Fox News Channel (FNC) and provides legal analysis on both FNC and Fox Business Network (FBN). He is the author of five books: Constitutional Chaos: What Happens When the Government Breaks Its Own Laws; The Constitution in Exile, a New York Times bestseller; Dred Scott's Revenge; Lies the Government Told You, also a New York Times bestseller; and A Nation of Sheep. His writings have been published in several newspapers, including the Baltimore Sun, the Los Angeles Times, the New York Times, the St. Louis Post-Dispatch, and the Wall Street Journal. He lives in New York City.
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Taking a Stand
Reflections on Life, Liberty, and the Economy
By Robert Higgs
The Independent InstituteCopyright © 2015 Independent Institute
All rights reserved.
It's Who You Know
GOVERNMENTS ARE MANAGED by elites who are beholden to somewhat larger elites for support. Members of the former usually spring from the latter. Whether the nature of rule dictates this sort of cozy arrangement, as pronounced by the Iron Law of Oligarchy, or not, we see this type of tight, inbred elite rule in virtually every society, regardless of its declared ideological commitments and ideals.
In U.S. history, defense and foreign policymaking has exemplified this pattern to a greater degree than anything else. Ever since the United States began to exert itself aggressively on the world stage at the end of the nineteenth century, a relative handful of persons drawn from a common, highly unrepresentative background has tended to call the shots in foreign and defense policymaking. Perhaps this pattern has weakened somewhat in the past two or three decades, but it has certainly not disappeared.
Earlier it was so blatant as to be unmistakable. People at the top of the heap in foreign and defense policymaking often had attended the same exclusive boarding schools, the same universities, and the same law schools. They generally had worked in top law firms or top investment banks in New York City. They had often known one another since boyhood. (Women didn't play in this league until very recently.)
One of the most important figures of the twentieth century in U.S. foreign and defense policymaking was Henry Stimson, who was twice secretary of war (under Taft and then under Franklin Roosevelt and Truman) and once secretary of state (under Hoover). Stimson, who epitomized the elite's exclusivity, drew the same sort of people to him, giving them an opportunity to put their noses under the tent of power, where many of them kept themselves until quite recently.
In reading a biography of Stimson by Godfrey Hodgson, The Colonel: The Life and Wars of Henry Stimson, 1867–1950, I came across a passage (on pp. 247–48) whose content is so remarkable, not to say astonishing, that I am moved to share it. This passage has to do with the men Stimson took on as his chief subordinates at the War Department after he became secretary there in 1940: Harvey Hollister Bundy, Robert A. Lovett, John J. McCloy, George Harrison, and Robert Patterson.
Stimson, Bundy, Lovett, [and] Harrison were all members of Skull and Bones [a secret society of students at Yale]. Only McCloy and Patterson of the inner circle were not. Stimson, Bundy, Harrison, McCloy and Patterson were all graduates of the Harvard Law School; only Lovett was not. Stimson, Harrison, Lovett, McCloy, and Patterson were all prominent on Wall Street; only Bundy was not, and he practiced law on State Street, the nearest thing to Wall Street in Boston. All six men were Republicans. The plain fact is that, during a war for democracy conducted by a Democratic President — which was also, more than any previous foreign war in American history, a democratic war in the sense that millions of men from every corner of American life fought it together — the War Department was directed by a tiny clique of wealthy Republicans, and one that was almost as narrowly based, in social and educational terms, as a traditional British Tory Cabinet.
Readers who wish to learn much more about such men, their backgrounds, their thinking, and their leading roles in the conduct of official affairs may wish to read The Wise Men, by Walter Isaacson and Evan Thomas.CHAPTER 2
What's the Point of Demonstrating?
THOUSANDS OF AMERICANS have just staged a demonstration in Washington, D.C., to express their displeasure with the growth of government in general and the Obama administration's health-insurance proposals in particular. Such demonstrations are a tradition in this country. The First Amendment, which people usually associate with freedom of speech, religion, and the press, also stipulates that Congress shall make no law abridging "the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." The Founders knew that people would sometimes desire to complain publicly against government policies that affected them adversely. After all, their own revolution had begun amid many such protests against the British government.
So, in this country, people have a constitutionally guaranteed right to demonstrate and petition for redress of grievances, and they often exercise this right. Although the government sometimes tries to control when and how people demonstrate, especially when such protests might prove too visibly embarrassing to the emperor or to one of the two gangs that purport to be competing political parties in what is actually a one-party state, most of the time the rulers seem to appreciate that such demonstrations pose no genuine threat to their control of the state and that the wise course is to allow the peasants to blow off steam. Later, they can be told how fortunate they are to live in a country where the government permits freedom of speech, assembly, and petition, as if such actions in themselves would feed the baby.
I have considerable experience as a demonstrator. In the late 1960s and early 1970s, I marched and otherwise participated in many protests against the U.S. war in Vietnam. Although I managed to get through all of these experiences without getting my head scarred by a police baton — an achievement of which many of my fellow demonstrators cannot boast — I did learn a fair number of lessons in what we might call "applied political science."
Lesson number one is that the cops do not believe in your First Amendment rights, or any other rights of yours, for that matter. If they find it convenient for their own purposes, which often seem to include nothing more than throwing their weight around, they will yell at you, shove you, threaten you with clubs, dogs, and horses, whack you with their batons, and lob tear gas into your ranks. It's all in a day's work for those who have sworn "to serve and protect." Best you remember, however, that this familiar phrase is short for "serve and protect the state," not for "serve you and protect your rights to life, liberty, and property." Protecting your right to demonstrate peacefully against state policies is not part of the cops' job description.
Lesson number two is that the people in the demonstrations are there for all sorts of reasons, despite what one might suppose from their announced issue(s) as signified by signs, banners, and group statements. I often bemoaned the lack of seriousness in many of the antiwar demonstrators with whom I marched. A great many of the younger ones seemed to be there mainly because demonstrating against the war was, literally, a sexy thing for a college student to do: at the demonstration, one might meet someone suitable for a not-very-subsequent sexual liaison — in plain language, participating in a demonstration served as a reasonably promising avenue to getting laid. Beyond this quite understandable motivation, however, people had all sorts of other reasons for participating. Some fancied themselves radicals out to overthrow the government. Others were worried that children, grandchildren, or other relatives and friends might be drafted, shipped to Vietnam, and killed. Some of us actually cared about the countless hundreds of thousands of Asians being slaughtered by U.S. forces for no good reason. Although we were all against the war in some way, our ways varied widely. The participants in most demonstrations, including the recent one in Washington, no doubt have this same heterogeneous quality. In a protest, however, the enemy of my enemy is my friend.
Lesson number three is that the mainstream media are in league with the government when they report on demonstrations. For example, they will minimize any violence the police use against the demonstrators and exaggerate any violence the demonstrators perpetrate. I recall one protest in particular, where our group included tens of thousands of marchers passing through the streets of downtown Seattle. The police, as usual, were out in force, lining the streets and salivating for a chance to crack some heads. Present also were the undercover agents with their cameras; for some reason, the authorities always wanted lots of photos of us dangerous protesters — college students, hippies, grandmothers, little kids in their mother's arms, and so forth, all obviously dangerous subversives. At this particular protest, the organizers took great pains to instruct everybody about scrupulously avoiding any kind of violence, because we all knew that the media would use it to discredit everything about the event. So we maintained absolute order, or so I thought as I made my way through the streets somewhere in the middle of the long parade. No violence whatsoever did I see. Hooray! The next morning, however, the banner headline in the Seattle Times read, "Violence Mars Antiwar Demonstration." Someone, it seems, had broken ranks and smashed a shop window, an occurrence so inconsequential that even I, positioned right in the middle of the affair, had not noticed it. This incident illustrates well what passes for journalistic impartiality and balance in this country. Rest assured that if you are bucking the system, the system's guardians in the news media will smack you down by stigmatizing you as some sort of dangerous hooligan or totally out-of-touch wing-nut. They'll also minimize your group's numbers, again seeking to marginalize and trivialize your efforts.
Lesson number four is that the powers that be don't give a damn about your demonstrations or the reasons that have impelled you to participate in them, except to the extent that your actions create bad press for them and their policies. The minute they conclude that your demonstrations actually imperil their personal grip on power, they will cease to be so accommodating of your First Amendment rights. They might even cook up something called COINTELPRO, whereby they employ every political dirty trick in the book against you, up to and including murder. (If you suppose I'm exaggerating, I suggest you do some research on COINTELPRO and other such government schemes to violate the people's civil rights systematically.) Nowadays, the USA PATRIOT Act lends itself splendidly to broad-gauge surveillance and disruption of peaceniks and other troublemakers.
After the Vietnam War ended, I stopped participating in public demonstrations, not because I thought the government no longer deserved protest and petition for redress of grievances, but because I lost all faith in the efficacy of the demonstrations. I was gaining a sounder appreciation of how the state operates, and as my understanding deepened, I found myself unable to suppose that the people who constitute the state have any interest in doing what might loosely be called "the right thing." As for those of us outside the precincts of the state and its supporting coalition of special-interest groups, the state wants us to buckle under to its dictates, shell out the taxes, fees, and fines it demands from us, and shut up. As long as we faithfully comply with the first two requirements, it is willing to cut us some slack on the third, but only up to the point at which our expressions of grievance might actually weaken its iron grip on power. So, when I see demonstrations like the one that just took place in Washington, I sympathize with the people who've gone to the trouble of protesting against the government's abuses, but I find myself wondering, do these poor souls really think they'll accomplish something by this protest?CHAPTER 3
A Fool's Game for the Masses
BECAUSE I DESPISE POLITICS in general, and the two major parties in this country in particular, I go through life constantly bemused by all the weight that people put on partisan political loyalties and on adherence to the normative demarcations the parties promote. Henry Adams observed that "politics, as a practice, whatever its professions, has always been the systematic organization of hatreds." This marshaling of hatreds is not the whole of politics, to be sure, but it is an essential element. Thus, Democrats encourage people to hate big corporations, and Republicans encourage people to hate welfare recipients.
Of course, it's all a fraud, designed to distract people from the overriding reality of political life, which is that the state and its principal supporters are constantly screwing the rest of us, regardless of which party happens to control the presidency and the Congress. Amid all the partisan sound and fury, hardly anybody notices that political reality boils down to two "parties": (1) those who, in one way or another, use state power to bully and live at the expense of others; and (2) those unfortunate others.
Even when politics seems to involve life-and-death issues, the partisan divisions often only obscure the overriding political realities. So, Democrats say that anti-abortion Republicans, who claim to have such tremendous concern for saving the lives of the unborn, have no interest whatever in saving the lives of those already born, such as the poor children living in the ghetto. And Republicans say that Democrats, who claim to have such tremendous concern for the poor, systematically contribute to the perpetuation of poverty by the countless taxes and regulations they load onto business owners who would otherwise be in better position to hire and train the poor and thereby to hasten their escape from poverty.
If the unborn children happen to be living in the wombs of women on whom U.S. bombs and rockets rain down in Iraq, Afghanistan, and Pakistan, however, all Republican concerns for the unborn evaporate completely, as do the Democrats' concerns for the poor children living in the selfsame bombarded villages. Both parties' positions would seem to rest on very flexible and selective morality, if indeed either party may be said to have any moral basis at all, notwithstanding their chronic public displays of "moral" wailing and gnashing of teeth.
In any event, the parties' principles of hatred have never passed the sniff test; indeed, they reek of hypocrisy. Thus, while railing against the "corporate rich," the Democrats rely heavily on the financial support of Hollywood moguls and multi-millionaire trial lawyers, among other fat cats. And the Republicans, while denouncing the welfare mother who makes off with a few hundred undeserved bucks a month, vociferously support the hundreds of billions of dollars in corporate welfare channeled to Lockheed Martin, Boeing, and General Electric, among many other companies, via larcenous "defense" contracts, Export-Import Bank subsidies, and countless other forms of government support for "national security" and service to "the public interest" as Republicans conceive of these nebulous, yet rhetorically useful entities.
Notice, too, that although ordinary Democrats and Republicans often harbor intense mutual hatreds, the party leaders in Congress rub shoulders quite amiably as a rule. Regardless of which party has control, the loyal opposition can always be counted on to remain ever so loyal and ready to cut a deal. And why not? These ostensible political opponents are engaged in a process of plunder from which the bigwigs in both parties can expect to profit, whatever the ebb and flow of party politics. At bottom, the United States has a one-party state, cleverly designed to disguise the country's true class division and to divert the masses from a recognition that unless you are a political insider connected with one of the major parties, you almost certainly will be ripped off on balance. Such exploitation, after all, is precisely what the state and the political parties that operate it are for.
Yet, rather than hating the predatory state, the masses have been conditioned to love this blood-soaked beast and even, if called upon, to lay down their lives and the lives of their children on its behalf. From my vantage point on the outside peering in, I am perpetually mystified that so many people are taken in by the phony claims and obscurantist party rhetoric. As the song says, "clowns to the left of me, jokers to the right," but unlike the fellow in the song, I am not "stuck in the middle." Instead, I float well above all of this wasted emotion, looking down on it with disgust and sadness. Moreover, as an economist, I am compelled to regret such an enormously inefficient allocation of hatred.
Excerpted from Taking a Stand by Robert Higgs. Copyright © 2015 Independent Institute. Excerpted by permission of The Independent Institute.
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Table of Contents
ContentsForeword by Judge Andrew P. Napolitano,
PART I Politics and the State,
1 It's Who You Know,
2 What's the Point of Demonstrating?,
3 Partisan Politics: A Fool's Game for the Masses,
4 Democracy's Most Critical Defect,
5 Nothing Outside the State,
6 Consent of the Governed?,
7 Why This Gigantic "Intelligence" Apparatus? Follow the Money,
8 Can the Dead (Capitalism) Be Brought Back to Life?,
9 The Welfare State Neutralizes Potential Opponents by Making Them Dependent on Government Benefits,
10 The Systematic Organization of Hatreds,
11 All Men Are Brothers, but All Too Often They Do Not Act Accordingly,
12 Once More, with Feeling: Our System Is Not Socialism, but Participatory Fascism,
13 Love, Liberty, and the State,
15 Political Problems Have Only One Real Solution,
16 The Power of the State versus the Power of Love,
17 State Power and How It Might Be Undermined,
18 All Government Policies Succeed in the Long Run,
19 Crisis of Political Authority? I Wish!,
PART II On Doing Analysis in Political Economy,
20 Ten Rules for Understanding Economic Development,
21 Underappreciated Aspects of the Ratchet Effect,
22 Diagnostics and Therapeutics in Political Economy,
23 Can the Rampaging Leviathan Be Stopped or Slowed?,
24 Higgs Is Just a Pessimist,
25 My Question for the Doomsters: Then What?,
26 Defense Spending Is Much Greater Than You Think,
27 Which End, if Any, Is Near?,
28 Communism's Persistent Pull,
29 The Dangers of Samuelson's Economic Method,
30 Don't Accuse Me of Blaming America When I Blame the Government,
31 Extreme Aggregation Misleads Macroeconomists and the Fed,
32 Why Do So Many People Automatically and Angrily Condemn Historical Revisionism?,
33 Where Should the Burden of Proof Rest?,
34 Politics and Markets: A Highly Misleading Analogy,
35 Social Science 101: Three Ways to Relate to Other People,
36 Ten Fallacious Conclusions in the Dominant Ideology's Political Economy,
37 Regime Uncertainty: Some Clarifications,
38 Not Every Intellectual Gunman Is a Hired Gun,
39 Truth and Freedom in Economic Analysis and Economic Policymaking,
40 Austrian Economics: The Queen of the Experimental Sciences,
41 Not All Countries Are Analytically Equal,
42 Creative Destruction — The Best Game in Town,
43 Thinking Is Research, Too!,
PART III Money, Debt, Interest Rates, and Prices,
44 Macroeconomic Booms and Busts: Déjà Vu Once Again,
45 The Continuing Puzzle of the Hyperinflation That Hasn't Occurred,
46 Money versus Monetary Base: An Elementary Yet Critical Distinction,
47 The Euthanasia of the Saver,
48 The Fed's Immiseration of People Who Live on Interest Earnings,
49 Extraordinary Demand to Hold Cash: The Mystery Persists,
50 More Monetary Peculiarities of the Past Five Years,
51 A Bogus Example of Controlling Inflation with Price Controls,
52 Monetary Policy and Heightened Price Volatility in Raw Materials Markets,
PART IV Investment and Regime Uncertainty,
53 Regime Uncertainty: Are Interest-Rate Movements Consistent with the Hypothesis?,
54 Do the Post-Panic Changes in Corporate Bond Yield Curves Indicate Regime Uncertainty or Only Expectations of Increased Inflation?,
55 The Great Divergence: Private Investment and Government Power in the Present Crisis,
56 Private Business Net Investment Remains in a Deep Ditch,
57 The Confidence Fairy versus the Animal Spirits: Not Really a Fair Fight,
58 Important New Evidence on Regime Uncertainty,
59 The Sluggish Recovery of Real Net Domestic Private Business Investment,
60 Government Spending and Regime Uncertainty — A Clarification,
PART V Boom, Bust, and Macroeconomic Policy,
61 World War II: Still Being Touted as the Quintessential Keynesian Miracle,
62 One More Time: Consumption Spending Has Already Recovered,
63 U.S. Economic Recovery Remains Anemic, at Best,
64 Likely Fiscal and Monetary Legacies of the Current Crisis,
65 Counsel of Despair?,
66 Unprecedented Household Deleveraging since 2007,
67 An Overview of Recent Changes in Federal Finances,
PART VI Labor Markets,
68 Will the Real Rate of Unemployment Please Stand Up?,
69 Short-Term Employment Changes in Longer-Term Perspective,
70 Cessation of Labor Force Growth since 2008,
71 Labor Markets Are Still in Bad Shape,
PART VII Libertarianism,
72 Are Questions of War and Peace Merely One Issue among Many for Libertarians?,
73 Freedom: Because It Works or because It's Right?,
74 The Salmon Trap: An Analogy for People's Entrapment by the State,
75 Libertarian Wishful Thinking,
76 "There Were Giants in the Earth in Those Days": Genesis 6:4,
77 The Rodney Dangerfields of the Ideological Universe,
78 Classical Liberalism's Impossible Dream,
79 Why the Precationary Principle Counsels Us to Renounce Statism,
80 Modern Communications Technology — Savior or Soma?,
81 On My Libertarian Catholicity,
PART VIII Remembrances of Parents, Teachers, Colleagues, and Comrades,
82 William Jess Higgs (March 21, 1909–October 15, 1977),
83 Work in Progress: A Boy and His Mom,
84 Murray N. Rothbard: In Memoriam,
85 Jürg Niehans (November 8, 1919–April 23, 2007),
86 R. Max Hartwell (1921–2009),
87 Manuel F. Ayau (1925–2010),
88 Joseph Sobran (1946–2010),
89 Morris David Morris (February 10, 1921–March 12, 2011),
90 Siobhan Reynolds: A True American Heroine 1961–2011),
91 Anna Jacobson Schwartz (November 11, 1915–June 21, 2012),
92 Thomas S. Szasz (1920–2012),
93 James M. Buchanan (October 3, 1919–January 9, 2013),
94 Armen Alchian [(April 12, 1914–February 19, 2013),
95 Robert William Fogel (July 1, 1926–June 11, 2013),
96 Donald S. Barnhart (July 18, 1925–September 8, 2009),
PART IX Just for Fun,
97 Mainstream Economists Will Have a Blast at This Year's Halloween Parties,
98 "American Pie": Altered to Lament My Life and Times as an Economist,
99 A Vulgar Keynesian Visits My Chamber,
About the Author,