Mises Wire |
- Our Graduates Need Books
- The Unending Farce of US Sanctions against Russia
- SCOTUS Attacked Indian Tribe Sovereignty in Castro-Huerta, and That's a Bad Thing.
- How Bad Were Recessions before the Fed? Not as Bad as They Are Now
- Africa's Entrepreneurs: The Igbos of Nigeria
- Contra Ben Bernanke, the Gold Standard Promotes Economic Stability
- Federalism, Not Centralization, Is the Way out of the Current Conflicts
- How Governments Expropriate Wealth with Inflation and Taxes
- The Real Aggressor
- Civil Society and Counterrevolution against Progressivism
- Don't Blame Social Media. Blame the Politicization of Nearly Everything
- Government Intervention Is Fueling Food Shortages
- Mark McGrath On After-Action Reviews
- Krugman Is Wrong (Again): Artificially Low Interest Rates Created Bubbles
- Entrepreneurship Should Be the Goal, Not White-Collar Jobs
- Foreign Policy Fail: Biden's Sanctions are a Windfall For Russia!
- The Role of Ideas
- Yes, They Were Socialists: How the Nazis Waged War on Private Property
| Posted: 13 Jul 2022 08:30 AM PDT With your support, the Mises Institute can send Mises U students home with a stack of Austrian classics such as Human Action, America's Great Depression, and Economics in One Lesson (see the full list below). After their week of destroying every preconceived, state-curriculum notion of how the world works, Mises U grads will have another month before they return to their college classes. Our graduates can continue to dive into their Austrian education before sitting in classrooms where Democratic Socialists of America are the norm and universal basic income is the hottest policy trend. We're asking everyone who wishes Mises University had been available in their college days to give toward this year's Mises U graduates' libraries. Mises U is the full package: the highly qualified students accepted into the program receive a week of lectures spanning all areas of Austrian thought, access to the top scholars of our time, and a network of liberty-focused peers, with a full scholarship for tuition, room, and board. Offering—and continuing—this priceless education is an unqualified success for those of us worried about a future dominated by a generation of entitled leftists. Help us give students a deeper understanding of liberty. Please donate today. During Mises University, your name will be prominently displayed on the Honor Roll. Every donor of $10 or more gets a Mises University bumper sticker, and every donor of $100 or more gets a Mises University T-shirt!
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| The Unending Farce of US Sanctions against Russia Posted: 07 Jul 2022 09:00 AM PDT Rather than working diplomatically to resolve the civil war in Ukraine that it played a principal role in precipitating (by backing the unconstitutional transfer of power in that country in 2014), the Biden administration spent the months leading up to the Russian invasion in February assiduously working to make sure "extreme" economic sanctions could be put in place. The threat of such additional sanctions, for Washington already had imposed a series of sanctions in 2014, was purportedly meant to deter the invasion. That having failed, it was then claimed the sanctions would force Russia to the negotiating table. That, too, has clearly failed. Given the centrality of economic warfare to Washington's foreign policy, it is worth exploring how the Kremlin has managed to keep the Russian economy afloat since invading Ukraine and the likely wider implications and possible future application vis-à-vis China. First, the immediate collapse of the ruble was reversed by the actions of the Russian central bank and the treasury. While the former nearly doubled interest rates overnight, the latter began spending its accumulated reserves to offset the price inflation that began eating into Russian consumers' purchasing power. Though locked out of nearly half of its foreign reserves by Washington and its vassal allies, the government in Moscow has used its record balance of payments surplus to make up for the temporary loss. While that balance of payments surplus, the result oil and gas sales continuing at lower volumes but higher prices while imports dropped precipitously, has mitigated the effects of domestic inflation, currently running at around 17 percent, it has not been able to prevent a sharp contraction in Russia's economic growth (a contraction of approximately 10 percent is now expected over the coming year). Given that governments from Washington to London, Warsaw, and Vilnius have made it clear that they do not even favor lifting these sanctions in the event of a cessation of hostilities, Russia's future growth is likely to be far short of what it otherwise would have been. Lacking access to Western capital and technology, Russia will be increasingly dependent on China, India, or other developing economies for imports, as well as for a home for its energy exports as much of Europe moves to drastically reduce and eliminate its dependence on Russian hydrocarbons—though this too will depend on US sanctions, secondary sanctions, and on US-allied governments and their domestic industries' willingness to risk running afoul of the US. Long term, therefore, there is little doubt that the sanctions now in place will make Russia weaker and poorer. Of course, just as at present, it is the Russian people who will bear the costs of the West's financial warfare—not their leadership. As usual, we are expected to believe that the people of the countries targeted by US economic warfare will blame their own government rather than Washington—that they may even throw off Vladimir Putin and welcome the West! Apart from the fact that from Cuba to Venezuela, Iran, Iraq, North Korea, et cetera, this has never worked, Anne Williamson explained twenty years ago that given that the last time Russia invited the West in, people like Jeffrey Sachs, Larry Summers, and Paul Rubin destroyed the economy, handing it to oligarchs they ultimately hoped would then hand it to Western multinationals, it's highly unlikely Russians will blame their government for their woes. Of course, the Russian people won't be alone in their present impoverishment. Normal people the world over are also being made poorer and weaker by Washington's policies. Indeed, while Europeans empty their savings in the face of record-high gas, oil, and food prices, many in the developing world are literally going to starve long before the war in Ukraine ends—which North Atlantic Treaty Organization (NATO) secretary general Jens Stoltenberg now says may take years. That these policies have been cheered by Democrats and Republicans alike is not surprising: America's Democrats are delusional with hatred for Russia because they can't accept that Hillary Clinton failed to beat Donald Trump, while Republicans like Ted Cruz are beholden to mercantilist interests—i.e., US oil and natural gas producers who want to sell to Europe. In the case of the former, even if Russia did concertedly try to interfere, it made no demonstrable impact on the elections, which even the thoroughly establishment Economist admits; and in the case of the latter, US gas and oil exports are already climbing toward all-time highs. As a demonstration of its capacity to force others in line with its policies, and to get its own population to bear the consequences, Washington has doubtlessly succeeded in sending its intended message to Beijing over Taiwan. While Washington's weaponization of the global financial system has no doubt alarmed Chinese Communist Party planners, the fact that their own population would be quite willing to suffer for the reunification of their country, as well as the fact that many countries in the developing world have eschewed following the West's example, provide ample reason to doubt the efficacy of looming sanctions as a deterrent in the event of another, bigger Taiwan Strait crisis. Not that it prevents the staff at the Atlantic Council from daydreaming about it in the runup to a NATO summit focused on saber-rattling in Beijing's direction. Because what does a history of failure and mass impoverishment prove if not that next time will be different? If only Karl Marx had been right when he said that history repeats, first as tragedy, then as farce, paraphrasing Georg Wilhelm Friedrich Hegel. The truth instead seems to be that we are doomed to suffer an unending parade of farces under Washington's continued pursuit of a demonstrably failed and immoral policy. This posting includes an audio/video/photo media file: Download Now |
| SCOTUS Attacked Indian Tribe Sovereignty in Castro-Huerta, and That's a Bad Thing. Posted: 07 Jul 2022 08:30 AM PDT Indian tribe sovereignty has long been a much neglected, yet important, tool in decentralizing and limiting government power in the United States. Since the early nineteenth century, it has been recognized by US courts and policy makers that—at least in theory—US governments have very limited jurisdiction within tribal lands beyond what is granted by treaties between the US and each individual tribe. Thus, in theory, tribal lands within the US function to limit the territorial sovereignty of both the US government and the state governments. In practice, on the other hand, the reality of the tribes' geopolitical weakness has long meant that both the US government and the US member state governments do whatever they want on tribal lands. Moreover, this US usurpation of tribal sovereignty arguably was virtually unchallenged from the late nineteenth century all the way up until the 1980s—and greatly strengthened by the 1987 California v. Cabazon Band of Mission Indians ruling. Nevertheless, in recent decades, federal courts and the US Congress have arguably ceded an increasing amount of independence to tribal governments. [Read More: "What the Supreme Court Got Right in Its Indian Tribe Ruling" by Ryan McMaken] Last month, however, the Supreme Court moved back in the wrong direction with its ruling in Oklahoma v. Castro-Huerta. Castro-Huerta is largely a reconsideration of 2020's SCOTUS ruling in McGirt v. Oklahoma, which had solidified tribal sovereignty in eastern Oklahoma in relation to the regime in Oklahoma City. Essentially, McGirt expanded tribal courts' ability to prosecute crimes committed on tribal lands according to tribal law. Put another way, McGirt expanded tribal sovereignty by limiting state governments' ability to impose state laws on tribal lands. (Regrettably, the ruling still granted federal courts some jurisdiction within tribal lands, although McGirt was paving the way for even greater tribal sovereignty in relation to the federal government as well.) The Castro-Huerta ruling slams the brakes on expanding tribal autonomy, however. It further expands state governments' power in tribal lands and "clarifies" that tribal sovereignty is not as significant as the court had suggested in 2020. Indeed, the ruling suggests that tribal lands are not really independent of state jurisdiction at all. Worse yet, the ruling maintains that the federal government will continue to have jurisdiction on tribal lands in a "partnership" with state governments. Logically, then, if Indian lands are simply part of Oklahoma, this means federal courts and federal agents now effectively have an expanded role and jurisdiction within Oklahoma itself. Simply put, Castro-Huerta manages to expand state power in relation to tribal lands and federal power in relation to the states. For those of us interested in reining in government power, Castro-Huerta is certainly an unfortunate ruling. The problem with the ruling—written by Justice Brett Kavanaugh—was not lost on Justice Neil Gorsuch, who is, by far, the best judge on the Supreme Court on most matters, including tribal matters. Gorsuch penned a scathing (and informative) dissent to the ruling, stating,
In fact, we hardly have to look much beyond 2019 and 2020 to find rulings buttressing claims of tribal sovereignty. McGirt itself is one such case, and we can also note 2019's Herrera v. Wyoming. In that case, the court ruled that treaties between the US government and tribal governments guarantee at least some level of sovereignty and autonomy—and that state governments cannot simply abolish this autonomy when it is convenient. Prior to this ruling, state governments had argued, in effect, that an Indian reservation ceased to be independent when the state in which it was located achieved statehood. Gorsuch goes on to note that legal and constitutional barriers to state-level violations of tribal sovereignty are numerous:
But what about limitations on federal abuses of tribal sovereignty? The unfortunate answer is indirectly acknowledged by Gorsuch when he notes that tribal sovereignty can indeed be modified when "Congress clearly ordains otherwise." In other words, Congress still has the ability to unilaterally modify the terms of relations between the federal government and tribes. In more recent decades, Congress has tended to respect tribal sovereignty to an increasing extent, but if tribal sovereignty comes down to a mere act of Congress, that's a pretty weak reed on which to hang any sort of true political independence. [READ MORE: Feds to Indian Tribes: We (Probably) Won't Prosecute You If You Grow Cannabis] We need not go into the bad old days of Indian boarding schools and tribal land thefts of ninety or a hundred years ago to see examples of what happens when Congress does decide to ignore tribal sovereignty. Perhaps the most flagrant violation in living memory for many is the creation of Lake Sakakawea in the late 1940s. In that case, Congress decided to seize some of the best grazing land in North Dakota from three different tribes for the purposes of damming up yet another river. There was little the tribes could do, especially since these were the postwar, post–New Deal years, during which the federal government enjoyed immense prestige and nearly untrammeled power. This was essentially the same government, after all, that put American citizens of Japanese descent in concentration camps—with the approval of the Supreme Court. Had the tribes of North Dakota been able to oppose the federal expropriation of land for Lake Sakakawea, this would have been a much-needed brake on federal power. Unfortunately, that never happened. Ultimately, though, tribal sovereignty is a good thing in the same way federalism is a good thing: it decentralizes government power and allows for more local self-determination. Castro-Huerta and Kavanaugh's reasoning, on the other hand, solidify both state and federal power, pushing us toward greater centralization both regionally and nationally. That's a mistake. This posting includes an audio/video/photo media file: Download Now |
| How Bad Were Recessions before the Fed? Not as Bad as They Are Now Posted: 07 Jul 2022 06:15 AM PDT The Federal Reserve was supposed to prevent recessions that people blamed on the lack of central banking. Not surprisingly, the post-Fed recessions have been worse. Original Article: "How Bad Were Recessions before the Fed? Not as Bad as They Are Now" This Audio Mises Wire is generously sponsored by Christopher Condon. |
| Africa's Entrepreneurs: The Igbos of Nigeria Posted: 07 Jul 2022 04:00 AM PDT The Igbos are one of the largest ethnic groups in Nigeria and are celebrated for their successes in entrepreneurship and academia. The Igbos' success extends outside the borders of Nigeria and cannot be considered a fluke. To account for their accomplishments, anthropologists have conducted several studies to ascertain the factors responsible for the outlier performance among the Igbos. Interestingly, cultural profiles often reveal the Igbos to be an achievement-oriented, individualistic, and adaptable group. Combined, these traits best explain the Igbos' progress. Profile 1: Achievement OrientationThe Igbos are community-oriented individuals with a passion for investing in social networks; however, they greatly value individual achievement and upward mobility. Achieving material prosperity is crucial to the Igbo community, so for many, becoming successful is about self-actualization and demonstrating commitment to community goals. In Igbo societies, community members motivate people to set aims and achieve them for the glory of the individual and his community. Excelling in life is a cultural value for the Igbos that can be likened to Brazil's devotion to dominating football. Describing their penchant for success, John Ugochukwu Opara writes: "Even though the Igbo as a people enjoy a communitarian spirit, yet a great premium is placed on individual achievements because the Igbo society is a success-oriented society, a society that appreciate both communal and individual achievements…. Ernest Ruch and K C Anyanwu observe that when a member of the family or a clan is honoured or is successful, the whole group rejoices and shares in the glory, not only psychology, as one would rejoice when one's local team has won a match, but existentially since each member of the group is really part and parcel of one another." Also, unlike other ethnic groups in Nigeria, the Igbos give greater credence to self-made entrepreneurs than elites who inherited wealth. Membership in honor societies like the Ozo is based on merit and good character, rather than the status of one's family. According to Simon Eboh, Igbos are unlikely to rely on family wealth and prefer to achieve through their own toil. In contrast to the Yorubas, the Igbos are less dependent on family wealth. Unlike some Hausas, Igbos are also unwilling to solicit traditional rulers for meals. Anthropologists also marvel at the fact that in Igbo society prestigious titles are nonhereditary, indicating the premium the Igbos bestow on individual merit. Moreover, as an achievement-oriented group, Igbos invest seriously in the acquisition of human capital to boost their competitiveness and abate the effects of discrimination. Children are encouraged to be industrious so that in adulthood they will be equipped to seize opportunities. Additionally, it is the norm for parents to instruct their sons to migrate to more promising regions to unlock new opportunities and improve themselves. Usually, when they return home, village elders reward them with political posts and titles. Ambitious young men's upward mobility is a common theme in Nollywood movies. And like most successful people, the young men featured in these movies are risk takers who venture into unknown terrain without the assistance of family and friends. Hence, we should not be surprised that the Igbos are the most mobile ethnic group in Nigeria. In a study on Igbo entrepreneurship in Nigeria, P. Igwe nicely sums up the culture of achievement with a quote from a former politician: "The society recognizes individuals who are successful and wealthy. This drives entrepreneurship in Igbos more than other tribes do. If you go to the North, West, or South-South, Igbos have the highest business investment outside the indigenes of those regions. We not only know how to do business but also how to be successful." Profile 2: IndividualismAlthough some Igbo groups created kingships, on average the Igbos have built decentralized societies that do not require monarchs. The paucity of centralized institutions in Igbo territories has nurtured a culture emphasizing individualism, democratic politics, and independence, as Ikenna Ukpabi Unya explains: "The Igbo never evolved centralized … institutions, thus, every village in Igboland considered itself autonomous with great respect for the independence of other villages. This semi-autonomous outlook with less emphasis on kingship made the Igbo to be individualistic, competitive, and highly egalitarian, unlike their neighbours that were encumbered by traditional hierarchies." In researching the Igbos, anthropologists have discovered that in Igbo society, ordinary people think that they are just as valuable as kings. This has led to the famous saying that in Igbo society "every man is a king." Because all men are as valuable as kings, people prize personal autonomy and self-expression and are hesitant to sacrifice happiness for the benefit of hierarchical institutions. Admittedly, Igbos respect the community, but they also possess an intrinsic desire to distinguish themselves from the community. Due to reverence for individual agency, Igbos view personal achievement as an expression of autonomy. Reporting on Igbo individualism, P. Igwe quotes the powerful observation of a retired judge: "Igbos tend to live individually and hustle individually. Everyone wants to be great and powerful. No one wants to have a king, but everyone wants to be king. Our families provide the support to achieve this greatness. Everyone wants to be independent and wealthy. This is possible through finding business opportunities and exploiting them." Accordingly, the ethos of individualism propels entrepreneurship by motivating Igbos to chart their own course in the quest for self-actualization. Entrepreneurship provides an opportunity for individualistic Igbos to prove their self-worth by deviating from the norm and achieving the unthinkable. On the other hand, the Igbos' physical environment is littered with environmental woes, making development difficult, so, as Damian Mbaegbu and Ehijiele Ekienabor submit, Igbos' individualism is useful in an environment of hostility:
Profile 3: AdaptabilityAdaptability could be the most fascinating trait of the Igbos. Classical and contemporary sources depict Igbo culture as flexible and amenable to changes. During the colonial era, Igbos embraced Western education at a pace that surprised many; they were even responsive to market institutions, which is unsurprising considering their culture of individualism and their achievement orientation. But the shocking part of this story is that the British struggled to subdue the Igbos even though they were quick to embrace elements of Western culture. Understandably, one would think that it would be easier to subjugate the Igbos, since they were interested in Westernizing, but the Igbos' inability to submit to Western authority should not surprise us at all. The Igbos were quick to appropriate Western ideas because they are an achievement-oriented people; hence, if adopting Western education enabled greater levels of material prosperity, then the Igbos would embrace Western learning. However, because Igbos are individualistic, acquiescing to foreign authorities would be a challenge for them. In describing the Igbos' tenacity, Elizabeth Isichei shows that the Igbos posed a vital threat to Britain's colonial efforts:
From the perspective of the Igbos, it's indeed possible to learn from oppressors and resist their advances with venom. After all, an appetite for achievement can make people responsive to useful ideas even when such ideas are cultivated by enemies. Because of their adaptability to new environments, the Igbos have operated successful businesses in Africa, Asia, and Europe. The Igbos' success demonstrates that despite obstacles, progress is possible when people set high standards, execute, and adapt to change. Groups targeted by class warriors in America will achieve more if they follow the Igbos' path and ignore the politics of grievance. This posting includes an audio/video/photo media file: Download Now |
| Contra Ben Bernanke, the Gold Standard Promotes Economic Stability Posted: 06 Jul 2022 12:15 PM PDT Ben Bernanke once claimed that a monetary gold standard caused economic instability. He failed to mention that his fiat money standard causes the boom-and-bust cycles. Original Article: "Contra Ben Bernanke, the Gold Standard Promotes Economic Stability" This Audio Mises Wire is generously sponsored by Christopher Condon. |
| Federalism, Not Centralization, Is the Way out of the Current Conflicts Posted: 06 Jul 2022 09:00 AM PDT The overturning of Roe v. Wade is a historic decision, upholding the highest principle of a republic. A republic is born through freedom of association in the same manner as individuals band together to form a family, families band together to make a community, and communities band together to make a society. In an ideal situation of law-based governance, the law givers and the law abiders must be the same, as it is only then that voluntary subservience to the law and the protection of the law abiders' interests can come to fruition. Now, what is to be done if two families can't reconcile on a matter that ails both to a great extent? the answer is enshrined in the nature of the United States government: both can go their separate ways! Therefore, it follows that the idea of a constitutional right that spreads over all of the respective states without the consent of a vast majority of Americans, who not only disagree but consider it a matter of ethics, becomes unjust. That being said, the precedent that has been turned doesn't ban abortions! It gives the question back to the individual states, each of which, based on its majority of Democrats or Republicans, can legislatively make the choice of which positions to hold based on its constituency. Further, in a legislative democracy, where the nature of governance has been division of power between the individual states and the center, the Supreme Court's role lies in acting as the dispute settler and guard of the Constitution. It doesn't give the court the power to make laws and award rights not mentioned in the Constitution. If there is agreement among readers with what has been said before, it naturally follows that if an individual state like California wants to make a law that legalizes abortion deep into the last trimester of pregnancy, we should not only be tolerant but accepting of their way of life, as this follows from the same principles of liberty that many of us hold dear. The action of persuasion always stands open in a society receptive to ideas and willing to engage in healthy discussions. The Case for Decentralized Immigration PoliciesThe proper functioning of a market economy requires the free movement of labor, capital, and goods across all regions throughout the world. In light of this, much attention has been paid to the virtues of free movement of capital and goods, but little has been said about the positive impact of free movement of labor on the markets. Despite the public's growing concerns with inequality of outcomes, it hardly seems to understand the equality of the market, which lies in the equal opportunity it affords to each producer and to labor to participate in the market, accumulate resources, and offer services. Workers' market wage becomes an essential factor that regulates the cost, and in turn producers' profitability, when labor becomes scarce on the market. Competing producers bid away the resource and end up increasing the market wage. These producers engage in competition, as to them, the increased labor cost is lower than the revenue they expect to derive by using its services. Thus, in the process of earning their expected profits, producers tend to pass on increased prices to consumers in proportion to the elasticity of market demand. If the consumers are less sensitive to price changes, as is the case with consumers of goods that do not have proper substitutes, the increased price, instead of lowering demand, leads to an increase in revenue for the producers and justifies the additional labor expenses. In addition to the inflated money supply, the labor markets' tightness also contribute to the rising prices today. Free movement of labor would thus allow the supply of people from one part of the world who want to provide the same services at a lower rate or at the market rate to connect with the producers, who can then charge less for their goods (due to their reduced production costs) in order to attract more marginal consumers. This would also lead to those producers earning more profits due to reduced costs and increased revenues while benefiting the consumers with lower prices at the same time. The argument for economic efficiency is quite sound to the person who has ears to hear it, but it shouldn't become an imperialistic commandment that forces all of a region's constituents to act and live in a given manner, as persuasion and not compilation is the heart of liberty. Thus, the control of the movement of labor should thus also go back to the individual states such that each decides on its immigration laws. The respective state governments could choose to set laws that limit entry into their territory via air, water, and land travel. This would also solve the problem of illegal immigration if the states believe it is a contributing menace to their constituents. In such a case, Texas could make different laws for entry through the border and through airports based on the local understanding of the situation. This posting includes an audio/video/photo media file: Download Now |
| How Governments Expropriate Wealth with Inflation and Taxes Posted: 06 Jul 2022 06:15 AM PDT Did you feel happy when the government gave you a check paid with printed money? Watch now as your daily groceries, gas and power become unaffordable. Original Article: "How Governments Expropriate Wealth with Inflation and Taxes" This Audio Mises Wire is generously sponsored by Christopher Condon. |
| Posted: 06 Jul 2022 04:00 AM PDT A sign of our time is the split-personality of the conservatives. Many to the right of center are off on a schizophrenic pursuit of both liberty and collectivism. In domestic affairs this regrettable condition is gradually being recognized for what it is. But the time is nigh for conservative foreign policy, as well, to be psychoanalyzed in hope of a cure! Conservatives call for free trade and free enterprise, yet also clamor for absolute embargoes on trade with Communist nations. Have they forgotten that both parties to free exchange benefit from trade? For our government or any others to prohibit trade is a vicious example of socialistic policy; it injures the Communist countries to be sure; it also injures us. Another example: conservatives are calling for lower taxes and less government control, while on the other hand they are calling for a virtual holy war against Russia and China, with all the costliness, death, and statism that such a war would necessarily entail. Such a holy war would be immoral, inexpedient, and ill-conceived at best—in this day of weapons for mass murder, such a call is near insanity. Yet while conservatives once preferred peace and "isolationism," in our day they appeal in vague terms for liberation of foreign nations and hint that "We've been at war with Communism for years, so let's get it over with." They bitterly denounce European "allies" for being neutralistic and therefore "unreliable," while they praise Chiang, Rhee, and Franco for being anti-Communist and therefore "reliable friends of the United States." They denounce our having entered the Korean War; yet denounce the Korean Truce and call for programs to carry war ever upward and onward. The notion—very widespread—that we should not have entered the Korean War, but once in it should have launched a total war against China, flouts rules of logic. The best preventive of war is to refrain from warring—period. If we had agreed to a cease-fire when the Commies suggested it, or had pulled out of Korea altogether (even better), we would have saved thousands of American and Korean lives. A "Blunt" PointHere I think one point should be made and made bluntly. Some people may prefer death to Communism; and this is perfectly legitimate for them—although death may not often be a solution to any problem. But suppose they also try to impose their will on other people who might prefer life under Communism to death in a "free world" cemetery. Is not forcing them into mortal combat a pure and simple case of murder? And is not anti-Communist murder as evil as murder committed by Communists? Many "isolationists," in concerning themselves with the liberation or security of foreign nations, have in truth become outright internationalists. Instead of praising European neutralism—the equivalent of real American isolationism—they now demand collective-security organizations such as NATO. Yet faith in international collectivism has already dragged us into one disastrous war after another during the present century. And now it is a faith in world government, supposedly restricted to the enforcement of so-called world law. This is a fantasy in which the various world states are seen as resembling a family of policemen taking it upon themselves to enforce a preservation of the status quo. The result of this international-collectivistic approach is that the United States is rapidly going down the classic warpath. And the path has all the signposts so unerringly pointed out by isolationist writers in the 1930s concerning the First World War, and in the 1940s concerning the Second World War: militarism, propaganda of hate, press distortions, atrocity stories about the enemy (and silence about our own atrocities), chauvinistic vainglory such as pride that "America has won all its wars" (but with the help of strong allies badly outnumbering the enemy), and in general, the "emotional complex of fear and vaunting" noted by Garet Garrett, which Harry Elmer Barnes calls the "1984 pattern." The tragic part of the whole situation is that it is the erstwhile isolationists, the ones who above all others should know better, who are leading the war parade. Sinking ever deeper into a war psychosis, these conservatives have failed to perceive that our whole problem today, broadly speaking, is ideological rather than military! If we carefully examine the facts we will find that the most commonly feared threat to peace—the Communist bloc—has been fairly scrupulous about not committing military aggression. All the Communist successes since the end of World War II have been through internal Communist rebellions. Korea itself was a civil war, and there is even there considerable evidence that it was begun by the South. Russia did not intervene directly in that war, and China intervened not only after the United States did, but only when our troops reached her borders. Patience, plus sponsoring of Communist parties and philosophy abroad, seems to be the Soviet plan. In brief, the Russian military menace is for the most part a bogey; the Commies are probably truthful in their assertion that their arming is meant in defense. The statement of Defense Secretary Wilson recently that Russian air production has been concentrated on defensive jets rather than offensive heavy bombers ( such as we are building) would tend to bear out this point. As a long-term threat as well, we should have no fear of military conquest by the Russians, or by the Chinese either. They began as backward countries and, since we know Communism to be a relatively inefficient economic system, we need not worry about their offensive military might—provided we let our own industries grow without the hamperings of a garrison state. What we really have to combat is all statism, and not just the Communist brand. To take up arms against one set of socialists is not the way to stop socialism—indeed it is bound to increase socialism as all modern wars have done. The Realm of BattleThe battle can only be waged in the realm of ideas and reason. Man shall only tighten his chains—and those holding other men—if he takes up arms simply against one foreign statist faction. Even if Russia and China both were to be wiped out tomorrow, Communism would continue to exist (just as it did before 1917) so long as people continue to give credence to its collectivist tenets. To attempt to stamp out heresy by force is the method of vindictive children, rather than the method of rational human beings. But some conservatives are failing to recognize that the enemy is statism, rather than simply Communism. And the fundamental reason, obviously, is that there is still an inadequate understanding of the very nature of the State. It is a fundamental libertarian proposition that the State only has the right to use force to defend the person and property of individuals against force. Actually, among libertarians and conservatives, there is agreement on that proposition; but most conservatives usually commit the fatal error of stopping there. Considering the analysis of the State closed, they conclude, "Therefore the State should be limited to what is necessary for defense purposes." Ponder the grave consequences of that reasoning: Peter is a peaceful citizen, devoted to productive work and minding his own affairs. By what right does any person or set of persons, in a group called the State, come to Peter and force him to give up money for the purpose of protecting him against possible future invasions of his person and property? The ethical answer can only be, no right whatsoever. Surely we have all heard of and ridiculed the racketeering "protective syndicates," which force merchants to purchase "protection" at an exorbitant fee. Yet the State syndicate manages to impose its own "protection," and to collect from Peter, with nary a single eyebrow being raised against it. Not a Self-Respecting RacketeerWhat is worse, the State gang does not even leave the scene of crime after collecting, as any self-respecting racketeer would do. Instead it hangs around to harass Peter and his kind, insisting on continually higher sums of money in tribute, pressing the Peters into the State army when competing robber bands attack, coercing the Peters to salute the State battle flag, to acknowledge the State as their sovereign, to regard the decrees of State as valid laws to be obeyed by all righteous persons. What would we think of the State gang, and what would we think of people who allowed themselves to be duped by the rulers' propaganda to believe that this is all well and good, natural, and necessary? Yet, being duped by State officials is precisely what mankind has been putting up with for thousands of years. Some might say that all this has been put to a stop in those nations which have turned to democracy. But libertarians are surely not so enamored of the voting process that they fail to perceive the flaws in the democracy argument. What democracy has done is simply to increase the number of State groups. The question becomes: Are we much better off now, having several groups (or "parties") of would-be plunderers, each desiring the control of a good thing? I think the answer must be No. The only advantage of a democracy is that it provides scope (strictly limited) for peaceful change of State rulers via ballot boxes, instead of requiring bloody revolutions, coup d'etats, etc. Instead of having bloody civil wars over the spoils of State, the robber gangs have their subjects vote every few years as to which gang will rule them. Never, however, do they so much as hint that the people may have a choice as to whether they wish to retain the State system itself. Caught on the HornsThus, conservatives who say that the State should be limited to what is necessary for defense purposes, are caught from the start on the horns of a great dilemma. For the State has been conceived in original sin. Any State, even the best intentioned, subsists by means of coercion. If Henry Thoreau says: I don't want your protection, so will pay no more taxes; he goes to jail—sent there by his "representatives." If he attempts to argue by saying: I wish to pay for my defense through privately financed police and judiciary companies, which I believe will be cheaper and far better than your coercive monopoly—the same punishment is meted out to him, or worse. In a libertarian society though, it is the individual, not the State, which has the primary choice as to whether and how his defenses shall be maintained. As an individual he has the right to fight in his own or another's defense; or, if he adjudges it foolhardy or disbelieves in fighting altogether, he has the right not to fight at all. And similarly, he has the right to subscribe voluntarily to police forces and courts which offer defense, but also the right not to subscribe. No one has the right to force him to fight or to pay others to fight for him. If the State forces him to pay tax moneys for State-conceived defense purposes, the State thereby deprives him of his individual rights. To sum up: every State oppresses its subjects and pillages them; every State functions—as A.J. Nock put it—as if having a "monopoly (or attempted monopoly) of crime" in its territory, asserting its sovereignty over a certain land area, and exacting compulsory levies on the inhabitants. Instead of having a group of policemen, we have in actuality a group of gangster States aggressing against their subject-citizens; forming alliances, and from time to time fighting to increase their share of the spoils collected from the various inhabitants of the earth. War is an attack by one robber band against another. Surely under these prevailing conditions, the supposed morality of every State's leaping to the defense of an alleged victim State becomes highly dubious indeed. Yet no matter how evil States are, we must accept the fact that they do exist, and that there is no likely prospect of their imminent disappearance. In a world of States and statism, then, what should the libertarian conservatives' attitude be with regard to international discord? Municipal police have one rather appealing principle: they look the other way during a gang war. If one set of gangsters "aggresses" against another set, the police do not participate. Why waste the taxpayers' money protecting one gangster against another? The Status Quo Might Not Be MoralIt is a version of that principle, I think, that ought to be applied to foreign affairs. For if any world police force were to be set up to punish "aggressors," the only result would be increased bloodshed and real aggression all over the world in an attempt to freeze the existing status quo, which might be a status quo no more moral, and perhaps less just, than any other possible one. We could hardly blame those States that came late into the struggle for territorial influence, if they turned a jaundiced eye on the hypocritical moralizing of the entrenched aggressor States who would invoke world law to forestall new depredations. States have always gained their territories by force, and any given land area has probably been fought over and changed hands many times. In almost every case of "aggression" each party to the dispute, and often many parties, have some sort of historical claim to the disputed territory. New territorial wars are no more "aggressive" than the present continuation of old conquests. What is more, there always arises the difficulty of spotting the "real aggressor" in any particular war. When both sides are armed camps, when there are many provocations, secret treaties, deals and frontier incidents, the question of unraveling the actual starter of war, let alone who is the more morally wrong, becomes a matter for the careful research of future historians. Sad are the few facts which do not remain for historians to reveal. These facts are that the people who end up conquered are subjected to the exactions and tyrannies of the master State; while the original subjects of the conquering State are forced not only to fight the wars but also to foot the bills. The wider a State attempts to extend its sphere of influence, indeed, the greater becomes its coercion against all concerned. Once we clearly understand the ever-coercive nature of States, and the ever-recurrent warfare between them, we will no longer want to offer ourselves up unthinkingly before the international-collectivist altar inscribed, "Necessary for Defense." Instead we will keep these three facts in mind: that each State's jurisdiction is limited, at any given time, to a certain geographical area over which it has assumed the power and responsibility of defense; that within this area the State builds its defensive power by means of compulsory levies; and that these levies involve immorality of conduct, because the act of forcing people to pay taxes for military defense usurps each individual's right to choose how and whether he will want it. The basic aim of our foreign policy then will become the greatest possible reduction of the amount of immorality; in other words, reduction and limitation of the State's area of assumed defense. Upon our escutcheon will be inscribed these words: "Let there be peace. Let not the State interfere in the affairs of other States." If the people of Korea are being oppressed, we will recognize that the oppressor State is vicious; but we will at the same time recognize that it would be immoral for the United States government as such to interfere in any way. For in so interfering, the American State would commit those of its citizens who have no wish to be committed, to battle for Korean citizens. Interference, moreover, would in no way insure that the foreign people thus "liberated" would be any the better off for it. Had the North won a quick victory in the recent Korean War, the Koreans might well have been left less unhappy and even economically better off under Communism than they are now under Rhee. Millions have been slaughtered by the weapons of both sides, and those remaining have been left to contemplate the utter destruction of their property. If some Americans wish to liberate the people of China or Poland, let them raise a private expeditionary force and private finances to go over and attempt liberation—but let them not try to commit the United States, and as a result, myself, to any such scheme. For a second wrong simply will not make a right; we should not add to oppression at home in a hope to effect some sort of "liberation" elsewhere. Hold Down the StateThe moral policy for libertarians is to see that the scope of war is kept as localized as possible. The State must be held to its responsibility to enter no foreign war—and to provoke no war via rash and irresponsible statements, official condemnations of other governments, or inordinate armament buildups. Even if our nation is directly attacked by another, justice for those who look askance upon war efforts and levies still requires that the scope of State action be kept within responsible limits. The goal of all State action at such times must be a negotiated peace, so that the burden of destruction and taxes will cease. The State should do its best to put limits and rules on the war, and to outlaw as many weapons of destruction as possible—starting with the worst. Furthermore, so long as the emergency endures, all efforts should be kept voluntary—without conscription, economic controls, or inflation. No purpose can be served when additional people are caused to lose their lives anywhere because of war. The fact is, the quarrel in modern large-scale war is not actually between the subject people, but between their States. The interest of the subjects is always in peace—since it is only in peace that full freedom for self-development can be attained. War decidedly increases the dangers of losing further individual freedom—to the "domestic" enemy, if not to the "foreign" enemy. In short, the individual subject will want the State to limit its objectives, to defend the country's territory rather than to attack, to abstain from a drive to victory and unconditional surrender, and to negotiate peace at the earliest possible moment. Moreover, if full terms of peace cannot be immediately decided upon, the most important thing becomes negotiation of a truce to stop the mutual slaughter. If Men Are to Forge FencesNot arms but public opinion must be the basic weapon if men are to forge fences between themselves and the master States. By force of public opinion men must resist conscription; must insist on absolute nonintervention in foreign wars; and, where warfare is in progress, must call for immediate negotiations and an end to the bloodletting. And most important, there must be a re-establishment of those once-revered rules of war that prevented innocent civilians from being harmed. As a corollary, there must be a re-establishment of the old-fashioned, pre-1914 type of international law, as distinguished from the sort of world law the present-day internationalists would attempt to impose. The old-time international law, as I understand it, set up rules by means of custom (and not by force) which carefully defined the difference between neutrality and intervention, and which declared sharply defined areas of neutrals' rights and belligerents' rights. Old-fashioned international law facilitated the maintenance of neutrality and served the important purpose of greatly limiting the scope of any wars that arose. Public opinion could then be educated to impose this type of international law to limit the scope of State action, just as Americans once used the Constitution and the Bill of Rights. The United Nations, unfortunately, does not afford a good breeding ground for such constructive principles of international law and order. For it is the seedling of a world State, a master imperialistic power that would dominate the citizens of the entire subject world. Furthermore, the UN is basically committed to collective-security warfare against "aggression" and is therefore a warmongering organization in its very essence. The Reds Are SaneSomebody has rightly said that the choice now is: coexistence or nonexistence. Any sane person prefers coexistence, and I am sure that the Reds are sane. The issue facing the world, therefore, has to do with nurturing a will and a way to talk things over—to negotiate—and to find lines of fruitful negotiation. Almost anything that would ease present tensions and provocations would be welcome. But we must negotiate honestly and sincerely, with our foremost aim being an agreement for a jointly planned disarmament. There must be no more secret deals with a Yalta-Potsdam odor, which would arbitrarily hand over territory and peoples of other countries to Russia. And there must be no idea of simply bolstering our "allies" by making a mere show of negotiation. On many issues, such as Korea, Germany, etc., it would be better to just retire completely from the fray. Yet the nurturing of a new era—of negotiation, of return to the pre-1914 type of international law, and of public opinion against statism—will all take time. Meanwhile, along what lines should our American government take immediate action? To begin, the United States should pull out of the United Nations, and also out of the North Atlantic Treaty Alliance. Secondly, our government should repudiate all other foreign commitments and agreements and foreign aid or "security" endeavors, while withdrawing the military from foreign bases. As good a place to start as any is at Trieste. American and British troops have absolutely no business there. They are the original meddlers and interlopers. Beginning with the mulcting of American and Triestino citizens alike of funds for occupational expenses, these troops have proceeded to the shooting down of inhabitants. Clearly the withdrawal of our foreign-based troops is one of the primary orders of business, leaving interested parties to settle things for themselves. Thirdly, the United States government should "recognize" Red China—on the basis of the old-fashioned international law principles of recognition. Prior to the interventionism of Woodrow Wilson, it was always understood that recognition—especially by a neutralist state—does not imply moral approval. The doctrine that it does has already been responsible for too many wars and bloodshed (vide the Stimson policy toward Japan). Recognition simply means recognizing the physical existence of a state—it is an act of sanity, not an act of praise. Whether we like it or not, Chiang is now ruler of Formosa alone—and no mere recognition or nonrecognition will alter that fact. Unfetter World TradeFourthly, there should be reestablishment of free and unhampered trade with the Communist countries, by our own nation and by all other nations. Free world trade would not only help break down the iron curtain, but would benefit anti-Communist nations as well as Communist. Nothing could be more inane than the present program of "helping other nations to help themselves" while at the same time coercively restricting their opportunities to engage in profitable commerce. Above all, our foreign policy must not be self-defeating; it must be consistent; it must pursue peace instead of war; and it must advance individual American freedom. This article originally appeared in the April 1954 issue of Faith and Freedom. |
| Civil Society and Counterrevolution against Progressivism Posted: 06 Jul 2022 04:00 AM PDT When Murray Rothbard and Lew Rockwell defined the paleolibertarian doctrine, they simply wanted to break the clock of social democracy and repeal the twentieth century, during which some of the greatest horrors in history were created from the deranged ideas of power-hungry nineteenth-century intellectuals by applying these ideas with the full might of the state, costing millions of human lives and the complete degeneration of the social and economic order. However, we wouldn't be at this point in history without a process that has been slowly destroying our social protections as individuals, first against the state and now against big business, which is nothing but the result of four centuries of political and even theological formulas of the Enlightenment. For instance, in his "Cost of Enlightenment" lecture given at the 2019 Austrian Economics Research Conference, Daniel Ajamian offers an account of how all the "bads" of the Enlightenment, "not so readily admitted by its proponents: communism, eugenics, racial purity, selective breeding, National Socialism, Fabianism, Progressivism, fascism, egalitarianism, modern democracy," as well as many others, came to be and how our mainstream, progressive thinking is preventing us from breaking away from its spell of abstract freedom and material equality under universal fraternity. Ajamian credits his ideas to various nonlibertarian thinkers, using their work to describe how the Enlightenment destroyed the free, organic, and spontaneous order of the Middle Ages, in which church and crown could outrank each other in different spheres and in which a plethora of institutions, such as extended family clans, guilds, municipalities, and associations, were free to thrive and incorporate individuals into like-minded communities. Conversely, from the works of John Gray, we discover the logic from which modern progressive thinking descended from the Enlightenment, based in the superstitious idea of progress, the belief that greater individual and political freedom invariably go with the expansion of rational thinking and the advancement of technological and material standards, which can only be achieved by breaking away from community and tradition. By World War I, it should have already been obvious that this progressive mindset was not only mistaken but also dangerous, as the war itself showed it could twist the ideas of individual religious and political freedom into moral relativism and mass conscription. Hans-Hermann Hoppe in some ways regarded World War I as the end of civilization because it was the main cause of the fall of the remaining Christian empires in Europe (Protestant Germany, Orthodox Russia, and Catholic Austria-Hungary) and its equally religious neighbor, the Muslim Ottoman Empire. Hoppe's perspective implies that the massive military mobilization undertaken during the Great War would not have been possible if Christendom's traditional system had still been in place, for the modern tyranny of numbers—in elections, warfare, and industry—could not have been supported by a network of small communities locally organized and guided by a common religion. Yet, the religious empires were not the bulwarks they seemed to be as all tried to harmonize their intermediate bodies with the political changes imposed by the progressive spirit of their ages. For instance, in Prussia and then the German Empire, the idea of cameralism was developed to incorporate the leadership of autonomous universities into the centralizing public administration. In Austria-Hungary, given the various nationalist uprisings of the nineteenth century, various federalization projects along ethnic lines were undertaken under the patronage of Archduke Franz Ferdinand. In Russia, serfdom was formally abolished and a system of local self-governing assemblies, the zemstvo, the was put into place, and in Ottoman Turkey, the Tanzimat reforms tried to adapt traditional institutions such as guilds and dhimmi-protected ethno-religious minorities into analogous Western institutions, such as factories and self-governing provinces. Nonetheless, none of these reforms prevented these empires' ultimate collapse under atomizing Western progressivism, for its mass-man doctrine of democracy, production, and conscription was at odds with the historical freedom of the intermediate bodies and small platoons that had organically developed from local traditions, and if reform did not destroy them, total war eventually did, as the liberal West had become more adept at its dynamics than them. This is because these were the protecting elements of the past order that progressive modernity destroyed, given that its whole doctrine leads toward the absolute restriction of freedom, a point we are currently reaching with increasing levels of government intervention and woke culture. Intermediate bodies, small platoons, and sphere of sovereignty all refer to what Alexis de Tocqueville called "civil society," the network of self-governing individuals organized in "associations operating outside the sphere of government and economic life," or, as Robert Nisbet and Plinio Corrêa de Oliveira thought of it, institutions that were between isolated individuals and the all-powerful government, preventing the latter from dominating the former. For Edmund Burke, this was "the little platoon we belong to in society, … the first principle (the germ as it were) of public affections…. the first link in the series by which we proceed towards a love to our country, and to mankind." For Abraham Kuyper and Juan Vásquez de Mella, these institutions provide competing spheres of sovereignty, organized according to moral principles in a way that allows people to participate in production, civic matters, and their family lives without interfering in the other spheres, making people free to act within all of them only subject to the moral framework common to all members of society, with Vásquez de Mella including church and locality as intermediate bodies in their own sovereign spheres. None of these thinkers are libertarian but conservative and traditionalist, but sharing a strong defense of private property and markets within intermediate bodies, as these two institutions allow for the material prosperity of society, whereas the little platoons themselves provide for social organization within the shared moral framework of religion, Tocqueville pointed out in Democracy in America. In the nineteenth and twentieth centuries, the state, under various forms of progressivism, first that of the French Jacobins and then that of the Marxists and other totalitarians, imposed its full might to destroy intermediate bodies, beginning with locality and guild and then going after the family and religion, for they all compete with the state for the people's full loyalty. But what makes the twenty-first century more dangerous is that the progressive regime no longer needs the state to destroy intermediate bodies, as it can weaponize the private sector with the cathedral to do so, beginning with the indoctrination of the managerial oligarchs who both run and regulate big business through the state, asphyxiating private entrepreneurs through intervention and causing the remnant of civil society to degrade into nothingness. In his 2022 Rothbard Graduate Seminar commencement address, Joseph Salerno explained how interventionism is the progressive regime's main tool to impose its program: by controlling and capitalizing on the economy, the state, under the fanatical influence of progressive doctrine, can destroy the material foundations of civilization and then proceed with the destruction of its social and theological ones. Government intervention not only has pushed for a frenzied economy, but has also granted a few cronies control of key sectors, making them virtual masters of certain markets. These cronies, whose power tool is scarcity, impose the progressive religion as a show of loyalty to the establishment and to erode civil society with woke "social justice" by attacking self-governing intermediate bodies and ultimately making people subject only to the state and its corporate cronies. Many libertarians still don't understand that an egoistic, atomistic view, erroneously understanding the individual person as isolated and self-sustaining and big business as "private" enterprise, supports the progressive project, in which freedom means liberation from all social bonds, equality means the same material misery for all, and fraternity means submission to the corporate state. As such, the "call to become openly and gloriously reactionary" against the progressive regime, as put by Rothbard and repeated by Salerno, is appealing, but I do not think "reaction" is the right term, for the progressive religion, as an historical phenomenon, has always adopted the guise of revolution, as Erik von Kuehnelt-Leddihn explained, given its true objective of returning to the "classless" and "egalitarian" state of nature of primitive communism. Progressivism is opposed to freedom, but not merely abstract liberty: its main enemy is a strong, self-governing civil society, composed of autonomous little platoons and organized by a common, objective morality, which means our struggle against the progressive regime must not be merely a reaction, but a true counterrevolution, working to restore intermediate bodies and reverse all the damages progressivism has done to society. And for our counterrevolution to succeed, we shall not only repeal the twentieth century, but also repeal the egalitarian mirage it implanted in history. This posting includes an audio/video/photo media file: Download Now |
| Don't Blame Social Media. Blame the Politicization of Nearly Everything Posted: 05 Jul 2022 12:30 PM PDT Although social media is blamed for many social ills, the sickness doesn't come from Twitter or Facebook but from how the ruling classes have politicized life itself. Original Article: "Don't Blame Social Media. Blame the Politicization of Nearly Everything" This Audio Mises Wire is generously sponsored by Christopher Condon. |
| Government Intervention Is Fueling Food Shortages Posted: 05 Jul 2022 12:30 PM PDT Neither the Ukraine war nor tough weather changes would threaten a global food shortage in a normal market environment. Unfortunately, world markets are riddled with regulations, killing production. Original Article: "Government Intervention Is Fueling Food Shortages" This Audio Mises Wire is generously sponsored by Christopher Condon. |
| Mark McGrath On After-Action Reviews Posted: 05 Jul 2022 10:30 AM PDT The business-as-a-flow orientation embraces continuous adaptive change within the firm. Traditional slow-motion control mechanisms like strategy and planning are no longer appropriate. The new toolkit that entrepreneurs are developing includes the after action review (AAR), a learning tool rather than a misguided attempt at predictive control. Key Takeaways and Actionable InsightsIn a VUCA world, entrepreneurial orientation embraces change and adaptation in order to reach goals.Learning fast is critical in times of accelerated change. A business firm must change at least as fast as its market and its external environment if it is to survive and thrive — ideally faster. In earlier podcasts, we've made reference to the OODA loop as a non-linear change management framework: Observe changing data, filter those Observations through your firm's capabilities, culture, heritage, and experience to understand what the new data means to your firm specifically, re-Orient if it's indicated, make new Decisions and take new Actions, and monitor the feedback loops for updated Observations. Speed of progression through the loop is a competitive advantage — make changes faster than your competitors. One of the keys to successfully managing change is a bias for action.It's possible that in some situations some businesses may fear taking action — they lack confidence in their own hypotheses and are concerned that their action might be "wrong". Austrian entrepreneurship takes a different perspective. Entrepreneurial orientation and intent shape decision-making by giving it a high potential focus and, thereafter, every action is framed an experiment from which to learn. Learning enables a greater capacity for reframing. Curt Carlson, in E4B podcast #175 (Mises.org/E4B_175), told us that relentless reframing is key to success in innovation. Learning through action is paramount. The tool for learning from action is the AAR – After Action Review.The After Action Review is a simple device that asks the questions: what did we intend would happen, what did actually happen, what can we learn from what happened, what will we change next time we take action.
AAR's can span all time periods: before action, during action, after action.When should a firm conduct AARs? All the time. In fact, there's a role for before action reviews, during action reviews and after action reviews. All have the same structure.
A learning culture and orientation are critical to the successful application of AAR's.Learning via AARs is not mechanical, it's cultural. The culture of the firm must be that there's no development, no progress, no improvement without learning. Mark McGrath links the learning culture to the growth mindset. The relevant assessment is not one of strengths versus weaknesses but the mindset of the firm compared to that of its competitors. Seeking growth is a mindset, and so is learning. It's a humble mindset in which we recognize our bounded understanding and seek eagerly to augment it with new knowledge. There are simple shared rules for individual AARs and for the learning culture: shared goals and mental models, open to every level of the organization, psychological safety, transparency, shared findings, preparation for next time. Within these rules, every firm can build a capacity for learning that becomes a capacity for growth. Additional ResourcesE4B AAR template (PPT): Mises.org/E4B_177_PPT Background reading: NextForge.com "Orientation: Bridging The Gap In The Austrian Theory Of Entrepreneurship" by Mark McGrath and Hunter Hastings (AERC 2022 Paper): Mises.org/E4B_177_PDF1 Mark McGrath on LinkedIn: Mises.org/E4B_177_LinkedIn OODA Loop: Mises.org/E4B_177_PDF2 |
| Krugman Is Wrong (Again): Artificially Low Interest Rates Created Bubbles Posted: 05 Jul 2022 09:00 AM PDT In his June 21 New York Times article "Is the Era of Cheap Money Over?," Paul Krugman argues against the view that the Fed has kept interest rates artificially low for the past ten to twenty years. Other commentators have argued that these low interest rates have inflated bubbles everywhere as investors desperately look for something that will yield a decent rate of return. Krugman expresses strong disagreement that the decline in interest rates caused bubbles and that the decline was artificial. For Krugman, the Federal Reserve sets short-term interest rates, which in turn determine long-term rates. He then suggests that there's no such thing as an interest rate unaffected by policy. The columnist then argues that what matters for the Fed's policy is the natural rate of interest, which is consistent with price stability and economic stability—i.e., economic equilibrium. This means that the key objective of Fed policies should be to target the policy rate to the natural rate in order to attain this state of equilibrium. Given that the natural rate was trending down it is not surprising that the policy rate followed suit. Why has the natural rate been trending down? According to Krugman, the downtrend was caused by demography. "When the working-age population is growing slowly or even shrinking, there's much less need for new office parks, shopping malls, even housing, hence weak demand." Krugman warns, "These demographic forces aren't going away. If anything, they're likely to intensify, in part because the rate of immigration has dropped off. So there's every reason to believe that we'll fairly soon go back to an era of low interest rates." Krugman also says that the Fed's interest rate policy has been in line with the neutral rate, which fell very sharply. Again, the key reason for this decline is aging population and reduced demand for the investment in the infrastructure. However, does it all make sense? Interest Rates and the FedAgain, according to Krugman, the Fed is the key factor for the determination of interest rates via its control of the short-term interest rates. The Fed influences short-term interest rates by influencing monetary liquidity in the markets. Through the injection of liquidity, the Fed pushes short-term interest rates lower. Conversely, by withdrawing liquidity the Fed exerts an upward pressure on the short-term interest rates. On this thinking, long-term rates are the average of current and expected short-term interest rates. If today's one year rate is 4.0 percent and the next year's one-year rate is expected to be 5.0 percent, then the two-year rate today should be 4.5 percent ((4+5)/2=4.5 percent). Conversely, if today's one-year rate is 4.0 percent and the next year's one-year rate expected to be 3.0 percent, then the two-year rate today should be 3.5 percent (4+3)/2=3.5 percent. On this logic, it would appear that the central bank is the key in the interest rate determination process. However, is this the case? Individuals' Time Preferences and Interest RatesWe believe it is individual time preferences rather than the central bank that hold the key in the interest rate determination process. What is it all about? An individual who has just enough resources to keep himself alive is unlikely to lend or invest his paltry means. The cost of lending, or investing, to him is likely to be very high—it might even cost him his life if he were to consider lending part of his means. Therefore, he is unlikely to lend, or invest even if offered a very high interest rate. Once his wealth starts to expand, the cost of lending, or investing, starts to diminish. Allocating some of his wealth towards lending or investment is going to undermine to a lesser extent our individual's life and well-being at present. From this we can infer, all other things being equal, that anything that leads to the expansion in the wealth of individuals is likely to result in the lowering of the premium of present goods versus future goods. This means that individuals are likely to accept lower interest rates. Note again, interest is the outcome of the fact that individuals assign a greater importance to goods and services in the present against identical goods and services in the future. The higher valuation is not the result of capricious behavior, but because of the fact that life in the future is not possible without sustaining it first in the present. Hence, various goods and services that are required to sustain a man's life at present must be of a greater importance to him than the same goods and services in the future. The lowering of time preferences—i.e., the lowering of the premium of present goods versus future goods due to wealth expansion—is likely to become manifest by a greater eagerness to invest wealth. With the expansion in wealth, individuals are likely to increase their demand for various assets—financial and nonfinancial. In the process, this raises asset prices and lowers their yields, all other things being equal. As a rule, a major factor for the discrepancy between observed interest rates and the time preference interest rate is the actions of the central bank. The Neutral Interest Rate MythAgain, by popular thinking, the neutral rate is one that is consistent with stable prices and a balanced economy. Hence, by this thinking in order to attain economic and price stability, Fed policy makers should navigate the federal funds rate towards the neutral rate range. By the neutral interest rate framework, in order to establish whether monetary policy is tight or loose it is not enough to pay attention to the level of money market interest rates, but rather one needs to contrast money market interest rates with the neutral rate. Thus if the market interest rate is above the neutral rate then the policy stance is tight. Conversely, if the market rate is below the neutral rate then the policy stance is loose. Hence, whenever the money market rate is in line with the neutral rate, then the economy is in a state of equilibrium and there are neither upward nor downward pressure on the price level. In the popular framework, the neutral interest rate is formed at the point of intersection between the supply and demand curves. The supply and demand curves as presented by popular economics originates from the imaginary construction of economists. None of the figures that underpin these curves originates in the real world; they are purely imaginary. According to Ludwig von Mises, "It is important to realize that we do not have any knowledge or experience concerning the shape of such curves." Consequently, this implies that it is not possible to establish from the imaginary curves the neutral interest rate. The employment of sophisticated mathematical methods does not solve the issue that the neutral rate is not observed. So what are the basis for Krugman to suggest that the neutral rate has been trending down? None whatsoever. Contrary to Krugman, the Fed by being a major source for money creation has been instrumental in the formation of bubbles. ConclusionContrary to Krugman the main source for money creation out of "thin air" is the central bank. Consequently, various bubble activities created are the outcome of the Fed's monetary pumping and nothing else. This posting includes an audio/video/photo media file: Download Now |
| Entrepreneurship Should Be the Goal, Not White-Collar Jobs Posted: 05 Jul 2022 04:00 AM PDT Black entrepreneurship in the United States has a remarkable history. Even during the inhospitable climate of Southern slavery, both enslaved and free blacks managed to establish lucrative ventures. Research on black entrepreneurship has revealed that in the Antebellum South black entrepreneurs' pursuits spanned the entire gamut of industry, ranging from merchandising to transportation. Indeed, the success of some black entrepreneurs was so astounding that the demand for their services transcended the boundaries of race and class. The case of Archy Carey, a black slave who acquired his freedom, merits attention. Carey was the proprietor of a successful hack-driving business, owner of several investment properties, and was even revered by eminent whites. "He is a person of Good character, honest deportment, and without exception in his behavior," they noted in a petition. Notwithstanding the illustrious pedigree of black entrepreneurship, researchers have observed that black businesses are failing to attain parity with their white counterparts. Experts cite numerous factors to illuminate the underperformance of black businesses, but the relevance of human capital is insufficiently explored. In their research on disparities in business performance, Robert Fairlie and Alicia Robb posit that sizeable variations in the inheritances of business are unable to explain the weaker performance of black businesses relative to white businesses. Instead, they argue that "the lack of prior work experience in a family business among black business owners, perhaps by limiting their acquisition of general and specific business human capital, negatively affects black business outcomes." Working in a family business equips youngsters with the work ethic and human capital to launch scalable businesses, and invariably blacks are missing out on opportunities to hone human capital by failing to get involved in family enterprises. Although blacks are entrepreneurial, black businesses are constrained by cultural dynamics. The black social theorist Elizabeth Wright once noted that black Americans express strong preferences for white-collar employment at the expense of entrepreneurship. Wright submits that in black intellectual circles from the era of W.E.B. Du Bois there has been a tendency to belittle commerce and what some would describe as menial work:
As a result, blacks might start trades, but rather than encouraging their children to embrace the mantle of entrepreneurship, they implore them to become professionals. Due to the disdain assigned to petty trades, these businesses are never transformed into power players by the second generation. Such ventures are started to generate income for the family so that funds will be available to finance the children's tertiary education. In sum, the goal is for children to matriculate in the professional class rather than to become entrepreneurs. Cultural economists would characterize blacks as having an "aristocratic mindset," emphasizing status signaling instead of accumulating wealth through entrepreneurship. For instance, in his survey of the black elite in America, Lawrence Otis Graham reveals a group obsessed with status and producing the next generation of doctors and lawyers. Unfortunately, intellectual elites fail to appreciate that although doctors and lawyers can become rich, the most sustainable path to wealth is to own a business. Additionally, another barrier to the success of black enterprises is financial illiteracy. Sourcing capital and investment partners requires an understanding of company finances and performance metrics. Business people who are incognizant of the criteria financial institutions employ to gauge business prospects will be unlikely to secure loans or receive equity financing. According to a study published by the Congressional Black Caucus Foundation, 82 percent of respondents in the 18–30 category failed to display financial literacy. Lead researcher Dr. Tiffany Howard observed that respondents
Even more serious is that the Financial Literacy and Wellness among African Americans report shows that blacks trail whites on the Personal Finance Index by double digits. Financial literacy makes black Americans better entrepreneurs, and entrepreneurship can narrow the wealth gap. Hence closing the financial literacy gap is a laudable goal, however it is quite surprising that racial gaps in financial literacy are observed in the information age. A possible explanation could be that the thirst for financial information is not embedded in black culture. In fact, many argue that black culture is marred by conspicuous consumption. Therefore, to remedy the problem, policy makers should not only build institutions to sell financial literacy and entrepreneurship in black communities, but also incorporate the star power of influencers to promote positive messages to black people. Entertainers are the thought leaders in the black community, so using them to advertise financial literacy is likely to garner success. Linking the misfortunes of black Americans to racism is fashionable, but a more sober argument is that problems afflicting blacks in entrepreneurship and other areas can be solved by a positive transformation of black culture. This posting includes an audio/video/photo media file: Download Now |
| Foreign Policy Fail: Biden's Sanctions are a Windfall For Russia! Posted: 05 Jul 2022 03:30 AM PDT It's easy to see why, according to a new Harris poll, 71 percent of Americans said they do not want Joe Biden to run for re-election. As Americans face record gas prices and the highest inflation in 40 years, President Biden admits he could not care less. His Administration is committed to fight a proxy war with Russia through Ukraine and Americans just need to suck it up. Last week a New York Times reporter asked Biden how long he expects Americans to pay record gasoline prices over his Administration's Ukraine policy. "As long as it takes," replied the president without hesitation. "Russia cannot defeat Ukraine," added Biden as justification for his Administration's pro-pain policy toward Americans. The president has repeatedly tried to deflect blame for the growing economic crisis by claiming Russia is solely behind recent inflation. "The reason why gas prices are up is because of Russia. Russia, Russia, Russia," he said in the same press conference. But Biden has a big problem: Americans do not believe him. According to a Rasmussen poll earlier this month, only eleven percent of Americans believe Biden's claim that Russian president Vladimir Putin is to blame for high prices. When it comes to disdain for the average American hurt by higher prices, there is more than enough in the Biden Administration to go around. Brian Deese, Director of President Biden's National Economic Council, was asked in a recent CNN interview, "What do you say to those families that say, listen, we can't afford to pay $4.85 a gallon for months, if not years?" His answer? "This is about the future of the Liberal World Order and we have to stand firm." Has there ever been an Administration more out of touch with the American people? If you asked working Americans whether they'd be happy to suffer poverty for the "liberal world order," how many would say "that sounds like a great idea"? President Biden's attempts to bring down gasoline prices are bound to fail because he does not understand the problem. He can beg the Saudis to pump more oil, he can even threaten the US oil companies as he did in a Tweet yesterday. He can buy and sell from the Strategic Petroleum Reserve in attempt to give the impression that prices are lowing. None of it will work. The strangest part of this idea that Americans must suffer to hurt the Russians is that these policies aren't even hurting Russia! On the contrary: Russia has been seen record profits from its oil and gas exports since the beginning of the Ukraine war. According to a recent New York Times article, increasing global oil and gas prices have enabled Russia to finance its war on Ukraine. US sanctions did not bring the Russian economy to its knees, as Biden promised. They actually brought the American economy to its knees while Russian profits soared. As Newsweek noted last week, Russian television pundits are joking that with the financial windfall Russia has seen since sanctions were imposed, "Biden is of course our agent." Washington's bi-partisan foreign policy of wasting trillions on endless wars overseas has finally come home. Biden is clearly out of touch, but there is plenty of blame to go around. The only question is whether we will see an extended recession…or worse. Originally published by the Ron Paul Institute. Republished with permission. This posting includes an audio/video/photo media file: Download Now |
| Posted: 05 Jul 2022 03:00 AM PDT 1. Human ReasonReason is man's particular and characteristic feature. There is no need for praxeology to raise the question whether reason is a suitable tool for the cognition of ultimate and absolute truth. It deals with reason only as far as it enables man to act. All those objects which are the substratum of human sensation, perception, and observation also pass before the senses of animals. But man alone has the faculty of transforming sensuous stimuli into observation and experience. And man alone can arrange his various observations and experiences into a coherent system. Action is preceded by thinking. Thinking is to deliberate beforehand over future action and to reflect afterward upon past action. Thinking and acting are inseparable. Every action is always based on a definite idea about causal relations. He who thinks a causal relation thinks a theorem. Action without thinking, practice without theory are unimaginable. The reasoning may be faulty and the theory incorrect; but thinking and theorizing are not lacking in any action. On the other hand thinking is always thinking of a potential action. Even he who thinks of a pure theory assumes that the theory is correct, i.e., that action complying with its content would result in an effect to be expected from its teachings. It is of no relevance for logic whether such action is feasible or not. It is always the individual who thinks. Society does not think any more than it eats or drinks. The evolution of human reasoning from the naive thinking of primitive man to the more subtle thinking of modern science took place within society. However, thinking itself is always an achievement of individuals. There is joint action, but no joint thinking. There is only tradition which preserves thoughts and communicates them to others as a stimulus to their thinking. However, man has no means of appropriating the thoughts of his precursors other than to think them over again. Then, of course, he is in a position to proceed farther on the basis of his forerunners' thoughts. The foremost vehicle of tradition is the word. Thinking is linked up with language and vice versa. Concepts are embodied in terms. Language is a tool of thinking as it is a tool of social action. The history of thought and ideas is a discourse carried on from generation to generation. The thinking of later ages grows out of the thinking of earlier ages. Without the aid of this stimulation, intellectual progress would have been impossible. The continuity of human evolution, sowing for the offspring and harvesting on land cleared and tilled by the ancestors, manifests itself also in the history of science and ideas. We have inherited from our forefathers not only a stock of products of various orders of goods which is the source of our material wealth; we have no less inherited ideas and thoughts, theories and technologies to which our thinking owes its productivity. But thinking is always a manifestation of individuals. 2. Worldview and IdeologyThe theories directing action are often imperfect and unsatisfactory. They may be contradictory and unfit to be arranged into a comprehensive and coherent system. If we look at all the theorems and theories guiding the conduct of certain individuals and groups as a coherent complex and try to arrange them as far as is feasible into a system, i.e., a comprehensive body of knowledge, we may speak of it as a worldview. A worldview is, as a theory, an interpretation of all things, and as a precept for action, an opinion concerning the best means for removing uneasiness as much as possible. A worldview is thus, on the one hand, an explanation of all phenomena and, on the other hand, a technology, both these terms being taken in their broadest sense. Religion, metaphysics, and philosophy aim at providing a worldview. They interpret the universe and they advise men how to act. The concept of an ideology is narrower than that of a worldview. In speaking of ideology, we have in view only human action and social cooperation and disregard the problems of metaphysics, religious dogma, the natural sciences, and the technologies derived from them. Ideology is the totality of our doctrines concerning individual conduct and social relations. Both worldview and ideology go beyond the limits imposed upon a purely neutral and academic study of things as they are. They are not only scientific theories, but also doctrines about the ought, i.e., about the ultimate ends which man should aim at in his earthly concerns. Asceticism teaches that the only means open to man for removing pain and for attaining complete quietude, contentment, and happiness is to turn away from earthly concerns and to live without bothering about worldly things. There is no salvation other than to renounce striving after material well-being, to endure submissively the adversities of the earthly pilgrimage and to dedicate oneself exclusively to the preparation for eternal bliss. However, the number of those who consistently and unswervingly comply with the principles of asceticism is so small that it is not easy to instance more than a few names. It seems that the complete passivity advocated by asceticism is contrary to nature. The enticement of life triumphs. The ascetic principles have been adulterated. Even the most saintly hermits made concessions to life and earthly concerns which did not agree with their rigid principles. But as soon as a man takes into account any earthly concerns, and substitutes for purely vegetative ideals an acknowledgment of worldly things, however conditioned and incompatible with the rest of his professed doctrine, he bridges over the gulf which separated him from those who say yes to the striving after earthly ends. Then he has something in common with everyone else. Human thoughts about things of which neither pure reasoning nor experience provides any knowledge may differ so radically that no agreement can be reached. In this sphere in which the free reverie of the mind is restricted neither by logical thinking nor by sensory experience man can give vent to his individuality and subjectivity. Nothing is more personal than the notions and images about the transcendent. Linguistic terms are unable to communicate what is said about the transcendent; one can never establish whether the hearer conceives them in the same way as the speaker. With regard to things beyond there can be no agreement. Religious wars are the most terrible wars because they are waged without any prospect of conciliation. But where earthly things are involved, the natural affinity of all men and the identity of the biological conditions for the preservation of their lives come into play. The higher productivity of cooperation under division of labor makes society the foremost means of every individual for the attainment of his own ends whatever they may be. The maintenance and further intensification of social cooperation become a concern of everybody. Every worldview and every ideology which is not entirely and unconditionally committed to the practice of asceticism and to a life in anchoritic reclusion must pay heed to the fact that society is the great means for the attainment of earthly ends. But then a common ground is won to clear the way for an agreement concerning minor social problems and the details of society's organization. However various ideologies may conflict with one another, they harmonize in one point, in the acknowledgment of life in society. People fail sometimes to see this fact because in dealing with philosophies and ideologies they look more at what these doctrines assert with regard to transcendent and unknowable things and less at their statements about action in this world. Between various parts of an ideological system there is often an unbridgeable gulf. For acting man only those teachings are of real importance which result in precepts for action, not those doctrines which are purely academic and do not apply to conduct within the frame of social cooperation. We may disregard the philosophy of adamant and consistent asceticism because such a rigid asceticism must ultimately result in the extinction of its supporters. All other ideologies, in approving of the search for the necessities of life, are forced in some measure to take into account the fact that division of labor is more productive than isolated work. They thus admit the need for social cooperation. Praxeology and economics are not qualified to deal with the transcendent and metaphysical aspects of any doctrine. But, on the other hand, no appeal to any religious or metaphysical dogmas and creeds can invalidate the theorems and theories concerning social cooperation as developed by logically correct praxeological reasoning. If a philosophy has admitted the necessity of societal links between men, it has placed itself, as far as problems of social action come into play, on ground from which there is no escape into personal convictions and professions of faith not liable to a thorough examination by methods of science. This fundamental fact is often ignored. People believe that differences in worldview create irreconcilable conflicts. The basic antagonisms between parties committed to different worldviews, it is contended, cannot be settled by compromise. They stem from the deepest recesses of the human soul and are expressive of a man's innate communion with supernatural and eternal forces. There can never be any cooperation between people divided by different worldviews. However, if we pass in review the programs of all parties—both the cleverly elaborated and publicized programs and those to which the parties really cling when in power—we can easily discover the fallacy of this interpretation. All present-day political parties strive after the earthly well-being and prosperity of their supporters. They promise that they will render economic conditions more satisfactory to their followers. With regard to this issue there is no difference between the Roman Catholic Church and the various Protestant denominations as far as they intervene in political and social questions, between Christianity and the non-Christian religions, between the advocates of economic freedom and the various brands of Marxian materialism, between nationalists and internationalists, between racists and the friends of interracial peace. It is true, that many of these parties believe that their own group cannot prosper except at the expense of other groups, and even go so far as to consider the complete annihilation of other groups or their enslavement as the necessary condition of their own group's prosperity. Yet, extermination or enslavement of others is for them not an ultimate end, but a means for the attainment of what they aim at as an ultimate end: their own group's flowering. If they were to learn that their own designs are guided by spurious theories and would not bring about the beneficial results expected, they would change their programs. The pompous statements which people make about things unknowable and beyond the power of the human mind, their cosmologies, worldviews, religions, mysticisms, metaphysics, and conceptual fantasies differ widely from one another. But the practical essence of their ideologies, i.e., their teachings dealing with the ends to be aimed at in earthly life and with the means for the attainment of these ends, show much uniformity. There are, to be sure, differences and antagonisms both with regard to ends and means. Yet the differences with regard to ends are not irreconcilable; they do not hinder cooperation and amicable arrangements in the sphere of social action. As far as they concern means and ways only they are of a purely technical character and as such open to examination by rational methods. When in the heat of party conflicts one of the factions declares: "Here we cannot go on in our negotiations with you because we are faced with a question touching upon our worldview; on this point we must be adamant and must cling rigidly to our principles whatever may result," one need only scrutinize matters more carefully to realize that such declarations describe the antagonism as more pointed than it really is. In fact, for all parties committed to pursuit of the people's earthly welfare and thus approving social cooperation, questions of social organization and the conduct of social action are not problems of ultimate principles and of worldviews, but ideological issues. They are technical problems with regard to which some arrangement is always possible. No party would wittingly prefer social disintegration, anarchy, and a return to primitive barbarism to a solution which must be bought at the price of the sacrifice of some ideological points. In party programs these technical issues are, of course, of primary importance. A party is committed to certain means, it recommends certain methods of political action and rejects utterly all other methods and policies as inappropriate. A party is a body which combines all those eager to employ the same means for common action. The principle which differentiates men and integrates parties is the choice of means. Thus for the party as such the means chosen are essential. A party is doomed if the futility of the means recommended becomes obvious. Party chiefs whose prestige and political career are bound up with the party's program may have ample reasons for withdrawing its principles from unrestricted discussion; they may attribute to them the character of ultimate ends which must not be questioned because they are based on a worldview. But for the people as whose mandataries the party chiefs pretend to act, for the voters whom they want to enlist and for whose votes they canvass, things offer another aspect. They have no objection to scrutinizing every point of a party's program. They look upon such a program only as a recommendation of means for the attainment of their own ends, viz., earthly well-being. What divides those parties which one calls today worldview parties, i.e., parties committed to basic philosophical decisions about ultimate ends, is only seeming disagreement with regard to ultimate ends. Their antagonisms refer either to religious creeds or to problems of international relations or to the problem of ownership of the means of production or to problems of political organization. It can be shown that all these controversies concern means and not ultimate ends. Let us begin with the problems of a nation's political organization. There are supporters of a democratic system of government, of hereditary monarchy, of the rule of a self-styled elite and of Caesarist dictatorship.1 It is true that these programs are often recommended by reference to divine institutions, to the eternal laws of the universe, to the natural order, to the inevitable trend of historical evolution, and to other objects of transcendent knowledge. But such statements are merely incidental adornment. In appealing to the electorate, the parties advance other arguments. They are eager to show that the system they support will succeed better than those advocated by other parties in realizing those ends which the citizens aim at. They specify the beneficial results achieved in the past or in other countries; they disparage the other parties' programs by relating their failures. They resort both to pure reasoning and to an interpretation of historical experience in order to demonstrate the superiority of their own proposals and the futility of those of their adversaries. Their main argument is always: the political system we support will render you more prosperous and more content. In the field of society's economic organization there are the liberals advocating private ownership of the means of production, the socialists advocating public ownership of the means of production, and the interventionists advocating a third system which, they contend, is as far from socialism as it is from capitalism. In the clash of these parties there is again much talk about basic philosophical issues. People speak of true liberty, equality, social justice, the rights of the individual, community, solidarity, and humanitarianism. But each party is intent upon proving by ratiocination and by referring to historical experience that only the system it recommends will make the citizens prosperous and satisfied. They tell the people that realization of their program will raise the standard of living to a higher level than realization of any other party's program. They insist upon the expediency of their plans and upon their utility. It is obvious that they do not differ from one another with regard to ends but only as to means. They all pretend to aim at the highest material welfare for the majority of citizens. The nationalists stress the point that there is an irreconcilable conflict between the interests of various nations, but that, on the other hand, the rightly understood interests of all the citizens within the nation are harmonious. A nation can prosper only at the expense of other nations; the individual citizen can fare well only if his nation flourishes. The liberals have a different opinion. They believe that the interests of various nations harmonize no less than those of the various groups, classes, and strata of individuals within a nation. They believe that peaceful international cooperation is a more appropriate means than conflict for attainment of the end which they and the nationalists are both aiming at: their own nation's welfare. They do not, as the nationalists charge, advocate peace and free trade in order to betray their own nation's interests to those of foreigners. On the contrary, they consider peace and free trade the best means to make their own nation wealthy. What separates the free traders from the nationalists is not ends, but the means recommended for attainment of the ends common to both. Dissension with regard to religious creeds cannot be settled by rational methods. Religious conflicts are essentially implacable and irreconcilable. Yet as soon as a religious community enters the field of political action and tries to deal with problems of social organization, it is bound to take into account earthly concerns, however this may conflict with its dogmas and articles of faith. No religion in its exoteric activities ever ventured to tell people frankly: The realization of our plans for social organization will make you poor and impair your earthly well-being. Those consistently committed to a life of poverty withdrew from the political scene and fled into anchoritic seclusion. But churches and religious communities which have aimed at making converts and at influencing political and social activities of their followers have espoused the principles of secular conduct. In dealing with questions of man's earthly pilgrimage they hardly differ from any other political party. In canvassing, they emphasize the material advantages which they have in store for their brothers in faith more than bliss in the beyond. Only a worldview whose supporters renounce any earthly activity whatever could neglect to pay heed to the rational considerations which show that social cooperation is the great means for the attainment of all human ends. Because man is a social animal that can thrive only within society, all ideologies are forced to acknowledge the preeminent importance of social cooperation. They must aim at the most satisfactory organization of society and must approve of man's concern for an improvement of his material well-being. Thus they all place themselves upon a common ground. They are separated from one another not by worldviews and transcendent issues not subject to reasonable discussion, but by problems of means and ways. Such ideological antagonisms are open to a thorough scrutiny by the scientific methods of praxeology and economics. The Fight Against ErrorA critical examination of the philosophical systems constructed by mankind's great thinkers has very often revealed fissures and flaws in the impressive structure of those seemingly consistent and coherent bodies of comprehensive thought. Even the genius in drafting a worldview sometimes fails to avoid contradictions and fallacious syllogisms. The ideologies accepted by public opinion are still more infected by the shortcomings of the human mind. They are mostly an eclectic juxtaposition of ideas utterly incompatible with one another. They cannot stand a logical examination of their content. Their inconsistencies are irreparable and defy any attempt to combine their various parts into a system of ideas compatible with one another. Some authors try to justify the contradictions of generally accepted ideologies by pointing out the alleged advantages of a compromise, however unsatisfactory from the logical point of view, for the smooth functioning of interhuman relations. They refer to the popular fallacy that life and reality are "not logical"; they contend that a contradictory system may prove its expediency or even its truth by working satisfactorily while a logically consistent system would result in disaster. There is no need to refute anew such popular errors. Logical thinking and real life are not two separate orbits. Logic is for man the only means to master the problems of reality. What is contradictory in theory, is no less contradictory in reality. No ideological inconsistency can provide a satisfactory, i.e., working, solution for the problems offered by the facts of the world. The only effect of contradictory ideologies is to conceal the real problems and thus to prevent people from finding in time an appropriate policy for solving them. Inconsistent ideologies may sometimes postpone the emergence of a manifest conflict. But they certainly aggravate the evils which they mask and render a final solution more difficult. They multiply the agonies, they intensify the hatreds, and make peaceful settlement impossible. It is a serious blunder to consider ideological contradictions harmless or even beneficial. The main objective of praxeology and economics is to substitute consistent, correct ideologies for the contradictory tenets of popular eclecticism. There is no other means of preventing social disintegration and of safeguarding the steady improvement of human conditions than those provided by reason. Men must try to think through all the problems involved up to the point beyond which a human mind cannot proceed farther. They must never acquiesce in any solutions conveyed by older generations, they must always question anew every theory and every theorem, they must never relax in their endeavors to brush away fallacies and to find the best possible cognition. They must fight error by unmasking spurious doctrines and by expounding truth. The problems involved are purely intellectual and must be dealt with as such. It is disastrous to shift them to the moral sphere and to dispose of supporters of opposite ideologies by calling them villains. It is vain to insist that what we are aiming at is good and what our adversaries want is bad. The question to be solved is precisely what is to be considered as good and what as bad. The rigid dogmatism peculiar to religious groups and to Marxism results only in irreconcilable conflict. It condemns beforehand all dissenters as evildoers, it calls into question their good faith, it asks them to surrender unconditionally. No social cooperation is possible where such an attitude prevails. No better is the propensity, very popular nowadays, to brand supporters of other ideologies as lunatics. Psychiatrists are vague in drawing a line between sanity and insanity. It would be preposterous for laymen to interfere with this fundamental issue of psychiatry. However, it is clear that if the mere fact that a man shares erroneous views and acts according to his errors qualifies him as mentally disabled, it would be very hard to discover an individual to which the epithet sane or normal could be attributed. Then we are bound to call the past generations lunatic because their ideas about the problems of the natural sciences and concomitantly their techniques differed from ours. Coming generations will call us lunatics for the same reason. Man is liable to error. If to err were the characteristic feature of mental disability, then everybody should be called mentally disabled. Neither can the fact that a man is at variance with the opinions held by the majority of his contemporaries qualify him as a lunatic. Were Copernicus, Galileo, and Lavoisier insane? It is the regular course of history that a man conceives new ideas, contrary to those of other people. Some of these ideas are later embodied in the system of knowledge accepted by public opinion as true. Is it permissible to apply the epithet "sane" only to boors who never had ideas of their own and to deny it to all innovators? The procedure of some contemporary psychiatrists is really outrageous. They are utterly ignorant of the theories of praxeology and economics. Their familiarity with present-day ideologies is superficial and uncritical. Yet they blithely call the supporters of some ideologies paranoid persons. There are men who are commonly stigmatized as monetary cranks. The monetary crank suggests a method for making everybody prosperous by monetary measures. His plans are illusory. However, they are the consistent application of a monetary ideology entirely approved by contemporary public opinion and espoused by the policies of almost all governments. The objections raised against these ideological errors by the economists are not taken into account by the governments, political parties, and the press. It is generally believed by those unfamiliar with economic theory that credit expansion and an increase in the quantity of money in circulation are efficacious means for lowering the rate of interest permanently below the height it would attain on a nonmanipulated capital and loan market. This theory is utterly illusory.2 But it guides the monetary and credit policy of almost every contemporary government. Now, on the basis of this vicious ideology, no valid objection can be raised against the plans advanced by Pierre Joseph Proudhon, Ernest Solvay, Clifford Hugh Douglas, and a host of other would-be reformers. They are only more consistent than other people are. They want to reduce the rate of interest to zero and thus to abolish altogether the scarcity of "capital." He who wants to refute them must attack the theories underlying the monetary and credit policies of the great nations. The psychiatrist may object that what characterizes a man as a lunatic is precisely the fact that he lacks moderation and goes to extremes. While normal man is judicious enough to restrain himself, the paranoid person goes beyond all bounds. This is quite an unsatisfactory rejoinder. All the arguments advanced in favor of the thesis that the rate of interest can be reduced by credit expansion from 5 or 4 percent to 3 or 2 percent are equally valid for a reduction to zero. The "monetary cranks" are certainly from the point of view of the monetary fallacies approved by popular opinion. There are psychiatrists who call the Germans who espoused the principles of Nazism lunatics and want to cure them by therapeutic procedures. Here again we are faced with the same problem. The doctrines of Nazism are vicious, but they do not essentially disagree with the ideologies of socialism and nationalism as approved by other peoples' public opinion. What characterized the Nazis was only the consistent application of these ideologies to the special conditions of Germany. Like all other contemporary nations the Nazis desired government control of business and economic self-sufficiency, i.e., autarky, for their own nation. The distinctive mark of their policy was that they refused to acquiesce in the disadvantages which the acceptance of the same system by other nations would impose upon them. They were not prepared to be forever "imprisoned," as they said, within a comparatively overpopulated area in which physical conditions render the productivity of labor lower than in other countries. They believed that their nation's great population figures, the strategically propitious geographic situation of their country, and the inborn vigor and gallantry of their armed forces provided them with a good chance to remedy by aggression the evils they deplored. Now, whoever accepts the ideology of nationalism and socialism as true and as the standard of his own nation's policy, is not in a position to refute the conclusions drawn from them by the Nazis. The only way for a refutation of Nazism left for foreign nations which have espoused these two principles is to defeat the Nazis in war. And as long as the ideology of socialism and nationalism is supreme in the world's public opinion, the Germans or other peoples will try again to succeed by aggression and conquest, should the opportunity ever be offered to them. There is no hope of eradicating the aggression mentality if one does not explode entirely the ideological fallacies from which it stems. This is not a task for psychiatrists, but for economists.3 What is wrong with the Germans is certainly not that they do not comply with the teachings of the Gospels. No nation ever did. With the exception of the small and uninfluential groups of the Friends practically all Christian churches and sects blessed the arms of warriors. The most ruthless among the older German conquerors were the Teutonic Knights who fought in the name of the Cross. The source of present-day German aggressiveness is the very fact that the Germans have discarded liberal philosophy and substituted the ideology of nationalism and socialism for the liberal principles of free trade and peace. If mankind does not return to the ideas today disparaged as "orthodox," "Manchester philosophy," and "laissez faire," the only method to prevent a new aggression is to render the Germans innocuous by depriving them of the means of waging war. Man has only one tool to fight error: reason. 3. MightSociety is a product of human action. Human action is directed by ideologies. Thus society and any concrete order of social affairs are an outcome of ideologies; ideologies are not, as Marxism asserts, a product of a certain state of social affairs. To be sure, human thoughts and ideas are not the achievement of isolated individuals. Thinking too succeeds only through the cooperation of the thinkers. No individual would make headway in his reasoning if he were under the necessity of starting from the beginning. A man can advance in thinking only because his efforts are aided by those of older generations who have formed the tools of thinking, the concepts and terminologies, and have raised the problems. Any given social order was thought out and designed before it could be realized. This temporal and logical precedence of the ideological factor does not imply the proposition that people draft a complete plan of a social system as the utopians do. What is and must be thought out in advance is not the concerting of individual's actions into an integrated system of social organization, but the actions of individuals with regard to their fellow men and of already formed groups of individuals with regard to other groups. Before a man aids his fellow in cutting a tree, such cooperation must be thought out. Before an act of barter takes place, the idea of mutual exchange of goods and services must be conceived. It is not necessary that the individuals concerned become aware of the fact that such mutuality results in the establishment of social bonds and in the emergence of a social system. The individual does not plan and execute actions intended to construct society. His conduct and the corresponding conduct of others generate social bodies. Any existing state of social affairs is the product of ideologies previously thought out. Within society new ideologies may emerge and may supersede older ideologies and thus transform the social system. However, society is always the creation of ideologies temporally and logically anterior. Action is always directed by ideas; it realizes what previous thinking has designed. If we hypostatize or anthropomorphize the notion of ideology, we may say that ideologies have might over men. Might is the faculty or power of directing actions. As a rule one says only of a man or of groups of men that they are mighty. Then the definition of might is: might is the power to direct other people's actions. He who is mighty owes his might to an ideology. Only ideologies can convey to a man the power to influence other people's choices and conduct. One can become a leader only if one is supported by an ideology which makes other people tractable and accommodating. Might is thus not a physical and tangible thing, but a moral and spiritual phenomenon. A king's might rests upon the recognition of the monarchical ideology on the part of his subjects. He who uses his might to run the state, i.e., the social apparatus of coercion and compulsion, rules. Rule is the exercise of might in the political body. Rule is always based upon might, i.e., the power to direct other people's actions. Of course, it is possible to establish a government upon the violent oppression of reluctant people. It is the characteristic mark of state and government that they apply violent coercion or the threat of it against those not prepared to yield voluntarily. Yet such violent oppression is no less founded upon ideological might. He who wants to apply violence needs the voluntary cooperation of some people. An individual entirely dependent on himself can never rule by means of physical violence only.4 He needs the ideological support of a group in order to subdue other groups. The tyrant must have a retinue of partisans who obey his orders of their own accord. Their spontaneous obedience provides him with the apparatus he needs for the conquest of other people. Whether or not he succeeds in making his sway last depends on the numerical relation of the two groups, those who support him voluntarily and those whom he beats into submission. Though a tyrant may temporarily rule through a minority if this minority is armed and the majority is not, in the long run a minority cannot keep the majority in subservience. The oppressed will rise in rebellion and cast off the yoke of tyranny. A durable system of government must rest upon an ideology acknowledged by the majority. The "real" factor, the "real forces" that are the foundation of government and convey to the rulers the power to use violence against renitent minority groups are essentially ideological, moral, and spiritual. Rulers who failed to recognize this first principle of government and, relying upon the alleged irresistibility of their armed troops, disdained the spirit and ideas, have finally been overthrown by the assault of their adversaries. The interpretation of might as a "real" factor not dependent upon ideologies, quite common to many political and historical books, is erroneous. The term Realpolitik makes sense only if used to signify a policy taking account of generally accepted ideologies as contrasted with a policy based upon ideologies not sufficiently acknowledged and therefore unfit to support a durable system of government. He who interprets might as physical or "real" power to carry on and considers violent action as the very foundation of government, sees conditions from the narrow point of view of subordinate officers in charge of sections of an army or police force. To these subordinates a definite task within the framework of the ruling ideology is assigned. Their chiefs commit to their care troops which are not only equipped, armed, and organized for combat, but no less imbued with the spirit which makes them obey the orders issued. The commanders of such subdivisions consider this moral factor a matter of course because they themselves are animated by the same spirit and cannot even imagine a different ideology. The power of an ideology consists precisely in the fact that people submit to it without any wavering and scruples. However, things are different for the head of the government. He must aim at preservation of the morale of the armed forces and of the loyalty of the rest of the population. For these moral factors are the only "real" elements upon which continuance of his mastery rests. His power dwindles if the ideology that supports it disappears. Minorities too can sometimes conquer by means of superior military skill and can thus establish minority rule. But such an order of things cannot endure. If the victorious conquerors do not succeed in subsequently converting the system of rule by violence into a system of rule by ideological consent on the part of those ruled, they will succumb in new struggles. All victorious minorities who have established a lasting system of government have made their sway durable by means of a belated ideological ascendancy. They have legitimized their own supremacy either by submitting to the ideologies of the defeated or by transforming them. Where neither of these two things took place, the oppressed many dispossessed the oppressing few either by open rebellion or through the silent but steadfast operation of ideological forces.5 Many of the great historical conquests were able to endure because the invaders entered into alliance with those classes of the defeated nation which were supported by the ruling ideology and were thus considered legitimate rulers. This was the system adopted by the Tartars in Russia, by the Turks in the Danube principalities and by and large in Hungary and Transylvania, and by the British and the Dutch in the Indies. A comparatively insignificant number of Britons could rule many hundred millions of Indians because the Indian princes and aristocratic landowners looked upon British rule as a means for the preservation of their privileges and supplied it with the support which the generally acknowledged ideology of India gave to their own supremacy. England's Indian empire was firm as long as public opinion approved of the traditional social order. The Pax Britannica safeguarded the princes' and the landlords' privileges and protected the masses against the agonies of wars between the principalities and of succession wars within them. In our day the infiltration of subversive ideas from abroad has undermined British rule and at the same time threatens the preservation of the country's age-old social order. Victorious minorities sometimes owe their success to their technological superiority. This does not alter the case. In the long run it is impossible to withhold the better arms from the members of the majority. Not the equipment of their armed forces, but ideological factors safeguarded the British in India.6 A country's public opinion may be ideologically divided in such a way that no group is strong enough to establish a durable government. Then anarchy emerges. Revolutions and civil strife become permanent. Traditionalism as an IdeologyTraditionalism is an ideology which considers loyalty to valuations, customs, and methods of procedure handed down or allegedly handed down from ancestors both right and expedient. It is not an essential mark of traditionalism that these forefathers were the ancestors in the biological meaning of the term or can be fairly considered such; they were sometimes only the previous inhabitants of the country concerned or supporters of the same religious creed or only precursors in the exercise of some special task. Who is to be considered an ancestor and what is the content of the body of tradition handed down are determined by the concrete teachings of each variety of traditionalism. The ideology brings into prominence some of the ancestors and relegates others to oblivion; it sometimes calls ancestors people who had nothing to do with the alleged posterity. It often constructs a "traditional" doctrine which is of recent origin and is at variance with the ideologies really held by the ancestors. Traditionalism tries to justify its tenets by citing the success they secured in the past. Whether this assertion conforms with the facts, is another question. Research could sometimes unmask errors in the historical statements of a traditional belief. However, this did not always explode the traditional doctrine. For the core of traditionalism is not real historical facts, but an opinion about them, however mistaken, and a will to believe things to which the authority of ancient origin is attributed. 4. Meliorism and the Idea of ProgressThe notions of progress and retrogression make sense only within a teleological system of thought. In such a framework it is sensible to call approach toward the goal aimed at progress and a movement in the opposite direction retrogression. Without reference to some agent's action and to a definite goal both these notions are empty and void of any meaning. It was one of the shortcomings of 19th-century philosophies to have misinterpreted the meaning of cosmic change and to have smuggled into the theory of biological transformation the idea of progress. Looking backward from any given state of things to the states of the past one can fairly use the terms development and evolution in a neutral sense. Then evolution signifies the process which led from past conditions to the present. But one must guard against the fatal error of confusing change with improvement and evolution with evolution toward higher forms of life. Neither is it permissible to substitute a pseudoscientific anthropocentrism for the anthropocentrism of religion and the older metaphysical doctrines. However, there is no need for praxeology to enter into a critique of this philosophy. Its task is to explode the errors implied in current ideologies. Eighteenth-century social philosophy was convinced that mankind has now finally entered the age of reason. While in the past theological and metaphysical errors were dominant, henceforth reason will be supreme. People will free themselves more and more from the chains of tradition and superstition and will dedicate all their efforts to the continuous improvement of social institutions. Every new generation will contribute its part to this glorious task. With the progress of time, society will more and more become the society of free men, aiming at the greatest happiness of the greatest number. Temporary setbacks are, of course, not impossible. But finally the good cause will triumph because it is the cause of reason. People called themselves happy in that they were citizens of an age of enlightenment which through the discovery of the laws of rational conduct paved the way toward a steady amelioration of human affairs. What they lamented was only the fact that they themselves were too old to witness all the beneficial effects of the new philosophy. "I would wish," said Bentham to Philarète Chasles, "to be granted the privilege to live the years which I have still to live, at the end of each of the centuries following my death; thus I could witness the effects of my writings."7 All these hopes were founded on the firm conviction, proper to the age, that the masses are both morally good and reasonable. The upper strata, the privileged aristocrats living on the fat of the land, were thought depraved. The common people, especially the peasants and the workers, were glorified in a romantic mood as noble and unerring in their judgment. Thus the philosophers were confident that democracy, government by the people, would bring about social perfection. This prejudice was the fateful error of the humanitarians, the philosophers, and the liberals. Men are not infallible; they err very often. It is not true that the masses are always right and know the means for attaining the ends aimed at. "Belief in the common man" is no better founded than was belief in the supernatural gifts of kings, priests, and noblemen. Democracy guarantees a system of government in accordance with the wishes and plans of the majority. But it cannot prevent majorities from falling victim to erroneous ideas and from adopting inappropriate policies which not only fail to realize the ends aimed at but result in disaster. Majorities too may err and destroy our civilization. The good cause will not triumph merely on account of its reasonableness and expediency. Only if men are such that they will finally espouse policies reasonable and likely to attain the ultimate ends aimed at, will civilization improve and society and state render men more satisfied, although not happy in a metaphysical sense. Whether or not this condition is given, only the unknown future can reveal. There is no room within a system of praxeology for meliorism and optimistic fatalism. Man is free in the sense that he must daily choose anew between policies that lead to success and those that lead to disaster, social disintegration, and barbarism. The term progress is nonsensical when applied to cosmic events or to a comprehensive worldview. We have no information about the plans of the prime mover. But it is different with its use in the frame of an ideological doctrine. The immense majority strives after a greater and better supply of food, clothes, homes, and other material amenities. In calling a rise in the masses' standard of living progress and improvement, economists do not espouse a mean materialism. They simply establish the fact that people are motivated by the urge to improve the material conditions of their existence. They judge policies from the point of view of the aims men want to attain. He who disdains the fall in infant mortality and the gradual disappearance of famines and plagues may cast the first stone upon the materialism of the economists. There is but one yardstick for the appraisal of human action: whether or not it is fit to attain the ends aimed at by acting men. This article is excerpted from chapter 9 of Human Action.
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| Yes, They Were Socialists: How the Nazis Waged War on Private Property Posted: 05 Jul 2022 01:00 AM PDT When the average person thinks of the Nazis, what often comes to mind is World War II, the Holocaust, and rousing speeches of hate. However, the National Socialists also had economic and political policies, policies many just assume were either free market or New Deal–style public works projects like the Autobahn. But Nazi policy was not so cut-and-dried. The Nazis were socialists, and it showed in many of the policies they implemented after coming to power in 1933. First, like the Soviets, the Nazis initiated a war on private property. Not surprisingly, property rights were severely curbed by National Socialism in the name of public welfare. How did the National Socialists combat private property in Germany? The first step came shortly after the Nazis took control, when they abolished private property. Article 153 of the Weimar constitution guaranteed private property, with expropriation only to occur within the due process of the law, but this article was nullified by a decree on February 28, 1933. With this, the new National Socialist government had complete control of private property in Germany. While they did not take complete control of the lands like the Bolsheviks did in Russia in 1917, the Nazis issued quotas for industries and farms, and later they reorganized all industry into corporations run by members of the Nazi Party. The War on BusinessPeter Temin wrote about this in Soviet and Nazi Economic Planning, stating:
The Nazis, ironically, called this reorganization "privatization," although the owners of these corporations were either removed from board positions and replaced by Nazi Party members or sold out and became Nazi Party members. They included IG Farben and the Junkers airplane factory. IG Farben was a chemical company founded in 1925 by Carl Bosch and Carl Duisberg, who were both Jewish, and had a capitalization of around a billion marks by 1926. By 1938, all of the company's Jewish workers had been purged and the supervisory board replaced by Nazis (see Joseph Borkin's book The Crime and Punishment of I.G. Farben). IG Farben was a clear example of the reorganization of industry the Nazis undertook for their benefit. Sybille Steinbacher, a professor of Holocaust studies, wrote about the public-private partnership in her book Auschwitz, stating:
After the Nazis took power, this kind of cooperation was common. Private businesses became merely public entities, and industrialists who resisted the Nazi commissars and their policies were removed from their positions and their businesses seized. Junkers airplane factory did not fare much better, according to Temin, who wrote:
This Nazi war on business left industrialists and other businessmen worried that they would have their livelihoods stolen from them, as Günter Reimann explains in The Vampire Economy. Reimann quotes a letter from a German businessman to an American businessman:
The letter continues:
This German businessman also complained of "arbitrary government decisions concerning quantity, quality, and prices of foreign raw materials." But businessmen were not the only members of the private sector who faced mass amounts of bureaucracy and control. The farmers faced it as well. The War on AgricultureWhen the Nazis came to power in 1933, a major interest for them was Lebensbraum (living space) for the "pure" German citizen. Professor Adam Tooze talks about the "hereditary farm" in his book Wages of Destruction:
These farms were to be passed down from generation to generation to keep the soil "pure," and Reich officials even thought that "Erbhof farmers should assume collective responsibility for each other's debts." This policy was introduced and supported by the Reich central bank and Reichsnährstand (RNS, State Food Society) officials. Farming price subsidies were also common in the Nazi Reich even before World War II broke out. The RNS was created to fix prices and create production controls in agriculture. In his book Hitler's Beneficiaries, German historian Götz Aly describes the measures the German government took in the farming sector. Götz states, "The prices producers were paid for milk and potatoes were raised by 25 to 35 percent in the course of the war." These subsidies would cause shortages as early as August 1939, when meat and eggs rationing was imposed to keep the industry focused on grain production. Life in Prewar GermanyIn high school history textbooks, very few pages are dedicated to prewar Germany (1933–39). However, two details are always covered: the Night of Broken Glass (Kristallnacht), which saw thousands of Jewish businesses vandalized and destroyed, and the Autobahn, a massive public works program that improved many lives and made travel easy. Because of this, people may reach the conclusion that prewar life was bad for the Jews, but beneficial for non-Jewish citizens. It is true that Jews suffered immensely, not only socially but also economically. At the start of 1933, there were an estimated hundred thousand Jewish businesses; by 1938, only 39,552 remained. In the same year, a capital levy was put on Jews; they needed to register all their assets with the local tax office, which placed a 20 percent and later a 25 percent capital levy on them. But for ordinary non-Jewish citizens, life was also hard. Private sale negotiations were subject to official rules, these rules being set selling prices for whatever good someone had. If a dealer wanted to increase his prices, he must get a special permit from a price commissar, who needed a detailed statement of necessity and other data such as production and distribution costs. R.J. Overy's War and Economy in the Third Reich and Richard Evans's Third Reich in Power talks about the shortages that came out of the industries at these times. In 1936, Germany steel producers were only producing 26 percent of Germany's domestic output requirement. The German government in 1937 would encourage citizens to hand in their scrap metal, and in the same year, authorities including the Hitler Youth would search people's homes for old metal keys. Metal was strictly rationed, and fines were handed out to building contractors who installed metal central heating pipes. Iron lamp posts and railings were replaced with wooden ones, but this was halted when there was a wood shortage, which also led to a paper shortage. All of this happened in 1937, two years before the war. Building projects had to cut back on wood and people were encouraged to burn peat instead of wood. Even coal was rationed. All industries under price controls were in the same situation, such as agriculture, where egg and dairy shortages led to the distribution of ration coupons. ConclusionThe Nazi government took control of the economy, which is what one expects from socialism. Unfortunately, the US economy today has similarities to the Nazi economy, from vast subsidies to price controls, and "stakeholder" advocates making even wilder demands. History tells us where these policies lead: the road to serfdom. This posting includes an audio/video/photo media file: Download Now |
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