Market Anarchy

by Gary North

F. A. Hayek wrote The Road to Serfdom in 1943. It was published in 1944. Americans who read the 1945 Readers Digest version liked it. University professors didn’t. This is one more bit of evidence that American voters have more sense than university professors. Are you surprised?

When Hayek wrote The Road to Serfdom, he had a marketing problem. The book’s title was absurd. He knew that. He knew the difference between Western serfdom, which had limited but defined property rights and the rule of law, and socialism, which in theory had neither. Serfdom was a system of liberty compared to Communism, Fascism, and National Socialism. But he was trying to sell the book to educated Leftists, who were favorable to socialism. He could not very well have sold copies in 1944 based on a title like The Road to Fascism, which was in fact the road the West was on in 1944.

We have been on the road out of “serfdom” ever since 1947, the year after Truman removed wartime price and wage controls. Anyone who doubts this development has no awareness of the lack of influence that free market ideas had in 1945. It was worse on campus, but it was bad in general. Henry Hazlitt’s Economics in One Lesson was a breath of fresh intellectual air in 1946. He was alone among financial journalists in 1946.

He would not be alone today.

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BUREAUCRACY IS NOT SOCIALISM

This is why I do not understand why conservatives believe that there is going to be a massive increase of socialism in the United States. There will be a lot of regulation. There will be a lot of special-interest legislation that benefits the Good Old Boys back home and the Old Boy Network that has its headquarters in New York City. There will be a lot of corruption. There will be a lot of Congressmen running around with their secretaries. There has been all this since 1788. What there isn’t going to be is socialism. The idea of socialism is dead in the water. It has almost no supporters any more, outside of universities. It has no legitimacy any more. There is no drift into socialism, because, since at least December 31, 1991, there has been a drift out of socialism. The USSR went belly-up.

It astounds me that there are still conspiratorial conservatives who tell us that the collapse of the Soviet Union was a deception. It also astounds me that anybody could believe this. I think it is a hangover of the outlook of the 1950s and 1960s, in which American conservatives really did think that the West might lose the Cold War. If we had stumbled into a nuclear war, as we almost did on several occasions — thank God for Stanislav Petrov — the West would have lost the war, but not the Cold War. In any case, we did not go to nuclear war, and we did not lose the Cold War. We won it. Our opponent disappeared in late 1991.

The simplest proof of this is to look at a map of Russia. The Soviet names of cities, which had been substituted for czarist names, have been changed back to the czarist names. Leningrad is back to St. Petersburg. It had been re-named Petrograd in mid-August 1914, a few days after Russia entered World War I, then Leningrad in 1924, three days after Lenin died. It was re-named St. Petersburg in September 1991, a few weeks after the failed coup by the Communists to regain control (August 19-21), but before the Soviet Union was officially disbanded — getting the czarist name back for the nation (December 31): Russia. Anyone who does not think name changes are significant has no understanding of how societies operate. What we call our cities reflects who we are as a people. Lenin was not St. Lenin, for there were no saints in Marxism. There were, however, pseudonyms: Lenin (Ulyanov), Stalin (Dzhugashvili), Trotsky (Bronstein).

I don’t care if Obama is a socialist, if he really is. Obama does not run the country. The entrenched Civil Service-protected bureaucracies run the country. They write 83,000 pages a year of three-column, fine print regulations that run the country. The people who implement the Federal Register run the country. The President and Congress have very little say in the details of running the country. The only major piece of legislation that Obama got through, other than a Keynesian stimulus package, which was no worse than George Bush’s Keynesian stimulus package, was Obamacare. The Supreme Court may throw it out next month. The man has almost nothing else to show for the first four years of his administration. He is not Franklin Roosevelt or Lyndon Johnson.

The system rolls along. For as long as investors turn their money over to the federal government in exchange for IOUs, the system is going to continue to roll along. When they stop turning their money over to the federal government, the Federal Reserve will begin to buy up the IOUs in order to make up the difference. But, at some point, the Federal Reserve will stop. The Federal Reserve will not go to hyperinflation unless Congress mandates it and threatens to take over the Federal Reserve. There will be time under those circumstances to hedge our bets. In any case, times of hyperinflation do not last very long. At the end of the period of hyperinflation, the government goes back to a stable money system, and the economy recovers. A lot of people will lose their wealth in the interim, and a few people will get very rich. If they sell their gold and silver and get into something like cash, they will do very well in the aftermath. But the bottom line is this: hyperinflation does not last very long. It is no solution, and central bankers know this. That is why I don’t think we are going to get hyperinflation.

Executive Producer Demetri Kofinas talks to Lew Rockwell about why Russia Today’s “Capital Account”, starring Lauren Lyster, is so good and so right.

Though I subscribe to the school of thought that the Constitution either permits the abuses or was powerless to stop it.  Either way the Constitution is a worthless piece of paper that didn’t stop the US government from becoming a fascist corporatist police state. 

By Thomas DiLorenzo (in 2006)

In his 1850 Disquisition on Government, John C. Calhoun argued that a written constitution would never be sufficient to contain the plundering proclivities of a central government. Some mechanisms for assuring consensus among the citizens of the states regarding “federal” laws would be necessary. Consequently, Calhoun proposed giving citizens of the states veto power over federal laws that they believed were unconstitutional (the “concurrent majority”). He also championed the Jeffersonian idea of nullification. To Calhoun (and Jefferson), states’ rights meant that the citizens of the states were sovereign over the central government that they created as their agent, and could only be so if such mechanisms — including the right of secession — existed.

Without these political mechanisms the forces of nationalism, mercantilism, and political plunder would relentlessly reshape the Constitution with their rhetoric, and their efforts would eventually overwhelm the strict constructionists. At that point the Constitution would become a dead letter.

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After a lucid explanation of each section of the Constitution the judge discusses how the nationalist/mercantilist coalition, led by Alexander Hamilton and his accomplice Judge John Marshall, conspired to effectively rewrite (and undermine) the Constitution almost as soon as he ink was dry on the original copy. The “Federalists” (who would eventually morph into the Whigs, and then the Republicans) never accepted their defeat in the Constitutional convention (which created a federal, not a national government). Nor did they accept Jefferson’s election as president. Thus, two days before his term ended the Federalist President John Adams appointed dozens of “midnight federal judges” and appointed John Marshall to the Supreme Court on March 3, 1801, one day before he would leave office. Marshall “spent the remainder of his career finding clearly disingenuous, historically inaccurate, and highly questionable justifications for ruling that federal power is not limited,” writes Judge Napolitano.

In his most famous decision, Marbury vs. Madison, Marshall gave the federal judiciary the power to rule on the constitutionality of both statutory law and the behavior of the executive branch. “[T]his means that the Supreme Court granted itself the authority to declare the will of the people … null and void …” This of course has caused endless mischief and tyranny. This principle of a monopoly in reviewing constitutionality was not widely accepted, however, until after Lincoln’s war of 1861—1865 destroyed state sovereignty once and for all. Until that point, many Americans believed that the citizens of the states, as well as the president and Congress, should have equally legitimate claims on interpreting the Constitution. As President Andrew Jackson famously said, “John Marshall has made his decision, now let him enforce it if he can.”

Marshall and his fellow Federalists, such as Justice Story, also paved the way for the Supremacy Clause of the Constitution. This clause only grants “supremacy” to the central government on the seventeen specific functions of the central government that are delineated in Article I, Section 8, period, many of which have to do with waging war and foreign policy. This power has been grossly abused by implying that the central government is somehow “supreme” in anything and everything vis-à-vis the citizens of the states. This of course is a perfect recipe for tyranny.

Judge Napolitano recognized that it was Federalists like Joseph Story and John Marshall, and later Whig politicians like Daniel Webster and Abraham Lincoln, who would tell The Big Lie that the Constitution was ratified by “the whole people” and not as it actually was — by the citizens of the sovereign states, with their representatives assembled in state conventions. “That was both historically incorrect and intellectually dishonest,” says Judge Napolitano.

According to this false view of the American founding the central government was always the master, not the servant, of the people. This, too, is a perfect recipe for tyranny that has been made by tyrants everywhere (Hitler even invoked this argument in Mein Kampf to make his case for destroying state sovereignty in Germany).

In McCulloch vs. Maryland Marshall enshrined into law Hamilton’s dangerous (to liberty) notion that there were supposedly “implied powers” in the Constitution. He did this in order to justify a central bank, which is mentioned nowhere in the Constitution under actual powers. This created the situation where the powers of the central government were only to be limited by the imaginations of federal politicians. Judge Napolitano proceeds to describe myriad examples of this, from the PATRIOT Act (“a lawless law because it allows the federal government to obtain information without a warrant, thus violating the Fourth Amendment”) to census snooping, television regulation, and hundreds of other major and minor power grabs.

The Food Police State:  Joel Salatin talks to Lew about Big Agra authoritarianism, and how to emancipate yourself.

Eric Margolis talks with Lew Rockwell about imperial meddling in Syria, Libya, Iran, Israel, Gaza, Afghanistan, China and Africa.

Ron Paul Has Won the Future

Gary North talks to Lew Rockwell about the euro crisis and us.

by Eric Margolis

Syria’s murky, multi-level conflict continues to grow worse. So does public confusion here in the west as the US, British and some European media keep depicting Syria’s civil war as a simple passion play pitting the evil Asad regime in Damascus against mostly unarmed democratic protestors.

We saw this same one-dimensional, deceptive reporting recently in Libya that was designed to support foreign intervention. It’s as incomplete today about Syria as it was in Libya which, by the way, is turning into a dangerous mess.

My assessment based on reliable primary sources in Washington, Turkey, Jordan and Lebanon:

Support for the Asad family’s Ba’ath regime, now in power for 41 years, is clearly slipping. But important sections of the armed forces, the 17 intelligence and security agencies, the powerful Alawai minority, most Syrian Christians, tribal elements and much of the commercial middle and upper class still back the Asad’s. In spite of intense western efforts to overthrow him, Bashar Asad, a mild-mannered former eye specialist, is still hanging on.

The US, Britain, France, and some conservative Arab allies have funded and armed the Syrian rebellion from its start a year ago. In fact, the US has been funding anti-Asad groups since the mid 1990’s. Arms and munitions are said to be flowing to Syria’s rebels through Jordan and Lebanon. Extreme rightwing groups in Lebanon, funded by western and Arab powers and Israel, are playing a key role in infiltrating gunmen and arms into northern Syria.

The Sunni Muslim Brotherhood has once again risen against the Alawi-dominated regime in Damascus. In 1982, this writer was outside the Syrian city of Hama when government forces crushed a Brotherhood uprising, killing an estimated 10,000 people and razing part of the city with heavy artillery.

Enter the jihadis. Recently, small numbers of al-Qaida veterans of Iraq and Afghanistan have entered Syria and are using car bombs to try to destabilize the government. Current al-Qaida leader, Dr Ayman al-Zawahiri, has called for all-out war against the Asad regime.

Interestingly, the US, France and Britain now find themselves in bed with the very jihadist forces they profess to abhor – but, of course, whom they used in Afghanistan inn the 1980’s and, lately, in Libya.

Add to this dangerous mix growing numbers of local militias in Syria who are battling one another and committing many of the atrocities against civilians, recalling Iraq and Lebanon’s bloody civil wars.

Washington’s key objective in Syria is to overthrow the Asad regime in order to injure its closest ally, Iran. There is so much anti-Iranian hysteria now in the US, that any blow against the Islamic republic is seen as good. Former US fears of a chaotic, post-Asad Syria are now forgotten in the rush to undermine Iran, by destabilizing Syria. Republicans, led by Sen. John McCain, are baying for war against Syria as President Barak Obama tries to hold back the war hawks.

Israel, whose influence in Washington in this election year is unprecedented, is stoking war fever against Syria and Iran. Israel is delighted that the crises with both nations have eclipsed the issue of Palestine and of Syria’s Golan Heights, which were illegally annexed by Israel in 1981. Golan supplies on third of Israel’s total water. Israel’s objective is to see Syria splintered into feuding cantons like today’s Iraq.

The System Is Paralyzed and the markets may be about to turn off the iron lung. David Stockman talks to Lew Rockwell about how the financial crisis is about to get even worse.

Charles Goyette talks to Lew Rockwell about the hole we’re in and how to climb out of it.