Thursday, May 13, 2010

Symmetry of Waste: Why Aren't Big Government Advocates Pragmatic?

For much of its history, proponents of "state activist liberalism," have claimed that expansion of government is "pragmatic."  This claim was set against three historical patterns.   First, the American ideology until the early twentieth century was freedom.  Expansion of the state could be posed as a more modern alternative.  Second, the pragmatism of William James and Charles Sanders Pierce was popular in the early twentieth century and state activist liberals used its rhetoric.  Third, the public became alarmed at economic developments in the late 19th century, specifically the development of large railroads and trusts that seemed to have economic power.   The large businesses claimed to exercise the right of free contract and laissez-faire in a tone that reflected social Darwinism.  In fact, the railroads and Standard Oil depended on government support.

The response to concerns about big business was big government. This meant legislation like the Sherman Anti-trust Act and the Interstate Commerce Act which aimed to regulate trusts and railroads.  These steps were extended during the Progressive era, when Theodore Roosevelt proposed the Federal Trade Commission and the regulation of trusts.  In his speeches, Roosevelt proposed most of the social legislation that was subsequently adopted during the New Deal.

However, the claim of pragmatism is that what works will be maintained and what fails will be terminated.  One of the earliest laws, the Sherman Anti-trust Act, did not work.  In fact, the Sherman Anti-trust Act resulted in firms growing larger each decade because it illegalized collusion among small firms, providing an incentive for mergers and takeovers. 

Without tracing the ensuing history, government was repeatedly extended, especially in the 1930s, 1960s and 1970s.  Yet, no one ever asked whether any of the programs worked or not.  No one asked whether the Fed was responsible for the greater economic instability and higher unemployment of the twentieth century than of the 19th century.  No one asked why welfare programs induced rather than reduced poverty and dependency.  No one asked why only three percent of government programs are terminated but 80 percent of businesses fail in their first five years.  Failure is an essential component of innovation.  Most ideas fail, and to find a good, workable idea many prototypes must be tried. But government programs never fail, hence they are not tested by reality.  They are not pragmatic.

It is not just that advocates of big government do not reject programs that fail.  Advocates of big government do not even QUESTION whether or not the programs that they advocate work.  There are no mechanisms in place to test whether social security, for example, works better than another alternative; or whether the post office is the optimal mode of mail delivery.  Not only is the information not known, the questions are scrupulously avoided.  To ask pragmatic questions is heresy to "state activist liberals."

In order to understand the reason why questions about program efficacy are avoided one needs to follow the money.  Government functions by borrowing money.  Banks make a profit off the lending.  The Federal Reserve Bank exists to expand the money supply so that the banks can profit by lending to the state. 

Banks do not care if the reasons for their lending work.  They want bigger government because they can lend more. Moreover, expansion of the state leads to monetary expansion and monetary expansion further subsidizes banks' profit margins.  This is so because increased government borrowing leads to crowding out of private sector borrowers.  Interest rates rise, the economy slows and the Fed can justify expansion of the money supply (lowering interest rates) to "stimulate" the economy to "help small business."  The result is that the Fed purchases treasury bonds from banks, and the monetary base expands.  The banks create a multiple of the reserves out of thin air, and business borrows.  Banks collect interest.  Much of the expanded money is diverted to privileged hedge funds, Wall Street and corporations.

In order to create the non-pragmatic version of "state activist liberalism" the government relies on two institutions: the media and the public schools.  The public schools fail to educate children, causing the majority to lack the basic cognitive skills needed to read, write, do basic math or follow a news story.  The graduates of American public schools are sub-literate, sub-numerate and lacking in basic reasoning skills.  At the same time, the graduates are ideologically trained to believe in government; in socialism and in state expansion. "Social justice education" is one of the fundamental goals of the banker-oriented education system.

The more capable, elite students are taught to scrupulously obey direction.  They are trained that the opinions of information sources such as newspapers and television are authentic while the opinions of friends or one's self are invalid.  They are trained to trust mass media rather than common sense.  The "other direction" that David Riesman described in the 1950s was a function of the financification of the US economy.

I've rarely met a "liberal" or left winger who was capable of thinking for him or herself. Rather, they parrot a newspaper or television station.   Many conservatives parrot radio and television talk shows.  Naturally, the newspapers and television stations are financially responsive to or owned by banks or other Fed-related institutions. 

There is a complete absence of pragmatism among both "conservatives" and "liberals".  "Conservatives" applauded the absurd Bush prescription drug plan and the Iraqi and Afghanistan Wars while "liberals" applauded the bailout, the stimulus and the absurdly designed Obama health care law.  Neither ends the other's programs.  The "liberals" have not ended the wars, which they claimed to oppose, and the "conservatives" have not cut back on the massive waste in Washington.  There is a perfect symmetry of waste.  The interest paid to the banking system mounts.


Doug Plumb said...

Excellent blog. I've been researching the root cause of all of this for years, I have a bachelors degree in engineering and started out "none too good at readin' and writin'"

But I began to read political philosophy and was blown away with Plato's Republic.

Rousseau explained the first modern crisis in that technology made us men of luxury and that luxury corrupts us by making us weak.

Neitszche explained the second crisis that God was dead. Mans view of civilization should not be teleogical (man has no purpose) and the existing foundations of political philosophy should be discarded. Man should inwards toward his true spirit. A superman needs to arise to pull us out of this.

I've just started reading Leo Strauss and I think he is widely misunderstood. He explains that man must return to philosophy to find a basis for natural right. Current philosophy has lead to existentialism. He is critical of Neitzsche. He explains the modern crisis we now have as a crisis of natural right in his introduction to "Natural Right and History".

Jaques Ellul blames it on technology itself in a famous book "The Technological Society"

Its a philosophical/political crisis at its root and these banksters (The Lex Mercantorium) may have been behind it all, knowing that the future technological state would put mankind into a position of weakness and they would be in a position to become our slave masters.

If we don't find a basis for natural right then we all go into the meat grinder IMO. No one will be free- our masters will be enslaved as well.

I wonder what political philosophy couldn't get published since Lex took over governments and education.

Stephen C. Rose said...

You paint with a broad brush. It is Sanders Peirce with an s in your labels.