Walter Block on Space Capitalism

Walter Block appeared on CSPAN to discuss his new book on space capitalism. Block makes the case that safety, efficiency, and environmental outcomes will improve if what are now considered public goods, such as roads, oceans, and outer space, are privatized.  Libertarian approaches to externalities depend on the creation of liability-and-damage torts.  Could the Apollo moon landing monies have been better spent?  Block thinks so, and he's right.

Block proposes that GDP  be defined as consumption + investment + imports - exports - government spending.

The current definition of GDP adds rather than subtracts government spending.

Block suggests that Elon Musk is a crony capitalist and not a legitimate investor. That's of course true.  I disagree, though, that you can assess whether someone who receives government money is a saint or a sinner.  All government action is coercive, and in our  socialist state all of us receive government subsidization to some degree.  The aim should be to limit government subsidization in general.  There is no good nor bad Elon Musk.

A leading Tesla bull, analyst Romit Shah, just downgraded Tesla, calling it "no longer investible."

Block's characterization of public-private partnerships as fascism is spot on. In Capitalism and Freedom Milton Friedman argues that interstate highways should be privatized, but city streets should be public because it is difficult to charge for use.  Today, with EZ Pass-like technology, there is no reason for public ownership of roads. The costs should be assigned to users.  If ownership is assigned to a private utility, it will be done more efficiently, with less threat to public safety and less likelihood of state use of public assets to suppress speech and opinion.

Block is an alum of Brooklyn College, where I teach, and he once spoke to my classes.  Bernie Sanders attended Brooklyn for one year with Block, and they were on the track team together in high school.  Block became a libertarian after Ayn Rand spoke at Brooklyn College, at which, along with several elite colleges, she chose to speak in 1960.  John Hospers, the first Libertarian Party presidential candidate, taught at Brooklyn College at that time and also was influenced by meeting Ayn Rand at that talk.

Dan Klein's "The Joys of Yiddish and Economics"

My coauthor, Daniel B. Klein, is publishing a hilarious piece ( https://papers.ssrn.com/sol3/papers2.cfm?abstract_id=2916854 ) about the libertarian and classical liberal ideas in Leo Rosten's Joys of Yiddish. I laughed out loud about ten times. It's well worth reading.

Walter Block Speaks to My Classes at Brooklyn College

Professor Walter Block, famed libertarian economist and Brooklyn College alum, spoke to my classes on November 3, 2015.  Block spoke about his impressions of Bernie Sanders when they were classmates together at Brooklyn. (Sanders later transferred to the University of Chicago.) Block talked about the minimum wage and victimless crimes. 

Why I Do Not Support National Review Conservatism

PO Box 130

West Shokan, New York 12494

December 7, 2012

Mr. J.P. Fowler

National Review

215 Lexington Avenue

New York, NY 10016

Dear Mr. Fowler:

I am in receipt of your fundraising letter of November 30.  I did contribute to National Review once or twice, but I have since concluded that the Buckley brand of conservatism has contributed to the nation's ongoing decline.  I have two chief reasons for reaching this conclusion. 

First, the lesser-of-two-evils voting strategy creates a Hegelian dynamic whereby a left-wing thesis confronts a conservative antithesis.  The conservative antithesis is an argument for no change, while the left-wing thesis is an argument for socialist change. The outcome is an incremental socialist (Democratic Party) or fascist (Republican Party) trend, and your lesser-of-two-evils voting philosophy has contributed to it.  American conservatism is unique because of William Howard Taft Progressivism, but it still leads to fascism.  Instead, there needs to be a pro-freedom thesis, or better yet, an elimination of the Hegelian model altogether because it is superstitious. At this point in history, only a radicalism alien to your Taft conservatism will be successful in reversing the totalitarian trend.

Second, your brand of conservatism does not aim to reduce or even to limit government, despite your and the GOP's protestations.  The expansion of government is an outcome of two interactive factors: the brokerage of coalitions of special interests and the unending availability of Federal Reserve Bank counterfeit.  The brokerage of coalitions inexorably pushes elected officials to expand government, and the Fed's unlimited monetary expansion power makes expansion possible.  You favor the Fed's unfettered monetary creation power, and you do not offer an alternative to democracy's brokerage of special interests, a brokerage recognized and heralded by Herbert Hoover, as William Appleman Williams describes in his Contours of American History.

I have concluded that I have as little common ground with your publication, William Howard Taft Progressivism , the GOP, and neoconservative fascism as I do with the Democratic Party and their more thuggish version of socialism. 

 

Please remove me from your mailing list.

Sincerely,

Mitchell Langbert, Ph.D.

Rilke on the Transformative Power of Human Achievement

One of the most beautiful modern poems is Rainer Maria Rilke's Ninth Elegy. Rilke, who was Czech and wrote in German, died at age 51 in 1926. There is considerable mystery in the poem, which is the ninth of ten "Duino Elegies", his most famous work. The poem acclaims the transformative nature of the human mind and seems to be related to Kantian Idealism, the idea that the real depends on the construction of the human mind. In this article Jan Wojcik argues that Rilke was influenced by Ralph Waldo Emerson, the most famous American Kantian or "Transcendentalist". Although Kant was not a libertarian (he bases his philosophy of justice -law or right- on Rousseau's social contract), you can read Kant in a libertarian way. For the categorical imperative requires that each individual be treated as an end, and state compulsion treats human beings as means. The welfare state is inconsistent with Kantian ethics. To be fair, Kant held that it is required to obey the law and that revolution is immoral. He was not Lockean. I wonder if that's what got the Germans into trouble.

Notice the reference to laurel in the opening stanza. When a Greek athlete won a contest, an agon, he was awarded a laurel crown. So too, the poet. Thus, the phrase "poet laureate" was a medieval reference to the laurel crown awarded to poets in classical Greece. Note too that the poem refers to words, to "logoi", that are the poet's materials of transformation, as when he asks:

"Are we here perhaps just to say:
house, bridge, well, gate, jug, fruit tree, window--
at most, column, tower... but to say, understand this, to say it
as the Things themselves never fervently thought to be."

If words transform being, or create being as the reality of human experience, then might not human achievement be our ultimate purpose and the world's fulfillment? In my favorite passage Rilke writes of the angel who is more advanced spiritually and emotionally but is not familiar with achievement in the material world:

"Praise the world to the angel, not the unutterable world;
you cannot astonish him with your glorious feelings;
in the universe, where he feels more sensitively,
you're just a beginner. Therefore, show him the simple
thing that is shaped in passing from father to son,
that lives near our hands and eyes as our very own.
Tell him about the Things. He'll stand amazed, as you stood
beside the rope-maker in Rome, or the potter on the Nile.
Show him how happy a thing can be, how blameless and ours;
how even the lamentation of sorrow purely decides
to take form, serves as a thing, or dies
in a thing, and blissfully in the beyond
escapes the violin."


Rainer Maria Rilke (C. F. MacIntyre, translator)

"The Ninth Elegy"

Duino Elegies

Why, if it's possible to spend this span
of existence as laurel, a little darker than all
other greens, with little waves on every
leaf-edge (like the smile of a breeze), why, then,
must we be human and, shunning destiny,
long for it?...

Oh, not because happiness,

that over-hasty profit of loss impending, exists.
Not from curiosity, or to practise the heart,
that would also be in the laurel...
but because to be here is much, and the transient Here
seems to need and concern us strangely. Us, the most transient.
Everyone once, once only. Just once and no more.
And we also once, Never again. But this having been
once, although only once, to have been of the earth,
seems irrevocable.

And so we drive ourselves and want to achieve it,
want to hold it in our simple hands,
in the surfeited gaze and in the speechless heart.
want to become it. give it to whom? Rather
keep all forever...but to the other realm,
alas, what can be taken? Not the power of seeing,
learned here so slowly, and nothing that's happened here.
Nothing. Maybe the suffering? Before all, the heaviness
and long experience of love--unutterable things.
But later, under the stars, what then? They are better untold of.
The wanderer does not bring a handful of earth,
the unutterable, from the mountain slope to the valley,
but a pure word he has learned, the blue
and yellow gentian. Are we here perhaps just to say:
house, bridge, well, gate, jug, fruit tree, window--
at most, column, tower... but to say, understand this, to say it
as the Things themselves never fervently thought to be.
Is it not the hidden cunning of secretive earth
when it urges on the lovers, that everything seems transfigured
in their feelings? Threshold, what is it for two lovers
that they wear away a little of their own older doorstill,
they also, after the many before,
and before those yet coming...lightly?

Here is the time for the unutterable, here, its country.
Speak and acknowledge it. More than ever
the things that we can live by are falling away,
supplanted by an action without symbol.
An action beneath crusts that easily crack, as soon as
the inner working outgrows and otherwise limits itself.
Our heart exists between hammers,
like the tongue between the teeth,
but notwithstanding, the tongue
always remains the praiser.

Praise the world to the angel, not the unutterable world;
you cannot astonish him with your glorious feelings;
in the universe, where he feels more sensitively,
you're just a beginner. Therefore, show him the simple
thing that is shaped in passing from father to son,
that lives near our hands and eyes as our very own.
Tell him about the Things. He'll stand amazed, as you stood
beside the rope-maker in Rome, or the potter on the Nile.
Show him how happy a thing can be, how blameless and ours;
how even the lamentation of sorrow purely decides
to take form, serves as a thing, or dies
in a thing, and blissfully in the beyond
escapes the violin. And these things that live,
slipping away, understand that you praise them;
transitory themselves, they trust us for rescue,
us, the most transient of all. They wish us to transmute them
in our invisible heart--oh, infinitely into us! Whoever we are.

Earth, isn't this what you want: invisibly
to arise in us? Is it not your dream
to be some day invisible? Earth! Invisible!
What, if not transformation, is your insistent commission?
Earth, dear one, I will! Oh, believe it needs
not one more of your springtimes to win me over.
One, just one, is already too much for my blood.
From afar I'm utterly determined to be yours.
You were always right and your sacred revelation is the intimate death.
Behold, I'm alive. On what? Neither childhood nor future
grows less...surplus of existence
is welling up in my heart.

Mike Huckabee Should Study Economics

Last week Newsmax reported that Mike Huckabee felt that too many conservatives are too focused on economic rather than social issues. Newsmax's Ralph C. Hallow writes:

"In a sign of lingering divisions on the right, former Arkansas Gov. Mike Huckabee blasted last week's Conservative Political Action Conference, the largest meeting of conservatives in the nation, saying it was unrepresentative of the Republican Party as a whole.

"'CPAC has become increasingly more libertarian and less Republican over the last years - one of the reasons I didn't go this year,' said the former Southern Baptist minister, who enjoys a devoted following among Christian conservative voters and who ran for the GOP presidential nomination in 2008."

I have told my colleagues in New York's Republican Liberty Caucus the same thing I'm going to say to Huckabee. The religious movement cannot go it alone, nor can the libertarian movement. Together they can win. That means that libertarians need to compromise on certain social issues and Christian-oriented Republicans need to respect (compromise is not the right word because libertarian economics is totally compatible with Christianity) libertarians' economics concerns.

During the Bush years big government apologists, who often were really neo-conservatives, adopted Christian rhetoric but advocated policies that subsidized banking and the pharmaceutical industry supposedly in a move toward "compassionate conservativsm". Those of us who are committed libertarians will no longer stand for this. I would rather see Obama in the White House in 2012 than another Republican like George Bush or Mike Huckabee.

So Mr. Huckabee has to make up his mind. Either he will work with freedom oriented Americans, or he will remain a newscaster.

Moreover, the idea that there is anything "compassionate" or "social justice" oriented about Keynesian economics is ridiculous. Anyone who thinks that should contact the Foundation for Economic Education and obtain a copy of Henry Hazlitt's Economics in One Lesson. Laissez-faire capitalism provides greater social justice than any other economic system in human history.

Governor Huckabee, it's time to study economics.

Republican Socialism, Obama's Second Term and the Tea Parties

The Obama presidency is so far a failure. Obama's bailout of money center banks and Wall Street coupled with his corrupt stimulus package amount to the largest effluence of waste in world history. This is the pattern that destroyed Athenian democracy and the Roman empire. In the case of Rome, Septimius Severus in the second century gave large benefits to the Roman army. Rome had long before adopted a welfare system that allowed the citizens of Rome free bread and circus. The Roman system was stable and took several centuries to decline. Rome's scale was the cause of both its stability and its decline as Rome was essentially a Ponzi scheme that depended on ongoing conquest. The extraction of wealth by interest groups contributed. In the case of Athens, the second greatest democracy in the history of the world, imperialism, its war with Sparta, and class warfare led to its failure.

Now, America is weakened by socialism of both the Roman and the Athenian varieties. The war on terror is a legitimate challenge, but the Bush administration handled both the Afghan and Iraqi wars incompetently, resulting in excessive cost. Fourth generation warfare, the use of embedded special forces, should have been adopted early on, but Bush preferred to defer to the second generation warfare concepts of Donald Rumsfeld and the Pentagon. In any case, the two wasteful wars were coupled with subsidies to Wall Street, the TARP plan and the bailout of Goldman Sachs, AIG and other money center banks.

In a free economy these institutions would have been put into chapter 11, reorganized, the management replaced and the firms split up into more manageable components. This would have been done by bankruptcy courts. The opposite policy of direct subsidization and federal intervention, i.e., socialism, was pursued at the behest of the Republicans and George W. Bush. The Obama administration added some pirouettes, but the basic socialist policy and a large portion of the socialist spending was directly due to George W. Bush and the national GOP leadership, from Newt Gingrich to Karl Rove.

The recent victory in Massachusetts suggests that Americans are upset but that their views are confused. If Americans are upset about the bailout, why did they not question Scott Brown's position on the bailout? In 2000 America elected George W. Bush expecting a conservative, not a socialist. Now, they vote for Scott Brown without asking whether he too is a socialist.

Now that health care has stalled, my 2008 claim that Obama was chiefly elected to put the bailout into place increasingly looks true. Not that John McCain wouldn't have done it too, which raises significant doubts about the GOP at the national level. What makes the GOP different from the Democrats? In other words, in the end there may have been little difference between Obama and McCain.

Both would have given trillions of public money to banks and Wall Street and done little else. At the state and local level, yes, the GOP is still the smaller government party. Not so at the national level. The national GOP leaders are big government Progressives.

In 2012 Obama will have the advantage of incumbency, and if he now transitions to a more libertarian posture, which is what Clinton did, he is likely to win in 2012.

Perhaps the position of Scott Brown on the bailout seemed unimportant this month in light of the threat of the health plan, which served to galvanize the public, including many non-Republicans. If Obama is smart, he won't allow a repeat of the health care fiasco. He will avoid further drama and focus on reducing cost, winning the two wars and balancing the federal budget.

Had Al Gore pursued the Clinton strategy in the 2000 election he would have won. But he rejected Clinton's approach in favor of New Deal social Democracy. He lost.

Oddly, the GOP took Bush's election to mean that it should return to the Progressivism of Nelson Rockefeller and Theodore Roosevelt. It remains a puzzle why Newt Gingrich and his colleagues adopted a big government mindset, but the GOP only can win if it rejects it. Let me repeat that. If the GOP wants to win, it needs to adopt a small government mindset. The social conservatives coupled with the neo-conservative big business socialists were not enough to win the presidency. They won't be in future.

The rank and file in the GOP need to find new candidates to run. The 2008 leadership was entirely in favor of Wall Street socialism and big government and so is tainted. But in order to find new leadership, the rank and file needs to take action. The Tea Parties are playing this role, but I remain unconvinced, at least at the national level.

The Tea Parties have not demonstrated the ability to focus on key issues and resist the cooptation that the GOP's establishment will attempt. I will be delighted if they do, but so far few national leaders have emerged. While the Tea Parties can play a useful role at the state and local levels, it is at the national level where the GOP has floundered worst, and I have yet to see national level deliberation that reflects the ability to overcome the national GOP establishment and Obama.

Michael Yon Detained in Airport and Released

One of my readers has suggested that I take a look at Andrew Breitbart's blog about Michael Yon, described as a "military blogger" who talked back to a customs officer in the Seattle Airport, was detained, questioned and then released. Breitbart's blog states:

>Yon was escorted to a room elsewhere in the airport where he said he remained silent during much of the questioning. According to Yon, “they handcuffed me for failing to cooperate. They said I was impeding their ability to do their job.”

>Yon described the TSA officials as noticeably frustrated by his refusal to answer their questions: “I always assume everything is being recorded. I was trying to be professional.”

>Yon continued, “They said I wasn’t under arrest, but I’m handcuffed. In any other country, that qualifies as an arrest.”

>Ultimately Port Authority police released Yon; according to Yon, the police were “completely professional” (emphasis added).

When I lived on the northern border of New York State in 1991-1994 I was body searched by the US customs officials and questioned several times in depth by the Canadians. At the time, I drove a bright blue Ford Probe, a somewhat sporty but inexpensive car (I liked it but Ford discontinued the model). Apparently, my scruffy appearance coupled with the car made me a target for search.

The imposition on my freedom was distasteful. I believe that the primary motive for the ongoing questioning was concern with drug trafficking, although terrorism may have been a secondary motive in the early 1990s. I believe in drug legalization, but that is irrelevant to the question of border searches.

I learned not to smart talk the customs officials and to answer their questions politely. One afternoon the US officers searched my car in considerable detail and I was physically searched. No one likes to be compelled like this, and there was a risk that a zealous customs officer might have planted evidence.

That said, the matter of terrorism is important. It is unfortunate that the techniques of investigating terrorism are not sophisticated enough to eliminate searches of someone like Yon who has done nothing wrong. Moreover, if it is possible to minimize terrorist threats while reducing searches of the Yon variety, I am for it.

I do not think that open borders would be wise at this time because of the terrorist threat. Instead, I do believe that more sophisticated profiling would be most beneficial. Likely, with more accurate profiling Yon would not have been questioned in detail.

Unfortunately, the left and many civil liberties advocates have opposed profiling. The thousands of people left dead by terrorists suffered the ultimate incursion on their civil liberties, but strangely, civil libertarians have rarely questioned how terrorist murder, a far more extreme incursion on civil liberties than anything that has been done by a customs officer, might be eliminated. Instead, objections have been raised at attempts to minimize more anti-libertarian murder by substituting less anti-libertarian tactics like profiling. Both are anti-libertarian, but murder more so than being questioned. Defense is a necessary evil.

Hence, I consider most civil libertarians of the Breitbart variety to be profoundly anti-libertarian. Nor do I think Yon is anything more than an activist trying for cheap publicity.

Question for Steve Forbes

Sharon Gitelle of the Forbes Blog Network sent the following:

Re: The Forbes Network: December 11th interactive call: Steve Forbes

Dear Mitchell,

Please join us for an interactive call with Steve Forbes, on Friday, December 11th at 3 PM Eastern time for a discussion about his new book called How Capitalism Will Save Us. (To learn more about this book please click here: http://bit.ly/WT2Um )

The expected duration of the call is 45 minutes.

Steve Forbes will be answering your questions about capitalism—please submit your question(s) to me by e-mail by Wednesday, December 9th. You will be notified by me if your question has been selected prior to the call.

My response:

Here is my question for Steve Forbes, Sharon.

In the 1870s an investment bank, Jay Cooke and Co., failed. In many respects it was similar to Citigroup and other of the Wall Street firms in that it had been heavily subsidized by the federal government throughout its life but was so incompetently run that it failed despite the large subsidies. In the case of Jay Cooke, the subsidy resulted in part from its involvement with the Civil War greenbacks (like Henry Paulson, one of its representatives, if I recall Salmon P. Chase, had been been appointed to be Secretary of treasury). In the case of Wall Street and the money center banks today, the government subsidy has taken the form of access to large amounts of artificially created money. That is, until the socialist Bush-Obama bailout, where cash was simply handed to the incompetently run American financial institutions.

In the aftermath of the Civil War, despite the subsidies it had received, Jay Cooke failed in tandem with the crash of 1873. No one was foolish or gullible enough to believe that sustaining Cooke would have helped the economy. That would have been a fool's fantasy. Following Cooke's failure and the crash there was a depression. The depression and crash were associated with the federal government's retiring of the greenbacks and deflation. During this continual deflation there were three depressions. However, real wages grew at a much faster pace than they have since 1970. Moreover, innovation occurred at a much faster pace than at any time in the history of the world, culminating with the creation of the concepts of television and radio by Nikola Tesla in 1897 and numerous inventions that were so vibrant that they continued to subsidize the American economy through the 20th century, a century of dramatically slowed creativity.

At the same time, real wages rose at an uneven clip, roughly two percent per year, more or less until the founding of the Federal Reserve Bank in 1913. As David Ames Wells points out in Recent Economic Changes (1889) the innovation and real growth of the economy was astonishing. What Wells mistakenly calls "overproduction" (see diatribe in Hazlitt's Economics in One Lesson) resulted from the dramatic innovation, as Wells points out. Of course, corporations, banks and Wall Street disliked the intense competition and deflation, which led to declining profits and hard work, but American workers saw their wages grow rapidly, as Wells pointed out.

Since the abolition of the gold standard in 1971, real wages of American workers have grown 2% over the 40 years. That's 2% in total over 40 years. In contrast, during the deflation of the late nineteenth century, real wages rose 2% per year. Yet, today's all-thumbs economics establishment claims that deflation is a major threat. It is, of course, to the banks who provide economists with endowed chairs, but it is not to workers who wish to raise their living standards. Workers did much better under deflation from 1865 to 1913 than they have under inflation from 1970 to 2009.

Thus, the 1873 failure of the major investment bank in America and the contraction of the money supply, deflation, left American workers much better off but Wall Street and corporate America less profitable. This was the period of freest markets in American history, the closest to what might be called a libertarian economy. Of course, Wall Street and the money center banks, then like now, opposed libertarianism and free market capitalism, preferring the socialist pattern that Alexander Hamilton and the Federalists advocated (Hamilton was indeed a socialist and advocated a government owned manufacturing firm that would establish American manufacturing).

Forbes has supported the bailout of Wall Street. In addition, you have echoed the all-thumbs economics establishment's obsessive fear of deflation. When I say "all-thumbs" I mean all-thumbs as far as the public is concerned, not all-thumbs as far as the government-subsidized banking interests are concerned. Politically the economists are wise servants of power.

Forbes has been on the bailout bandwagon. The bailout does not reflect libertarian or pro-free market sentiments, but sentiments in favor of the subsidization of a specific sector of the American economy through state intervention, Wall Street and banking. As I wrote to one of your columnists, and contrary to your philosophy, a libertarian America would need Wall Street as much as I need lung cancer.

Thus, it would seem that Forbes has taken not so much a free market position, but a crony capitalist or socialist position, closer to Hamiltonian Federalism, or fascism than to libertarianism, the idea that markets should be governed by a non-judgmental, objective legal standard.

Can you reconcile Forbes's position on the bailout with the views of Presidents Andrew Jackson and Grover Cleveland?

Best wishes,

Mitchell Langbert

Sharon's reply:

Great. Thank you!

Totalitarian--Authoritarian--Pro-Freedom Political Continuum

The categorization of political views along a spectrum of right to left was never applicable to the United States. The terms "left" and "right" refer to the revolutionary French General Assembly's seating plan. The Jacobins, famous for the Reign of Terror and the first modern political mass murder, sat on the left, and the French aristocrats sat on the right. Instead of left and right I propose a continuum of pro-freedom and anti-freedom.

America has never had aristocrats and never had mass murderers, although Franklin D. Roosevelt's internment of the Japanese during World War II mildly paralleled the direction of European history. Rather, the left has used this dichotomy as propaganda. It claims that the "right" represents "aristocrats" while the "left" represents "the people". But it has never explained why the "people" tend to be highly paid college professors, hedge fund managers, professionals, the Ochs Sulzbergers, Warren Buffet, George Soros, and trust fund babies while the "aristocrats" are inevitably blue collar plumbers and carpenters.

In fact, the "left's" re-distributional scheme has always involved heavy support for the professions; for banking; for the Ochs Sulzbergers; for big business; and for large real estate developers. Thus, the "progressive" supporters of Robert Moses in the 1940s and 1950s, who destroyed New York's entrepreneurial spirit and turned New York into a haven for investment bankers and European aristocrats, today support the "progressive" President Barack Obama, who is handing America to well, well-paid college professors, hedge fund managers, professionals, Warren Buffet, George Soros and trust fund babies. This is accomplished in part by hiding the attack on the dollar that Presidents Obama's and Bush's policies have required. The sale of American assets to the Chinese hides the weakening of the dollar that the Bush-Obama wealth transfer requires. The Chinese are apparently willing to suffer losses in order to prop up the dollar and continue on a straight path to industrialization not impeded by currency fluctations. Nineteenth century American economic history saw considerable fluctuations in the nation's economy when prices rose and fell due to disturbances in Europe. The Chinese are pursuing fool's gold, though, because purchasing overvalued assets in America will ultimately hurt them. They are delaying a hangover by drinking more scotch, but in the end the hangover will be all the worse for them.

Early on, much of the Jacobin platform was consistent with a moderate degree of limited government republicanism, to include separation of church and state and universal education. Initially, the Jacobins were mostly aristocrats and French middle class or bourgeois. The debate between left and right in France did parallel a debate in America. The Federalists supported Burke's ideas, which today would be called "conservative". The Democratic-Republicans of Jefferson were supportive of France. But in America, unlike in France where both sides were somewhat statist, the dispute between right and left was between advocates of limited government intervention, especially of support for business and banking, and advocates of limited government who opposed supports for business and banking. If anything, the "left" of today, along with today's "conservatives", is closer to the Federalists of Revolutionary War times in that they support government intervention in all areas of life, to include anti-civil-libertarian intervention with respect to speech (see, for instance, Dinesh D'Souz's Illiberal University) as well as with respect to business (as in the recent bailout). The recent bailout was a Federalist program that both national Democrats and Republicans supported. The Democrats did so more heartily than the Republicans because a large fraction of the Republicans are pro-freedom and anti-Bush. The Democrats are mostly anti-freedom and anti-Bush.

In America, the debate between Federalists and Democratic Republicans; Democrats and Whigs and Progressives and their opponents has increasingly revolved around freedom as well as privilege. The Progressive-liberal philosophy of Herbert Croly and Theodore Roosevelt, a Republican, was carried forward by the social democrat Franklin D. Roosevelt, a Democrat. Further confusing the discussion, the left appropriated the term "liberal" which was an appellation of support for free trade and liberty. It has claimed that it is in favor of civil liberties. But when the left gains power, as it has in universities, it adopts speech codes and advocates tight, politically correct restrictions on speech that deviate from its ugly moral opinions. This is consistent with the left's anti-liberal stance where it has gained power in Europe and in the communist countries.

Today there are three views: the descendants of the old Federalists, Whigs and Progressives, who might be called "Rockefeller Republicans"; the descendants of social democratic Progressives, socialists, who are "liberal" Democrats; and descendants of Jeffersonian Republicans, who are liberal or libertarian Republicans and some Democrats. The first two of these groups, the Progressives and social democrats, differ primarily with respect to who should get the spoils. The Republican Progressives advocate taxing the majority and redistributing wealth 60% to the wealthy and 40% to others. The Democratic social democrats advocate taxing the majority and redistributing wealth 55% to the wealthy and 45% to others. It is only the pro-freedom Republicans (and some Democrats) who advocate ending taxation; who see taxation as theft; and understand that an innovative economy cannot be planned.

The continuum of American politics looks like this:


Totalitarian--->Authoritarian--->Pro-Freedom Republicans/Libertarians/Democrats

Some examples of these groupings are:

Totalitarian

Communist Party
Neo-Nazi Party
Socialists
Bill Ayers


Authoritarian

Democratic Party
New York Times
George W. Bush
John McCain
National Republican Party
Neo-conservatives

Pro-Freedom

Tea Parties
Republican Liberty Caucus
Goldwater Republicans
Ron Paul
Libertarian Party

It is Time for Republicans to Drop the New York Times

Sharad Karkhanis, Professor Emeritus of Kingsborough Community College, has forwarded the above link.

I have just been on the Yahoo! Group of the Republican Liberty Caucus of New York State (membership group at http://groups.yahoo.com/group/RLCNY), and I have been debating with someone who aimed to refute Paul Krguman and the New York Times.

There is a link between what the former KGB agent is saying in the above video and the discussion whether or not to pay attention to the New York Times. As the former KGB agent points out, American liberalism is not a rational or pragmatic belief system but rather a programmed ideology. Because it is not reasonable, it is pointless to attempt to argue rationally with the Times or its ideological acolytes, whether academics who advocate socialism after socialism's repeated dismal failures; Keynesianism; or other forms of state-activist liberalism. As the former KGB agent points out, brainwashed ideologues cannot be convinced through evidence or rational argument.

By attempting to refute the New York Times, we give it credence. Yet it does not deserve credence. I start with my concluding comment and work backward.

Mitchell Langbert: The influence of economists is not so great...The main reason Krugman is well known is the New York Times itself. It is a circular process, so you empower him and it by paying attention. Moverover, the only reason that the New York Times has influence is that Republicans continue to read it and pay attention to what it says. If they stopped, then the Times would become just another partisan voice.

There are lots of economists who publish many articles of whom no one has ever heard. Krugman may have some influence with students, but so did many other economists whose ideas have been forgotten or ignored and whose students forgot them when faced with the realities of the job market and economic events. The repeated failure of the ideas of most (statist) academics has not stopped the current crop from making the same old (failed) arguments. Their chief motivator is power. If the public shows boredom with the Times, et al., and does not pay attention to the nonsensical statist approach that has made inroads this year, the Times will die or change.

Within the past few years there was a takeover attempt by financial interests, but the Ochs Sulzbergers were able to ward them off. The precipitous decline in the newspaper's stock price can be pushed further, and possibly the Times into bankruptcy, which would be a major victory for freedom. Within the past few months the Times has had to obtain a 200 million dollar emergency loan from the Mexican billionaire Carlos Slim. They can be pushed over the edge. This is not your father's world. The Times can be killed.

I would wager that about 1/4 or more of the Times's readers are from the conservative/small government side. Even if it's only 1/8th, including yourself, a drop in readership from roughly one million to 875 thousand would have a devastating impact on the Times. If conservatives stopped taking them seriously and if Republicans stopped referring to them at all, their influence would be reduced. Partisan sources are not influential. Equally important, they might be subject to a takeover by interests with a different perspective. Even a more moderate perspective would be a major improvement.

The Times is a partisan source, but somehow conservatives and libertarians have been convinced to pay attention to them. There may have been a time when their quality was good enough to warrant the attention, but that time is long past. With the advent of the Internet, the Times is facing a major extinction event that conservatives delay by paying attention to them.

The Times has enjoyed a faux reputation as an accurate newspaper and a representative of mainstream views. It is neither. If a large segment drops it, then its claim to objectivity and to being an influence on mainstream opinion is less credible. And if Republicans scorn it or ignore it, not argue with it as though it has a voice of importance and integrity, but scorn it as the fraud that it is, then its influence will end. Which it, as a fringe voice, deserves.

Let's reverse the situation. Do big government types read each issue of "National Review" or the von Mises website and argue with them? Does the New York Times regularly present the Cato Institute's arguments and dispute them? I don't think so. They simply do not pay attention. They characterize the American liberal view as fringe. They win victory by not acknowledging the alternative views and arguing with them, but disparaging them. That is how the two party system has become two versions of state-activist "liberalism": the Times has defined conservatism as the Rockefeller-T Roosevelt-Straussian view, and "liberalism" as the FDR-Obama view, and has ignored the American view. If the Times ignores us, why should we pay attention to them?

There are thousands of economists who disagree with Krugman yet do not get any coverage. The coverage is what gives him influence. And by paying attention to the coverage, conservatives make the coverage possible. If the conservatives laugh at the Times, it will no longer have authority.

Ultimately social science is a smoke and mirrors scheme. There is no interest in what works, only what increases the power of the ruling group, the military industrial complex and the special interests that the Times and Krugman represent. Their arguments need not be taken seriously. They are ideology and can be safely ignored, with no loss in intellectual rigor. So why bother arguing with frauds?

Brian:

I should not have limited my last post to the NY Times. The main issue at hand is not the considerable damage that rag has done to our nation, though if anything that is all the more reason to refute rather than ignore it. My father knew in the late 1950’s who the real Castro was from reading Robert Welch; rather than ignore the NY Times as they praised Castro, he was able to point out to friends the stark contrast between the truth and the lies on its pages. By doing so, he did his part to erode its influence.

The main issue is not the exact number of millions of readers the print edition of the NY Times reaches either; the circulation of its print version hardly defines its influence. I skim its headlines daily online, as I am sure millions more do, and as the ideas are digested and influence the thinking of those millions, the effects ripple outward through myriad channels.

The main issue is the original contention that we should not concern ourselves with Paul Krugman. Lets’ assume, merely for arguments sake, that the NY Times is “fringe” and inconsequential. Krugman’s influence is hardly limited to readers of the Times. He is a major economist and perhaps one of our most influential intellectual foes.

Krugman is one of the most widely read and influential economists in the world today. He has written many widely read books and edited even more than he has written. He has written hundreds of papers and articles that are published all over the world. He has written for Fortune, Slate, The Harvard Business Review, Foreign Policy, The Economist, Harper's, and Washington Monthly and had his articles and ideas published, reprinted, or otherwise disseminated in countless others, from the Huffington Post and USA today to Newsweek . And that’s just print media CNN, MSNBC

Students have been infected with Krugman’s economic virus in his classes at MIT, Yale, Princeton, Stanford, and the London School of Economics. He won the Nobel Prize for Economics. He is a Fellow or Associate or prominent member of a variety of groups and organizations. He has advised the Federal Reserve. If this thumbnail sketch isn’t enough to deem him worthy of refutation, consider that his influence hardly stops at our borders. He has the ear of the World Bank, the IMF, and the UN, as well as other nations. The Asia Times and The Economist have both noted his influence, and the King of Spain gave him an award. (Speaking of awards, how many has he won, including the Nobel Peace Prize?)

Krugman is a dangerous enemy and, as such, we must keep a close eye on him; he must be met head to head, toe to toe, issue by issue, point-by-point.

Last thought: I don’t consider the Libertarian Party “fringe” because of its tiny influence in elections. Our ideas are exponentially more influential than our total votes. While we may only garner a few precious percent nationally, look at the major strides we made in this last election with Ron Paul carrying the ball. Without that effort, we would never have been able to garner support for auditing the Federal Reserve. We are at war. We must renew our spirits and redouble our efforts now, while words can me our most effective weapon. Fight on compatriots!

Mitchell Langbert

Why bother concerning ourselves about Paul Krugman? We're at a point where attention paid to the Times and its writers merely serves to empower them. They don't need to be debunked any more than a writer for the ACORN or AFL-CIO newsletters, or any other partisan group. The best policy toward the Times is to forget its existence and to regard anyone who refers to it as a crank or a flake.

Brian:

1) Krugman's Intellectual Waterloo
Mises Daily
http://mises.org/story/3530#


2) Related resources:

One of the links in the von Mises article is to an excellent list of Krugman quotes arguing for the Fed to inflate a housing bubble: Krugman Did Cause the Housing Bubble (url:http://blog.mises.org/archives/010153.asp).

One of the comments under that blog adds another example of Krugman Gnawing on His Foot (NY Times 8/2/02) (url: http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html): "To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

Another comments links to: Reason Magazine: "Dr. Krugman: This Patient Needs More Blood-letting" - Comment by "Ben" (url: http://www.reason.com/blog/show/134131.html#1305886), which is worth the read just for this Vintage Inflation Propaganda Clip (10:00 min) and the comments under it.

Richard:


While I can't stand Krugman, he is an actual economist and not a journalist. He
won a Nobel prize for something that was sensible on location factors in trade,
not nonsense. As he is influential, it pays to be aware of what he says. He is
not a fringe, marginal figure.

I made a narrow escape from Krugman. I dated his sister-in-law years ago.
Imagine if things had developed and I would have to talk to him.

De Jouvenal on the Investment Banker Bailout-Socialism of Bush and Obama

"It is far from being the case that these new aristocrats show all the characteristics of the old, or even of those who have climbed the rungs of society's ladder by their own unaided efforts. It is one thing to rise at the riser's own risks, another to owe promotion to a master's favor. A pirate like Drake, enriched by his voyages, the importance of which his ennoblement if nothing else, attests, owes everything to himself and makes a very different sort of aristocrat from a public administrator grown great in public offices often by qualities of flexibility rather than of energy.

"No absolute rule can be laid down, and there have been public functionaries who have displayed the most virile qualities. But often also, as was seen in the late Roman Empire, the functionary is only a freedman who has never shaken off the characteristics of a slave. Recruited from those freedmen, the ruling class of the late Empire became tame and spiritless.

"Towards the end of the ancient regime the French aristocracy, too, felt the effect of the ways in which most of its members had obtained their elevation in the astonishing picture of Pontchartrain given us by Saint-Simon (Pontchartrain [1674-1747]--His administration of his office was deplorable and Saint-Simon's memoirs are studded with unflattering references to him. He obtained his elevation through the influence of his father, who was Chancellor.)

"The tone of an aristocracy gets transformed by the process of internal decay, along with its restocking by elements with little in them of the libertarian spirit: securitarian elements come to predominate in it.

"It is the most pitiable spectacle to be found in social history. Instead of maintaining their position by their own energy and prestige, as men who are always ready to take the initiatives, responsibilities and risks which are too formidable for the other members of society, the privileged, whose role it is to protect others, aim at being protected. Who alone is placed high enough to protect them? The state. They ask it to defend for them the positions which they are no longer capable of defending for themselves and are therefore unfit to occupy.

"When the French nobility, recruited as it then was by the purchase of public offices, was no longer capable of excellence in war, then was the time that it got reserved to it by law the officers' berths. When to the merchants, who, like Sindbad, embarked in a voyage their entire capital there had succeeded a prudent generation of traders, the latter sought to have the king's navy secure to their travellers exclusive rights to some distant coast--from which their ancestors would have kept all intruders away themselves by their own artillery.

"...The essential psychological characteristic of our age is the predominance of fear over self-confidence. The worker is afraid of unemployment and of having nothing saved for old age. His demand is for what is nowadays called 'social security.'

"But the banker is just as timorous; fearing for his investments, he places the capital monies at his disposal in government issues, and is content to credit effortlessly the difference between the interest earned by these securities and the interest which he pays out to his depositors. Everyone of every class tries to rest his individual existence on the bosom of the state and tends to regard the state as the universal provider. And President Franklin Roosevelt cam out as the perfect psychologist when he laid down as 'the new rights of men' the right of the worker to be regularly employed at a regular salary, the right of the producer to sell stable quantities of goods at a stable price, and so on. Such are, in substance, the securitarian aspirations of our time.

"The new rights of man are given out as coming to complete those already proclaimed in the eighteenth century. But the least reflection is sufficient to show that in fact they contradict and abrogate them..."

Bertrand de Jouvenal, On Power, pp. 383-8. 1945.

Social Mythology and Public Dismay

In his 1972 article "Myth of the New Deal"* "New Left" historian Ronald Radosh writes:

"The New Deal reforms were not mere 'incremental gestures'. They were solidly based, carefully worked out pieces of legislation. They were of such a character that they would be able to create a long-lasting mythology about the existence of a pluralistic American democracy, in which big labor supposedly exerts its countering influence to the domination that would be otherwise undertaken by big industry.

"One cannot explain the success of the New Deal by pointing to its rhetoric. The populace responded to FDR's radical rhetoric only because it mirrored their own deeply held illusions. They could not comprehend how the reforms that changed their lives only worked to bolster the existing political economy, and they did not realize that many sponsors of the reforms came from the corporation community themselves. The integration of seemingly disparate elements into the system was successful. Labor did not get its share and it did benefit from the development of a permanent war economy and the military-industrial complex. Many of those who lived through and benefited from the New Deal most likely view its accomplishments in much the same way as Schlesinger or Carl Degler. One can never be sure whether they reflect the explanations offered by the 'vital center' historians or whether these historians merely reflect the false consciousness of their own epoch."

Radosh wrote this in the early 1970s, just as Richard Nixon changed the monetary regime by abolishing the international gold standard and just as employers were about to shift their supportive stance toward labor unions, which Radosh documents in his article, to a more anti-labor stance. I have previously blogged that there was a major shift in the pattern of stock returns as related to real wages around 1971. Between 1932 and 1971, net of cumulative inflation, stock returns were about 5.9% compounded, and between 1971 and 2008 they were also around 5.9% compounded. However, from 1932 to 1971 real wages increased 2.6% compounded, while from 1971 to 2008 real wages declined -1.1% compounded. The 1971-2008 period was characterized by high inflation (the highest 40-year period of inflation in America's history) but real stock returns were held constant at 5.9% net of inflation. As well, the post-1971 period was characterized by manufacturing's exiting the country, a decline in the quality of education, and declining unionization. The one variable that the Progressive and New Deal policies have ultimately held constant is corporate stock returns net of inflation. Real wages, unemployment, inflation rates and public welfare gyrate, but in the end real stock returns find their way back to the baseline real 5.9% level.

At the time Ronald Radosh wrote his article in New History of Leviathan it could still be argued that the statist Progressive and New Deal ideologies integrated social justice concerns. This is no longer the case. Rather, it is apparent from my earlier blog that Radosh's argument is actually understated. The New Deal labor union edifice was easily overturned because of declining manufacturing presence, globalization, declining scale in post-modern American industry and employer resistance to unions. Hence, unions' ability to represent workers has diminished just as inflation escalated. Unions lack the resources to organize small shops, and it is more profitable for them to concentrate on government workers who enjoy monopolistic privileges and can impose costs on taxpayers. The one variable that has been fairly steady since Franklin D. Roosevelt's election in 1932 has been returns on the Dow Jones Industrial Average, net of inflation. Since 1971 workers' real wages have declined, but returns on the Dow have remained strong even in spite the past eight years' stagnation, a period characterized by relentlessly increasing inflation as the mismanagement and incompetence characterized by the Progressive and New Deal regimes has become evident in corporate scandals, inept real estate investment and taxpayer-financed subsidies to millionaire investment bankers through the Fed's low interest rate regime and through direct subsidies to incompetently run firms like Bear Stearns.


*Ronald Radosh, "Myth of the New Deal" in Ronald Radosh and Murray N. Rothbard, editors, A New History of Leviathan: Essays on the Rise of the American Corporate State, New York: EP Dutton, 1972, p. 186

The Left As Teen-Age Rebellion

The programs that the left advocates have done little to help and instead have harmed the poor. American inner cities deteriorated in response to urban renewal and welfare programs. The socialist revolution in Russia resulted in the starvation of millions of peasants and a wide range of ethnic hatreds. The Chinese socialists have oppressed and murdered Tibetans and the religious as well as millions of politically incorrect businessmen and bourgeoisie. More people have been slaughtered by the left and by socialism than by the advocates of any other creed or belief system. There has not been a socialist economy that has produced economic progress, and the general result of socialism as in Cuba and North Korea have been violent suppression and impoverishment of the poor. Yet, sociopathically, the academic left continues to justify, rationalize and lie about the effects of its programs.

In America, the left advocates a Kafkaesque program of large institutions, big government and centralized control. Its program includes not only the bureaucratization of medicine but also of investment, self-defense, business and political speech. The failure of its programs do not deter its commitment to rigid, large scale enterprises. For instance, the left remains obsessively attached to social security and the Federal Reserve Bank despite dismal benefit/contribution ratios from the former and inflation and corruption from the latter.

The left's recidivist advocacy of failed ideas can be explained in three ways. One, the left might be depicted as religiously obsessed with its ideas, and riddled with power needs, and so habituated to its love of government and centralized power despite seventy years of repeated failure. Two, the left is cognitively limited. Although many on the left are not smart, many are smart enough to grasp the pragmatic implications of its program. So this is at best a partial explanation. Three, the left is economically motivated.

There is a recurrent theme that goes something like, "Oh, isn't it amazing that George Soros or this or that businessman is a billionaire and yet he favors our (left-wing) positions". Conversely, many Libertarians and conservatives conceive of businessmen as supportive of the free market position, and then are astounded when businessmen do not support that view. In reality, the left's views coincide fairly neatly with the views of big business. Big business believes in big government because without it it would not be so big. The political scientist Charles Lindblom in his book on market economies remarks on the "privileged" position of big business, and indeed, since the days of Hamilton big business has relied on centralized government. There is no evidence that government support of big business helps the public in any way. Rather, subsidization makes firms less efficient and less customer oriented. For instance, cable television, telephone, public utilities, health care, banking and insurance firms are subsidized and they are among the least customer-responsive firms. The reason is that government regulation reduces competition.

Chief among government subsidies to big business is first the Fed, which provides interest rate and loan subsidies to business, and second, higher education, which provides training to large firms, to a degree at public expense. Thus, professors' livelihoods are linked to the welfare of big business and they themselves enjoy subsidies just like the ones big business enjoys. Without big business demand for graduates, there would be no demand for universities. So why are academics so often critical of big business?

In fact, university professors are NOT critical of big business where it counts, and their criticisms are not adverse to big business's interests. Big business is not adverse to enhanced central control, socialism, regulation and the mixed economy because such control eliminates competition. Universities have, as well, been the chief advocate of central banking through economics and business programs. Big business would not be so big without the Fed, and without the regulation that historians and sociologists advocate. There are few economists who question central banking, and of all the issues this is the one that big business cares about most.

University professors depend on big business much as teen-agers depend on their parents. Without big business demand for graduates, there would be no demand for universities. Thus, like teen-agers, university professors rebel by criticizing big business's hypocrisy, its lack of "social responsibility", and its selfishness, even as the professors themselves are equally hypocritical, equally irresponsible socially and even more selfish than business executives. But, like teen-agers, the university professors return home to be fed at the end of the day, and find the possibility that they will be thrown out and sent to work unthinkable. Moreover, the upshot of their criticisms, like teen-agers', is a psychological replica of the institutions and habits that they criticize. In other words, they claim to criticize big business even as they advocate systems that are necessary to it. In the end, the university professors are the chief proponents of big business capitalism, helping it by diverting attention to shrill issues like diversity and global warming.

Herbert Croly's Progressive Democracy: A Roadmap for Social Justice Educators

Herbert Croly. Progressive Democracy with a new introduction by Sidney A Pearson, Jr. Transaction Publishers, New Brunswick, NJ. 1998. Originally published in 1914 by the Macmillan Company.

Herbert Croly's 94-year-old Progressive Democracy is slow going because its English is as thick as Turkish coffee. A contemporary reader needs patience to imbibe its grounds, but the gulping is worth it. Many of Croly's ideas are outdated, but the degree to which current progressive-liberals continue to advocate them is remarkable given their persistent failure.

At times, Croly uses the term progressive-liberal. Those who called themselves liberal, dropping the progressive in the post-war period, have reverted to calling themselves progressive, dropping the liberal part, in the post-Clinton era. Perhaps the term progressive-liberal, which is a term Croly sometimes uses, instead of either progressive or liberal is best. Game playing with nomenclature distracts attention from content. Given the outcomes of the progressive-liberals' ideas, game playing might serve their purposes well.

The progressive-liberals' game-playing with nomenclature follows Croly. Croly's use of the term conservatives versus progressive-liberals is an example. In various places (p. 148) he contrasts individual justice with social justice but he does not refer to advocates of individual justice as say individualist-liberals versus progressive-liberals, which would have been more neutral. Instead, he uses the terms progressive-liberals versus conservatives, which suggests that progress requires adoption of progressive-liberals' ideas. Although Croly's ideas were adopted through the 1980s, their adoption stalled rather than furthered progress.

Croly's emphasis on democracy at the expense of limited government remains a mainstay of progressive-liberal ideology. Many of Croly's ideas about governmental reforms, such as the executive's proposing the budget to the legislature, are taken for granted today. His vision that vaguely defined law will be implemented through regulation is what exists today. Those who advocated government reform in the early twentieth century, such as Theodore Roosevelt, were Croly's friends and admirers.

As I have previously blogged, Croly emphasizes social justice education and the role of education in the inculcation of his social justice ideology. Democracy and education overlap. The book's final chapter (p. 406) on social education is a precursor to post-1960s political correctness:

"The need of imposing more exacting standards of behavior upon the citizens of an industrial democratic state applies to the citizen as citizen no less than the citizen as worker...The being of better men and women will involve, as it always has involved, the subordination, to a very considerable extent, of individual interests and desires to the requirements of social welfare."

Ayn Rand termed Croly's view altruism. It explains why progressive-liberals are eager to advocate policies that common sense rejects. One can subordinate oneself to an infinite set of incompetent or harmful policies. Although progressive-liberalism has consistently advocated these, progressive-liberals remain convinced because they believe in altruism. In their view, self-sacrifice is virtue so their advocacy of harmful policies is moral. There is no end to the ways that progressive-liberals can encourage altruistic virtue, especially when applied to others.

The progressive-liberals base their ideology on the pragmatists of the late nineteenth and early twentieth centuries, who argued that the best course is found empirically through trial and error. However, at least since the New Deal, progressive-liberalism has been rigidly attached to government solutions and has rejected the possibility of error in government-based solutions. The government solution, once adopted, has been written in stone tablets and cannot be abridged. Even when programs fail, and private sector solutions might work better, progressive-liberals irrationally adhere to them. The progressive-liberals have betrayed William James and Charles Sanders Pierce.

In Progressive Democracy Croly argues that the 19th century American system of government, which combined legal limits that restrained political power with legal review, needed to be revised. The American democracy had been "timid" (p. 26) and needed to be "aroused to take a searching look at its own meaning and responsibilities". In his advocacy of the Americanism of reform Croly was not far from Jefferson, who in a famous letter to William S. Smith wrote:

"The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure."

Croly argues that "the way to rationalize political power" is not to limit it but (p. 38) to "accept the danger of violence" and to develop reasonable thinking from within. Croly was of course no Jeffersonian. Rather, he was more favorable to Hamilton and the Whigs, and admired the pro-business policies of the Republicans, although he considered them to have failed.

Education

In Croly's view, "reasonable thinking" was to be inculcated through education. He discusses the threat to social values and social cohesion of the various suffrage, labor and similar movements of the early twentieth century (p. 407) and argues that (p. 408)"social cohesion cannot be made effective without some measure of social compulsion." Thus, Croly's progressive-liberal ideology is a violent one, an argument more explicitly expressed in Croly's other famous book, Promise of American Life. Croly aims to contain the danger of democratic violence with compulsion through education:

" the creation of an adequate system of educating men and women for disinterested service is a necessary condition both of social amelioration and social conservation."

Thus, progressive-liberalism is in part a program for social control through education. Croly's view of national purpose as necessary to bind the democracy and create human excellence suggests compulsion as well. Croly argues against "moral coercion" or the inculcation of the habit of self-restraint in education (p. 413), which he saw as part of the maintenance of the old social order in favor of (p. 417) "a liberal education" which opposes "traditional culture" (p. 417):

"The social education appropriate to a democracy must be, above all, a liberal education. It must accomplish for the mass of the people a work of intellectual and moral emancipation similar to that which the traditional system of human culture has been supposed to accomplish for a minority. This traditional culture could never become really liberating, because of the narrowness and sterility of its human interests...(Traditional liberal education) was intended to emancipate only a few privileged people..."

Croly disagrees that education ought to encourage "self-control, moderation and circumspection". He argues that the rule of "live and let live" favors the rich, who engage in conspicuous consumption, and ought to be replaced with a philosophy of "live and help live" (p. 426), a philosophy of social justice education. He links social justice education to labor issues, and the restructuring of work.

In this, Croly anticipates modern management theory, specifically the ideas of Elton Mayo's human relations school, and the job redesign theories of Frederick Herzberg and Abraham Maslow. He writes (p. 422):

"The masses need, of course, a larger share of material welfare, but they need most of all an increased opportunity of wholesome and stimulating social labor. Their work must be made interesting to them, not merely because of its compensation, but because its performance calls for the development of more eager and more responsible human beings."

Like Herzberg, Croly advocates redistribution of dull and interesting work, which Herzberg, 45 years later, called vertical downloading. This idea saw its fulfillment in the 1980s downsizing of corporations, where managerial work was assigned to rank-and-file workers along with the rote work. In contrast, Croly advocated the socialization of dull work by distributing it among all citizens. However, this view is naive because it ignores the specialization of labor on which modern economies rest.

Rather than discipline, Croly argues that education should involve active involvement in social behavior, which relates to the issue of social justice dispositions or competencies. He argues that "the only way to prepare for social life is to engage in social life" (p. 423). He emphasizes faith in the belief in the "invincible interdependence between individual and social fulfillment" (p. 425). "Live and help live" suggests, in Croly's view "the ultimate collectivism" (p. 426-7):

"The obligation of mutual assistance is fundamental...Every victorious selfish impulse, every perverse and cowardly thought, every petty action, every irresponsibility and infirmity of the will helps to impoverish the lives of other people as well as our own lives. We cannot liberate ourselves without seeking to liberate them..."

Croly's book leaves little doubt about the ideological foundation of the concept of social justice disposition that the National Council on Teacher Education has permitted in education schools and, according to George Will, has been prevalent in social work schools.

Croly's faith in the perfectibility of humanity is the same faith that has been at the root of the worst crimes of the twentieth century, from the 25 points of Adolf Hitler's Nazi Party program and Marx's Communist Manifesto to the mass killings in Germany, the USSR and Cuba. While Croly suggests the importance of moderation and self-restraint (that is, focusing on others rather than ourselves requires self-restraint), it is precisely the inculcation of moderation and self-restraint that Croly attacks in his discussion about education.

The followers of Croly and John Dewey have inevitably focused on developing habits of self-esteem, experiential educational and the unimportance of basic skills and knowledge, coupled with an ideology that assumes a tremendous degree of human self-restraint. Thus, progressive-liberal education sets up students for failure on moral as well as academic grounds.

Summary

Croly bases his argument on the idea that limited government, what he considers the legalistic Constitutionalism of nineteenth century America, was a way for the founding fathers, 18th century republican liberals, to permit the government to escape "popular control" (p. 46). Excessive emphasis or "deification" of the Constitution resulted from lack of respect for the "popular will". The American system perpetuated the English "political and legal tradition" (p. 57) and focused on individual liberty and property. The Jeffersonian Democrats opposed federalism, which amounted to the legalistic system that Croly decries, but Jefferson allied himself with the Constitutional system, to the Democrats' political advantage (p. 59). Croly repeatedly expresses frustration with American democracy's unwillingness to change the underlying Constitutional system. In his view, American government was government by law and the courts while the two political parties reflected direct popular control, and the purpose of the parties was to "humanize and control government by Law" (p. 67).

Croly's frustration with the Constitutionalism of nineteenth century American democracy relates to its limits on the power and scope of government:

"Good administration consists in the adoption of the most efficient available methods for the accomplishment of an accepted policy."

But while the state was hamstrung, the 19th century political parties were effective. But the political parties are self-interested and so did not care about efficient administration.

Croly is relatively fond of the pro-business Whigs. He describes them (p. 75) as

"a national party whose life depended upon its ability to unite on an enterprising positive assertion of the public interest...Its National Bank was abolished. Its protective tariff was reduced to almost a revenue basis. A national plan of internal improvements was never adopted. Thus the Whigs were beaten all along the line."

Despite the Whigs' defeat, the expansion of markets led to a recognition of the need for a national economic policy and (pp. 86-7):

"Stephen Douglas was the first conspicuous political leader who proposed national grants of land in aid of railroad corporations...Public assistance was bestowed upon almost every essential economic interest...The Republican Party...almost immediately became the victim of special economic interests and devoted its power to the establishment of a privileged and undemocratic economic system..."

In turn (p. 93), "both the capitalist and the agricultural had come to depend for the satisfaction of their interests not merely on the vigorous stimulation afforded by the Constitution, but on the vigorous stimulation provided by the government." This government subsidy to industry was being made based on the belief that "every economic class was benefiting equally from the stimulation" but this was not, in Croly's view, true (p.95):

"In point of fact the stimulation of productive economic energy no longer contributed necessarily to the public welfare; and the two partisan organizations were no longer instruments of democratic rule."

Croly (p. 88) approves of the Republicans' emphasis on "accelerating the production of wealth" although he does not believe that their individualist, laissez faire philosophy was successful.

This ultimately becomes an empirical question: do the policies that the nineteenth century Republicans advocated have a better long term effect on increasing wealth than the policies that Croly advocates or not? Given that Croly's policies have been adopted, and the twentieth century has not seen the economic progress of the nineteenth, it seems that Croly was wrong. Indeed, Croly contradicts himself when he is making different points. On p. 92 he writes of the post Civil War period:

"Wealth was created and accumulated more quickly than ever before...The American people were enjoying much prosperity and were mad for more..."

But it does not occur to him that this is impossible without major technological advance because Croly assumes a distributive economic process (p. 97). Again we see the basic Progressive-liberal pattern, where a fallacy that Croly enunciated in 1914 (along with socialists, such as Marx) remains a foundation of progressive-liberal views today. Because, in Croly's view, pioneers used up resources, their individual actions did not necessarily serve social interests. The wealth creation of the late nineteenth century was exploitative in his view. But it was not. In a distributive economic process, one side's gain is the other side's loss. In an integrative process, one side's gain is the other side's gain as well. Market transactions are inevitably integrative because otherwise they would not occur. Even the most exploited third world worker has the right to refuse to work in a factory. The same was true of capitalist industrial expansion in the nineteenth century. It enabled an enormous influx of immigrants, who were poorer than Croly would have liked. But if the wealth creation of the nineteenth century had been distributive, there would have been a downturn because of the immigration. But there was not. Rather, real wages rose throughout the late nineteenth century and until the establishment of the Federal Reserve Bank.

Croly's points about government support of business are good, but, and this is in keeping with the progressive-liberal viewpoint of today, the remedy for the failure of government is not necessarily more government. The remedy might be to shrink or eliminate government because its programs are poorly conceived and executed. Yet, Croly does not consider this to be a realistic possibility. Better to address the problem of failed government support for railroads by having government regulate the railroads and support them even more.

Croly argues that as industry expanded more people became employees and so could not benefit from government subsidies to business (p. 98):

"A system which had intended to scatter the benefits of special economic privileges over the whole surface of society had resulted in the piling up of these benefits on certain limited areas...Mere stimulation of the production of wealth, which was being distributed in so unequal a manner, was no longer a nationalizing and socializing economic policy..."

Thus, the capitalist class, in Croly's view, gained the chief advantage from Republican support for business, while the growing working class was ignored. Ironically, policies that Croly advocated, notably various regulations, ended up serving the same ends. It remains a puzzle to me why, given the inability of government to avoid special interest capture, the progressive-liberals have not concluded that government opposes the ends that they seek.

Private Property

Croly (p. 112) also argues for a modification to, but not elimination of, the institution of private property in order to "socialize human nature" and that private property inevitably leads to privilege (p. 113):

"The recognition of a necessary inequality and injustice in the operation of the existing institution of private property, coupled with the recognition that the immediate abolition of private property would be both unjust and impracticable, constitutes the foundation of any really national and progressive economic policy."

Instead, Croly argues for the "socialization" (p. 115) of privilege. People should be permitted to keep the privileges they have, but be gradually taught that they must earn the privileges. Society must require that those who benefit from wealth earn the spoils. The Republicans had failed to require that privileges be passed around. Society should make privileges available to the "disenfranchised" (p. 116) and, in somewhat odd terminology that almost sounds like compulsory labor(p.116):

"create a system of special discipline, coextensive with the system of special privilege, the object of which will be assurance, as the result of its operation, of socially desirable fruits."

In other words, Croly argues that wage earners had been excluded from opportunity, and the American capitalist system could not make property ownership accessible to them because the frontier was used up. A new system of privilege involving social legislation would thus be focused on wage earners. This regulation was subsequently passed in the Progressive era and the New Deal, to include health and safety regulation (passed in the 1970s), labor regulation (passed during the New Deal) and expansion of higher education, a post World War II phenomenon. What is most noteworthy today about these proposals is that although they have been in place for decades, social stratification is today greater than ever. Hence, Croly's policies have failed to eliminate social stratification. Today, we have universities that graduate semi-literates; labor legislation that is irrelevant to workers' interests; health and safety regulation that at most marginally protects workers but significantly raises costs to small firms; and inflationary credit policies that have concentrated wealth among connected hedge fund operators, Wall Street executives and commercial bankers. Croly's vision of democratized privilege has failed. Yet, today's progressive-liberals are not pragmatists who urge experimentation and new approaches, say abolition of the Federal Reserve Bank. Should anyone suggest that the poor cost/benefit ratio that Social Security provides requires an alternative approach, our reactionary progressive-liberals howl.

Croly's belief (p.123) that "responsible" American political organizataion must be coextensive with the new system of "privilege" has also fared poorly. Although open bribery no longer exists, as it did in Croly's day and earlier, the extent of corruption is probably greater in absolute dollars. Hence, Croly's vision of a responsible government coupled with a new system of privilege has merely served to cloak more privilege and more corruption than ever before. This results directly from the failure of the Croly's method, a strong state and an emphasis on popular deliberation, that has become fundamental to today's progressive-liberalism.

Popular Political Education

Croly (p. 144) argues that American Constitutional democracy succeeded and that the American public had been educated as to how to function democratically, so that the safeguards against tyranny that limited government and the Constitution promulgated were no longer needed. Likewise, progressive-liberals must emphasize popular political education (p. 145):

"The great object of progressives must always be to create a vital relation between progressivism and popular political education. If such a relation cannot be brought about, progressive democracy becomes a snare and an illusion..."

Faith and Progressive-liberalism

The difference (p. 148) between the progressive-liberal political education and the 19th century classical liberal education is that:

"The ideal of individual justice is being supplemented by the ideal of social justice...Now the tendency is to conceive the social welfare not as an end which cannot be left to the happy harmonizing of individual interests, but as an end which must be consciously willed by society and efficiently realized. Society has become a moral ideal not independent of the individual but supplementary to him, an ideal which must be pursued less by regulating individual excesses than by active encouragement of socializing tendencies and purposes."

Democracy can be furthered only by popular good will. But laissez faire republicanism limited the popular will. The founders intended to (p. 153):

"create a system which would make for liberty and justice in spite of he want of character of the American people"

while progressive-liberals believe that increasing democracy will enhance the "collective enlightenment of the people". Laissez faire resulted in cynicism and business opportunism. Progressivism is an expression of and form of faith (p. 168):

"A democracy becomes courageous, progressive and ascendant just in so far as it dares to have faith...Faith in things unseen and unknown is as indispensible to a progressive democracy as it is to an individual Christian..."

Croly (p. 168) compares the progressive-liberals' rejection of the Constitution with the early Christians' replacement of the Jewish law with faith. The progressive-liberals' faith is in social justice and in social justice education (p. 211-12):

"The socially righteous expression of the popular will is to be brought about by frank and complete confidence in (popular democracy). This faith is in itself educational in the deepest and most fruitful meaning of that word...The value of the social structure is commensurate with the value of the accompanying educational discipline and enlightenment...The idea of social justice is so exacting and so comprehensive that it cannot be progressively attained by any agency save by the loyal and intelligent devotion of popular will...The people are made whole by virtue of the consecration of their collective efforts to the realization of an ideal of social justice."

Croly also argues for pragmatism in the pursuit of social justice and democracy (p. 217):

"The immediate program is only the temporary instrument which must be continually reformed and readjusted as a result of the experience gained by its experimental application..."

In practice, of course, progressive-liberalism has turned out to be extremely conservative. I doubt that even one in one thousand progressive-liberal programs and ideas has ever been terminated from the federal government once adopted. In contrast, private firms kill ideas all the time, and the ratio is reversed for new product introductions or business start ups.

Restructuring of Government

Several of Croly's ideas about restructuring government were subsequently adopted. Croly favored increased government power but was only lukewarm toward the ideas of "direct democracy" that have been adopted in the west---the referendum, the recall and the initiative. In his view, the importance of strengthening democracy was that it permits pursuit of "a vigorous social program" (p. 270), and in turn the need for a vigorous social program results from changes in society and political organization. Positive social policies require "strong responsible governments" (p. 271) and (p. 274) "a thoroughly representative government is essentially government by men rather than by Law". In order to accomplish unlimited government, the (p. 272) administrative and legislative branches of government needed to be enhanced (p. 270):

"Direct democracy, that is, has little meaning except in a community which is resolutely pursuing a vigorous social program. It must become one of a group of political institutions whose object is fundamentally to invigorate and socialize the action of American public opinion..."

More important, in Croly's view would be a new organization to (p. 283) "promote political education." This is accomplished by increasing both state government and popular control together (p. 286). I got the feeling in reading these recommendations that Croly was anticipating George Orwell's 1984. He says that both government agencies that function beyond the cognitive domain of the public ought to have increased authority and popular control of the same organizations ought to be increased. But you cannot have both. Perhaps Croly believed that you could, but there are cognitive limits on rational decision making even in private enterprises. How on earth could the general public evaluate the actions of specialized regulators, who may well be doing things that would meet with public disapproval if the public understood what they were doing?

Croly (p. 287) speaks glowingly of municipal commissions that combine "a simple, strong and efficient government with a thoroughly popular government." It seems to me that the history of Robert Moses in New York is very much an outgrowth of this kind of self-contradictory mental gymnastics. Moses started out doing things that met with popular approval, but carried his activities to the point of doing things that threw tens of thousands of people out of their homes in order to provide transportation outlets to suburbanites. Ultimately, Moses's work became corrupt in areas like urban renewal and public housing. Moses's corruption and the hatchet job Moses did on the Upper East Side's coastline is the fruition of Croly's ideas.

Croly (p. 292) uses a proposal of the People's Power Leaguge for the government of Oregon as an example of progressive-liberal reform. The governor and legislature would be elected on the same day. The governor would have extensive appointment authority. The governor could be recalled. The governor could recommend legislation and also vote in the legislature. He would have no veto power. He would introduce the budget. The state legislature would counterbalance a stronger executive. Voters could cast their ballots for legislative candidates of other districts. If any one sixtieth of all voters vote for a candidate, the candidate would be elected to the legislature. No bill could pass unless the number of legislators voting for it reflected a majority of the voting citizens. Defeated candidates for governor would be members of the legislature representing voters who voted for unsuccessful candidates. By allowing voters to vote for candidates in other districts, voting might be more along the lines of class and interest groups such as labor unions and farmers.

Thus (p. 303) in Croly's view the governor ought to be responsible for proposing legislation and executing law, which is the basic approach that many states have adopted although not in such extreme ways. In Croly's view (p. 304) executive leadership best reflects majority opinion. Initiatives and referendums are not really democratic because (p. 306) only a minority of people vote. Referendums place power in a knowledgable minority (p. 308):

"A democracy should not be organized so that the alert and vigorous minority can easily make its will prevail over their less vigorous fellow-citizens."

The two-party system (p. 312) leads, in Croly's view, to the suppression of differences of public opinion in the interest of party unity. A focus on executive leadership involves a greater emphasis on the candidate for governor's ability to oranize a legitimate majority. Executive leadership will arouse and concentrate public opinion. Interest groups would form coalitions. "Majority rule would be salutary, precisely because it would be fluid and adjustable" (p. 323).

Conclusion

Croly puts excessive faith on the public's ability to discern errors or governmental decisions that are entirely in opposition to the public's interest. The media are able to mislead and misrepresent. Economic interests with much to gain are likely to pay in various ways to obtain misrepresentation that serves them. Coverage of the Federal Reserve Bank and inflation, for instance, has been a joke for the past 50years. The public hears that Alan Greenspan has done an excellent job, and is asleep to the reality that a dollar in 1979 is worth 38 cents today. The flattening of real wages, they are told is due to the tax system and free trade, and they vote for Mike Huckabee.

Croly's optimism about the power of democracy was tragically naive. We will never know how many lives would have been transformed by technological breakthroughs that did not occur because of the adoption of progressive-liberalism.

Similarly, his views on social justice education have had unfortunate outcomes in recent years. One can appreciate his optimism but find his misguided application of religious fervor to democracy distasteful and foolish.

It is tragic that Croly's ideas have had a dominant influence on twentieth century America. His progressive-liberal ideology is intrusive, destructive and ugly. That it has gained favor among American elites suggests a massive failure of twentieth century education and morality. We live in a dark age, especially when compared to the nineteenth century.