The New Deal in Old Rome

"The attempt of Diocletian and his successors to save an empire that was crumbling resulted in complete regimentation under a totalitarian state.  In the reign of Marcus Aurelius many villages and towns had been virtually wiped out by a great plague…On a diminished population with greatly impaired resources taxes were increased to support the enlarged army and the vast bureaucracy.  Heavy contributions of grain were extracted from farmers to feed the soldiers and the population of the large cities.  There were land taxes, property taxes, occupation taxes, poll taxes.  It has been said of this period that 'the penalty of wealth seemed to be ruin.'  The heart was taken out of the enterprising men. Finally the burden became so intolerable that to escape the imperial levies tenants fled from the farms and business men and workmen from their occupations.  The government intervened and bound the tenants to the soil--the beginning of serfdom--and the business men and workmen to their occupations and trades.  Private enterprise was crushed and the state was forced to take over many kinds of business to keep the machine running.

"As oppression by the central authority increased, many Romans in the frontier provinces escaped from its heavy hand to find refuge among the Germans and even the Huns.  It is recorded that a refugee with the Huns told a Roman ambassador that 'he considered his new life with the Huns better than his old life among the Romans.'  To the poor, it was said, the enemy was kinder than the tax collector. "

--H.J. Haskell, The New Deal in Old Rome, p. 221. 

More on Slavery

 In response to a comment:

One of the more blatant lies taught in American schools is that the Civil War was fought over slavery. A reading of DiLorenzo's and Hummel's books will disabuse you of that myth.

First of all, four slave states fought on the side of the North--Maryland, Delaware, Missouri, and Kentucky. They did not abolish slavery even after the war ended. It took the Thirteenth Amendment passed by the radical, post-war Congress.

Second, four secessionist states that in total had a greater population than the seven that seceded when Lincoln was elected, most importantly Virginia, did not secede until Lincoln attacked the South after he was elected. The reason was specifically Lincoln's violent imposition of the federal government on the secessionist states.

Third, Lincoln repeatedly said that he did not aim to repeal slavery. In fact, he said that he favored a constitutional amendment that would have prohibited the abolition of slavery. He said this repeatedly.

Fourth, on November 7, 1861 The London Times wrote an editorial expressing its and the British people's dislike of slavery. Britain at that time was the leading abolitionist nation in the world, for it  had abolished slavery a few decades earlier. Nevertheless, the Times editorialized, it was eminently clear that the Civil War was not being fought about slavery. As Lincoln repeatedly stated and made clear through direct action, the war's aim was to keep the union united. This was contrary to the aims of the American founders, and directly contradictory to Jefferson's statement in the Declaration of Independence that just government is derived FROM THE CONSENT OF THE GOVERNED. As a result, The London Times opined, most British citizens favored the South over the North because the North's war was an effort to enforce a government on a people who did not consent; The Times held that the Civil War had nothing to do with slavery.

Fifth, many leading abolitionists, including William Lloyd Garrison, had for years advocated NORTHERN SECESSION as a way TO END SLAVERY. In other words, leading opponents of slavery had believed all along that secession would by itself end slavery. Rather than give this idea a chance, Lincoln chose to kill 500,000 to 800,000 people, maim a million people, and conquer the South, forcing a tyranny on them.

Why might secession have ended slavery? Because the Fugitive Slave Law was a key impediment to slaves' escaping, and it would have been repealed with secession. The result would have been that slaves could escape and not be returned. That is what happened in Delaware. By the end of the war virtually all the slaves had left to enlist and could not be returned. Rather than let slavery die naturally, Lincoln, who  repeatedly said he favored continuation of slavery, fought a war to suppress the South and prevent them from seceding.

In sum, your belief that the Civil War was fought over slavery and that disagreement with the Civil War in some way suggests agreement with slavery is based on bad education, lies, misinformation, and propaganda that you probably learned in an American school. You did not get a good education, and I didn't either.


 In response to two political activists:

Dear     _________           :

 I have decided to disassociate myself from political activity.  Political activity requires some concern and common ground with the polity and the citizenry.  Having just read DiLorenzo’s Lincoln Unmasked and, worse, Jeffrey Hummel’s Emancipating Slaves, Enslaving Free Men, I have concluded that the United States is based on the false premise that a government can be derived from the barrel of a gun; consequently,  the American people and the American form of government are immoral; focusing concern or political emotion on them is misguided.  

The developments that occurred after the Civil War are a function of a people bent on violence, theft, and self-aggrandizement;  the establishment of the Federal Reserve Bank and Wall Street’s ongoing economic rape of the American people is a symptom of a deeper, underlying immorality on the American people’s part.  All con men know that it is greed that makes a mark susceptible to their cons.  Americans are those greedy marks.  

Americans have been satisfied with the violent compulsion that Lincoln imposed on the South (he did not oppose slavery, and four slave states fought on Lincoln’s side, which we are not told in in pro-government, progressive schools).  More generally, America is not a nation based on premises of freedom and consent of the governed; as a result, I do not support the current form of government, and I do not care what happens to an American people willing to use violence to impose their will on others.   I have zero interest in conservatism, in Republicans, in establishment candidates, or in opposing Andrew Cuomo with other, equal candidates.

Please remove me from your mailing list.

In 1861, The London Times Got It Right

The contest is really for empire on the side of the North, and for independence on that of the South, and in this respect we recognize an exact analogy between the North and the Government of George III, and the South and the Thirteen Revolted Provinces.

---The London Times, November 7, 1861, quoted in Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War, Chicago and La Salle, Illinois, Open Court Press, 1996, p. 168

Hummel notes earlier on p. 168:

Britain was the neutral country that mattered most, and slavery was a key issue affecting its reaction.  Lincoln, however, had made clear that the war was for the preservation of the Union only.  He promised not to interfere with slavery in the states, and many Union commanders during the early campaigns returned runaways to their southern masters, in compliance withe the Fugitive Slave Law.  As a result, the foreign antislavery movement was reluctant to throw its weight behind the Union, and many Britons openly sympathized with the Confederacy.

A Colossal Failure of Common Sense

I have been preparing a new course called Government and Business, and I wanted to include a few examples of the consequences of monetary expansion and ongoing Fed policy.  A good candidate is the case of Lehman Brothers.  I ordered Lawrence G. McDonald and Patrick Robinson's A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers from Amazon and read it over the past two days. It is a colorful, enjoyable book that I recommend.  It is mostly well written, but there are occasional sophomoric grammatical errors.  I wondered whether Three Rivers Press bothered to copy edit the work; at the same time,  McDonald's self-deprecating humor reminded me of Ragged Dick's from Horatio Alger's novel; moreover, the early part of the book is a  rags-to-riches tale.  McDonald pulls no punches in describing Richard Fuld and Joe Gregory's (the top management's) incompetence.

McDonald lacks a paradigm to accurately grasp the sources of Lehman's failure.  He sees Fuld's dominance of the firm as the cause--if only his friend Michael Gelband had gained control of the institution, things would not have gone wrong.  His philosophy is the result of his education at the University of Massachusetts Dartmouth and, more generally, of the one-dimensional coverage in the media and in universities, which serve as cheerleaders for America's value-destroying financial-and-banking system.  Things may have gone better if competent people were at the helm, but there are few competent people; they weren't at the helm at Goldman, AIG, Bear Stearns, GE Capital, or any of the other foolishly run outfits that were trading derivatives that they did not understand.

The cause was not bad leadership, but a bad system that permits the Fed to print money and hand it to people who lack the ability to use it wisely.  Investment in Wall Street's waste and the income tax crowd out innovative investment such as occurred in the late 19th century, when there was was no Fed, no central bank, no income tax, and Wall Street was in extremis. Historically, Wall Street's strength and growth rate are inversely related to the nation's innovation and the average American's financial well being.  Yet, Americans continue to vote into office politicians whose first priority is to subsidize Wall Street. 

Lehman had borrowed two thirds of a trillion dollars in printed money. The Federal Reserve Bank had stolen its value from the American people and handed it to half-witted crooks like Fuld and Gregory.  Lehman does not represent a deviant problem like bad leadership. It represents the core of the problem: malinvestment because of a financial system that has no incentive to invest optimally and that lives off the theft of wealth from the public; the stock market will not rise without such theft.

The entire money supply during the millennial years was close to $800 billion.  An amount equal to almost the entire US money supply was handed to half wits who proceeded to buy hundreds of billions of dollars in over-valued real estate and take financial gambles that they did not understand.

McDonald's message, which he does not grasp, is that the American systems of government and finance are  broken and cannot be fixed. An American people that continues to be satisfied with the stealing that underlies the profligacy McDonald describes (via the Federal Reserve Bank, which had printed the money Lehman badly invested ) is the underlying problem.  On this score, McDonald stands accused of apathy along with the rest of a nation that has allowed itself to be financially molested for the past century.

Perhaps a tragedy greater than the fall of Lehman is that smart guys like McDonald and his friends can think of no more imaginative career than living off printed money and playing financial markets. When America was a worthwhile place to live, people like McDonald, Gelband,  and McCarthy were inventors rather than stock jobbers. 

McDonald is a true insider, and he gives an insider's picture of the distressed asset trading desk at Lehman.  He is starry eyed, referring to his various colleagues as "the best in history" at various points, but the sophomoric grammar and starry-eyed reverence amount to a small price to pay for McDonald's wit, charm, idealism, and apparent workmanlike competence with respect to his craft.  At Enron there were two or three people, chiefly Vince Kaminski of Enron's risk management group, who saw that the firm was headed for disaster.  McDonald asserts that several of his trading colleagues, such as Michael Gelband and Larry McCarthy, had warned Fuld and Gregory of an impending crash in the real estate market nearly two years before Lehman's ultimate demise;  they and several others in McDonald's group had resigned months and weeks before the collapse. The remaining members of his group took over the firm when it was already too late; as will occur with the United States, things had to get close to the edge before Fuld and Gregory could be ousted; it seems to me that America may face a fate similar to Lehman's.  Hopefully, by then I will be resident elsewhere.

I think I will fit part of this book into my course, which also includes some material on Long Term Capital Management and Enron--all products of the American Whigs' and financial establishment's stealing from the Americn people via the value-destroying Federal Reserve Bank.  If you want to know why the average American's real hourly raise hasn't gone up since 1970, read this book.  The high salaries in exchange for the destruction of real wealth by Wall Street's bums is malinvestment on a scale that Ludwig von Mises could not have imagined.