Whiskey and Gunpowder
by Jeffrey Tucker
January 5, 2012
Auburn, Alabama, U.S.A.
Elections and the Illusion of Choice
The political season has unleashed its predictable frenzy, much to delight of people who make a living off it. But to what end? There are only two types of politicians who end up holding office, wrote H.L. Mencken: "first, glorified mob-men who genuinely believe what the mob believes, and secondly, shrewd fellows who are willing to make any sacrifice of conviction and self-respect in order to hold their jobs."
The about sums it up. The plus side of elections is that sometimes the debates, discussions, candidates and parties raise fundamental questions about what kind of society we want to live in. That's the best we can hope for.
But there is a downside to all this hullabaloo: It gives the impression that the mere existence of the electoral process gives "we the people" a fundamental choice about the kind of state we want. This is not true. The politicians we elect are veneers or facades. They are bandits, but they do not constitute what is called the state. This goes for just about every developed state in the world for the last 200 years.
The whole election process leads people to believe that the state is in embedded in leaders. Not so. In France, this system ended with the execution of Louis XVI; in Germany, with the ascent of Bismarck; and in Russia, with the Bolshevik Revolution. The personal state died in the U.S. pretty early on, as even Thomas Jefferson discovered when he became president in 1801; he felt himself powerless to do anything.
The modern state lives outside the will of a particular leader or administration. Voting and elections only change the temporary managers, but do not touch the core of the problem.
The first book that saw through the facade was by the great German sociologist Franz Oppenheimer. It is called, appropriately, The State. It was written in 1908, just as the state had begun to entrench itself deeply into the social order -- more so than at any point in the previous thousand years. He described the state as the one class that dominates all others, obeying a  different law and thriving off violence against person and property. He sums up this violence in a phrase: the "political means." He contrasts this with the "economic means," the essence of which is voluntary human association and trade. (His book came to have an amazing influence through Albert Jay Nock's Our Enemy, the State.)
Violence? That sounds like the opposite of elections, doesn't it? Surely, we are exercising our free will in deciding who leads us. The truth is that the people who run for office specialize mostly in what they do best: running and getting elected as an end in itself. The real state is beneath the surface of this public theater. It is the vast army of professional bureaucrats and the mandates they carry out. It is the enforcement apparatus that oversees a gargantuan tax code. It is the Federal Register that is too large to print. It is the central bankers, their staffs, their machinery, their mandate to bail out the state no matter what. It is the hundreds and thousands of agencies that purport to control every aspect of life.
No voter ever approved any of this; no election puts any of this at risk. This is because the state itself is not subject to any plebiscite. Imagine if all the elected officials in the entire country and all those who work in their offices decided not to show up to work for an extended period. What would happen? New bills wouldn't pass. The media wouldn't have politics to cover. There would be a periodic scramble over superficial issues like the debt limit. But otherwise, the state would go on just as before. Nothing fundamental would change.
Nor is it the case that any of the elected officials have the power to do serious damage to this system. This goes for the president, too. They can often influence the way the state grows, but they can't actually fundamentally threaten the apparatus itself. The longer they are in office, the less personal power they realize that they have. The reason is simple. The system is not structured to permit them to dismantle it, even if they wanted to. They are temporary managers of a ruling class, and the members of this class mostly scoff at these people, treating them like actors on a stage that the class itself owns.
The best source to gain a full grasp of the realities of the modern state apparatus is Robert Higgs' amazing work , Against Leviathan. No contemporary author has so fully documented the vast expanse of the modern leviathan in all its permutations. He sees how welfare and warfare are not opposed to each other, but work together to form the main two activities of the modern state. He sees how central banking works to sustain the system. He understands the ways in which the state serves as a cash cow for every form of interest group, and how it works to trick  the population into believing that the state is doing good for people when it is really wrecking their lives.
Most of all, Higgs gets that the political system that so enraptures the public mind is not owned by us. It is owned and managed by the state itself and for a precise purpose: to perpetuate the idea that we have all chosen the regime that rules us. That is why there is so little difference between the political parties. As Higgs puts it, the U.S. has "two revolving factions of a one-party state farcically masquerade as authentic alternatives, the one specializing in crushing economic freedom and the other concentrating on crushing every other form of freedom."
After the election is all over -- in a grueling 10 months! -- and our new managers take their seats, the talking heads will tell us once more:
"The system worked." Yes, it did work in exactly the way they want it to work. Nothing much will change. If you don't like the results, there is something wrong with you. If you don't like the rules, taxes, human suffering, wars, inflation, intrusions, confiscations and all the rest of the apparatus, you had better run for office, give to another candidate or otherwise throw yourself into the politics full time!
This is not choice. When we go to the grocery, we face a choice of what to buy. Or we can walk out without buying at all, keeping our money instead. Whatever the result, it is really in our hands. The electoral system is different. The store is the state. The products it offers are produced by the state. There is no real choice, only enough shadings of differences to keep us entertained. And we cannot really walk away. There is "no none of the above" and there is no keeping your own money.
Every once in a while, someone comes along who offers a fundamental challenge to the whole racket and somehow manages to attract public attention and even use the system to urge the dismantling of the system. This is what has happened with the candidacy of Ron Paul, and it is precisely why the media strains so hard to keep from reporting on him or letting others speak out for his views.
The elites are not so concerned that he can be elected. The system is fixed well enough to prevent that outcome. The real threat -- and Dr. Paul understands this better than anyone -- is the fundamental intellectual challenge that he offers. His book Liberty Defined contains enough radicalism and enough intellectual power to destabilize the entire structure that Oppenheimer and Higgs have so beautifully described.
The ideas in these books are far more powerful than any ballot box. They expose the illusion of choice for what it is and unmask the violence embedded in the state-dominated society, a system that no one chose but has been imposed on the population through propaganda, wars, payoffs and every manner of trickery. If there were a way to re-channel all the human energy that people put into politics into reading and thinking, the state would have finally meet its match.
Whiskey & Gunpowder
by Jeffrey Tucker
January 11, 2012
Auburn, Alabama, U.S.A.
Capitalism or Money in Crisis When the Financial Times started its series on "Capitalism in Crisis," I winced. Here we go yet again, an attempt to blame private enterprise for what are actually the failures of the state and paper money. And some writers -- but not all -- in the series have done exactly this, while obscuring the differences between free and unfree markets by referring only to the way "the system" has failed.
And what is the evidence of this failure? It is everywhere. Household income continues to fall all over the developed world. Unemployment is persistent, and to the extent that it is being fixed, it is by dramatic reductions in living standards, one paycheck at a time. Debt is egregious. Young people face terrible prospects. Complaints about inequality resonate in this environment not because the financial sector has bred such paper wealth, but because life is such a struggle for everyone else.
All of this begs the question: What exactly is this "system"? Our times are constantly being compared with the Great Depression, and plenty of people are hoping for an analogous ideological shift toward ever more state control of economic life. J.M. Keynes urged the destruction of the gold standard and the "end of laissez-faire." Strongmen all over the world complied.
But back then, it was easier to bamboozle the public into believing that capitalism was the source of the problem and that the new scientific managers of the state machinery would restore prosperity. The Jazz Age was surely a time of free markets, was it not? Not entirely -- there was the important matter of Prohibition as well as the central bank and its capacity to blow bubbles, such as the one that burst in 1929. That message did not stick, because only a handful of people truly understood, and they didn't have the microphone. So the strongmen had a field day.
But today? The state machinery is the lumbering leviathan that leaves no part of life untouched. It taxes and regulates all things and uses the central bank as its unlimited credit card to pass out welfare to all classes and maintain a worldwide empire rooted in military violence and executive privilege. It takes chutzpah to claim that this has anything to do with a capitalist crisis. This is a crisis of a system of state-based social and economic management
This might explain why the socialist left has yet to gain much traction in the post-2008 environment. Does any living soul doubt the role of the government and its friends in generating the housing and financial bubble? It has been demonstrated 10,000 times, and this information is available to one and all in a world of digital information delivery. We are no longer hunkered down by the radio, waiting on a homily from the high priest in Washington. This guy no longer controls what we are allowed to read and think.
Writing as part of the series, former Clinton Treasury Secretary Lawrence Summers points out that a recent survey demonstrated that "among the U.S. population as a whole, 50% had a positive opinion of capitalism while 40% did not." I'm not sure what the take-away from that survey really is, however, because it presumes a shared understanding of what "capitalism" really is. Is it a system of privileged protection for the financial elite at the expense of everyone else or it is a synonym for the free economy? These are two very different things.
What is especially striking about Summers' article is his admission that Keynesian-style solutions seem pointless in this environment. He writes that, concerning the crisis, "there is no obvious solution at hand." He further points out that some of the largest existing social anxieties are focused on three sectors in particular: education, health care and old-age provision. All three are run or lorded over by the state. He concludes with an honest admission: "It is not so much the most-capitalist parts of the contemporary economy but the least...that are in most need of reinvention."
Another contribution to the series comes from Gideon Rachman. He presents a fascinating typology of the four ideological divides of our time. He says that public and intellectual opinion can be divided as follows: 1) right-wing populist, 2) social democrat, 3) Hayekian libertarian and 4) anti-capitalist socialist. This sounds right to me.
The right-wing populist camp (alive in the U.S. and Europe) is the warmongering contingent that opposes immigration, wants war on Islam, favors restrictions on civil liberties, obsesses over demographics, clamors for its own kind of income distribution and longs for a strongman to arrive to impose some kind of order. This penchant has a long history in politics, probably dating to the ancient world.
The social-democratic tendency is found in the Obama constituency, and it wants more of the same that got us into this mess: Keynesian fiscal management, union privileges, an ever-larger public sector, piecemeal planning and regulation, central bank-backed stimulus, democracy-spreading imperialism or some random combination of this list. This is the party in power here, there and nearly everywhere.
The anti-capitalist/socialist element is obvious enough. It consists of a strange coalition of intellectuals and down-and-out young people leading the Occupy movement, together with media idiots always looking for a splashy and simple story to tell. It is a ridiculously simple-minded view of the world that all would be well if we could just take the income from the tiny group at the top and spread it around the population. To them, the market-based social order is little more than a scam to rob and loot the iPhone-carrying workers and peasants and benefit the financial elites.
What's most interesting is the emergence of what Rachman calls the Hayekian-libertarian tendency, represented most conspicuously by Ron Paul but actually encompassing a global intellectual and popular movement that sees through the fog of propaganda. Here we find total coherence: both realistic explanations of our current plight and clear answers for what to do about it.
Of the four groups, this is the only group that sees the importance of the issue of monetary reform. Keynes saw back in the 1930s that the most-important step to modifying the market system in favor of state management was the destruction of the gold standard. He hated it and dedicated himself to convincing all governments to give it up in favor of paper money. Without this step, there was no hope for Keynesian policies.
In a similar way, the libertarians recognize that the most-important step toward restoring economic vitality and a free market is to repair the quality of money. The gold standard would be wonderful but unlikely, since its reinstitution requires enlightened statesman and bankers who do the right thing. A more-viable path toward the restoration of sound money is through total monetary freedom: Let the market reinvent sound money in our time through the free use of any and all monetary instruments.
What's critical is that the libertarians have put the money issue on the map. We are living under a form of monetary prohibitionism today, forbidden to use any means of payment other than that maintained by the state. And it is not unlike the alcohol prohibition of old. It redistributes wealth, steers gains to the unscrupulous, strengthens the state and promotes various forms of criminality.
In introducing this series, John Plender writes, "F. Scott Fitzgerald chronicled the moral vacuity of Jazz Age capitalism in The Great Gatsby." Nonsense. Fitzgerald nowhere slams capitalism in his great novel. Jay Gatsby made his fortune as a bootlegger, a profession that would not have existed in absence of state Prohibition.
Our own age is filled with Gatsbys, people who have done well for themselves by manipulating a failed system. It is the system that must change, not the right to do well.
Peace, love and happiness...until next time...
“There is no amount of darkness that can extinguish the inner light. The important thing is not to spend our lives trying to control the environment around us. The task is to control the environment within us. ”
- Joan Chittester
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