Thursday, November 9, 2017

When will free markets emerge?

If someone asked you to define “free market,” could you?  Could you do it on the spot without recourse to dictionaries or other crutches?

There’s an old tale about the origin of the term “laissez-faire” that gets to my point.  Here’s the write-up in Wikipedia:
The term laissez faire likely originated in a meeting that took place around 1681 between powerful French Comptroller-General of Finances Jean-Baptiste Colbert and a group of French businessmen headed by M. Le Gendre. When the eager mercantilist minister asked how the French state could be of service to the merchants and help promote their commerce, Le Gendre replied simply "Laissez-nous faire" ("Leave it to us" or "Let us do [it]," the French verb not having to take an object).
Given the meeting with a known mercantilist, Le Gendre probably intended his comment in a restrictive sense, meaning he was refusing the state’s offer of protection from foreign competition.  In later years others have expanded “laissez-faire” to mean the state should be restricted to “upholding the rights of private property and individual liberty.”  In Human Action, Mises defined a laissez-faire economy as one unhampered by state interference; it means upholding “the individuals' discretion to choose and to act.” [Mises, The Meaning of Laissez Faire, excerpted from Human Action]

Most libertarians would agree with this broader interpretation.  The problem is any state that actually took a hands-off policy towards the economy wouldn’t be a state.  States are, by design, predatory and parasitical.  They exist for the purpose of accruing power and pelf.  Libertarian visions of domesticating the state are fantasies.  

Besides which, states work for certain people — they enable politicians to buy votes and other support needed to keep the racket going.  As for voters, who needs freedom when you can get free handouts?  Though citizens gripe about taxes and corrupt politicians, they’ve grown comfortable with the devil they’ve always known.  They’re okay with the state’s willingness to assume responsibilities they refuse to accept.  They want the state to pave their roads and educate their kids.  They want the state to pay for their health care.  They want the state to pay for the safety nets of life.  Who better to do the paying than the state, which will never run out of money?  Even a failed state like socialist Venezuela has yet to flatline because of its grip on power and propaganda, even as its people descend into cannibalism and prostitution for survival.

Where did states come from?

In Common Sense, Thomas Paine, in writing about the “race of kings,” far from having an honorary origin, considered the first of them “nothing better than the principal ruffian of some restless gang” whose purpose was to plunder the defenseless.  Eventually, as Murray Rothbard tells us, the gangs realized the “time-span of plunder would be longer and more secure, and the situation more pleasant if the conquered tribe were allowed to live and produce, with the conquerors settling among them as rulers exacting a steady annual tribute.”

If a conquered people is the garden from which we expect free markets to grow we’re deluding ourselves.  As painful experience has taught us, attempting to bind a state to the terms of a constitution is another exercise in folly.  States have allies, none more important than the opinion makers, the intellectuals.  Intellectuals, in return for “a secure and permanent berth in the State apparatus,” as Rothbard notes, will provide the needed rationale for the state’s predations.  Thus, to pick examples at random, we have “court historians” and others providing the necessary cover for the blood-bath known as World War I, a famous Keynesian telling us the debt explosion of World War II ended the Great Depression, a “political cross section of prominent economists” expressing their opposition to the Paul-Grayson Audit the Fed bill (seven of the eight of whom have Fed connections), and the wholesale lying that characterizes national elections. 

Most states, being parasites, have learned to park their depredations somewhere between freedom and despotism.  Paine recognized this when he wrote,
The portion of liberty enjoyed in England, is just enough to enslave a country more productively than by despotism; and that as the real object of all despotism is revenue, a government so formed obtains more than it could do either by direct despotism, or in a full state of freedom, and is therefore, on the ground of interest, opposed to both.  [Rights of Man]
In a “full state of freedom” there would be no government “so formed.”

In 1939 Albert Jay Nock published an essay expressing astonishment at the surprised reaction of “all our institutional voices” over the barbarism and betrayals of various foreign States.  As he put it,
The history of the State being what it is, and its testimony being as invariable and eloquent as it is, I am obliged to say that the naive tone of surprise wherewith our people complain of these matters strikes me as a pretty sad reflection on their intelligence. Suppose someone were impolite enough to ask them the gruff question, "Well, what do you expect?" — what rational answer could they give? I know of none. 
Polite or impolite, that is just the question which ought to be put every time a story of State villainy appears in the news. It ought to be thrown at our public day after day, from every newspaper, periodical, lecture platform, and radio station in the land; and it ought to be backed up by a simple appeal to history, a simple invitation to look at the record.... 
Also, in order to keep down the great American sin of self-righteousness, every public presentation ought to draw the deadly parallel with the record of the American State. The German State is persecuting a minority, just as the American State did after 1776; the Italian State breaks into Ethiopia, just as the American State broke into Mexico; the Japanese State kills off the Manchurian tribes in wholesale lots, just as the American State did the Indian tribes; the British State practices large-scale carpetbaggery, like the American State after 1864; the imperialist French State massacres native civilians on their own soil, as the American State did in pursuit of its imperialistic policies in the Pacific, and so on. 
The headlines from Nock’s day to ours — to say nothing of previous history — suggests he’s been overwhelmingly ignored.  States are not mankind’s benefactors.  With nuclear technology at their command they could end up turning the planet over to the insects.

How do we End the State?

There are few voices calling for an end to the state — a reflection of its propaganda prowess — but this doesn’t mean our future is bleak.  On the contrary, most people will see major improvements in their lives in the coming years.  

There are two unmistakable trends working in liberty’s favor: Massive government debt and exponentially advancing technology.   You won’t have confidence in this claim unless you read the essay at the link, Ray Kurzweil’s seminal The Law of Accelerating Returns.  It would also help to have an understanding of the acronym TANSTAAFL as well as a grasp of monetary fundamentals.

As I wrote in an earlier essay,
Technology is ripping a hole in centralized social control and its Keynesian underpinnings, bringing power and freedom to individuals the world over.  
Both Keynesianism and technology are on a cusp. One is on a road to collapse, while the other is about to kick into high gear. . . .
[With a fiscal gap in excess of $200 trillion,] government promises will be broken. The bill for the Keynesian free lunch will come due, and the government check will bounce. 
Where will that leave us? With a weakened and discredited government, and the bogus Keynesian ideas that supported it, we will have to become more self-reliant. The cry of “Do something!” to the government will be answered with an echo. Free markets will emerge where they’ve been suppressed because much of government will be ineffective or no longer exist. A free market in combination with a revolution in technology will remake our world. [The Fall of Tyranny, the Rise of Liberty]
We need to do with the state what we’ve done with slavery.  We can govern ourselves without a coercive sovereign.  Truly free markets will emerge when the state is gone.  

1 comment:

Finn said...

I believe fully in the conclusion of this article. It's what keeps me up at night; not sure how many will live through it.

The State Unmasked

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