- Frank Knight and the Place of Principles in Economics and Politics - May 13, 2021
- Hayek’s Still Relevant Response to Today’s Paternalist Planners - May 12, 2021
- Biden’s Agenda of “Democratic” Paternalism and Planning - May 3, 2021
The daily and unending bombardment of political campaign reporting and news, with its “drama” about who will be the Republican and Democratic Party candidates for the U.S. presidency, hides from view the continuing and real choice facing the American public: freedom or statism, individual liberty or government control.
This real underlying question is hidden from view because the media coverage emphasizes in what ways the competing candidates differ from each other in personality and policy prescriptions for America’s future. What is missed, however, are all the common premises that bind these candidates together.
Listen to either Republicans or Democrats, “liberals” or “conservatives,” and what one discovers with a little bit of reflection is the degree to which most of them accept and believe in the same type of “activist” role for government in human affairs. They merely differ on the type and degree of such government intervention, regulation, control and redistribution.
With the Democratic Party candidates for president, this is fairly clear and obvious. Watching or reading the campaign stump speeches of Hillary Clinton or Bernie Sanders, it is easy to wonder if they have ever met a government interventionist program they did not like.
On the Republican side, the intensity of the support for or dislike of Donald Trump has made this a little less clear. The debate and disagreement has primarily focused on Trump’s abrasive personality, his evasion of detail about either domestic or foreign policy, his use of colorful “off-color” language, and his less than subtle support for “roughing up” and “punching out” anti-Trump demonstrators, and his threats of possible “riots” by his followers if he does not win the Republican nomination for the presidency, even if he has not won a majority of the convention delegates in the primaries.
The “Sacred Cow” of Social Security vs. Personal Liberty
But over a significant number of public policy issues, the differences in views among the candidates are often more a matter of degree than of kind. For instance, on Social Security, and not surprisingly, both Hillary Clinton and Bernie Sanders are insistent on the preservation and perpetuation of the government mandated retirement program. Sanders has blindly presumed that nothing is fundamentally wrong with the funding and coverage of the Social Security system, other than guaranteeing that it stays and is reinforced and increased, while Clinton has admitted that demographics may require some tweaking of the system while basically leaving it intact.
On the Republican side, it is not that much different. Trump assures the voters that he will change nothing in terms of Social Security eligibility, coverage or payments. He will make sure that America “wins,” is “strong” and has the wealth to maintain the system. End of story. Just trust him. He knows how to “make deals.”
John Kasich also wants the U.S. government to keep its promises to the American people, with few changes to the Social Security system. He reminds us – unendingly over and over again – that as governor of Ohio he has grown jobs, increased production, balanced the budget and taken care of the needy, and known how to bring people together. Put him in the White House and he’ll do the same in Washington to save Social Security for the current and future generations. You can trust him, he’s the “fix-it man.”
Ted Cruz has emphasized that Social Security is in financial trouble because of the demographics of an aging population. But, he too, has insisted that a government Social Security system is an essential part of American society. He wants to partly privatize the funding of the system, while continuing to presume a guiding hand of the government in the retirement planning of the American people.
The friend of freedom would ask, what is government doing in the retirement business in the first place? There is nothing in the Constitution that gives the federal government the responsibility or authority to mandate compulsory participation or funding of such a Social Security scheme. And it is worth recalling that before eighty years ago, it was not Uncle Sam’s job to oversee the financing of people’s “golden” post-work years.
Before 1935, this was considered to be the responsibility of individuals, families and private charities, along with some local community funding. It was argued that part of the meaning of freedom was the right of the individual to plan the affairs of his own life and that of his family. Just as the individual was expected, under liberty, to make his own choices on the allocation of his income among alternative uses in the present, the same applied on deciding on spending his income in the present versus setting aside a portion of it as savings for his and his family’s needs and desires in the future.
The fact is, any candidate who fully believed in and advocated individual liberty and constitutionally limited government would be attempting to explain and persuade the voting public that a government-funded pension plan through intergenerational redistribution is not only unconstitutional and inconsistent with the type of personal freedom promulgated by the Founding Fathers in the Declaration of Independence, but is, pragmatically, rapidly reaching its financial end due to an aging population and a shrinking workforce to fund Social Security.
Such a candidate would be making the case for the end of Social Security and in some manner that would do justice to the older segment of the American population who have been compelled to pay into a system that made it, as a result, more difficult or impossible to plan for their own retirement years. But which closed the chapter on government and the pension business. (See my article, “There is No Social Security Santa Claus.”)
Freedom Means Ending Government-Funded Healthcare
The same applies to government involvement and responsibility for the health care and medical insurance of the American people. Hillary Clinton and Bernie Sander merely argue over an immediate government single-payer system of socialized medicine versus an easing into it as budgetary revenues and costs permit an end to any predominantly privately provided health insurance and medical care.
Among the Republicans, there is a general insistence that ObamaCare should be repealed, but there is no call for the removal of government from the health care and insurance business, as a whole. Medicare and Medicaid are generally considered essential among Uncle Sam’s grab bag of duties and responsibilities.
The fact is virtually all the problems associated with people’s frustration with health care premiums and coverage has its origin with the extent to which government has intervened in and interfered with the health care industry in America. The problem has not been too little government in medical care, but far too much over the decades, which has stymied competition, fixed and manipulated prices for medical services, and narrowed the choices and options available to people compared to what a truly free market healthcare industry could have provided to the population.
A candidate interested in fostering a free market system in healthcare and insurance would be educating the voters on how and why eliminating government control and involvement is essential to moving America forward towards a vibrant, innovative and affordable totally private sector medical industry for the current generation and looking ahead for the rest of this century. Alas, none of the candidates for the presidency in the current election cycle have even come close to doing so. (See my article, “For Healthcare the Best Government Plan is No Plan.”)
Besides the Social Security system and government-funded health care and insurance being taken for granted to one degree of anther by all presidential candidates this year, there is also the acceptance that some form of the welfare state is compatible with and complementary to a free society.
The Welfare State Undermines Incentives and Balanced Production
But, in fact, the welfare state is an arrow in the heart of a truly free society that is respectful of individual choice and is based on the rights of individuals to manage their own lives as they freely decide in peaceful and mutually beneficial association with others.
The presumption is often made that a free society can successfully function with a market economy that “delivers the goods” while having the government siphon off large portions of the income and wealth generated through the production and productivity of that economy for purposes of redistributive largess guiding by some notion of “social justice.”
This reasoning presumes that the resulting production is independent of the incentives that make the members of society have a motive for work, saving and investment. All of us know that the higher (lower) the price of something the less (more) people are willing to buy of it, and the lower (higher) the price of something the less (more) people are willing to supply it. Why should we presume this is any different concerning goods and services that government supplies to people for “free” or below market price, or concerning people’s willingness to work to earn income the more they are taxed.
Make something relatively free or inexpensive compared to a market price that covers the actual costs of supplying it, and the demand will swell and overwhelm the available supply. Tax people more and more at higher and higher rates to pay for below market price “free” goods, and the incentive to keep producing and earning is increasingly undermined. Demand outruns supply and supply fails to grow to keep up with the demand.
But even beyond these important and crucial distortions and imbalances between supply and demand the more the government offers desired “goodies” for “free” and undermines the incentives and abilities for production to provide the required supplies, there is a wider moral dimension to a growing and encompassing welfare state.
The Paternalistic State Creates Childlike Citizens
The welfare state denies individuals the right to have the liberty to make such decisions for themselves. Every step further in this direction reduces people’s self-determination over their own lives, chips away at one more aspect and corner of the person’s life over which they have diminished responsibility and autonomy to be self-governing. They become, one step at a time, a bit more of the ward of the state.
This threatens another central element that is part of being a truly free person: the cultivation and exercise of moral choice. A child is one who is considered not sufficiently developed psychologically and morally to fully make its own choices and decisions. Parents serve as guardians to care for their young and educate them as they grow up in learning the meaning of responsible decision-making, to think before your leap, to consider tomorrow before you make a choice today, and to ask what is the ethical things to do concerning my own life and in my interactions with others?
The more government takes responsibility over these aspect of human life, and the more the political authority asserts the obligation to handle “social problems” that concern the mutual affairs of individuals in society, then the less people develop the experience, maturity or appreciation for what it means to think about and act upon such corners of life and human association. (See my article, “A World Without the Welfare State.”)
Political paternalism through the redistributive welfare state brings about a permanently infantilized population. Government protected or supported employments, government subsidized levels of income and revenues, and government guaranteed social “safety nets,” result in the creation of an increasingly childlike population.
More and more people want more and more things for “free,” and they want it “now.” They want to be sheltered from “hurtful” or “uncomfortable” situations or choices. They come to expect politically provided security and protection over all the everyday affairs of ordinary life. They lose the capacity to think and act as free men and women. They take for granted and long for the political shepherd who oversees and takes care of the human sheep.
“Fair Trade” is Politically Managed and Manipulated Trade
Also look at the policy positions taken by both Democrats and Republicans running for the presidency on America’s place and role in the world. Both Hillary Clinton and Bernie Sanders rant about how international trade can be and has been detrimental to American jobs and industry, promising to redress the unfair trade practices of other nations.
On the Republican side, Donald Trump wails about how America is being robbed, beaten up and abused by the trade policies of other nations. And while the other Republicans who have been running in the primaries over the last half year have given lip service to free trade, they, too, to varying degrees have assured the voters that “free trade” must be tempered by “fair trade.”
The friend of freedom, since the time of Adam Smith, has emphasized that the benefits from trade do not come from what we export but from what the sale of our exports enable us to import. We trade with our immediate neighbors or with others half way around the world because it enables each of us to obtain from our exchange partners goods and services that we would not be able to produce for ourselves, or which we could not produce with as a high quality or at a similar low cost.
It is the division of labor and specialization of production that domestic and foreign trade facilitates and encourages that has given us and continues to provide the existing and continually rising standards and qualities of life that we take for granted.
Yet, listening to the rhetoric and policy proposals from both the Democratic and Republican competitors in the presidential primaries, we are being abused and misused by our trading partners. Nothing could be further from the truth. Even when other governments subsidize the exports of their own nations goods to the U.S., they, in fact, give the American consumer more goods at lower prices than would be otherwise the case.
It should be the citizens of those foreign governments who should be complaining because it is their higher taxes that are making it possible for American consumers to buy desired goods at below cost prices. And it frees up American producers to manufacture and supply others goods that Americans could not, otherwise, afford to demand and buy if not for the lower-cost foreign imports. (See my article, ”Global Free Trade Makes for Mutual Prosperity and World Peace.”)
In addition, to the extent that government takes on the role of arbiter over the buying and selling of goods between the citizens of its own country and the rest of the world, the promised “fair trade” becomes the politically corrupted trade. Rather than global competitive forces of supply and demand determining the types and direction of production to satisfy the world’s consumers, it becomes influential special interest groups close to those in political authority who have it in their power to raise import taxes or impose regulations that hamper the market-determined patterns of production and sales to improve the lives of people in their own lands and in other corners of the world.
An Interventionist Mindset in Foreign Affairs
The interventionist mindset applies across the party lines in foreign affairs, in general. The friend of freedom has always argued that if government has any rationale it is to protect the life, liberty and honestly acquired property of the citizenry. For that reason the essential task of constitutionally limited government is to secure a country’s citizens from domestic threats through the use of the constabulary and the courts; and to protect the population from foreign threats of invasion and destruction from abroad through national defense.
But Hillary Clinton has been ready to intervention in foreign countries involving little or no threat to the United States both when she was a Senator from New York or Secretary of State in the Obama Administration. And while Bernie Sanders has been highly critical of the wars in Afghanistan and Iraq, he has demonstrated a love affair with Marxist and other socialist regimes around the world; a President Sanders most likely would be very willing to provide American diplomatic and economic support to radical regimes devoted to the demise of capitalism.
Among the Republicans, Donald Trump has criticized the invasion of Iraq, but has assured a rapid and devastating military attack on Islamic fundamentalists in Syria and Iraq, including thousands of American ground forces to do the job, as well as unleashing torture techniques on suspected terrorists and their families.
The other Republican hopefuls pursuing their party’s nomination for the presidency have also, to varying degrees, all called for a continuation and intensifying of such military intervention to set right parts of the Middle East.
Thus, across party lines, there is a common presumption that America must play an “active” and military hands-on presence in many parts of the world that can be very inconsistent with practicing a policy of liberty at home and abroad. (See my article, “Practicing the Principles of Non-Intervention – at Home and Abroad.”)
The task of the informed citizen and the friend of freedom is to cut through the political confusion and rhetorical combat in the current election cycle, and to realize that no matter what the outcome of this year’s election, there is little cause for confidence that liberty will be victorious or advancing, due to the all too common interventionist and statist premises that underlie the policy positions offered by all the candidates.