- Paul Krugman’s Ad Hominem Defense of Central Banking - August 4, 2020
- Gold and Free Banking Versus Central Banking - July 28, 2020
- “Systemic Racism” Theory is the New Political Tribalism - July 21, 2020
An old adage says that tragedies often come in threes. Certainly, the first half of 2020 has seen a version of this. First, the coronavirus that has infected millions of people and killed hundreds of thousands. Second, the response by most governments to the virus by commanding near universal business lockdowns and stay-at-homes that have wrecked economic havoc on the world economy. And, third, the horrific killing of George Floyd, an unarmed and handcuffed black man in Minneapolis by a policeman, that has served as the catalyst for demonstrations against police abuse and charges of racism all around the world.
They are tragedies that, for the most part, have been man-made. Yes, the coronavirus has been a “force of nature,” though the verdict is still out on the actual origin of the virus and how it first entered the general population in Wuhan, China and then began to spread from one continent to another. But what has become fairly clear is the “human factor” in analyzing and forecasting its likely impact on the world population, which, in turn, highly influenced government responses to it.
Human “Error” in the Coronavirus Projections
British Professor Neil Ferguson of the Imperial College in London, and a member of the Scientific Advisory Group for Emergencies (SAGE), offered modeling projections about the likely spread and effect of the virus on the world population that greatly influenced the British and many other governments’ decisions to order business shutdowns and stay-at-home “social distancing” lockdowns. Partly because of this advice, much of the world’s social and economic life came to a halt.
The only problem, it turned out, was that access to much of the basic data upon which he made his forecast was not readily available to other researchers, could not be easily replicated by other qualified scientists, and worked on the bizarre assumption that there would be little or no human reactive response to the dangers from the virus unless government command and control methods were introduced. Ferguson had to resign from most of his positions when it came to public light in early May that he had violated the very stay-at-home rules he advocated to have a tryst with his lover. His own poor role-modeling was added to his other modeling errors.
There is absolutely no doubt that the coronavirus confronts the world with a serious health problem due to the contagiousness of the virus, especially for those in older age categories and with a number of pre-conditions that lower their immune systems in various ways. The virus has also impacted disproportionately certain racial and ethnic groups, the full reasons and causes of which have not as yet been satisfactorily determined. I personally know people who have come down with the virus and seem to have successfully survived it, and people whose relatives have died from it, and not in the most pleasant ways.
Central Command and Control Has Wrecked Economic Havoc
But once it was clear that the coronavirus was a serious health matter, the issue then arose about what should be the role of government. We live in a world in which the first response to almost any social or economic problem or “crisis” is to immediately turn to the government for solutions and directing leadership. So, and not too surprisingly, the “answer” from governments have been nearly all one-size-fits-all central planning policies.
The results have been disastrous. Depending upon the projection, global economic growth for all of 2020 may end up declining anywhere between 2.2 percent to more than 8 percent. The volume of world trade for the year may decline somewhere between 13 percent to 32 percent. In the first quarter of 2020, aggregate working hours around the world decreased by 4.5 percent and may be down an additional 10.5 percent by the end of the second quarter of 2020.
Here in the United States, unemployment reached a high of 14.7 percent in April 2020, and declined to 13.3 percent in May, according to the Bureau of Labor Statistics’ (BLS) monthly Employment Situation Report (June 5, 2020). According to the BLS’s wider U-6 measure of unemployment (which also includes discouraged workers, those working part-time wanting full-time employment, and those marginally attached to the workforce), unemployment was 22.8 percent in April and 21.2 percent in May.
The hardest hit by falling employment were the young. For men, in general, 16 year or older, unemployment was 13.5 in April and 12.2 in May. But for males between 16 and 19 years old, unemployment for April and May, respectively, was 27.6 percent and 28.6 percent. For men 25 years or older the April and May unemployment numbers, respectively were 12.1 percent and 10.5 percent.
For women 16 years or older, the April unemployment number was 16. 2 percent and 14.5 percent in May. For women between 16 and 19 years old, the numbers, respectively, for April and May were 36.6 percent and 31.3 percent. For females 25 years and older, unemployment for April was 14.2 and 12.8 percent in May.
For black Americans, for both April and May unemployment was between 16.7 and 16.8 percent. This more or less applied for both male and female black Americans during both months. The unemployment rate was noticeably high for those classified as Hispanic or Latino, with unemployment rates in April and May, respectively, at 18.9 percent and 17. 6 percent. While for Hispanic men the unemployment rates were 16.7 percent and 15.1 percent, respectively, in April and May, for Hispanic females, the unemployment rate in April was 20.2 percent and for May, 19 percent. Asian-American unemployment in April and May of 2020 was, respectively, 14.5 and 15 percent.
According to the Congressional Budget Office (CBO), in its Interim Economic Projection Report for 2020 and 2021(May 19,2020), Gross Domestic Product (GDP) declined at an annualized rate of 4.8 percent in the first quarter of 2020, and is projected to possibly decrease at an annualized rate of more than 37 percent during the second quarter. GDP is projected to increase at annualized rates during the third and fourth quarters of the year of 21.5 percent and 10.4 percent, respectively, but still down for 2020 as a whole by 5.6 percent. In 2021, the CBO anticipates, GDP will grow by 4.2 percent. But it should be kept in mind that CBO forecasts and projections are often notorious off the mark.
The Economic Disaster Rests at the Government Door
No doubt the U.S. economy would have taken a “hit” in terms of output and employment even if the government had done “nothing,” due to the impact of the coronavirus. Yet the magnitude and depth of what has actually been experienced in declines in production and rises in unemployment have one and only one primary and singular source: the federal and especially state government-ordered shutdowns across the country.
If the political authorities command the stoppage or radical reduction in lines of production viewed by them as “unessential;” if they decree which retail businesses must close their doors or reduce their activities and are told what they may sell and during what times of the day; and if they dictate that tens of millions of ordinary citizens may not go to work or shop for anything not considered “essential” by the politicians and bureaucrats, the economy as a whole cannot do anything except go into the catastrophic tailspin that we have witnessed.
Most of the political pundits and economic policy know-it-alls were surprised and “shocked” when those May 2020 employment numbers were released by the BLS in early June and showed that 2.5 million jobs had returned in May once state governments began to at least partly release the almost blanket restrictions on private sector economic activity. What? Jobs can be created and exist without government command, control and direction? How can that be? We “know” that private enterprise does not work, don’t we? Some even wondered if Donald Trump had tampered with the numbers at the BLS to make the impression of “fake” jobs.
Some of those same state governments also have on their hands the deaths of many of those who have died from the coronavirus as well as from other possibly treatable illnesses due to the way those politically in charge micro-mismanaged instructions and use of retirement and old-age care facilities, and the decisions on what other serious ailments had to be put on hold in terms of hospital visits and surgical operations. All because “government knew best” how to prepare for the expected number of cases due to the virus; projections and restrictions that have done great harm to many caught in the web of bureaucratic decisions, who might have been saved or treated sooner.
Political Paternalists Reject Markets and Civil Society
The idea that “society” – which means all of us as interacting and interdependent individual human beings – might be able to deal with the coronavirus crisis with little or no government involvement or interference has failed to even enter into almost any of the discussions and debates. But there was a time when it was generally assumed and taken for granted that answers to social problems were better left in the arenas of market supply and demand and the institutions of voluntary civil society.
In the 1970s, the noted American sociologist, Robert Nisbet (1913-1996), analyzed the Twilight of Authority (1975). Historically and culturally, “authority” referred to the voluntarily won and recognized and respected possession of useful and valued knowledge, experience, and trust on the basis of which others in society deferred to a particular person’s judgment and wisdom. Human associations and authorities were local, voluntary, mutually assisting, and supporting. They are the essential and central elements to the spontaneous order of a free society.
Governments especially in the 20th century, Nisbet argued, increasingly replaced civil society and its associations of voluntary authority and collaborative assistance in everyday affairs, as well as in times of hardship and emergency. The real and proper meaning of “community” in the voluntary, associative and market-based sense, has been replaced with political command and control, Nisbet explained.
We are, Nisbet warned, “prisoners in the House of Politics”:
“Of all the consequences of the steady politicization of our social order, of the unending centralization of political power . . . the greatest in many ways is the weakening and disappearance of traditions in which authority and liberty alike are anchored . . .
“Of all the needs in this age the greatest is, I think, a recovery of the social, with its implication of the diversity of social membership, that in fact exists in human behavior, and the liberation of the idea of the social from the political . . . Crucial are the voluntary groups and associations. It is the element of the spontaneous, of untrammeled, unforced volition, that is undoubtedly vital to creative relationships among individuals . . .
“Voluntary associations have an importance well beyond what they do directly for their individual members. Most of the functions which are today lodged either in the state or in great formal organizations came into existence in the first place in the context of largely voluntary association. This is true of mutual aid in all its forms – education, socialization, social security, recreation, and the like . . . It is in the context of such [voluntary] association, in short, that most steps in social progress have taken place.” (pp. 241 & 270-271)
How much different and better, in my opinion, would be the world, including American society, if government was limited to its essential responsibilities of protecting each individual’s right to his life, liberty, and honestly acquired property from domestic thieves and foreign aggressors directly threatening or attacking American territory and lives.
Customs and Traditions Enable Social Order and Creative Opportunity
Nisbet added that, “Pluralist society is free society exactly in proportion to its ability to protect as large a domain as possible that is governed by the informal, spontaneous, custom-derived and tradition-sanctioned habits of the mind rather than by the dictates, however, rationalized, by government and judiciary.”
Yes, custom and tradition can be burdensome and may even seem “oppressive” to the “free thinker” and to the peaceful eccentric and “Bohemian.” But all custom and tradition really mean are the rules of interpersonal conduct and judgment that have emerged and evolved over the generations to establish non-coercive but influential procedures and standards for purposes of harmonious human cooperation and association and personal conduct.
And as disagreeable as some customs and traditions may sometimes seem, they can be ignored, disagreed with, and challenged, even if, sometimes, there are personal costs of going against the socially taken for granted and “expected.” But these can be far lower costs, in the longer run, than having to go against the coercively imposed and dictated commands and controls of government and its agents.
The voluntary institutions of civil society, both inside and outside of the marketplace, offer the adaptive and creative avenues to set to work as many minds as possible to solve the problems confronting society, including pandemics, rather than restricting the possible to what the minds of those in political positions of authority can image or appreciate. (See my articles, “To Kill Markets is the Worst Possible Plan” and “Leaving People Alone is the Best Way to Beat the Coronavirus”.)
The Murder of George Floyd and Police Abuse
And in a way, this gets us to the third of these recent tragedies, the murder of George Floyd and the public responses to it. On May 25, 2020, a store owner in Minneapolis, Minnesota called the police when he suspected that Mr. Floyd, a 46-year-old black man tried to pass what the owner believed was a counterfeit $20 bill. After Mr. Floyd had been gotten on the ground, in handcuffs behind his back, a police officer proceeded to press his knee on his neck for almost nine minutes, during which Mr. Floyd repeatedly said he could not breathe and asked not to be killed.
Pleas by bystanders who were videotaping the incident for the officer to take the pressure off his neck was to no avail, nor did other police officers directly nearby attempt to intervene. He was pronounced dead after finally arriving at a hospital.
This event has set off a huge response both in the United States and many other parts of the world, where mass demonstrations, mostly peaceful and some violent and destructive, against perceived police abuses of those arrested and taken into custody. Demands have been made for changes in police procedures concerning various methods of subduing a suspect and to restrict or abolish the partial immunity that law enforcement agents have against civil or criminal cases concerning their conduct in their professional duties.
All of these would, no doubt, be all to the good. It will remind police officers, who may have a tendency to forget with their legal authority to use force against members of the citizenry, that they are servants and not masters. Rule of law means no one, including police representatives of government, are above or outside the law and its procedures and restraints, which are meant to assure that everyone in society is secure from arbitrary and unwarranted abuses of their persons or property.
Ending Police Militarization, Asset Forfeiture, and the Drug War
Some have also called for reducing police department budgets as a way of choking off the funds that are potentially misused in law enforcement activities. In my view, one way of making some of those funds unnecessary is to end the frequent sale of surplus military equipment to local police forces. This psychologically and sometimes in practice “militarizes” what is meant to be civil techniques of policing and law enforcement.
Another law enforcement tool that should be abolished is asset forfeiture practices that enable the police on very often arbitrary and unsubstantiated suspicions to seize on the spot cash money being carried by someone in their car who has been pulled over, or confiscating homes, bank accounts, and other real property with the accused not being presumed innocent until proven guilty. Indeed, the dispossessed finds himself having to prove his innocence through a labyrinth of costly legal procedures that give no guarantee that any or all of his money and other property will be returned, even if the courts find in his favor at the end of the day.
Also central to the frequency of misuses and abuses of law enforcement is the “war on drugs.” The criminalization of the growing, manufacture, and selling and buying of various substances considered “socially harmful” by government agencies has unjustifiably swelled the prison population, rationalized the abridgement of many people’s privacy, and created vast black market networks that spawn violence, corruption, and hypocrisy in respect for and obedience to the law.
We need to take to heart what the 19th century libertarian, Lysander Spooner (1808-1887) pointed out, that Vices are Not Crimes (1874). In a free society, when our friends, family members, or fellow citizens act in ways that we consider harmful or detrimental to themselves, the moral method of guiding them in better directions and ways of living is reason, persuasion, and the example of our own lives.
As Austrian economist Ludwig von Mises expressed it in Liberalism (1927): “A free man must be able to endure it when his fellow men act and live otherwise than he considers proper. He must free himself from the habit, just as soon as something does not please him, of calling for the police” (p. 33).
Some estimates say that nearly 50 percent of all those being held in federal prisons are there for drug-related offenses. If drug-criminalizing laws were repealed from the federal and state-level legal statutes, the dollar savings would be huge, policing budgets could be revised downwards, and it would radically reduce the frequency and types of police actions against members of society.
These types of legal and law enforcement reforms would dramatically transform the culture and practice of policing in the United States and would narrow the reasons and rationales for anyone to be of interest to and the target of police intervention into their lives. In other words, as Robert Nisbet said, we need to radically depoliticize as many corners of society as possible, by decriminalizing social life.
Racism in American History
But the demonstrations that have followed the murder of George Floyd are not focused only or even primarily on police abuses, in general. The drive behind them is the concern that many in society have about racist attitudes and actions against minorities and especially black Americans.
It should be obvious to anyone even vaguely familiar with U.S. history that the most egregious blight across the land well into the 19th century was the institution of slavery. Millions of human beings were transported from Africa to the Americas in the 17th and 18th and even into the 19th century to serve as slave labor. Stolen from their homelands, brutalized by the slave traders who were, themselves, Africans as well as Arabs and Europeans, they were transported by ship in despicable conditions, and then sold and set to work for life, and that of their children’s lives, at the arbitrary control and command of those who had bought them.
Even after the Civil War and the formal end to slavery through Constitutional Amendment, the black man rarely could consider this fully his rightful and recognized home. In the North, where slavery had been ended in the early years of the 19th century, the free black was far too often ostracized, shunned, and discriminated against in terms of work and opportunity.
Not long after the Reconstruction period and the withdrawal of Union troops from the Southern states, white-controlled Southern state governments introduced segregation laws that legally reduced blacks to politically, socially, and economically second- if not third-class citizens. Well past the middle of the 20th century, far too many Americans of African descent were treated as not being fully part of the country into which they had been born. The Jim Crow laws made that clear each and every day in humiliating ways, particularly in the South. (See my article, “George S. Schuyler, Anti-Racist Champion of Liberty”.)
America Has Come Along Way from Its Racist Past
While it is very far from politically correct to say it, 2020 is not 1920 or 1940 or 1960. There may be racial prejudices by individuals inside and outside the business world. Some white people may not look at black Americans with the same innocuousness in which they notice whether someone is blond, brunette or redhead. But to say or insist that the United States is the same racist society that it was fifty years ago, or seventy-five or a hundred years ago is to possess little or no historical knowledge or context.
I am old enough to remember seeing as a small boy the television news of dogs and water hoses being turned on civil rights demonstrators in Southern states to prevent equal rights before the law for blacks in that part of the country; of church bombings and freedom riders being killed.
I remember going to a movie theater in 1971 to see the movie “Shaft,” in which actor, Richard Roundtree, plays a black private detective who, oh, no! has a scene with a white woman in the shower. That was considered to be a “statement” at the time. Fast-forward to 2015 to 2018, when the television show “Scandal” aired on American television, starring black actress Kerry Washington, who has sexual affairs with two white men almost at the same time, and one of them is supposed to be president of the United States. The public reaction? A yawn. Except for a small minority of stupid and ignorant people, nobody cares about these things anymore. Or interracial marriage or if a black man is elected president of the United States.
The vast, vast majority of white people don’t care anymore who works next to them, or takes a swim in the same pool, or has dinner at the same restaurant or lunch counter or sits next to them at a sports event. Is America a “color-blind” society? Of course not. But America today, and most white people’s attitudes about black Americans, is light-years away from the 1950s or 1960s or 1970s or 1980s.
Identity Politics Creates Tribal Race Consciousness
I am white. I live among a lot of white people. I talk to white people of a variety of socio-economic backgrounds, educational levels, and social standings. Guess what? Except when brutal acts like the murder of George Floyd occur or the murdering of nine blacks in a church by a white racist like happened in Charleston, South Carolina in June 2015, for instance, the vast majority of whites do not express or verbalize any negative concerns about or thoughts on race and racial matters.
If anything, the large majority of whites attempt to be consciously open, differential, and supportive toward black Americans in various social and economic settings. Now this, in itself, of course, could be taken as a demonstration of a “race consciousness” among whites. But to the extent that this is the case, the question is, why?
If it exists, I would suggest, it does so for at least two reasons. First, the media, political groups, and “progressive” ideologues constantly and continuously insist that we must think along racial lines because America is presumed to be a racist society. So how can people not be pushed into thinking about each other in “black” and “white” terms when it is yelled in your ears that they are racist and have to be aware of your racism, even if they are not racist and you do all that you can as a person to treat and look upon others simply as individuals?
But what about those people who feel or believe that there is racism and racist behavior all around them? In my view, this shows how much of reality is really a state of mind. If someone thinks that a witch doctor pushing a pin into a doll will cause them pain, then, sometimes, the mind plays tricks and you can think you are experiencing pain seeing the pin pushed into the doll.
If every glance taken, if every word spoken, if every action made, if every event, near or far, is presumed to be inescapably embedded with racial and racist meaning, then you will consider everything in the world to be race and racist-based. When a Nazi in 1930s Germany considered that every “misfortune” suffered by the German people was caused by the Jews among them, and that the only way to overcome this was to “get rid of the Jews,” did that, in reality, make it so? But if enough people believe things that are objectively not correct or not connected, but act anyway upon their erroneous states of mind, bad things can happen.
If “race” is constantly pushed into people’s consciousness, if they are told that human beings are not individuals with various “accidents” of birth, but inescapable creatures of their racial and ethnic birth, defined and determined by their “tribal” origin, and that “politics” shall dictate their life chances and opportunities, what can it result in other than a “race consciousness” that runs counter to the very philosophical principles and ideals upon which the United States was founded? (See my article, “An ‘Identity Politics’ Victory Would Mean the End to Liberty”.)
Racial Consequences and the Interventionist-Welfare State
The second reason that race has been raised to the level of awareness in America has to do with the modern interventionist-welfare state. Again, in my view, it has been the role of government in racial policies that has prevented more of an improvement in the economic and social standing of black Americans.
In the 19th and a good part of the 20th centuries, white labor unions were notorious, in many instances, in using their strike threat power to exclude members of the black community from entering various segments of, especially, the skilled labor market.
At the same time, minimum wage laws have also worked to price many unskilled minority workers out of the labor market. It has legally prevented a member of a racial minority from making himself more attractive to a potential employer by offering himself at a wage (marginally) lower than, say, a white worker. This has limited the ability for market incentives to undermine and reduce racial discrimination in the marketplace over time.
Having been driven out of potential labor market opportunities due to minimum wage laws, government regulations of business have also often made it too costly for low income and relatively unskilled members of the black community to start their own private enterprises. As a consequence, it has made enterprise and employment in illegal black markets more attractive in some minority communities.
Locked away in government subsidized housing and dependent on government welfare payments and in-kind benefits, dealing in the illegal drug market has seemed to too many as a way to escape from poverty through the making of “easy money.” It has also resulted in a disproportionately high incarceration rate among young black men, who then have prison records that add to the difficulty of later finding their way into a better economic life.
In other words, the interventionist-welfare state has served as a mechanism – in spite of many, no doubt, with good intentions – to keep far too many in the black community separate and unequal. It serves the interests of too many in political power, especially, but not solely on “the left,” that segments of the population view themselves as victims who only government can help; people whose votes may be relied upon, since forms of redistributive largess comes from those members of the political class, but which continues to keep those segments of the black community in perpetual dependency.
The New Tribalism of Identity Politics
This has been reinforced, as I suggested, by the focus on “identity politics” by many on the political left. However imperfect in practice, the idea and ideal of America have been the uniqueness, dignity and respect for the individual, regardless of that person’s accidents of birth or country of origin. I consider this philosophic and political principle of individualism to be the source and the basis of all the advancements and improvements in American society, including for a growing number of those who are of African descent.
However, people are being forced back into a new tribalism and a new racial and ethnic collectivism in the public arena due to the renewed insistence on “group-think” that is reinforced by a variety of government policies. It has ended up compelling people to think about others and themselves not in terms of whom they are as individual human beings, but about what racial, ethnic or gender group they belong to and what politically bestowed benefits or disadvantages come with that collectivist classification.
What also stands out throughout the American experience is that in spite of these anti-individualist cultural trends and economic policies, there has endured enough of the American spirit of individualism and practice of free enterprise that has more than anything else succeeded in being the great and good force for reducing many of the racial animosities and tensions that may continue to linger in our society.
Do not get me wrong. The behavior of some police forces and some policemen around the country has been deplorable in terms of a disregard for a color-blind respect and enforcement of people’s rights in many black communities. The political left feeds off highlighting these egregious acts of abuse of police power. But their worldview is based and dependent on the belief and insistence that race relations are as bad as or even worse than in the “bad old days.”
This is flagrantly not the case by any reasonable historical standard. But the political left’s agenda and policies are helping to make us a far more race-conscious society once again, which can only bring with it serious negative consequences for American society as a whole. And the tragic events of George Floyd’s murder has only made this even worse.