- The Centenary of Ludwig von Mises’s Critique of Socialism - June 9, 2022
- In the Beginning: The Mont Pelerin Society, 1947 - May 19, 2022
- Political Paternalism, Not Free Markets, Cause Economic Shocks - May 9, 2022
Much of the news and social media chatter following the vice-presidential debate on October 7, 2020 seemed to focus on two events during the 90-minute exchange: Kamala Harris’s unwillingness to say whether she and Joe Biden would or would not try to “pack” the Supreme Court with justices to assure voting majorities for “their side,” and the dark colored fly that attached itself to Mike Pence’s white hair and distracted everyone from anything he tried to say.
Soon after the debate, Democratic Party presidential candidate Joe Biden, hedged his answer about packing the Supreme Court by saying that voters “don’t deserve to know” until after the election. That is, he would inform the American public whether he intends to try to rig the highest court in the land only after he finds out whether the Republican-controlled Senate had or had not approved Amy Coney Barrett, Trump’s nominee for the Court, following his own win for the White House.
As for Mike Pence, well, he did not insult his vice-presidential opponent or give her a demeaning nickname; instead, he was polite and mostly courteous, while emphasizing that Ms. Harris was a facilitator of lies and distortions and misrepresentations, about which he was mostly right, especially about Abraham Lincoln and the Supreme Court in 1864.
Both Biden and Trump Have Big Plans for You
All the opinion polls suggested that the VP debate did little or nothing to change voter decisions, other than that those voters who watched the debate felt that Harris came across as more honest than Pence, but that majorities found both of them “cold” and unattractive as personalities. Neither seemed warm and cuddly.
So, what really stood out in the vice-presidential debate that said something meaningful, not just about this election but the political times in general in which we live? That both the Trump-Pence and Biden-Harris teams have Big Plans to run your life.
Kamala Harris was especially clear and direct about this. I must confess, I did not go back to count how many times she did it, but time and again she looked into the camera and promised the American people that Joe Biden had a plan to solve the coronavirus pandemic, a plan to cover all your health care needs, a plan to protect your Social Security, a plan to supply “free” higher education to all, a plan to save the planet from the climate changing, a plan for social and racial justice, a plan for infrastructure repair; well, a plan, seemingly, for everything around and in your life.
It is true that once or twice, Mike Pence attempted to brand Harris with the “socialist” label, particularly about such things as the imposing of a Green New Deal upon the country and the deleterious effects that would result. But it did not resonate, if for no other reason than that people expect politicians to offer them “plans” to solve the problems of the world, and, therefore, the word “socialism” no longer carries for a growing number (particularly among younger age groups) the negative connotations and fear that it once did.
Trump’s Big Plans to Keep America Great
Besides, it is hard to see the “dime’s worth of difference,” between the Democrats and the Republicans when Pence proceeded, time after time, to assure people of all of Trump’s beautiful and great plans for America. Donald Trump will see to it that everyone has access to the soon-to-be available vaccines to defeat the coronavirus, since he is working with the pharmaceutical companies to make sure that they provide it more or less for free to people everywhere; and don’t worry, the U.S. military are experts at “logistics” and will transport and distribute it all around America in no time as soon as it’s ready to be loaded on military transportation vehicles, in traditional central planning fashion.
Trump will also see to it that your health care pre-conditions are covered by medical insurance; and will keep creating more jobs through trade protectionism and various interventions to nudge American business into the directions that the president knows to be best for the country’s economic well-being. But most of all, don’t forget that President Trump has successfully planned and navigated America’s path through the coronavirus crisis, something that not only critics but even a good number of his admirers do not believe to be true.
It is true that Pence did mention that during Trump’s tenure in office, a variety of taxes have been lowered, a noticeable number of regulations have been eliminated or reduced from hampering private enterprise, and that the economic greatness of America comes from private sector innovation. But all that sounded like hackneyed talking points expected from Republicans that rang hollow and irrelevant. It fell flat especially since the wider message presented by Pence was that Trump cares about and has trust in the American people, something very few voters believe to be the case according to almost every public opinion survey.
Let’s be honest. Even if a voter believes that, all things considered, a second term for Trump is better than a Biden Administration, he needs all the help that the Fox and ION news networks can give him to reach that comforting “message” through the Trump medium of Twitter and his other modes of communications. Some White House insiders have recently argued that there is a thought-out method behind all of Trump’s apparent Twitter madness, but if there is, the seeming madness drowns out the message in the method for a good many people around the country.
Hey, Big Spenders, Spend a Little Time with Me
At the same time, over what is Trump arguing with House Speaker Nancy Pelosi, concerning a new federal funded “stimulus” package of government spending? Not whether the federal government has the Constitutional authority to deal with pandemics and should spend money in this way, but how big the spending bill should be. Trump wants a “mere” $1.8 trillion of more such spending, while Pelosi and the House Democrats insist on at least $2.2 trillion.
Where either sum would come from is not mentioned. Just more deficit spending, one presumes, with all or a good portion of it, no doubt, monetized by the Federal Reserve. The Congressional Budget Office reported that the federal government ended its 2020 fiscal year on September 30th with a budget deficit of $3.1 trillion, three times larger than expected back in January of 2020. No reason, therefore, not to begin Uncle Sam’s new fiscal year that began on October 1st with a budget deficit of an additional $2 trillion right off the bat. As the old song says, “Hey, big spender, spend a little time with me!”
Both Trump and Pelosi seem to be implicit disciples of “Modern Monetary Theory,” (MMT) which argues that government can, in principle, finance all of its spending needs with budget deficits covered by new money created by the central bank. There are no deleterious effects, it is said, until real “full employment” is reached. Then, to prevent general price inflation, the government can impose and raise taxes to rein in the emerging general scarcity that is putting upward pressure on overall prices.
Of course, this modern monetary theory is merely the latest variation on an old theme, that printing money can create prosperity for all with no negative consequences. What is ignored is that monetary inflation is still a tax on the members of society, because all the resources and goods bought and used by the government with created-out-of-thin-air currency are so much of the people’s wealth that is siphoned off and away from being available and used by the private sector citizenry. So, a tax by any other name . . .
Part of the reasoning behind MMT is that as long as a country has its own currency, it can just print as much money as it wants. And as for any government debt held by the private sector or by the central bank, well, even more money can be created to pay off any and all debt owed to anyone, including to the government itself. This “modern” monetary theory is at least almost a century old, since it was John Maynard Keynes who said in his Tract of Monetary Reform (1923), that we should widen the monetary discretion of central banks, and not worry about short-run or other such concerns since, “In the long run, we are all dead.” (See my articles, “Why Government Deficits and Debt Do Matter” and “Debts and Deficits are Out of Control” and “America’s Fiscal Follies are Dangerously in the Red”.)
Wilhelm Röpke on the Psychology of Political Dependency
But this is indicative of the political ideology and psychology of our time. The psychology of the modern welfare state, about which all these political plans and promises necessarily revolve, was explained by German liberal economist, Wilhelm Röpke (1899-1966) in A Humane Economy (1957):
“The morally edifying character of a policy which robs Peter in order to pay Paul cannot be said to be immediately obvious. But it degenerates into an absurd two-way pumping of money when the state robs nearly everybody and pays nearly everybody, so that no one knows in the end whether he has gained or lost in the game . . .
“It is true, of course, that people do not always realize that when they turn to the state for the fulfillment of their wishes that their claims can be satisfied only at the expense of others. We have met the underlying sophism before. It rests on the habit of regarding the state as a kind of fourth dimension, without stopping to think that its till has to be filled by the taxpayers as a whole. A money claim on the state is always an indirect claim on somebody else . . . it is a mere transfer of purchasing power through the medium of the state and its compulsory powers. It is astonishing for how long this natural and simple fact can be obscured by the modern welfare state.” (p. 165)
In our own time, this has been captured by the mindset of the Entitlement State, in which access to other people’s money and wealth has been rationalized and legitimized as a “human right” to any and all things considered necessary or desirable for a dignified and deserving life. That one person’s entitlement has its other side of an imposed obligation on some other(s) to produce and provide the monetary and real resources needed to have possession of such wanted things, often gets lost in the translation to reality. It is Röpke’s “fourth dimension” that either presumes it comes from simply “somewhere” via the government, or is justified as a legitimate “taking” from others because those who have those financial and other means waiting to be redistributed do not have a justifiable right to them, since how can anyone be really that “rich” unless they have somehow stolen from or oppressed others?
The Individual Free From or Subservient to the State
And that gets to the ideology of our time, regardless of the political party label of the person running for high or low government office. This ideology is premised on political paternalism, under which the government is expected to protect, plan and provide for all the members of society, with what those in political authority deem and decide all the citizens deserve. The individual is not viewed as a self-determining and self-guiding human being. He or she is “white” or “black” or “Hispanic;” he or she is “male” or “female” and any one of a number of genders now considered to be somewhere in between; he or she is “rich” or “poor;” “oppressed” or “oppressing.”
But however the categorization, the individuals, in whose name those in political power are undertaking this paternalism, are reduced to the subjects of those administering the regulations and redistributions. Saying that it is to assure “social justice” for all implicitly means that everyone must conform to the status assigned to them in society by that government; otherwise the plans for planetary social perfection cannot be imposed and implemented.
The paternalist state is merely the latest incarnation of one of the two ways to ultimately think about man and society. The other has been the liberal idea and ideal of individual liberty, free association, and constitutionally limited government. This was articulated clearly by the Austrian-American classical liberal-oriented historian, Hans Kohn (1891-1971) in Revolutions and Dictatorships (1939):
“Throughout history we find two fundamental attitudes concerning the relationship between the individual and the state. One attitude puts the state above the individual, the individual depends for the full realization of his faculties upon the state before whose authority he bows and to whose ends he is subservient. The other attitude regards men not as the object, but as the subject of the state. The state is no end in itself, but a means for the self-realization of the individual, to the transformation of the society of men into a really human society.
“The first attitude is represented by the authoritarian, the second attitude by the democratic form of state . . . [Liberal] democracy is based upon two fundamental concepts: the liberty and the equality of individuals . . . This recognition of the equal rights of one’s fellows creates in democracies a spirit of mutual tolerance . . . These [anti-liberal democratic] forces and interests set against the principle of liberty the principle of authority, against the equality of democracy the fundamental inequality of aristocracy, whether based on birth, wealth, race or creed. They proclaim generally the priority and superiority of the state over the individual . . .
“[Liberal] democracy has not always lived up to its own promises. There have been attempts to reserve its blessings to privileged classes or privileged races. But these shortcomings are not surprising; democracy has had barely more than a century [in 1939] in which to develop. Its main task is still ahead; the enlargement of all that it implies, liberty and equality, dignity and happiness for all individuals.” (pp. 211; 214; 223)
America’s Place in Preaching and Practicing Liberty
This spirit of individual liberty, equal rights before the law, and confidence in reason to better humankind through freedom of association were the foundations of the American experience. In another of his books, The Twentieth Century: A Mid-Way Account of the Western World (1949), Hans Kohn summarized this meaning of America:
“The United States is in an especially fortunate position. It was born as a nation in the 18th century, in the age of rationalism and enlightenment, and it could build its political life on the foundations of English constitutional liberty in a country where the influences of court, aristocracy, and established church were weak. The very fact that the people of America are immigrants coming from many different countries, from diverse racial stocks – and finding in the United States a common promised land of a freedom unknown in the home countries – leads to an emphasis on a rational future common to all of them and to settlements by compromise and accommodation . . .
For what the United States succeeded in doing was one of the major accomplishments in history: to imbue millions of men of various and conflicting backgrounds of civilization with the traditional English concept of liberty under law and thus to broaden it from an English heritage into a universal message and force.” (pp. 32-33)
As Hans Kohn also pointed out in a number of his other writings, in America liberty meant self-reliance, the mutual benefits of commerce and industry, a forward-looking confidence in an improvement of the conditions of life for a growing number. It also included a firm belief that government, however much it might be necessary to secure the life, liberty and pursuit of happiness of each man from the predation of other men, always had to be held to a degree of suspicion and doubt, since it represented a powerful threat to the very freedom that a government was meant to protect.
This is the America that has been and is being increasingly lost. Where is liberty when each politician runs for office explaining how, if elected, he will introduce new or expanded encroachments on the freedom that remains with increased cradle-to-grave government guarantees? What remains of personal responsibility when the ordinary affairs of everyday life are more and more removed from the control and determination of people themselves, as government “plans” replace individual choice and decision-making?
How is there dignified respect for each member of the society when everyone is drained of his humanness as a distinct individual by being increasingly classified and controlled on the basis of the race, gender, or social “class” to which the political paternalists in their higher wisdom decide each of us, respectively, belongs, and which determines our life opportunities as more of everything around us is determined by governmental command and compulsion?
In such a setting, is it surprising that all those who offer themselves for elected high political office center their campaigns on the Plans (with that capital “P”) that they are offering to the citizens who are to be the social and economic captives of those they place in political positions of power?
So, rather than wondering on what rationale political candidates such as Kamala Harris and Mike Pence, or Joe Biden and Donald Trump can have the audacity to offer themselves for any election consideration, since they insist that they need our votes so they can then lord over us according to their political prerogatives and caprices, we, instead, express our chagrin that Biden and Harris won’t say if they will pack the court if and when they are elected, and we show focused amusement that a fly takes a rest in Pence’s hair even as he reassures us that Trump is in planful control of our lives in the trying times of a pandemic.
[Originally posted on American Institute for Economic Research (AIER)]