Pillars of Prosperity
FREE MARKETS, HONEST MONEY, PRIVATE PROPERTY
The Economics of a Free Society
What is the solution?
Most importantly, a new attitude about the role of government is necessary if we expect to solve our problems. As long as we, as a nation, accept the notion that government is the ultimate provider and world policeman, implementing the elusive concept of liberty will be impossible. The degree to which governments are permitted to exert force over the people determines the extent to which individuals retain their liberty as well as the chances for peace and prosperity. Historically, governments have always initiated force against the people with disastrous results. America is the best example of what can happen if that force is restrained, thus maximizing individual freedom and prosperity. Yet today, that wonderful experiment is all but abandoned. We must once again clearly reject the idea that government force and threat of force can be carelessly administered.
Voluntary contracts must be permitted. The trend toward government dominance, interference, and altering of voluntary con- tracts is prevalent and a most dangerous sign. Responsibility to care for one’s self is necessary for a free society to function, and trust that individuals will look out for their own self-interest, even if imperfectly, is required and should be achieved through contractual arrangements. Government interference in voluntary agreements between two parties must be strictly prohibited. Enforcement of those contracts in event of a violation invites the government’s participation in settlement of the dispute. This limited involvement of government in voluntary contracts is necessary in a free society.
The strict limitation of government power imposed by the Constitution must be respected. We must accept the principle that government’s function is not to regulate and plan the economy, protect us from ourselves, arbitrarily attempt to make us better people, or police the world by interfering in the internal affairs of other nations. Its proper function in a free society is to protect liberty and provide for a common defense. When that proper role is assumed, our problems will vanish.
To bring about real changes, we first need to recognize that the politician, per se, is a lot less important than he appears. He is basically a puppet of public opinion that reflects the prevailing ideas of the intellectual and thought leaders. John Maynard Keynes, in one of his more lucid moments, said:
Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
Media opinion is critical in establishing popular views just as that same media may support or destroy certain political careers. Having accepted the philosophy of economic interventionism and political pragmatism, our society grants political knighthood to the highly paid lobbyists who represent the powerful special interests. But we must remember the lobbyists are the result, not the cause, of our problems. The politician is the puppet of the opinion makers.
Political success is the single goal that drives participants in our political system. No invitations to participants are sent to men of principle, upholders of equal rights, and defenders of the Constitution. Determined political aspirations under today’s circumstances are key to achieving a successful political career—the career being an end in itself. We must be aware that this system of politics is not conducive to bringing about changes necessary to solve our problems. The legislative and political intrigues that con- trol the system for the benefit of the special interests must one day come to an end if personal liberty is to be restored.
The resort to power to control people and the economy must be rejected. Also violence to bring changes beneficial to liberty serves no purpose (unless exerted in true defense under reprehensible conditions). The illicit use of power, even with noble intentions,
has created history’s dung heap of human misery. True change will come through persuasive intellectual influence. If the people refuse to listen, mere recording of significant movements in his- tory will be the limited result of the effort. Yet, not making the effort to persuade the thought leaders to accept freedom and total nonviolence of the state, guarantees that the perpetuation of organized force—the tyranny of the state—will flourish and the suffering will continue for all of us.
Ideas do count; all government action is a result of ideas. It’s incorrect to suggest that freedom ideas must be rejected because they are idealistic—the planned economy is also a result of an idea. It’s only a choice between good and bad ideas. The job of the true believer in liberty is to convince the majority of our leaders that free- dom ideas are superior to the ideas of government coercion. Never can we relax by hoping that the good intentions of the big govern- ment proponents will protect us from the evils of government power that intimidate us all. All politicians, from total statists—Marxists and Fascists—to average conservatives and liberals of today’s Congress, devoutly promise that all their actions are based on good intentions. But it doesn’t matter: Bad ideas regarding the nature and role of government breed bad results and suffering occurs nevertheless. Twisted logic, Machiavellian justifications, excuse making, and short-run benefits can never justify the removal of one iota of liberty from any one person if we intend to live in a free society.
Once the role of government is agreed upon, and government initiation of force is rejected as a legitimate function, the consequences will quickly occur—all positive.
Individuals will reclaim their moral and natural right to their lives and liberty as granted to them by the Creator. The state will be put in its proper place as the protector of equal rights, not the usurper. That in itself should be enough reason to institute a sys- tem of limited government, but the benefits go far beyond the moral justification of true liberty. Prosperity will abound and the chance for war will be greatly reduced.
If this is done, the welfare-warfare state is repealed and spending by the federal government reduced by 80 percent. Special interest politicians will not be served and will vanish. Lobbyists will become mere petitioners for liberty. The budget will be immediately balanced and the debt repaid. No more wealth will be transferred to the poor, the rich, the foreigner, the bankers, or arms manufacturers. Military spending will once again be used for defense and not for the domination of an unofficial American empire.
Money will be honest, the unit precisely defined, and its integrity guaranteed by government or by voluntary contracts. Counterfeiting privileges of the Fed will be abolished and rele- gated to notorious underground figures. Honest money will allow credit to be freely created in the market and not by the privileged banking cartel, yet controlled by the integrity of the market and the convertibility of the dollar. The economic benefits of low-long- term fixed interest rates will be welcomed by all, since credit can then fuel true long-term economic growth.
This scenario sounds utopian, yet it’s more practical than the ill effects of the planned society financed by fiat money and debt creation. It’s difficult to understand the persistence in following the impractical ideas of runaway government coercion.
The philosophy of the free market, sound money, private property ownership, and equal rights, offers the only real “compromise” to the impasse existing in Washington where only token attempts are made to cut the deficit. A truly practical approach to this dilemma can be immediately implemented. I suggest six points:
First, instead of debating forever over whether or not the cuts should be made in domestic welfare or military spending, the answer is simple: Cut both, and quit arguing—that is, if anyone is serious about his declared hostility toward massive deficits.
Second, all votes on spending should be tradeoffs. Welfare to the poor versus welfare to the rich; domestic aid versus foreign aid; aid to friends versus aid to Communists; water projects in the United States versus water projects in Africa; subsidized loans for steel plants in the United States versus those in South America. Sure, many projects will still exist inconsistent with a truly free market but these projects would only be financed by dropping expenditures elsewhere.
Third, centralized planning fails everywhere else so we can expect it to fail with centralized control over bank credit. Sound money, and breaking up the credit/bank cartel, will solve the problem of high interest rates and long-term financing.
Fourth, talks with the Soviets need not stop—only be redirected. But all subsidies to all Communists must end. We can discuss ways to enhance free trade and voluntary cultural exchanges. True friendly unsubsidized relations with even the apparent enemy go a long way toward reducing the chances of war. A nonaggressive purely defensive foreign policy which would prompt troop and missile withdrawals from Europe and elsewhere would be actions much stronger than all the political rhetoric heard surrounding disarmament conferences.
Fifth, equal rights must be guaranteed and enforced regardless of circumstances of race, color, or creed. Equal rights cannot, how- ever, be defined vaguely to include demands on another’s life or property. The goal of freedom must surpass our obsession with material wealth and its forced redistribution.
Sixth, prosperity with freedom for the individual is the only humanitarian system ever offered that prevented mass starvation and suffering. Refusal to accept the free market based on a natural rights philosophy is the most impractical thing we can do. A system that provides sound money, low interest rates, the removal of the bankers’ monopoly over credit, and peace and prosperity will restore trust in the politicians, the money, the future, and in ourselves.
More government cannot possibly offer the solution to the problems we face. Big government is the cause; freedom is the answer.