by Harry Binswanger
Contributor
December 31, 2013
from
Forbes Website
President
Obama's Kansas speech is a remarkable
document. In calling for more government controls, more taxation,
more collectivism, he has two paragraphs
that give the show away.
Take a look at them.
"there is a certain crowd in Washington who,
for the last few decades, have said, let's respond to this economic
challenge with the same old tune.
"The market will take care of
everything," they tell us.
If we just cut more regulations and cut more
taxes - especially for the wealthy - our economy will grow stronger.
Sure, they say, there will be winners and
losers. But if the winners do really well, then jobs and prosperity will
eventually trickle down to everybody else. And, they argue, even if
prosperity doesn't trickle down, well, that's the price of liberty.
Now, it's a simple theory. And we have to admit, it's one that speaks to
our rugged individualism and our healthy skepticism of too much
government. That's in America's DNA. And that theory fits well on a
bumper sticker. (Laughter.)
But here's the problem: It doesn't work. It
has never worked. (Applause.) It didn't work when it was tried in the
decade before the Great Depression. It's not what led to the incredible
postwar booms of the '50s and '60s. And it didn't work when we tried it
during the last decade. (Applause.)
I mean, understand, it's not as if we
haven't tried this theory."
Though not in Washington, I'm in that "certain
crowd" that has been saying for decades that the market will take care of
everything.
It's not really a crowd, it's a tiny group of
radicals - radicals for capitalism, in Ayn Rand's well-turned phrase.
The only thing that the market doesn't take care of is anti-market acts:
acts that initiate physical force. That's why we need government: to wield
retaliatory force to defend individual rights.
Radicals for capitalism would, as the Declaration of Independence says, use
government only "to secure these rights" - the rights to life, liberty,
property, and the pursuit of happiness. (Yes, I added "property" in there -
property rights are inseparable from the other three.)
That's the political philosophy on which Obama is trying to hang the blame
for
the recent financial crisis and every other social ill.
But ask yourself, are we few radical capitalists
in charge? Have radical capitalists been in charge at any time in the last,
oh, say 100 years?
I pick 100 years deliberately, because it was exactly 100 years ago that a
gigantic anti-capitalist measure was put into effect: the Federal Reserve
System. For 100 years, government, not the free market, has controlled money
and banking.
You be the judge.
How did the dollar hold up over the 100 years
before this government take-over of money and banking? It actually gained
slightly in value.
Laissez-faire hasn't existed since the
Sherman Antitrust Act of 1890. That was the
first of a plethora of government crimes against the free market.
Radical capitalists are just beginning to have a slight effect on the Right
wing. The overwhelming majority on the Right are eclectic. Which is a nice
way of saying inconsistent.
The typical Republican would never, ever say,
"the market will take care of everything."
He'd say,
"the market will take care of most things,
and for the other things, we need the regulatory-welfare state."
They are for individualism - except when they
are against it.
They are against free markets and individualism
not only when they agree with the Left that we must have antitrust laws and
the Federal Reserve, but also when they demand immigration controls,
government schools, regulatory agencies, Medicare, laws prohibiting
abortion, Social Security, "public works" projects, the "social safety net,"
laws against insider trading, banking regulation, and the whole system of
fiat money.
Obama blames economic woes, some real some manufactured ("inequality") on a
philosophy and policy that was abandoned a century ago. What doesn't exist
is what he says didn't work.
Obama absurdly suggests that timid, half-hearted, compromisers, like
George W. Bush, installed laissez-faire capitalism - on the
grounds that they tinkered with one or two regulations (Glass-Steagall)
and marginal tax rates - while blanking out the fact that under the Bush
administration, government spending ballooned, growing much faster than
under Clinton, and 50,000 new regulations were added to
the
Federal Register.
The philosophy of individualism and the politics of laissez-faire would mean
government spending of about one-tenth its present level.
It would also mean an end to all regulatory
agencies:
no SEC, FDA, NLRB, FAA, OSHA, EPA, FTC, ATF,
CFTC, FHA, FCC - to name just some of the better known of the 430
agencies listed in the federal register.
Even you, dear reader, are probably wondering
how on earth anyone could challenge things like Social Security, government
schools, and the FDA.
But that's not the point.
-
The point is: these statist,
anti-capitalist programs exist and have existed for about a century.
-
The point is: Obama is pretending that
the Progressive PGR -2.02% Era, the New Deal, and the Great Society
were repealed, so that he can blame the financial crisis on
capitalism. He's pretending that George Bush was George Washington.
We radical capitalists say that it was the
regulatory-welfare state that
imploded in 2008.
You may disagree, but let's argue that out,
rather than engaging in the Big Lie that what failed was laissez-faire and
individualism.
The question is:
in the messy mixture of government controls
and remnants of capitalism, which element caused the Great Depression
and the recent financial crisis?
By raising that question, we uncover the
fundamental: the meaning of capitalism and the meaning of government
controls:
-
Capitalism means freedom
-
Government means force
Suddenly, the whole issue comes into focus:
Obama is saying that freedom leads to poverty and force leads to
wealth.
He's saying:
"Look, we tried leaving you free to live
your own life, and that didn't work. You have to be forced, you have to
have your earnings seized by the state, you have to work under our
directions - under penalty of fines or imprisonment. You don't
deserve to be free."
As a bit of ugly irony, this is precisely what
former white slave-owners said after the Civil War:
"The black man can't handle freedom; we have
to force him for his own good."
The innovation of the Left is to extend that
viewpoint to all races.
Putting the issue as force vs. freedom shows how the shoe is on the
other foot regarding what Obama said.
Let me re-write it:
there is a certain crowd in Washington who,
for the last few decades, have said, let's respond to this economic
challenge with the same old tune.
"The government will take care of
everything," they tell us.
If we just pile on even more regulations and
raise taxes - especially on the wealthy - our economy will grow
stronger.
Sure, they say, there will be winners and
losers. But if the losers are protected by more social programs and a
higher minimum wage, if there is more Quantitative Easing by
the FED, then jobs and prosperity will eventually trickle up
to everybody else. And, they argue, even if prosperity doesn't trickle
up, well, that's the price of the social safety net.
Now, it's a simple theory. And we have to admit, it's one that speaks to
our intellectuals' collectivism and Paul Krugman's skepticism
about freedom. That's in Harvard's DNA. And that theory fits well on a
bumper sticker. (Laughter.)
But here's the problem: It doesn't work. It
has never worked. (Applause.)
It didn't work when it was tried in the
Soviet Union. It's not what led to the incredible booms in India and
China. And it didn't work when Europe tried it during over the last
decades. (Applause.)
I mean, understand, it's not as if we
haven't tried this statist theory.
How does that sound? That's blaming an actual,
existing condition - government controls and wealth-expropriation - not a
condition that ended in the late 19th century.
So which is the path to prosperity and happiness - freedom or force?
Remember that force is aimed at preventing you from acting on your rational
judgment.
Obama's real antagonist is
Ayn Rand, who made the case that reason
is man's basic means of survival and coercion is anti-reason. Force
initiated against free, innocent men is directed at stopping them from
acting on their own thinking.
It makes them, under threat of fines and
imprisonment, act as the government demands rather than as they think their
self-interest requires. That's the whole point of threatening force: to make
people act against their own judgment.
The radical, uncompromised, laissez-faire
capitalism that Obama pretends was in place in 2008 is exactly what morality
demands.
Because, as Ayn Rand wrote in 1961:
"No man has the right to initiate the use of
physical force against others...
To claim the right to initiate the use of
physical force against another man - the right to compel his agreement
by the threat of physical destruction - is to evict oneself
automatically from the realm of rights, of morality and of the
intellect."
Obama and his fellow statists have indeed
evicted themselves from that realm.