…about being a little swamped?

Hey friends. I just wanted to let everyone know that I’m absolutely going to get back to blogging soon. This month has proven to be a real workathon and the blog has taken a back seat to some other important things (family must come before ranting).

The good news is that one of those things is a very expansive relaunch of econstories.tv, which is coming later this summer with a rich collection of content to help everyone better understand the ideas of Keynes and Hayek and our unique take on them.

So stay tuned folks. There is more to come. I promise…

…but what the hell do I know?

…about freedom, democracy and independence day?

Today, we in the United States celebrate our day of independence from the distant, taxing tyranny of Great Britain and it’s imperial monarchy. Our founding fathers, libertarian radicals all, were not patriotic to their government. Indeed, they declared independence and ultimately war against their government. The founders were patriots for their land, their communities and their natural rights. They were patriots for their ideas. Our founders, in short, were uncompromising ideologues.

The founders were philosophers steeped in the classical liberal tradition of John Locke and Adam Smith, whose Wealth of Nations was also published in 1776 and explained the laissez faire economics that would enable young America to prosper. They held to the concept of natural human rights that were not provided by the state but must be protected from it. Thomas Jefferson, the author of our declaration wrote:

The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first. – Thomas Jefferson

Our founders were not simply satisfied with an escape from “taxation without representation”. They sought to fundamentally bind government as an institution on all fronts. They rightly saw government itself as a natural enemy of freedom. And so they sought to create a system of checks and balances such that government could never get too far in it’s efforts without becoming entangled in the chains of law. Democracy is a form of restraint on the state, but democracy itself was never an end goal unto itself. Indeed, the rule of a majority can itself become a tyranny. James Madison, the “father of the constitution” wrote with great skepticism of majority rule as the penultimate judge of truth:

There is no maxim, in my opinion, which is more liable to be misapplied, and which, therefore, more needs elucidation than the current one, that the interest of the majority is the political standard of right and wrong…

In Republics, the great danger is, that the majority may not sufficiently respect the rights of the minority. – James Madison

If democracy is the only benchmark for justice, than there is no such thing as minority rights. Unrestrained democracy is mob rule. Nothing more. All rights in such a view are simply grants from the mob. The founders rejected such a thuggish, tribal conception of representative government, and thus bound not just the institution of the state but democracy itself in checks and balances. The President was to be elected by a college of electors who could, in theory, be a buffer between the supreme office and direct democracy. The Senate, originally, was not to be elected by popular vote but appointed by state legislatures, thus pitting the power lust of local and federal politicians against one another.

This check on federal power grabbing, and many constitutional limits, was reversed during the Progressive Era at the turn of the century, which was a time when the notion of limited government as envisioned by the classical liberals came under attack from warmongering statists and would-be despots like Teddy Roosevelt and Woodrow Wilson. These so-called “progressive” thinkers rhetorical celebration of democracy stood in stark conflict with the vision of Jefferson and Madison.

Beware the defense of state expansion and aggression and overreach under the rubric of “democracy”. Such pleas, much like the simplistic notion that “government is us” are fundamentally at odds with the philosophy on which our founding was based. In a commencement speech at the University of Michigan, president Obama articulated just such a progressive vision:

When our government is spoken of as some menacing, threatening foreign entity, it ignores the fact that in our democracy, government is us.  We, the people — (applause.)  We, the people, hold in our hands the power to choose our leaders and change our laws, and shape our own destiny. – Barack Obama

Our founders would be the first to raise up in protest against this claim by the most statist president in a generation. They understood the limits of “collective choice” and recognized that such choice is ultimately made not by “us” but by THEM, the elites of government. Unforeseen by our founders as well is the now massive bureaucracy of the executive branch whose agents are appointed and powers and vague and expansive. Again, Jefferson saw government as one of two great enemies of mankind. If that isn’t a menacing view, I don’t know what is. Even the most statist founder, Alexander Hamilton, who envisioned the presidency as life-long position akin to the King (likely with himself at the helm) would recoil at Obama’s democratic supremacy:

The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity. – Alexander Hamilton

Obama and his progressive statists in kind are wrong about the inherent justice of democracy and the nature of American governance. Make no mistake, “government is us” is no less than the centralization of power and socialization of responsibility. It is the antithesis of our founding vision.

Where government is elected by majority vote, restrictions on government are, of course, restrictions on the rule (and tyranny) of the majority. So the constitution was not just a structure for binding government, but for binding the majority as well. Our Bill of Rights is in fact a list of rights which must be PROTECTED FROM DEMOCRACY. Our freedom to speak and assemble is not legally subject to the whim of the majority. Deep down, most Americans recognize that unpopular speech cannot be made illegal, no matter how much that speech offends us. That Elena Kagan, Obama’s Supreme Court pick, disagrees only further alienates him and his regime from the American classical liberal tradition.

And so, as we celebrate our independence from colonial Great Britain, we must recognize that American independence is also freedom from the tyranny of majoritarian rule by democracy itself.

Our founders were not just seeking an escape from British rule. They sought to escape the rule of man by dictate and protect themselves from the tyranny of the majority in the process. The result, was a constitutional republic whose rule of law required unanimous consent and whose legislative process was designed for maximum gridlock. Our founders correctly understood our freedoms to be inherent and natural, not grants from the majority. In so far as we have a government at all, it should reflect and be held accountable to the will of the governed. But it must be bound in the chains of law. The solution our founder sought for the inadequacies and inequities of democratic rule was constitutional rule of law. Independence requires the rule of law.

We were founded as a republic and that republic is in danger. As Ben Franklin understood this fact and the threats to it’s survival:

“When the people find they can vote themselves money, that will herald the end of the republic. – Benjamin Franklin”

I believe that statism, under the guise of “democracy” is swamping our republic with money and “redistributive justice” and undermining our nation’s classical liberal foundation. Our federal government has taken the unprecedented step of mandating by force and fear that every American purchase health insurance, an action which is surely illegal. The independence of our local governments and municipalities, envisioned as another layer of check against Federal tyranny, is being systematically undermined by indebtedness to federal largesse through “stimulus” spending, the military industrial complex, enormous (and wasted) department of education money and interventions and countless other transfers of wealth from taxpayers to the politically connected. The President and Congress continue to expand central power and control with plans for national ID cards, executive authority to shut down the internet, “indefinite detention” and countless other tyrannies.

It’s time to begin restoring our founder’s respect for limits on democratic rule. It’s time to role back the statism that has burdened all of us with debt in the name of “justice”. Ironically, just as the statist regime ruling our government seeks to expand their dominance of everything in sight, our former imperial overlords in Great Britain appear to be leading the way on this vital restoration. Deputy Prime Minister Nick Clegg is helping lead the charge:

During their 13 years in power, the Labour Government developed a dangerous reflex. Faced with whatever problem, legislation increasingly became the standard response. Something needs fixing? Let’s pass a new law.

And so, over the last decade, thousands of new rules and regulations have amassed on the statute book. And it is our liberty that has paid the price. Under the cover of pretending to act in our best interest, the state has crept further and further into people’s homes and their private lives. That intrusion is disempowering. It needs to change.

The Coalition Government is determined to restore great British freedoms. Major steps have been taken already. ID cards have been halted. Plans are underway to restrict the storage of innocent people’s DNA. Schools will no longer be able to take children’s fingerprints without their parents consent.

But we need to do more. The culture of state snooping has become so ingrained that we must tackle it with renewed vigour. And, especially in these difficult times, entrepreneurs and businesses need our help. We must ensure we are not tying them up in restrictive red tape.

So today we are taking an unprecedented step. Based on the belief that it is people, not policymakers, who know best, we are asking the people of Britain to tell us how you want to see your freedom restored.

We are calling for your ideas on how to protect our hard won liberties and repeal unnecessary laws.

Could anything be farther from the actions and rhetoric of our current American regime, with it’s endless desire for the expansion of state power and control? Could it be that, 234 years after our Declaration of Independence, Great Britain’s leaders now understand the American vision or republican goverance better than our own? It appears so.

Independence Day matters for America. It is our most important national holiday; it is a day worthy of national introspection (and lengthy blog posts). It’s time for us to stand together in rejection of state tyranny and support for the classical liberal values of our founders: constitutional limited-government, decentralized power and decision making, respect for individual natural rights and skepticism of mob rule by the majority. If Great Britain’s population and leaders can rediscover the merits of liberty, so can we…

…but what the hell do I know?

…about the return of F. A. Hayek and classical liberalism?

My friend and partner in econ video production, Russ Roberts, has an excellent piece in today’s Wall Street Journal on why he believes (as do I) that Friedrich Hayek is making a comeback. This article is a must-read primer for the key concepts and contributions of Hayek and why they are so vitally important for understanding our problems today and the way forward.

The most crucial point in the piece is a distinctly Roberts perspective on civil society:

Hayek understood that the opposite of top-down collectivism was not selfishness and egotism. A free modern society is all about cooperation. We join with others to produce the goods and services we enjoy, all without top-down direction. The same is true in every sphere of activity that makes life meaningful—when we sing and when we dance, when we play and when we pray. Leaving us free to join with others as we see fit—in our work and in our play—is the road to true and lasting prosperity. Hayek gave us that map.

This is an essential point that is routinely misunderstood. Being opposed to government actions in an area is not opposition to action in general. Too many people conflation the state with society itself.  The way nations are discussed every day on the news only magnifies this mistake. “America” did this. “China” thinks that. “Europe” must chose between this or that. This mindset and language is deeply flawed. Nations don’t act, think or choose. Nations don’t plan. People do.  People make up the society and come together in peaceful, private collective enterprises all the time.

Being against the state and it’s army of distant bureaucrats making our choices and plans for us is exactly that. Each of us at the local and community level have the specific knowledge and crucial vested interest in ourselves and each other to choose the means with which to seek our own individual and collective ends. Central planning, the great villain of Hayek’s collective work and of civil society at large, must come at the expense of local planning. When the Feds tell you to buy health insurance or else, you no longer have the choice.

Hayek was, indeed, a liberal in the classical tradition of Adam Smith and John Locke. He believed deeply in an open, dynamic society where change was to be expected and embraced and the order of life would evolve and emerge out of the actions of each of us working toward our ends in peace.

In comparison, his intellectual adversary, John Maynard Keynes, had a theory of economic life that both assumed and, in fact, advocated a static world where central planners would ultimately guide all investment decisions. Hayek said of his rival’s  theory that “Mr. Keynes aggregates conceal the most fundamental mechanisms of change”. In focusing on overly summarized (or aggregated) statistics like GDP, Keynes sought to maintain the status quo through spending immaterial of changes in reality on the ground. If people stop spending for some reason, the state should spend for them by force, saddling them with debt but (in theory) preserving their incomes and employment in the process.

Unfortunately, the debt part of the Keynesian prescription is the only aspect of his “stimulus” plan which pans out in reality. Meanwhile, some people benefit by the increases in government spending while others are hit with reduced investment opportunities and higher taxes. These changes are the dynamics which Mr. Keynes aggregate view conceals.

Rather than allow order to emerge from a natural process of discovery, Keynesianism fights that process through the status quo of the political system. It seeks to re-employ workers in their old jobs through force in fields for which there is no longer need through deficit-financed make-work and (often literal) ditch-digging rather than assist a rapid and sound readjustment to reality. These “hair of the dog” measures actually calcify the excesses of the prior boom rather than

It makes sense, then, to think about Lord Keynes as a conservative, not a liberal in the classical sense. He was, after all, a member of the political elite and stood only to lose from sweeping changes to the status quo of power. More disturbing, though was the disregard for individual freedom and bottom-up competition. The foreward to the German edition of Keynes’ General Theory includes this chilling passage:

Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire.

Add to that distressing recommendation, the fact that Lord Keynes was an anti-semite and the treasure of the Cambridge Eugenics Society and a picture emerges that is, again, incredibly illiberal.

Keynes was a contradictory figure, oscillating between truly marvelous calls for peace and justice in “The Economic Consequences of the Peace”, to pitching his ideas of central control to the most murderous regimes in history. He called for the “socialization of investment” by the State as a means of silencing the volatile “animal spirits” of business, yet praised Hayek’s Road to Serfdom and it’s attack on central planners, saying:

You will not expect me to accept quite all the economic dicta in it. But morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in a deeply moved agreement.

It remains an oddity of history that America’s modern “liberals” including self-proclaimed “Conscience of a Liberal”, Paul Krugman, have come to admire John Maynard Keynes as a hero and scorn F. A. Hayek as a right wing reactionary.

I want to bring this notion of liberality to the foreground because I think it underscores the moral concepts beneath F. A. Hayek’s philosophy of decentralized decision making based on sound money and property rights with that of his rival. Those who claim a moral high ground in activist central planning and big government in the spirit of Keynes must inevitably come to terms with the ethical shortcuts and disregard for the individual that such forceful action requires.

The dynamic world that the free and liberal society Hayek envisioned can be challenging. Change is hard for people. But efforts to counter the mechanics of dynamic change do indeed have severe and lasting social costs which I believe outweigh any benefits for particular groups.

I think it’s high time we revisit our cultural notions of liberality and “conservatism” with F. A. Hayek as our benchmark…

…but what the hell do I know?

…about progress on property rights after Kelo?

This video is inspiring and a sign that out of the ashes of tyrannical theft and pillage can emerge a real movement towards greater freedom.

You can read all about the progress made in the 5 years since the Kelo case at the Institute for Justice. When I saw in the video that my home state of New Jersey was not listed in the 43 states which changed their laws in response to the outrage, I was disappointed but not surprised. New Jersey is second only to New York in being a fascistic nightmare for liberty and property. But then read this in the report:

Moreover, the New Jersey Supreme Court implicitly rejected Kelo while also curtailing the use of redevelopment and blight as an excuse for private development. New Jersey has historically been one of the worst states in the country—its municipalities seem to all be addicted to eminent domain for private projects.  But the New Jersey Supreme Court decision in Gallenthin ruled that local governments could not declare areas blighted simply because they are “stagnant or not fully productive,” which was essentially the argument for taking the land in Kelo in the hope of improving the local economy.  Gallenthin, along with appeals court decisions emphasizing the importance of real evidence and procedural due process in challenging redevelopment designations, have totally changed the eminent domain landscape for home and small business owners in New Jersey.

If New Jersey can move in the direction of liberty, any government can. Well, any government other than the bankrupt goons in New York. I think it’s time for my workplace neighbors in the Empire State to put on some real pressure…

…but what the hell do I know?

…about migrating to wordpress?

I’ve migrated the site to wordpress and am in the process of getting up to speed on its features. This will hopefully allow me to enable cool features like facebook-integrated comments and iPhone optimized browsing without too much fuss. Bear with me as I take a week or two to geek out and get the new site up and running.

- John

…about American Fascism, progressive style?

Jon Stewart says it all... The Daily Show With Jon Stewart Mon - Thurs 11p / 10c

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..about public sector unions?

The president is pushing hard to borrow $50 billion more dollars from China so that he can funnel it to bloated unionized state bureaucracies in the name of an “emergency measure” to avoid "massive layoffs of teachers, police and firefighters”. This ...

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..about the not-so-secret love of despotism among intellectuals?

I’m a director. The job is despotic. You’re the boss of the production. You play god, the designer of the film/commercial/music video’s universe. When you’re good at it, as James Cameron or Oliver Stone or Woody Allen is, you create a window into a rich world that connects with people on an emotion, empathetic level.  The ...

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…about instability of private cartels?

Meet the Anti-Apple Coalition. Remember when everyone was terrified that Apple and Google were going to collude to take over the world? Surely Uncle Sam should step in, they claimed. Uncles Sam responded with “we’re watching you”. This was the next great anti-trust target…. or… ...

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…about opposite day at the NY Times?

Paul Krugman, whose mind appears to be permanently clouded by puerile partisan political punditry, attempted to refute the idea of libertarian limited (or eliminated) government philosophy… by demonstrating that politicians are crooked. Behold: Thinking about BP and the Gulf: in this old interview, Milton Friedman says that there’s no need for product safety regulation, ...

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I’m John. This blog is where I work through ideas. I’m not an economist. In some cases, that may work to my advantage (or so I’m told). Still, I’m bound to make mistakes. That’s kinda the point. Be skeptical. Take everything with a grain of salt. Push back. I’m looking for feedback. Oh… and I’m not this serious in real life. I’m actually kinda goofy. Read my full backstory.