Saturday, April 5, 2014

The Fallacy of Whig Libertarianism

Writing in Reason, Alex Stevenson reviews a debate about continued UK participation in the European Union (EU).  Stevenson gives a useful overview of a new British political party, the United Kingdom Independence Party, and he questions whether participation in the EU is relevant to libertarianism. Stevenson holds on to an antiquated left-right dichotomy: He reasons that in the past the left opposed the EU, so there is no reason for libertarians to oppose it now. He claims that centralization is not a libertarian issue.

Bertrand de Jouvenal's On Power outlines the emergence of the unitary state from the decentralized fiefdoms of the Middle Ages.  De Jouvenal shows that a decline in freedom coincided with the growth of the unitary state under Louis XIV, the Sun King, and Henry VIII, and continued centralization led to further diminution of freedom. In his Economic Thought Before Adam Smith, Murray Rothbard shows that 17th century mercantilism in Spain, France, and the UK led to inefficient, anti-libertarian outcomes.

The dream of a centralized Europe goes back to the Romans, the inventors of the mixed economy and government-business partnerships.  Today's European and American economies are modernized versions of Rome, and the blessings of modernity were largely developed in the United States and Great Britain before the current, antique levels of centralization emerged.

Looking at the big picture, Charlemagne's conquest of much of Europe and Hitler's Third Reich were halting attempts to reestablish Rome. The EU is a third attempt.  No attempt, including the EU, has been libertarian in nature. Centralization of power is neither left nor right, but it is anti-libertarian because  centralization of power leads to abuse of power. It does so because citizens in a large, centralized state face high costs of organization, so protest becomes difficult.  In contrast, compact special interests with access to the central bank and high benefits per capita from organization can organize efficiently.  Centralization leads to skewed outcomes that benefit elite interests.  Smaller scale increases the benefit per capita from organization by general citizens.  Citizens' monitoring of and resistance to special interests increases as the scale of government decreases.

In the UK the Whigs began as the country party, and they originated many libertarian ideas.  In the US the Whig Party, which used the country party's name, was a court party and a reaction to Andrew Jackson's democratic and libertarian views.  By Jackson's time the courtly Federalists and country anti-Federalists were gone, but remnants of the anti-Federalists' views survived, including in the South, so when South Carolina threatened to secede in 1832 over its demand to nullify the Tariff of Abominations, Jackson threatened them with military force.

Jackson, then, was no libertarian, but he was too libertarian for the remnant of the Federalist Party, which Henry Clay, Abraham Lincoln's mentor, led by the 1820s.  In 1832 Clay founded the Whig  Party, the party of  a centralized bank, centralized power, subsidized banks, subsidized railroads, increased tariffs, big government, public works, and government waste.

The American Whigs have always claimed to be for freedom: Today's Republicans, like Mark Levin and Mitt Romney, continue to claim so just as today's Democrats continue to call themselves "liberals," a term that had been applied to libertarians in America until the 1890s.

While claiming to favor freedom, the Whigs--both today's Democrats and today's Republicans--are anti-libertarian, while a minority of decentralizers has tended to be libertarian.  The reason that decentralization fosters liberty even when some of the smaller units adopt anti-libertarian policies is that government cannot be measured as just a quantity.  The government that governs least is not the most libertarian government if it is imposed by force; it is fundamental to Lockean libertarianism that government be derived from the consent of the governed.

A government that governs an increasingly large population finds that it has a decreasing ability to derive consent from the governed.  If America had conquered the heart of Mexico instead of just California and Texas, it would have imposed less government on the Mexicans than they have since imposed on themselves. Nevertheless, as Thoreau points out in Civil Disobedience, such an action would not have been libertarian because it would have involved force rather than consent.  As the scope of a governed territory grows, the likelihood of consent diminishes.  A single government cannot represent the diverse needs of a large number of people.  In 1787 America had three million, mostly Christian, mostly white, mostly English citizens. The governments of about half of today's states govern larger, more diverse populations.

In economic terms there is only one real-world governmental utility curve; it reflects the sum of public choices about government's use of violence.  At the same time each citizen has his own utility curve, and culturally convergent groups, nations, communities, and peoples share utilities, so the distance from each individual's utility curve to the government curve is smaller under self-rule than it would be if strangers were to impose their values from without.

The imposition of an American state, albeit with a lesser quantity of government, would have been more divergent from the Mexicans' preferences than the Mexicans' own government has been even though there would have been less government under American imperialism. Hence, less can be more.  In the same way, the imposition of a centralized state on diverse Europeans leads to greater divergence from each group's preferences than would exist under decentralized, nationalist rule.  Scale increases coercion.

Decentralization not  only leads to freedom because it leads to competition among governments, but it  also leads to freedom because of a greater likelihood that a given government will reflect its citizens' preferences. The EU, like Rome, imposes a unitary set of preferences on all of its citizens. The sum of the distances of the preferences from the stated policy is greater than would be under a greater number of decentralized states.

As the power of Brussels increases, additional threats to liberty will emerge. The centralization of power will lead, as it did in the United States, to suppression of consent.  Suppression of consent in the United States led, within four decades after the Civil War, to suppression of  a wide range of rights, and within five decades to the founding of a central bank, an income tax, and an imperialistic foreign policy linked to the central bank and the income tax.

The Whigs, who in the post-Civil War, Mugwump era claimed to be libertarians, had ended government by the consent of the governed through the Civil War; they have since relentlessly extended the scope and power of the state, just as de Jouvenal describes. (De Jouvenal discusses FDR toward the end of his monumental work.)  For the past 120 years Whig liberalism has amounted  to government by experts who shape and control public opinion through a centralized media and enforce special interests' dictates  to a manipulated majority.

Thursday, April 3, 2014

Millionaires Thank Krugman, Yellen, Obama, and the Democratic Party

As the Dow Jones industrial average nears its all-time high, those who are rich need to take a moment to praise the Democratic party and its supporters.  It is advantageous to have clever advocates, and who can be a better advocate for millionaires than those who claim that they dislike them?

The elite Democrats of academia, those who advocate taxes out of one side of their mouths and monetary expansion out of the other, are  the millionaire's best friend.  The Republicans aren't because they claim to favor the wealthy and those who work, and the public and many of the wealthy have yet to understand that the wealthy are not so because they work; they are wealthy because they own.

When Janet Yellen and the Fed reduce interest rates, the value of assets is increased, and the rich become richer.  What else can matter to the wealthy? Do gay rights, global warming, great  causes, gross income inequality, or a stagnant real wage matter?

All are distractions to the one issue that matters, the one issue about which the news will ever remain silent: the expansion of the money supply, the reduction of interest rates, the inflation of asset values, the suppression of  real wages, and the increment to the  portfolio.

On behalf of the world's millionaires, I thank Paul Krugman; I praise Janet Yellen; I sing hallelujah to Barack Obama.

Tuesday, April 1, 2014

Donald Trump Says "Yes" to the Second Amendment

New York is too far gone for it to matter much, but it's nice to hear Mr. Donald Trump tell New York's politicians that they're bad guys and to tell Andy Cuomo, "You're fired!"  H/t Mert Melfa.

Monday, March 31, 2014

The Science Is Settled: What's Interesting about the American Media Is What It Doesn't Talk About

I was privileged this past Saturday to join Lincoln Eagle publisher Mike Marnell on Scott Harrington's Speak Out show on WKNY, Kingston, NY.  We discussed education and politics; I posted the interview here.  WKNY is a great local music station that plays close-to-nonstop soft rock.  Since they had me on the air, I've been listening to their programming. The soft-classic rock format is great, but the station is an affiliate of ABC News.  As a result, I've inadvertently heard a few of the ABC newscasts, which breaks one of my personal moral rules: Do not listen to the media.  Most of what ABC discusses is irrelevant.  What caught my attention was their blaring claim: "The debate is settled: There is global warming." Well, that's all well and good because there has been a global warming for the past 10,000 years, since the last Ice Age, as the chart below shows.

As I mentioned on the radio show, the useful information to be gained from listening to the media is to learn what it doesn't talk about.