Why I am a libertarian

Vote Johnson 2012

I’ve never liked the term libertarian. The views held by the people called libertarians today are the views held by those people who, until about half or two thirds of the way through the 19th century, were called liberals.

Then, so called liberals like JA Roebuck and his descendants interpreted a hole in John Stuart Mill’s “harm principle” big enough to drive state education, state pensions, and state healthcare through.

Since then the people who have called themselves liberals, especially in America, have been anything but. However, their theft of the title has been so complete that the real liberals are left with the clunky, manufactured label “libertarian”.

You can reach a libertarian philosophy one of two ways. Empirically, there is the fact that free societies fare better than those which aren’t free.

Morally, you can think that human beings are sovereign; that they have the right to choose what they do with their body and their property as long as anyone they do it with is consenting. That word, “sovereign”, used to apply to kings and emperors like George III or Louis XIV. For the libertarian, every man and woman is a king or a queen.

The belief in freedom of body and property is what sets libertarians apart from those on the left and right. In America, Democrats say you can do what you like with your body but what happens to your paycheque is up to the government. Republicans believe that you can do what you like with your paycheque but that what you do with your body is up to the government.

This confused hypocrisy of selective freedoms leads both Democrats and Republicans into ridiculous contradictions.

Democrats loudly proclaim their support for people’s freedom to marry who they want whilst seeking to limit their freedom to spend their money as they want by taking it from them in higher taxes. Republicans noisily support the individual’s choice to spend their paycheque as he or she likes, as long as he or she doesn’t spend it on marrying their gay husband or lesbian wife; that’s a choice they want to deny you.

Their belief in the freedom of body and property helps libertarians avoid such confusions. A libertarian understands that to be socially free and to be economically free are indivisible. It makes no sense to believe in social freedom without believing in economic freedom and vice versa. A libertarian supports gay marriage for the same reason he or she supports low taxes.

Aren’t libertarians selfish? After all, aren’t all those taxes spent on good things like welfare? Well, no. Lots of your tax money is spent on dropping bombs on other countries, interest on ballooning government debt, and attempts at economic “stimulus” which have only stimulated the red ink industry.

But just because a libertarian thinks the government shouldn’t be doing something it doesn’t mean that the libertarian thinks that thing shouldn’t be done at all. Take welfare. A libertarian believes that men and women will not walk by while their fellow human beings starve. A believer in government provision, on the other hand, believes men and women will not help their fellow human beings unless they are made to by government.

A belief that the government must provide is a belief in the rottenness of other people.

A libertarian would help that person themselves with their own resources. A statist would get the government to do it for them with someone else’s. The idea that libertarianism is selfishness is an inversion of the truth.

Besides, why is it considered “selfish” for a person to want to distribute the money they earn as they wish while it is considered “compassionate” for someone else to want to take that money from them so it can be distributed as they wish?

If person A supports the government taking money from person B to give it to person C that does not make person A generous. Person A giving person C their own money would do that.

A libertarian does not seek to impose his or her choices on others. The same goes across borders. Most people do not choose to live under cruel and despotic regimes but, as we saw in Algeria in 1991 and the “Arab Spring” recently, sometimes they do.

Where people live under oppressive regimes they despise, history indicates that freedom has to be won, as on battlefields from Naseby to Saratoga, or as in Eastern Europe in 1989, it cannot be simply bestowed. Successful orders emerge from within; they are not imposed from without.

I am not an Anarcho-Capitalist nor am I a Utopian. There is a role for government and there is a role for armed force. Just because your society might exist on peaceful, libertarian lines doesn’t mean others will. Ultimately the only guarantee against a Hitler or a Galtieri is the ability to defend oneself militarily. This includes pre-emptive strikes.

If Poland had had a reasonable belief that a pre-emptive strike on Germany in 1939 would have stymied Hitler’s invasion plans the Poles would have been quite justified in doing so.

But crucially this is about defence quite narrowly defined. Attempts in recent years to define “defence” more broadly so as to include nation building, democratisation, and humanitarian intervention, have failed and a heavy expenditure in lives and money hasn’t even bought much discernible goodwill.

The libertarian believes in twice as much freedom as a Democrat or a Republican. As long as everyone involved is consenting I would not seek to curtail what you do with your body or your property. I would not seek to use the government to enforce my choices upon you.

That’s why I’m a real liberal, a libertarian. It’s why you should be too.

This article originally appeared at The Commentator

NB For some reason The Commentator carried this with the name The evolution of liberal thinking

What Star Trek means to me

Still boldly going…

Today I attended my first Star Trek convention at the age of 32 as an early Christmas pre a little delirious.

Wandering round the hall most of the other attendees lived up to the stereotype. There were ill fitting Starfleet costumes, Mudd’s Women outfits, and homemade bat’leth’s galore. I had plenty of time queuing to see Shatner to ponder a little on what it is about Star Trek that has inspired this level of devotion for nearly 50 years.

Star Trek first appeared about two thirds of the way through the most murderous century in human history. On ‘the right’ you had the Nazis who’s vision of a future populated by blonde, blue eyed Aryans led to the deaths of millions in World War Two. The communists murdered millions more based on class, education, and, in Zaire, on whether they wore ties. And, though it is largely forgotten now, the genetic engineering and selective breeding of eugenics was a key part of ‘Progressive’ thought. The 20th century totalitarians saw no room in the future for anyone who differed from the Plan.

Star Trek went against all that. It offered a future which didn’t exclude. If there was room in the 23rd century for blue faced Andorrans, lumpy headed Klingons, pointy eared Vulcans, and, strangest of all, humans, there was room enough for you too.

That is the central, simple message of Star Trek and it is as relevant and necessary today as it was in 1964. That’s the reason there was a green woman getting off a bus in east London at 9am this morning.

London Mises Circle November Meet Up

Hayek with Harris and Seldon at the IEA

The seminars hosted by Ludwig von Mises, first in Vienna and later in New York, have a key place in the history and development of Austrian economics. Such figures as Hayek, Rothbard, and Hazlitt all attended.

Inspired by this the London Mises Circle is holding a seminar at the Institute of Economic Affairs at 6:30pm on November 1^st.

The resurgence in popularity of Austrian Business Cycle Theory in recent years has prompted renewed criticism of ABCT. In a recent article A Reformulation of Austrian Business Cycle Theory in Light of the Financial Crisis one of the leading Austrians, Joseph Salerno of Pace University, responds to some of these criticisms and makes some additions and refinements to ABCT. We will be aiming to discuss these at November’s meeting.

All are welcome. If you have any questions please email londonmisescircle@gmail.com.

Augustinian economics: Balanced budgets, but not yet

I dreamed I saw St Augustine…it was Ambrose Evans-Pritchard

n his Confessions St Augustine of Hippo recalled how, as a young man torn between the pleasures of the flesh and devotion to God, he had prayed “Grant me chastity and continence, only not yet”. This neatly sums up the thinking of those economists and policy makers today who, faced with spiralling debt and historically low interest rates, acknowledge that this cannot continue indefinitely, but say that some prosperous tomorrow, not today, is the time to address those issues.

An example of this Augustinian economics came from Ambrose Evans-Pritchard in the Telegraph on Sunday. As Evans-Pritchard reported, the International Monetary Fund has crunched some numbers and discovered that the fiscal multiplier is not 0.5 as previously thought but between 0.9 and 1.7.

This means that it was previously thought that each £1 of government spending would generate an increase in GDP of 50p. Now it transpires that each £1 of government spending actually generates an increase in GDP of between 90p and £1.70p. It follows from this that cutting £1 of government spending does not, as was thought, cause GDP to fall by 50p but by somewhere between 90p and £1.70p.

One lesson to take from this is to be wary of econometrics. The spread between 0.9 and 1.7 is pretty wide. If the multiplier is 0.9 it is actually much closer to the 0.5 originally thought than the 1.7 upper bound which is the cause of such horror.

A second lesson is to question the idea that government borrowing and spending boosts economic growth. Economic growth is a deceptively tricky thing to measure so policy makers and economists use a proxy, GDP, which actually measures spending. Obviously any fool can boost their spending (GDP) by borrowing a load of money; what’s more questionable is to what extent this represents economic growth, i.e. the capacity of the economy to generate goods and services.

A third lesson is to be wary of the IMF which changes its mind like most people change their socks. The IMF’s latest stance, after embracing stimulus and then austerity, is that the news about the multiplier suggests an easing of austerity. Greece, with a debt of over 160 percent of GDP, will be better off if it borrows a bit more money. Of course, Christine Lagarde, head of the IMF, assures us that getting spiralling debt under control remains necessary, but explains that “Reducing public debt is incredibly difficult without growth”. Budgetary balance but, like the horny teenage Augustine, ‘not yet’.

Evans-Pritchard agrees that while the eurozone’s runaway debts need to be dealt with now is not the time. “The Greco-Latins should be given more time to cut their deficits” he says, “The AAA creditor bloc should stop cutting altogether until the eurozone is off the reefs”.

Like other Augustinian economists, Evans-Pritchard makes the same argument over monetary policy, writing recently

“Needless to say, I will be advocating 1933 monetary stimulus à l’outrance, or trillions of asset purchases through old fashioned open-market operations through the quantity of money effect (NOT INTEREST RATE ‘CREDITISM’) to avert deflation – and continue doing so until nominal GDP is restored to its trend line, at which point the stimulus can be withdrawn again”

The Augustinians tell us that while our economies are in the tank this is not the time to be sorting our finances. The trouble is that we didn’t do anything to sort out our finances when our economies were galloping along. The same goes for monetary policy.

Our economies are so weak that ultra-low interest rates are apparently called for. But ultra-low interest rates were also, apparently, the order of the day in the years before the crisis. We will deal with all this someday, the Augustinians tell us, but it appears that, as Creedence Clearwater Revival sang, Someday Never Comes.

There is a bigger problem though. Just as patients can become hooked on painkillers so can economies get addicted to short term fiscal and monetary fixes. Consider how Evans-Pritchard advocates for massive monetary stimulus until “GDP is restored to its trend line, at which point the stimulus can be withdrawn again”.

But this is exactly what failed last time. The massive monetary stimulus enacted by the Federal Reserve to stimulate the American economy in the wake of the bursting of the dot com bubble in 2000 led Americans to flock into the real estate market and banks to package and repackage, sell and re sell the new debt that ensued. But as soon as this monetary stimulus was withdrawn interest rates rose as they were bound to. This popped the housing bubble and, with it, much of the world economy.

Enterprises undertaken when interest rates are artificially low will not survive when they rise. Every monetary stimulation contains the seeds of the ensuing bust.

It seems that, whether the economy is up or down, while rocketing debt and low interest rates are really, really serious problems which need to be dealt with, the time is never quite right to cut spending or let interest rates rise. This is the Augustinian creed.

Indeed, it doesn’t seem too hard to imagine Evans-Pritchard or Lagarde kneeling before an effigy of Lord Keynes and beseeching “Grant me a balanced budget and sound money, only not yet”.

This article first appeared at The Commentator

Crisis of statism, not capitalism

In search of that magic money tree

t might not have been the ‘crisis of capitalism’ which some have been waiting so long for, but it is widely thought that the last few years certainly represent a “crisis of capitalism”. But if you think of capitalism as a system whereby profits and losses acting unhindered by the hand of government guide capital to its most productive uses, this is difficult to sustain.

The sectors which blew up and took the rest of the economy with them were riddled with intervention. Banks have their capital adequacy rates set and their bad investments covered by government. The housing market is kept inflated with all manner of tax breaks and politically motivated distortions like Fannie Mae, Freddie Mac, and the Community Reinvestment Act. Behind it all interest rates are set by a small panel of political appointees, much as the price of alum keys was set in the Soviet Union.

But as we see violence on the streets of Athens and Madrid, the Occupy protests in the United States, and unadulterated rage on the pages of The Guardian’s Comment is Free (Cif), there is certainly some sort of crisis afoot. It is, however, a crisis of big government.

Over the last few decades governments throughout the western world have made extravagant spending commitments. In Ireland the welfare budget was tripled. In Greece pastry chefs, radio announcers, hairdressers, and steam bath masseurs were included among 600 professions deemed so “arduous and perilous” that workers could retire at 50 on a state pension of 95 percent of their final salary.

But it wasn’t just small basket case economies doing it; big basket case economies were doing it too. France decided that its workers could work no more than 35 hours a week and still generate the wealth to pay for everyone to retire at 60 and spend a third of their lives as state pensioners. In the United States the Bush administration launched the largest expansion of Federal spending since Lyndon Johnson’s Great Society program of the 1960s. In Britain the Labour government increased spending by more than half in six years.

As long as you didn’t look either too closely or too far ahead, these massive spending commitments looked just about affordable as long as there was plenty of money to spend. And there was. In Britain tax receipts rose by 40 percent between 2001 and 2007. In the United States, Federal tax revenues rose by 30 percent between 2000 and 2007. French tax revenue increased by 30 percent between 2002 and 2008.

But these were the effects of the bubble. These were taxes swelled by property values, house sales, and bank profits on those house sales and the myriad ancillary transactions such as securitisation. With the bursting of that bubble that wealth is gone, if it was even there in first place, and it is not coming back. Nor should it.

That does mean, however, that lots of the extravagant government spending promises made before the bust now stand revealed for what they are; unaffordable in the absence of bubble taxation. And given the undesirability of bubbles, that just makes them unaffordable full stop. No amount of general strikes, protesting, occupying, or posting on CiF will change that. We do not have a mighty oak of a money tree, but a bunce bonsai and, in truth, that’s all we ever did have.

Since the crisis hit we have seen both the unavoidability of this truth and the reluctance of electorates to accept it. In the last few years the voters of Greece, Spain, and France have voted out ‘austerity’ governments only to have ‘austerity’ visited upon them anyway by their replacements (at least they were asked, unlike the Italians). There is a very good chance that this November and in May 2015 the voters of the United States and United Kingdom will discover that reality doesn’t just disappear because you tick a box marked ‘Obama’ or ‘Miliband’.

The amount of money spent by the government has grown inexorably. We have reached its limit. In Britain, since 1964, whether top rates of tax have been at 83 percent, as in the 1970s, or 40 percent, the percentage of national income paid in taxes has never exceeded 38% of GDP.

Whatever the designs of the politicians, the social democrats, the Labour party, the Guardian, or Polly Toynbee, the British people, collectively and unconsciously, seem to have decided that they are not willing to fund a state sector any bigger than this. When the share of state spending as a share of GDP reaches 45 percent or 50 percent, as it has recently, the only way is down. That is where we are now.

If the extravagant spending promises of politicians outstrip both the capabilities of even a well-functioning capitalism to generate the necessary wealth and the public’s willingness to pay for it, that is not capitalism’s crisis, but a crisis of big government. Its time is up.

This article first appeared at The Commentator

T.I.N.A.

If “riots, revolts and revolutions” are the “alternative to capitalism I’m sticking with capitalism

The life and death of Eric Hobsbawm

Eric Hobsbawm, 1917 – 2012

In his dotage in the 1990s a respected academic historian, author of bestselling books, and lifelong Nazi was interviewed for the Times Literary Supplement about his youthful commitment to Hitler. The interviewer asked “What that comes down to is saying that had the radiant tomorrow actually been created, the loss of fifteen, twenty million people might have been justified?”

The historian replied instantly; “Yes”

Of course, that never happened but something almost identical did.

In his dotage in 1994 a respected academic historian, author of bestselling books, and lifelong Marxist was interviewed for the Times Literary Supplement about his youthful commitment to Stalin. The interviewer asked “What that comes down to is saying that had the radiant tomorrow actually been created, the loss of fifteen, twenty million people might have been justified?”

Eric Hobsbawm, who died yesterday aged 95, replied instantly; “Yes”

It is one of the great mysteries of intellectual life in the last few decades that anyone who confesses to a youthful flirtation with Nazism or fascism is shunned by polite society until a sufficiently long and intense period of penance had passed, while a youthful fondness for communism is presented as one of those harmless things we all go through, like collecting football stickers.

During the 20^th century the miserable ideology of communism slaughtered millions and immiserated millions more. Between the Ukrainian famine and purges of the 1930s, the gulags, Mao’s Great Leap Forward and Cultural Revolution, and the Killing Fields of Cambodia, to the insanity of Mengistu in Ethiopia, communism was responsible for as many as 94 million deaths in the last century.

To paraphrase Montesquieu, there has never been a kingdom given to so much bloodshed as that of Marx.

And yet we don’t regard it with the same abhorrence as Nazism. Instead, the death of Eric Hobsbawm is mourned.

Ed Miliband said that this apologist for totalitarianism “cared deeply about the political direction of the country.” More, one hopes, than he cared for the millions whose deaths he excused.

For the BBC Nick Higham wrote that “Eric Hobsbawm was remarkable among historians in being proud to call himself a Marxist long after Marxism had been discredited in the West.” Hobsbawm was remarkable for no such thing. He was remarkable for his slavish devotion to the Soviet Union long after its full horror had been exposed. As Michael Moynihan wrote:

“When the bloody history of 20th-century communism intrudes upon Mr. Hobsbawm’s disquisitions, it’s quickly dismissed. Of the countries occupied by the Soviet Union after World War II—’the Second World War,’ he says with characteristic slipperiness, ‘led communist parties to power’ in Eastern and Central Europe—he explains that a ‘possible critique of the new [postwar] socialist regimes does not concern us here.’

Why did communist regimes share the characteristics of state terror, oppression and murder? ‘To answer this question is not part of the present chapter.’ Regarding the execrable pact between Nazi Germany and Stalinist Russia, which shocked many former communist sympathizers into lives of anticommunism, Mr. Hobsbawm dismisses the ‘zig-zags and turns of Comintern and Soviet policy,’ specifically the “about-turn of 1939–41,”‘which “need not detain us here'”.

In 2002 Hobsbawm wrote “To this day I notice myself treating the memory and tradition of the USSR with an indulgence and tenderness.” Imagine a historian writing that about Nazi Germany and getting a 21 gun salute from the BBC.

Hobsbawm became a Marxist while living in Germany in the early 1930s. Like many during that time he saw a straight choice between communism and Nazism. He wasn’t alone in lacking the imagination to see the alternative of liberal democracy and many embraced totalitarianism of one colour or other.

But few embraced it with Hobsbawm’s vigour. In August 1939 erstwhile foes Hitler and Stalin signed the Nazi-Soviet Pact making Nazis and communists allies until Hitler’s invasion of the Soviet Union in June 1941. Many communists severed ties with Moscow in disgust but, as Nick Cohen points out, Hobsbawm remained a loyal propagandist for Stalin which in practice meant Hitler too.

Hobsbawm traveled to the Soviet Union in 1954 but noted that “It was an interesting but also a dispiriting trip for foreign communist intellectuals for we met hardly anyone there like ourselves.” To quote Nick Cohen again,

“If he had gone to Siberia, alongside the corpses of “anti-Soviet” Ukrainians, Lithuanians, Estonians, Latvians, Chechens, Tartars and Poles, of tsarists, kulaks, Mensheviks and social revolutionaries and of merely unlucky citizens who had been denounced by malicious neighbours, or rounded up by the secret police to meet an arrest quota, Hobsbawm would have found the bodies of communist intellectuals – just like him”

In 1956 the Communist Party of Great Britain again fractured over Soviet policy, this time the brutal conquest of Hungary which left possibly 2,500 Hungarians dead. Hobsbawm supported the invasion.

Time and again Eric Hobsbawm was faced with the full scale of the horror visited by the regime he supported and time and again he remained loyal. As he wrote in 2002

“The Party . . . had the first, or more precisely the only real claim on our lives. Its demands had absolute priority. We accepted its discipline and hierarchy. We accepted the absolute obligation to follow ‘the lines’ it proposed to us, even when we disagreed with it . . . We did what it ordered us to do . . . Whatever it had ordered, we would have obeyed . . . If the Party ordered you to abandon your lover or spouse, you did so”

Hobsbawm pleaded for “historical understanding”; he isn’t hard to understand. He was a man who failed to see that the choice of one murderous regime over another was no choice at all, who lacked the humility to admit it, and who was possessed of an incredible ability to blind himself to realities, no matter how bloody, which didn’t fit his view of the world.

Hobsbawm was the Marxist version of David Irving. Why is his death any more worthy of mourning?

This article originally appeared at The Commentator