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How do we eliminate the paradox of poverty & privation amid plenty & abundance?

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Author Topic: How do we eliminate the paradox of poverty & privation amid plenty & abundance?  (Read 8090 times)
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« on: August 24, 2010, 09:36:47 am »

Economic Ignorance and Liberal Hypocrisy

Jacob Hornberger
Campaign For Liberty
April 24, 2010

A liberal named John Sumner, who goes by the pseudonym Devilstower, has weighed into the debate originally inspired by my article ďLiberal Delusions about Freedom.Ē Sumnerís article, ďWhat Conservatives Mean When They Say ĎLibertarianí,Ē which appeared yesterday on the liberal website, reveals a lot about the liberal mindset as well as the reasons why America today is suffering so many economic woes.

Sumner takes me to task for singing the praises of our American ancestors, who chose a federal government without such statist programs as income taxation, Social Security, Medicare, Medicaid, welfare, public (i.e., government) schooling, food stamps, corporate bailouts, foreign aid, a central bank, paper money, drug laws, and many, many more.

Sumner thinks that that type of society was absolutely horrible and cites the terrible things that were taking place in the United States in 1880, the year I pointed to in my article ďUp from Serfdom.Ē Sumnerís response contains all the standard stuff that has long been taught in Americaís government-approved schools, where Sumner just happens to work as a substitute teacher.

You know, like the stuff that suggests that our American ancestors hated their wives and children, as reflected in their sending them into dangerous factories to work long hours. You know, like the stuff that suggests that liberals love the poor, needy, and disadvantaged while advocates of the free market just love the rich, greedy, and selfish people in life. You know, like the stuff that suggests that without the coercive apparatus of the welfare state, poor people and old people would just be dying in the streets.

As I have long pointed out, the problem with liberals is their dismally poor understanding of economics, and Sumnerís article is just the most recent example of this phenomenon.

Permit me to explain why.

In their purported concern for the poor, liberals never ask the important question: What is it that causes wealth and prosperity to come into existence? The only question they ask themselves is, ďWhat is the cause of povertyĒ?

But the latter is a ridiculous question because poverty has always been the natural state of mankind. Throughout history, most people have been poor.

Thus, the real question is: What are the causes of wealth? What is it that enables societies to break free of the chains of poverty? Why are some societies wealthier than others?

You would think that those would be important questions for a liberal, especially since liberals have long purported to be concerned about the poor.

Alas, those questions are unimportant to liberals. Sumner, not surprisingly, doesnít raise the questions either.

Instead, he points out all the bad things that were taking place in, say 1880, and then concludes that all those statist programs that our American ancestors rejected, and which are so beloved to Sumner, should be embraced. In other words, heís suggesting that the absence of the statist programs is the cause of the bad living conditions in American society that he laments. But his logic and his conclusions are faulty and fallacious.

No one denies that economic conditions were bad for many people in 1880. No question about it. No dispute there.

But in focusing on those bad conditions, Sumner makes a common mistake. He is comparing those conditions to conditions in which we live today or at least to some sort of ideal economic utopia. In doing that, he misses the important point, which is this: What were conditions for ordinary people prior to the Industrial Revolution? Answer: As Hobbes put it, life was nasty, brutish, and short ó that is, much, much worse than it was in 1880 America.

As bad as things were in 1880 America, it was a golden era compared to the pre-industrial age. This point was made as long ago as 1954 in a book entitled Capitalism and the Historians, which was edited by libertarian Nobel Prize-winning economist Friedrich Hayek. As Austrian economist Murray Rothbard stated, ďHayek contributed to and edited a series of essays that showed conclusively that the Industrial Revolution in England, spurred by a roughly free-market economy, enormously improved rather than crippled the standard of living of the average consumer and worker in England. In this way, Hayek led the way in shattering one of the most widespread socialist myths about the Industrial Revolution.Ē

So, does that help clarify why I would refer to 1880 as a golden era? Not because of the bad things that were still existing (duh!) but rather because for the first time in history, massive numbers of poor people actually had a decent chance to survive and even prosper. In fact, in the 1880s there are countless stories of poor people actually becoming wealthy people! Imagine that!

And why was this so? Thatís the critical question, the one that liberals never ask. They just assume that wealth is a given, that there is this big economic pie, and that the state should confiscate the pie and redistribute it in the interests of making everyone have an equal share of the pie. What liberals fail to recognize, however, is that in doing so, they begin a process that ends up condemning people to a life of massive poverty, starvation, famines, and short life spans that characterized the pre-industrial age.

To explain why I consider 1880 to be a golden era, especially for the poor, letís consider a modern-day example, one that a good liberal like John Sumner would consider to be a model society: the socialist paradise of North Korea. In that country, everyone is equal in terms of economic condition. The state owns everything, and everyone works for the state. There are no profits, speculators, or entrepreneurs. Greed and selfishness have been stamped out of society. Total government ownership and total government control. Everyone works for the benefit of the collective.

In other words, a liberal dream!

Oh, did I mention that there is also horrific poverty, famine, and starvation in North Korea? Letís assume, just for the sake of argumentation, that each year some 10 percent of the North Korean population is dying from malnutrition or illness.

Now, suppose we asked Sumner to give us his recommendation for ending poverty in North Korea. What would he say? He would say: ďAdopt a welfare state and a controlled economy! Create bureaucratic departments, modeled on the IRS and U.S. welfare agencies, whose job it is to confiscate wealth from the rich and give it to the poor!Ē

Do you see the problem though? Sumner would be doing what liberals always do: they assume that there is a pie of wealth to confiscate and redistribute. Thatís their solution to ending poverty. But he would be missing the obvious point: They already have total socialism in North Korea, which is precisely why there is no pie for Sumner to confiscate and redistribute. Everyone has nothing.

So, obviously the standard liberal statist solution for ending poverty isnít going to work in our North Korea hypothetical. Instead, we have come up with another solution.

Letís try a free-market-oriented solution, similar to the one that our American ancestors adopted and embraced. (I say ďorientedĒ because freedom isnít really freedom when government is permitting people to exercise it.) Letís assume that the North Korea authorities place 60 percent of the land and buildings in North Korea under private ownership. They also enact a law that permits 60 percent of the North Korean populace to engage in any economic enterprise they want, without any permission or interference from the state. The people in that sector will be free to engage in any mutually beneficial exchange with anyone in the world. There will be no income tax, and people will be free to accumulate unlimited amounts of wealth. There will be no economic regulations whatsoever, including price controls, minimum-wage laws, and anti-speculation laws. There will be no Social Security, Medicare, Medicaid, or any other government welfare plan. No central bank and no paper money; the market will determine the media of exchange. No one will be coerced into helping another person but will be free to do so if he wishes. There will be no restrictions on emigration or immigration.

After 10 years, Sumner and I make a visit to North Korea. We discover that there is now an enormous difference between the liberated sector and the government-owned sector. In the liberated sector, there are no more famines, no more starvation. Peopleís real standard of living is soaring.

Thatís not to say though that things are easy in the liberated sector. There is still much poverty given that it was only 10 years ago that people had absolutely nothing and were on the verge of starvation. People are having to work long hours in difficult working conditions, and that includes spouses and children. But everyone knows that those conditions are a blessing, compared to what is still happening in the government-controlled sector, where everyone is suffering much more horrific poverty and where 10 percent of the populace continues to die, year after year.

Now, I would call that a golden era, one in which 60 percent of the population was not only being saved but actually prospering.

What would Sumner say in response? He would say, ďWhy, thatís just the most ridiculous thing Iíve ever heard! Thatís no golden era because the people in the government-owned sector are still suffering and dying. Hornberger must think that all that misery and death is a good thing. And look at how much poverty there still is in the liberated section.Ē

Even worse is what Sumner would propose. Furious over the fact that people in the free-market sector now have more wealth than people in the government-owned sector, he would propose statist programs that would restore government control and ownership over the free-market sector. As a good liberal, what would matter to him is that everyone should be made equal, even if everyone is made equally poor.

Would his criticism leveled at me be valid? Would I really be praising the government-owned sector when I referred to this period as a golden one? Of course not! What I would be praising is that libertarian economic means ó i.e., the free market ó have been used to bring 60 percent of the population out of horrific poverty and given them a chance to survive and even to prosper, especially as the generations progress.

What would be my solution to the bad things still remaining? Thatís obvious ó I would expand private-property, free-market principles to the 40 percent sector, enabling everyone in North Korean society to experience the benefits of the unhampered market economy.

And this is precisely what was going on in the United States throughout the 1800s, notwithstanding the fact that there were a large number of people to whom free-market principles were not being applied, such as the slaves. But for the sector that was liberated, it was the most phenomenal era in history, insofar as living standards were concerned. People were actually going from rags to riches into one, two, or three generations.

The proof of the pudding was the thousands of penniless immigrants who were fleeing the lands of government control and regulation to come to the land of little or no income taxation, regulation, or welfare. They just wanted a chance to make it, all on their own.

Did I mention that 19th-century America was not only the most prosperous nation in history but also the most charitable nation in history? In a land with no income tax and no welfare state, it was voluntary contributions that built the churches, opera houses, museums, and so much more.

So, what was the obvious solution to those Americans who were not permitted to experience the benefits of economic liberty? Expand it to them! What was the solution to the restrictions on liberty still being enacted in the 19th century? Repeal them!

In fact, the best thing Americans could ever do today is enact a constitutional amendment for economic liberty similar to the one our American ancestors enacted for religious liberty: ďNo law shall be passed respecting the regulation of commerce or abridging the free exercise thereof.Ē

The worst thing that could have ever happened was to return to the old, bankrupt idea of government ownership and control. But thatís precisely where liberals took us, with their socialistic welfare state. Gripped by envy and covetousness and unable to control themselves as they saw the enormous wealth coming into existence because of the free market, liberals (or ďprogressivesĒ as some of them like to call themselves) brought into existence in the 20th century a massive confiscatory and redistributive socialist system, one that has been taking our country down the road to serfdom, impoverishment, and loss of liberty, the road that humanity has traveled throughout the ages.

Liberals have long justified their socialist and interventionist schemes under the pretense of loving the poor, needy, and disadvantaged. And their favorite justification whenever their programs go awry is, ďBut we have good intentions.Ē But good intentions are irrelevant. All that matters is reality, especially in terms of the immorality and destructiveness that have accompanied socialism and interventionism.

Sumner piously points out that 1880, the year that I used as an example of economic liberty, was characterized by the Chinese Exclusion Act. Of course, that couldnít be true given that the Act wasnít enacted until 1882. (Oh well, whatís a couple of years?) But his real point in bringing it up was to imply that the period wasnít really golden because there was an immigration restriction on Chinese immigrants.

But letís use Sumnerís example to show the rank hypocrisy with which liberals have long suffered. He complains about a law that excluded Chinese from freely immigrating to America, and rightfully so. Yet, look at what 20th-century liberals have done for decades: Theyíve used immigration controls to exclude not only Chinese but also Mexicans, Nicaraguans, Africans, Haitians, and, well, the poor of just about every country in the world.

Isnít it the liberals ó the lovers of the poor ó under liberal icon Barack Obama who are continuing the building of that fortified fence along our southern border, to keep the poor from coming here and trying to sustain their life through labor? Isnít it the liberals who are conducting those raids on businesses all across the land, rounding up poor people who just want to work and improve the lot of their families, deporting them to their home countries where they can experience a life of hardship and poverty?

In fact, wasnít it under the regime of liberal icon Bill Clinton that U.S. forces were attacking defenseless poor people, including women and children, who had escaped socialist and communist tyranny in Cuba and were trying to make it to the United States? Didnít liberals forcibly repatriate those refugees to Cuba? Oh well, maybe Sumner would argue that is was for their own good, since in Cuba there is free education, free health care, and free everything else in that paternalistic society.

Please, Sumner, remind me again how much you liberals love the poor, because Iím tempted to say that an era in which there is only one group of people who are being excluded is golden compared to the massive numbers of poor people that you liberals have been excluding from our country for decades under the guise of immigration controls.

In fact, would you, as a good, poor-person-loving liberal, explain something to me that Iíve always had trouble understanding. As you know, the premier icon for you people is Franklin D. Roosevelt. You liberals say that his enactment of Social Security, the crown jewel of the socialistic welfare state, showed how much he loved the poor, needy, and disadvantaged.

Well, if thatís the case, would you please explain to me FDRís attitude toward German Jews during the 1930s? Would you please explain to me why he refused to permit them to come to America when Hitler was willing to let them go? Werenít they poor? And while youíre at it, can you please explain to me why he refused to let those poor Jews traveling on the SS St. Louis to disembark at Miami Harbor in the infamous ďvoyage of the damnedĒ?

You see, Iím having a difficult time understanding why a man who purports to love the poor would do that to poor Jews. And Iím also having a difficult time understanding why you liberals would extol a man who did that sort of thing to poor Jews.

Please provide me with your best explanation on this, because Iím tempted to conclude that Rooseveltís Social Security plan had nothing to do with any purported love of the poor but instead everything to do with the love of power and with making as many people dependent on the federal government as possible.

Oh, and while you are at it, would you explain to me something about FDRís protťgť, the liberal icon Lyndon Johnson, who brought Medicare and Medicaid into existence because of his purported love for the poor, needy, and disadvantaged? LBJ, as I hope you know, killed some million Vietnamese people, most of whom were poor, in an illegal war that was based on nothing but lies. He also sent some 58,000 of my generation to their deaths in Vietnam, many of whom were poor because thatís who they were drafting to fight in that war.

Would you be so kind as to reconcile that one for me, because Iím getting real tempted to conclude that LBJís Medicare and Medicaid plans were nothing more than a political power grab designed to put more Americans under the yoke of federal power and dependency?

While weíre on the subject, I also have a question about liberal icon Bill Clinton, another purported lover of the poor, needy, and disadvantaged. During the entire 8 years he was in office, he killed hundred of thousands of Iraqi children with the brutal sanctions that he enforced against that country. His U.S. Ambassador to the UN, Madeleine Albright, another liberal icon, said that those deaths were worth the attempt to oust Saddam Hussein from power.

Thatís always been difficult for me to swallow. How can the deaths of poor, innocent children ever be worth a political goal such as regime change, especially given that Saddam had once been the partner of the U.S. government?

Of course, Iíd be remiss if I failed to mention the vicious attack by liberal icon Janet Reno (and Bill Clinton) on the poor people inside the Branch Davidian compound at Waco, including innocent children, given that today is the 17th anniversary of that horrific slaughter.

Oh, one final thing, Sumner. Please donít lump conservatives with libertarians, especially since there ainít a dimeís worth of difference between liberals and conservatives. Both of you are statist to the core, and both of you are lovers of big government, big spending, big debt, and big inflation. And both of you are taking our nation down the road to serfdom, bankruptcy, and moral debauchery.

The only solution to the woes that you statists, both liberals and conservatives, have foisted onto our nation lies with libertarianism. Our American ancestors discovered the truth, and lots of Americans are now re-discovering it, which is precisely why you statists are so terrified.
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"For the first years of [Ludwig von] Misesís life in the United States...he was almost totally dependent on annual research grants from the Rockefeller Foundation.Ē -- Richard M. Ebeling
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