President Obama has succeeded in seizing new power over health care and other swaths of American lives in part because previous presidents muddied Americans' understanding of freedom.
Most of the past century's debates over the meaning of liberty have featured one politician after another who promised people true freedom, if only they would submit to increased government power. In the process, politicians have been generously shrinking people's individual liberty.
The clearest political turning point in the American understanding of freedom came during the presidency of Franklin Roosevelt. He often invoked freedom, but almost always as a pretext for increasing government power. He proclaimed in 1933, "We have all suffered in the past from individualism run wild." Naturally, the corrective was to allow government to run wild.
Roosevelt declared in a 1934 fireside chat, "I am not for a return of that definition of liberty under which for many years a free people were being gradually regimented into the service of the privileged few." Politicians such as Roosevelt began by telling people that control of their own lives was a mirage; thus, they lost nothing when government took over.
In his renomination acceptance speech at the 1936 Democratic Party convention, Roosevelt declared that "the privileged princes of these new economic dynasties ... created a new despotism.... The hours men and women worked, the wages they received, the conditions of their labor -- these had passed beyond the control of the people, and were imposed by this new industrial dictatorship."
But if wages were completely dictated by the "industrial dictatorship" -- why were pay rates higher in the United States than anywhere else in the world, and why had pay rates increased rapidly in the decades before 1929? Roosevelt never considered limiting government intervention to safeguarding individual choice; instead, he favored multiplying power to impose "government-knows-best" dictates on work hours, wages, and contracts.
New improved freedom
On January 6, 1941, he gave his famous "Four Freedoms" speech, promising citizens freedom of speech, freedom of worship -- and then he got creative: "The third [freedom] is freedom from want ... everywhere in the world. The fourth is freedom from fear ... anywhere in the world." Proclaiming a goal of freedom from fear meant that the government henceforth must fill the role in daily life previously filled by God and religion. His list was clearly intended as a "replacement set" of freedoms, since otherwise there would have been no reason to mention freedom of speech and worship, already protected by the First Amendment.
Roosevelt's list of new freedoms liberated government while making a pretense of liberating the citizen. It offered citizens no security from the state, since it completely ignored the rights protected by the Second Amendment (the right to keep and bear firearms), the Fourth Amendment (freedom from unreasonable search and seizure), the Fifth Amendment (due process, property rights, the right against self-incrimination), the Sixth Amendment (the right to a speedy and public trial by an impartial jury), and the Eighth Amendment (protection against excessive bail, excessive fines, and cruel and unusual punishments).
Roosevelt's revised freedoms also ignored the Ninth Amendment, which specifies that the listing of "certain rights, shall not be construed to deny or disparage others retained by the people," as well as the Tenth Amendment, which specified that "powers not delegated" to the federal government are reserved to the states or to the people.
And, even though Roosevelt included freedom of speech in his new, improved list of progressive freedoms, he added: "A free nation has the right to expect full cooperation from all groups.... ... We must especially beware of that small group of selfish men who would clip the wings of the American eagle in order to feather their own nests.... The best way of dealing with the few slackers or troublemakers in our midst is, first, to shame them by patriotic example, and, if that fails, to use the sovereignty of government to save government."
Thus, the "new freedom" required that government have power to suppress any group not actively supporting the government's goals. (The United States was still at peace at the time of Roosevelt's speech.) The expansions of freedoms in the list were promised to the whole world -- primarily people who did not vote in U.S. elections -- while the implicit contractions of previously sanctified freedoms would affect only Americans.
Roosevelt elaborated on his concept of freedom in his 1944 State of the Union address. He declared that the original Bill of Rights had "proved inadequate to assure us equality in the pursuit of happiness." He called for a "Second Bill of Rights," and asserted, "True individual freedom can't exist without economic security." And security, according to Roosevelt, included "the right to a useful and remunerative job," "decent home," "good health," and "good education." Thus, if a government school did not teach all fifth-graders to read, the nonreaders would be considered oppressed. Or, if someone was in bad health, then that person would be considered as having been deprived of his freedom, and somehow it would be seen as the government's fault.
Roosevelt also declared that liberty requires "the right of every farmer to raise and sell his products at a return which will give him and his family a decent living" -- a nonsensical concept that would require setting food prices high enough to keep the nation's least efficient farmer behind his mule and plow.
Roosevelt clarified the necessary underpinnings of his new freedom when, in the same speech, he called for Congress to enact a "national service law -- which for the duration of the war ... will make available for war production or for any other essential services every able-bodied adult in this Nation." He promised that this proposal, described in his official papers as a Universal Conscription Act, would be a "unifying moral force" and "a means by which every man and woman can find that inner satisfaction which comes from making the fullest possible contribution to victory." Presumably, the less freedom people had, the more satisfaction they would enjoy.
Commenting on foreign policy, Roosevelt praised Soviet Russia as one of the "freedom-loving Nations" and stressed that Marshal Stalin was "thoroughly conversant with the provisions of our Constitution." Roosevelt's concept of freedom required people to blindly trust their leaders -- a trust he greatly abused. He also denounced those Americans with "suspicious souls" who feared that he had "made ‘commitments' for the future which might pledge this Nation to secret treaties" at the summit of Allied leaders in Tehran the previous month. But at that summit, he had secretly agreed to allow Stalin to move the Soviet border far to the West -- thus consigning millions of Poles to life under direct Soviet rule. (Roosevelt and Stalin used roughly the same dividing line that Hitler and Stalin had used in 1939 to divide Poland into Nazi and Soviet spheres.)
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The relative decline in manufacturing -- the British case and the world
Woes is us, we don't make anything any more. We get this all too frequently, that manufacturing in the UK has declined so much, that we're over reliant upon services, that simply we've too few northerners making things that can be dropped on feet, that, in short, we're all stuffed.
That we all know that the value of manufacturing production has been rising, even as it shrinks as a portion of the economy, doesn't seem to clinch the matter. For we're still told that the decline of manufacturing as a portion of the economy is some dreadful fate.
OK, so it has indeed been falling as a percentage of GDP. Is this a bad thing?
Hmm, well, it doesn't really seem so, does it? Or at least if it is, then we're in good company. For as you can see (and don't worry too much about the absolute numbers, they might not be calculated in quite the same way, just look at the trends), manufacturing is falling as a percentage of the global economy all over. And we know very well that global manufacturing output isn't falling: so it must be just that other parts of the economy, services obviously, are growing faster than manufacturing.
At which point it becomes terribly difficult to worry about what percentage of the UK economy manufacturing is or isn't. For as we know, GDP is the "value of goods and services". The total amount of value produced that we can share out in some or another manner. It matters not whether that value is created by building jet engines or painting women's nails: it's still value created, an increase in wealth and that is rather the point of this whole thing, isn't it?
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Capital is the key to wealth
A Travel Channel episode of No Reservations, a cooking-focused show narrated by Anthony Bourdain, took viewers to Port-au-Prince, Haiti.... In a scene early in the show set in this giant city after the earthquake, Bourdain and his crew stop to eat some local food from a vendor. He discusses its ingredients and samples some items. Crowds of hungry people begin to gather. They are doing more than gawking at the camera crews. They are waiting in the hope of getting something to eat.
Bourdain thinks of a way to do something nice for everyone. Realizing that in this one sitting, he is eating a quantity of food that would last most Haitians three days, he buys out the remaining food from the vendor and gives it away to locals.
Nice gesture! Except that something goes wrong. Once the word spreads about the free food — word-of-mouth in Haiti is faster than Facebook chat — people start pouring in. Lines form and get long. Disorder ensues. Some people step forward to keep order. They bring belts and start hitting. The entire scene becomes very unpleasant for everyone — and the viewer gets the sense that it is worse than we are shown.
Bourdain correctly draws the lesson that the solutions to the problem of poverty here are more complex than it would appear at first glance. Good intentions go awry.
The people of Haiti in the documentary conform to what every visitor says about them. They are wonderfully friendly, talented, enterprising, happy, and full of hope. Like most people, they hate their government. Actually, they hate their government more than most Americans hate theirs. Truly, this is a precondition of liberty. There is a real sense of us-versus-them alive in Haiti, so much so that when the presidential palace collapsed in the recent earthquake, crowds gathered outside to cheer and cheer! It was the one saving grace of an otherwise terrible storm.
With all these enterprising, hard-working, and creative people, millions of them, what could possibly be wrong with the place?
Where is the wealth? There is plenty of trade, plenty of doing, plenty of exchange and money changing hands. Why does the place remain desperately poor? If the market economists are correct that trade and commerce are the key to wealth, and there is plenty of both here, why is wealth not happening?
One can easily see how people can get confused, because the answer is not obvious until you have some economic understanding. A random visitor might easily conclude that Haiti is poor because somehow the wealth is being hogged by its northern neighbor, the United States. If we weren't devouring so much of the world's stock of wealth, it could be distributed more evenly and encompass Haiti too. Or another theory might be that the handful of international companies, or even aid workers, are somehow stealing all the money and denying it to the people.
These are not stupid theories. They are just theories — neither confirmed nor refuted by facts alone. They are only shown to be wrong once you realize a central insight of economics. It is this: trade and commerce are necessary conditions for the accumulation of wealth, but they are not sufficient conditions. Also necessary is that precious institution of capital.
What is capital? Capital is a thing (or service) that is produced not for consumption but for further production. The existence of capital industries implies several stages of production, or up to thousands upon thousands of steps in a long structure of production. Capital is the institution that gives rise to business-to-business trading, an extended workforce, firms, factories, ever more specialization, and generally the production of all kinds of things that by themselves cannot be useful in final consumption but rather are useful for the production of other things.
In a developed economy, the vast majority of productive activities consist in participation in these capital-goods sectors and not in final-consumption-goods sectors.
But there is a sense in which capitalism is the perfect term for a developed economy: the development, accumulation, and sophistication of the capital-goods sector is the characteristic feature that makes it different from an undeveloped economy. The thriving of the capital-goods sector was the great contribution of the Industrial Revolution to the world.
Now, this is interesting to me because anyone can easily miss this point just by looking around Haiti where you see people working and producing like crazy, and yet the people never seem to get their footing. Without an understanding of economics, it is nearly impossible to see the unseen: the capital that is absent that would otherwise permit economic growth.
Now to the question of why the absence of capital. The answer has to do with the regime. It is a well-known fact that any accumulation of wealth in Haiti makes you a target, if not of the population in general (which has grown suspicious of wealth, and probably for good reason), then certainly of the government. The regime, no matter who is in charge, is like a voracious dog on the loose, seeking to devour any private wealth that happens to emerge.
This creates something even worse than the Higgsian problem of "regime uncertainty." The regime is certain: it is certain to steal anything it can, whenever it can, always and forever.
This is an interesting case of a peculiar way in which government is keeping prosperity at bay. It is not wrecking the country through an intense enforcement of taxation and regulation or nationalization. One gets the sense that most people never have any face time with a government official and never deal with paperwork or bureaucracy really. The state strikes only when there is something to loot. And loot it does: predictably and consistently. And that alone is enough to guarantee a permanent state of poverty.
More HERE
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ELSEWHERE
Bank overhaul battle pays off for GOP pols: "Republicans fought a hard but ultimately losing battle to block the Wall Street regulatory overhaul that Barney Frank and his fellow Democrats guided through Congress last year. But now they are turning the legislation known as the Dodd-Frank law to fullest advantage. The GOP is winning a larger share of campaign money contributed by banks and other Wall Street interests who want to roll back elements of the stricter rules."
Rules for thee, not for me: "It seems that many of the same organizations that supported the passage of Obamacare are also the organizations that have been granted waivers to not be subjected to that legislation. It seems rather ironic, because if the people involved in those organizations really believed in the program then they would have no reason to ask for a waiver. On the other hand, those groups that were not favorable to Obamacare are not being granted any waivers."
Government, Fed to blame for high gas prices: "I do a lot of driving. I probably fill my gas tank up three or four times a week. So, needless to say, I feel the pain when gas prices soar. Unfortunately, President Barack Obama and the Democrats in Congress want to make things worse, as they are wont to do when it comes to all things economic. Obama has decided, wrongheadedly of course, that the evil oil companies are the problem."
GM’s profits: Nothing to gloat about: "While bailout enthusiasts hail GM's first-quarter earnings as proof that the administration saved the auto industry, President Obama should know better than to gloat. No such feat was accomplished and the imperative of extricating the government from GM's operations has yet to be achieved."
There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
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