Libertarianism: Political Career and Risks

When society has been lobotomized or programmed into believing that government is a “given”, and that the individual is not only branded as immoral (e.g. greed) but more importantly, nonexistent (e.g. nationalism), then looking for a political career from the standpoint of liberty seems almost close to nil.

But this shouldn’t stop passionate freedom loving disciples from preaching the truth. Austrian economist Bob Wenzel writes,

And that's what libertarians need to know about running for office. It's not about compromising your principles to gain more votes, its not about hiding your true views on taxes and minimum wage laws to gain more votes, it's about running to get the hardcore libertarian message out.

It's about hoping that after you give a speech where you denounce minimum wage laws, all taxes and the local public fire department, that at least one person, maybe two, wander over to you after your speech and tell you that what you said sounded interesting. It's about losing the election, but at the same time advancing the libertarian cause.

In other words, it's okay for a libertarian to run for office, if it's the Ron Paul way. If it's about losing the election but spreading the word. If it's about writing op-eds, appearing in debates and being interviewed on radio about hardcore libertarianism.

Libertarians aren't close to getting elected in most places with just a libertarian message. But the message can be spread. Ron Paul has proved that. If this is done in enough places, enough times, the message can be spread even more, and more people will catch on.

Then some day, perhaps five years from now, perhaps ten, we may hear of people sticking completely to libertarian principle and winning here and winning there. That will be the signal that large numbers of people at that time want liberty and understand what liberty is.

Embracing the principle of freedom confronts mountains of sacrifices and risks, particularly the risk of ostracism and of losing social privileges in the face of massive tentacle of influence by governments in almost every aspect of our lives.

The great Ludwig von Mises sets a shining example of this fight of principle over convenience; Professor Mises sacrificed a glamorous teaching career.

In an encomium, one of the greatest student by Professor Mises, the preeminent dean of the Austrian school Murray Rothbard reveals of the career life of Mises,

But it remains an ineradicable blot on the record of American academia that Mises was never able to find a paid, full-time post in any American university. It is truly shameful that at a time when every third-rate Marxoid refugee was able to find a prestigious berth in academia, that one of the great minds of the twentieth century could not find an academic post. Mises's widow Margit, in her moving memoir about life with Lu, records their happiness and her gratitude that the New York University Graduate School of Business Administration, in 1945, appointed Mises as Visiting Professor teaching one course a term. Mises was delighted to be back at university teaching; but the present writer cannot be nearly as enthusiastic about a part-time post paying the pittance of $2,000 a year. Mises's course was, at first, on "Statism and the Profit Motive," and it later changed to one on "Socialism." This part-time teaching post was renewed until 1949…

Likewise, in the face of Keynesian revolution, the great Mises stuck to his convictions when the rest sold out, again from Professor Rothbard,

It must have been galling to Mises that, in contrast to his shabby treatment at the hands of American academia, favorite former students who had abandoned Misesian doctrines for Keynesianism, but whose only real contributions to economics had come as Misesians, received high and prestigious academic posts. Thus Gottfried Haberler was ensconced as full professor at Harvard, and Fritz Machlup went to John Hopkins and later to Princeton. Oskar Morgenstern, too, landed at Princeton. All of these high academic positions were, of course, paid for by the university

Well, even the soul of American revolution Thomas Paine, known for this famous passage…

Society in every state is a blessing, but government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.

…had a melancholic-tragic ending.

Author George Smith accounts for Mr. Paine’s demise,

The man who inspired the country to secede from a corrupt state had six people in attendance at his funeral, none of whom were dignitaries.

The struggle for the cause of liberty is a tall order.

But I think the information age will most likely tilt the balance from the dominant political mindset towards liberty.

Quote of the Day: Good Conduct is a Consequence of Freedom

Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilised community upon each other, create that great chain of connection which holds it together. The landholder, the farmer, the manufacturer, the merchant, the tradesman, and every occupation, prospers by the aid which each receives from the other, and from the whole. Common interest regulates their concerns, and forms their law; and the laws which common usage ordains, have a greater influence than the laws of government. In fine, society performs for itself almost everything which is ascribed to government.

That’s from Thomas Paine, English-American author, pamphleteer, radical, inventor, intellectual, revolutionary, and one of the Founding Fathers of the United States quoted from the Rights of Man Part 2, by libertarian author Sheldon Richman who aptly sums it up…

good conduct isn’t a precondition of freedom; it is a consequence of freedom

The Zombie-fication Of Financial Markets

World markets appear to be increasingly transmogrifying into zombie markets.

This from the New York Times,

``A week after rattling global bourses and annoying allies with a unilateral ban on some forms of financial market speculation, Germany went much further Tuesday, proposing a law that would greatly broaden restrictions on several instruments that investors use to bet against stocks, bonds and currencies.

``Despite criticism that market regulation will be toothless unless it is enacted globally, the German finance minister, Wolfgang Schäuble, on Tuesday proposed extending a ban on what the draft legislation called “certain transactions that amplify the crisis.”

``There is broad support for such measures among leaders on both sides of the Atlantic, and some of the proposed rules are already in effect in the United States. Other European nations, however, have complained about Germany’s decision to act alone.

``“What the Germans are doing would be all the more effective if it were done at a coordinated European level,” Chantal Hughes, a spokeswoman for Michel Barnier, the European Union internal markets commissioner, said Tuesday.

``The draft law, released Tuesday by the German Finance Ministry, expands a ban on so-called naked short-selling to all stocks that have their primary listing in Germany, as well as on government bonds issued by euro countries.

``The law, which will take at least until September to win passage in Parliament, would also ban naked short-selling of the euro, and enshrine a ban on use of so-called credit default swaps to bet against European government bonds."

What the news reveals is how mainstream politicians think. They believe they can:

1.control or manipulate the markets at will, with no unintended effects. (yes, they seem to think that as deified entities, they are far superior to market forces and above the laws of scarcity)

2. prevent markets from revealing their natural state by controlling price signals. Thus, a market collapse markets isn't in their books. (yet the markets have been collapsing)

3. paper over solvency issues with massive liquidity injections and price control measures.

More demand for zombification...

From BCA Research,

``History shows that whenever authorities limit the commitment to a particular value, it encourages investors to quantify their worst case scenario (which during times of financial sector strains can be horrific), leading to a panic and meltdown. It is only once policymakers provide a credible unconditional commitment to put an end to the turmoil that investors’ fears calm, allowing financial markets to stabilize. Unfortunately, the “open-ended” nature of European policmakers’ commitment has come into question: German authorities moved to prevent speculative attacks by banning naked short selling for 10 German bank stocks as well as for CDS on regional government debt. Similarly, the ECB continues to reiterate their intent to sterilize purchases of public and private debt securities, i.e. not quantitative easing. The decision on short selling should not be a large surprise given that the primary motive of German politicians to participate in any rescue package has been to protect their domestic banks. The only good news is that German lawmakers have approved its country’s share of the $1 trillion bailout package. Still, the ECB will need to be much more forceful in its reflationary efforts. Bottom line: The ECB should reassure markets that any expansion of its balance sheet will be unwound in an orderly fashion once the economy is on a stable footing. In the meantime, substantial quantitative easing must be undertaken."

First of all, the claim of "history" as reference is dubious. That's because all these debt binges, rescue efforts and reflationary measures, have been unprecedented in scale and in scope, so there is basically no basis for comparison.

Besides in our own Asian crisis, an open-ended rescue was not an option, instead we were prescribed to adapt "austerity" programs via structural adjustment programs (SAP).

Only today, do we see the "need" for massive or aggressive substantial quantitative easing. In short, money printing as a policy is selective and conveniently applied, where it involves the developed nations. It becomes not only a fashion but a false sense of entitlement.

Yet as we keep pointing out, even Keynesian Hyman Minsky believes that massive government intervention leads to systemic bubbles by engendering the moral hazard conditions that sow the seeds of a bubble.

And likewise, as noted above, substantial QE's or money printing won't solve the solvency issues. They merely "kick the can" or defer and even aggravate the day of reckoning. Yet, history has never been quite digested, but misrepresented.

In the words of Thomas Paine, ``I remember a German farmer expressing as much in a few words as the whole subject requires; "money is money, and paper is paper."

``All the invention of man cannot make them otherwise. The alchemist may cease his labors, and the hunter after the philosopher's stone go to rest, if paper can be metamorphosed into gold and silver, or made to answer the same purpose in all cases."

If printing money is, indeed, the elixir to the world's problem, then Zimbabwe should have been the most prosperous and the world's largest exporter.

Besides, based on this line of reasoning, why do we or anyone need to work, if, at all, money printing can solve the issue of scarcity? Why do we even need the markets?