Monday, April 27, 2009

The Truth About the Economy (Updated)

There is indeed plenty of business-government col­laboration around, enough to justify calling it by its own name: corporatism. Since such practices are the antithesis of laissez-faire liberalism, it is hard to see how the free market can rightly get the blame for them. - Joseph Stromberg

My wife and I had a long discussion yesterday after church, one that began on the glider in her garden area and ended on the loveseat in our living room. We talked about the differences between laissez-faire free markets and the state-capitalist (or state-corporate, or virtual fascist) system we actually live under, and how very few people know the distinction.

This morning I ran across an absolutely brilliant piece at The Freeman by Chris Sciabarra that lays out the argument in no uncertain, John Taylorite terms:

There is no free market. There is no “laissez-faire capitalism.” The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine “laissez-faire capitalism” has never existed...

We heard a lot about “change” during the last presidential campaign, and about the necessity to end the influence of Washington lobbyists on public policy. But that influence exists because Washington has the power to dispense privilege. And privileges will always be dispensed in ways that benefit “ultimate decision-makers.” That’s the way the system is rigged. It is not simply that intervention breeds corruption; it’s that corruption is inherent in the process itself. [emphasis added]

Read all of this essential article here.

Thursday, April 23, 2009

The Invisible Hand

It has been said that “only God can make a tree.” Why do we agree with this? Isn’t it because we realize that we ourselves could not make one? Indeed, can we even describe a tree? We cannot, except in superficial terms. We can say, for instance, that a certain molecular configuration manifests itself as a tree. But what mind is there among men that could even record, let alone direct, the constant changes in molecules that transpire in the life span of a tree? Such a feat is utterly unthinkable!

I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite, and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies—millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human master-minding! Since only God can make a tree, I insist that only God could make me. Man can no more direct these millions of know-hows to bring me into being than he can put molecules together to create a tree.
- From Leonard Read’s wonderful essay, “I, Pencil” (1958).

Friday, April 3, 2009

Old Hop’s Paradigm

Taking a break from Rothbard’s economics epic, I stumbled across an article by Chandran Kukathas of the London School of Economics, entitled, “Two Constructions of Libertarianism.” Dr. Kukathas argues that in nature only two types of libertarian societies could theoretically emerge. One he calls “Federation of Liberty” (which I will call “Federal* Liberty”), the other, “Union of Liberty.”

The underlying premise of both theoretical systems is non-aggression. Respect for an individual’s self and property is paramount. However, the two systems have the potential to evolve toward different ends. Under the Federal Liberty model, non-aggression and freedom do not preclude the possibility of groups forming within the society that may not respect individual liberties. For example, religious cults that restrict or enforce certain behaviors on their members, or even groups that practice slavery, could arise. Under the Federal model, however, respect for libertarian rights is such that no group or individual can coerce other groups to alter or extend individual liberties to their members. At best, one can stand outside an “oppressive” group (my phrase) and beckon individuals out of it; or attempt to educate its members on the virtues of individual liberty. But no enforcement of liberty can be undertaken.

Under the Union of Liberty model, a similar coalescence of individuals into different pockets or groups would likely occur. However, within this system libertarian freedom is held on such an ideological pedestal that repressive or oppressive acts engaged in by separate groups cannot be tolerated by the society at large. Eventually, some committee or judicial authority would emerge that would enforce the rules upon the groups deemed outside the ideological mainstream. At that point, however, the fundamental premise of libertarianism is lost; coercion has been exercised, and its exercise empowers, perhaps permanently and detrimentally to the whole, the authority that brought that coercion to bear. For this reason, Kukathas concludes that the Federal model, all its potential perils notwithstanding, is preferable to the Union model.

In his study of 18th century Cherokee culture, anthropologist Fred Gearing describes a society that somewhat approximates Kukathas’ Federation model. While the Cherokees formed a tribal and linguistic nation, they were divided into over 60 separate and autonomous towns. No Cherokee town could impose its will upon a neighboring or distant town. No decision reached at a tribal “capital” like Great Tellico or Chota was binding upon an individual town or, for that matter, upon individual Cherokees.

At the individual level, Cherokee conduct was ruled by the principle of non-aggression. An honorable man was expected to walk away from potential conflict; he acted in self-defense only if his person or possessions were threatened.

Warfare among Cherokees was largely a matter of justice according to the tribal tradition of blood vengeance. When a member of the local town was slain by someone from another town (or different tribe) the member’s clan would form a war party to exact proportional retribution, i.e. “an eye for an eye.” But even here individual rights were highly regarded. Even to the point of attack, an individual warrior could decide that he wanted out of the enterprise and abort his participation without retaliation from his fellows.

Each town was ruled by a council of elders who upheld the tribal traditions. Tradition and family (clan) formed the glue that bound Cherokee society. The elders enforced tradition chiefly through their power to shame or to encourage the ostracizing of contentious individuals. But real coercive force they lacked. If an individual disagreed with a council decision, he was free to go his own way in the same sense that an entire town could ignore the decision of a higher, tribal council.

Tribal councils existed primarily for discussion of how to deal with foreigners, i.e. other American Indian tribes or European settlers. Councils arrived at major decisions only by consensus, at which point the appointed headman would speak, or have one of his representatives speak, on behalf of that consensus. Old Hop (d. 1761) was the headman at Chota when the Cherokee nation found itself sandwiched between the rival French and British colonial empires. Because of Old Hop’s physical infirmity (thus, his nickname) Attakullakulla, “the little carpenter,” served as his ambassador. But a reading of Anglo-Cherokee relations during the mid-18th century reveals how little coercive power Old Hop and the Chota council actually possessed. Retributive wars erupted between Cherokee towns and white settlers in the South Carolina upstate that Old Hop, from his seat in what is now southeast Tennessee, was powerless to prevent or stop.

The Cherokee nation was eventually overwhelmed by the expanding British and then American empires. But its polity left an indelible influence on the thought of some American Founders, particularly Thomas Jefferson. The defeat and dispersion of the nation should not be seen as a failure of its polity, especially given that the Cherokees lived in relative harmony and peace for centuries before European contact. For both paleoconservatives and paleolibertarians searching for historical culture examples that fall within their paradigms, the Cherokees of old are ripe for deeper investigation.

*I mean Federal in its original sense – the spreading of power over various constituencies; not to be confused with the present U.S. Federal government, which has become nothing if not authoritarian.