Instead of substantive and crucial debate about power, Americans are led to fret about which person will head an agency. American children learn in civics classes that this country is a land of laws, not men; the financial press disproves that myth daily. FULL ARTICLE by Robert P. Murphy
Source link: http://archive.mises.org/13915/its-not-about-personnel-its-about-power/
{ 23 comments }
To extend the referee analogy, the alleged unbiased government referee is taking kickbacks from the teams to get favorable calls and punish opponents, and has the arbitrary power to change the rules of the game whenever it suits them. In other words, the game is rigged, and the government is doing the rigging.
Rothbard would have cackled joyously after reading this nifty piece. Thanks!
good read
If you do things right, people won’t be sure you did anything at all. The opposite will be true in this instance.
Bob,Thanks for the article. I have been thinking about this for a couple of months, but on an ever broader level. The entire anti-liberal central planning mind set is based no finding the best person rather than having the best policies. This mindset always blames failure on simply not finding the right person for the job. central planners never consider that their system is actually a flawed system.The news media is absolutely filled with people who think this way. That is why you never have news outlets question the policy, procedure, or bureaucracy. They always assume that the planning system is correct, all we need is the right person. It is the irrational belief in a perfect human who can make omnicient decisions.This is why they have such disrespect for the founders of our country. Our founders understood the sinful nature of man and the system of government they designed was filled with controls and restrictions of power so that the flaws of man would not gain too much power. This is also why they disrespect Austrian Economics. It talks about right policies and systems rather than relying on character. We have totally forgotten this and most of the people in our nation don’t even understand the difference. The news media and politicians perpetuate the myth of the omnicient dictator. The politicians love this because they spend their time trying to convince votes that they are such a person.The only solution is for us to force people to discuss structure not people.
Great point. Finding the right person… isn’t this what elections are now based on? meaning, “Elect me, I will fix all the problems…”
Franklin, I agree with your comment. But, I think it really is JUST an opinion piece for the choir. Not written for dissemination in order to convince the masses. Nothing wrong with that , is there?
This was generally a feel-good puff piece for the already-converted.
In the Reuters article, there is reference to, “She is a hero to liberal activists and consumer groups for taking on Wall Street excesses seen as a root cause of the global financial crisis that drove the United States into its worst recession since the Great Depression of the 1930s.”
And so??? Has she been successful in doing this, or not? And this is not to miss your point, which is that Washington wants to shift the focus to the person rather than the philosophy. Therefore, one could have used this to highlight her (any government crony’s) ineptitude when trying to play economic god.
Sorry to rain on the parade, but the free market philosophy is on the defensive because it is perceived as the Wall Street philosophy.
And the present interpretation leads many to believe that government indeed is the answer.
Citing “Enron” as doing nothing to prevent current excesses only further solidifies the case FOR government; the statist will respond that Enron excesses are now mitigated thanks to more government oversight. And if the counter is, “Well, how did that prevent the financial crash in 2008?” The simple answer is, “What are you talking about? The regulations were about validating corporate income statements, not overseeing investment banking derivatives! Remember the S&L fiasco? This was another failure due to lax oversight. The government fixed it. If the government had broader reach, then the current crash would have been mitigated.”
The libertarian must show the results of the new regulation. This article does nothing to elicit all the new statutes and laws and oversight by governmental czars and then *demonstrate the negative consequences of the new regulation and oversight.*
Under the “This Wouldn’t Happen in a Free Market,” the major complaint that while this is yet another government watchdog, this one is much oh-so-much-scarier.
And why?
This was an opportunity to knock the story/woman out of the park, and then scholastically link the theme to a proof — more czars and more regulations has created (not simply will create) nothing but inequity and more losers.
I’m a big fan of Murphy’s. I don’t think this was up to his usual stellar par.
Franklin, I agree with your comment. But, I think it really is JUST an opinion piece for the choir. Not written for dissemination in order to convince the masses. Nothing wrong with that , is there?
‘course not.
This is a good piece. While not as profound as some might wish, I think it is touching on a very important point. Lovers of central planning tend to think that there are no scientific principles of Human Action. For example, I read a speech by Mao where he complained that his plans were failing because of selfishness. People were not following his dictates! We need to say it every day, loud or soft, blog or post, that there are scientific principles of Human Action that are valid at all times and all places for everyone. One of the consequences is that regulatory bureaucracies fail. They get more expensive and quality declines over time. Just as prices fall and quality increases over time in the real world (free market).
I believe that is why the Revolutionary Founding Fathers created the USA under the Articles of Confederation with no executive. A chief executive cannot be contained for ever.
I think they agreed to the Constitution because they thought that the country would be soon split by slavery and the Constitution would be replaced.
…”there are scientific principles of Human Action that are valid at all times and all places for everyone.”
By that logic, you can assume that no dictator has as of yet discovered those principles of human action, resulting in failure. Did I misunderstand your point, Ron? I believe you half-ass made a case for Mao.
Conflict occurs precisely because there are NO scientific principles of human action that are valid at all times and all places for everyone. The problem is that we all THINK we know what is valid for everyone at all places and all times. For Mao, altruism was the key principle of action for success.
Thanks for taking time to read my post. Conflict occurs because some people try to compel behavior in others. It does not matter what we think (therefore the first amendment). It matters what we do. Everyone has to eat. Everyone desires food. Everyone acts to obtain dinner. That is why I believe in the Axiom of Action.
Why are the Chinese turning away from Mao and embracing economic freedom? Why did they give up on Mao’s altruism? Because it is failed. Why has Christianity endured? Common purse. Same thing, isn’t it? No. Christianity is a choice, a club. Freedom is the key. You are free to join or quit Christianity. Mao killed and incarcerated those who opposed him. No freedom. That is why Mao failed and Jesus continues to succeed.
And what of the inquisition? It tore the church apart. It was the King and Queen attempting to impose compulsory Christianity through a government regulatory bureau which is what the church became. Another failure of force.
Dictators and lawmakers set goals they find desirable. They can take your money now, or they can wait until you have more and then take it. Something now is worth more than something later. They may not be in power later. They want it now. Will it hurt the nation. Then question for the dictator is ‘how bad?”
Please explain, Andy. I do not follow your argument.
“By that logic, you can assume that no dictator has as of yet discovered those principles of human action, resulting in failure. Did I misunderstand your point, Ron? I believe you half-ass made a case for Mao.”
…”there are scientific principles of Human Action that are valid at all times and all places for everyone.”
I wasn’t sure what you meant.
The point I was trying to make about conflict is that some people attempt to compel others to action BECAUSE they believe “there are scientific principles of action…” Mao was unable to accept that all of our undertakings are not based on altruism, his axiom of action. My impression of Libertarians so far is that nothing compels us beyond rationality. Secondly, everything (especially individual rights) is absolute.
“Dictators and lawmakers set goals they find desirable.” You ask why the Chinese are turning away from Mao. I ask the same question about America abandoning laissez faire economics in favor of a mixed economy. According to many Libertarians, in my limited experience, the answer is naivety , stupidity and a slave mentality. I prefer to believe that modifying the rights of some to the benefit of others is justified in some cases.
Mao had no science. His axioms were not valid. He thought that he could remake people into socialists. He thought that laissez faire is a club. China could just opt out of “capitalism” and modify human rights to the benefit of all. When it did not work, he blamed the people for selfishly struggling to survive instead of marching off to starvation. In fact, his policies are to blame. Here is the point. Central planning is the problem. Freedom is the solution. The USA is the wealthiest nation on earth because we are the freest. If you try “modifying… rights” and compelling behavior, you follow Mao and will not obtain the goal you seek. Government should only act when there is a complaint. And then only when the complaint is reasonable. Read Human Action or Man, Economy and State for details on how freedom works to provide economic prosperity for all. These books are attempts to describe how things work scientifically, not calls to action. I think that most people feel called to act once they understand that Freedom works and compulsion does not. Many libertarians like what they hear and get enthused without the depth of knowledge to support their argument. But I think that they are closer to the rational truth of scientific human behavior than your description. And the greatest altruists are the ones who chose it freely, like Andrew Carnegie and Bill Gates. As for our leaders, they reject economic freedom because, like you and Mao, they think that there are no independent principles of human behavior that they cannot control. They believe that they can make any laws they want and get what they want if their edicts are enforced vigorously enough. Sorry. It is not so. The past attempts by government lawmakers to help are the main causes of the big problems in the USA today. The Fed causes the economic ups and downs. Minimum wage and labor laws cause high unemployment, public schooling is so bad people are paying school taxes and then home schooling their children, HUD is such a failure that people have replaced the word “getto” with “projects,” as in housing projects, recreational drugs were never a problem until government declared war on drugs. Government is the worst possible way of doing anything. If you are going to allow it, then it must be restricted to only those things that cannot be done any other way. The department of State you can keep. OK, we are not unreasonable, you can keep the supreme court and a few other things. But government needs to be neutral. Don’t try to help or hurt, just resolve disputes. Leave the rest to the people. I know you think that they cannot handle it and they will consume one another. I answer that you need only look at the history of the United States of America from colonial days until the early 1900′s. We went from a scattered bunch of farmers to the richest country in the world in a state of near anarchy. Almost no taxes and minimal government bureaucracy is the secret of our success. Yes, slavery was an economic drag on the economy and a contradiction of “Liberty and Justice for All.” So, abolish slavery not liberty! Lest you misunderstand, know that for Austrians, the Federal Reserve is the greatest evil and at the top of our list. The Fed exists to steal value from dollar holders and give it to member banks and the US Treasury. The process by which the Fed operates (fractional reserve banking) causes the boom bust cycle according to economic science.
I was stating my observation that what you and I would call a delusion would be perfectly rational to Mao, and his followers. We don’t act on assumptions that we consider false. If we all did have the same “truth”, there would be no conflict. If I had the same confidence as you in a free market (completely unregulated), we would have no debate. That doesn’t make you or I right or wrong, and it doesn’t make me a Maoist.
“Central planning is the problem”. Central planning doesn’t present much of a problem within a large corporation, and is required for production. The goal of the corporation is dictated by a CEO to subordinates that accomplish the task at hand. One problem inherent within ANY large organization includes imperfect knowledge. That doesn’t suggest that there should be no planning.
Smoking bans are an excellent example of modifying personal rights. The “rights” issue is typically debated within very absolute terms: A smoker’s right to smoke in public facilities vs. a non-smokers right to be free of second-hand smoke. What solution would ever make either side 100% satisfied under these conditions?
Smoking bans are not a zero sum solution. Smokers are giving-up far less than the patrons and employees that do not wish to breathe cigarette smoke. It is unfair and inconvenient, but you do have a choice to assume your own risks without forcing a reaction to your action on others.
This is a reasonable solution to me and not everyone else agrees. We would all have to agree on what “reasonable” means before the government could do anything without 100% consent.
“The department of State you can keep. OK, we are not unreasonable, you can keep the supreme court and a few other things.” Your idea of a reasonable government is quite a bit more than a lot of Libertarians I’ve met. I would add IRS to collect the taxes for your ideal and add SSA, OSHA, EPA, Medicare, Medicaid, a public option, etc.
This is a very interesting discussion to me. I appreciate you taking time for me. I apologize for implying you are a Maoist. The point of your first paragraph is that you are a skeptic? How is it rational for Mao to keep the policies which impoverish his people? There is a common reality that we share. It may just be a dream or something, but I and you act as if it is real. This apparent common reality is my standard of measure. When the laws produce more harm than good, I would like to change them. I think that Mao’s leadership was detrimental to China. Would you disagree?”Central planning.” OK. I stated that poorly. I thought that the context was government. I should have said that government regulatory bureaucracies funded by taxes are the main problem with government. I include independent agencies like the Fed in the regulatory bureau category. I defy you or anyone else to show me one that has done as much good as harm. Every example with which I am familiar is destructive to the people and an economic burden. I would not permit Taxation by the central govt. In my magic world they would have to beg for money and only spend what they get from voluntary contributions. Smoking — I dislike tobacco. I do not use it, though I did when young. I would like to talk about limits on power. I do not know the law but i know it is not like i would have it. I think that the owners of restaurants should be able to use their property however they wish. Before the ban I asked for no smoking and would ask to be moved if too close to smokers. I do not see a need for government to be involved at all. I detest the expense caused by government smoking regulators and I fear the consequent encroachment of government on the property rights of the people. I would rather have to search for hours and leave establishments that do not limit smoking than have to support a smoking bureau with taxes. I do like being smoke free. I do not like having masters who can involve themselves in my life at that level. I feel confident that the taxes and legal red tape from smoking bans make it a negative sum economically. and I am offended that our alleged representatives tell us what to do. They are in back rooms making deals, buying each other’s vote with our taxes. I am not sure that they would do the right thing if they new what it was and I am convinced that usually they do not.
Finally I have never heard of a better solution to the govt problem than abolition.
“How is it rational for Mao to keep the policies which impoverish his people?” It isn’t, unless you truly believe the problem is selfishness and not your policies. I believe Mao was detrimental to China, but I also believe he hasn’t ruined the virtue of altruism for the rest of us. He was oblivious to his own sefishness.
How long would we let Americans wallow in poverty before we decided to do something to help them? When you believe that we are all individually responsible for our own prosperity at all times, there would never be a reason to offer help. Rationally, you only help those that you deem worthy. You don’t help someone that you believe is a con. When you do decide to help, you may be helping a really good con man or someone truly in need. When you decide not to help, you are ignoring cons and the truly needy alike. But no, I wouldn’t advocate murder to apply my personal philosophy to the rest of the world.
When I hear stories from my wife about the inadequate healthcare that her retarded and mentally ill clients are receiving, I don’t have the same enthusiasm about charity as many people do. Her deceased husband was denied transportation to and from his daily Dr. appointments by a VERY famous charity because “he should be able to work,” despite having his lymph nodes and half of his face surgically removed. There is a lot of good work going on, just not enough.
“In my magic world they would have to beg for money and only spend what they get from voluntary contributions.” I would agree with that if we all had adequate, unbiased information to make those decisions.
Feel free to read my discussion with J Murray in the, “The Poor” blog. There are a lot of people that would voluntarily pay taxes for programs that I feel are worthwhile, but not enough. I doubt we could even get enough support for our roadways. If we did, the roads would be littered with homeless 16 y.o. enduring “a minor inconvenience” as Murray puts it.
“Government should only act when there is a complaint. And then only when the complaint is reasonable.” How does this not apply to the complaint over second-hand smoke? What about limiting the power one individual has over another?
The controversy is over the danger of second-hand smoke. You have the freedom to choose the risk you are willing to take. You have the freedom to choose the validity of very contradictory literature concerning the danger of second hand smoke. You have the freedom to enjoy whatever establishment you desire.
If I choose to believe that second-hand smoke is detrimental to my health, I can avoid establishments that allow indoor smoking or I can choose to expose myself to a substance that I deem dangerous. I can go stand outside in the cold and rain so that he can enjoy his cigarette inside, then wait until the smoke clears before I return. I can wear a respirator, I can politely ask him to go outside, I can extinguish the cigarette on his forehead then fart in his face, etc…
The reactions I have available to me are a result of the action of someone else, not my own. What is the cost to the smoker in this situation? I incur the cost of avoiding public places that I enjoy (and work at), I put myself at risk for diseases he will not pay for (monetarily or otherwise), I get wet and cold, I can’t eat because there is a respirator on my face. If he doesn’t reply in kind with my courteous request, we have a conflict.
Smoking bans, in essence, cost 5 minutes of time to do something you enjoy. Possibly a loss of dignity. And, smokers and non-smokers together give up a small bit of personal freedom because they were unable or unwilling to reach an amicable resolution.
Asking someone to smoke outside is a far cry from Maoist doctrine. I think we ALL could stand a little perspective on this particular issue.
To me, this kind of enjoyable article is about covering something many readers will already get, but from yet another angle. I’ve been noticing that I enjoy Mr. Murphy’s articles, because they generally have this aspect of giving me yet another way of looking at the same thing, so that I have a firmer ground.
There is a simple answer. Put the people who engaged in fraud, in prison. Simple. Not just the bankers, but the politicians who facilitated the fraud, as well. Can anybody honestly say that Dick Fuld doesn’t belong in a cell next to Madoff? How about those 20 or so at AIG’s FP division? Hank Paulson? Jamie Dimon? Please. Bill Black cleaned up the S&L scandal 20 years ago. He’s the only person with the balls to do it. Appoint him special prosecutor with the authority to go after anyone and everyone, and let the courts sort it out. The only way to restore confidence to investors, is to restore the rule of law.
“Imposing accurate accounting standards, stopping high-frequency trading, quote-stuffing and front-running, and prosecuting fraud to the fullest extent of the law are prerequisites to restoring trust in our economy.”
http://www.zerohedge.com/article/free-market-not-possible-without-strong-laws-against-fraud
Of course, if there was commodity based currency, and near 100% reserve requirements, banks would face the real possibility of bankruptcy and most of the regulations on the books would disappear. However, even then, the government would still need to prosecute criminal behavior, especially fraud.
First off, I agree there was widespread fraud, but It would be very hard to determine which people to put in jail, since the entire system is based on fraud. If the system is fradulent, who do you jail, those who were most adaptable to using that same system? and who prosecutes them, the same folks that regulate the same system?
Better yet, just let them go to the poorhouse, like most would of if the bailouts hadn’t occurred. But, preventing the risk is part of the same system and the reason for the “fraud” in the first place. what good are CDSs, if no one has the funds to pay them off? how viable would they be if the government didn’t back them up?
we don’t need “trust” in the economy, we simply need economic freedom and the freedom to establish our own “economices’ free of force. in other words, we need the freedom to “trust” who we wish to trust, not be forced to trust the {fraudulent} system. this is unlikely until the “system” and force no longer prevails.
Even in our fraudulent system, the FBI warned the Bush administration of widespread fraud in the mortgage industry in 2004, and that it could lead to a major collapse. I’m not trying to argue that the reckless expansion of credit wasn’t responsible, but the fraudulent loans that the mortgage companies were writing played a big part in the collapse, and the Bush people had ample opportunity to stop it. We know who were writing those bad loans. Countrywide, Aurora, et al. We also know that Lehman was buying those mortgages and selling them to the World with AAA ratings. Without prosecution of this level of fraud, how can one possibly be free? We need to be able to trust that the government will prosecute this magnitude of fraud, the same way they would prosecute someone who came into your house and murdered your family. If fraud and misrepresentation can not be prosecuted, there can be no freedom. Whether the government should have a monopoly on the ability to prosecute, is another debate.
Even in a perfect free market, there will always be contract disputes, and non-compliance, for whatever reasons. With no outlet to properly resolve these disputes, there can be no liberty.
Comments on this entry are closed.