Utter Madness

by Don Boudreaux on September 20, 2014

in War

Wilfred Owen – killed just one week before the armistice, in November 1918, that ended the first official round of the gruesome world war of the first half of the 20th century – is likely and justly most famous for the moving poem “Dulce Et Decorum Est.”  But this other anti-war poem of his – “The Parable of the Old Man and the Young” – is also excellent.  (HT Tom Palmer):

So Abram rose, and clave the wood, and went,
And took the fire with him, and a knife.
And as they sojourned both of them together,
Isaac the first-born spake and said, My Father,
Behold the preparations, fire and iron,
But where the lamb for this burnt-offering?
Then Abram bound the youth with belts and straps,
and builded parapets and trenches there,
And stretchèd forth the knife to slay his son.
When lo! an angel called him out of heaven,
Saying, Lay not thy hand upon the lad,
Neither do anything to him. Behold,
A ram, caught in a thicket by its horns;
Offer the Ram of Pride instead of him.

But the old man would not so, but slew his son,
And half the seed of Europe, one by one.

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David Henderson, writing over at Antiwar.com, does a beautiful job countering Richard Epstein’s case for an interventionist U.S. foreign policy.

At first, I planned to include David’s essay in my next “Some Links” post, but because of the special importance of the topic (exposing the hubris, dangers, and immorality of U.S. militarism*), as well as because of Richard Epstein’s justly prominent role in libertarian scholarship, I’ve decided to single out David’s excellent essay.

Here are some slices (original emphases and links):

People abroad who attack other people abroad are not clearly engaged in “foreign aggression” against the United States. And recall that it is the protection of “our nation,” not other nations, against foreign aggression that Professor Epstein thinks is a legitimate function of the U.S. government.

There’s a much older tradition in the United States that I would have thought Professor Epstein, a strong believer in and defender of the US Constitution, would harken to. George Washington expressed that tradition in his farewell address. Washington wrote:

Why quit our own to stand upon foreign ground? Why, by interweaving our destiny with that of any part of Europe, entangle our peace and prosperity in the toils of European ambition, rivalship, interest, humor, or caprice?

Note that Washington wanted not to be involved in conflicts in Europe, an area from which most Americans or their forefathers hailed. Imagine what his view would have been of getting involved in an even more remote region – namely, the Middle East.


Washington’s worry was understated. The largest violations of freedom in the United States have tended to occur during wars. During the Civil War, both North and South used military conscription, and the United States had conscription throughout World War I, World War II, the Korean War, and the Vietnam War. Short of slavery, military conscription is one of the most extreme violations of freedom, as I think Professor Epstein would agree.


When governments intervene in the domestic economy, they almost always do damage. One of the main reasons is that they don’t have – and can’t have – the information they would need to plan the economy well. As Nobel Prize winning economist Friedrich Hayek argued in a classic 1945 article, “The Use of Knowledge in Society,” the information that matters most for economics decisions is held in the minds of the hundreds of millions of market participants.

Similarly, when governments try to intervene in other countries, they are even more ignorant about those countries than they are about their own. This can have disastrous consequences. Consider the Middle East and ISIS. Where did ISIS come from? As President Reagan used to say, let’s take a trip down memory lane.

In 2003, President George W. Bush invaded Saddam Hussein’s Iraq to “finish the job” that, 12 years earlier, his father had promised “would not be another Vietnam.” Keep in mind that Saddam, as President George H.W. Bush liked to call him, was a Sunni. Kicked out of power by the invasion and the occupation government, Sunni tribal leaders and remnants of Hussein’s army launched an insurgency that turned the entire west and north of the country into a lawless territory. Al Qaeda used this territory to train a generation of bin Ladenite, Salafist jihadists, the same ones who helped to solidify the turn toward full-blown sectarian civil war in 2005-07, which killed hundreds of thousands and displaced millions more.

Do, please, read the whole thing.


(All that appears below in this post is written by me, Don Boudreaux.)

* One of the greatest dangers of war – a danger that is simultaneously both a cause of war and a consequence of war – is the stupid anthropomorphism of collectives: “Us” versus “Them.”  Individuals are lost sight of; they become invisible.  All that is seen are the mentally-constructed wholes (usually, but not always, represented by governments that do indeed claim to be the living embodiments of their peoples).

“They” are “Our” enemy, so any damage, even if it’s “collateral,” to any of “Them” is proper, even good – and sometimes downright glorious.  ”We” treat “Them” as the Bad; “They” treat “Us” as the Bad.  And because “We” must spare no effort to defeat “Them” the Bad, “We” turn on each other if and to the extent that any individuals amongst us dare to not join in “Our” crusade against “Them.”

We rightly are appalled that savages in foreign countries kill, maim, behead specific individuals from our ranks – kill, maim, behead these individuals only because these unfortunate individuals are from our ranks, share our culture, worship our gods (or don’t worship their gods), and look more like us than like them.  We rightly get furious that beasts in human form brutalize individual human beings based on nothing other than those human-beings’ birthplaces, native languages, or citizenship….  And then we fall into the same gross stereotyping and uncivilized habit of seeing only “Them,” as if “They” are all responsible for the commission of these brutalities.

And yet to speak this truth is to risk condemnation and ridicule.  I stand with Mark Twain.

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Look at the graph below (which I get from this Heritage Foundation page).  (To enlarge this graph, just click on it.)  You tell me if the revving-up of Uncle Sam’s welfare-state activities in the mid-1960s can be considered, by any scientific criterion, to have been clearly successful at reducing officially measured rates of poverty in the U.S.

Screen Shot 2014-09-20 at 10.37.12 AM

Can anyone say Losing Ground?

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… is from page 104 of Roger Koppl’s remarkable 2014 monograph, From Crisis to Confidence: Macroeconomics after the Crash (links added):

Big Players [such as the Fed] and regime uncertainty create and increase the very sort of uncertainty that Keynes described.  If we may call such policies ‘Keynesian’ then we may draw the inference that Keynesian policies tend to create and enhance the irregular ups and downs that Keynes attributed to modern capitalism as such.  In this sense, Keynesian policies tend to create a Keynesian economy.  Those post-Keynesians who argue for discretionary state intervention as a result of certain features of economic behaviour argue for policies that will increase – rather than reduce – the very behaviours they see as the problem.

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Here’s a letter to Fred Hochberg, Chairman and President of that great geyser of cronyism, the U.S. Export-Import Bank:

Dear Mr. Hochberg:

I seldom agree with any of your attempts to justify the existence of your government agency.  The Export-Import Bank is, after all, a bureaucracy that diverts private-sector resources into artificially expanded operations and bloated revenues for politically powerful corporations - and all on the ridiculous superstition that exports are uniquely good for the domestic economy.

Yet yesterday you spoke truthfully when you said that “[b]usinesses don’t pursue overseas sales, invest in their operations, or hire new employees on a month-to-month basis.”

Of course, what this reality tells you is that Congress should reauthorize your agency for a term longer than a few months.  What this reality tells me, in contrast, is that U.S. exporters that now depend upon your political agency for some of their sales should immediately and forever be denied that dependence.  Private capital markets are open for business 24/7/365 and never need reauthorization from politicians.  So if you’re really interested in ensuring that Boeing and other U.S. exporters enjoy access only to financing that is never subject to political sun-setting, please join those of us who call for the Ex-Im Bank to be straightaway and permanently shut down.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

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Quotation of the Day…

by Don Boudreaux on September 19, 2014

in Politics, Reality Is Not Optional

… is from page 287 of the 1975 HarperPerennial printing of the third (1950) edition of Joseph Schumpeter‘s magnificent 1942 treatise, Capitalism, Socialism, and Democracy:

The incessant competitive struggle to get into office or to stay in it imparts to every consideration of politics and measures the bias so admirably expressed by the phrase “dealing in votes.”  The fact that in a democracy government must attend primarily to the political values of a policy or a bill or an administrative act … is likely to distort all the pro’s and con’s.  In particular, it forces upon the men at or near the helm a short-run view and makes it extremely difficult for them to serve such long-run interests of the nation as may require consistent work for far-off ends; foreign policy, for instance, is in danger of degenerating into domestic politics.  And it makes it no less difficult to dose measures rationally.  The dosing that a government decides on with an eye to its political chances is not necessarily the one that will produce the results most satisfactory to the nation.

In short, no miracle occurs to transform the same humanity that operates imperfectly within private markets into a god-like force when it operates in political spheres.

(Schumpeter is correctly regarded as having helped lay the ground work for the emergence of the public-choice scholarship that begin in the second half of the 20th century.)

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Citing Ilya Somin, one of my GMU colleagues from over in the law school, George Will explains that Barack Obama is violating his oath to uphold the Constitution.  (To be fair, all presidents since Grover Cleveland – and many before him – have done so.)

Sandy Ikeda writes about the causes of rising wages (which emphatically do not include labor unions, minimum-wage mandates, or tariffs).  A slice:

The historical trend in per-capita real income since the year 1800 has been unambiguous. Per-capita real income around the world has been rising at an accelerating rate, which coincides with the spread of and respect for free-market ideas and practices. Deirdre McCloskey refers to this phenomenon as the “hockey stick” of economic growth.

Writing in the Fraser Book Review, Philip Cross explains why he’s unimpressed with Thomas Piketty’s Capital in the Twenty-First Century.

No one – and I do mean no one – writes with more insight and knowledge about the bizarre mindlessness of locavorism and similar food fads than does Pierre Desrochers.  Here’s a slice from Pierre’s most-recent essay:

Unfortunately, for many of our remote ancestors, the absence of effective transportation, such as railroads and container ships, meant that they had no choice but to survive on a local diet and, in the process, put all their agricultural eggs into one geographical basket. This was always a recipe for disaster. The Roman poet Virgil in his Georgics described how, in bad years, weeds invaded the land, voles and mice spoiled the threshing floor, cranes and geese attacked the crops, goats ate the young vines, and moles, toads and ants each feasted on or undermined the farmer’s work. (Virgil could also have discussed fungus, insect pests and other problems.) Of course, whatever survived these pests could be damaged or wiped out by summer droughts and winter windstorms, as well as snow, hail or heavy rain. Even in good years, Virgil observed, a field might be accidentally set on fire.

Here’s wisdom about voluntary exchange from Gary Galles.

Mark Perry – with help from Warren Meyer – contributes important insights to the debate on the alleged merits of minimum-wage legislation.

Here’s the great Wendy McElroy at her Schumpeterian best!

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… is from page 128 of Roger Koppl’s outstandingly good 2014 monograph, From Crisis to Confidence: Macroeconomics after the Crash (link added):

[I]f regulators are human, their decisions may be biased towards self-serving ends.  An obvious bias to fear and expect is one towards greater centralisation and greater state control over the decisions of financial institutions (Higgs 1987: 159-95).  Such control serves the bureaucratic interests of the regulators in general.  Thus regulators may have an interest in more control, as well as a cognitive bias in that direction that develops regardless of any particular self-interest.  Moreover, regulators will be loath to blame themselves when things go wrong.  They will sincerely protest that they need more tools, more power and more control in order to prevent future problems.

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Quotation of the Day…

by Don Boudreaux on September 17, 2014

in Civil Society, Music

… are lyrics from the final stanza of the studio recording of Hank Williams, Sr.’s, 1949 song “Mind Your Own Business”:

Mindin’ other people’s business
Seems to be high-tone;
I got all that I can do just to mind my own.
Why don’t you mind your own business?
Mind your own business.
‘Cause if you mind your own business
You’ll stay busy all the time.

Here’s a recording of a live performance by Williams of this wise song.  (Williams changes the wording slightly in this live performance, but in a way that only reinforces the wisdom of his counsel.)

Hank Williams (1923-1953) was born 91 years ago today in Mount Olive, Alabama.  He never got out of this world alive.

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Capitalism Destroys Slavery

by Don Boudreaux on September 16, 2014

in Competition, History, Myths and Fallacies

Here’s a letter to the Wall Street Journal:

John Addison Teevan rightly rejects the claim that slavery is a capitalist institution (Letters, Sept. 16).  Slavery began soon after the invention of agriculture and disappeared only with the emergence of modern capitalism.  Moreover, widespread opposition to slavery arose first in those societies that first became capitalist.

The forces endemic to capitalism that undermine slavery are many.  Among these is entrepreneurial innovation.  This innovation broadens and intensifies competition for workers.  Specifically, new industries can get the workers they need, on the most favorable terms, only by competing them away from older, established industries.  Even if each owner of every established farm and firm wants to enslave his workers, market entrepreneurs resist such an obstacle to the manpower necessary to transform their entrepreneurial visions into productive realities.

In short, innovative entrepreneurs – defining agents of capitalism – have no use for slavery.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

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