The rights of Reason

The Intransigence of Ludwig von Mises

by Jacques Rueff Mises

Ludwig von Mises is a rara avis in this 20th century of ours, for he considers reason a valid and efficacious instrument even in the study of questions that concern economics. According to him, "any given social order was thought out and designed before it could be realized … any existing state of social affairs is the product of ideologies previously thought out … action is always directed by ideas."[2]

The very title of his great book, Human Action, is in and of itself both an affirmation and a denial. It indicates what, for its author, constitutes the real economic problem, which is raised by the behavior of men with respect to the things they desire — the things called wealth. And it shows that the real economic problem is completely encompassed within the study of such behavior; that it does not consist only in an analysis "of objective processes taking place quite independently of human will."[3]

Mises considers social organization to be dependent upon and in conformity with the very ideas that inspire it. It is merely a system of ways and means for attaining certain ends. He is convinced that the vast majority of people concur on the ends. Hence the economic problem is only that of choosing the means by which men can achieve, effectively and at the lowest cost, the results desired.

This problem constitutes an object of science and is open to only two kinds of solution — those which are effective, and those which are not. Reason — and only reason — enables us to choose between them. "Man has only one tool to fight error: reason."[4]

It is the task of the economist to tell the politician which system he must set up in order to give men what they want, and not the very opposite.

Such an attitude on the part of Mises sets him apart from other economists. Most of his colleagues take the social structure as a fact that cannot be changed in any respect by the will of men. The Marxists explain it as a revelation of history. The non-Marxists look upon it as the inevitable product of a technical evolution which has given rise to a capitalism of large units, and to monopolies, cartels, and trusts. Marxists and non-Marxists alike ascribe to our modern economies a rigidity which makes them almost completely immune to the price mechanism.

For both groups any doctrine basing the establishment and maintenance of economic equilibria on price movements is false, fruitless, and outdated. According to them, it is the task of the economist to discover the proper processes that guarantee economic order without resorting to spontaneous regulation. The sum total of these processes constitutes the new science of economics, which is required by the actual state of the world in which we live.

It is true — nor does Mises deny it — that our contemporary economy is more rigid than that which existed before employers' associations and labor unions had regimented a large part of the forces of production.

The essential thing, however, is that the present inelasticity of our societies is far more the result of their institutional character than it is of the nature of the techniques applied.

It is institutions established by men and wanted by them that immobilize prices, salaries, and rates of interest. It is the same institutions that lend their protection, without which the oligopolies or monopolies in their quasi-totality could never exist.

If, then, such institutions are wanted by men, it is because the economists have failed to convince them that these institutions are leading and must lead to results diametrically opposed to the ones desired and expected to be attained.

In actual fact, the characteristic rigidity of most contemporary economies, and particularly of several economies, has been made possible only by the silence of the economists. Had they but shed a revealing light on the social consequences that such rigidity could not fail to bring about, and on the privations and sufferings which it was bound to engender, the rigidity could have been neither established nor maintained.

French legislation on rents, for example, has been inspired by laudable social considerations. And yet, it has been a tremendous source of unhappiness and disorder. Anybody of good faith and with the slightest knowledge of the price mechanism could have foreseen these tragic social effects. But no! The few warnings that did foretell the ill-fated consequences have always been denied by the chorus of complacent men anxious above all not to oppose the solutions wanted by public opinion and accepted by governments.

It would be cruel to insist on learning the reasons for the practically universal renunciation of thinking. Leibnitz already indicated that "if geometry conflicted with our passions and interests as much as morality does, we would no less question and violate its laws. And this despite all the proofs offered by Euclid and Archimedes, which we would then treat as flights of fancy and believe to be full of fallacies. And in that case Joseph Scaliger, Hobbes, and others who attacked Euclid and Archimedes, would not be so bereft of supporters as they now are.[5]

What this philosopher said of morality applies with even more validity to political economy.

But though there may be but few minds in the field of economics who have remained loyal to Euclid and Archimedes, Ludwig von Mises undoubtedly is the most pronounced, the most efficient, and the most determined. With an indefatigable enthusiasm, and with courage and faith undaunted, he has never ceased to denounce the fallacious reasons and untruths offered to justify most of our new institutions.

He has demonstrated — in the most literal sense of the word — that those institutions, while claiming to contribute to man's well-being, were the immediate sources of hardship and suffering and, ultimately, the causes of conflicts, war, and enslavement.

No consideration whatever can divert him in the least from the straight steep path where his cold reason guides him. In the irrationalism of our era he has remained a person of pure reason.

Those who have heard him have often been astonished at being led by the cogency of his reasoning to places whither they, in their all-too-human timorousness, had never dared to go. His person and ideas have always brought to my mind the story of Mr. Teste

In the following words, one of Mr. Teste's listeners reports the sensations experienced while listening to him.

He shatters my mind with a word, and I feel like a defective vase that the potter has discarded. He is as hard, sir, as an angel. He is unaware of his own strength; he finds unexpected words that are all too true, that overwhelm people, that awaken them in the midst of great folly confronting them, all ensnared in being what they are, in the meshes of living, in foolishness. We live in comfort, each in his own absurdity, like fish in water, and we never become aware, except by chance, of how much stupidity is contained in the life of a reasonable person.[6]

And the same listener goes on to say,

There is in him some appalling purity, detachment, undeniable strength and light. Never have I observed such complete absence of confusion and of doubt in an intelligence that is so deeply industrious. He is awfully quiet! There can be ascribed to him no uneasiness of soul, no shadow in his heart.[7]

If we compare the guile of economic irrationality with the imperturbable intransigence of his lucid thinking, Ludwig von Mises has safeguarded the foundations of a rational economic science, the value and effectiveness of which have been demonstrated by his works. By his teachings he has sown the seeds of a regeneration which will bear fruit as soon as men once more begin to prefer theories that are true to theories that are pleasing.

When that day comes, all economists will recognize that Ludwig von Mises merits their admiration and gratitude. For it is he who, amidst the confusion of a science which tends to belie the reasons for its own existence, has indefatigably affirmed the rights of reason, its supremacy over matter, and its effectiveness in human action.

Notes

[2] Ludwig von Mises, Human Action. Yale University Press, New Haven, 1949, p. 188.

[3] Stalin, Les problèmes économiques du socialisme en U.S.S.R., Ed. Sociale, p. 4.

[4] Ludwig von Mises, Ibid., p. 187.

[5] Leibnitz, Nouveaux Essais, I.II.12.

[6] Paul Valéry, Monsieur Teste. NR.F., p. 86.

[7] Ibid., p. 104.

The Animal Farm

ZOMBIES DO ATLANTA

By S. JohnsonThe report accompanying the video below reads:

What we saw at the “revolution”:

Many curious citizens and media outlets came to the first Occupy Atlanta event, and were visibly shocked and confused by the consistent Marxism employed by the group. People abandoned their individuality and liberty to be absorbed into a hypnotizing collective. The facilitator made it clear that he was not a “leader” and that everyone was completely equal; words often spoken by leftists, but in this case they actually applied their philosophy. Into this surreal and oppressive environment, Rep. John Lewis, a civil rights hero and icon of American leftism, came to speak as has so often done at left-wing rallies and events in Atlanta. He is practically worshiped in Democrat circles, and was visibly stunned to see these Marxists turn him away. It was reminiscent of previous Marxist revolutions in history when those who ignorantly supported the revolutionaries are, over time, purged and rejected for the “good of the collective,” when their usefulness has expired.

Voting for a living

Nearly Half of U.S. Lives in Household Receiving Government Benefit

By Sara Murray

Families were more dependent on government programs than ever last year.

Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Those numbers have risen since the middle of the recession when 44.4% lived households receiving benefits in the third quarter of 2008.

The share of people relying on government benefits has reached a historic high, in large part from the deep recession and meager recovery, but also because of the expansion of government programs over the years. (See a timeline on the history of government benefits programs here.)

Means-tested programs, designed to help the needy, accounted for the largest share of recipients last year. Some 34.2% of Americans lived in a household that received benefits such as food stamps, subsidized housing, cash welfare or Medicaid (the federal-state health care program for the poor).

Another 14.5% lived in homes where someone was on Medicare (the health care program for the elderly). Nearly 16% lived in households receiving Social Security.

High unemployment and increased reliance on government programs has also shrunk the nation’s share of taxpayers. Some 46.4% of households will pay no federal income tax this year, according to the nonpartisan Tax Policy Center. That’s up from 39.9% in 2007, the year the recession began.

Most of those households will still be hit by payroll taxes. Just 18.1% of households pay neither payroll nor federal income taxes and they are predominantly the nation’s elderly and poorest families.

The tandem rise in government-benefits recipients and fall in taxpayers has been cause for alarm among some policymakers and presidential hopefuls.

Benefits programs have come under closer scrutiny as policymakers attempt to tame the federal government’s budget deficit. President Barack Obama and members of Congress considered changes to Social Security and Medicare as part of a grand bargain (that ultimately fell apart) to raise the debt ceiling earlier this year. Cuts to such programs could emerge again from the so-called “super committee,” tasked with releasing a plan to rein in the deficit.

Republican presidential hopefuls, meanwhile, have latched onto the fact that nearly half of households pay no federal income tax, saying too many Americans aren’t paying their fair share.

There are no Jews in Egypt unfortunately

More clashes erupt in Egypt

by Maggie Michael

Several hundred Christians pelted police with rocks outside a Cairo hospital Monday in fresh clashes the day after 24 people died in riots that grew out of a Christian protest against a church attack. Sunday's sectarian violence was the worst in Egypt since the uprising that ousted Hosni Mubarak in February.

Egyptian Prime Minister Essam Sharaf warned in a televised address that the riots were another setback on the country's already fraught transition to civilian rule after three decades of Mubarak's authoritarian government.

"These events have taken us back several steps," Sharaf said. He blamed foreign meddling for the troubles, claiming it was part of a "dirty conspiracy." Similar explanations for the troubles in Egypt are often heard from the military rulers who took power from Mubarak, perhaps at attempt to deflect accusations that they are bungling the management of the country.

"Instead of moving forward to build a modern state on democratic principles, we are back to seeking stability and searching for hidden hands _ domestic and foreign _ that meddle with the country's security and safety," Sharaf said.

The clashes Sunday night raged over a large section of downtown Cairo and drew in Christians, Muslims and security forces. They began when about 1,000 Christian protesters tried to stage a sit-in outside the state television building along the Nile in downtown Cairo. The protesters said they were attacked by "thugs" with sticks and the violence then spiraled out of control after a speeding military vehicle jumped up onto a sidewalk and rammed into some of the Christians.

Most of the 24 people killed were Coptic Christians, though officials said at least three soldiers were among the dead. Nearly 300 people were injured.

The latest clashes Monday broke out outside the Coptic hospital where many of the Christian victims were taken the night before. The screams of grieving women rang out from inside the hospital and some of the hundreds of men gathered outside held wooden crosses. Empty coffins were lined up outside the hospital.

There were no word on casualties from Monday's clashes.

Christians, who make up about 10 percent of Egypt's 85 million people, blame the ruling military council for being too lenient on those behind a spate of anti-Christian attacks since Mubarak's ouster. The chaotic power transition has left a security vacuum, and the Coptic Christian minority is particularly worried about a show of force by ultraconservative Islamists, known as Salafis.

The ruling military council led by Field Marshal Hussein Tantawi, defense minister of 20 years under Mubarak's former regime, took over after the 18-day popular uprising forced Mubarak to step down. The military initially pledged to hand back power to a civilian administration in six months, but that deadline has passed, with parliamentary elections now scheduled to start in late November. According to a timetable floated by the generals, presidential elections could be held late next year.

The religion of eternal peace

Church Protests in Cairo Turn Deadly

By DAVID D. KIRKPATRICK

CAIRO — A demonstration by Christians angry about a recent attack on a church touched off a night of violent protests here against the military council now ruling Egypt, leaving 24 people dead and more than 200 wounded in the worst spasm of violence since the ouster of President Hosni Mubarak in February.

The sectarian protest appeared to catch fire because it was aimed squarely at the military council that has ruled Egypt since the revolution, at a moment when the military’s latest delay in turning over power has led to a spike in public distrust of its authority.

When the clashes broke out, some Muslims ran into the streets to help defend the Christians against the police, while others said they had come out to help the army quell the protests in the name of stability, turning what started as a march about a church into a chaotic battle over military rule and Egypt’s future.

Nada el-Shazly, 27, who was wearing a surgical mask to deflect the tear gas, said she came out because she heard state television urge “honest Egyptians” to turn out to protect the soldiers from Christian protesters, even though she knew some of her fellow Muslims had marched with the Christians to protest the military’s continued hold on power.

“Muslims get what is happening,” she said. The military, she said, was “trying to start a civil war.”

Thousands filled the streets of downtown, many armed with rocks, clubs or machetes. Witnesses said several protesters were crushed under military vehicles and the Health Ministry said that about 20 were undergoing surgery for bullet wounds.

Protesters responding to the news reportedly took to the streets in Alexandria as well.

The protest took place against a backdrop of escalating tensions between Muslims and Coptic Christians, who make up about 10 percent of the population. Christians had joined the pro-democracy protests in large numbers, hoping for the protections of a pluralistic, democratic state, but a surge in power of Islamists has raised fears of how much tolerance majority rule will allow.

But the most common refrain of the protests on Sunday was, “The people want to bring down the field marshal,” adapting the signature chant of the revolution to call for the resignation of the military’s top officer, Field Marshal Mohamed Hussein Tantawi.

“Muslims and Christians are one hand,” some chanted.

The military and riot police, on the other hand, appeared at some points to be working in tandem with Muslims who were lashing out at the Coptic Christians. As security forces cleared the streets around 10 p.m., police officers in riot gear marched back and forth through the streets of downtown alongside a swarm of hundreds of men armed with clubs and stones chanting, “The people want to bring down the Christians,” and, later, “Islamic, Islamic.”

“Until when are we going to live in this terror?” asked a Christian demonstrator who gave his name only as John. “This is not the issue of Muslim and Christian, this is the issue of the freedom that we demanded and can’t find.”

By the end of the night, as clouds of tear gas floated through the dark streets and the crosses carried by the original Christian demonstrators had disappeared, it became increasingly difficult to tell who was fighting whom.

At one point, groups of riot police officers were seen beating Muslim protesters, who were shouting, in Arabic, “God is Great!” while a few yards away other Muslims were breaking pavement into rocks to hurl in the direction of a group of Christians.

“It is chaos,” said Omar el-Shamy, a Muslim student who had spent much of the revolution in Cairo’s Tahrir Square and returned again to help support the Christians against the military. “I was standing with a group of people and suddenly they were chanting with the army! I don’t know what is going on.”

State television announced a curfew in downtown Cairo beginning at 2 a.m., and the civilian cabinet, which serves under the military council, said that a committee headed by Prime Minister Essam Sharaf was meeting to address the crisis. The cabinet said it would not allow any interference with “national unity” or “the path of the democratic transition,” noting that a first step, the registration of parliamentary candidates for elections Nov. 28, will begin Wednesday.

“What’s happening is not sectarian tension,” Mr. Sharaf said in a telephone interview with state television. “It is an escalating plan for the fall and fragmentation of the state. There’s a feeling of a conspiracy theory to keep Egypt from having the elections that will lead it to democracy.”

Echoing the Mubarak government’s propaganda, he added, “There are hidden hands involved and we will not leave them."

Public patience with both street protests and military rule has grown increasingly thin. The military, initially celebrated as the savior of the revolution for ushering Mr. Mubarak out the door, has become a subject of public ire both for its failure to establish stability and for its repeated deferrals of its pledged exit from power.

In a timetable laid out last week, the military’s top officers said they expected to finish parliamentary elections by March but wait for the subsequent drafting and ratification of a constitution before holding a presidential election. That schedule could leave the military as an all-powerful chief executive for another two years or more. Newspapers and talk shows, once cowed by the military’s threats to censor any perceived insult, have begin openly debating whether the military will follow through on its commitments to democracy.

Where previous Christian demonstrations here appealed to the military for protection against radical Islamists, Sunday’s demonstration began from the start as a protest against the military’s stewardship of the government.

Christians who marched from the neighborhood of Shubra to the radio and television building to protest the partial dismantling of a church near the southern city of Aswan, said that they scuffled at least three times with neighbors who did not want them to pass.

But the violence did not escalate until they joined another demonstration at the radio and television headquarters around 6 p.m. Demonstrators and plainclothes security forces began throwing rocks at each other.

State news media reported that at least three security officers had died in attacks by Christian protesters, though those accounts could not be confirmed. The protesters did not appear to be armed and they insisted they were peaceful until they were attacked.

In retaliation, military vehicles began driving into protesters, killing at least six, including one with a crushed skull, several witnesses said. Some said they saw more than 15 mangled bodies. Photographs said to depict some of them circulated online.

Father Ephraim Magdy, a priest fleeing the tear gas, said he saw soldiers fire live bullets at protesters, and showed a journalist two bullet shells. “It is up to the military to explain what happened, but I see it as persecution,” he said. “I felt that they were monsters. It’s impossible for them to be Egyptians, let alone members of the army that protected the revolution.”

Crony Capitalism at Work

Too Big Not to Fail

The wealth producers can no longer support the parasites of socialism

What Socialism Has Done to the World's Economy  

BY SAM BLUMENFELD   

Nobody in the Western world has been willing to admit that it is the socialist policies of their governments that have led to the dire economic problems the world now faces. Sir Mervyn King, governor of the Bank of England, revealed how severe the crisis is after the decision was made by the bank’s Monetary Policy Committee to put 75 billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession.

The Daily Telegraph quoted the governor: “This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”

“The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.”

How did we get into this mess? By following the siren song of the socialists who think that the private sector and the taxpayer can pay for more and more socialist programs. And they think that whipping the capitalist horses that drive the economy is the way to get them to support more and more socialist spending. Obamacare is the program that will finally kill the American Golden Goose. Americans will be reduced to a survivalist economy.

The fact that we have in the White House a president totally committed to socialist madness and who can’t spend enough money to his satisfaction is an indication of how insane the American government has become. America, the leader of the capitalist world, is saddled with a government determined to drive it into bankruptcy. And the left has now released mobs in the streets demanding more spending on welfare and an end to capitalism. One mobster held up a sign that read: “People Not Profits.” Chinese communists, seeing those signs on television, must shake their heads in disbelief. How stupid have Americans become.

A capitalist economy is driven by one governing principle: the need to make a profit. Without profit there is no free-market economy and there is no creation of wealth. Socialists have been feeding off this creation of wealth because they themselves do not create wealth but only consume the wealth capitalism creates. But their minds are so twisted that they believe that by killing capitalism they can create utopia.

Meanwhile, the children in our public schools are being trained to become dumbed-down socialists. Won’t they be surprised when some day they learn that socialism doesn’t work, and that they’ve been misled by their schools to think that they must destroy the only economic system that actually creates wealth.

Socialist philosophers have so perverted the Western mind, particularly the minds of the political and university classes, that we are now on the brink of a total economic collapse. The United States has all the intellectual and material means to create the greatest wealth-producing economy in all of human history. But our socialist politicians and bureaucrats are doing everything in their power to prevent that from happening. They think that printing money and borrowing from those who have wealth will sustain their socialist dreams.

No socialist society has ever existed without the assistance of capitalists. Soviet Russia was constantly helped by the capitalist West. Cuba depends on tourists from capitalist countries to bolster its non-wealth producing economy. Hugo Chavez is using Venezuela’s oil revenues to destroy capitalism in that nation. And communist China has completely abandoned socialist economics and adopted the profit-making principles of capitalism, although the centers of production are still in the hands of its government.

But in America, the very citadel of capitalism, the greatest example of profit-making wealth creation, we have politicians and intellectuals at the highest levels of power leading us into an abyss of economic chaos.

Ludwig von Mises wrote in Bureaucracy (p. 57):

Socialism, that is, full government control of all economic activities, is impracticable because a socialist community would lack the indispensable intellectual instrument of economic planning and designing: economic calculation. The very idea of central planning by the state is self-contradictory. A socialist central board of production management will be helpless in the face of the problems to be solved….Socialism must result in complete chaos.

And that applies to Obamacare, which will turn the American medical system into chaos. And that is why it hangs over the heads of Americans like a sword of Damocles, about to slice and dice the American economy.

Von Mises has something interesting to say about all those meddlers like Michele Obama and Mayor Bloomberg who want to change the way Americans eat. He writes:

The dictatorial nutrition expert wants to feed his fellow citizens according to his own ideas about perfect alimentation. He wants to deal with men as the cattle breeder deals with his cows….He wants to domesticate them, to give them cattle status. The cattle breeder also is a benevolent despot.

Children in our public schools should be taught what von Mises teaches:

Capitalism is a system under which everybody has the chance of acquiring wealth; it gives everybody unlimited opportunity….under capitalism everybody is the architect of his own fortune….Work well done and services well rendered are the only means to succeed.

Wouldn’t it be wonderful if our schools taught children to read by intensive phonics and educated them on the benefits of capitalism? But we see the products of our schools in the unwashed mobs occupying Wall Street, without any understanding of the important function Wall Street has in our economy. By denouncing profit, and calling for an end to capitalism, they might as well be telling Americans to commit economic suicide.

As for job creation, here is some more economic wisdom from von Mises:

It is an illusion to believe that government spending can create jobs for the unemployed, that is, for those who cannot get jobs on account of the labor unions’ or government’s policies….There is but one way toward an increase of real wage rates for all those eager to earn wages: the progressive accumulation of new capital and the improvement of technical methods of production which the new capital brings about. The true interests of labor coincide with those of business.

I wish that every member of Congress were given a copy of Bureaucracy to read. Better yet, I wish that every economics department in our universities would teach von Mises. What we need is a cleansing of the American mind of all the socialist nonsense and propaganda that has been put there by socialist philosophers. As Von Mises writes:

Propaganda is one of the worst evils of bureaucracy and socialism. Propaganda is always the propaganda of lies, fallacies, and superstitions. Truth does not need any propaganda; it holds its own….It carries on by the mere fact of being true.

It is a pity that this great nation should have been taken down this socialist path by its intellectuals and politicians. Their pathetic propaganda fills our mass media through the mouths of left-wing journalists 24/7. On Sundays these pundits pontificate their dribble using the great technological means created by capitalism. They enjoy the products of capitalism but hate its very reason for being: to make a profit. And that is why the world’s economy is in crisis. The wealth producers can no longer support the parasites of socialism.

The approaching end of the road to serfdom

Another step down the road to serfdom

by Roger Koppl

Peter Orszag, former director of the Office of Management and Budget, has written an article for The New Republic entitled “Too Much of a Good Thing: Why we need less democracy.”  “To solve the serious problems facing our country,” he says, “we need to minimize the harm from legislative inertia by relying more on automatic policies and depoliticized commissions for certain policy decisions. In other words, radical as it sounds, we need to counter the gridlock of our political institutions by making them a bit less democratic.”

Orszag notes that “polarization” has been growing since about 1970.  He casts about for an explanation and rightly rejects gerrymandering as an important contributor.  If that were it, there should be less polarization in the Senate than the House, which does not seem to be the case.  His best explanation is that Americans are increasingly sorted into locations where we hear only opinions similar to our own.  With “the big sort,” more and more of us are living in ideological echo chambers.

Orszag does not consider another cause, which may itself contribute to the big sort: the increasing volume and cost of federal regulation.  The Federal Register publishes the new regulations coming out of federal government.  The number of pages in the Federal Register keeps growing, as does the administrative cost of federal regulation.  (See Figure 1 here.)

As the scope of federal regulation grows, Congress finds itself increasingly embroiled in problems of economic planning.  How shall we balance the tradeoff between cheap energy and reduced greenhouse gases?  Shall we support solar power or wind power?  Should medical care focus more on prevention or treatment?  And so on.  In The Road to Serfdom  F. A. Hayek pointed out that no solution could satisfy all members of the democratic public.  The greater the scope of centralized planning in economic affairs, the more gridlock there will be in the legislature.  “The inability of democratic assemblies to carry out what seems to be a clear mandate of the people will inevitably cause dissatisfaction with democratic institutions,” Hayek says.  For a while it may be possible to get something done by delegating the legislature’s authority to outside bodies, such as a panel of experts.  “The conviction grows,” Hayek explains, “that the direction must be ‘taken out of politics’ and placed in the hands of experts – permanent officials or independent autonomous bodies.”  This expedient is a stopgap, however.  At some point democratic planning brings on calls for a more complete abrogation of legislative power.  “The cry for an economic dictator is a characteristic stage in the movement toward planning.”

Hayek’s discussion of “Planning and Democracy” in The Road to Serfdom fits national politics in America today all too well.  We have gridlock and calls to take politics out of important decisions, including debt reduction.  We have the delegation of Congressional authority to bodies such as the debt Supercommittee.  And now with Peter Orszag we have calls for the nation to become “less democratic.”

We should see Hayek’s warning in Orszag’s call to be less democratic.  The cause of the problem is not the big sort, but the big government.  If we do not mend our ways, we shall end up at the end of the road to serfdom.

The vanishing Fifth Amendment

The Targeted Killing of Anwar al-Awlaki

by Roger Koppl

Anwar al-Awlaki was killed in a drone strike today.  If you recognize the name Awlaki, then you know that he was bad guy.  He was a propagandist for Al Qaeda who seems to have inspired the Fort Hood shooting, in which Nidal Hassan killed 13 people.  He was also an American citizen, born in New Mexico.  He was charged with no crime.  No attempt was made to arrest him.  The United States government seems to have had no plan to try him or charge him with any crime.  He was simply targeted for killing, and killed.

The Obama administration announced in April 2010 that it had targeted Awlaki for an extra-judicial killing.  The previous January, the Los Angeles Times reported that Awlaki was a likely target, quoting a source who said it was “all but certain.”  Time magazine comments, “Cynics will point to the strategic timing – just a week after embattled Yemeni President Ali Abdullah Saleh returned from four months of medial treatment in Saudi Arabia following an attack on the presidential compound. Saleh has been facing intense international pressure to acquiesce to a compromise deal with opposition parties that will see him step down after 33 years in power, in exchange for immunity from prosecution.”  As far as I can tell, there is no reason to think the US government’s relationship to Saleh had anything to do with targeting Awlaki.  But it does seem possible to wonder whether the timing of the kill might have been influenced by Saleh’s political fortunes.  As far as I know, public information does not allow us to go beyond somewhat vague speculations on this relatively minor issue of timing.

The government has constructed a legal defense of the targeting of Awlaki, and at the heart of that defense is the invocation of a state-secrets privilege.  Adam Serwer discusses the government argument, which is given here.

Glenn Greenwald rightly notes that it is hard to square this targeted killing with the Fifth Amendment, which reads in full:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Anwar al-Awlaki was denied due process of law.  How can we square the facts with the plain meaning of the Fifth Amendment?

We have lost the due process protections of the Fifth Amendment.  Prisoners in Bagram have no right of habeas corpus, even if brought there after being “rendered” from a location outside of Afghanistan.  These disturbing facts are more worrisome in the context of the increasing militarization of our municipal police and the recent court decision upholding the portion of an Alabama immigration law “that requires state and local law enforcement officials to try to verify a person’s immigration status during routine traffic stops or arrests, if ‘a reasonable suspicion’ exists that the person is in the country illegally.”

So far the authoritarian powers national, state, and local governments in the United States have not visibly encroached on the daily lives of most Americans.  But if we abandon due process, what assurance do have that our children and grandchildren will not be subject to the full array of authoritarian oppressions including censorship, intimidation, and arbitrary arrest?

Don't Expect Apple-Like Innovation in China

China Frets: Innovators Stymied Here

By Li Yuan

Millions of Chinese flooded the popular micro blogging site Sina Weibo to tweet their condolences on the death of Steve Jobs over the past two days. They also raised the question: Why isn't there a Steve Jobs in China?

The tone of the resulting discussion was almost unanimously pessimistic. As is always the case on the Chinese Internet, the discussion quickly moved to talk about the problems in China's political, economic and legal systems. Wang Wei, chairman of the Chinese Museum of Finance, tweeted, "In a society with an authoritarian political system, monopolistic business environment, backward-looking culture and prevalent technology theft, talking about a master of innovation? Not a chance! Don't even think about it."

China may be the manufacturer of the world, but many are frustrated that Chinese companies are better at knocking off others' original work than coming up with innovative ideas. The commemoration of Mr. Jobs' genius highlighted the dilemma.

Chinese companies themselves will perform as well as Apple Inc., but their products won't match up, Kai-Fu Lee told his eight million followers on Weibo. "Chinese companies can be expected to have the market valuation and business model like Apple's within a decade, but it will be difficult to expect any type of Apple-like innovation," he tweeted.

The former head of Google China and founder of a start-up incubator Innovation Works said by phone that Chinese schools focus too much on memorization and don't encourage critical thinking. "It's not that Chinese are not smart or don't have the potential. Look at Jerry Yang of Yahoo Inc. and Steve Chen of YouTube," he said, referring to the two Internet entrepreneurs who were both born in Taiwan and migrated to the U.S. at young ages.

Chen Zhiwu, a finance professor at Yale University, tweeted that in Chinese schools, "The first thing the teachers do is to rub down the edges of those students who are different from the crowd."

One of the most popular postings on Mr. Jobs' legacy came from scholar Wu Jiaxiang. "If Apple is a fruit on a tree, its branches are the freedom to think and create, and its root is constitutional democracy," he wrote. "An authoritarian nation may be able to build huge projects collectively but will never be able to produce science and technology giants." On that, Wang Ran, founder of a boutique investment bank China eCapital Corp., added, "And its trunk is a society whose legal system acknowledges the value of intellectual property."