Why
do people say things that they cannot, on a moment’s reflection, possibly
believe? Mainly, I suppose, to congratulate themselves on their own moral
grandeur and to appear right-thinking in the eyes of their peers. Truth is the
least of their worries.
What
would those who wish to preserve a maximum diversity of species, as a good in
itself, make of the announcement in the latest New England Journal of Medicine
of the trial of a vaccine that is a step towards the elimination in Africa of
the worst and most dangerous kind of malaria? Will they form a society for the
protection of Plasmodium falciparum, the causative organism of that malaria? I
suggest as a name for the society Friends of Falciparum, or Friefal.
The
vaccine, tested on children in malarious areas of Africa, was in fact only 55
percent effective in protecting against all episodes of malaria, and still less
effective, at 35 percent, against severe episodes. In addition, children given
the vaccine had an increased number of cases of meningitis, which might or
might not prove to be a chance finding.
Further
research is likely to improve the protective quality of the vaccine, though no
one currently believes that malaria, which causes about a million deaths per
year, will be totally eliminated by vaccine alone. But if the malarial parasite
could be eliminated by a conjunction of vaccination and other preventive
measures, would it be desirable?
Presumably
those who believe in the benefits of biodiversity per se would have to say no;
and it is indeed possible, even likely, that the elimination of the malarial
parasite would have unforeseen consequences. But unforeseen consequences are
the Promethean bargain of mankind that it made leaving its “natural” state
behind; and it would be a pretty inflexible ideologue of biodiversity who
insisted upon the survival of mankind’s malarial parasites.
Just
as I suspect that multiculturalists have a lot of different restaurants and
cuisines in mind when they praise multiculturalism, so I suspect that most of
those who espouse biodiversity as a good in itself are thinking mainly of
attractive or at least of harmless creatures, rather than, say, Ascaris
lumbricoides, the giant (and repellent) roundworm that infects children and can
cause intestinal obstruction, or Dracunculus medinensis, the Guinea-worm that,
once it emerges from the skin of the foot, must be wrapped round a stick and
pulled out slowly and painfully over
weeks or months. It is not difficult, in fact, to think of many species that
would not much be missed.
The
espousal of biodiversity as a good in itself, then, is a form of pagan
theodicy, in which Nature is ultimately benevolent and knows best, appearances
to the contrary notwithstanding. It is the belief that organisms such as Taenia
solium, the pork tapeworm, fulfill a function in the great, but unspecified,
scheme of things. No one wants this kind of biodiversity in or for himself, of
course.
None
of this implies that the destruction of species is never, often, or even
usually regrettable; but that is quite another matter from the new paganism of
biodiversity.
The
ongoing appeal of this ‘libel against the human race’
The
reason why such an army of present-day miserabilists are drawn to the gloomy
reverend has far more to do with Malthus’s thorough-going social pessimism than
his supposed laws of population growth.
by Tim
Black
Lisping,
reclusive and reviled by the working class of his day, the Reverend Thomas
Malthus (1766-1834) – the man behind the idea that the ‘lower orders of
society’ breed too quickly – would probably be surprised by his current
popularity. Because that’s what he is today: popular. Commentators, activists
and academics positively fall over themselves in the rush to say, ‘you know
what, that Malthus had a point. There are too many people and, what’s more,
they are consuming far too much.’
Earlier
this summer, a columnist for Time magazine was in no doubt as to the pastor’s
relevance. The global population is ‘ever larger, ever hungrier’, he noted,
‘food prices are near historic highs’ and ‘every report of drought or flooding
raises fears of global shortages’. ‘Taking a look around us today’, he continued,
‘it would be easy to conclude that Malthus was prescient’. Writing in the
British weekly, the New Statesman, wildlife lover Sir David Attenborough was
similarly convinced: ‘The fundamental truth that Malthus proclaimed remains the
truth: there cannot be more people on this Earth than can be fed.’ Not to be
outdone, the liberal-left’s favourite broadsheet, the Guardian, also suggested
that Malthus may have been right after all: ‘[His] arguments were part of the
inspiration for Charles Darwin’s theory of evolution, and they have validity in
the natural world. On the savannah, in the rainforests, and across the tundra,
animal populations explode when times are good, and crash when food reserves
are exhausted. Is homo sapiens an exception?’ The melancholy tone whispered its
answer in the negative. Writing in the New York Times, Paul Krugman was less
coy: ‘Malthus was right!’ shouted the headline.
Given
the encomia that are currently coming the way of Malthus you may well wonder
what exactly it was that he was meant to be right about. To find the answer to
this it is worth actually taking a look at the work, first published in 1798,
on which his supposed prescience is based: An Essay on the Principle of
Population. It makes for surprising reading.
Sure
enough, within the first few pages, we do encounter what has been taken to be
Malthus’s theory of population growth. In this, Malthus claims to be dealing
with what he calls two ‘fixed laws of nature’, the need for food and the
‘passion between the sexes’, or procreation. The problem, as Malthus sees it,
is that population ‘when unchecked’ grows faster than the means to support it
(or as he calls this latter category, ‘the means of subsistence’). He even
ascribes different mathematical titles to the rate of population growth and the
rate at which we develop the means of subsistence: ‘[Population] increases in a
geometrical ratio. Subsistence increases only in an arithmetical ratio.’ That
is, population doubles every 25 years (1, 2, 4, 8, 16, 32 etc) ‘when unchecked’,
whereas subsistence merely grows additively every 25 years (1, 2, 3, 4, 5, 6),
etc. And of course, if you take this as true, if you accept that population
will always, ‘when unchecked’, outstrip the development of the means to support
it, then Malthus will indeed seem ‘right’. Not only that, Malthus’s
vice-and-misery checks on population, from socially enforced restraint to
population-induced catastrophe, might well seem incredibly prescient. In this
regard, a famous passage is worth quoting in full:
‘The
power of population is so superior to the power in the earth to produce
subsistence for man, that premature death must in some shape or other visit the
human race. The vices of mankind [eg, wars for resources] are active and able
ministers of depopulation. They are the precursors in the great army of
destruction; and often finish the dreadful work themselves. But should they
fail in this war of extermination, sickly seasons, epidemics, pestilence and
plague advance in terrific array, and sweep of their thousands and ten
thousands. Should success be still incomplete, gigantic inevitable famine
stalks in the rear, and with one mighty blow levels the population.’
You
can almost hear contemporary misery merchants trilling their approval. You’ve
got wars for resources, you’ve got pandemics, you’ve got famine… Indeed,
virtually every cataclysm, every End of Man is there, forecast in Malthus’s
pulpit prose. No wonder environmentalists sidle up to Malthus’s corpse to
whisper their approval: ‘You knew all along that nature would take its
necessary revenge unless humans, breeding like rabbits, stopped consuming so
damned much.’
But
what’s strange about reading Malthus’s actual text is that the ‘imperious
all-pervading law of nature’ he outlines – that nature will check population
growth if humans don’t implement checks themselves – takes up just a few
paragraphs of a work over 120 pages long. In fact, he barely bothers to justify
his assertion that population grows geometrically while the means of
subsistence expand arithmetically. His sole source for his relentless assertion
about population growth seems to be ‘Dr [Richard] Price’s two volumes of
Observations’, a 1776 treatise on civil liberty which featured factoids about
population growth in the New England colonies during the seventeenth century –
‘when the power of population was left to exert itself with perfect freedom’.
As for his assertions about the development of the means of subsistence, there
are admittedly a few sketchy paragraphs on the transition between hunter-gather
societies and agricultural ones. But beyond that, nothing.
That
Malthus’s actual ‘theory of population’ is, by any standard, groundless at
least explains why it was vitiated by subsequent history. Because, make no
mistake, Malthus has never ceased to be wrong. Not only did population not
expand to anything like the ‘geometric’ degree he outlined, but more
importantly, the technological developments of the industrial revolution of the
nineteenth century and the agricultural, ‘green’ revolution of the twentieth
century showed that our ability to support a growing population can, as it
were, leap forward. The ‘arithmetic’ rate at which we develop the means of
subsistence proved to be what it always was – an arbitrary assertion.
The Death Of Global Warming
Skepticism, Or The Birth Of Straw Men?
By J. Taylor
The mainstream media has been
spiking the football in the proverbial end zone ever since a paper released
last Friday claimed two-thirds of global temperature stations show some warming
occurred during the past century. The media have been claiming the new paper
delivers a death blow to skepticism, but the paper itself brings almost nothing
new to the global warming debate and instead shows how far global warming advocates
are from presenting credible evidence of a crisis. Rather than delivering a
death blow to skepticism, the media has merely invented and shredded an
insignificant straw man.
University of California, Berkeley
physics professor Richard Muller analyzed land-based temperature readings from
temperature stations around the world and found two-thirds indicate warming
temperatures and one-third indicate cooling temperatures. As a result, “Global
warming is real,” summarized Muller in an editorial he wrote in the October 21
Wall Street Journal .
Muller acknowledged that many of the
stations produced incomplete temperature records and had poor quality control.
He claimed that he nevertheless included them in the study to avoid
“data-selection bias.” Scientists such as Anthony Watts have pointed out
several additional flaws in the Muller paper. But let’s assume, for the sake of
argument, that Muller’s paper is flawless in its conclusion that two-thirds of
land-based temperature stations report warming rather than cooling. Even under
such an assumption, Muller’s paper does nothing to dispel skeptical objections
to the theory that humans are causing a global warming crisis.
The case for a human-induced global
warming crisis requires the demonstration of several components. These include
(1) that global temperatures are rising, (2) that global temperatures will
likely continue to rise in the future, (3) that the rise in temperatures is or
will be sufficiently rapid and substantial to cause enormous negative
consequences that far outweigh the benefits of such warming and (4) that human
emissions of greenhouse gases account for all such temperature rise or enough
of the temperature rise to elevate the temperature rise to crisis levels.
In order to justify government
action against global warming, advocates must also show that the proposed
action will substantially reduce the negative impacts of the asserted crisis
and that the costs of such action will not outweigh the benefits.
Muller’s paper merely addresses the
first component necessary to support the theory of a human-induced global
warming crisis. Moreover, this first component hasn’t been in dispute, even
before publication of Muller’s paper.
Very few if any skeptics assert that
the earth is still in the Little Ice Age. While the Little Ice Age raged from
approximately 1300 to 1900 AD, it is pretty well accepted that the Little Ice
Age did indeed end by approximately 1900 AD. The mere fact that the Little Ice
Age ended a little over 100 years ago, and that temperatures have warmed during
the course of recovering from the Little Ice Age, tells us absolutely nothing
about the remaining components necessary to support an assertion that humans
are creating a global warming crisis.
Muller himself admits, “How much of
the warming is due to humans and what will be the likely effects? We
made no independent assessment of that.”
So we have a paper merely claiming
that two out of three global temperature stations report the Little Ice Age is
over. This supports the media spiking the football and proclaiming the death of
skepticism regarding a human-induced global warming crisis?
Even prominent global warming
advocate Eric Steig admits, “Anybody expecting earthshaking news from Berkeley,
now that the Berkeley Earth Surface Temperature group being led by Richard Muller
has released its results, had to be content with a barely perceptible quiver.
As far as the basic science goes, the results could not have been less
surprising if the press release had said ‘Man Finds Sun Rises At Dawn.’”
“Overall, we are underwhelmed by the
quality of [the] Berkeley effort so far,” Steig adds.
Far from marking the death of
skepticism, the media’s over-the-top sensationalism of the Muller paper shows
just how far global warming advocates are from supporting their assertions of a
human-induced global warming crisis. The straw man may be dead, but skepticism
of a human-induced global warming crisis is alive and well.
Would the Founders approve of the nation we’ve made?
By Myron Magnet
A U.S. Supreme Court justice recounted over cocktails
a while ago his travails with his hometown zoning board. He wanted to build an
addition onto his house, containing what the plans described as a home office,
but he met truculent and lengthy resistance. This is a residential area, a
zoning official blustered—no businesses allowed. The judge mildly explained
that he would not be running a business from the new room; he would be using it
as a study. Well, challenged the suspicious official, what business are you in?
I work for the government, the justice replied. Okay, the official finally
conceded—grudgingly, as if conferring an immense and special discretionary
favor; we’ll let it go by this time. But, he snapped in conclusion, don’t ever
expletive-deleted with us again.
Isn’t that sort of petty tyranny? I asked.
Yes, the justice replied; there’s a lot of it going
around.
Tyranny isn’t a word you hear often, certainly not in
conversations about the First World. But as American voters mull over the
election campaign now under way, they’re more than usually inclined to ponder
first principles and ask what kind of country the Founding Fathers envisioned.
As voters’ frequent invocations of the Boston Tea Party recall, the Founding
began with a negation, a statement of what the colonists didn’t want. They
didn’t want tyranny: by which they meant, not a blood-dripping,
rack-and-gridiron Inquisition, but merely taxation without representation—and
they went to war against it. “The Parliament of Great Britain,” George
Washington wrote a friend as he moved toward taking up arms several months
after the Tea Party, “hath no more Right to put their hands into my Pocket
without my consent, than I have to put my hands into your’s, for money.”
With independence won, the Founders struggled to
create a “free government,” fully understanding the novelty and difficulty of
that oxymoronic task. James Madison laid out the problem in Federalist 51.
“Because men are not angels,” he explained, they need government to prevent
them, by force when necessary, from invading the lives, property, and liberty
of their fellow citizens. But the same non-angelic human nature that makes us
need government to protect liberty and property, he observed, can lead the men
who wield government’s coercive machinery to use it tyrannically—even in a
democracy, where a popularly elected majority can gang up to deprive other
citizens of fundamental rights that their Creator gave them. In writing the
Constitution, Madison and his fellow Framers sought to build a government
strong enough to do its essential tasks well, without degenerating into what
Continental Congress president Richard Henry Lee termed an “elective
despotism.” It’s to ward off tyranny that the Constitution strictly limits and
defines the central government’s powers, and splits up its power into several
branches and among many officers, all jealously watching one another to prevent
abuse.
When we ask how our current political state of affairs
measures up to the Founders’ standard, we usually find ourselves discussing
whether a given law or program is constitutional, and soon enough get tangled
in precedents and lawyerly rigmarole. But let’s frame the question a little
differently: How far does present-day America meet the Founders’ ideal of free
government, protecting individual liberty while avoiding what they considered
tyranny? A few specific examples will serve as a gauge.
The Supreme Court’s 2005 Kelo v. City of New London
decision is notorious enough, but it bears recalling in this connection, for
the whole episode is objectionable in so many monitory ways. In the year 2000,
the frayed Connecticut city had conceived a grandiose project to redevelop 90
waterfront acres, in conjunction with pharmaceutical giant Pfizer’s plan to
build an adjoining $300 million research center. A conference hotel—that
inevitable (and almost inevitably uneconomic) nostrum of urban
economic-development authorities—would rise, surrounded by upscale housing,
shopping, and restaurants, all adorned with a marina and a promenade along the
Thames River. Promising to create more than 3,000 new jobs and add $1.2 million
in revenues to the city’s declining tax rolls, the redevelopment authority set
about buying up the private houses, mostly old and modest, on the site.
In Oakland, California, where I live, the Occupiers
have been struggling to keep their ground on Ogawa Plaza, a piece of public
property in front of City Hall. On the night of Tuesday, October 25, I saw from
my apartment, miles northeast of the action, dozens of police cars zoom in from
a neighboring jurisdiction. I looked at an online police scanner where the
Oakland police department described the situation as a riot and requested a
multi-county tactical response. Hundreds of police, donning intimidating riot
gear, swept in to confront the crowd on the streets. There was no riot,
however, as almost all the protesters were peaceful, the only ones acting out
with petty violence being loudly chastised by the crowd. The most belligerent
participants by far were law enforcers, who responded to thrown bottles and
civil disobedience with tear gas and rubber bullets. One man, Scott Olsen, was hit with one of the
police’s projectiles, his skull fractured. Thankfully, he is now reportedly in
fair condition. You can tell from the videos that the police were not exactly
using restraint with these weapons. They even threw percussion grenades at the
protesters who came to Olsen’s aid. What began as a typical overbearing
government response to protesters in the name of public health now offers a
peak into the full threat to liberty that we face in modern America.
When it comes to the rights of the protesters vs. the
police, we have to side with the protesters. Some of the particulars were
different in his time, but we should remember that Murray Rothbard argued that
the occupiers of People’s Park in Berkeley were in the right and the police who
beat, gassed, arrested and injured them entirely in the wrong.
Beyond this human rights issue, how freedom lovers
should regard the Occupy movement, now alive in over a hundred towns and cities
worldwide, depends largely upon whether we see it as a radical rebellion
against the establishment or an uprising on behalf of more statism. But there’s
also another consideration: whether there exists an opportunity to reach out to
the disaffected and explain to them why only true liberty will remedy the grave
economic and social problems some of them at least partly diagnose correctly.
Insofar as this movement is an arm of the left-liberal
establishment, there are reasons to worry. There appears to be an Astroturf
element in play, and as the movement grows, the risk of it being co-opted by
the administration and the institutional center-left increases. At the same
time we must cautiously note that, as with most leftish groups, the more
radically opposed to the status quo someone is, the more likely he is to oppose
private property and to wish to revolutionize society in many of the worst possible
ways.
Yet there is also a libertarian contingent in these
protests that cannot be denied. Like the Tea Parties, the Occupy movement
comprises a hodgepodge of voices, some of which are aimlessly calling for
change, some with good rhetoric but not so good an agenda, some who simply
favor one faction of the bipartisan American state, and some who would replace
current policy with something much worse. The folks in both camps who rail
against corruption but oppose key pillars of the free society have no better a
vision than Obama or Bush. Occupiers who wish to expropriate the
entrepreneurial class, nationalize the economy, and abolish private property
are flirting with totalitarian ideals, just as Tea Partiers who reject civil
liberties, demonize Muslims, and cry for war with Iran are embracing the very
worst components of modern American governance, and are in fact calling for a
program even worse than the current president’s.
But many like millions of other Americans are simply
frustrated with the undeniable corruption running through the state-corporate
nexus. Seeing this common ground, some conservatives have defended the
Occupiers, just as Noam Chomsky has humanized the Tea Partiers as "people
with real grievances." And surely there is a lot to be angry about. Like
some of the disenchanted Tea Party types, the Occupiers include many who have
played by the rules and work hard to scrape by in a system that seems
gratuitously rigged in favor of corporate fat cats, which of course it is. A
faction of the Occupiers have been waving End the Fed signs, as they among the
crowd understand that the government’s money monopoly – anathema to
Austro-libertarians, Old Right conservatives, and Tuckerite anarchists alike –
has created a crooked system that gradually seizes money from the poor and
middle class and funnels it to the banking establishment, government
contractors, and the military-industrial complex. And beyond this, nearly the
whole economy is dominated by the corporate state.
Intellectual property and licensure have turned much
of the telecommunications industry into a fascist arm of the government. The
agricultural sector is so distorted by the USDA and subsidies so as to present
a threat to the health and liberty of all Americans and many foreigners.
American health care is plagued by patents, the FDA, Medicare, and other
national programs that tip the scales in favor of Big Pharma, the medical
cartels, and the insurance companies. Clearly, the ubiquity of corporate
influence, if it could emerge in a free market setting, did not do so in our
world. Even the welfare state and federal education programs often benefit the
rich and connected as much as they help the poor.
But how many of the Occupiers see this? When
establishment hacks like Paul Krugman and Robert Reich cozy up to the
protesters, many of whom take them with open arms, we know something is wrong,
because the very New Deal-Great Society style of governance that has ruled
America for four generations is exactly what is responsible for the very
disease the Occupiers wish to cure.
The modal Occupier appears to be some kind of social
democrat who can easily be used as a pawn for Obama’s left-corporatist schemes
like job plans and infrastructure Keynesianism. The Occupy Wall Street Demands
Working Group unanimously approved a horrible "Jobs for All"
proposal, reportedly angering anarchists and others who see it as an obvious
call for Obama-style liberal corporatism. As for the more radical and yet more
clueless camp, I previously wrote about one list of socialistic demands and was criticized on the Web for
tarring all Occupiers with the same brush, although I didn’t really intend to,
but it really does seem that insofar as the Occupiers are calling for anything,
it is channeled into a statist demand. I still stand by my concern that this
movement, at least on its current trajectory, will ultimately serve as pressure
from below to enhance the ruling class’s power.
The same day the liberal Democratic Oakland government
brutally cracked down on the Occupiers, President Obama held a posh fundraising
event in nearby San Francisco. This speaks to an immutable political reality
the Occupiers need to understand: the president probably loves the
demonstrations to the extent that they serve as pressure for his jobs, student
loan, and stimulus programs, but in any altercation between the protesters and
the police state, the president of course represents the side of power – not
just represents it, but serves as its chief executor and figurehead.
The Obama administration and domestic liberal
government are the police state. The same police power
involved in tear-gassing and critically injuring dissidents is used to
implement national health care. The same statist force behind war and the
corruption on Wall Street is behind taxation and liberal social democracy. It
is also this force that has extracted the nation’s wealth for the benefit of a
few, so that now the Washington, DC, area is the richest in the country. Mao
was right: All political power flows from the barrel of a gun. To ask for the
state to tax anyone more or regiment society in any way is to give another tool
to the true power elite to punish enemies, give advantage to the politically
connected, and threaten those who don’t go along with the central plan with
imprisonment and state violence.
Entrepreneurs, taxpayers, and everyday Americans
should see one another as being on the same side, with big government, the
fascist financial system, the empire, and corporate state being on the other,
and as long as the establishment divides us against each other, liberty will be
lost and Obama’s cronies will laugh all the way to the bank.
I’ve been nuanced on the Occupiers and I’ve been asked
to take sides. I think it’s time for the Occupiers to take sides: Do you oppose
police brutality? Do you oppose state capitalism? If so, you must oppose the
government power that makes them both possible. Reject any and all calls for
more government for any reason, and instead only focus on reducing and abolishing
the state’s control.
Divorcing the ruling class from state power, using
political power to equalize the economy, is the most fanciful aspiration humans
have ever considered. Lord Acton was right that no class is fit to govern. It
is why when the disenfranchised grab the reins of the state, they almost always
become as despotic as those they have supplanted. Instead, we must all reject
the state and all its works. Government is the iron fist, and its promises of
welfare and universal humanitarian always come with nightsticks, tear gas, and
rubber bullets, at best. When the state offers you a hand up or a hand out,
notice the blood dripping from its fingers.
In
chapter 24 of The General Theory of Employment, Interest and Money, John
Maynard Keynes laid out his screwball idea that capital might soon become, or
be made to become, no longer scarce; hence no payment would have to be made to
induce people to save, and that condition would be splendid inasmuch as it
would entail the “euthanasia of the rentier.” This stuff really must be seen to
be believed; here is the meat of Keynes’s discussion in his own words:
The
justification for a moderately high rate of interest has been found hitherto in
the necessity of providing a sufficient inducement to save. But we have shown
that the extent of effective saving is necessarily determined by the scale of
investment and that the scale of investment is promoted by a low rate of
interest, provided that we do not attempt to stimulate it in this way beyond
the point which corresponds to full employment. Thus it is to our best
advantage to reduce the rate of interest to that point relatively to the
schedule of the marginal efficiency of capital at which there is full
employment.There
can be no doubt that this criterion will lead to a much lower rate of interest
than has ruled hitherto; and, so far as one can guess at the schedules of the
marginal efficiency of capital corresponding to increasing amounts of capital,
the rate of interest is likely to fall steadily, if it should be practicable to
maintain conditions of more or less continuous full employment—unless, indeed,
there is an excessive change in the aggregate propensity to consume (including
the State).I
feel sure that the demand for capital is strictly limited in the sense that it
would not be difficult to increase the stock of capital up to a point where its
marginal efficiency had fallen to a very low figure. This would not mean that
the use of capital instruments would cost almost nothing, but only that the
return from them would have to cover little more than their exhaustion by
wastage and obsolescence together with some margin to cover risk and the
exercise of skill and judgment. In short, the aggregate return from durable
goods in the course of their life would, as in the case of short-lived goods,
just cover their labour costs of production plus an allowance for risk and the
costs of skill and supervision.Now,
though this state of affairs would be quite compatible with some measure of
individualism, yet it would mean the euthanasia of the rentier, and,
consequently, the euthanasia of the cumulative oppressive power of the
capitalist to exploit the scarcity-value of capital. Interest today rewards no
genuine sacrifice, any more than does the rent of land. The owner of capital
can obtain interest because capital is scarce, just as the owner of land can
obtain rent because land is scarce. But whilst there may be intrinsic reasons
for the scarcity of land, there are no intrinsic reasons for the scarcity of
capital. An intrinsic reason for such scarcity, in the sense of a genuine
sacrifice which could only be called forth by the offer of a reward in the
shape of interest, would not exist, in the long run, except in the event of the
individual propensity to consume proving to be of such a character that net
saving in conditions of full employment comes to an end before capital has
become sufficiently abundant. But even so, it will still be possible for
communal saving through the agency of the State to be maintained at a level
which will allow the growth of capital up to the point where it ceases to be
scarce.I
see, therefore, the rentier aspect of capitalism as a transitional phase which
will disappear when it has done its work. And with the disappearance of its
rentier aspect much else in it besides will suffer a sea-change. It will be,
moreover, a great advantage of the order of events which I am advocating, that
the euthanasia of the rentier, of the functionless investor, will be nothing
sudden, merely a gradual but prolonged continuance of what we have seen
recently in Great Britain, and will need no revolution. [pp. 375-76]
Given
the Fed’s policy during the past three years of, first, driving short-term
interest rates down almost to zero, and, more recently, undertaking Operation
Twist, with the intent of driving longer-term interest rates down to levels
that, in real terms, equal or fall below zero, we might seriously wonder
whether Chairman Ben Bernanke and his colleagues have decided to give a shove
to the wheel of history that Keynes longingly anticipated.
However
that may be, no one can dispute that people who rely on the earnings on
invested funds to support themselves—a situation in which many retired persons
in particular find themselves—are now in a world of hurt. Bank savings accounts
are paying interest rates of 1 percent or less. Certificates of deposit are
paying 0.5 percent to 1.7 percent, depending on the term. U.S. Treasury bonds
with terms of 5 to 30 years are yielding in the neighborhood of 1 percent to 3
percent.
In
short, the highest yield available to ordinary investors who seek a simple,
low-risk investment of their funds is, at best, roughly equal to the rate of
inflation—and then, with a 30-year term to maturity, only with substantial risk
of capital loss if interest rates should rise. To put the matter another way,
all ordinary investors are now being progressively impoverished because the
nominal return on their investments falls short of the loss of purchasing power
of the dollar during the term of the investment. Getting a positive real rate
of return is effectively impossible for the proverbial widows and orphans. Only
investors with the knowledge of how to invest in gold, crude commodities, and
other such esoteric assets stand any chance of earning positive real returns,
and then only with great risk of substantial capital losses.
Given
that the Fed’s official policy is to drive all interest rates to near zero, one
may conclude that the Fed seeks to impoverish the widows, orphans, retired
people, and all other financially untutored people who rely on interest
earnings to support themselves in their old age or adversity. Can a crueller
official policy be imagined, short of grinding up these unfortunate souls to
make pet food or fertilizer?
The
politicians constantly bark about their solicitude for those who are helpless
and in difficulty through no fault of their own. Yet, the scores of millions of
people who saved money to support themselves in old age now find themselves
progressively robbed by the very officials who purport to be their protectors.
There are many reasons to oppose the Fed’s policy. The reason brought to mind
by the official enthanasia of the nation’s small savers deserves far more
attention than it has received to date.
It is interesting to compare
Lincoln and his treachery in causing the Southern "enemy" to fire the
first shot at Fort Sumter, resulting in the Civil War, with Roosevelt's similar
manipulation causing the attack on Pearl Harbor and America's entry into World
War II.
Arthur M. Schlesinger Jr., a
well-known American "court historian," has written the definitive
defenses for both Abraham Lincoln and Franklin D. Roosevelt regarding their
reprehensible behavior in causing their respective unnecessary American wars.
He clearly documents the unconstitutional behavior of both and offers great
praise for the same. He attempts to justify the actions of both presidents on
grounds that they were acting during a "crisis" pertaining to the
"survival of the American government," and that their
unconstitutional actions were thereby made "necessary." Schlesinger
has stated that "Next to the Civil War, World War II was the greatest
crisis in American history."[1] His defense of these two
"great" presidents is as follows:
Roosevelt in 1941, like
Lincoln in 1861, did what he did under what appeared to be apopular demand and a public necessity. Both presidents took their actions in
light of day and to the accompaniment of uninhibited political debate.
They did what they thought they had to do to save the republic.
They threw themselves in the end on the justice of the country and the
rectitude of their motives. Whatever Lincoln and Roosevelt felt compelled to do
under the pressure of crisis did not corrupt their essential commitment to
constitutional ways and democratic processes.[2]
Schlesinger, however,
recognizes the terrible precedents that were created by these presidents'
violations of the clear constitutional restrictions on their office:
Yet the danger persists that
power asserted during authentic emergencies may
create precedents for transcendent executive power during emergencies that
exist only in the hallucinations of the Oval Office and that remain invisible
to most of the nation. The perennial question is: How to distinguish real
crises threatening the life of the republic from bad dreams conjured up by
paranoid presidents spurred on by paranoid advisers? Necessity as Milton said,
is always "the tyrant's plea."[3]
Let us add to John Milton's
statement a more specific warning by William Pitt in his speech to the House of
Commons on November 18, 1783: "Necessity is the plea for every
infringement of human freedom. It is the argument of tyrants."[4]
Finally, it is instructive to
compare the circumstances for Lincoln at Fort Sumter with those for Roosevelt
at Pearl Harbor. In neither case was there an actual "surprise"
attack by the enemy. In fact, there was an extended period of time, many months
prior to the "first shot," in which both Lincoln and Roosevelt had
ample opportunity to attempt to negotiate with the alleged "enemy,"
who was desperately trying to reach a peaceful settlement.
In both cases, the presidents
refused to negotiate in good faith. Lincoln sent completely false and
conflicting statements to the Confederates and to Congress — even refused to
talk with the Confederate commissioners. Roosevelt also refused to talk with
Japanese Prime Minister Konoye, a refusal that brought down the moderate,
peace-seeking Konoye government and caused the rise of the militant Tojo
regime. Both Lincoln and Roosevelt repeatedly lied to the American people and
to Congress about what they were doing while they were secretly provoking the "enemy"
to fire the first shot in their respective wars. Both intentionally subjected
their respective armed forces to being bait to get the enemy to fire the first
shot.
