How the nationalisation of parenting stoked the riots

People think that the government is responsible for their children

The state’s relentless undermining of parental authority has created a world in which no one knows how to control children or teens.

by Jennie Bristow 

‘We have nationalised child-raising’, claimed Shaun Bailey, head of the charity My Generation, during an autopsy of the riots and looting that swept England in summer 2011. Bailey continued: ‘People think that the government is responsible for their children - that weakens the family structure. One of the worst things as a parent is having nothing to teach your children; one of the worst things as a child is to believe that authority lies outside your parents.’ (1)

Now, I am spontaneously prone to questioning the pronouncements of Big Society worthies such as Shaun Bailey. I have no idea what My Generation actually is; according to the Charity Commission records, it has now ‘ceased to exist’. And it was striking that, having denounced the ‘nationalisation’ of parenting by the state, Bailey’s proposed solutions seemed to involve yet more of the same: for example, that school pupils should be taught about ‘parenting’ from an even earlier age.

But Bailey’s diagnosis of the dangers inherent in eroding parental authority was absolutely spot on. By attempting to ‘nationalise’ childrearing, whether by providing classes to instruct parents in officially approved childrearing methods or by using schools to inculcate children in a heightened awareness of the failings of their mothers and fathers, in recent decades, government parenting policy has stripped parents of their directly authoritative role.

Freedom of Association

The Right to exclude

by Llewellyn H. Rockwell Jr.

It seems incredible that in the last days, a fundamental right of the whole of humanity, the freedom of association, has been denounced by the New York Times and all major opinion sources, even as a national political figure was reluctant to defend his own statements in favor of the idea, and then distanced himself from the notion. Has such a fundamental principle of liberty become unsayable?

Or perhaps it is not so incredible. An overweening government, in an age of despotism such as ours, must deny such a fundamental right simply because it is one of those core issues that speaks to who is in charge: the state or individuals.

We live in anti-liberal times, when individual choice is highly suspect. The driving legislative ethos is toward making all actions required or forbidden, with less and less room for human volition. Simply put, we no longer trust the idea of freedom. We can't even imagine how it would work. What a distance we have traveled from the Age of Reason to our own times.

Referencing the great controversy about the 1964 Civil Rights Act, Karen De Coster put the issue to rest by turning Rachel Maddow's question on its head. She demanded to know whether a white businessman has the right to refuse service to a black man. Karen asked, does a black businessman have the right to refuse service to a Klan member?

America Has Failed to Big Pimp

"Embracing your own stigma is a political act, an act of resistance and defiance"

By ROD DREHER

In case you hadn’t noticed, hip-hop, the degenerate pop music genre known for hit songs like Jay-Z’s “Big Pimpin”, has failed America — but so too has the nation failed hip-hop. So says a person named Toure’, to whom the Washington Post gave actual column space to write wisdom such as:

Hip-hop is the product of a generation in which many black men did not know their fathers. How did these fatherless MCs construct their masculinity? For some, it was by watching and idolizing drug dealers. Many would make it as rappers by packaging themselves as former dealers — either because that is what they were or because that’s who they revered. I’m talking about the Notorious B.I.G., Nas, the Wu-Tang Clan, Jay-Z, Lil Wayne, 50 Cent, the Clipse, Rick Ross and others. By then, it seemed as though an MC needed to claim drug-trade stripes to earn acceptance among hip-hop’s elite.

America's Next Energy Revolution

Forget peak oil; forget the Middle East

By WALTER RUSSELL

The energy revolution of the 21st century isn’t about solar energy or wind power and the “scramble for oil” isn’t going to drive global politics. The energy abundance that helped propel the United States to global leadership in the 19th and 2oth centuries is back; if the energy revolution now taking shape lives up to its full potential, we are headed into a new century in which the location of the world’s energy resources and the structure of the world’s energy trade support American affluence at home and power abroad.

By some estimates, the United States has more oil than Saudi Arabia, Iraq and Iran combined, and Canada may have even more than the United States. A GAO report released last May (pdf link can be found here) estimates that up to the equivalent of 3 trillion barrels of shale oil may lie in just one of the major potential US energy production sites. If half of this oil is recoverable, US reserves in this one deposit are roughly equal to the known reserves of the rest of the world combined.

Social Darwinism and the Free Market

The Free Market is the means by which human beings cooperate

by David Gordon

In a speech to the American Society of Newspaper Editors on April 3, 2012, President Obama called a budget proposal of his Republican opponents in Congress "thinly veiled social Darwinism."

What did the president mean by this comment? The budget proposal in question, he claimed, would require drastic cuts in government programs designed to aid the poor. "And by gutting the very things we need to grow an economy that's built to last — education and training, research and development, our infrastructure — it is a prescription for decline." Further, his opponents reject proposals to increase taxes on the rich.

How can anyone favor refusing government aid to the poor and oppose requiring the rich to pay more in taxes? Obama answered that those who think in this way must believe that the welfare of the rich is of primary significance. The poor, and everyone else, must take whatever "trickles down" to them from the rich.

Who Actually Destroyed The Middle Class?

Economic Forensics

A gold-standard 1928 one-dollar bill.
The income of the median full-time male worker
begins to stagnate  at exactly the point in 1971
when the dollar was de-linked from gold.   

By Nathan Lewis

The difficulties experienced by the great middle in the U.S. can be, in my opinion, traced to the delinking of the U.S. dollar from gold in 1971. Now, I know a lot of people are going to say that is ridiculous. But, one reason I say that is, even by the U.S. government’s own statistics, the income of the median full-time male worker begins to stagnate at exactly that point, after rising by huge amounts during the 1950s and 1960s.

The median U.S. full-time male income was $47,715 in 2010. In 1969, it was $44,455. The 1969 numbers are of course “adjusted for inflation,” and you know that the government’s inflation adjustments are thoroughly low-balled. With slightly more honest statistics, the trend would not be flat, but instead downward over the past forty years.

Another way of looking at it is in terms of ounces of gold. After all, gold was the monetary basis of the United States for 182 years, from 1789 to 1971, so why shouldn’t we use that as a measure of how much people are really getting paid?

The Government makes all the difference

Quite Possibly The Dumbest Thing I’ve Heard An Economist Say

by Simon Black

In the mid-1800s, a cousin of Charles Darwin by the name of Francis Galton wrote a series of works expanding on an old idea of selective breeding in human beings.

Galton’s theory became known as eugenics. At its core, eugenics was underpinned by an assumption that talent and genius were hereditary traits, and that deliberate breeding could improve the human race.

Within decades, intellectuals were spending their entire careers studying these ideas, quickly spawning a number of different fields dedicated to ‘racial sciences.’

Scholars began closely examining racial differences and building volumes of statistics on everything ranging from intelligence to reproduction to genetic effectiveness in combating disease.

‘Scientists’ would scurry about taking cranial measurements, sizing up jaw lines, calculating forehead slopes, and estimating nose angles… all of which became ‘evidence’ of racial superiority.

Peugeot Has 51% Chance of Debt Default

Hollande Says France Will Not Let Peugeot Lay Off Workers

The incredibly inept policies of French president Francois Hollande are back in the news.

Hollande is following up on his proposal to not let companies fire workers, starting right now with French car maker Peugeot's Plan to Cut 8,000 Jobs, Close Plant

An article in El Pais has better details of Hollande's denial of reality than I have found elsewhere.

My friend Bran who lives in Spain offers this translation key paragraphs of Hollande's "Moralization" of Political Life.

Hollande says "Peugeot's plan is unacceptable and will be renegotiated."

Hollande accused Peugeot owners of having delayed the restructuring plan with the excuse of not interfering in the election campaign and denied that the biggest problem are labor costs, as claimed.

"There is also a strategy, a market and some shareholders who have distributed a dividends rather than reinvest them," he said.

The solution? "Have an independent expert examine the company, find a way out of the plan to close the plants, and create a strategic plan for the automotive industry and encourage the purchase of French products in France."

Peugeot Has 51% Chance of Debt Default

Just to highlight how out of touch with reality Hollande is, please consider Peugeot Has 51% Chance of Debt Default, Credit Swaps Show

Austerity In Greece? Sure, And There's Snow In Mykonos Too

The Beast is still very hungry

By Nathan Lewis

Let’s look at “austerity” in Greece, which must certainly be under the greatest pressure of any government today to resolve its financial issues.
In January-May 2012, the central government had revenue of €18.173 billion (this is net of the public investment budget, which is accounted for separately). It spent €29.243 billion.

In the same period in 2011, the government had €18.358 billion of revenue, and spent €27.747 billion.

Financial Disintegration In Europe

Planned Chaos

By Jeff Harding

Here are some recent research notes from DB Research of Deutsche Bank Group. I noticed that Thomas Mayer, the former Chief Economist for Deutsche Bank no longer is listed as the author of these notes. In fact, he has been replaced as Chief Economist and is now listed as “Senior Economic Advisor” to the bank. My guess: he was gently fired, they pay him the balance of his contract, and he gets to do “academic research.” I originally carried his commentary when he announced he was “Austrian” but upon further probing I discovered he was not really. Maybe he has time now to read some Mises.

Still, these research notes represent some of the best thinking in Germany about the Eurozone’s economic crisis, and that’s important to know. The Financial Disintegration note is quite interesting (disturbing). Weren’t they supposed to be integrating?

The Cure for Our Economy’s Stationary State

The cure is so simple

By Niall Ferguson

Jesse L. Jackson Jr. has been suffering from “a mood disorder.”

He is not alone. The world economy may not be in a depression as bad as that of the early 1930s. But it’s certainly got emotional problems.

A year ago, according to Gallup, economic confidence in the United States plunged, touching bottom in late August. It then rallied, only to start sliding again with the arrival of summer. Sunshine doesn’t seem to work like it used to.

What is going on?

The middle is shifting toward the bottom

Two Classes, Divided by ‘I Do’

By JASON DePARLE

Jessica Schairer has so much in common with her boss, Chris Faulkner, that a visitor to the day care center they run might get them confused.

They are both friendly white women from modest Midwestern backgrounds who left for college with conventional hopes of marriage, motherhood and career. They both have children in elementary school. They pass their days in similar ways: juggling toddlers, coaching teachers and swapping small secrets that mark them as friends. They even got tattoos together. Though Ms. Faulkner, as the boss, earns more money, the difference is a gap, not a chasm.

But a friendship that evokes parity by day becomes a study of inequality at night and a testament to the way family structure deepens class divides. Ms. Faulkner is married and living on two paychecks, while Ms. Schairer is raising her children by herself. That gives the Faulkner family a profound advantage in income and nurturing time, and makes their children statistically more likely to finish college, find good jobs and form stable marriages.

5 Signs of the Chinese Economic Apocalypse

From hog ratios to growing coal stockpiles, the Chinese economy is blinking red

BY TREFOR MOSS

The lights are flickering in the world's economic powerhouse.

Although China's outlook may still be positive by, say, European standards, the numbers show that the country's storied growth engine has slipped out of gear. Businesses are taking fewer loans. Manufacturing output has tanked. Interest rates have unexpectedly been cut. Imports are flat. GDP growth projections are down, with some arguing that China might already be in recession. In March, Premier Wen Jiabao put the 2012 growth target at 7.5 percent; then seen as conservative, it's now viewed as prescient. If realized, it would be China's lowest annual growth rate since 1990, when the country faced international isolation after the 1989 Tiananmen Square massacre.

What are the concrete indications that China is experiencing something more than just a spreadsheet slowdown? Here are five real-world signs of China's economic malaise.

Are Millennials the Screwed Generation?

‘Boomer America’ never had it so good

by Joel Kotkin  

Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”

How has this generation been screwed? Let’s count the ways, starting with the economy. No generation has suffered more from the Great Recession than the young. Median net worth of people under 35, according to the U.S. Census, fell 37 percent between 2005 and 2010; those over 65 took only a 13 percent hit.

The wealth gap today between younger and older Americans now stands as the widest on record. The median net worth of households headed by someone 65 or older is $170,494, 42 percent higher than in 1984, while the median net worth for younger-age households is $3,662, down 68 percent from a quarter century ago, according to an analysis by the Pew Research Center.

The older generation, notes Pew, were “the beneficiaries of good timing” in everything from a strong economy to a long rise in housing prices. In contrast, quick prospects for improvement are dismal for the younger generation.

One key reason: their indebted parents are not leaving their jobs, forcing younger people to put careers on hold. Since 2008 the percentage of the workforce under 25 has dropped 13.2 percent, according to the Bureau of Labor Statistics, while that of people over 55 has risen by 7.6 percent.

“Employers are often replacing entry-level positions meant for graduates with people who have more experience because the pool of applicants is so much larger. Basically when unemployment goes up, it disenfranchises the younger generation because they are the least qualified,” observes Kyle Storms, a recent graduate from Chapman University in California.

A Gold Rush in the Abyss

The last redivision of the world

By WILLIAM J. BROAD

Tom Dettweiler makes his living miles down. He helped find the Titanic. After that, his teams located a lost submarine heavy with gold. In all, he has cast light on dozens of vanished ships.

Mr. Dettweiler has now turned from recovering lost treasures to prospecting for natural ones that litter the seabed: craggy deposits rich in gold and silver, copper and cobalt, lead and zinc. A new understanding of marine geology has led to the discovery of hundreds of these unexpected ore bodies, known as massive sulfides because of their sulfurous nature.

These finds are fueling a gold rush as nations, companies and entrepreneurs race to stake claims to the sulfide-rich areas, which dot the volcanic springs of the frigid seabed. The prospectors — motivated by dwindling resources on land as well as record prices for gold and other metals — are busy hauling up samples and assessing deposits valued at trillions of dollars.

“We’ve had extreme success,” Mr. Dettweiler said in a recent interview about the deepwater efforts of his company, Odyssey Marine Exploration of Tampa, Fla.

Skeptics once likened mining the deep to looking for riches on the moon. No more. Progress in marine geology, predictions of metal shortages in the decades ahead and improving access to the abyss are combining to make it real.

Environmentalists have expressed growing alarm, saying too little research has been done on the risks of seabed mining. The industry has responded with studies, reassurance and upbeat conferences.

The technological advances center on new robots, sensors and other equipment, some of it derived from the offshore oil and gas industry. Ships lower exploratory gear on long tethers and send down sharp drills that gnaw into the rocky seabed. All of this underwater machinery is making it more and more feasible to find, map and recover seabed riches.

Cheap at Any Price

At a billion dollars a year, it's a bargain for China to prop up its rogue state next door

BY ANDREI LANKOV

For those who worry about North Korea, the past few months can best be described as a time of quiet despair. Since North Korea reneged on the "Leap Day" food aid deal in March by announcing the test of a long-range rocket (the test later failed), it has become painfully clear that neither engagement nor sanctions will deliver what many in Washington still consider to be the only acceptable outcome: the denuclearization of North Korea. And China, long considered the best hope to push North Korea in the right direction, has spent the seven months since Kim Jong Un took power stepping up its efforts to maintain the status quo for its unstable neighbor, increasing aid and trade with Pyongyang.

China already controls approximately three-quarters of North Korea's foreign trade and is by far North Korea's largest provider of food aid -- possibly the only thing preventing North Korea from sliding back into famine. But instead of tweaking its aid in response to the North's bad behavior, China has demonstrated a remarkable willingness to spend money on keeping the Kim family regime afloat, quietly sabotage international sanctions in the process. Since the introduction of U.N. sanctions after the 2006 North Korean nuclear test, Sino-North Korean trade and aid have risen exponentially. Bilateral trade, much of it directly or indirectly subsidized by the Chinese government, has more than tripled, to $5.6 billion in 2011 from $1.7 billion in 2006. Beijing has also reportedly invited tens of thousands of North Korean guest workers into China; the assumption seems to be that the workers will provide needed hard currency to their home country while remaining safely isolated from ideas Pyongyang deems dangerous.

What Israel knows, and doesn’t know, will change the world.

The Israeli Dangers From Syria and Egypt

By Niall Ferguson

Israel is the land of argument. Each June its president holds a conference in Jerusalem to which people flock from all over the world to argue. Every weekday the prime minister has meetings with his cabinet colleagues at which they argue. There is even a white board in his office on which the latest argument is recorded. He could not get up to greet my wife and me because his leg recently had an argument with a soccer ball.

The old joke still applies: as soon as you bring together two Israelis, you have three arguments. And that is the other thing I love about Israel. It is also the land of jokes. The fact that Benjamin Netanyahu injured his leg in a soccer match with Jewish and Arab youths strikes even him as pretty funny.

Yet the situation of Israel today is no laughing matter. The phrase “Arab Spring” is now considered something of a joke as people nervously await the latest developments in neighboring Egypt, where the Muslim Brotherhood is poised to take power. The Israeli government is convinced the Iranian government is merely playing for time in the negotiations over its nuclear-arms program and that the timeline to an Iranian nuke is measurable in months.

A Fight To The Last Mexican

The Audacity of Despair

By David Simon 

"A long habit of not thinking a thing wrong gives it the superficial appearance of being right, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason.”

So wrote Thomas Paine against monarchy, the morally bankrupt ethos of his day.  But then, it was a less fearful time, and the political leaders of Paine’s moment were scarcely risk-adverse.  Indeed, they were willing to address the moral questions before them to the point of treason.

Not so today, when we can hold a national political contest and neither candidate — nor their respective parties — can find the courage to speak a word about the policy disaster and dishonorable fraud that is the American drug war.

So here, for the hell of it – and because it can never happen in American political discourse – let’s take a solitary moment to be honest with ourselves about why we remain addicted to drug prohibition.

Addicted is the precise word, too, because as any twelve-step survivor can relate, a sure sign of addiction is when one keeps doing the same self-destructive things and expecting a different result.

Surely, we can’t believe any longer that we are preventing much in the way of drug abuse.  After forty years and billions wasted, the drugs available on any American corner are purer, cheaper, more plentiful than ever.

The Day Your Life Fell Apart

How and why did we let them do this to us?

By Jeffrey Tucker

People tell me that I get overly worked up about small government regulations. But small matters. The building of civilization is revealed in small steps, tiny, bit-by-bit improvements in the things we have and do. In the same way, seemingly small government regulations can cause a reversal of the magnificent world that enterprise has built. Under the right conditions, these can create human catastrophes.

So I offer the following scenario, based on real events very recently in the northeast of the U.S.. It is a composite of cases where government regulation is more than just a menace; it becomes absolutely life threatening.

A summer storm comes and kills your electricity for days. A tree falls on your deck, and you need to cut it away just to get out the back door. You find your chainsaw, but it is out of gas. You reach for the gas can, but the new federal regulations make it nearly impossible to pour. You hack the can with a knife because the drill doesn’t work, and you transfer the gas to another bottle and adding the gas to the saw.

Still, the saw won’t work. The gas seems no better than water. Then you remember what you had read about the new gas. The ethanol mandates, stemming from 2005 legislation, have made gas difficult to store. The corn-based additives absorb water, and the mixture loses its ability to burn after a time, depending on climate. You had heard of buyrealgas.com, but you had thought that was a kooky service for preppers, maybe useful for boaters but not you.

So you hop in the car and set out for new gasoline. The storms have caused the usual anti-gouging mania. Station owners have been hauled before Congress in the past just for having raised prices in a storm — a time when they should be pricing prices. Stations fear bad PR and even laws against the practice, and so they can’t properly ration supplies.

You drive and drive, but every gas station in a 10-mile radius of your house is out of gas. In fact, after all this driving, you are nearly out of gas. You creep home and beg the neighbor for some gas, but he has the same problems: bad can, and the stored gas doesn’t work right.

Fortunately, he has another can left over from the old days with good gas in it. Together, you empty out the old gas from the saw and put in new gas. The engine starts, but only in fits, and the sound is uneven. Finally, it sputters to a halt.

What is it this time? It’s the carburetor. Just then, you remember another sad fact about corn-based ethanol. It leaves a sticky residue in your engine, kind of like corn syrup, which is not surprising given the makeup of ethanol. That’s why all the stores sell so many tank additives that promise to clean out the muck from your engine. But it’s too late for this one.

All these gas additive products weren’t even around 25 years ago. Why are they necessary now? It’s the same reason there are so many cleaning additives for laundry. The essential stuff that makes things work, whether gas or detergent, has been despoiled and degraded by federal regulations that mandate certain ingredients. Never mind performance: It’s all under the guise of saving the environment.

But your environment isn’t being saved right now. You have a tree all over your back porch, your electricity is out, you are nearly out of gas in your car and there’s no gas to be had anywhere. You can’t even charge your phone, and you have only 40% of its power remaining.

Forget the Internet. You have the ability to get online through a 3G network, but doing that would waste scarce power. You have about eight hours remaining on your phone at best, and that needs to be used for a more-serious emergency. Facebook, which would be a wonderful way to communicate with people you love, has to wait.

You look around and realize something ghastly. In a matter of hours and without much warning, the whole of your life has collapsed. There is no way out. You are completely dependent on city workers coming around to fix things. But they will fix only so much. Why? Because the city hopes that the federal government will declare the place a “disaster area” so that the city can get federal aid — aid you will never see. So the mess has to stay just as it is for days, maybe for weeks.

The kids are screaming. Fortunately, no one needs immediate medical help. You long ago stopped stocking up on medicines, because the regulations don’t allow it. Not even medicine to unclog noses can be hoarded. The federal government keeps a list of how much you have bought in the last month. And forget painkillers. Those are barely even available through prescription.

True, the aged person living in your house is lacking essentials. You hope that oxygen isn’t necessary, because the machine doesn’t work. You might have bought a generator, but that wouldn’t have helped. You have no fuel, little food and your means of communicating with the outside world are dwindling down by the minute.

You know that the pools of water in your backyard could quickly breed killer mosquitoes in a day, especially in this heat. But you also know that the insecticides you can get at the store now are weak and just short of worthless. The strong stuff was pushed out of the marketplace by more regulations some 10 years ago. You will just have to stay indoors, even though the temperature is hotter and hotter.

There’s only one thing left to do. Embrace your despair, and be happy that you can light a candle and read a physical book. You wait and hope to be saved.

Now consider all the ways in which the above scenario might have been different absent the central plan that has been imposed, allegedly with the goal of saving you. Without anti-gouging regulations, gas would have been more expensive, but at least it would have been plentiful. Even then, you probably wouldn’t have needed it, because both the gas line and the gas in the can would’ve worked (since it would have a vent, just as gas cans always had until the new mandates wrecked them).

This way, you could have used the gas in your car to keep your cellphone charged and working. You could have used Twitter and Facebook all you wanted, and everyone would have known your whereabouts and well-being.

The chainsaw would have been fully functional, with an engine that stayed clean and worked every time, even when not used in years. You could have cut your tree and helped your neighbors with theirs. City workers would have already been out on the job helping to clean things up. The absence of federal aid would have made them alone responsible for the results, and they would have a mayor breathing down their neck, rather than a mayor with his hand out to Washington.

All these seemingly small regulations may not seem like much in ordinary times. But in extraordinary times, they can make the difference between life and death. A natural disaster we can deal with. A man-made disaster such as that imposed by thick layers of crufty, enterprise-destroying regulations are a far greater problem because they are permanent, cumulative, and imposed at the point of a gun.

The regulators play with our products and our lives as if they know better than we do what’s good for us. To the political class, there’s nothing quite as satisfying as managing the lives and property of others. But when the unexpected happens, the mischief they do begins to reveal terrible things. Suddenly, the denial of our freedom to manage our own lives matters a great deal.

This is the point at which we slap our heads and ask ourselves, “How and why did we let them do this to us?” They wrecked our home appliances. They ruined the paint on our walls, making it dingy and unstable. They degraded makeup, detergent and unclogging agents. Insecticides don’t work. They ruined our toilets, our refrigerators, our lawn mowers, our water heaters, our showers and even our furniture by declaring sofa cushions to be too flammable.

Small things, right? They all add up to a giant thing. They set out to make an environmental utopia for us, a world of perfect safety that leaves no human footprint, and instead they created a hell of dependency in which we have no choice but to join the rest of the drones who sit and wait for the bureaucrats to bail us out of our troubles. And the bureaucrats take their own sweet time, unless you own a gun, in which case they will be right over to take it from you.

We look for someone to blame. The politicians who passed the laws are all out of office, while their legacy lives on in the concrete palaces inhabited by lifetime bureaucrats, who are never subject to any election and who make more money living off your income than you do by actually producing things that people want. The predatory class is destroying the host, yet no one has a clue about what to do to make it stop.

But there are things you can do. You can become aware. You can stop trusting them and stop deferring to them. If enough people do, history can turn on a dime. We can all decide that man-made catastrophe need not be our fate.

The Road to Recovery

As Hayek taught, freedom and the rule of law drive prosperity

By John B. Taylor

Burdened by slow growth and high unemployment—especially long-term unemployment—the American economy faces an uncertain future. We have endured a painful financial crisis and recession, the recovery from which has been nearly nonexistent. Federal debt is exploding and threatening our children and grandchildren. In my view, the reason for this predicament is clear: we have deviated from the principles of economic freedom upon which America was founded.

Few thinkers of the past century understood the importance of economic freedom better than the Austrian economist Friedrich Hayek did. As we confront our current situation, Hayek’s work has much to tell us, especially about policy rules, the rule of law, and the importance of predictability—topics that he discussed in his classic The Road to Serfdom (1944) and in greater detail in The Constitution of Liberty (1960). But his work in these areas goes beyond economics into fundamental issues of freedom and the role of government. That’s why reading Hayek is more important than ever.

As Hayek would insist, we need to be careful about what we mean by economic freedom. The basic idea is that people are free to decide what to produce, what to buy, where to work, and how to help others. The American vision, as I explain in my book First Principles, held that people would make these choices within a policy framework that was predictable and based on the rule of law, with strong incentives emanating from a reliance on markets and a limited role for government. Historically, America adhered to these principles more than most countries did, a major reason why the nation prospered and so many people came to these shores.