Tyler Cowen: Nothing to Look at Here, Folks, Just Keep Moving

Tyler Cowen writes in today's NYT:

“THE ROAD TO SERFDOM,” the critique of socialism written 65 years ago by the Nobel laureate economist Friedrich von Hayek, was recently No. 1 in nonfiction sales at Amazon.com.

Many people, including the Fox News commentator Glenn Beck, have contended that growth of government power has, indeed, set us on such a road today. But the reality looks different. In many respects, the expansionary phase of big government is coming to an end, and quickly.

Oh yeah, the U.S. is coming home from Afghanistan and Iraq, real soon.

Obamacare is not really going to control what type of medical service is available in America. The new consumer agency stuck into the heart of the Federal Reserve is just a paper tiger.

And Obama really isn't getting a kill switch for the internet.

Everything is just peachy, like Cowen says.

How does Cowen reach this mad conclusion?

It's peachy, according to him, because of the Greek crisis. You see, aside from fighting wars,and paying for healthcare for the masses, the U.S. is on an austerity program because the Greek crisis is scaring Americans.

Cowen is pulling a slick trick here. He is claiming that government is about to shrink, and then switches the argument from the obvious growth of government to the fear of the Greek crisis.

Of course, the Greek crisis is a warning sign for what could happen to the financial sector in the U.S., that everyone can understand, but to translate this fear into the suggestion that government growth is over is absurd. Government is growing and taking control of our lives from thousands of different directions and it is doubtful the the fear of the Greek crisis will even have real impact in slowing the deficit.

Bottom line: Cowen has simply become an apologist for the state, twisting the reality of the situation to promote a benevolent view of a government that is a monster, that continues to growl and grow.

The truth of the matter is that the situation of an out of control government is very serious. Thomas DiLorenzo writes about the same Road to Serfdom that Cowen says doesn't apply to current America:

The parallels to today's world are unsettling, to say the least. Perhaps this is why, a few weeks ago, The Road to Serfdom ascended to #1 in sales on Amazon.com after Glenn Beck discussed the book on his Fox News Channel program. There may not be a Hitler on the horizon, but the extent to which governments all over the world have simply ignored the lessons of the past in response to the economic crisis that they created with their own monetary policies and other interventions is mind boggling. The US government, in particular, responded to the bust portion of the Greenspan Fed's boom-and-bust cycle with the most economically destructive — but politically centralizing — policies: trillion-dollar bailouts of failing corporations that will create moral-hazard problems the likes of which have never been seen; an escalation of the money supply that dwarfs the monetary inflation of the Greenspan Fed; the Soviet-style nationalization of automobile companies, banks, and much of the healthcare industry; government regulation of executive compensation; the appointment of dozens of dictatorial "czars" with unaccountable power to regulate and regiment myriad industries; trillion-dollar-a-year deficits; an expansion of the powers of the Fed (!); and a president who believes he has the power to fire corporate executives, nationalize industries, and send unmanned "drone" bombers to any country in the world on a whim.

Washington DC no longer recognizes any limits at all to its powers to "socially plan" all aspects of American life. This totalitarian impulse is not limited to national politics. The mayor of New York City believes he has the power to regulate all of the eating and drinking habits of New Yorkers, even including how much salt they consume with their meals and what type of soft drinks they can enjoy

Clearly, it's not that government is shrinking, it is that Cowen is one of the types of operators Hayek warned about in the chapter "The End of Truth". He called them "the totalitarians in our midst".

Cowen's attack in NYT on the application of the lessons in The Road to Serfdom to present day America makes DiLorenzo's upcoming course, The Road to Serfdom: Despotism, Then and Now, more important than ever. The big government apologists clearly want to muffle Hayek's warning that is contained in The Road to Serfdom.

Hayek's Road to Serfdom: Despotism Then and Now

By Thomas DiLorenzo

"Every economy has its contradictions …. What counts is results, and there can be no doubt that the Soviet planning system has been a powerful engine for economic growth." ~ Paul Samuelson, Economics, 1985 edition


"Contrary to what many skeptics had earlier believed, the Soviet economy is proof that … a socialist command economy can function and even thrive." ~ Paul Samuelson, Economics, 1989 edition


"The Road to Serfdom was 'inaccurate innuendo about the future'." ~ Paul Samuelson, 2009

When Friedrich A. Hayek published his classic book, The Road to Serfdom, in 1944 he was loudly denounced by academic statist apologists in England, where he resided at the time, and in America. In the preface to the 1976 edition of the book Hayek noted that a prominent philosopher even denounced the book despite admitting that he had not read it! But average citizens did read it. The book was a gigantic success in America, quickly selling over half a million copies. Millions of copies of a condensed Reader's Digest version of the book were also sold and widely read.

The court historians in academe were not concerned about Hayek's age-old warnings about the dangers that centralized political power posed to liberty and prosperity, for they intended to be beneficiaries of that power as well-paid advisers to the state. Millions of average citizens were not as enthusiastic, especially Americans who, during the war, had experienced oppressive and confiscatory taxation, the slavery of military conscription, government-imposed product rationing, pervasive shortages of basic staples, and endless bureaucratic bungling.

Hayek's motivation for writing The Road to Serfdom was the shocking speed at which so many Europeans – especially in Germany – had simply forgotten all that they had learned over the centuries about the virtues of a free society, the need for limitations on government power, the dangers of centralized power, and the workings of capitalism as a worldwide network of mutually advantageous exchange. It only took a couple of decades of socialistic sloganeering to persuade Germans to abandon their classical-liberal roots and embrace Big Government of the worst sort.

Hayek was deeply concerned that the same despotic ideas were also becoming more and more popular in England, America, and in other countries. As the above quotations of MIT's Paul Samuelson demonstrate, much of America's educational "elite" was enamored with Soviet communism and central planning. Samuelson even went so far as to say in his textbook, which was by far the biggest seller of its day, that "it is a vulgar mistake to think most people in Eastern Europe [during communism] are miserable."

The parallels to today's world are unsettling, to say the least. Perhaps this is why, a few weeks ago, The Road to Serfdom ascended to #1 in sales on Amazon.com after Glenn Beck discussed the book on his Fox News Channel program. There may not be a Hitler on the horizon, but the extent to which governments all over the world have simply ignored the lessons of the past in response to the economic crisis that they created with their own monetary policies and other interventions is mind-boggling. The US government, in particular, responded to the bust portion of the Greenspan Fed's boom-and-bust cycle with the most economically destructive – but politically centralizing – policies: trillion-dollar bailouts of failing corporations that will create moral-hazard problems the likes of which have never been seen; an escalation of the money supply that dwarfs the monetary inflation of the Greenspan Fed; the Soviet-style nationalization of automobile companies, banks, and much of the healthcare industry; government regulation of executive compensation; the appointment of dozens of dictatorial "czars" with unaccountable power to regulate and regiment myriad industries; trillion-dollar-a-year deficits; an expansion of the powers of the Fed (!); and a president who believes he has the power to fire corporate executives, nationalize industries, and send unmanned "drone" bombers to any country in the world on a whim.

Washington DC no longer recognizes any limits at all to its powers to "socially plan" all aspects of American life. This totalitarian impulse is not limited to national politics. The mayor of New York City believes he has the power to regulate all of the eating and drinking habits of New Yorkers, even including how much salt they consume with their meals and what type of soft drinks they can enjoy.

The subtitle of the 1976 edition of The Road to Serfdom, published by the University of Chicago Press, is "A Classic Warning Against the Dangers to Freedom Inherent in Social Planning." The exponential explosion of governmental powers in response to the current, government-generated economic crisis makes The Road to Serfdom as relevant today as it ever was (as Glenn Beck's audience instinctively understands). This is why the Mises Institute is offering a special five-week online class, The Road to Serfdom: Despotism Then and Now, under my direction through the Mises Academy, beginning on Monday, July 5. The course will be an in-depth examination and discussion of Hayek's analysis, its relevance to today's world, and how such ideas can be used to put America – and other parts of the world – back on the road to freedom.

Hayek's insights were remarkable, and remain so to this day. He understood and explained the power of ideas: European fascism could never have been adopted without a 25-year propaganda campaign against individualism (basic respect for the individual), classical liberalism, and free-market economics. He pointed out the "fatal conceit" of believing that government bureaucrats could "plan" an entire society. He explained why socialism – including its fascist variant – meant little more than "equality in restraint and servitude." "Marxism has led to Fascism and National Socialism," he wrote, "because, in all its essentials, it is Fascism and National Socialism [i.e., Nazism]."

Hayek saw through all the rhetorical tricks and gimmicks of the socialists of his day, one of which was the constantly repeated refrain that socialism and government "planning" was "inevitable"; therefore, it is futile to oppose it. Nor did he fall for the gimmick of wrapping totalitarian socialism in the mantle of the god of democracy. Government planning is inherently incompatible with both democracy and the rule of law in the long run, he explained, and leads to some degree of economic dictatorship. Any business person who has had to deal with the dozens of federal, state, and local government regulatory agencies knows that "economic dictatorship" is a key feature of the current American political system.

"The worst" always rise to the top of the political heap under a regime of government planning, Hayek explained, for they are the ones with the least qualms about brutalizing their fellow citizens and depriving them of their liberties. All of this can only be sustained by what Hayek called "The End of Truth," or the effects of massive government propaganda that demonizes the civil society, individualism, and the system of peaceful voluntary exchange and private property (capitalism), while glorifying all aspects of the state.

The purpose of this course, The Road to Serfdom: Despotism Then and Now, is to educate students about these contemporary dangers and arm them with the intellectual ammunition that they will need to oppose them and champion freedom instead. The totalitarian socialists of the early 20th century understood that they could not succeed unless they first discredited the ideas of freedom. The only way to stop their intellectual descendants ("the totalitarians in our midst," as Hayek would call them) is to counter their totalitarian ideas. Hayek was a hero of society for putting his career as a renowned economic theorist on hold (for most of the rest of his life, it turned out) to lay out one of the most articulate arguments for a free society ever made. We must revisit and strengthen these arguments if we are to choose capitalism and freedom over socialism and serfdom.

Reprinted from Mises.org.

Thomas J. DiLorenzois professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You’re Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton’s Curse: How Jefferson’s Archenemy Betrayed the American Revolution – And What It Means for America Today.

Publish Post

Stateless but Not Lawless*** Myths of Violence in the Old American West: An Interview with Dr. Thomas DiLorenzo

Michael McKay emails:

This show will Positively Change your understanding of American History and you will never be able to hear the words, 'Wild West' again without saying to yourself, 'No, they were not!'.

How was the Old West peaceful BEFORE a government? What caused the West to become violent?

The facts and history will surprise and shock you!

Specifically, you will learn that *Law and Order* did NOT (and does not) require a Government at all.

Law and Order are Natural to humans and we actually figured it out before the government arrived - learn how!

After all, LAW preceded GOVERNMENT and not the other way around.

The Old West was mostly Peaceful UNTIL the US Government arrived - find out why!

This interview ranks as one of the more eye opening shows produced by Radio Free Market.

The show will illustrate the Real History we all should have learned in Grade School - but did not. It will debunk the myths and fallacies of the Old West that continue to this day.

It is time to learn what really happened and stop using the term 'Wild West' as a synonym for 'Lawlessness' when clearly The Old West Was Not Lawless - it was merely Stateless.

The interview will be broadcast , Saturday, at 1PM CT on the Radio Free Broadcast Network.

On The "Living Constitution"

“Whenever you hear the phrase ‘living Constitution’ [which you’ll hear a great deal from president elect Obama], just substitute the word ‘no’ for ‘living,’ and you’ll understand what it means.” -from Thomas DiLorenzo (via Ilana Mercer).

Hamilton's Curse: The Current Crisis Is Alexander Hamilton's Fault

The current economic problems are the result of America living under Hamiltonian mercantilistic conditions where essentially the economic and political system that Americans have lived under for several generations now is a king-like president who rules through "executive orders" and disregards any and all constitutional constraints on his powers; state governments that are mere puppets of the central government; corporate welfare run amok, especially in light of the most recent outrage, the Wall Street Plutocrat Bailout Bill; a $10 trillion national debt ($70 trillion if one counts the government's unfunded liabilities); a perpetual boom-and-bust cycle caused by the Wizard of Oz–like central planners at the Fed; constant military aggression around the world that only seems to benefit defense contractors and other beneficiaries of the warfare state; and more than half of the population bribed with subsidies of every kind imaginable to support the never-ending growth of the state. This is Hamilton's curse on America wrires Thomas DiLorenzo.

Read DiLorenzo's scholarly take on Hamilton here.

What The Hell Are Lew Rockwell, Thomas DiLorenzo and James Ostrowski Thinking?

Rockwell, DiLorenzo and Ostrowski are all ga ga, here, here and here, over John McCain's VP pick, Sarah Palin. They write she's a Paulian, she's a Buchanaite, in fact, she probably would jump on any bandwagon that has wheels and is looking to stir up trouble.

As we have already pointed out, Palin signed into law a $6.6 billion operating budget—the largest in Alaska's history.

Palin proposed giving Alaskans $100-a-month energy debit cards. Of course, basic economics teaches the last thing you want to do, when a commodity is rising in price, is to encourage consumption. She also proposed providing grants to electrical utilities so that they would reduce customers' rates, again the last thing you want to do. She subsequently dropped the debit card proposal, and in its place she proposed to send Alaskans $1,200 directly.

In short, economically clueless.

As far as foreign policy is concerned, she has put her son in line for a potential tour of duty in Iraq. He joined the army on 9-11-07. Nuff said.

Frankly, what we have here is Mary Tyler Moore without the Ford mustang--maybe a great candidate to star in a modern day version of the Minnesota-based situation comedy, but not a Minnesota convention-based Republican VP candidate.