Book Review: Economic Freedom and Representative Government

Economic Freedom and Representative Government is a lecture delivered by F. A. Hayek at The Royal Society of the Arts on the 31st of October, 1973, about a year before Hayek was awarded the Nobel Prize in Economic Sciences.  This lecture highlights the dangers of unlimited government, points out flaws which lead to unlimited government, and offers a theoretical solution.  As always, Hayek's observations are very perspicacious, and though this lecture was written primarily for a British audience (they do not have a written Constitution), we in the United States today find ourselves facing many of the problems he wrote of 40 years ago.

To begin with, Hayek assumes that the majority of the people are in favor of a free market and against government direction; however, most of the groups would like an exception to be made in their favor.

 Take, for example, an Iowa farmer.  He is in favor of the free market, and though he may dislike the idea of giving welfare to thousands of lazy people in the inner city of Chicago, he may deem farm bills and agricultural subsidies fair and right.  The auto manufacturers couldn't care less about agricultural subsidies, but they want their bailouts, the folks in government housing want their handouts, the banks want a share when they're in trouble, and on and on...

 Any political party that wants to achieve and maintain power is forced to use its powers to buy the support of particular groups "not because the majority is interventionist, but because the ruling party would not retain a majority if it did not buy the support of particular groups by the promise of special advantages."  This is the problem.

Hayek explains that the problem is there because of majority rule.  Whatever the majority decides becomes law, and since it is law, it is believed to be just.  "A legislature is now not a body that makes laws; a law is whatever is resolved by a legislature."  Hence, "law is not dependent on justice but determines what is just."  This is a perversion of "law."  The old, real sense of the word is lost.  The legislature is not bound by committing themselves to general rules, and if they want to retain a majority they must "use coercion in the discriminatory manner that is required to assure benefits to particular people or groups."  

Here in the United States, I must note, we had a law which bound the legislatures to general rules...It was called the Constitution.  Davy Crockett understood this and said, "We have the right as individuals to give away as much of our own money as we please in charity; but as members of Congress we have no right to appropriate a dollar of the public money [for special interests or charity]."  The legislatures were bound to specific duties outlined in the U.S. Constitution, but now they've freed themselves from a strict interpretation of the Constitution and make laws to try to control anything and everything, binding and fettering the people instead.  But, I digress...

According to Hayek, "The main subject of this lecture is what we have to do, if we ever again get a chance to stop those tendencies [outlined above] inherent in the existing political systems which drive us toward a totalitarian order"--an unlimited government.

To preserve individual freedom, Hayek says, coercion must be confined to the general rules of just conduct.  "An individual who is bound to obey only such rules of just conduct as I have called these rules of law in this narrow sense [lawyer's law--relating to the laws which apply equally to all and define the protected sphere of each person with which others are prohibited from interfering, made to "prevent conflicts between people who do not act under central direction but on their own initiative, pursuing their own ends..."] is free in the sense that he is not legally subject to anybody's commands, that within known limits he can choose the means and ends of his activities."  

But how?  How can legislatures, especially divided into political parties that only gain a majority by promising special benefits to some groups, resist these pervasive tendencies?  Hayek admits that there never has been a legislature limited to making laws in the narrow sense described in the last paragraph.  

Hayek proposed having two representative assemblies.  One would make laws in the narrow sense and its members, disinterested citizens, would be elected for very long terms and would not be eligible for re-election.  The other would be governed by the laws of the first assembly in directing government proper.

F.A. Hayek admitted that he did not believe his "utopian construction" of an idea for a government would not be realised in the foreseeable future.  However, he decided to promulgate the idea because as David Hume said, "In all cases, it must be advantageous to know what is the most perfect in the kind, that we may be able to bring any real constitution or form of government as near it as possible, by such gentle alterations and innovations as may not give too great a disturbance to society."

I enjoyed reading this lecture.  The problems presented by Hayek are pertinent today.  I think many of these problems would have been prevented in the United States if we had insisted on keeping Congress and the President bound by a strict interpretation of the Constitution.  

And now, my dear reader, I pose the question to you: what do you believe is the best way to face this problem caused by special interests?  What do you think is the most efficient way to preserve the classical meanings of law and justice?  Is a law whatever the legislature decides, and because a majority decides something should be a "law," is it necessarily just?  Think about it.

Book Review: Understand Your Rights

Many people make New Year's Resolutions.  I make December 28th resolutions.  With the year quickly drawing to a close, I quickly think of all the things I want to finish before the year is over.

It seems Congress has been trying to make resolutions too, but I'm skeptical that any of their December 31st--last 12 hours of the year--resolutions to save our country from the fiscal cliff are going to work, no matter how much Senator Reid "Really hopes so."  

We will survive this fiscal cliff, just like we survived the Mayan Apocalypse and Y2K,  but it will be more serious and it is not going to make life any easier for anyone.  As Hank Anzis wrote in his must-read post "Off the Cliff" it shouldn't be "unreasonable to ask the government to make some tough choices themselves."

The government should make the drastic cuts needed to put our nation back on the right track.  But, it's December 31st.  It's simply not going to happen.    

However, at least one of my December 28th resolutions is going to get done.  That is writing a book review about Understand Your Rights: Because You're About to Lose Them, by Revolutionary War and Beyond.

I was given a free autographed copy of the book by the author and his father (who reenacted John Adams) at the Liberty Fest in Hampton this fall.  I found the book very informative and I would recommend it to anyone looking for a refresher course on the Bill of Rights.  It is written in a trying-to-be-objective manner, explaining both sides of the argument, but it is very definitely  from a conservative Republican perspective.  

The book begins with a Prologue and then the first three chapters give the early history of the United States with the Articles of Confederation and a purposefully weak government.  Then, the arguments for and against the U.S. Constitution (by the Federalists and Anti-Federalists) are explained. 

 One interesting fact I hadn't realized until I read this book is that although the first Congress under the Constitution met in March of 1789, and Washington was inaugurated in May of '89, North Carolina did not join the Union until November of '89, and Rhode Island did not join until May of the following year.  Many of the states would not accept the Constitution without the promise of a Bill of Rights, and so writing the Bill of Rights was a major task of the first Congress. 

Chapter 3 of Understand Your Rights goes hand in glove with Einstein's statement: “The strength of the Constitution lies entirely in the determination of each citizen to defend it.  Only if every single citizen feels duty bound to do his share in this defense are the constitutional rights secure."  This chapter lists various ways the government has taken away rights and declares that only the voters can defend their rights.

The next ten chapters are each dedicated to one of the first 10 amendments, using the same format for each one.  Each chapter starts with the text of the amendment, followed by a short explanation.  

Next comes a history of the rights listed in the amendment.  The histories explain how the rights go back into English history and were developed with the Assize of Clarendon, the Magna Carta, British court cases, Sir William Blackstone, the colonial era and the colonists' relationship with each other and the mother country, the American Revolution, and the Articles of Confederation.  

Then, the book explains how the Amendment effects life today.  A summary of each important court case that involved the Amendment or the right, is given.  Finally, the chapter ends with a summary from the author's perspective about how the right is threatened and what can be done to preserve it. 

 The fourteenth chapter is a conclusion; then there is a very reasonably sized Appendix containing the texts of the Assize of Clarendon, the Magna Carta, the Articles of Confederation and many other documents essential to the history of law in our country.  

The author maintains a positive tone throughout his work, while clearly laying out what he believes are the major threats to the traditional American way of life and government:

Next to the ignorance of the American population about the importance of their rights, an overactive judiciary is probably the number 1 threat to your personal freedom.  The American people must do everything they can to stop the escalating power grab of the judiciary before it is too late and we descend into a totalitarian state."

The courts have, with the 14th ammendment and then the case of Griswold vs. Connecticut, taken more and more power.  The author also points to the administration of Franklin D. Roosevelt as a major turning point during and after which the government has taken more and more power. 

The author believes that "We must shrink the powers of the federal government and the Courts and restore self governance and local state governance."  He warns of "an oligarchical totalitarian system" which is already taking over and will take over, if Americans don't "wake up."  Remedying the problem is not going to be easy, he admits, but "We will win if we don't just lie down and continue to let them [those who want to increase government power]" walk all over us."  

The author concludes by saying:

     "It's time to stop the decay of America.  But it won't happen unless WE do something.  What can we do today?  Educate ourselves and others.  Vote!  It is our responsibility.  Nothing is going to change...unless we change!"   

 I wrote an article that expressed most of the same sentiments last year.  If every American understood their rights and treasured them, our country would take a turn for the better.

But, it's December 31st.  Midnight is in 12 hours.  We're about to go off the cliff.

In any case, I've decided not to worry as worrying doesn't help anything, so Have a Happy New Year!

I'm a Trillionaire

Yes, I am now a trillionaire!  I invested less than 30 dollars, did no work, and waited less than a week.  I promptly received the return on my investment: a total of $260,000,000,000,000  issued by the Reserve Bank of Zimbabwe in 2008. 

The problem with this rich quick scheme?  It's only paper.

Zimbabwe hyperinflation reached it's peak in 2008-2009.  Hyperinflation was preceded and caused by droughts, a large national debt, the redistribution of wealth, and "uncontrolled government spending."  Read more at the Dallas Federal Reserve's website.

Would you like to be a trillionaire like me?   You can for 1 cent plus $4.99 shipping and handling  (here)  or (if you're interested in hundreds of trillions) here or here.

But if you're hungry, I recommend you skip this investment and use your 5 dollars to buy a Whopper at Burger King instead.  Don't invest in something that can quickly lose its value with the whims of politicians.  Invest in something real that has inherent value--be it sandwiches, businesses, gold, silver, or oil...because, well, you can't eat paper.