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Trump Turns Back the Clock With Cold War Cuba U-Turn – Article by Ron Paul

Trump Turns Back the Clock With Cold War Cuba U-Turn – Article by Ron Paul

The New Renaissance Hat
Ron Paul
June 24, 2017
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Nostalgia seems to be very popular in Washington. While the neocons and Democratic Party hard-liners have succeeded in bringing back the Cold War with Russia, it looks like President Trump is determined to take us back to a replay of the Bay of Pigs!

In Miami on Friday, June 16, the president announced that he was slamming the door on one of President Obama’s few foreign-policy successes: easing 50 years of US sanctions on Cuba. The nostalgia was so strong at Trump’s Friday speech that he even announced participants in the CIA’s disastrous 1961 Bay of Pigs invasion of Cuba in the audience!

President Trump said Friday that his new policy would be nothing short of “regime change” for Cuba. No easing of US sanctions on Cuba, he said, “until all political prisoners are freed, freedoms of assembly and expression are respected, all political parties are legalized, and free and internationally supervised elections are scheduled.”

Yes, this is the same Donald Trump who declared as president-elect in December that his incoming Administration would “pursue a new foreign policy that finally learns from the mistakes of the past. We will stop looking to topple regimes and overthrow governments.” Now, in another flip-flop toward the neocons, President Trump is pursuing regime change in Cuba on the pretext of human rights violations.

While the Cuban government may not have a spotless record when it comes to human rights, this is the same President Trump who just weeks ago heaped praise on perhaps the world’s worst human rights abuser, Saudi Arabia. There, he even participated in a bizarre ceremony to open a global anti-extremism center in the home of state-sponsored extremism!

While President Trump is not overturning all of President Obama’s Cuba policy reforms – the US Embassy will remain open – he will roll back the liberalization of travel restrictions and make it very difficult for American firms to do business in Cuba. Certainly foreign competitors of US construction and travel companies are thrilled by this new policy, as it keeps American businesses out of the market. How many Americans will be put out of work by this foolish political stunt?

There is a very big irony here. President Trump says that Cuba’s bad human-rights record justifies a return to Cuba sanctions and travel prohibitions. But the US government preventing Americans from traveling and spending their own money wherever they wish is itself a violation of basic human rights. Historically it has been only the most totalitarian of regimes that prevent their citizens from traveling abroad. Think of East Germany, the Soviet Union, and North Korea. The US is not at war with Cuba. There is no reason to keep Americans from going where they please.

President Trump’s shift back to the bad old days on Cuba will not have the desired effect of liberalizing that country’s political environment. If it did not work for fifty years why does Trump think it will suddenly work today? If anything, a hardening of US policy on Cuba will prevent reforms and empower those who warned that the US could not be trusted as an honest partner. The neocons increasingly have President Trump’s ear, even though he was elected on promises to ignore their constant calls for war and conflict. How many more flip-flops before his supporters no longer recognize him?

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

No Good Can Come from Trying to Resurrect the Cold War – Article by Brittany Hunter

No Good Can Come from Trying to Resurrect the Cold War – Article by Brittany Hunter

Brittany Hunter
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A few days go, as I sat with my eyes fixated on my television screen during a particularly riveting Netflix marathon, an alert on my iPhone went off and interrupted an otherwise perfect night of binge-watching.

As I glanced down to see what fresh new hell awaited me in the hectic non-fiction world, I noticed that it was an alert from an Apple news app that I never bothered to deleted when I upgraded to a newer iPhone over six months ago. The app only goes off if there is significant breaking news, which, usually means a terrorist attack or another lost airliner.

This time, however, the news that disrupted my luxurious night of lounging was a headline about Jared Kushner, Trump’s loyal son-in-law, and his connection to Russia. The content of the alert was vague at best, something along the lines of “Kushner has Russian connection Proving Malicious Intent,” or something equally over-dramatic and sensationalized.

Enough Is Enough

Normally, I would roll my eyes at the media rushing to conclusions and go about my day, but after the roller coaster of an election cycle that the nation is still attempting to recover from, this alert somehow managed to become my own personal “straw that broke the camel’s back,” as they say.

For the record, I am no fan of Jared Kushner nor of Trump, but that is because I am no fan of any politician. However, given the amount of times I have personally been subjected to the “ fear Russia” rhetoric, I find myself quickly losing faith in what passes for “news” these days and am even more concerned that this fear-mongering will inevitably turn to warmongering if the drums of war continue to beat in Russia’s general direction.

Between hearing the term “Russian meddling” every 30 seconds on CNN, and Time Magazine’s controversial cover depicting the White House being taken over by the Kremlin, I have had just about enough of this return to 1950s Cold War speak.

While I am wary of any news story that justifies the military industrial complex’s lust for war, the Time cover speaks volumes about the modern day media industry as a whole. When it comes to the purposefully shocking Time cover, no one bothered to notice that the “Kremlin” seen swallowing the White House into a sea of red is in fact St. Basil Cathedral. The sensationalism of the story, despite its possible consequences, was of more importance than fact-checking the actual content.

Some might argue that this is a small detail to get worked up over in the long-run, but as the country “celebrates” Memorial Day today, it is important to remember that any rhetoric that aims to perpetuate our country’s obsession with war should always be questioned and scrutinized to the utmost degree.

Reinventing the Red Scare

Russia has recently replaced the millennial generation as America’s favorite group to collectively throw under the bus every time something goes wrong.

At a pivotal moment just a few weeks shy of voting day, Wikileaks revealed leaked emails that showed collusion between the Democratic National Committee (DNC) and the Hillary Clinton campaign (as if either can be distinguished from the other). The content of these emails seemed to shed light on the combined efforts of the DNC and the Clinton campaign, who together had done everything within their power to rig the election against Bernie Sanders.

But rather than blame those actually responsible for the constructed demise of the Sanders campaign, Russia somehow became the enemy — again.

Suddenly, the shadiness on the part of the DNC and the Clinton camp were pushed aside as “Russian hackers” became the main cause for concern. While there has yet to be a definitive answer on the matter, the authenticity of the leaked emails was not a source of outrage for devoted Democrats. Instead, they wanted justice because how dare we let Putin interfere in our elections! This is America! This is a Democracy!

Overnight, the Democrats began to sound like the bloodthirsty Republicans of the Bush/Cheney era, calling for war without any logical forethought. What their candidate did was of less importance than punishing those who may or may not have brought the information to light.

Appearing almost out of thin air, Russia became the culprit even though there was evidence to the contrary and Wikileaks maintains that Russia is not involved. For those insistent that the Red Scare be brought forth from its warmongering grave, the idea of a foreign body meddling in the U.S. presidential elections was too egregious a reality to live with in an allegedly free country.

Apparently, these same people have forgotten about the numerous times throughout history where the United States Government has interfered in foreign elections over the years.

Blood on Our Hands

If for example, Russia was found to be explicitly and directly tied to the election of Donald Trump, it does not, at least thus far, come close to the disastrous consequences that arose from America’s role in the Iranian coup d’etat in 1953. It also pales in comparison with the American backing of the President of the Republic of Vietnam, Ngo Dinh Diem in the 1960s. In the predominantly Buddhist territory of southern Vietnam, the United States ushering a devout Catholic into the powerful role of President was not appreciated, as history proved.

While these are just a few instances of many, the aforementioned examples have both caused and perpetuated conflicts that are still ongoing today. The United States’ reputation of meddling in the Middle East is exactly what gave rise to the sentiment seen with Islamist extremists, such as ISIS. But it didn’t begin in 2003 with the Invasion of Iraq.

The United States left Vietnam in shame after forcing their own men to go off and die in foreign jungles without a clear purpose. But U.S. intervention was largely to blame for the escalation of the conflict in the first time.

Simply knowing and understanding that the federal government has an unfortunate tendency of being all too hasty to declare war — or just attack without any formal declaration — should be enough to caution those who are calling for the nation to retaliate against Russia.

Let’s Really Remember

Memorial Day has unfortunately become a holiday that glamorizes war and glorifies professional federally sanctioned killing, rather than urging caution against escalating foreign conflict. While the U.S. Department of Veterans’ Affairs (VA) has been an utter and complete disaster when it comes to honoring those who went off to die for undefined “American interests” abroad, the government has instead declared that Memorial Day is sufficient enough to at least calm the masses.

But as we spend the majority of the day enjoying our paid time off with BBQs and pool time, may we not forget to be increasingly skeptical of any propaganda that seeks to put the federal government’s interests ahead of individual life.

To be sure, the atrocities committed by Putin and other Russian agents of the state are reprehensible. However, not only does this not explicitly prove that Russia was involved in the leaks, those seeking to perpetuate this rhetoric are doing so only to save face and distract from the actions of the DNC and the Clinton camp.

For those who continue attempting to reignite the Cold War, protecting partisan politics is more important than sparing innocent lives from the brutal realities of war.

Brittany Hunter is an associate editor at the Foundation for Economic Education (FEE). Brittany studied political science at Utah Valley University with a minor in Constitutional studies.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

The “Battle of Berkeley” Is a Bad Sign for Liberty – Article by Dan Sanchez

The “Battle of Berkeley” Is a Bad Sign for Liberty – Article by Dan Sanchez

The New Renaissance Hat
Dan Sanchez
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Just how close are we to repeating the political violence of interwar Germany? How bad is it, and how bad can it get?

Populist-right demonstrators and radical-left protesters clashed in Berkeley, California, on April 16, 2017. The belligerents used such weapons as fists, feet, rocks, pepper spray, smoke bombs, barricades, and a trash dumpster/battering ram. There was one reported non-lethal stabbing.

At one point, the left-radicals ill-advisedly threw a smoke bomb while they themselves were standing downwind. The smoke wafted back in their faces causing them to flee. Today, right-populists are crowing online about having “won the Battle of Berkeley,” because, after a concerted charge, they managed to seize and hold a major downtown street.

Berkeley has become a favorite battleground for these budding political street warriors. Two months ago, a scheduled speech at UC Berkeley by Alt-Right darling Milo Yiannopoulos speech was canceled due to riots, arson, and assaults on Milo-supporters. Weeks later, a “March 4 Trump” was held off-campus in Berkeley, and this too was attacked by militant leftists, using metal pipes, baseball bats, two-by-fours, and bricks.

Yesterday, the occasion was another pro-Trump rally in Berkeley celebrating “Patriot’s Day.” As usual, it was the leftists who were the main instigators. That doesn’t alter the fact that these gradually-escalating street conflicts signal a two-pronged threat to liberty.

Nationalists Versus Communists

The brawls seem like a half-hearted, semi-play-acting reenactment of the street fights of Germany’s Spartacist uprising of 1919. The “Spartacists” were Marxist insurgents who sought to overthrow the new Weimar government, take power themselves, and expropriate the bourgeoisie. The government, which itself was made up of milder Marxists, relied on nationalist militias called Freikorps to crush the uprising. Then, as yesterday, nationalists trounced communists in the streets. Yet this did not yield a happy ending.

As Ludwig von Mises points out in Omnipotent Government, when the Freikorps first arose, they were modeled after the armed bands of communist revolutionaries that they would later suppress.

“The November Revolution brought a resurgence of a phenomenon that had long before disappeared from German history. Military adventurers formed armed bands or Freikorps and acted on their own behalf. The communist revolutionaries had inaugurated this method, but soon the nationalists adopted and perfected it. Dismissed officers of the old army called together demobilized soldiers and maladjusted boys and offered their protection to the peasants menaced by raids of starving townsfolk and to the population of the eastern frontiers suffering from Polish and Lithuanian guerrilla invasions. The landlords and the farmers provided them in return for their services with food and shelter.”

The Freikorps, like today’s budding right-wing street militias, arose in response to leftist aggression. That didn’t make them any less dangerous. Mises continued:

“When the condition which had made their interference appear useful changed these gangs began to blackmail and to extort money from landowners, businessmen, and other wealthy people. They became a public calamity. The government did not dare to dissolve them. Some of the bands had fought bravely against the communists. Others had successfully defended the eastern provinces against the Poles and Lithuanians. They boasted of these achievements, and the nationalist youth did not conceal their sympathy for them.”

The Road to Nuremberg

These Freikorps were then integrated into the army, and the problem of rival armed bands subsided for a while, although it did not disappear. As Mises wrote:

“War and civil war, and the revolutionary mentality of the Marxians and of the nationalists, had created such a spirit of brutality that the political parties gave their organizations a military character. Both the nationalist Right and the Marxian Left had their armed forces. These party troops were, of course, entirely different “from the free corps formed by nationalist hotspurs and by communist radicals. Their members were people who had their regular jobs and were busy from Monday to Saturday noon. On weekends they would don their uniforms and parade with brass bands, flags, and often with their firearms. They were proud of their membership in these associations but they were not eager to fight; they were not animated by a spirit of aggression. Their existence, their parades, their boasting, and the challenging speeches of their chiefs were a nuisance but not a serious menace to domestic peace.

After the failure of the revolutionary attempts of Kapp in March, 1920, that of Hitler and Ludendorff in November, 1923, and of various communist uprisings, of which the most important was the Holz riot in March, 1921, Germany was on the way back to normal conditions. The free corps and the communist gangs began slowly to disappear from the political stage. They still waged some guerrilla warfare with each other and against the police. But these fights degenerated more and more into gangsterism and rowdyism. Such riots and the plots of a few adventurers could not endanger the stability of the social order.” [Emphasis added.]

But then, feeling threatened by the continued existence and activity of nationalist armed bands, the embattled socialist government created a new armed force consisting of loyal Marxists. As Mises explains, this caused many in the public to throw their support behind Adolf Hitler’s personal militia, the Nazi Storm Troopers.

“But these Storm Troopers were very different from the other armed party forces both of the Left and of the Right. Their members were not elderly men who had fought in the first World War and who now were eager to hold their jobs in order to support their families. The Nazi Storm Troopers were, as the free corps had been, jobless boys who made a living from their fighting. They were available at every hour of every day, not merely on weekends and holidays. It was doubtful whether the party forces—either of the Left or the Right—would be ready to fight when seriously attacked. It was certain that they would never be ready to wage a campaign of aggression. But Hitler’s troops were pugnacious; they were professional brawlers. They would have fought for their Führer in a bloody civil war if the opponents of Nazism had not yielded without resistance in 1933.” [Emphasis added.]

And the rest is History Channel programming. Once in power, the nationalist brawlers proved to be just as deadly foes to liberty as the communists they trounced in the streets and drove from power.

It’s Never Too Early to De-Escalate

We’re a long way from Weimar. The Alt-Knight and his merry band are a far cry from the brutal Storm Troopers. And the black-clad waifs of Antifa are a pale shadow of the homicidal Spartacists. In fact, there is distinctly ridiculous and even comical vibe to the scuffles, which the late, great Will Grigg aptly described as “political cosplay.” But these things have a way of escalating. The foot soldiers of the Spartacists and Storm Troopers may have gone through a harmless, posturing early phase as well. As Grigg wrote:

“…through political cosplay people can become habituated into thinking in eliminationist terms: The “other side” is not merely gravely mistaken, but irreducibly evil, and since reason is unavailing the only option that remains is slaughter.”

He also warned:

Unlike the wholesale violence that our country saw in the late 1960s and early 1970s, contemporary street-level political conflict is heavy on posturing and pretense and light on actual bloodshed – but it does whet degenerate appetites that will grow to dangerous proportions as times get leaner and meaner.

Just as the right-populists were not content to accept their “defeat” in the First Battle of Berkeley, the left-radicals will not just lick their wounds after the Third Battle of Berkeley. The right is reporting chatter among the left of bringing firearms next time. Such militarization will only breed more polarization and radicalization on the left and the right, both which are driven by a desire to wield state power. And it will provide the police state with a welcome excuse to further assault our already-decimated liberties.

The left-wing combatants claim to be anarchists, and yet are furthering centralized power. The right-wing combatants claim to be for liberty, and yet are putting liberty in danger. If these conflicts continue to escalate, no matter which side “wins,” liberty will lose.

EDIT (4/18/17): Some of the interesting responses to this article made me realize one of the key problems. Too many people are more anti-leftists and anti-communists than they are anti-leftism and anti-communism. For them, it’s more about the enemy tribes that hold pernicious ideas than the pernicious ideas themselves. This breeds a tribal warfare mentality that will only make things worse.

dan-sanchez

Dan Sanchez

Dan Sanchez is Managing Editor of FEE.org. His writings are collected at DanSanchez.me.

This article was originally published on FEE.org and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

Against War, the Greatest Enemy of Progress – Presentation by G. Stolyarov II

Against War, the Greatest Enemy of Progress – Presentation by G. Stolyarov II

The New Renaissance HatG. Stolyarov II
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Gennady Stolyarov II, Chairman of the U.S. Transhumanist Party and Chief Executive of the Nevada Transhumanist Party, articulates the view that war is not acceptable by any parties, against any parties, for any stated or actual justification.

This presentation was delivered to the Young Americans for Liberty (YAL) Chapter at University of Nevada, Reno (UNR), on April 24, 2017.

Read “Antipolemus, or, the Plea of Reason, Religion, and Humanity against War” by Desiderius Erasmus.

Read the Wikipedia page on the Free Syrian Army, in particular the section entitled “Allegations of war crimes against FSA-affiliated groups”, here.

Visit the Nevada Transhumanist Party Facebook group and see its Constitution and Bylaws.

Become a member of the U.S. Transhumanist Party for free here.

Why the Joint Session Standing Ovations Creeped Me Out – Article by Marianne March

Why the Joint Session Standing Ovations Creeped Me Out – Article by Marianne March

The New Renaissance HatMarianne March
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On February 28, 2017, I tuned in for President Trump’s speech to a joint session of Congress. What stood out to me most, besides VP Pence and Speaker Paul Ryan’s matching cobalt ties, was the way those two men and a portion of the audience kept popping up and down, out of their chairs like plastic rodents in a game of whack-a-mole. During the roughly hourlong speech, (some of) the audience rose out of their chairs, clapping, no less than twenty times.

Clap Until Your Hands Are Raw

There is something incredibly disingenuous about giving an enthusiastic standing ovation every three minutes. What inspires people to participate so eagerly in, what is clear to any outsider, an orchestrated scene?

It calls to mind, Russian novelist, Aleksandr Solzhenitsyn’s book The Gulag Archipelago, in which he describes the following scene,

At the conclusion of the conference, a tribute to Comrade Stalin was called for. Of course, everyone stood up (just as everyone had leaped to his feet during the conference at every mention of his name). … For three minutes, four minutes, five minutes, the stormy applause, rising to an ovation, continued. But palms were getting sore and raised arms were already aching. And the older people were panting from exhaustion. It was becoming insufferably silly even to those who really adored Stalin.

However, who would dare to be the first to stop? … After all, NKVD men were standing in the hall applauding and watching to see who would quit first!

Then, after eleven minutes, the director of the paper factory assumed a businesslike expression and sat down in his seat. And, oh, a miracle took place! Where had the universal, uninhibited, indescribable enthusiasm gone? To a man, everyone else stopped dead and sat down. They had been saved!

The squirrel had been smart enough to jump off his revolving wheel. That, however, was how they discovered who the independent people were. And that was how they went about eliminating them. That same night the factory director was arrested. They easily pasted ten years on him on the pretext of something quite different. But after he had signed Form 206, the final document of the interrogation, his interrogator reminded him:

“Don’t ever be the first to stop applauding.”

Circa 2017

Some amount of applauding and even standing ovations are not out of place at a political event, especially a presidential speech, but audience reactions to Mr. Trump’s joint session address were borderline ridiculous.

People in the gallery, and seated behind Trump, stood and applauded law enforcement, the First Lady, protectionist trade policies, “transitioning” out of Obamacare, and they clapped almost endlessly for Carryn Owens, the grieving widow of Navy Seal Ryan Owens who was killed during a raid in Yemen in late January.

During the several minutes that they stood clapping for her, Carryn Owens sobbed, clenched her hands together and looked up to the ceiling, mouthed the words ‘thank you,’ and clearly struggled to keep her composure. It was difficult to watch.

Glenn Greenwald described the moment perfectly in an Intercept article:

Independent of the political intent behind it, any well-functioning human being would feel great empathy watching a grieving spouse mourning and struggling to emotionally cope with the recent, sudden death of her partner.”

And it’s true. I imagine few could help feeling sympathy for this woman. Not only has she borne the loss of her husband, but she is now being used as a pawn to promote and glorify war and suffering.

Using Women to Promote War

And what a paltry recompense applause is. I’m sure that the widow Owens would much prefer that the men and women of Congress keep their hands in their pockets to losing her spouse. But this is a powerful tool for promoting war and it has been used for a long time.

Exalting only a country’s own soldiers, without so much as a whispered reference to the other victims of war, the deaths of innocent civilians, and using women, particularly mothers and widows, to connect an audience with less negative perceptions of war is an old trick.

This tactic is perhaps best explained in the 1964 film, The Americanization of Emily,

And it’s always the widows who lead the Memorial Day parades…. We shall never end wars by blaming it on ministers and generals or warmongering imperialists or all the other banal bogies. It’s the rest of us who build statues to those generals and name boulevards after those ministers; the rest of us who make heroes of our dead and shrines of our battlefields. We wear our widows’ weeds like nuns … and perpetuate war by exalting its sacrifices.”

What is amazing is that we’re still falling for these schemes.

Again, I agree with Greenwald that,

None of this is to say that the tribute to Owens and the sympathy for his wife are undeserved. Quite the contrary: when a country, decade after decade, keeps sending a small, largely disadvantaged portion of its citizenry to bear all the costs and risks of the wars it starts – while the nation’s elite and its families are largely immune – the least the immunized elites can do is pay symbolic tribute when they are killed.”

In his address, President Trump called for “one of the largest increases in national defense spending in American history.” And then he proceeded to show us just how he’s going to get it. How many more widows and victims will be paraded out in front of us in the years to come?

We must recognize that when we allow our emotions to be manipulated in this manner, we, too, become pawns of the powerful.

Marianne March is a recent graduate of Georgia State University, where she majored in Public Policy, with a minor in Economics. Follow her on twitter @mari_tweets.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

Alan Greenspan Admits Ron Paul Was Right About Gold – Article by Ryan McMaken

Alan Greenspan Admits Ron Paul Was Right About Gold – Article by Ryan McMaken

The New Renaissance Hat
Ryan McMaken
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In the next issue of The Austrian, David Gordon reviews Sebatian Mallaby’s new book, The Man Who Knew, about the career of Alan Greenspan. Mallaby points out that prior to his career at the Fed, Greenspan exhibited a keen understanding of the gold standard and how free markets work. In spite of this contradiction, Mallaby takes a rather benign view toward Greenspan.

However, in his review, Gordon asks the obvious question: If Greenspan knew all this so well, isn’t it all the more worthy of condemnation that Greenspan then abandoned these ideas so readily to advance his career?

Perhaps not surprisingly, now that his career at the Fed has ended, Old Greenspan — the one who defends free markets — has now returned.

This reversion to his former self has been going on for several years, and Greenspan reiterates this fact yet again in a recent interview with Gold Investor magazine. Greenspan is now a fount of sound historical information about the historical gold standard:

I view gold as the primary global currency. It is the only currency, along with silver, that does not require a counterparty signature. Gold, however, has always been far more valuable per ounce than silver. No one refuses gold as payment to discharge an obligation. Credit instruments and fiat currency depend on the credit worthiness of a counterparty. Gold, along with silver, is one of the only currencies that has an intrinsic value. It has always been that way. No one questions its value, and it has always been a valuable commodity, first coined in Asia Minor in 600 BC.

The gold standard was operating at its peak in the late 19th and early 20th centuries, a period of extraordinary global prosperity, characterised by firming productivity growth and very little inflation.

But today, there is a widespread view that the 19th century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics. World War I disabled the fixed exchange rate parities and no country wanted to be exposed to the humiliation of having a lesser exchange rate against the US dollar than itenjoyed in 1913.

Britain, for example, chose to return to the gold standard in 1925 at the same exchange rate it had in 1913 relative to the US dollar (US$4.86 per pound sterling). That was a monumental error by Winston Churchill, then Chancellor of the Exchequer. It induced a severe deflation for Britain in the late 1920s, and the Bank of England had to default in 1931. It wasn’t the gold standard that wasn’t functioning; it was these pre-war parities that didn’t work. All wanted to return to pre-war exchange rate parities, which, given the different degree of war and economic destruction from country to country, rendered this desire, in general, wholly unrealistic.

Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today we would not have reached the situation in which we now find ourselves.

Greenspan then says nice things about Paul Volcker’s high-interest-rate policy:

Paul Volcker was brought in as chairman of the Federal Reserve, and he raised the Federal Fund rate to 20% to stem the erosion [of the dollar’s value during the inflationary 1970s]. It was a very destabilising period and by far the most effective monetary policy in the history of the Federal Reserve. I hope that we don’t have to repeat that exercise to stabilise the system. But it remains an open question.

Ultimately, though, Greenspan claims that central-bank policy can be employed to largely imitate a gold standard:

When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. I told him that US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency. In that regard, I told him that even if we had gone back to the gold standard, policy would not have changed all that much.

This is a rather strange claim, however. It is impossible to know what signals a gold standard “would have” created in the absence of the current system of fiat currencies. It is, of course, impossible to recreate the global economy under a gold standard in an economy and guess how the system might be imitated in real life. This final explanation appears to be more the sort of thing that Greenspan tells himself so he can reconcile his behavior at the fed with what he knows about gold and markets.

Nor does this really address Ron Paul’s concerns, expressed for years, toward Greenspan and his successors. Even if monetary policymakers were attempting to somehow replicate a gold-standard environment, Paul’s criticism was always that the outcome of the current monetary regime can be shown to be dangerous for a variety of reasons. Among these problems are enormous debt loads and stagnating real incomes due to inflation. Moreover, thanks to Cantillon effects, monetarily-induced inflation has the worst impact on lower-income households.

Even Greenspan admits this is the case with debt: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.”

Certainly, debt loads have taken off since Nixon closed the gold window in 1971, breaking the last link with gold:

Ryan W. McMaken is the editor of Mises Daily and The Free Market. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. 

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Malthus Predicted Penury on the Eve of Plenty – Article by Richard M. Ebeling

Malthus Predicted Penury on the Eve of Plenty – Article by Richard M. Ebeling

The New Renaissance HatRichard M. Ebeling
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Those of us fortunate enough to have been born in the so-called Western World (Europe and North America) rarely appreciate the historical uniqueness of our material and cultural well-being compared, not only to many around the globe today, but to westerners just a handful of generations ago.

A mere 200 years ago, in 1820, the world population numbered only around 1.1 billion people. About 95 percent of that number lived in poverty, with 85 percent existing in “extreme poverty.” By 2015, the world population had increased to over 7 billion, but less than 10 percent lived in poverty. Indeed, over the last quarter of a century, demographers calculate that every day there are 137,000 fewer people around the world living in extreme poverty.

This escape from poverty originated in Western Europe in the eighteenth and nineteenth centuries with the coming of the Industrial Revolution and the freeing of men and markets from the heavy-handed regulations and commercial restrictions of government. Especially since the mid-twentieth century, that liberation from poverty has been slowly but surely enveloping more of the people in the so-called “developing countries.”

Before this economic revolution of human betterment was made possible by free, or at least freer, markets, life around the world was (borrowing part of Thomas Hobbes’s famous phrase) basically nasty, brutish and short for virtually all of mankind.  The idea and ideal of material prosperity for humanity as a whole was merely the dream of a few dreamers who concocted utopian fantasies of remaking society to make a better world. For some at the end of the 1700s, the French Revolution served as the inspiration to believe that now that the “old regime” of power, privilege, and political position was being overthrown and a “new dawn” was opening for humanity.

The destruction of the ancient institutional order opened the door for remaking society and its structure; and with the institutional transformation could come a change in man. There emerged a new version of Plato’s belief that human nature was primarily a product of the social environment. Change the institutions within which men lived and the character of man could be transformed over time, as well.

William Godwin and the Collectivist Remaking of Man and Society

A leading voice in support of this “transformative” vision was William Godwin, a British social philosopher and critic, who argued that selfishness, poverty, and the form and content of human relationships could be radically made over, if only the institution of private property and the political order protecting it was abolished.

He argued for this new understanding and conception of man and society in his books, An Enquiry Concerning Political Justice (1793), and The Inquirer (1798). Indeed, some have argued that Godwin was one of the first of the modern advocates of “anarchism” – an ideal society without a system of political coercion in which men will cooperatively and collectively live and work for a higher “common good.”

The guiding principles in Godwin’s political and economic philosophy (which received some revision and modification between the three editions of Political Justice during his lifetime) were:

First, the moral foundation of all human actions should be based on the individual being concerned with the interests and betterment of the collective society, and not himself; any judgment concerning the ethics in men’s behavior should not be based on the results those actions produce, but the intention or motive behind the actions undertaken.

Second, that human nature is not a universal “given,” but rather man is born like a “blank slate,” the content of which can be influenced by the social environment and the education experienced by the new mind.

Third, that poverty is not and need not be an essential part of the human condition; rather, it is the result of the institution of private property that gives what rightly belongs and should be shared equally by all men to some by arbitrary political power and legitimacy; a “new society” of communal work and sharing will raise production to unimaginable levels, abolishing poverty and creating plenty.

Fourth, this would be coupled with the fact that as there was less concern with material want, people would turn their minds to intellectual pursuits; this would result in a reduction in the sex drive, and a falling off in reproduction and the number of people in society. Thus, concerns that a materially better off world might mean a growth in population exceeding the capacity to feed it was downplayed. Besides, there were plenty of places around the world to which any excess population could migrate.

Said William Godwin in Political Justice:

“If justice have any meaning, it is just that I should contribute everything in my power to the benefit of the whole . . . It is in the disposition and view of the mind, and not in the good which may accidentally and intentionally result, that virtue consists . . .

“Human beings are partakers of a common nature; what conduces to the benefit or pleasure of one man will conduce to the benefit or pleasure of another. Hence it follows, upon the principles of equal and impartial justice, that the good things of the world are a common stock, upon which one man has as valid a title as another to draw for what he wants . . . What can be more desirable and just than that the produce itself should, with some degree of equality, be shared among them?”

What if some individuals refused to sacrifice for the collective, and were unwilling to bend their own self-interest to the betterment of the societal group? Godwin was equally direct that the individual had no right to his own life if his foregoing it served the needs of the collective:

“He has no right to his life when his duty calls him to resign it. Other men are bound . . . to deprive him of life or liberty, if that should appear in any case to be indispensably necessary to prevent a greater evil . . .”

Thomas Malthus on the “Natural” Limits to Human Betterment

Thomas Malthus (1766-1834) was an ordained minister who became interested in various themes in political economy and became famous for arguing against the theories espoused by William Godwin. His father, Daniel Malthus, took a view sympathetic to Godwin’s on man, human nature, and society. Thomas took the opposite view and ended up writing his famous, An Essay on the Principle of Population as It Affects the Future Improvement of Society, with Remarks on the Speculations of Mr. Godwin, M. Condorcet, and Other Writers (1798).

The gist of Thomas Malthus’s argument was that physical capacities to regularly increase the supply of food for human survival falls far short of the natural inclinations of human reproduction. Thus, the growth in population, when left unchecked, and given the “passions” of men and women, has the tendency to outrun the supply of food.

Hence, there were natural limits on the improvement of the material conditions of man, which no change in the political, economic, and social institutions of society, by themselves, can assure or bring about a “heaven on earth,” as prophesied and promised by Godwin and others.

Not surprisingly, the book caused a firestorm of controversy. Malthus’s apparent “pessimism” concerning the possibility of improving the human condition through conscious social change led the British social critic and essayist, Thomas Carlyle, to call economics, “the dismal science.”

Malthus argued that human existence is bound by two inescapable principles that have not and are not likely to change, given all of human history: the need for food to exist, and the degree of sexual passions of men and women for each other, which he enunciates in his Essay on the Principle of Population:

“I think I may fairly make two postulata. First, that food is necessary to the existence of man. Secondly, that the passion between the sexes is necessary, and will remain nearly in its present state.

“These two laws ever since we have had any knowledge of mankind, appear to have been fixed laws of his nature; and as we have not hitherto seen any alteration in them, we have no right to conclude that they will ever cease to be what they now are . . . I do not know that any writer has supposed that on this earth man will ultimately be able to live without food.

“But Mr. Godwin has conjectured that the passion between the sexes may in time be extinguished. As, however, he calls this part of his work, a deviation into the land of conjecture, I will not dwell long upon it at present, than to say, that the best arguments for the perfectibility of man, are drawn from a contemplation of the great progress that he has already made from the savage state, and the difficulty of saying where he is to stop.

“But towards the extinction of the passion between the sexes, no progress whatever has hitherto been made. It appears to exist in as much force at present as it did two thousand, or four thousand years ago.”

The Checks on Mouths to Feed: Misery and Vice

Malthus then made his famous statement concerning the relationship between the “geometric” rate of unchecked population growth in comparison to the “arithmetical” growth in the rate of food production. Eventually, the rate of population growth would overtake the rate of food production, the result of which would be a “natural check” on population through poverty, starvation, and death.

“Assuming then, my postulata as granted, I say, that the power of population is indefinitely greater than the power in the earth to produce subsistence for man. Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first process in comparison to the second.

“By the law of our nature which makes food necessary to the life of man, the effects of these two unequal powers must be kept equal. This implies a strong and constantly operating check on population from the difficulty of subsistence. This difficulty must fall somewhere; and must necessarily be severely felt by a large portion of mankind . . .

“This natural inequality of the two powers of population and of production in the earth, and that great law of our nature which must constantly keep their effects equal, form the great difficulty that to me appears insurmountable in the way of the perfectibility of society.

“All the arguments are of slight and subordinate consideration in comparison of this. I see no way by which man can escape from the weight of this nature. No fancied equality, no agrarian regulation in their utmost extent, could remove the pressure of it even for a single century. And it appears, therefore, to be decisive against the possible existence of a society, all the members of which, should live in ease, happiness, and comparative leisure; and feel no anxiety about providing the means of subsistence for themselves and families.”

Malthus argued that taking periods of 25 years as a benchmark, the accelerating growth in population would finally reach a crisis point relative to the rate of food growth.  What, then, may check this growth in an unsustainable population? Malthus concluded only two factors. What he called “vice” and “misery.”

Fearful of marrying before he can support a family and bring about starvation and ruin to his offspring, a man may delay and defer marriage until he feels financially able to care for a wife and children. But this results in “vice,” since the sexual urges lead men to search out physical gratification outside the bonds of matrimony, and the birth of illegitimate offspring.

Or it brings about “misery,” due to a failure to defer marriage, and the bringing into the world children for which means of subsistence do not adequately exist. This results in starvation and premature death of children and adults that brings the population and its growth down, again, to a level sustainable from existing food production.

Malthus added that if Godwin’s proposal for a greater community of property and equality of distribution of its output were to be introduced it would soon diminish the incentives for work and effort and set men into conflict with each other. Or as he put it, weakened private property rights would soon set in motion “the black train of distresses, that would inevitably be occasioned by the insecurity of property.”

Tempering Nature’s Constraints through Moral Restraint

In 1799, after the publication of An Essay on the Principle of Population, and then again in 1802, Thomas Malthus went on trips around parts of Europe. He collected a large amount of historical and demographic data on population (to the extent that such data then existed). He used this to publish a second edition of the book in 1803 that was substantially increased in size and factual information, as he had been able to gather it.

To his previous argument, Malthus now added an additional factor that could serve as a check on population, and could even keep population growth sufficiently under control so that standards of living might rise, even in the long run. This was what he called “moral restraint.”  This was a conscious act to defer marriage until an individual had the financial means to adequately support a family, and the will to renounce the temptations of “vice.” That is, to abstain from sexual gratification outside of marriage. Said Malthus:

“It is of the utmost importance to the happiness of mankind that population should not increase too fast; but it does not appear that the object to be accomplished would admit of any considerable diminishment in the desire for marriage.

“It is clearly the duty of each individual not to marry till he has a prospect of supporting his children; but it is at the same time to be wished that he should retain undiminished his desire for marriage, in order that he may exert himself to realize this prospect, and be stimulated to make provision for the support of greater numbers . . .

“And if moral restraint be the only virtuous mode of avoiding the incidental evils arising from this principle, our obligation to practice it will evidently rest exactly upon the same foundation as our obligation to practice any of the other virtues.”

Unleashing of Free Markets Negated Malthus’ Prediction

Given the seven-fold increase in world population since 1820 discussed above, accompanied by an even more dramatic fall in global poverty over the last two hundred years, Malthus’ warnings and fears seem to have been totally undermined by the facts of history. Population has exploded beyond all experience in human history during the last two centuries, yet all of these billions of additional mouths are increasingly fed and with a rising standard of living for a growing number of them.

Clearly, Malthus, writing in the late eighteenth and early nineteenth centuries underestimated one important influence that was beginning during his lifetime: market-based industrialization. Investment in productive capital equipment, especially in agriculture, began to dramatically increase the output and the nutritive quality of food produced per unit of cultivated land. This included the development of modern chemistry to increase harvests and productive strains of crops. Thus, food production has grown exponentially, and not, as Malthus feared, “arithmetically.”

Urbanization has resulted in a conscious choice by married couples to reduce the size of families. In farming societies with limited mechanization, each child is an additional mouth that comes with two hands to help in the working of the land.  Hence, children are “investment goods” in agricultural society, both for work to be done and offering support for parents in their old age.

In industrial, urban society, children are additional mouths to feed that supply little or no extra income to the family during most of childhood. Hence, children are “consumer goods” that consume income, and reduce the standard of living of the family.  In addition, the cost of urban residential living space has influenced the incentives about sizes of families. And, of course, the development of birth control has greatly influenced the ability and widened of the choice of how many children to have, and when.

In fairness, what Malthus and many others failed to see or anticipate was the explosion of production, industry, and commerce that was soon set loose by expanding economic liberty in the nineteenth century. This unleashed entrepreneurial innovation and discovery of market opportunities in the pursuit of profits. This was made possible by ending the trade protectionism, domestic regulation, heavy tax burdens, and paper money inflations that enveloped all of Europe, including Great Britain, during nearly the quarter of a century of war from 1791 to 1815 between first Revolutionary and then Napoleonic France against practically all of the rest of Europe.

The difference was made by the arrival of peace and the beginning of a conscious introduction of economic liberalism, first in Great Britain and then other parts of the European continent, and independently at the same time in the United States. Only then was free market capitalism’s potential horn-of-plenty able to begin to release its bounty upon humanity.

Malthus’s Contributions to Human Understanding

Many historians of economic thought have pointed out the various weaknesses, exaggerations, inconsistencies, and factual errors in Malthus’s argument and the changing premises and arguments in the various editions of his Essay on the Principle of Population. Indeed, one of the leading such historians, Edwin Cannan, stated that Malthus’s analysis, “falls to the ground as an argument, and remains only a chaos of facts collected to illustrate the effect of laws which do not exist.” And Joseph A. Schumpeter even said that the actual pattern of birth rates with industrialization and urbanization accompanied by growth in food production suggested “a sort of Malthusianism in reverse.”

But even with its weaknesses and factual errors, others have seen an enduringly valuable contribution in Malthus’s theory of population. No less than an authority than the Austrian economist, Ludwig von Mises, in his treatise, Human Action, suggested that in Malthus’s work can be seen a contribution equal to the discovery of the logic of division of labor and the spontaneous workings of the market order for the betterment of human circumstances:

“The Malthusian law of population is one of the great achievements of thought. Together with the principle of the division of labor it provided the foundation for modern biology and the theory of evolution; the importance of these two fundamental theorems for the sciences of human action is second only to the discovery of the regularity in the intertwinement and sequence of market phenomena and their inevitable determination by the market data . . .

“Malthus showed that nature in limiting the means of subsistence does not accord to any living being a right of existence, and that by indulging heedlessly in the natural impulse of proliferation man would never have risen about the verge of starvation. He contended that human civilization and well-being could develop only to the extent that man learned to rein in his sexual appetites by moral restraints…

“Nonhuman beings are entirely subject to the operation of the biological law described by Malthus . . . But the case is different with man. Man integrates the satisfaction of the purely zoological impulses, common to all animals, into a scale of values, in which a place is also assigned to specifically human ends.

“Acting man also rationalizes the satisfaction of his sexual appetites. Their satisfaction is the outcome of a weighing of the pros and cons. Man does not blindly submit to a sexual stimulation . . . He refrains from copulation if he deems the costs – the anticipated disadvantages – too high.”

Thomas Malthus, even with the limits and incompleteness of his analysis, can be seen to have made essential contributions to understanding the inescapable human condition. First, man at any time exists under a scarcity of the means for his ends.  Other things held given, the larger the population the greater needs to be the available supply of food and other necessities of life, if the standard and quality of life are not to be diminished. The only way to prevent a decline in standards of living is for there to be increases in capital investment that increase production and the productivity of the workforce more than any increase in the population.

Second, given the level of capital investment and technological knowledge, there is an optimal size of a society’s population, below which more people means greater net output, and above which there results less net output. And, third, the political and economic institutional circumstances can make a difference in that they may foster capital investment, more forward-looking choices by individuals, and incentives to save and work.

On this latter point, Malthus was well aware of the dangers from overreaching and expanding governmental power in terms of their threat to liberty and popular self-improvement. In the expanded, fifth edition of his Essay on Population, which appeared in 1817, he warned that ignorance of the laws of nature and the essential institutions of a free commercial society can easily lead astray mobs of people whose violent actions may open the door to despotism.

This sets the stage for a dangerous confrontation between individual liberty and political authority, in which people must always be watchful and knowledgeable so as to check the government’s drive for unchecked power. Malthus warned:

“The checks which are necessary to secure the liberty of the subject will always to some degree embarrass and delay the operations of the executive government. The members of the government feeling these inconveniences while they are exerting themselves, as they conceive, in the service of their country, and conscious perhaps of no ill intention towards the people, will naturally be disposed on every occasion to demand the suspension or abolition of these checks; but if once the convenience of ministers be put in competition with the liberties of the people and we get into the habit of relying on fair assurances and personal character, instead of examining with the most scrupulous and jealous care the merits of each particular case, there is an end of British freedom.

“If we once admit the principle that the government must know better with regard to the quantity of power which it wants than we can possibly do with out limited means of information, and that therefore it is our duty to surrender up our private judgments, we may just as well at the same time surrender up the whole of our constitution. Government is a quarter in which liberty is not nor cannot be very faithfully preserved. If we are wanting to ourselves, and inattentive to our great interests in this respect, it is the height of folly and unreasonableness to expect that government will attend to them for us.”

Thus, Thomas Malthus’s contribution may be said to be the following: Man is above all other life forms on earth in that he is able to use his reason to control his passions when they may entail costs greater than the anticipated benefits; at the same time he can use his rational faculties to devise ways to escape limits that nature places upon him by planning ahead to increase his future productive and income earning capacities to improve his standard of living. And that to do so most successfully there must be the necessary institutional prerequisites, among which freedom, property, and peace are the most essential.

Richard M. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

See the original article here.

What Marx Could Teach Obama and Trump about Trade – Article by Jairaj Devadiga

What Marx Could Teach Obama and Trump about Trade – Article by Jairaj Devadiga

The New Renaissance HatJairaj Devadiga
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Karl Marx was hardly known for championing economic freedom. Yet, even he understood the evils of protectionism. Marx, as quoted by his sidekick Frederick Engels, gave probably my favorite definition of protectionism:

“The system of protection was an artificial means of manufacturing manufacturers, of expropriating independent laborers, of capitalizing the national means of production and subsistence, and of forcibly abbreviating the transition from the medieval to the modern mode of production.”

Wow. So much wisdom packed into one sentence, and from Marx of all people. Let’s go through the sentence piece by piece to understand its meaning.

“Artificially manufacturing manufacturers”

This is an obvious one. We need only look at Donald Trump and the way he seeks to create jobs in the United States. By imposing tariffs on imported goods, Trump wants to encourage their production in America by making it relatively cheaper. This is what Marx meant by “manufacturing manufacturers”.

“Expropriating independent laborers”

Protectionism, as Marx observed, hurts the working class. Apart from the corporations who are protected against foreign competition, and their employees, everybody loses. For example, when Obama increased tariffs on tire imports, it increased the incomes of workers in that industry by less than $48 million. But it forced everyone else to spend $1.1 billion more on tires.

Just imagine the impact of Trump imposing across the board tariffs on all products. The cost of living for the average working class American would shoot up by an order of magnitude. And that is not even considering the impact of retaliatory tariffs.

“Capitalizing the… means of production” and  “forcibly abbreviating the transition… to the modern mode of production.”

Marx knew that when you make it expensive to employ people by way of minimum wage and other labor regulations, you make it relatively more profitable to use machines. Economist Narendra Jadhav tracks how manufacturing in India has become more capital-intensive over the years. Tariffs on imported goods did not help create jobs in the manufacturing sector. Even though India has armies of young, unemployed people it is cheaper to use machines rather than comply with the nearly 250 different labor laws (central and state combined).

Just because Trump imposes a tariff on Chinese goods does not mean that jobs will “come back” to the US. Even if there were no minimum wage, wages in the US are naturally higher than wages in less-developed countries, meaning it would still be cheaper to use robots.

“Emancipation of the Proletarians”

Apart from more and better quality goods that would be available more cheaply, as economist Donald Boudreaux points out ever so often, there is another thing to be gained from free trade. Marx said it would lead to the “emancipation of the proletarians.” I turn once again to India as an example. Where earlier the rigid caste system forced so-called “untouchables” into demeaning jobs (such as cleaning sewers), in the past 25 years some of them have become millionaires as a result of India being opened up to trade.

It is a shame, that even when virtually all intellectuals, from F.A. Hayek and Milton Friedman to Karl Marx and Keynes, have agreed that free trade is the best, there are those who would still defend protectionism.

Jairaj Devadiga is an economist who illustrates the importance of property rights and freedom through some interesting real-world cases.

This article was originally published on FEE.org. Read the original article.

Do You Know Who the Swiss President Is? – Article by Bill Wirtz

Do You Know Who the Swiss President Is? – Article by Bill Wirtz

The New Renaissance HatBill Wirtz
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Doris Leuthard. That’s the name of the incumbent Swiss president in case you wondered or might need it in a general knowledge quiz any time soon. But how come a country this well known on the international stage happens to have such an unknown executive?

The Swiss Opposed Centralization from the Start

The beginning of the Swiss confederacy wasn’t about power.

From the 14th century on, while Europe was torn in territorial conflicts or the religious Thirty Years War of 1618 to 1648, the (originally) 8 cantons of the Old Swiss Confederacy were a microcosm of peace and prosperity. These cantons in themselves did have religious differences, but preferred to agree on a pact of mutual military assistance to protect the neutrality of the region and its peace. The Holy Roman Empire had granted this community of cantons imperial immediacy, meaning they were declared free from its rule while being a part of it. As the European royalties raised massive amounts of taxes to finance their decade-long wars, being Swiss was comparable to living in the first true tax haven: by any means the destruction in all of Europe made the differences that these cantons have look insignificant.

Later, religious differences in Switzerland grew, sparkling battles between Catholic and Protestant cantons. Each of these battles had winners, yet none were able to impose a true change of regime, as the cantons were too diverse to be governable. The cantonal governments refused to cooperate with each other: the only foreign policy they could agree on was that of neutrality, which ended up saving it from war.

The French Revolutionary army invaded the Confederacy in 1798 and established the Helvetic Republic, a centralized state, abolished cantonal sovereignty and feudal rights and reduced the cantons to administrative districts, all in the image of France itself. This French nation-building project failed 5 years later, as the population didn’t cooperate with any centralization attempts. The Helvetic Republic was incompatible with the Swiss mentality: the people demanded that government decisions be made at the canton level, not at the federal level.

Centralization and Switzerland’s Civil War

After decades of struggles over the centralization of power, a civil war ended the everlasting Swiss question of the legitimacy of a federal government. The Sonderbund War started in 1847 and was a fight between seven conservative and Catholic cantons who opposed the centralization of power and rebelled against the Confederation which had been in place since 1814. What followed was probably one of the least spectacular wars in world history: the federal army had lost 78 men and had 260 wounded. The Sonderbund conspiracy dissolved and Switzerland became the state it is today in 1848.

Think about this, the Swiss fight (which was marked by its incredible lack of violence in comparison to others) was purely over the rejection of the centralization of power, the skepticism of the responsibilities that a large entity has, while, mind you, we’re only talking about a country of 16,000 square miles. The result is a relatively neutral state which maintains a greater amount of freedom and prosperity than most European nations.

The Federal Council, Impotent by Design

The executive of the federal multi-party directorial republic is a body called the Federal Council. It is composed of 7 members (each one responsible for one of the seven departments in Switzerland) who are voted into their position by both chambers of the Federal Assembly. Their presidency and vice-presidency is rotating each year, their mandate is four years. The current council is composed of 2 social democrats, 2 center-right conservatives, 2 national conservatives, and one Christian-democrat (Doris Leuthard, who’s the current president).

While the Confederation of Switzerland was designed to follow the example of the United States when it comes to federalism and states’ rights, the Swiss avoided the concentration of the executive into one person. It is interesting to note that although every European country made (and makes) constant changes to their form of government, this council has not changed since 1848. The only political change has been made to the Federal Council, is the reversal of the Magic Formula, or also known as the Swiss consensus, a political custom which divided the 7 seats in the country between the four ruling parties. With the arrival of billionaire industrialist and EU-opponent Christoph Blocher and his Swiss People’s Party, this political agreement had been shaken up and, furthermore, made Switzerland’s accession to the European Union more and more unlikely.

The council shows unity towards to the public and most decisions are made by consensus. That is largely because their function is more decorative than functional, as most of the power is still held by the cantons. Decisions related to education and even levying taxes are made at the regional level. There is no executive action or veto which the federal government could use.

The president of Switzerland has little to no room in public political discourse. So if you don’t know who the new president of Switzerland is, don’t worry. Some Swiss people might not know either.

Localism Works in Switzerland

The Swiss cantons perform the balancing act of politics: the conservative cantons are those outside of the big cities such as Zurich, Geneva or Bern (the capital). The population in the smaller communities reject the tendency to govern from the capital. As a result, the Swiss have continuously rejected proposals like the ones phasing out nuclear energy.

This push for localism would be considerably more difficult if it wasn’t for the system of direct democracy that is very common in the Confederacy.

All federal laws are subject to a three to four step process:

  1. A first draft is prepared by experts in the federal administration.
  2. This draft is presented to a large number of people in an opinion poll: cantonal governments, political parties as well as many NGO’s and associations out of civil society may comment on the draft and propose changes.
  3. The result is presented to dedicated parliamentary commissions of both chambers of the federal parliament, discussed in detail behind closed doors and finally debated in public sessions of both chambers of parliament.
  4. The electorate has a veto-right on laws: If anybody is able to find 50,000 citizens who will sign a form demanding a referendum within 3 months, a referendum must be held. In order to pass a referendum, laws need only be supported by a majority of the national electorate, not a majority of cantons. It’s not unusual for Switzerland to have referenda on more than a dozen laws in any given year.

These referenda are the reason why the political majorities have decided to include their own opposition in government: if the majority does not seek a consensus, the oppositions can use a citizens initiative (referendum) to overturn any decision made on the national level.

The system of checks and balances through both the aggressively localist cantons and the tool of direct democracy has made Switzerland particularly resistant to the growth of government, and one of the few relatively liberty-minded bastions in Europe.

Bill Wirtz studies French Law at the University of Lorraine in Nancy, France.

This article was originally published on FEE.org. Read the original article.