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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.

Brazil’s Lost Decade: We Must Free Our Economy – Article by Felipe Capella

Brazil’s Lost Decade: We Must Free Our Economy – Article by Felipe Capella

The New Renaissance HatFelipe Capella
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It was a lost decade for Latin America. Years of populist governments combined with a commodity boom turned out to be our oil curse, our Dutch Disease. This disastrous mix made bad public policies look like temporary successes, pushing developing countries to an unsustainable path. The collectivist ideology monopolized the debate for more than 10 years, and now that the natural resource party is over, the harm of these policies have become clearer: deep economic crisis generated by a utopia whose greatest achievement was turning toilet paper into a rare-earth product.

Populist and authoritarian South American regimes have set up government bureaucracies aimed at pleasing special interest groups that provide political support while tirelessly harming the population as a whole. These groups are divided into several small groups with special rights and privileges: judges, civil servants, members of parliament, friendly businessmen. These factions are getting their more-than-fair share while the unprivileged citizen foots the bill.

Latin American politicians played it very well during these favorable times. Cronyism and populism greatly benefited some chosen groups, while the harms were diffused enough throughout the whole country and difficult to measure during favorable economic winds. Brazil is just the biggest and clearest example of that.

How We Got Here 

For many years Brazil’s road to serfdom was being paved by the left through a combination of the world’s worst ideas: a Venezuelan-like project to subordinate decisions of the Supreme Court to the ratification of Congress; an Ecuadorian will to regulate and control the free press; a Russian compassion for cronies handpicked by the executive; Greek style benefits for public servants; Southern European pension costs (for a much younger population); Argentinean barriers for international trade, and an American/EU taste for subsidies.

The former — and now failed — cherry-picked billionaire darling of the regime Eike Batista was showered with tax funds while ordinary entrepreneurs lacked governmental support; friendly national industries were heavily protected, while people were taxed up to 50 percent on food and health supplies. Oi Telecom, a multibillion dollar mobile company, is just the most recent example of Lula’s national-champion policy (the company has just filed for bankruptcy, with 17 percent of its debt held by state-owned banks).

That was the result of 10 years of left-populist government in Brazil, all of them enjoying the applause of the international press. For years The New York Times constantly published articles with a pro-Dilma/Lula tone. Right after Dilma’s reelection — which is now known to have been funded by money siphoned from state-owned companies — The NYT published a piece half-mocking 48 percent of voters that were concerned about Dilma’s economic and political approaches.

The good thing about bad journalism is that reality eventually catches up with it. Since that 2014 article, Dilma has since lost her job and is about to be impeached for illegal budgetary schemes and deep corruption. Her top aides are all in jail or about to be thrown there, accused of stealing dozens of billions of dollars, including former Ministers and three former treasurers of her Labor Party (which some people now deem to be the most dangerous job in the world). Brazil is in its worst economic crisis since the 1930s, which has been worsening since 2014 (while Dilma was coming up with her now-famous accounting tricks to fool the Brazilian voters). Lula had even become a frequent contributor of The Times after his presidency, but now faces criminal charges and has seen the federal police knock on his door with a coercive trip to the criminal courts.

In its recent opinion page about the failed Rio Olympic Games preparation, The NYT’s favorite Brazilian correspondent Vanessa Barbara wrote that “political turmoil has paralyzed the country and frozen the economy.” This rhetoric of blaming “political turmoil” for Latin American calamities does not help to set the record straight. The problems with the Olympic games stem directly from Dilma’s and Lula’s incompetence and corruption. But the problem also lies on media vehicles like The Times, always ready to turn a blind eye to mismanagement and corruption in the name of ideology.

So here we are. Brazil is a failing state after a decade of populist presidents, misguided policies and commodity boom, all under the auspices of the progressive press.

The Need for Laissez-Faire Liberalism

For a long time, Brazil has been a place where liberalism (i.e., the ideology of freedom and free markets) was mostly marginalized, despite its positive track-record. In the minds of most Brazilians, being liberal was conspiring for the wealthy, being socialist is taking care of the poor.

But if The Times does not want to recognize its mistakes, apparently the Brazilian population is more willing to deal with self-criticism. There is now a strong resurgence of liberalism throughout the country.

Partido Novo (“New Party”) is a new political party created with a clear liberal approach to the economy, and it is just one of the recent examples of how liberalism is growing in the country, waking up millions of Brazilians who were orphans of a liberal political leadership. Many creative and hardworking people that do not think that socialism (or heavy-handed South American social democracy) will make our countries more prosperous. There are substantial constituencies that want public policies driven by research, metrics and actual public interest.

Free Trade Is the Key

The European Union has no appetite and no urgency to negotiate any comprehensive trade agreement with Mercosur or other Latin American countries. The United States faces a choice between a populist protectionist and a trade-dubious democrat (to put it mildly).

It is essential for the world that someone — anyone — pushes forward the liberal pro-trade agenda. As we natives well know, it is never wise to bet on Brazil as a global force for good. But maybe — just maybe — because we are suffering first-hand the harms of a decade of interventionist, protectionist, and corrupted government, we can somehow understand that populism is an illusory lucky charm that actually curses a country for years to come; and maybe — just maybe — we can do something to redeem ourselves.

Now that international trade seems under constant attack from all places and political spectrums, and no big world economy wants to step up and bluntly defend the liberal track record — including the United States — maybe Brazil could become the champion of good policy at last, pushing for reforms throughout Latin America and holding the liberal torch high in these dark times.

As Roberto Campos advised decades ago, for us Brazilians there are only three ways out of the current mess: Rio’s airport, Sao Paulo’s airport, and Liberalism.

Felipe Capella is an attorney turned entrepreneur. He is a former law professor at the Federal University of Santa Catarina (Brazil), former attorney at Sullivan & Cromwell (New York) and the Inter-American Development Bank (Washington, DC), has Master degrees from UPenn/Wharton and Universidad Francisco de Vitoria (Spain), and holds an MBA from FGV (Brazil).

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.

Three Popular Myths behind Trump’s Success – Article by Barry Brownstein

Three Popular Myths behind Trump’s Success – Article by Barry Brownstein

The New Renaissance HatBarry Brownstein

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Why the Unprincipled Worst Get on Top

“Nothing sinks people faster in their careers than arrogance,” according to Stephen R. Covey, the bestselling author of The Seven Habits of Highly Effective People. But it is hard to imagine a less humble or more arrogant individual than Donald Trump, and to date, his shoot-from-the-hip, prideful, self-referencing arrogance has not sunk his career.

In his book Principle-Centered Leadership, Covey described “politics without principle” as a politics of personality focused on “the instant creation of an image that sells well in the social and economic marketplace. You see politicians spending millions of dollars to create an image, even though it’s superficial, lacking substance, in order to get votes and gain office.”

The marketplace imposes a check on empty promotion and false confidence, which is why, as Covey observes, the most successful leaders in the private sector are often also quite humble.

So why do the arrogant do so well in elections? Is there something different about the political process that allows the worst to succeed?

In his seminal book The Road to Serfdom, Nobel laureate F.A. Hayek offers part of the answer. He lists three widely held beliefs that allow arrogant politicians to emerge.

Belief 1: We should be able to get out of our economic difficulties without pain.

As Hayek saw it, some people blame “the system” for their troubles and “wish to be relieved of the bitter choice which hard facts often impose upon them.” They “are only too ready to believe that the choice is not really necessary, that it is imposed upon them merely by the particular economic system under which we live.”

Let the implication of Hayek’s words sink in. The successful politicians may be those who increasingly blame the “system.”

With a majority of Americans feeling economically insecure, there is plenty of fear for Trump to exploit and a ready audience for promises that he can ease the economic pain of ordinary Americans.

Trump postures as a great fixer. Consider this retweet on Trump’s official Twitter page:

trumptweet20150824

He promises that things are going to be “great again,” once he gets us a better deal with China. Trump tells us he gets what he wants. To purchase a hotel in Miami, he brags, “I went in and punched and punched and beat the hell out of people, and I ended up getting it.”

Of course, Trump is not alone. In their arrogance, politicians will claim to fix social pain points — while they create many, many more.

Belief 2: Government should command or partially command significant portions of the economy.

Hayek observes that many well-meaning people ask, “Why should it not be possible that the same sort of system, if it be necessary to achieve important ends, be run by decent people for the good of the community as a whole?”

Those who believe in command economies think that when things go wrong, it must be because the wrong people are in charge. They don’t question their core belief that controls are needed.

History, economics, and the contemporary world teach lessons of command-and-control societies that have experienced economic failure. Yet, the wrong-person-in-charge belief is sadly all too common.

In her book The Art of Choosing, social psychologist and business professor Sheena Iyengar reports on 2007 research about societal attitudes in East Germany. She observes that among former East Germans, “more than 90% believed socialism was a good idea in principle, one that had just been poorly implemented in the past.”

Look around at your friends and neighbors who are supporting a candidate who advocates top-down solutions to social and economic problems. With few exceptions, they want the same things that you want: prosperity and peace for their family and the world. It is not that they want different outcomes than you do. They simply don’t understand that command economies are inherently, fatally flawed and cannot accomplish those goals.

Without examining their core beliefs, decent people tell themselves they’re choosing the “right” person to put in charge. Arrogant politicians are standing by, posturing as the “right” people.

Belief 3: There is a “good of the community as a whole” that our current economy is not meeting.

It is essential to understand why there can be no such thing as the “good of the community as a whole.” Hayek explains,

The “social goal” or “common purpose” for which society is to be organized is usually vaguely described as the “common good,” the “general welfare,” or the “general interest.” It does not need much reflection to see that these terms have no sufficiently definite meaning to determine a particular course of action.

All top-down solutions will be win-lose, benefiting some and harming others, for as Hayek explains,

The welfare and happiness of millions cannot be measured on a single scale of less or more. The welfare of the people, like the happiness of a man, depends up on a great many things that can be provided in an infinite variety of combinations.

Some see health care as a common good and a human right that the market system has failed to provide. In my FEE essay, “Castro and Obama Are Wrong about ‘Human Rights’” (FEE.org, March 25, 2016), I explain why real rights are win-win, not win-lose. “Rights” such as health care are win-lose and not real rights at all.

The arrogant believe they know what is best for you and best for the community. To them the course of action is clear. However, Hayek warns that in collectivist ethics, the ends justify the means and thus lead to amoral totalitarianism:

There is literally nothing which the consistent collectivist must not be prepared to do if it serves “the good of the whole” because “the good of the whole” is to him the only criterion of what ought to be done.

The Consequences of Our False Beliefs

Since there is no majority to agree on a specific plan of action to promote a nonexistent “common good,” the worst get on top in a centrally planned economy.

The “worst” will take advantage of the fact that agreement can be more readily forged by focusing on a “negative program.” Hayek writes,

It seems to be almost a law of human nature that it is easier for people to agree on a negative program — on the hatred of an enemy, on the envy of those better off — than on any positive task. The contrast between the “we” and the “they,” the common fight against those outside the group, seems to be an essential ingredient in any creed which will solidly knit together a group for common action. It is consequently always employed by those who seek, not merely support of a policy, but the unreserved allegiance of huge masses.

The “mass” that the “worst” seek to mobilize will include those who themselves are not grounded on principles. Hayek cautions that those having “imperfectly formed ideas are easily swayed”; their “passions and emotions are readily aroused.”

Hayek helps us to understand why the careers of arrogant politicians do not sink fast. The careers of arrogant politicians rise as long as we believe in a common good, seek the “right” politicians to be in charge, and support those who promise to shelter us from the work of examining our beliefs and the pain of making a different choice.

We shouldn’t be surprised when the outcome is not what we expect. As Freeman editor B.K. Marcus observes, “The more decisions we cede to the political process, the less we should expect anyone to protect our interests” (“Why Do We Believe These Pathological Liars?” FEE.org, April 27, 2016).

As individuals, we can question our core beliefs. We can humbly “try to live in harmony with natural laws and universal principles.” And we can demand the same of our politicians.

Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. He is the author of The Inner-Work of Leadership. He blogs at BarryBrownstein.com, Giving up Control, and America’s Highest Purpose.

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.

Don’t Turn Foreign Tragedies into Domestic Tragedies – Article by Doug Bandow

Don’t Turn Foreign Tragedies into Domestic Tragedies – Article by Doug Bandow

The New Renaissance HatDoug Bandow
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Americans Enjoy Prosperity and Peace in a Dangerous World
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The Islamic State’s March attacks in Belgium reinforce Americans’ belief that we live in a dangerous world, perhaps the most dangerous ever. Thankfully, most of the horror bypasses the United States, which remains a global oasis.

Americans can help alleviate the ugliness elsewhere. But rarely can they remake other nations, at least not at a reasonable cost in lives and resources. Americans’ priority must remain safeguarding and uplifting the United States.

I recently visited the city of Erbil, Iraq. Briefly threatened by the Islamic State two summers ago, Erbil is the capital of largely autonomous Kurdistan. Today, the city operates without evident fear, though security remains heavy. The Kurdish people are spread throughout Iraq, Syria, Turkey, and Iran, and are the largest ethnic group without their own nation. They have suffered oppression and violence at the hands of all four states.

In Erbil, one government official spoke of fleeing his home with his family years ago as Saddam Hussein’s air force attacked from above. Hussein employed mustard gas against Kurdish civilians who opposed his brutal rule. The official’s father explained that they could count on no one else and should be prepared to die fighting. Many did.

Kurdistan remains largely separate from the Baghdad government and has become a sanctuary for others, especially religious minorities. I attended a training seminar on religious liberty organized by the group HardWired, headed by Tina Ramirez, who previously worked on Capitol Hill handling foreign policy and religious persecution. The meeting brought together people of all faiths to deepen their commitment to protecting the religious liberty of all.

Every group had suffered. Christians fled the Islamic State’s takeover of the Nineveh Plain. A Baha’i who lived close to Baghdad went to Turkey with her son. A Sunni judge got out of Mosul three days before the brutal ISIS takeover. Many in his family were not so lucky: the Islamic State detained his youngest brother for more than a year before beheading the 17-year-old. A Yazidi abandoned her home when her city was overrun by ISIS forces. Many people lost contact with friends or relatives left under Islamic State rule.

Even those who escape suffer. A church turned its grounds across the street from my hotel into a mini-refugee camp for 94 families. Homes went from tents to metal containers, but kitchens and bathrooms remain communal. People play soccer and volleyball in the common area, marking time while hoping to return home or find refuge abroad.

Even more people have been displaced by the Syrian conflict. The European migrant crisis is a result of millions fleeing their war-ravaged nation. Many have crossed into neighboring Turkey. Refugees make up an astonishing one-third of Lebanon’s population. Last summer, I visited Jordan’s Zaartari camp, home to some 80,000 people. Many residents have been there for years. Some, in a mix of frustration and desperation, return to Syria aflame.

Only today, decades into a widespread insurgency in eastern Burma, is there hope for the 50,000 residents of Mae La refugee camp, across the border in Thailand. For years, when I visited, children would tell stories of murdered parents, wrecked homes, and desperate flight across the Moei River. Few people could leave the camps and none could work legally.

Today, an uneasy peace has descended upon most of the land also known as Myanmar. In fact, it now may be freer politically than Thailand, which suffered a coup two years ago. Although the Burmese military retains much influence, it is yielding ground. In contrast, the Thai junta seems determined to hold on to power and to construct a faux democracy in which the generals will rule however the people vote.

In many other nations, the threat similarly is repression and persecution rather than conflict and war. Turkish journalists risk jail and ruin for criticizing the new sultan-wannabe, President Recep Tayyip Erdogan. A Christian minister’s wife lost a leg in a church bombing in Indonesia. Russians are arrested for demonstrating against the Putin government. Palestinian Christians are unable to worship in Jerusalem or to farm ancestral lands due to the Israeli occupation. Chinese students are angry over censorship and curious about the Tiananmen Square massacre.

Pervasive repression is evident in totalitarian systems, in which the state claims authority over almost every aspect of human life, including religious faith. North Korea, Eritrea — known as Africa’s North Korea — and Saudi Arabia come to mind. An accident of birth separates those with a future of freedom and opportunity from those who endure a modern form of serfdom.

Americans face many challenges, too, especially this political season. What believer in liberty could savor a presidential match-up between Hillary Clinton and Donald Trump? Or Bernie Sanders and Ted Cruz? It’s enough for many of us to consider committing ritual seppuku.

Nevertheless, the United States remains largely invulnerable to foreign attack. Only a couple of nations could launch a nuclear assault, and they would be annihilated in return. None can challenge America conventionally: indeed, Washington spends so much on the military to enable it to attack others, not to protect the homeland. Yet, America’s prosperous and populous allies, like the Europeans, prefer to fund generous welfare states rather than potent defenses.

Horrific conflicts elsewhere appropriately tug at Americans’ heartstrings, but that is no reason to turn foreign tragedies into domestic tragedies. Terrorism remains America’s most serious security concern, but it does not threaten the nation’s existence, as did conflict during the Cold War. Less promiscuous intervention abroad is the surest means to limit such attacks at home.

America’s economic dream of a constantly improving future has lagged, but the United States is not alone in that regard. And the wounds are largely self-inflicted: foolish regulatory, spending, and tax policies that weaken Americans’ ability to compete in the world. It’s a lesson that even Europe has had painfully to learn.

No one should wish America’s political system on anyone else, yet a similar populist uprising is occurring in many European nations. It’s a problem born of frustration with bipartisan elites who rig the game for their own benefit. Who can blame people for believing that it really doesn’t matter who they vote for? There is a permanent national government that works most assiduously to ensure its permanence, irrespective of the wishes of those it governs.

The ongoing populist response is fraught with danger. Nevertheless, American supporters of liberty remain alert, constitutional protections persist, checks and balances abound, and for at least two decades, Washington pols have perfected their ability to block and frustrate their opponents. Despite fevered claims this political season, America remains far from a fascist dictatorship.

There is much in America about which to be concerned and even anguished. Yet, traveling the world reminds one just how special Americans remain. Rather than give up in despair, we should remember our blessings and redouble our efforts to reclaim the Founders’ revolutionary legacy. We don’t need to try to remake the world, as so many people seem to desire. Rather, we should concentrate on reviving America.

Doug Bandow is a senior fellow at the Cato Institute and the author of a number of books on economics and politics. He writes regularly on military non-interventionism.

This article was originally 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.

Actually, “Neoliberalism” Is Awesome – Article by Scott Sumner

Actually, “Neoliberalism” Is Awesome – Article by Scott Sumner

The New Renaissance HatScott Sumner
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Unfortunately, What’s Best for the World Is Not Best for Every Subset of It

I am seeing more and more articles, even at respectable outlets such as the Economist and the Financial Times, suggesting that the rise of right-wing and left-wing populism shows that something is wrong with the neoliberal model.

Nothing could be further from the truth. The past two decades have been by far the best two decades in human history, and that’s what really matters.

Naysayers will sometimes acknowledge that hundreds of millions of people have recently risen out of poverty, but then claim that living standards have stagnated in America. That’s also nonsense, as I explained in this post.

The next fallback position is that while real incomes in America have risen, the gains have gone to corporations, not workers. That’s also nonsense, as I explained in this post. The share of national income going to workers today is the same as it was 50 years ago, the supposed heyday of the working class.

The next fallback position is that while wages have done fine, even in real terms, wage income is becoming less equal. Bingo! Finally we get to an accurate statement. Fifty years ago, blue-collar workers at General Motors often made more than college professors. People with short attention spans sometimes act like this period was “normal”, ignoring 10,000 years of human history. They seem to suggest that our most pressing problem is that young men who don’t study in school and just shoot rubber bands across the classroom should be able to earn an income that (in relative terms) was never possible in any period of world history before the 1950s and has never been possible in any period of world history after the 1970s. It reminds me of when farmers used to set the “parity” of farm prices with other goods prices based on the relatively high levels of 1909-14, treating that ratio as normal for purposes of farm subsidies.

Don’t get me wrong: I have nothing against blue-collar workers. I’m relatively intellectual, and even I found the public schools to be mind-numbingly boring. I could hardly stay awake. I can’t even imagine how students less interested in ideas than I am could’ve gotten through the day. Nor am I one of those conservatives that will trash low-income whites for their lifestyle choices. As far as blue-collar workers are concerned, I wish them well. But I wish everyone well (except Trump), and the unfortunate truth is that the set of economic policies that is best for the world right now is probably not optimal for a subset of American blue-collar workers.

When I point out that the most important factor in trade policy is the impact on the poor in developing countries, some of my commenters tell me that the US shouldn’t have to import from China or India because they have lots of other countries to sell to. As Marie Antoinette might’ve said “let them sell to Canada.” That’s right, progressives ease their conscience by claiming that other developed countries won’t follow the same evil trade policies that progressives like Sanders want the US to follow, so things won’t actually be that bad for poor people in Bangladesh. More often, they entirely ignore the issue.

I know that progressives like to think of themselves as the good guys, but the honest truth is that on trade they are increasingly becoming the bad ones, right along with Trump.

And here’s what else people don’t get. Not all the problems in the world are caused by neoliberal economic theories, for the simple reason that not all economic policies reflect neoliberal economic theories. Even if everything people say about inequality is true, there’s nothing wrong with the neoliberal model, which allows for the EITC, progressive consumption taxes, and sensible reforms of intellectual property rights, occupational licensing, and zoning laws.

I can’t help it if Democratic politicians oppose reforms of intellectual property rights. I can’t help it if progressives that once favored progressive consumption taxes now oppose progressive consumption taxes. I can’t help it if Democrats voted to repeal the luxury tax on yachts soon after having enacted a luxury tax on yachts. I can’t help it if progressives suddenly feel that a $15 an hour minimum wage is not a loony idea.

The simple truth is that neoliberal economic policies work, as we’ve seen in Denmark and Switzerland and Singapore, and socialism doesn’t work, as we’ve seen in Venezuela. So I’m asking all those wavering neoliberals in the respectable press (Thatcher called them “wets“) to stop your handwringing and get out there and boldly defend the neoliberal model. It’s not just the best model; in the long run it’s the only model that really works.

Scott B. Sumner is the director of the Program on Monetary Policy at the Mercatus Center and a professor at Bentley University. He blogs at the Money Illusion and Econlog.

This article was originally 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.

Donald Trump Is the Nightmare Version of a Political Outsider – Article by Lucy Steigerwald

Donald Trump Is the Nightmare Version of a Political Outsider – Article by Lucy Steigerwald

The New Renaissance HatLucy Steigerwald
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Trump Is Not an Alternative to Politics as Usual: He Is Its Purest Form

At a CNN-hosted town hall debate, Donald Trump said that the US government’s core focus should be on security (times three!), health care, and education. In spite of this vague, rambling answer, and much other blathering in support of big government, the real estate mogul has a large, intense following, which includes people on the right, the left, and even some paleoconservatives and libertarians.

In some ways, it’s understandable: if the normal process of politics revolts you in any way, the dream of anti-candidate Trump is sweet. The approval rating for the presidency in general is around 30 percent, according to Gallup. For Congress, it’s a stingy eight percent. People — or at least the people Gallup calls — do not seem terribly impressed by their elected officials.

Nor should they be. Powerful men and women spy, meddle, steal, and go to war, whether the people want them to or not, and then pat them on the head and coo euphemisms when people get upset with the results.

Into this travesty strolls Donald Trump, with a terrible, shallow campaign, brilliant in its bombastic vagueness. Populism, it’s been a while. You’re looking tanned, rested, but disturbingly familiar.

When Trump boasts about being against the Iraq war, or disses Dick Cheney, or says that being called a politician is insulting, it’s all too easy to like him. It would be so nice to believe he is not one of them, but one of us. Sure, he’s a billionaire on his third wife, with numerous failed business ventures, a love of eminent domain, and his own brand of “luxury” steaks, but he feels our loathing of the political class.

Yet it is infuriating that this is the year, and this is the man who has stolen the heart of the people fed up with DC. Not someone with principles (such as one against, oh, gleefully saying literally anything to be elected), not someone notably different from the elites he professes to loathe — merely a man who knows how to blab with the purest, most bald-faced confidence ever seen on a national stage.

In one way, Trump’s presidential run is about an outsider group revolting against the status quo, the way that fringey, quixotic campaigns like Pat Buchanan, Dennis Kucinich, or Ron Paul’s were. And some libertarians and paleocons have jumped on the Trump float, but it is clearly not their parade. The cause of Trump is not small government or social democracy or even Catholic populism.

It is Charlie Sheen-esque nationalism. It is strident whining confused for truth-telling. It is nonsense mercantilist ideas, bullying as public policy, and the worst anti-immigrant scapegoating in decades. However, there are no ideas here: it’s merely a billionaire playing that he’s angry about Mexicans and rallying swarms to his meaningless sort of “patriotism.”

Whether Trump was inevitable, or whether he simply speaks to the truly mediocre 2016 candidates is uncertain. But boy is it frustrating that the man who wants to raze DC is the one who wants to erect a statue of himself in its place. He tells it like it is, he knows politicians don’t work for the people! But he’s going to wave his hands and make a Mexico wall and 18th-century trade policy appear by incantation.

Back in September, the New Yorker wrote that “Trump … is playing the game of anti-politics.” We should be so lucky. Trump is merely politics distilled down to the size of one angry rich guy. On the campaign trail, would-be officials swear they can do anything and everything (and in the first 100 days, no less). Trump is bolder, brasher, and even more divorced from reality. But he’s still essentially that. The waking reality of the presumptive GOP nominee — who disses Dick Cheney, Hillary Clinton, and both party establishments — is that he is, heart and soul, a consummate politician.

His critique of the political class is not that they meddle too heavily in the lives of individuals, but that they haven’t done enough. If they had, wouldn’t we have a 50-foot wall on the southern border? Wouldn’t all those manufacturing jobs come back from China? For Trump and his supporters, the problem with Washington is not the inherent disaster of a massive bureaucracy with no consequences for failure and a surplus of corrupting power. No, it’s lack of strident, Trump-like spirit: a lack of will.

In spite of his twitches towards a less militaristic foreign policy — in between suggesting the United States rip up the Geneva Conventions, bomb the hell out of Syria, and seize Iraq’s oil — there is nothing really consistent about Trump. He may or may not be worse in practice than the status quo, but there is no reason to suspect that he is the savior of anything except his own ego. Indeed, his view that the government is incompetent due to bad managers sounds more like progressive technocracy than anything conservative. But somehow his screaming fans have gotten their signals crossed or, more grimly, they are as disinterested in small government as he is.

Hating DC is fun, but it doesn’t magically translate to supporting liberty. And populism is a not principle — it has no policies, feasible or otherwise. It is raw emotion. It is preaching. It is the flimflam, finger-pointing, and impossible promises of traditional assembly-line politics, just stripped down to bare parts. Trump is the schoolyard version of everything Marco Rubio or Bill Kristol advocates. He isn’t flattering anyone’s intelligence with his policy acumen. He doesn’t think we’re terribly smart, but he also thinks those fancy pants DC elites are not as smart as they pretend. He’s right about all of that. It’s not as if politics is noble or deserves better than Trump. It is Trump.

The Donald is not some demon summoned from another dimension to destroy America. He probably isn’t a new Hitler or Mussolini. He is a part of us, a glitzy, gilded reflection of the dark soul of politics: the lies, the self-promotion, and the delusion. Take a good, long look.

Lucy Steigerwald is a contributing editor to Antiwar.com and a contributor to Playboy; she previously worked as an Associate Editor for Reason magazine. Her articles have appeared at Playboy, Vice, Antiwar, Reason, Pittsburgh City Paper, the Pittsburgh Tribune-Review, and various libertarian blogs.

This article was originally 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.

The Conservative Meltdown, Courtesy of Trump – Article by Jeffrey A. Tucker

The Conservative Meltdown, Courtesy of Trump – Article by Jeffrey A. Tucker

The New Renaissance HatJeffrey A. Tucker
******************************

Trumpflag2For 60 years, the conservative establishment has worked to overcome the biggest leftist lie of them all: that non-leftists are really Nazis in disguise. To wreck that view, conservatism reinvented itself after World War II.

William Buckley, editor of National Review, led the way. He purged the hard racists, dedicated segregationists, the Falangists, the anti-semites, the crypto-Nazis, the theocrats and ecclesiocrats, and the wildly paranoid conspiracy mongers.

Buckley was the one to do it too, because he was erudite and educated, with a subtle sense of things. It was a massive effort in social and political control, and it mostly worked. The culminating victory came with the election of Ronald Reagan.

So sensitive was Buckley to the charge of Nazi sympathies that he lost his composure completely, on live television, when in 1968 Gore Vidal charged him with being a crypto-Nazi. It was enough to cause Buckley, again on live television, to threaten Vidal with a punch in the face.

And Buckley never stopped the purges even through the 2000s. To be in the Buckley circle, you had to be housebroken. You had to avoid the fever swamps.

Many of these purges were wholly justified, but there was also collateral damage. He also purged the libertarians and the Randians too, for different reasons. Libertarians weren’t on board with the Cold War, so that was enough for him. As for Rand, perhaps it was the atheism above all else, since by this time, a firm defense of religious faith had become essential to the package of this new thing called conservatism.

If Buckley was so worried about the impression that the only alternative to leftism was Nazism, he might have cooled it a bit on suggesting nuclear war against the North Vietnamese and the Russians. If a distinguishing mark of Nazism is the use of mass violence to serve political ends, an ideological change would have been more effective than purges in countering the smears against the right. He might also have shown less affection for police-state tactics against antiwar protestors. After all, these smears from the left have the whiff of credibility for a reason.

And now in 2015 enters Donald Trump. He is not a marginal candidate. His rise and persistent dominance of the Republican field has establishment conservatives panicked, simply because it’s proof that their ideology is not dominant among GOP voters. Every demographic analysis of his supporters shows that they do not get their news from magazines or the internet. These people (middle age, middle income, white) are TV watchers and mostly haven’t been to college. What the intelligentsia says doesn’t impact their lives at all.

And yet their voices have a plurality in the Republican party. We haven’t heard from them that much in recent years because they’ve not had a standard bearer and the establishment has exercised such tight control. Now with Trump, we have the perfect storm: a person who is the caricature of the ugly American. He pushes patriotism to the point of nativism, energy in the executive to the point of fascism, police power as a solution without limits, and military strength to the point of outright worship of war as the only suitable means.

The latent statism of the right reaches its apotheosis in Trump, and it is driving the conservative establishment crazy. He is the painting in the attic, and they want it to remain hidden.

As for populism generally, both conservatives and libertarians have variously toyed with it in the past. Surely the people want liberty. Surely the only real problem is the ruling class and its power. If the people get their way, through an assertive wresting of control from the elites, the result would be a freer America. The real problem traces to the people controlling the party, not the voters as such.

But look at what’s happening. The establishment is losing control, but the result is not a movement that favors freedom but something more like the right-wing version of the Red Guard. The Trump movement is unleashing unguided hate: it was Mexicans, then Syrians, then all Muslims, and now he can stand in front of audiences ridiculing free speech and elicit cheers from the frothing masses.

H.L. Mencken is making much more sense to me today. This is a change for me. I’ve always appreciated Mencken’s love of freedom, his suspicion of the state, his appreciation for high culture, his disdain for the age-old superstitions. All that I could grasp and share. What I could not entirely share was his dread of the common man, and his absolute loathing of the political system that puts the hoi polloi in charge of choosing political leadership. He found the system preposterous.

I’ve always understood the intellectual arguments against democracy and agreed more or less. But I could never muster Mencken’s passion concerning the topic. I’ve never fully understood his intense conviction that democracy is the single biggest threat to liberty.

Trump has changed all that. Now I see it fully. The common man is gold as a consumer, worker, family member, church goer. As a voter and political influencer, the common man is a disaster waiting to happen.

What effect does this have on conservative ideology? It makes the job of seeming intelligent and responsible ever more difficult. If I were a leftist, I would be laughing out loud at all these upheavals. Trump as the only alternative to Sanders/Hillary is not a world I want to inhabit.

My prediction is this. Whether or not Trump snags the nomination, his dominance of the polls in 2015 has given the biggest boost the left has received in half a century. It also calls on conservatives to clean up their act: get more libertarian or prepare for the full Trumpization of your movement.

Read more:
Trumpism: The Ideology
Why We Should Talk About Fascism
The Eff Word Goes Mainstream
Has Donald Trump Unleashed the Neo-Nazis?
How Carly Fiorina and a Boring Debate Took Out Trump
The Rand Paul Campaign: A Retrospective

The featured image was taken by Michael Vadon (CC BY-SA 2.0 — photoshopped).

Jeffrey Tucker is Chief Liberty Officer of Liberty.me (http://liberty.me/join), a subscription-based, action-focused social and publishing platform for the liberty-minded. He is also distinguished fellow of the Foundation for Economic Education (http://fee.org), executive editor of Laissez-Faire Books, research fellow of the Acton Institute, founder of the CryptoCurrency Conference, and author of six books. He is available for speaking and interviews via tucker@liberty.me.

The Bait-and-Switch Behind Economic Populism – Article by Nicolás Cachanosky

The Bait-and-Switch Behind Economic Populism – Article by Nicolás Cachanosky

The New Renaissance Hat
Nicolás Cachanosky
May 26, 2015
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Argentina will hold elections this year, and a number of provinces will be electing governors. Buenos Aires, the capital city, is holding elections for mayor, and Mauricio Macri, who is stepping down as mayor, is a favorite to become the next president. Toward the end of the year, a presidential election will be held and Cristina Kirchner, after two consecutive mandates, will have to step down because she cannot be re-elected.

Like Chávez and Maduro in Venezuela, Argentina can be described as a country that fell victim to extreme populism during the Nestor and Cristina Kirchner administrations, which began in 2003. Twelve years later, this populist political project is about to end.

The economic policy of populism is characterized by massive intervention, high consumption (and low investment), and government deficits. This is unsustainable and we can identify several stages as it moves toward its inevitable economic failure. The last decade of extreme populism in Argentina can be described as following just such a pattern.

After observing the populist experience in several Latin American countries, Rudiger Dornbusch and Sebastián Edwards identified four universal stages inherent in populism in their article “Macroeconomic Populism” (1990). Even though populism can present a wide array of policies, certain characteristics seem to be present in most of the cases.

Populism usually fosters social mobilization, political propaganda, and the use of symbols and marketing practices designed to appeal to voter’s sentiments. Populism is especially aimed at those with low income, even if the ruling party cannot explain the source of its leaders’ high income. Populist rulers find it easy to use scapegoats and conspiracy theories to explain why the country is going through a hard time, while at the same time present themselves as the saviors of the nation. It is not surprising that for some, populism is associated with the left and socialist movements, and by others with the right and fascist policies.

The four stages of populism identified by Dornbusch and Edwards are:

Stage I

The populist diagnosis of what is wrong with an economy is confirmed during the first years of the new government. Macroeconomic policy shows good results like growing GDP, a reduction in unemployment, increase in real wages, etc. Because of output gaps, imports paid with central bank reserves, and regulations (maximum prices coupled with subsidies to the firms), inflation is mostly under control.

Stage II

Bottleneck effects start to appear because the populist policies have emphasized consumption over investment, the use of reserves to pay for imports, and the consumption of capital stock. Changes in sensitive relative prices start to become necessary, and this often leads to a devaluation of the exchange rate, price changes in utilities (usually through regulation), and the imposition of capital controls. Government tries, but fails, to control government spending and budget deficits.

The underground economy starts to increase as the fiscal deficit worsens because the cost of the promised subsidies need to keep up with a now-rising inflation. Fiscal reforms are necessary, but avoided by the populist government because they go against the government’s own rhetoric and core base of support.

Stage III

Shortage problems become significant, inflation accelerates, and because the nominal exchange rate did not keep pace with inflation, there is an outflow of capital (reserves). High inflation pushes the economy to a de-monetization. The local currency is used only for domestic transactions, but people save in US dollars.

The fall in economic activity negatively affects tax receipts increasing the deficit even more. The government needs to cut subsidies and increases the rate of the exchange rate, depreciation. Real income starts to fall and signs of political and social instability start to appear. At this point the failure of the populist project becomes apparent.

Stage IV

A new government is swept into office and is forced to engage in “orthodox” adjustments, possibly under the supervision of the IMF or an international organization that provides the funds required to go through policy reforms. Because capital has been consumed and destroyed, real wages fall to levels even lower than those that existed at the beginning of the populist government’s election. The “orthodox” government is then responsible for picking up the pieces and covering the costs of failed policies left from the previous populist regime. The populists are gone, but the ravages of their policies continue to manifest themselves. In Argentina the expression “economic bomb” is used to describe the economic imbalances that government leaves for the next one.

Economic Populism is Alive and Well

Even though Dornbusch and Edwards wrote their article in 1990, the similarities to the situation in countries like Venezuela, Bolivia, and Argentina is notable. In recent years, to keep populist ideas going in the minds of voters, Venezuela created the Ministry of Happiness, and Argentina created a new Secretary of National Thought.

These four stages are actually cyclical. The populist movement uses the fourth stage to criticize the orthodox party, and argues that during the populists’ tenure, things were better. The public opinion discontent with stage IV allows the populist movement to win new elections, receive an economy in a crisis or recession and the cycle starts over again from stage I. It is not surprising that populist governments usually appear following the hard times caused by economic crisis. A more bold populist government could avoid stage IV by finding a way to remain in office, calling off elections, or creating fake election results (as was the case in Venezuela). At such a point, the populist government succeeds in turning the country into a fully authoritarian nation.

Nicolás Cachanosky, a native of Argentina, is assistant professor of economics at Metropolitan State University of Denver.

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.

Illiberal Belief #17: Democracy is a Cure-All – Article by Bradley Doucet

Illiberal Belief #17: Democracy is a Cure-All – Article by Bradley Doucet

The New Renaissance Hat
Bradley Doucet
May 14, 2013
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I know it is sacrilege, but that is all the more reason to say it, and say it loud: Democracy is not the be-all, end-all, Holy Grail of politics that many imagine it to be. It is one, but only one, of the ingredients that make for good societies, and it is far from the most important one. Why point this out? If democracy is a good thing, why stir controversy by questioning just how good? Because the widespread, quasi-religious devotion to democracy in evidence today has some very nasty consequences. Democracy means “rule by the people.” The people usually rule by electing representatives, a process which is called, simply enough, representative democracy. Sometimes, as in the case of a referendum on a specific question, the people rule more directly, and this is known as direct democracy. Actually, though, “rule by the people” is a bit misleading, since “the people” are never unanimous on any given question, and neither are their chosen representatives. In practice, democracy is rule by majority (i.e., 50% + 1), or even mere plurality (i.e., more than any one other candidate but less than half) when three or more candidates compete.
***

Long before any nation had experienced anything even approaching universal suffrage, people concerned with human liberty—thinkers like Alexis de Tocqueville and John Stuart Mill—expressed concerns that the fading tyranny of kings might merely be replaced by a “tyranny of the majority.” They worried that majorities might vote away minorities’ hard-won rights to property, freedom of religion, freedom of expression, and freedom of movement. Majorities with a hate on for certain minorities might even vote away their very right to life.

History has given these worries ample justification. Democracy by itself is no guarantee of peace and freedom. Adolf Hitler’s victory in democratic 1930s Germany is only the most glaring example of popular support for an illiberal, anti-human regime. The people of Latin America have a long and hallowed tradition of rallying behind populist strongmen who repay their fealty by grinding them (or sometimes their neighbours) beneath their boot heels, all the while running their economies into the ground. Their counterparts in post-colonial Africa and certain parts of Asia have shown similarly stellar political acumen.

As writers like Fareed Zakaria (The Future of Freedom: Illiberal Democracy at Home and Abroad) point out, in those parts of the world that have successfully achieved a respectable degree of freedom and prosperity (basically Europe, the Anglosphere, and Japan and the Asian Tigers), sheer democracy has been supplemented—and preceded—by institutions like the rule of law, including an independent judiciary; secure property rights; the separation of church and state; freedom of the press; and an educated middle class. Indeed, instead of supplementing democracy, it is more accurate to say that these institutions limit the things over which the people can rule. It is enshrined in law and tradition that neither the people nor their representatives shall be above the law, violate the lives or property of others, impose their religious beliefs on others, or censor the freedom of the press. These checks on the power of the people have created, in the most successful parts of the world, not just democracies but liberal democracies.

According to Zakaria, societies that democratize before having built up these liberal institutions and the prosperity they engender are practically doomed to see their situations deteriorate instead of improve, often to the detriment of neighbouring countries, too. Liberty is simply more important than democracy, and must come first. We who are fortunate enough to live in liberal democracies would do well to remember this when judging other nations, like China, and urging them to democratize faster.

We would do well to remember it when thinking about our own societies, too. Thinkers like economist Bryan Caplan, author of The Myth of the Rational Voter: Why Democracies Choose Bad Policies, argue that even in the most liberal countries, democracy often works against liberty. Economists have been saying for a few decades now that political ignorance is an intractable problem that undermines the beneficial effects of democracy. The argument is that since a single vote has practically no chance of affecting the outcome of an election (or a referendum), the average voter has no incentive to become informed. Defenders of democracy have replied that ignorance doesn’t matter, since the ignorant essentially vote randomly, and random ignorant votes in one direction will be cancelled out by random ignorant votes in the opposite direction, leaving the well-informed in the driver’s seat.

Caplan agrees that if average voters were merely ignorant, their votes would cancel each other out, and the well-informed would be in charge and make good decisions. His central insight, though, is that voters are not merely ignorant, but irrational to boot. Voters have systematically biased beliefs, to which they are deeply attached, and those biases do not cancel each other out. Specifically, the average voter underestimates how well markets work; underestimates the benefits of dealing with foreigners; focuses on the short-term pain of job losses instead of the long-term gain of productivity increases; and tends at any given time to be overly pessimistic about the economy. These biases lead voters to support candidates and policies that undermine their own best interests.

The alternative to democracy, Caplan emphasizes, is not dictatorship, but markets. The market is not perfect, but it works a lot better than politics, because in my daily life as a producer and a consumer, I have an obvious incentive to be rational: my pocketbook. This incentive is lacking when it comes time to go to the polls, because of the aforementioned near-impossibility that my vote will determine the outcome. Given this asymmetry, we should favour markets over politics whenever possible. For those things that must be decided collectively, democracy may be the best we can do, but we should strive to decide as many things as possible privately, resorting to politics only when no other option is feasible. In other words, we should recapture the wisdom of the American Founding Fathers, rediscover the genius of constitutionally limited democracy, and reclaim some of the liberty previous generations fought so valiantly to secure. If we don’t, it might not be too much longer, in the grand scheme of things, before the Western world ceases to be a model worth emulating.

Bradley Doucet is Le Quebecois Libré‘s English Editor. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness.