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Is Serfdom an Executive Order Away? – Article by Sheldon Richman

Is Serfdom an Executive Order Away? – Article by Sheldon Richman

The New Renaissance Hat
Sheldon Richman
July 7, 2012

Sometimes a step back helps to provide perspective on a matter. President Obama provided such a step with his March 16 Executive Order, National Defense Resources Preparedness. In it we see in detail how completely the government may control our lives—euphemistically called the “industrial and technological base”—if the president were to declare a national emergency. It is instructive, if tedious, reading.

President Obama claims this authority under the Constitution and, vaguely, “the laws of the United States,” but he specifically names the Defense Production Act of 1950. As Freeman columnist and Independent Institute Senior Fellow Robert Higgs observed, “Under this statute, the president has lawful authority to control virtually the whole of the U.S. economy whenever he chooses to do so and states that the national defense requires such a government takeover.”

We shouldn’t assume this is merely an academic exercise or that a third world war would need to break out. In the last decade, under circumstances representing no “existential threat” to our society, the executive branch has exercised extraordinary powers.

Reading the Executive Order, I was reminded of a quotation of Leonard Read’s: “[A]nyone who even presumes an interest in economic affairs cannot let the subject of war, or the moral breakdown which underlies it, go untouched. To do so would be as absurd—indeed, as dishonest—as a cleric to avoid the Commandment ‘Thou shalt not steal’ simply because his parishioners had legalized and were practicing theft.”

The Executive Order begins by authorizing executive-branch officers to “assess on an ongoing basis the capability of the domestic industrial and technological base to satisfy requirements in peacetime [!] and times of national emergency, specifically evaluating the availability of the most critical resource and production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel.”

But these officials are to do more than assess. They are to be prepared to “ensure the availability of adequate resources and production capability,” to “improve the efficiency and responsiveness of the domestic industrial base to support national defense requirements,” and to “foster cooperation between the defense and commercial sectors. . . .”

Further, the President’s order notes his authority to “require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense” (emphasis added).

That is, the executive branch is first in line for whatever it wants (except civilian labor—perhaps).

Under the section titled “EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY,” the heads of agencies engaged in procurement are authorized to “guarantee loans by private institutions,” “make loans,” and “make provision for purchases of, or commitments to purchase, an industrial resource or a critical technology item for Government use or resale, and to make provision for the development of production capabilities, and for the increased use of emerging technologies in security program applications, and to enable rapid transition of emerging technologies.”

Think of the potential for corporatist rent-seeking.

In the section on personnel we learn that the secretary of labor shall “collect and maintain data necessary to make a continuing appraisal of the Nation’s workforce needs for purposes of national defense and upon request by the Director of Selective Service, and in coordination with the Secretary of Defense, assist the Director of Selective Service in development of policies regulating the induction and deferment of persons for duty in the armed services.”

So along with the commandeering of private resources, there will be a draft, the commandeering of military (and other?) labor—that is, slavery by another name.

Advocates of the freedom philosophy have a dual concern: that the executive has virtually unchecked authority to declare an emergency and that in an emergency the private economy would be commandeered by government officers. The Executive Order is a breathtaking reminder that, as Higgs put it, “private control of economic life in the United States, to the extent that it survives, exists solely at the president’s pleasure and sufferance.”

Sheldon Richman is the editor of The Freeman and, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America’s Families.

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

Thoughts on James Sterba’s “Liberty and Welfare” – Article by G. Stolyarov II

Thoughts on James Sterba’s “Liberty and Welfare” – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
April 14, 2012

In “Liberty and Welfare” (2007), James P. Sterba of the University of Notre Dame makes an argument that a libertarian society, grounded in the principle of classical enlightened egoism, would be consistent with a government-organized system of welfare, or redistribution of wealth from wealthier to poorer members of the society. There are some areas where I am in agreement with Sterba’s premises, and some areas of difference.

Sterba’s argument, essentially, is that enlightened self-interest renders it legitimate for a person to take the property of another in certain “conflict situations” – cases where doing so would save that person’s life (or not doing so would endanger that person’s life).  I acknowledge that there may be cases where it is legitimate to violate the property right of another in order to save one’s life – but only to the extent actually necessary to save one’s life and only if proper compensation is made afterward. For instance, suppose Person X is ejected from a burning airplane onto the vast estate of Person Y, a wealthy landowner with plenty of fruit orchards. Person Y is an absentee landowner, and is not able to give permission, and it would take Person X several days on foot to leave Person Y’s land. In my view, Person X can legitimately eat some of Person Y’s fruit so as to survive his journey. However, the proper course of action after Person X has returned to his normal life would be for him to contact Person Y and ask whether Person Y desires to be compensated for the fruit that was taken. There is, at that point, a likelihood that Person Y would be generous and overlook the incident, recognizing Person X’s need to survive. But, if this does not happen, Person X could offer Person Y a reasonable payment for the fruit. It is unlikely that Person Y would, for instance, turn down a payment that is several times the fruit’s market value.

As the loss of life is irreversible, while loss of many kinds of property can be undone through adequate compensation, in true emergency situations, it may be justified for someone else’s property to be put to use in truly saving an individual’s life. But this can only be carried out if confined to true emergencies, if done with minimal interference, and if adequate reparations are made afterward.

That being said, what I am referring to are true emergency situations – which are, by definition, acute events that subside after the cause of the emergency has passed. An ongoing situation where one person or a group of people appropriate the belongings of others without the consent of those others is not a justifiable position within a truly free society. Sterba’s paper borders on implying that there exists some group right for “the poor” to expropriate “the rich” without regard for the circumstances of specific individuals having either of these designations or for whether individuals called “the poor” could, in fact, manage to survive without such expropriation. If there is a way not to take another’s property without his consent and to still preserve human life, then that is the course of action that should be pursued.

Ultimately, Sterba’s argument leads to the support of some manner of redistributionist welfare system. Such a system may indeed be justified in an unfree or semi-free society, where artificial political privileges result in a non-meritocratic distribution of wealth – and where, for instance, inefficient and customer-unfriendly firms can achieve market dominance or incompetent individuals can come to control vast resources. The overall level of wealth in such societies is lower compared to a libertarian society, and there may be many “worthy poor” in such societies, who are poor for none of their fault and despite earnest efforts at improving their position. Indeed, the United States at present, with its massive levels of involuntary unemployment resulting from an economic bubble inflated by the Federal Reserve, could be considered to exist in such conditions. Thinkers such as Sheldon Richman have argued that, in such situations, welfare systems can be seen as secondary or “band-aid” interventions to mask or mitigate some of the harmful effects of the primary interventions (e.g., corporate subsidies, barriers to entry into markets, and laws that limit innovation and progress). While the secondary interventions bring their own unintended negative consequences, a national government that only practiced the primary interventions (which benefit and enrich a favored and politically connected elite) would be much worse in its effects. The only aspects of the secondary interventions that might be justified are those aspects that would undo some of the harms of the primary interventions and more closely approximate a meritocratic, individualistic, market-driven outcome.

I contrast “band-aid” welfare measures in a mixed economy – which could be justified – with redistribution of wealth by a government in an otherwise libertarian society – which would not be justified. Such redistribution of wealth would infringe on the justly earned property of numerous individuals, simply because they belong to some arbitrarily designated category (e.g., “the rich” – as defined by some artificial threshold). In a libertarian society, occasional emergencies might arise whereby one or a few people might legitimately avail themselves of the property of another, but only if they compensate the owner fairly afterward. But, by definition, such emergency treatment cannot apply across the board and as a systematic, ongoing matter. Furthermore, unlike the emergency treatment I described, a welfare system by definition redistributes wealth from some people to others, and does not compensate the people whose wealth has been redistributed. In a fully libertarian society, where all wealth is acquired based on the principles of merit and consent, such redistribution would be unjustified and harmful. It would, further, be unnecessary, as practically all people would be massively more prosperous than the majority of people are in today’s Western societies.