History

A Conservative

henrymoore History, Politics , , , , , , , , ,

Why I Am One

The bizarre bohemian bilge that plagues conventionally left-wing schools of thought, whether from Marx or Rawls or Chomsky, is just not for me. For the most part anyways. Since I’ve become more (this is an understatement; I have gone much farther than, say, Glenn Beck) of a libertarian (a classical liberal while socialists are usually just reverse reactionaries), I’ve learned to make some exceptions. This has tended to be more on the level of semi-reluctant tolerance than on that of open-armed embrace.

As you can see, therefore, I am a conservative because my cultural values and my outlook on life are certainly not (socially) liberal. I find that the libertinism and relativism of most left-wing ideologies, to say nothing of the economic ignorance and denial that accompanies them, were they commonplace, are incompatible with the maintenance of a free society. Generally, the only commendable quality I find in left-wing ideologies is compassion. And then only where it is sincere and/or reasonable, the latter being far more rare than the former. A moral people, as per conservatism, and yet a compassionate people, as per liberalism, is what is needed in order to establish and then preserve a free society. That is not to say that immoral or indifferent people should be given less rights or that they should be driven forth into the wastelands (although, and I think Hans-Hermann Hoppe is absolutely correct on this, they could be excluded from covenant communities without violating anyone’s rights).

Why I Am Not One

Conservatism is about conserving things. But what if the thing being conserved is a tradition of liberalism? Can not then a conservative also be a liberal? Liberalism is about freedom of thought and action. But what if the thoughts or actions are conservative? Can not then a liberal also be a conservative? The dichotomy and at times mutual exclusivity between the two is merely the result of certain factions that were never interested in (or at least not consistent in their solutions towards) conserving freedom or the freedom to conserve in the first place, but because they had one or two important (and perhaps only at the specific point in history that certain factions coalesced) things in common, the labels were adopted. This was then compounded by certain pseudo-liberals falsely characterizing all conservatives as illiberal or intolerant, and certain pseudo-conservatives falsely characterizing all liberals as intemperate or nihilistic. In the United States this was made even worse, at least for the realm of national politics, by the electoral college, which mathematically favors a two-party system because having three or more major parties would necessarily prevent presidential nominees from garnering the 271 electors necessary to win. Continue reading →

FDR, Uncle Fred, and the NRPB

Warren Gibson Economics, History, Law, Politics , , , , , , , , , , , , , , ,

In Ayn Rand’s epic novel Atlas Shrugged, government officials regulate the economy through something called the Bureau of Economic Planning and Natural Resources. She clearly chose that name to reflect their belief that productive people were bound to produce just because of their “conditioning” and could therefore be treated pretty much like coal in the ground—as resources ripe for exploitation.

One wonders whether she had ever heard of the National Resources Planning Board (NRPB). The NRPB was a real agency, part of the kaleidoscope of bureaus that formed the New Deal. Its history is in some ways as dry as dust, but a closer look reveals some interesting and timeless insights into the planning mentality and the role of personalities in shaping history.

The philosophy underlying Roosevelt’s New Deal, if one can call it that, was to try something and if it didn’t work, try something else. In that same spirit the NRPB mission changed frequently; even its name changed four times before it was killed in 1943. It had been authorized as part of the National Industrial Recovery Act, but that program was ruled unconstitutional in 1935, leaving the National Planning Board, as it was called then, in danger of extinction. It was quickly rescued by FDR, however, and established as an independent agency. Casting about for a new name, one planner suggested “natural resources,” whereupon another commented that human beings were America’s most important resource. “National Resources” was suggested. The President chewed the phrase over a few times, then, pleased with its sound, grinned and announced, “That’s it. Get that down, boys, because that’s settled.” Continue reading →

Russian and US Relations: Definitely Cooler and a Further Inquiry Into Why This Is

Brandon Christensen Current Events, History , , , , , ,

I appreciate Evgeniy’s recent remarks on the deterioration of Russian and American relations. This is an issue that has not received as much attention as it should.

From my own point of view, I can think of a few items that have caused deterioration on the American side of the relationship. Here is a small and by no means comprehensive list:

  1. The missile shield being built in Eastern Europe, ostensibly for the prevention of missile attacks from Iran. This is pure garbage. Iran has zero interest in attacking Europe with missiles. The Europeans have proven themselves to be very even-handed when it comes to affairs in the Middle East over the past few decades, and especially in regards to all things Israel. The missile shield in states previously under Moscow’s thumb is a direct provocation towards Russia, and there is absolutely no need for it. Russia, for its part, has no need of attacking Europe either. Moscow currently has a symbiotic relationship with Europe and its energy needs and its own problems in the Caucasus and the Far East.
  2. The contempt that establishment foreign policy figures in Washington have shown, and continue to show, towards Russia. The remnants of the Cold War have simply refused to go away in Washington. I think this is largely because if the establishment consensus were to acknowledge that Cold War policies are irrelevant, then they would all be out of their lucrative jobs. This contempt spills over into the political arena as well. Remember Mitt Romney’s comments about Russia being the “number one enemy” of the United States? Pure nonsense and both the American people and the Russian people deserve better.
  3. The continued occupation of the Balkans by Western coalition troops. NATO should have either dissolved or become an all-European alliance once the Warsaw Pact came apart and the Soviet Union split up. Taking sides in the Balkan conflict was designed to do two things at once: 1) stick the West’s thumb in Russia’s eye and 2) convince the Muslim world that the West was paying attention to its needs. A few years after attacking Serbia and initiating the process of splitting it up into smaller states, two skyscrapers full of innocent people were bombed by two jet planes filled with innocent people in New York City. The attacks were done in the name of Islam. In addition to the failure of the Balkan invasion to court the Muslim world, the exercise of power in Russia’s traditional backyard did indeed infuriate the Russians. Instead of an ally or a friend, the policies of NATO have led to cool receptions and deep levels of mistrust in Moscow.

These three policies are a good starting point for understanding why Russian-US relations have cooled considerably since the collapse of the USSR and the presidency of George HW Bush. I think more reaching out is needed on both sides, and I again thank Evgeniy for initiating this discussion. I am hoping for a long and prosperous friendship between free thinkers from two magnificent societies. A friendship that is dedicated to peace and understanding between two peoples who should have never been enemies in the first place.

Maps in History

Brandon Christensen History , , , ,

I’m thinking of starting a new project of putting up maps that I think will help to enhance my own perception of history and the struggle between power and liberty. Hopefully it catches on. I’ll probably have a small vignette to go along with some of the maps, some of the time. At least I hope to. This’ll help me clarify my own thoughts and perhaps even help to clarify the thoughts of others. So without further adieu: Continue reading →

NotesOnLiberty featured on RealClearHistory

Brandon Christensen History, Links

Last month NotesOnLiberty was featured on the RealClearHistory website. Forgot to mention it here before. Thanks for all your thoughts and participation folks! You can find the week we were featured (1st week of February) here.

Religion or Institutions? An Ongoing Dialogue

Brandon Christensen Books, Current Events, History, Liberty, Religion

Dr. Delacroix and I are continuing our back-and-forth over at Facts Matter. My latest volley:

Religion is often such an important part of a given culture that it is commonly treated separately giving the false impression that it’s a different subject in its own right [Dr. Delacroix]

This is true up to a point. Once a society adopts one of the “great religions” as their own, though, the cultural-religious blend disappears and two distinct categories arise. Small tribes with their parochial animist beliefs are one thing, but large nations sharing a holy book are quite another.

As it stands, the stonings of women in Saudi Arabia are political acts, not cultural ones. Thus the Saudis (or their enemies) are using religious undertones to their political advantage. The violence and backwardness of the region – which I readily admit is prevalent – goes back to institutions and their political and economic ramifications.

The lack of books in the Arab world is another case in point. During the late Ottoman era, and during the era of European imperialism, Arabs gobbled up books left and right. Once Arab socialism and other anti-colonial movements began to isolate their societies, the demand for books was severed.

What do you think would happen if the states of Iraq and Egypt, for example, suddenly lifted their controls on trade, universities, the press and the internet? Would Arab culture or Islam hinder the thirst for knowledge in the citizens of these countries?

Cue Marvin Harris.

Origins of Terrorism in the Middle East

Brandon Christensen Books, History, Religion , , , , , ,

I just recently came across a very, very good book on the history of the Middle East. As far as theory goes, it is lacking, but it is readable enough that the intelligent layman can pick it up and learn new things from it. Written by historian Eugene Rogan, it’s titled The Arabs: A History and it has won numerous awards. Be sure to check it out. One new fact that I learned is that while terrorism as a tactic in the Middle East did not appear on the radar until the 1920s, it was undertaken on behalf of Jewish interests, not Muslim ones. Rogan explains:

The terrorists had achieved their first objective: they had forced the British to withdraw from Palestine. Though their methods were publicly denounced by the leaders of the Jewish Agency [the pre-state government], the Irgun and Lehi [terrorist organizations] had played a key role in removing a major impediment to Jewish statehood. By using terror tactics to achieve political objectives, they also set a dangerous precedent in Middle Eastern history-one that plagues the region down to the present day.

Now, I am not “blaming the Jews” for terrorism in the Middle East, nor is the historian. What I would like to do is point out that the theories and excuses about Islam’s violent penchant produced by Western analysts are horribly wrong. In a similar vein, Arab culture is not to blame for the violence in the region, either. Terrorism is entirely a product of politics.

What we have in the Middle East is simply a problem of statecraft. A conceptual turn away from cultural and religious explanations for the violence in the Middle East and towards one that looks at political and legal institutions and the economic consequences that arise from them would do wonders for the region (and the world). If we cannot even agree on the fundamentals of what is wrong with the Middle East institutionally, we sure as hell are not going to agree upon anything else. This goes for domestic and regional factions in the Middle East as well as for Western ones.

Israel exists. It is a state in the Middle East, and a highly successful one at that. This may well explain why terrorism has been used so often, as a political tactic, for almost a century in the Middle East. It also helps to explain – conceptually – why terrorist attack rates were so high in Sri Lanka until the defeat of the guerrilla insurgency a few years ago, and why Latin America has suffered from chronic terrorism. Arab culture and Islam, on the other hand, do not explain terrorism in other parts of the world. I see no reason why we should make an exception to the rule for terrorism in Middle East. This is an institutional problem, not a cultural one.

Aggressive Swimming Rabbits: Conservative Violence, Abortion

Jacques Delacroix History, Liberty, Politics ,

When he was President, Jimmy Carter reported that while he was hunting in some swamp, armed to the teeth of course, a rabbit had swam toward him and acted threateningly. (Would I make this up?) The current orchestrated media reports about violence and threats of all kinds against Democrats remind me of this glory moment in American liberal history.

Several black Representatives affirmed that they had be called “nigger” on Sunday. Today, as I write, almost four days later, I have been looking in vain for visual or audio evidence of this alleged episode. Let’s think things through: Tea Party activists are demonstrating outside Congress in their thousands against a bill that enrages much or most of the population. There is no hostile press, there are no mikes, there are no television cameras to record the historic event and the precious “n” moment? Among the thousands of counter-demonstrators, in the Congressmen’s entourage, there is no one with the presence of mind to whip out his cell-phone camera and recorder to catch the insults? What is this, 1958?

With each passing hour without evidence, I become more persuaded that the insults story was fabricated and disseminated by a supine and complicit media.

It’s like Pres. Carter’s rabbit story: It probably did not happen; if it did, it’s regrettable but insignificant. Somewhere between 50 and 70 million Americans are angry because of the contents of the law (those small parts of it they know), and even more angry because of the way it was passed. Under the circumstances, if only two, twenty, or two hundred of them allow themselves intemperate language, it’s a cause for celebrating our collective reasonableness. Continue reading →

Obama’s Haitian Policy

Jacques Delacroix History, Liberty, Religion , ,

A strange symmetry of irrationality and meanness in the news about Haiti: Pat Robertson declares that God is punishing the Haitians for their sins; two days latter, Denis Glover, the activist of all Leftist causes observes that the Haiti earthquake is somehow connected to the failure of the climate conference in Copenhagen. It turns out that Gaia is just as mean as God the Father! Why bother to switch, I wonder. I have been telling you, friends, for a long time that climate warmism is a cult.

I have cool thoughts about the human catastrophe in Haiti, almost inhumane thoughts. I suspect the Haitians will end up coping better than many others would have under the same terrible circumstances. The population is so damned poor that it’s trained to do with little. I worry about water mostly because humans can’t make do without it but for a short time.

Parallel reasons lead me to predict that the 2010 earthquake will turn out to be a blessing in disguise for the survivors. Port-au-Prince and the rest of the country were so dismal that it would be impossible to restore them to their former awfulness if you tried. It’s difficult to rebuild massive quantities of housing without accompanying infrastructures, including roads, water pipes, and sewers (which are almost lacking today). I am betting, of course, that there is going to be a serious international effort to “rebuild.”

Another uncharitable thought: I will be curious to see how the population of Haiti stacks up, in energy and in entrepreneurship, with the population of New-Orleans post-Katrina. In case, you wonder, my money is on the Haitians. Continue reading →

The Tragedies of Haiti

Fred Foldvary History ,

The greatest tragedy of the earthquake of 12 January 2010 in Haiti was that the devastation was caused more by human failure than the natural disaster. The earthquake that hit the San Francisco Bay Area in 1989 was about as strong, causing the Bay Bridge to break, but killed only 63 people.

Before the Spanish came, the island of Hispaniola had been divided into chiefdoms, and the two western ones, Jaragua and Marien, became Haiti. Haiti’s first tragedy began with the arrival of the Spanish, who sickened, enslaved and killed off the native Taino Indians.

The second tragedy of Haiti was the importation of African slaves by the Spanish. French pirates and colonists cam to Haiti, The Treaty of Ryswick of 1697 split Hispaniola between Spain and France. Many more French settlers arrived and established plantations producing sugar, coffee, and indigo with slave labor.

A slave rebellion, inspired by the ideals of the French Revolution, fought the French government from 1791 to 1803. The liberated armies were commanded by General Toussaint L’Ouverture. The French National Assembly abolished slavery in the French colonies in 1794, but later Napoleon sent troops to regain French control. Continue reading →

The Labor Theory of Value

Brandon Christensen Economics, History, Religion ,

From Stanford’s Encyclopedia of Philosophy entry on Karl Marx:

Suppose that such commodities take four hours to produce. Thus the first four hours of the working day is spent on producing value equivalent to the value of the wages the worker will be paid. This is known as necessary labour. Any work the worker does above this is known as surplus labour, producing surplus value for the capitalist. Surplus value, according to Marx, is the source of all profit. In Marx’s analysis labour power is the only commodity which can produce more value than it is worth, and for this reason it is known as variable capital. Other commodities simply pass their value on to the finished commodities, but do not create any extra value. They are known as constant capital. Profit, then, is the result of the labour performed by the worker beyond that necessary to create the value of his or her wages. This is the surplus value theory of profit.

Read how Marx got this wrong here.

There is more:

Although Marx’s economic analysis is based on the discredited labour theory of value, there are elements of his theory that remain of worth. The Cambridge economist Joan Robinson, in An Essay on Marxian Economics, picked out two aspects of particular note. First, Marx’s refusal to accept that capitalism involves a harmony of interests between worker and capitalist, replacing this with a class based analysis of the worker’s struggle for better wages and conditions of work, versus the capitalist’s drive for ever greater profits. Second, Marx’s denial that there is any long-run tendency to equilibrium in the market, and his descriptions of mechanisms which underlie the trade-cycle of boom and bust. Both provide a salutary corrective to aspects of orthodox economic theory.

Your thoughts please.

Bank Deregulation: Friend or Foe?

Warren Gibson Economics, History, Law , , , , ,

Banking has changed a lot during my lifetime—for the better. The changes are partly due to technology (ATMs, online access), but also to deregulation that subjected banks to a lot more competition. What were the major deregulatory moves and how might they have contributed to the recent crisis? Before addressing those questions, a little personal history.

I got interested in money and banking at a very young age. My mother often took me along on shopping trips, explaining what money was, why we needed it in stores, and how my father got it for us. Trips to the bank were a special treat. The Cleveland Trust branch near us was an imposing affair, with a limestone façade, high ceilings, and tellers ensconced behind ornate barred windows. The architecture was intended to instill confidence, but to me it was just a magic place.

Later, my sixth-grade class operated a student branch of another bank, the Society for Savings. Twice a month our classroom was rearranged like a bank branch. Tellers (all boys, as I recall) would accept student deposits of a dime, a quarter, or sometimes a whole dollar. Assistant tellers (girls) would write the amount of the deposit in the student’s passbook, while the boys handled the cash. After closing we tallied the deposits and packed the loot—perhaps $50—into a canvas bag, and a privileged student would trundle it off to the principal’s office under the watchful eyes of two “guards.” What great lessons we learned: thrift, honesty, attention to detail!

By the time I was 14 I was earning good money shoveling snow, raking leaves, and mowing lawns. I had become something of a saving fanatic. I soon found out that the local savings and loan (S&L) offered higher interest than commercial banks, so I opened an account there. Savings passbooks seem quaint in hindsight, but mine was a treasured possession, a tangible reminder of my growing nest egg. Continue reading →

Credit Booms Gone Wrong

Fred Foldvary Economics, History , , , , , , , ,

Recent research by economists Moritz Schularick and Alan M. Taylor have confirmed the theory that economic booms are fueled by an excessive growth of credit. They have written a paper titled “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870–2008“, published by the National Bureau of Economic Research.

A major cause of the Great Depression was a credit boom, as analyzed by Barry Eichengreen and Kris Mitchener in their paper, “The Great Depression as a credit boom gone wrong” (BIS Working Paper No. 137). Eichengreen and Mitchener cite Henry George’s Progress and Poverty as providing an early theory of booms and busts based on land speculation. They also credit the Austrian school of economic thought, which in the works of Friedrich Hayek and Ludwig von Mises, had developed a theory of the business cycle in which credit booms play a central role. Henry George’s theory of the business cycle is complementary to the Austrian theory, as George identified the rise in land values as the key role in causing depressions.

An expansion of money and credit reduces interest rates and induces a greater production and purchase of long-duration capital goods and land. The most important investment and speculation affected is real estate. Much of investment consists of buildings and the durable goods that go into buildings as well as the infrastructure that services real estate. Much of the gains from an economic expansion go to higher land rent and land value, so speculators jump in to profit from leveraged speculation. This creates an unsustainable rise in land value that makes real estate too expensive for actual uses, so as interest rates and real estate costs rise, investment slows down and then declines. The subsequent fall in land values and investment reduces total output, generates unemployment, and then crashes the financial system.

We can ask whether this theory is consistent with historical evidence. One strand of evidence is the history of the real estate cycle, which has been investigated by the works of Homer Hoyt, Fred Harrison, and my own writings. Another strand is the history of credit booms, as shown by Schularick and Taylor, who assembled a large data set on money and credit for 12 developed economies 1870 to 2008. They show how credit expansions have been related to money expansions, and how financial innovations have greatly increased credit. Because economic booms are fueled by credit expansion, Schularick and Taylor note that credit booms can be used to forecast the coming downturn.

Followers of Henry George have focused on the real estate aspect of the boom and bust, while the Austrian school has focused on credit, interest rates, and capital goods. A complete explanation requires a synthesis of the theories of both schools, but these recent works on credit booms have not recognized the geo-Austrian synthesis. In order to eliminate the boom-bust cycle, both the real side (real estate) and the financial side (money and credit) need to be confronted.

Current Austrian-school economists such as Larry White and George Selgin have investigated the theory and history of free banking, the truly free-market policy of abolishing the central bank as well as restrictions on banking such as limiting branches and controlling interest rates. In pure free banking, there would be a base of real money such as gold or a fixed amount of government currency. Banks would issue their own private notes convertible into base money at a fixed rate. The convertibility and the competitive banking structure would provide a flexible supply of money along with price stability. The banks would associate to provide one another with loans when a bank faces a temporary need for more base money, or a lender of last resort.

Both the members of the Austrian school and the economists who have studied credit booms have not understood the need to prevent the land-value bubble by taxing most of the value of land. That would stop land speculation and eliminate the demand for credit by land buyers.

But the credit-bubble theorists have not understood that financial regulation and rules for central banks cannot solve the financial side of credit bubbles. Credit booms always go wrong. As the Austrians have pointed out, there is no scientific way to know the correct amount of money or the optimal rates of interest. Only the market can discover the rate of interest that balances savings and borrowing, and only the market can balance money supply with money demand.

Thus the remedy for the boom-bust cycle is both land value taxation and free banking. Land speculation would not be as bad without a credit boom, but will still take place as land values capture economic gains and land speculators suck credit away from productive uses. But also, a credit boom with land-value taxation will still result in excessive construction and the waste of resources in fixed capital goods, reducing the circulating capital need to generate output and employment, as Mason Gaffney has written about.

Economic bliss requires both the public collection of rent and a free market in money.

[Editor’s note: this essay first appeared on Dr. Foldvary’s blog, the Foldvarium, on April 4 2010]

“How China Became Capitalist”

Brandon Christensen Current Events, Economics, History, Liberty , ,

That’s the title to this short piece by Nobel laureate Ronald Coase and his co-author Ning Wang published by the Cato Institute. Among the gems:

The presence of two reforms was a defining feature of China’s economic transition. The failure to separate the two is a main source of confusion in understanding China’s reform. The Chinese government has understandably promulgated a state-centered account of reform, projecting itself as an omniscient designer and instigator of reform. The fact that the Chinese Communist Party has survived market reform, still monopolizes political power, and remains active in the economy has helped to sell the statist account of reform. But it was marginal revolutions that brought entrepreneurship and market forces back to China during the first decade of reform when the Chinese government was busy saving the state sector.

Do read the whole thing. The Cato Institute ranks third on my list list of trustworthy think tanks. Hoover and Brookings are two that I think produce university-caliber research. Cato ranks far below Hoover and Brookings in my estimation, but it occupies a lonely third place, as none of the other think tanks out there are even close to Cato’s stature, either.

You can check out Cato’s website here.

The Civilization Bubble

Fred Foldvary Current Events, History , ,

There have been many financial and real estate bubbles during the past few hundred years, and there have been empire bubbles, but never before has there been the global civilization bubble in which we are now in. The bubble will collapse within a few decades. It will be the end of civilization, and will result in world-wide violence, deaths, and chaos.

Empire bubbles can last several hundred years, as for example the Mayan civilization or the Roman Empire. What brings down empires is invasion, bad economic policy, environmental exhaustion, or weakened tyranny. The Soviet Union, for example, was a statist bubble that was brought down by economic decay and weakened tyranny.

Most of the world is now in a global civilization. There are two enemies of this global order. One enemy is terrorist pseudo-religious supremacists. They could bring down the global civilization with electromagnetic bombs that would wipe out the storage and transmission of data that the world’s economy depends on. Very little is being done to protect the global electronic infrastructure from attack, thus the bubble.

The other threat to global civilization is internal, or as scientists say, endogenous. Global civilization is rushing towards an environmental collapse. There are hints of this in the plastic contamination of the oceans, the depletion of fresh water, the destruction of fish and corals, the eradication of forests, and possibly accelerated climate change. What will most likely bring down global civilization is the plundering and poisoning of the natural infrastructure of the earth. Continue reading →