Continued from yesterday’s column
‘Service to Others’ Is NOT Part of the U.S. Constitution
Hoover may not have been a socialist, and he might have claimed in his book to be both against socialism and against capitalism. But whenever you take a stand against capitalism, you have delivered a victory to the socialists. Capitalism has nothing to gain from the compromises of socialism, but socialism has everything to gain by a compromise in capitalism. Hoover was right about some things. For example, ‘We in America have had too much experience of life to fool ourselves into pretending that all men are equal in ability, in character, in intelligence, in ambition.’
If a President or other high-level official were that honest today, he’d be impeached or prosecuted. But in the same paragraph Hoover undercut himself: ‘We have grown to understand that all we can hope to assure to the individual through government is liberty, justice, intellectual welfare, equality of opportunity, and stimulation to service.’
Actually, the Constitution does guarantee protection from force and fraud. Any just government would. But the Constitution says nothing about a guarantee to ‘intellectual welfare, equality of opportunity, and stimulation to service.’ Did Hoover, the infamous Republican who supposedly caused the Great Depression because of all his capitalist thinking, actually believe in a Constitutional ‘right’ to being ‘stimulated to serve’—whatever in the world that means!? Such a claim gives rise to totalitarianism where politicians and rulers can justify anything they want in the name of ‘service.’ Thanks to religious traditionalism and other idiocy, people are accustomed to bowing their heads at the mention of a duty to ‘serve.’ In practice, it always means service not to capitalists or business owners, but to political dictators. And the dictators know it.
Contradictions of Conservatives, Then and Now The contradictions of people we label political conservatives know no limits. Those contradictions have been well documented with the conservatives of our day, such as George W. Bush, Mitt Romney and even Ronald Reagan. It turns out this is not a new phenomenon. In the same small book, Herbert Hoover, the conservative of his time, wrote something like this: ‘Here lies the great urge of the constructive instinct of mankind. But it can only thrive in a society where the individual has liberty and stimulation to achievement.’
He also wrote, ‘Progress of the nation is the sum of progress in its individuals. Acts and ideas that lead to progress are born out of the womb of the individual mind, not out of the mind of the crowd. The crowd only feels: it has no mind of its own which can plan.’
This last is a beautiful and eloquent statement about the origin of all human achievement: The mind.
Achievement comes from rationality and reason, not mere feelings. And rationality and reason can only come from the individual mind. Two heads are not better than one, not if ‘two heads’ are to be understood as two brains thinking collectively. All reason, including all genius, is, by definition, an individual act.
It would seem to follow from this profoundly important understanding of Hoover’s that any social system which ensures human growth and survival would be one that respects this fact. Socialism, especially of the democratic variety (which ultimately took hold in America), is based on the mob mentality of feelings, of group power over individual power and achievement.
In the early twenty-first century, a hundred years after Hoover’s time, America has descended (quite literally) into the ‘legalized plunder’ and fiscal recklessness characterized by Frederic Bastiat in nineteenth century France. The economy has virtually stopped growing and morale has perhaps never been lower in the United States. Short of Communism or Naziism, it doesn’t get any worse than that.
Given his grasp of the proper means of knowledge for human beings and the methods required for human achievement and progress, Hoover should have known better. But for whatever reasons, he came down not so much on the side of outright socialism, but a third way.
In his book he frequently advocated for an undefined middle road between socialism and capitalism, and equally criticized people who want ‘no regulation’ along with those who wanted nothing but government regulation.
So where does one draw the line? Why should government regulate one enterprise, and not another? Of course government must make a distinction between those who initiate fraud or force, and those who do not. That’s a valid distinction which must be made in a rational and objective way, respecting the due process of law. But there’s no way to make a distinction between a company that should be regulated or given a tax break, or not given a tax break — other than by what’s known as ‘crony capitalism.’
Crony capitalism is not justice. It’s simply political favors and political powers. That’s all any ‘third way’ between laissez-faire capitalism and total socialism will get you. Hoover writes, ‘The most important of considerations in any attempt to pass judgment upon social systems is whether we maintain within them permanent and continuous motivation towards progress.’ In economic terms, this means we should judge a social system by whether it continuously lifts the standard of living for all, or whether things remain stagnant or even worsen.
Think Soviet Russia. Under that system, the standard of living never accelerated. Things remained the same, and ultimately worsened, even when compared to the previous dictatorship of the Czars. Think Cuba. The standard of living has not risen under decades of Communist, collectivist rule. They have, under the law, guaranteed health care for all. So what? The country is a pit, and nobody would willingly live there if they did not have to do so. Ditto with Communist North Korea.
Any Compromise Between Capitalism and Socialism Means Socialism
People like Herbert Hoover, as well as most liberals and conservatives today, would respond by saying, ‘We don’t need Communism. But we must have a middle way between Communism and capitalism.’ How is that to work? Every policy of the government involves reliance on socialist or Communist principles.
All you succeed in doing by bringing government interference into capitalism is to hamper and ultimately undermine capitalism. It happens again and again. At the end of the day, private markets and private businesses must act rationally and intelligently. If they don’t, they will not survive. They must do what’s required for profit and survival. This doesn’t mean all of them will, but only the ones that do can survive and profit.
Government is just the opposite. It only needs to do what looks good, or perhaps what actually is good, at least for certain constituency groups, for 2, maybe 4 years, tops. Consider the trillion dollar ‘stimulus’ bill of Obama’s passed in 2009. After three years, unemployment remained just as high, if not higher, and economic growth barely registered. The bill pleased a lot of constituency groups in the country by transferring taxpayer money to projects and companies who otherwise would never have had that money. This is proof positive how the incentive and imperative in government, when it interferes in the economy, is not to create economic growth so much as please constituents.
Government will never go out of business. A private company could never transfer money from one owner to another against its will, and a private company cannot manipulate the currency, as the Federal Reserve does. The stimulus bill of 2009 shows how government simply goes through the motions of making it look like it’s doing something. The long-term damage to the economy is massive, because the national debt increased exponentially thanks to this spending.
And no good came out of it by any standard of economic growth, i.e., lifting the standard of living for all. Liberals criticize and make fun of ‘trickle down’ economics. They claim that private economic growth only benefits the few at the top. Yet, reality and facts speak volumes to the contrary. Under the mostly capitalist social system in 19th century America, the standard of living in the United States rose faster and higher than it did in all of human history prior to that time. This is not indicative of a failed system!
Under the hampered capitalism of the 20th century, the overall trend continued. There were more booms and busts as the government increased its meddling and intervention in the economy. There would have been fewer, or less severe busts were it not for this government interference. But the trend continued. Each generation was economically better off than the last.
Now that we’re in the twenty-first century, we’re at a turning point. Obama and his allies in the universities, in the media and in government say it’s time to ‘transform’ the whole American system. What they mean by this, very explicitly, is to move away from hampered capitalism and in to outright socialism. That has already been completed with medical care, and major inroads have been made in the automobile industry, the banking industry, and the entire financial system.
Obama claimed that the economy suffered from too little regulation. In fact, the economy had been very heavily regulated. The mortgage crisis came about because government requirements and mandates encouraged private lenders to lend money to people who would never be able to pay it back. Political policies (under the Clinton and Bush administrations) overshadowed the incentives of a rational private market, and we got the biggest economic downturn since the Great Depression itself. It was the lack of ‘moral hazard’ fostered by a regulatory government that created this disaster. But it’s capitalism that got the blame. And the way was paved for Obama to come to office and try to ‘transform’ America into complete socialism, once and for all — if he can get away with it.
Concluded in tomorrow’s column
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