The Cobden Centre, May 16, 2011.
When the bestriding colossus Murray N. Rothbard departed this life, he left the rest of us with the hallowed gifts of his thoughts, his books, and his ideas (as well as an occasional secret desire to wear bow ties), and the happily reverberating sound of that anarchic cackle.
However, to those few — those lucky few — who knew him dans le flesh, he also bequeathed various fractional stamps of his personality.
What did Thomas E. Woods receive from this last will and testament of the bow-tied and bespectacled one?
After reading Rollback, Woods's latest best-selling book, I think it has to be antigovernment invective and incisive wit, particularly as regards the unwanted rediscovery and revelation of inconvenient historical truths and hastily buried politically embarrassing lies.
Fortunately for the rest of us, who have nothing but state-approved history books to learn from, Woods has employed this mighty guiding tool to show him where to dig in the obfuscated historical record that has been turfed over constantly by endless shovel-ready phalanxes of court historians and other pelf-consuming tax eaters who dig in shifts for the ongoing victory of the state and their own demarcated take from the spoils.
For example, in the latter half of the book, when examining the creation of the world's welfare states, Woods provides much raw data, and then the sensible state-ignoring conclusions that arise from these detailed researches:
He [Charles Murray, the social scientist] wanted to know why it should be that "the number of people living in poverty stopped declining just as the public-assistance program budgets and the rate of increase in those budgets were highest." He went on to explain why, counterintuitive as it may be, we should in fact expect this result.
Woods later follows this up with,
Another way to approach it is to recall that at least two-thirds of the money assigned to government welfare budgets is eaten up by bureaucracy. Taken by itself, this would mean it would take three dollars in taxes for one dollar to reach the poor. But we must add to this the well-founded estimate of James Payne that the combined public and private costs of taxation amount to 65 cents of every dollar taxed. When we include this factor, we find the cost of government delivery of one dollar to the poor to be five dollars.
We have seen the same large scale of growth in the "welfare industry" in the United Kingdom, with literally millions of people earning good salaries in the provision of government welfare, and the commensurate growth of the numbers of UK citizens in poverty. And yet the broken machine continues to grow like Topsy — even in these supposed times of austerity — as rival government factions squabble over this totemic issue like demented ferrets in a bag, all claiming to be worthier than their rivals (by driving more people into poverty at ever-increasing cost).
However, Woods goes beyond the usual utilitarian arguments as to why we should reprivatize welfare after a century of escalating government failure, with higher costs and those ever-higher amounts of poverty. He examines government motivations for taking over welfare in the first place, beyond even the usual ones of providing friends with nice, fat, central-government-agency positions, providing local government clientele with salaried sinecures, and the straightforwardly corrupt naked buying of votes.
As in the United Kingdom, US welfare systems are based directly upon those created by Otto von Bismarck in 19th century Germany. But why did this martial Prussian introduce the first pilot programs of European state welfare? Was it because this Teutonic Iron Chancellor possessed a soft, mushy heart?
Hardly, according to Woods:
When Otto von Bismarck introduced wide-ranging social insurance in Germany in the 1870s, he did so for the express purpose of buying the people's loyalty to his regime. An enervated, spiritless people is far less likely to rise up against parasites who live off their labor, even when that regime is exploiting and robbing them blind, if they have been conditioned to believe that they cannot live any other way.
Rollback thus "rolls back" the usual flimflam of conventional state-school history books to reveal the core of poisonous mendacity that lies at the heart of every modern nation-state. Once through the earlier, restrained US-centric chapters, the lessons exposed by Woods in Rollback become increasingly familiar to those of us in England and Europe, and the text accelerates.
To paraphrase the entire book, Woods attacks the following neosocialist position, which I'm sure most of us have had to endure at the occasional dinner party or three over the past year or so: all of the world's problems have been caused by uncaring selfish extremists like you and the brutal free market that you so callously defend.
Woods replies to this mind-drained position with the following question: What free market?
In a way, Rollback is almost a sequel to his earlier polemic, Meltdown; it could even have been entitled Meltdown II by a less imaginative editor — but only in the same fashion that you could have given Lord of the Rings a different title as well, such as The Hobbit II.
As Gandalf deals with the problem of a dragon in The Hobbit, Meltdown deals directly with the single draconian problem of state control over our lives, which is the failure of centrally planned socialist banking, peopled by its overmanned host of bumbling bureaucratic commissars and their mistaken belief in state-loving Keynesianism.
Rollback bypasses all such outer symptoms caused by a shadowy necromancer pulling on the usually hidden strings of state failure — where the Bank of England is regarded as an exalted, pin-sharp übercapitalist entity of omniscient accuracy, as opposed to being seen in its actual nature as a state-owned socialist organ of morally haphazard ineptitude — and goes straight for the throat of the Sauronic nation-state.
He charts its insatiable grasping desire to drown us all under its life-destroying socialist controls and cloak us forever in a choking ashen layer of self-aggrandizing tyranny, pelf-taking, and general imbecility, as can be witnessed by any coerced foot soldier in any state army since the dawn of time.
This book will therefore be a delight, not only to the Austrian hardcore who is going to buy it anyway, but to anyone else who wants an honest and straightforward answer to the following simple question: What is going on, and how do we fix it?
Woods kicks off in a suitably ebullient postexistential Rothbardian mood of glee:
A systemic crisis is poised to strike an unprepared America, as the federal government is forced to renege on its impossible promises. It will no longer be the godlike dispenser of bounties, the miracle worker that summons bread from stones.
What I love about the passionate Woods, almost the Michael Bublé of Austrian economics, is the way you can hear his spoken voice sing through the timeless medium of ink on paper.
You can hear this controlled emotion again on the next page:
The scale of the coming, inevitable spending cuts will be unlike anything Americans have ever experienced during peacetime. Americans have never seen federal spending scaled back. Even when the newspapers speak of "budget cuts," they don't actually mean the budget will be lower than it was the previous year. They mean only that its rate of growth is falling. Government is never cut. But it will be.
Are you listening, Mister Cameron? Are you listening, Monsieur Sarkozy? Are you listening, Frau Merkel?
Having soaked up the unquenchable Rothbardian optimism, Woods lays a contrarian message on the line:
Federal bankruptcy, in short, may turn out to be one of the best things that ever happened in America.
Go brother! as we say in Henley-on-Thames.
When lambasting Barack Obama, in the second chapter, and the anointed one's crass-busted program of "Change We Can Believe In," initially mild-mannered words begin to reveal more of an exposed toothsome edge:
The Obama economic program has perpetuated and intensified the problems that are sinking the U.S. economy. Those parts of it that can be legislatively reversed, like the health-care plan, ought to be promptly repealed. Those parts that cannot, like the "stimulus" packages, ought to be refuted and ridiculed. The nicest thing we can say about the president's economic program is that it is only one in a long line of presidential programs that have wrecked Americans' futures in the name of helping them.
That Woods brands the spectacularly inept Keynesian voodoo of Obama as an "economic program" is only due to his innate Catholic politeness. Later in the book, once Woods has moved through a few gears, he is much less conciliatory.
We really start chomping into the beef in chapter 3:
It was not the "free market" that failed us. It was a ginned-up housing market, overheated from political manipulation and artificially low interest rates courtesy of the Federal Reserve. Governments do not "smooth out" or eliminate business cycles. They cause and exacerbate them. They then cite problems they themselves caused as good reasons for them to expand their authority.
This is straight from the playbook of Mises himself, the master, who always reckoned that one bad government intervention would always deserve another, until a previously free and happy situation became wrapped in a red-tape thicket of monstrous stupidity and nonsense, as witnessed by the appalling mess that is the British government's holy sacred cow — its own National Health Service.
"In the private entrepreneurial world, failing businesses have their resources removed until the failed entrepreneurs in charge are forced to become employees again."Obviously, we in England can also look at our rail system, education system, legal system, or welfare system to witness this ratcheting effect of government cost, waste, and incompetence, but at the heart of all this ongoing failure lies a government's underlying ability to print money out of thin air to fund this oafishness and power-grabbing foolishness in the otherwise crushing face of economic sense.
This fundamental truth is never far from Woods's roving crosshairs. On page 42, always a significant number, the book unmasks the creature from Jekyll Island as the Gollum hiding in the mithril mine, with Woods plunging a glowing Numenorian dagger through the solar plexus of the US central bank.
The other culprit the establishment has tried without success to exonerate is the Federal Reserve System, the U.S. central bank that holds government-granted monopoly privileges. Had the Fed not repeatedly intervened to push interest rates down, the market would have stopped the housing bubble in its tracks. Faced with an inordinate demand for mortgage loans, banks would have found their supply of loanable funds rapidly depleted. As a result, interest rates would have shot up, and further speculation in real estate would have been arrested. These high interest rates would also have encouraged people to save, and those increased savings would have provided the genuine wherewithal for any further home lending to take place. The role of the Fed was much more significant than that of the U.S. government itself, since without the wherewithal to finance these home purchases, attempts to manipulate the housing market on the political side would have hit a natural brick wall.
In the private entrepreneurial world, failing businesses have their resources removed until the failed entrepreneurs in charge are forced to become employees again, just like the rest of us. Only in government is it possible to grow fatter and better resourced the more you fail, leading to the perverse incentives that so plague all government affairs. What happens to a private school that fails, asks Woods? It goes bust. What happens to a government school that fails? It receives more tax funding.
It is this Mad Hatter economics that is sucking the life out of our Western economies, and until we reverse this process, we will continue our long-term decline, to be replaced in economic ascendancy by the much more sensible people of the East.
After thus pulling back the green silk curtain in the Emerald City, and fully revealing the central-planning role of the failed Federal Reserve and other satellite central banks, Woods then aims an elvish spear or two at that other arm of US imperium — its military:
The F-22 was sold as a stealth fighter. But it keeps showing up on radar systems — and even if it didn't, the thing is huge. "The only way to make the F-22 stealthy," says retired Air Force Colonel Everest Riccioni, "is to tear the eyes out of enemy pilots' heads." It wasn't until 2010 that the program was finally scrapped. Over the life of the program, some $65.3 billion was spent, which translates into over $356 million per plane.
And you thought Gordon Brown was a massive waster of other people's money? No wonder the ghoulish former British prime minister spends so much of his time in North America these days (to really experience what government waste is all about, ready for whatever tarnished pot he is eventually awarded for his wretched services to world socialism).
Woods then tackles an area close to my own heart. If you were to award me a magic wand and allow me to abolish just one government fiefdom, it would the one in which it melds the fluid minds of children to believe in the sanctity of government. Joseph Goebbels would have called my abolition target the State Propaganda and Child Indoctrination Department, though Guardian readers who make their living in it might prefer to call it the State Education Department:
Schoolchildren are taught a version of history worthy of Pravda. Governments, they are convinced, abolished child labor, gave people good wages and decent working conditions; protect them from bad food, drugs, airplanes, and consumer products; have cleaned their air and water; and have done countless other things to improve their well-being. They truly cannot imagine how anyone who isn't a stooge for industry could think differently, or how free people acting in the absence of compulsion and threats of violence — which is what government activity amounts to — might have figured out a way to solve these problems.
Okay, so I would like to be greedy — being so intrinsically selfish — and claim a second wish to also abolish the Bank of England and replace it with absolutely nothing at all, but what I find strange about this is that a typical undergraduate at an English university would nod their head with you if you said, "It was terrible when Adolf Hitler took over private schools in Germany, to indoctrinate German children," but finds it inconceivable to imagine government being kicked out of the education sphere here in England. Because, as Tom Woods points out,
Under the free market, children were condemned to live lives of hard labor. Before the rise of industrial capitalism, children spent their days picking flowers and skipping through meadows. Then capitalism appeared and whisked the children away into lives of miserable toil. Only our wise public servants could have rescued them from this cruel fate.
Woods immediately counters this fanciful nonsense with a quote from Mises:
"It is a distortion of facts," he wrote, "to say that the factories carried off the housewives from the nurseries and the children from their play. These women had nothing to cook with and to feed their children. These children were destitute and starving. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation."
You will never see that lesson relayed in any English state school, however, or even in many of the few remaining private ones — such is the defenestrating stranglehold that Whitehall has taken over child indoctrination via its national curricula and state-sanctioned key stage criteria, to strangle the ability of anyone to think or (God forbid) disagree with the official civilized positions on everything, including perhaps the ruthless evil capitalist exploitation of Peruvian basket weavers and the selfish societal denial of sustainable development for cardboard windmills.
Even in Harry Potter, that most quintessentially English experience, one of Voldemort's stated aims, when he takes power, is to take Hogwarts under the direct control of government to ensure that all wizard children are "correctly educated" — and this is quite clearly seen by one and all as intrinsically evil, as is the earlier failed takeover of Hogwarts by the head of state, Cornelius Fudge.
But in the real world, such a government takeover is seen as being "progressive" and "necessary." And this is what I love about Woods. He is able to articulate this Austrian incredulity in such a way, that possibly — just possibly — even a Guardian reader might be just able to spot the blindingly obvious incongruity of such a vital sensitive service as a child's education being under the control of tax-fed bureaucrats and self-serving politicians.
Woods is also able to slay other sacred socialist magical beasts, for instance, that regular paean of Neil Kinnock, Britain's former Labor Party leader, that we should be more like Sweden, which even the redoubtable P.J. O'Rourke once labeled as "Good Socialism."
Woods differs from these mighty opinions:
In 2008, Swedish Prime Minister Fredrik Renifeldt urged his countrymen to face facts: Swedish prosperity had been built up by the free market, and the much-vaunted Swedish welfare state merely drew parasitically upon that wealth until the country was forced to begin returning to the market economy once again. Wealth that "took a hundred years to build was almost dismantled in twenty-five years," he said.
And there's much more in that vein, which helps contribute a down payment toward the entrance fee.
And so Woods continues, with the myth of good government, the "War on Drugs," and finally, how the state can be rolled back from its current preeminent position in the United States (or at least how this inevitable rollback can be accelerated and neutralized, to avoid the US government retaliating upon Americans and the rest of the world as its funding and power base shrinks).
Yes, this is a very "American" book. If, however, like me you believe that the idea of America is still where proper liberty may once again flower in this world, in somewhere like an independent Texas, an independent Oregon, or an independent New Hampshire (or as Hoppe says, somewhere even smaller, like just one single free American city), then that flowering will partially be due to the indefatigable work of Thomas E. Woods and the books he has written, such as Rollback.
Although this commonsense work may be optional for Europeans — though it is full of ideas that I think they will still find useful — it is absolutely essential for all Americans, and anyone else who believes in Doug Casey's America, as opposed to Barack Obama's United States.
If such a second American Revolution as described above should ever come to pass, involving honest money, peace, prosperity, and freedom, then Thomas Woods could even match his namesake Thomas Paine, the rebellious Englishman from Norfolk who helped create the original successful revolt against Britain with his similarly radical pamphlets in 1776.
Rollback will help Woods stake that claim.
Just to nail that claim home, he even spares room, in the final paragraphs of the final chapter, for this lengthy quote from the Cobden Centre's very own Professor Kevin Dowd, on the matter of debt repudiation, as delivered to an audience of younger people, in Paris, in 2009:
You can play by the rules your elders would impose on you. You can expect to pay higher and higher taxes, work harder and harder to stand still, and get less and less back in return for yourselves — a life little different from slavery — and then the system will collapse anyway.
Or, alternatively, you can fight back. There is no law of nature that says you have to honor checks that other people write at your expense. You are not slaves — you are slaves only if you choose to submit to slavery. You can repudiate those checks.
Let's be blunt about what I am suggesting. I am suggesting that if default is inevitable, and if default is more damaging the longer it is delayed, then it would be a good idea to consider embracing it. We should lance the boil, as it were, and kill off the scam — sooner rather than later.
Do you want a life of toil and slavery, followed by ultimate destitution, or do you want to stand up for yourself and fight for the chance of a decent life? It's your choice.
Woods concludes:
It is the choice facing America.
I would contend that it is the choice facing everyone in the West.
