Seventy-four years ago yesterday, Ludwig von Mises addressed the University Club of New York. He ended his speech with this:
Even in this country which owes to a century of “rugged individualism” the highest standard of living ever attained by any nation, public opinion condemns laissez-faire. In the last fifty years [and in the seventy-four years since], thousands of books have been published to indict capitalism and to advocate radical interventionism, the welfare state, and socialism. The few books which tried to explain adequately the working of the free-market economy were hardly noticed by the public. Their authors remained obscure, while such authors as Veblen, Commons, John Dewey, and Laski were exuberantly praised. It is a well-known fact [still true] that the legitimate stage as well as the Hollywood industry are no less radically critical of free enterprise than are many novels. There are in this country many periodicals which in every issue furiously attack economic freedom. There is hardly any magazine of opinion that would plead for the system that supplied the immense majority of the people with good food and shelter, with cars, refrigerators, radio sets, and other things which the subjects of other countries call luxuries.
The impact of this state of affairs is that practically very little is done to preserve the system of private enterprise. There are only middle-of-the-roaders who think they have been successful when they have delayed for some time an especially ruinous measure. They are always in retreat. They put up today with measures which only ten or twenty years ago they would have considered as undiscussable. They will [and did] in a few years [and several decades] acquiesce in other measures which they today consider as simply out of the question. What can prevent the coming of totalitarian socialism is only a thorough change in ideologies.
The title of Mises’s speech is “Middle-of-the-Road Policies Lead to Socialism”. But in fact (as Mises knew well) compromise (a better descriptor than middle-of-the-road) leads to tyranny. His student and later colleague, Friedrich A. (von) Hayek, argued at length against inevitability of tyranny through economic micro-management in “Freedom and the Economic System” (1938) and The Road to Serfdom (1944). Hayek put it this way in part 16 of Liberalism (1973):
There is, however, yet another reason why freedom of action, especially in the economic field that is so often represented as being of minor importance, is in fact as important as the freedom of the mind. If it is the mind which chooses the ends of human action, their realization depends on the availability of the required means, and any economic control which gives power over the means also gives power over the ends. There can be no freedom of the press if the instruments of printing are under the control of government, no freedom of assembly if the needed rooms are so controlled, no freedom of movement if the means of transport are a government monopoly, etc. This is the reason why governmental direction of all economic activity, often undertaken in the vain hope of providing more ample means for all purposes, has invariably brought severe restrictions of the ends which the individuals can pursue. It is probably the most significant lesson of the political developments of the twentieth century that control of the material part of life has given government, in what we have learnt to call totalitarian systems, far‑reaching powers over the intellectual life.
Where’s the compromise in that? In the United States, it began in earnest two lifetimes ago, in 1887, with the establishment of the Interstate Commerce Commission. The ICC was abolished in 1996, but by then (and since) its originally limited regulatory powers were (and have since been) expanded upon through the aggrandizement of the original cabinet-level departments of the federal government, the creation of new cabinet-level departments, the creation of a multitude of “independent” regulatory agencies, and the emulation of federal regulatory power by the States and their subsidiary jurisdictions.
None of that would have happened had the three branches of the federal government not collaborated to expand the powers of the federal government beyond their clear constitutional limits and enabled the various departments and agencies to exercise unconstitutional legislative, executive, and judicial authority. Every bit of that represents compromise — unconstitutionally altering the Constitution or allowing it to be altered — for various personal reasons: feeling good by spending other people’s money, power-lust, getting along by going along, wanting to not seem “mean”, and getting elected or re-elected by assuaging the masses.
Consider Obamacare, for example. A key provision of Obamacare — the camel’s nose, head, and shoulders in the tent of universal health care (a.k.a., socialized medicine) — is the vast expansion of eligibility for Medicaid. In the 30-some States that have opted to participate in the expanded program, persons with incomes up to 133 percent of the poverty line are eligible, including adults without dependent children.
It would seem that only a Simon Legree or Ebenezer Scrooge would deny Medicaid coverage to those millions who have obtained it by way of Obamacare. Or it would until the following considerations come to mind:
- The poverty line is a misleading metric. It’s a relative measure of income, not an absolute one. Most “poor” persons in today’s America are anything but poor in relation the truly poor of the world, and they live far above a subsistence level. The poverty line is nothing but an arbitrary standard that justifies income redistribution.
- Other persons, with their own problems, are paying for the government’s generous “gift” to the semi-poor. But who is really in a position to say that the problems of Medicaid recipients are more deserving of subsidization than the problems facing those who defray the subsidy?
- If expanded Medicaid coverage were withdrawn, those now covered would be no worse off than they had been before taxpayers were forced to subsidize them.
- Being relatively poor used to be a good reason for a person to work his way up the ladder of success. Perhaps not far up the ladder, but in an upward direction. It meant learning skills — on the job, if necessary — and using those skills to move on to more-demanding and higher-paying jobs. Redistributive measures — Medicaid subsidies, food stamps, extended unemployment benefits, etc. — blunt the incentive to better oneself and, instead, reinforce dependency on government.
I will underscore the last point. The lack of something, if it’s truly important to a person, is an incentive for that person to find a way to afford the something. That’s what my parents’ generation did, even in the depths of the Great Depression, without going on the dole. There’s no reason why later generations can’t do it; it’s merely assumed that they can’t. But lots of people do it. I did it; my children did it; my grandchildren are doing it.
Republicans used to say such things openly and with conviction, before they became afraid of seeming “mean” or losing the perks and powers of office. Principled conservatives should still be thinking and saying such things. When conservatives compromise their principles because they don’t want to seem “mean” or lose perks and powers they are complicit in the country’s march down the road to serfdom — dependency on and obeisance to the central government.
Every advance in the direction of serfdom becomes harder and harder to reverse. The abolition of Social Security, Medicare, and Medicaid is now unthinkable, even though those programs have caused hundreds of millions of Americans to become addicted to government handouts.
And how does government pay for those handouts? In part, it taxes many of the people who receive them. It also pays generous salaries and benefits of the army of drones who administer them. It’s a Ponzi scheme enforced at gunpoint. Despite the seeming benevolence of it all, it’s tyranny. The examples multiply, just as the size, scope, and cost of the federal government (at all levels) multiplies. And the price is liberty.
The best time — usually the only time — to kill a government program is before it starts. That’s why conservatives shouldn’t compromise.
Politics and Prosperity 