Currently, we have more time than usual to contemplate philosophical topics. This is a perfect opportunity to consider the following question: “What is the proper role of government?” Please review all 12 exhibits below while you ponder that question. Also, during your deliberations please keep the following 4 quotations in mind:
The state is God, deifies arms and prisons. The worship of
the state is the worship of force. There is no more dangerous menace to
civilization than a government of incompetent, corrupt, or vile men. The worst
evils which mankind ever had to endure were inflicted by bad governments. The
state can be and has often been in the course of history the main source of
mischief and disaster. ~ Ludwig von Mises, “Omnipotent Government”, Chapter
III: Etatism
“I prefer dangerous liberty over peaceful slavery”. ~
Thomas Jefferson
How far we are willing to go to protect human rights
is just as important a test of a nation’s character as what we will do to
protect human life. ~ Tim Stanley
"Necessity is the plea for every infringement of human
freedom. It is the argument of tyrants; it is the creed of slaves." ~
William Pitt, 1783.
The current pandemic and the ensuing heath and economic crisis
are the results of government actions.
Please examine these 12 exhibits and read the details for each exhibit in the list that follows below:
1. The Chinese government encouraged the consumption of wild animals during the famine caused by the cultural revolution. The Chinese government also encouraged the proliferation of wet markets that have produced virus crossovers from animals to humans and is the source of the coronavirus.
2. The Chinese government intentionally suppressed information about the spread of the coronavirus.
3. Governments worldwide have assumed the role of first responders in any natural disaster and preempted private citizens and private organizations from playing a major role. Governments have granted themselves extraordinary “emergency powers”. This reliance on Government as first responder caused the citizens to be vulnerable and submissive in the initial phase of the epidemic due to lack of individual preparations.
4. The Strategic National Stockpile is unprepared to service the needs of a pandemic.
5. Governments have declared some segments of the economy to be essential and have forced all other businesses to close.
6. The Food and Drug Administration (FDA) and The Center for Disease Control (CDC) interference in the marketplace caused a delay in the development of test kits and shortages of personal protective equipment (PPE).
7. The development of drug treatment has been delayed by the FDA.
8. Shortages of consumer and wholesale goods are the result of anti-price gouging laws.
9. Limited availability of hospital beds and medical equipment is caused by certificate of need laws.
10. Government regulation of Graduate Medical Education and Medical licensing places restrictions on the number of new doctors and creates physician shortages.
11. Bans on single-use plastic bags contribute to the spread of bacteria and viruses.
12. The current stock market volatility is caused by the actions of the Federal Reserve Bank.
1. The Chinese government encouraged the consumption of wild animals during the famine caused by the cultural revolution. The Chinese government also encouraged the proliferation of wet markets that have produced virus crossovers from animals to humans and is the source of the coronavirus.
Wild-animal farming has a long history in China, emerging after disastrous decades of state control of rural production under Mao Zedong. By the end of the Cultural Revolution in 1976, tens of millions of Chinese citizens had died of starvation under a system that could not produce enough food for China’s population.
Mao’s successor, Deng Xiaoping, in the late 1970s lifted state controls on rural farming to allow peasant farmers to provide for their own sustenance. Rats, bats, civet cats, pangolins, and other wild animals became staples of rural farming. To acknowledge and even encourage this, the government enacted laws that protected “the lawful rights of those engaged in the development or utilization of wildlife resources.”
Over time, this led to the breeding and distribution of these animals, and small rural outposts developed into larger-scale operations. Add to this the use of wild animals not only for consumption but as the supposedly magic ingredients in tonics and alternative medicines, and it is obvious that what began as subsistence farming for the rural poor has developed into a substantial industry.
Wet Markets
2. The Chinese government intentionally suppressed information about the spread of the coronavirus.
The first cases of an unknown strain of pneumonia were reported on 12/8/2019. Local authorities in Hubei province, the epicenter of the virus, had first hoped the virus would disappear on its own. Their kneejerk response was to cover up anything negative in the hopes that it wouldn’t get back to Mr. Xi’s inner circle.
On December 31, the Wuhan government made its first official announcement that 27 people had fallen ill to a mysterious virus that appeared to stem from a seafood market.
But it denied human-to-human transmission – a crucial factor that differentiates more easily quashable illnesses from full-blown epidemics.
3. Governments worldwide have assumed the role of first responders in any natural disaster and preempted private citizens and private organizations from playing a major role. Governments have granted themselves extraordinary “emergency powers”. This reliance on Government as first responder caused the citizens to be vulnerable and submissive in the initial phase of the epidemic due to lack of individual preparations.
The same government that can’t stop robocalls micromanages the delivery of health care in the U.S. and monopolizes medical procedures — like testing for a virus — that the free market can do better and faster. Because the government tolerates no competition, it was uninformed and ill-prepared.
So, the essence of its response has been to treat our freedoms as if they were licenses to be rescinded on governmental whims, not guarantees as declared by the Declaration and Constitution.
This Forbes article describes how a free market would react to a pandemic:
This short video describes a more targeted approach to managing the epidemic:
Here are 2 examples of Government gone wild:
Governor Cuomo said Friday he will sign an order to redistribute hundreds of ventilators to hospitals overwhelmed with coronavirus patients amid a surge in outbreak-related deaths and hospitalizations. [What Cuomo means by "redistribute" is to take ventilators from some hospitals and give them to other hospitals.]
Mayor De Blasio called Friday for a national enlistment program for doctors and nurses to handle an expected surge in coronavirus cases in New York and other places around the country where virus cases are straining existing health care systems.
“Next week in New York City is going to be very tough — next week in New York City and Detroit and New Orleans and a lot of other places,” de Blasio said on MSNBC’s “Morning Joe.” “And unless the military is fully mobilized and we create something we’ve never had before, which is some kind of national enlistment of medical personnel moved to the most urgent needs in the country constantly if we don’t have that we’re going to see hospitals simply unable to handle so many people who could be saved.”
De Blasio first broached the idea of enlisting civilian health care workers Thursday.
4. The Strategic National Stockpile is unprepared to service the needs of a pandemic.
Shortages of N95 respirators, gloves, gowns, face shields, and ventilators are directly the result of the health care industry relying on government agencies to prepare for a pandemic.
The stockpile program was created at the end of the 1990s in response to terrorist events. The original goal was to be prepared for chemical, biological, radiological and nuclear threats. The reserve, for example, was stocked with nerve agent antidotes, stored and maintained at more than 1,300 locations around the country, where they could be accessed quickly.
In the decades since, its mission has widened to include responses to natural disasters and infectious disease threats.
Politicians have a deep disdain for free markets. As an example we have this quotation:
“Allowing the free market to determine availability and pricing is not the way we should be dealing with this national crisis at this time,” said Virginia Gov. Ralph Northam (D). “This is why we need a nationally led response.”
5. Governments have declared some segments of the economy to be essential and have forced all other businesses to close.
The mayor of Los Angeles has a new program that he is proud of:
Los Angeles Mayor Garcetti went on to announce the "business ambassadors program" — an effort to get nonessential businesses to close.
“This behavior is irresponsible and selfish,” he said of those that remain open.
He said the Department of Water and Power will shut off services for the businesses that don't comply with the "safer at home" ordinance.
Neighborhood prosecutors will implement safety measures and will contact the businesses before issuing further action, according to Garcetti.
“The easiest way to avoid a visit is to follow the rules,” he said.
Now we will consider the relationship of the individual to the state:
Politicians’ argument in favor of the closures is the following: out of solidarity with the rest of the population, especially with the elderly, people should help bring the rate of infection down because otherwise many people will die due to the limited capacities of the public health systems and the lack of provision for such an epidemic. People staying at home, confined to their houses, would save lives. They would thereby help others. And as people cannot be expected to help others and stay at home voluntarily, the state has the right to enforce confinement that saves lives.
Now, the essential ethical question is the following: is anyone allowed to use violence in order to ensure that people will help their fellow men? Can the use of coercion to make people help others be justified?
Murry Rothbard answers this question in “The Ethics of Liberty”:
It is impermissible to interpret the term “right to life,” to give one an enforceable claim to the action of someone else to sustain that life. In our terminology, such a claim would be an impermissible violation of the other person’s right of self-ownership.
Note that in general, the concept of “rights” is purely negative. Rights protect the radius of a person’s action that no one else can interfere with using aggressive violence. Property rights demarcate the area in which an individual can act freely.
Rothbard continues:
No man can therefore have a “right” to compel someone to do a positive act, for in that case the compulsion violates the right of person or property of the individual being coerced….As a corollary, this means that, in the free society, no man may be saddled with the legal obligation to do anything for another, since that would invade the former’s rights; the only legal obligation one man has to another is to respect the other man’s rights.
Of course, it is a different case if someone knows that he is infected and opens his business with the intention of infecting and doing harm to the customers. This would be criminal behavior and defensive violence, such as closing the business by the threat of force, would be justified. But how do we know that the opening of the business is really an act of aggression on part of an infected owner?
As Rothbard points out, the burden of proof is on the people using violence: the burden of proof that the aggression has really begun must be on the person who employs the defensive violence.
We only know if someone is a criminal when he is convicted. Until people are convicted, they must enjoy all the rights of innocents, such as being allowed to leave their houses or open their stores. As Rothbard reminds us, “they are innocent until proven guilty.”
The argument that central planning through confinement or other forms of violence would save lives is also highly problematic, because it ignores the problem of economic calculation. These infringements of private property involve (subjective) costs that cannot be calculated and compared to the benefits in a nonarbitrary way.
For instance, being confined to one’s own four walls, with the corresponding lack of physical exercise, will lead to increased cardiovascular disease, high blood pressure, strokes, and thromboses, among other things. Moreover, the psychological burden of being locked up is immense. The psychological strain can cause divorces and break up families; traumatization and depression are created. Domestic violence and child abuse are expected to surge. In sum, some people may die due to these infringements of private property; others may be saved.
Moreover, the economic havoc created by these measures is potentially devastating. It is true that there would have been an economic crisis anyway due to the distortions created by monetary policy. The epidemic is only the trigger of the crisis. Nevertheless, the crisis is made harsher by the government infringements on private property rights. If people are not allowed to produce, because they cannot leave their homes or open their businesses, production falls.
But that is not all. Governments all over the world are advancing on the road to serfdom, controlling their populations and increasing their power relative to the private sector via increased public spending and new regulations. According to the “ratchet effect,” defined by Robert Higgs, government power usually increases in crisis times. However, when the crisis recedes, government power is not reduced to its initial position. Thus, the long-term victim of the government intrusion may be liberty. More socialist regimes may be instituted. And in these regimes’ life expectancy is shorter. The greater the power of government, the lower will be the quantity and quality of life ceteris paribus. For instance, the capitalist West Germans had a life expectancy that was about three years longer than that of their East German counterparts.
{The so-called ratchet effect described most comprehensively by Robert Higgs in his book “Crisis and Leviathan”, is the phenomenon of rapid government growth in the face of crises, followed by a lack of its proportional reduction in the post-crisis stage. Crisis and Leviathan}
In a crisis like this one, words like “personal liberty” are brought up and almost immediately tossed aside by politicians and commentators, as if they are mere luxuries–and selfish ones at that. Because “saving lives is more important.”
But even if that false dichotomy were true (and the past century of human history screams to us that it is not), the question that remains hanging in the air is: What kind of lives? Do we want to live lives in which we get to make our own choices and decisions, or do we want to live the kind of lives where our choices are made for us, by some centralized authority?
Because that is what we are talking about. When a few politicians can order entire economies to grind to a halt, when they can dictate to us what goods and services are “essential” (a category that always includes themselves) and which are not, then there is very little they cannot do. I would argue that there is nothing at all they cannot do.
The much more important issue is: What kind of world are we creating when we allow a government to have this kind of power?
Fortunately–or perhaps not so fortunately–we don’t have to use our imaginations to come up with an answer. The 20th Century’s tragic experiments with all-powerful authoritarian regimes give us plenty of real-life examples. Those regimes were born out of dreams of perfect societies, crafted by “experts” and directed from above.
It’s a shame that nearly everyone in the US has learned entirely the wrong lessons from these tragedies. We say, “never again,” we visit Holocaust memorials, we condemn the internment of Japanese Americans, and we vow to treat all people as equals, never to hate an entire group of people because of their race or ethnicity or sexual preference.
And all of that is beautiful. But it completely misses the point. The atrocities of the century before ours did not take place because a lot of people hated a lot of other people. Those atrocities were the product of all-powerful states that could do whatever they wanted to the people living under them. Not a single one of the living nightmares of the Nazis or the Soviets, of Pol Pot or Mao or any of the others could ever have happened without total state power. And once a state has that kind of power, there is very little that anyone living under it can do to stop it.
Each one of us needs to ask ourselves this question. Each one of us needs to decide which side of this they are on, which side they will stand up for. And yes, there really are only two sides: Choosing to go in the direction of a more free society, or choosing to go in the direction of a more authoritarian one.
We should all be far more frightened by the consequences of letting a government have this much power over our lives, than we should be of any pathogen. Why? Because human beings have the tools and the capacity to deal with viruses.
But after all this time, after all the man-made famines, the endless wars, the gulags, the killing fields, the death camps… after all of this, we still have not yet found the tools to effectively deal with the problem of an all-powerful state.
Now back to our question of whether the government — state or federal — can confine persons against their will in order to protect public health. The short answer is yes, but the Constitution requires procedural due process. That means a trial for every person confined.
Thus, a government-ordered quarantine of all persons in a city block or a postal ZIP code or a telephone area code would be an egregious violation of due process, both substantive and procedural. Substantively, no government in America has the lawful power to curtail natural rights by decree.
The shutdown of the American economy by government decree should end. The lasting and far-reaching harms caused by this authoritarian precedent far outweigh those caused by the COVID-19 virus. The American people—individuals, families, businesses—must decide for themselves how and when to reopen society and return to their daily lives.
Neither the Trump administration nor Congress has the legal authority to shut down American life absent at least baseline due process.
6. The Food and Drug Administration (FDA) and The Center for Disease Control (CDC) interference in the marketplace caused a delay in the development of test kits and shortages of personal protective equipment (PPE).
The Food and Drug Administration helped turn the coronavirus from a deadly peril into a national catastrophe. Long after foreign nations had been ravaged and after many cases had been detected in America, the FDA continued blocking private testing. The FDA continued forcing the nation’s most innovative firms to submit to its command-and-control approach, notwithstanding the pandemic. South Korean is in a far better situation dealing with coronavirus because its government did not preemptively cripple private testing.
I spoke to one significant medical supplier who talked to me on the condition of anonymity, for fear of FDA retaliation. In one location on the Pacific coast, this supplier has had more than 20 pallets of coronavirus-specific medical supplies waiting in a warehouse for five days. Yes, five days.
At another depot in the south-central United States, this same supplier has had 500,000 level-three or level-four masks sitting in a warehouse for two days now. They expect the FDA delays to continue indefinitely.
And get this — some of what the supplier is delivering is supposed to be gifted to a hospital. But even in that case, the FDA has warned that the supplies cannot even be unpacked until an inspector arrives. If they are broken down before then, even if only to expedite delivery once the inspector's approval is given, fines are threatened to follow.
The delays in distributing test kits are explained in this article:
More about test kits in this article:
A discussion about how the FDA and CDC have caused the economic disaster:
This article discusses the overall effect on the supply chain:
7. The development of drug treatment has been delayed by the FDA.
Stanford University professor Dale Geringer observed, "In terms of lives, it's quite possible that the FDA bureaucracy could be killing on the order of three to four times as many people as it saves." One study estimated that 150,000 heart attack victims may have lost their lives as a result of the FDA's delays in approving the emergency blood-clotting drug TPA. National Cancer Institute officials accused the FDA of being "mired in a 1960's philosophy of drug development, viewing all new agents as...poisons."
Hopefully, a silver lining of this current crisis will be an American awakening to what has long been clear: the costs of the FDA bureaucracy is a far greater public health risk than any of the advantages that it claims to provide. It’s past time to scrap the agency altogether.
The Covid-19 pandemic is exposing how the U.S. Food and Drug Administration puts Americans at increased risk of sickness and death. Decades of killing medical innovation and forcing industries offshore made this inevitable.
In order to overcome the coronavirus crisis and to be fully prepared for the next public health episode, America must rid itself of the bureaucracy that has slowly choked out the greatest medical industry in the world.
If Americans want to live in a truly free country, one that is actually independent instead of dependent on the likes of China, then there must be internal reform before any meaningful external reform. It begins with rolling back the FDA.
8. Shortages of consumer and wholesale goods are the result of anti-price gouging laws.
The government is always and everywhere at war with market prices. Regulations creating barriers to entry limit supply, artificially inflating prices. Price controls, including “anti-price gouging” laws override market prices, creating shortages. Subsidies to producers (farm subsidies, for example), allow producers to limit supply, artificially inflating the price.
Given the surge in demand, the market is trying to raise the price of items like toilet paper, certain medical supplies and other essential items.
What is the government doing in response? It is escalating its usual, conventional war on market prices to a nuclear war. It is punishing suppliers of essential goods for raising prices. It is ramping up monetary inflation to historic levels to keep stock prices artificially high and unprofitable businesses alive to go on producing products for which there is no demand. At a time when market prices are more essential to our survival than ever, the government is doing more to override them than ever.
Why is there no toilet paper available? Ask most people and they will say it is because of “hoarders.” These are people who bought far more than they needed in anticipation of future shortages. The people who arrived at the store after the toilet paper is sold out vilify them. Others might just call them prudent.
The same people who vilify hoarders also vilify “price gougers.” They don’t seem to grasp the obvious cause/effect relationship here. If it weren’t for artificial limits on price, i.e., “anti-price gouging” laws, the price of toilet paper would rise dramatically with the surge in demand and the so-called hoarders would not be able to buy nearly as much. That would leave far more for everyone else. The toilet paper market would find the optimal price level where the greatest number of people could get what they need.
Why are there not enough ventilators right now? Because government regulation raises the price of entry into the market and lengthens the lead time for new production. If not for these artificial barriers, hundreds of new ventilator producers would seize the opportunity to enter the market and sell ventilators.
Instead, the government is considering ordering companies who make related items to make ventilators instead. That will only result in less efficient production of ventilators and shortages in the products those manufacturers would otherwise produce
The free market doesn’t produce perfect outcomes. It’s an imperfect world. But a free market produces the best possible outcomes in the real world of scarcity and occasional disasters. Prices are the lifeblood of the free market. They are what make it produce the best outcomes. Every time the government overrides market prices, it makes things worse—in most cases, unfortunately, to thunderous applause..
9. Limited availability of hospital beds and medical equipment is caused by certificate of need laws.
Effectively today the construction of any new medical facility or the installation of any new medical equipment requires the approval of a state governmental agency. The anti-competitive, inflationary effects of the certificate of need statutes on the cost of health care are astronomical.
10. Government regulation of Graduate Medical Education and Medical licensing places restrictions on the number of new doctors and creates physician shortages.
Due to their complexity, residency caps don’t make for scintillating news. Outside the medical field – where the debate rages on – not many people are aware of the issue. But nonetheless, these caps on the number of residencies available to US medical students are incredibly important, not only to aspiring doctors but to the health of the nation as a whole.
Currently, United States medical students pay for the first four years of their medical education either out of pocket or through student loans – or some combination of the two. However, after becoming doctors, they must go through a residency program which can last 3-4 years or more depending on their specialty, where they provide patient care under the supervision of a more experienced physician in their field.
Some residency funding for comes from the states themselves or from private insurance companies who negotiate with teaching hospitals across the country. However, at present, the bulk of the money for American residencies (called General Medical Education, or GME) comes from the Federal Government, specifically the Department of Health and Human Services via the Center for Medicare and Medicaid. This money eventually makes its way to the over 1,000 teaching hospitals where medical students go to serve as residents and hone their clinical skills.
The limitation in funding has essentially put a cap on the number of residencies that can take place in the United States – and since a doctor cannot go into practice without a residency, this is essentially a cap on the number of new, American-trained physicians who are allowed to practice in this country.
The benefits of state licensing are overstated. Licensing authorities verify education and training, but little else. State licenses do not indicate an individual physician’s specialty-specific skills. Specialty certification is the purview of medical specialty boards, which are private.
State boards fail to identify and sanction the majority of physicians who put patients at risk. The boards have been criticized for protecting physicians by keeping investigative findings from the public and for long delays in resolving investigations, during which physicians continue to practice. State licensing does not assure quality, just ask a medical malpractice insurance professional who insures “hard-to-place” doctors.
Consumers are protected by an interdependent system of private oversight motivated by concerns over reputation and liability. The participants in this system include hospitals, health maintenance organizations, health insurance providers, medical malpractice insurance companies, and private certification organizations.
"What the analysis says," Simmons explains, "is that consumers as a whole are worse off under licensing—the gains to those who benefit are far outweighed by the burden on the vast majority, who don't."
11. Bans on single-use plastic bags contribute to the spread of bacteria and viruses.
The Covid-19 outbreak is giving new meaning to those “sustainable” shopping bags that politicians and environmentalists have been so eager to impose on the public. These reusable tote bags can sustain the Covid-19 and flu viruses—and spread the viruses throughout the store.
Researchers have been warning for years about the risks of these bags spreading deadly viral and bacterial diseases, but public officials have ignored their concerns, determined to eliminate single-use bags and other plastic products despite their obvious advantages in reducing the spread of pathogens.
The world really has turned upside down. In 2007 San Francisco became the first large city in the country to ban single-use plastic bags. Now, as part of its effort to combat the spread of COVID-19, the city is banning the reusable tote bags it's spent over a decade promoting.
12. The current stock market volatility is caused by the actions of the Federal Reserve Bank.
The Austrian business cycle theory says that the way to understand economic recessions and depressions is by turning attention to the prior boom period. It is during the boom period when unsustainable investments are made, which ultimately must be liquidated during the bust.
In a typical cycle, the central bank will artificially lower interest rates by buying assets and flooding the banking system with new money. The lower interest rates are indeed a “stimulus” to investment and consumer spending, but the prosperity is not genuine, because the amount of true saving has not increased. The central bank can keep the illusory boom going for several years if it continues to provide easy credit, but ultimately reality reasserts itself.
The boom typically ends when rising prices causes the authorities to pull back on the monetary inflation, causing interest rates to rise and thereby rendering many projects unprofitable. At the higher interest rates, business owners realize they had been overly optimistic and begin laying off workers or shutting down altogether. The euphoric boom period turns into a miserable recession.
In the Austrian analysis, the way to avoid painful recessions is to avoid the preceding boom. That means during a recession, it is bad policy to slash interest rates and try to stimulate spending—which is of course the textbook “Keynesian” prescription. According to the Austrians, trying to ease the pain of the bust through the use of inflation and cheap credit will simply sow the seeds for the next bust.
A provision of the stimulus bill throws a big shroud over the activities of the central bank. The bill repeals the sunshine law as it relates to Federal Reserve board of governors’ meetings until the end of 2020 or when the president determines the coronavirus crisis has passed, whichever comes first.
The latest financial stimulus legislation provides broad powers to the Federal Reserve. For example:
SEC. 4009. TEMPORARY GOVERNMENT IN THE SUNSHINE ACT RELIEF. (a) IN GENERAL.—Except as provided in subsection 8 (b), notwithstanding any other provision of law, if the Chairman of the Board of Governors of the Federal Reserve System determines, in writing, that unusual and exigent circumstances exist, the Board may conduct meetings without regard to the requirements of section 552b of title 5, United States Code, during the period beginning on the date of enactment of this Act and ending on the earlier of— (1) the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 20 U.S.C. 1601 et seq.) terminates; or (2) December 31, 2020.”
In other words, Jerome Powell doesn’t have to let you know what the Fed is doing. All he has to do is assert “exigent circumstances” and a veil of secrecy descends over the central bank.
Practically speaking, the new law effectively empowers the Fed to hand out money to whomever it pleases, and nobody will ever be able to find out the whos, hows and whys.
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