The Road to Totalitarianism

The Ludwig von Mises Institute recently published an article written by Henry Hazlitt.  This is a brilliant article and the most amazing aspect is that it was written in 1956.  The complete article is at this link:

The Road to Totalitarianism

The following are some of the highlights:

...the greatest threat to American liberty today comes from within. It is the threat of a growing and spreading totalitarian ideology.  Totalitarianism in its final form is the doctrine that the government, the state, must exercise total control over the individual.  The essence of totalitarianism is that the group in power must exercise total control. Its original purpose (as in communism) may be merely to exercise total control over "the economy." But "the state" (the imposing name for the clique in power) can exercise total control over the economy only if it exercises complete control over imports and exports, over prices and interest rates and wages, over production and consumption, over buying and selling, over the earning and spending of income, over jobs, over occupations, over workers — over what they do and what they get and where they go — and finally, over what they say and even what they think.

If total control over the economy must in the end mean total control over what people do, say, and think, then it is only spelling out details or pointing out corollaries to say that totalitarianism suppresses freedom of the press, freedom of religion, freedom of assembly, freedom of immigration and emigration, freedom to form or to keep any political party in opposition, and freedom to vote against the government. These suppressions are merely the end-products of totalitarianism.  All that the totalitarians want is total control. This does not necessarily mean that they want total suppression. They suppress merely the ideas which they don't agree with, or of which they are suspicious, or of which they have never heard before; and they suppress only the actions that they don't like, or of which they cannot see the necessity. They leave the individual perfectly free to agree with them, and perfectly free to act in any way that serves their purposes — or to which they may happen at the moment to be indifferent.

And it isn't too difficult to recognize the totalitarian mind when we meet one. Its outstanding mark is a contempt for liberty. That is, its outstanding mark is a contempt for the liberty of others.  The denial of freedom rests, in other words, on the assumption that the individual is incapable of managing his own affairs.

Three main tendencies or tenets mark the drift toward totalitarianism. The first and most important, because the other two derive from it, is the pressure for a constant increase in governmental powers, for a constant widening of the governmental sphere of intervention. It is the tendency toward more and more regulation of every sphere of economic life, toward more and more restriction of the liberties of the individual. The tendency toward more and more governmental spending is a part of this trend. It means in effect that the individual is able to spend less and less of the income he earns on the things he himself wants, while the government takes more and more of his income from him to spend it in the ways that it thinks wise. One of the basic assumptions of totalitarianism, in brief (and of such steps toward it as socialism, state paternalism, and Keynesianism), is that the citizen cannot be trusted to spend his own money. As government control becomes wider and wider, individual discretion, the individual's control of his own affairs in all directions, necessarily becomes narrower and narrower. In sum, liberty is constantly diminished.

The second main tendency that marks the drift toward totalitarianism is that toward greater and greater concentration of power in the central government. This tendency is most easily recognizable here in the United States, because we have ostensibly a federal form of government and can readily see the growth of power in Washington at the expense of the states....And so deep is the belief in the benevolence and necessity of uniform regulation and central planning that the federal government assumes more and more of the powers previously exercised by the states, or powers never exercised by any state; and the Supreme Court keeps steadily stretching the interstate commerce clause of the Constitution to authorize powers and federal interventions never dreamed of by the Founding Fathers. At the same time recent Supreme Court decisions treat the Tenth Amendment to the Constitution practically as if it did not exist.

The third tendency that marks the drift toward totalitarianism is the increasing centralization and concentration of power in the hands of the president at the expense of the two coordinate branches of the government, Congress and the courts. In the United States this tendency is very marked today. To listen to our pro-totalitarians, the main duty of Congress is to follow the president's "leadership" in all things; to be a set of yes-men; to act as a mere rubber-stamp.  One invariable accompaniment of the growth of Caesarism is the growing contempt expressed for legislative bodies, and impatience with their "dilatoriness" in enacting the "Leader's" program, or their actual "obstructionist tactics" or "crippling amendments." Yet in recent years derision of Congress has become in America almost a national pastime. And a substantial part of the press never tires of reviling Congress for "doing nothing" — that is, for not piling more mountains of legislation on the existing mountains of legislation — or for failing to enact in full "the President's program."

We have now outlined what I have called the three main tendencies that mark a drift toward totalitarianism. They are (1) the tendency of the government to attempt more and more to intervene, and to control economic life; (2) the tendency toward greater and greater concentration of power in the central government at the expense of local governments; and (3) the tendency toward more and more concentration of power in the hands of the executive at the expense of the legislative and judiciary.
To these I am tempted to add a fourth tendency — the pressure for a world state.
The addition of this will doubtless come as a shock to many self-styled liberals and well-intentioned idealists who would regard the establishment of a world state as the crowning achievement of liberalism and internationalism. A little examination, however, will show us that the present pressure for a world state represents a false internationalism and a retreat from freedom. It is, on the contrary, merely the equivalent on a world scale of the pressure for centralized government on a national scale.  This whole tendency makes a travesty of international freedom for the individual, which is the essence of true internationalism. For true internationalism does not consist in compelling the taxpayers or citizens of one nation or the inhabitants of one part of the globe to subsidize, or give alms to, or even to do "business" with, the citizens of any other nation or the inhabitants of any other part of the globe. True internationalism, on the contrary, consists in permitting the individual citizen or firm in any nation to buy from, or sell to, or trade with, the individual citizen or firm of any other nation.

This was Henry Hazlitt view of the road to totalitarianism in 1956.  What would his opinion be of our journey down this road today?

The despotism of public opinion

The following article is written by Daniel James Sanchez editor of Mises.org and director of the Mises Academy:

The 99 and the 1

The concept of the bottom 99% of society versus the top 1% has been promoted for the last year by the "Occupy Wall Street" movement.  The above article dissects this topic and puts it into historical perspective.

Here is the historical analysis:

Whatever one thinks of the current plight of the 99%, throughout almost all of history, things were much worse for the vast majority of the population. In precapitalist ages, the average member of the economic 99%, if lucky enough to survive infancy, was consigned to a life of back-breaking work and poverty, constantly on the verge of famine, disease, and death.
The only individuals who did not have such a wretched life were the "1%" of old. This economic 1% was virtually identical with the state. It was made up of the French kings, the English lords, the Roman senators, the Egyptian viziers, and the Sumerian temple priests. The members of this elite lived in Olympian splendor: servants at their beck and call, as much food as they could possibly want, spacious homes, an abundance of jewelry, and a tremendous amount of leisure time.
Everything the Occupy Wall Street protesters say today about the 99% and the 1% was completely accurate then.
Why did the 99% of old put up with the 1% lording it over them? Why did they not rise up, and overthrow their masters? Were they simply cowed by the mailed fists and the flashing sabers?
No; as David Hume pointed out, since "those who are ruled" always vastly outnumber "those who rule," a regime's power can never be about brute strength alone. The ruled many must believe that the power of the ruling few is somehow good for them.
Perhaps the temple priests have convinced the people that the gods would be angry if the rulers were disobeyed: that the rains won't come, and the crops won't grow. Or maybe the populace believes that the rulers are responsible for the peace and order in society.
Not only do the 99% put up with the ruling 1%; they put them up on their lofty pedestals. The 99% give the 1% their power.
As Ludwig von Mises made clear, real power, what he called "ideological might," always lies in the support of public opinion. If public opinion were ever to turn on any regime, its days would be numbered.
Mises went even further to argue that public opinion not only determines who is in charge but the general character of the legal order, or as he put it, "whether there is freedom or bondage."
Ultimately the only kind of tyranny that can last is a tyrannical public opinion.
The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.
...throughout most of the history of civilization, the ruling 1% took for itself a huge portion of what the 99% produced. And if any private person ever accumulated enough wealth for it to be noticeable, some potentate would snatch that too.
With such rampant government confiscation, there was never enough incentive for large-scale capital accumulation. Without large-scale capital accumulation, there can be no mass production. And without mass production, there can be no great improvements in the lives of the masses.
And that is basically why the 99% had such shabby lives for almost all of history.
Then in the 18th and 19th centuries, something revolutionary happened......"Laissez faire et laissez passer," the economists said. Let people control as much of their property as completely as possible, and everybody will be more prosperous.
Through this process, public opinion shifted toward the belief that government should be as limited as possible, and property rights as sacrosanct as possible.
Again, the way society is organized ultimately depends on public opinion. So, since public opinion changed, policy changed too. Private capital became more secure. Trade restrictions were lifted. Business barriers were abolished. Private property reigned supreme as never before.
And the results were miraculous. As never before in history, the productive energies of humanity were unleashed. Items that were once reserved for the elite 1% were soon mass produced for the 99%. Amenities that did not even exist before were developed, first for small markets, but ultimately for the mass market.
In the new order there was still a 99% and a 1%. But the 99% of this period lived better than the 1% of times past. And the chief way to ascend to the 1% was to become a successful capitalist-entrepreneur: to strive to serve the 99% (the masses of consumers) better than one's competitors.
In the old order, most would-be one-percenters, in order to get ahead in life, would have had to apply their smarts and ambition to become conquerors, rulers, and government administrators, and in those roles to exploit the masses. In the new order, under what Mises called the "consumer sovereignty" of the market, their capabilities were turned toward providing for the masses of sovereign consumers.
The masters became servants: wealthy servants, but servants nonetheless.
Now, the 99%, under the thrall of unsound ideas, are once again oppressing themselves. Thanks to the calamitous state of public opinion, the ranks of the 1% are once again increasingly being filled, not by capitalist-entrepreneurs serving the 99%, but by the state and its cronies exploiting and impoverishing the 99%. And the redistributionist remedies that the self-styled 99% clamor for would only accelerate this trend.

 Daniel James Sanchez delves beyond a historical discussion of the "Occupy Wall Street" movement.  He suggests actions to combat the assault on society by the proponents of redistribution and state control.

These economic philosophers, people like Richard Cantillon, Adam Smith, and J.B. Say, were theorists. They wrote brilliant, if sometimes turgid, books that changed the minds of communicators: individuals whom F.A. Hayek called "secondhand dealers of ideas."
These included professional communicators: writers, like Richard Cobden, and speakers, like John Bright. These writers and speakers wrote pamphlets and gave speeches that changed the minds of many thoughtful, if less eloquent, individuals, who might be called amateur communicators. And this thoughtful stratum, in turn, led their nonthoughtful fellows (who, in modern parlance might be called "sheeple") to change their positions on public affairs.
If our civilization is to be rescued — if the tide of public opinion is ever to turn again — it will be thanks to the sound ideas formulated by theorists like Mises and the scholars who work in his tradition. But that can only happen if those ideas are effectively disseminated by a new generation of communicators.

And so dear reader it is time to decide if you will become an active participant in the struggle for freedom.  As Daniel James Sanchez so eloquently reminds us this struggle is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion. To join this struggle you must become a "secondhand dealers of ideas".  You do not need to write books, author blogs or host radio shows.  You need only to be an "amateur communicator".  Speak openly, honestly, and without fear about your belief in limited government, property rights, the rule of law, free markets, and personal freedom.

A warning ignored

Our recent economic recession was to be corrected by the application of “Government Stimulus”.  We have all been treated to speeches about shovel ready projects.  The concept of public works projects as a method of reversing an economic recession has been discredited for decades.

Ludwig von Mises leader of the Austrian School of economics wrote his masterpiece “Human Action” in 1940.  This book was later translated into English in 1949.  The following article is excerpted from chapter 31:

The Chimera of Contracyclical Policies

This article exposes in a few paragraphs the faulty logic that has been used to justify the unimaginable expansion in Federal spending.  The following are some of the highlights of the article (remember as you read this it was written in 1940):

An essential element of the "unorthodox" doctrines, advanced both by all socialists and by all interventionists, is that the recurrence of depressions is a phenomenon inherent in the very operation, of the market economy….the interventionists ascribe to the government the power to correct the operation of the market economy in such a way as to bring about what they call "economic stability." … What they want is to expand credit more and more and to prevent depressions by the adoption of special "contracyclical" measures.

In the context of these plans the government appears as a deity that stands and works outside the orbit of human affairs, that is independent of the actions of its subjects, and has the power to interfere with these actions from without….What is needed to make the most beneficent use of this power is merely to follow the advice given by the experts.

The most advertised among these suggested remedies is contracyclical timing of public works and expenditure on public enterprises. The idea is not so new as its champions would have us believe. When depression came, in the past, public opinion always asked the government to embark upon public works in order to create jobs and to stop the drop in prices….If, however, the government resorts to the cherished inflationary methods of financing, it makes things worse, not better. It may thus delay for a short time the outbreak of the slump. But when the unavoidable payoff does come, the crisis is the heavier the longer the government has postponed it.

All this talk about contracyclical government activities aims at one goal only, namely, to divert the public's attention from cognizance of the real cause of the cyclical fluctuations of business. All governments are firmly committed to the policy of low interest rates, credit expansion, and inflation. When the unavoidable aftermath of these short-term policies appears, they know only of one remedy — to go on in inflationary ventures.

Ludwig von Mises was warning us in1940 that government policy of low interest rates, credit expansion, and inflation was a recipe for disaster.  Hopefully today more people are willing to listen to this warning.